RIDE INC, 10-K, 1997-03-31

RIDE INC
10-K, 1997-03-31
SPORTING & ATHLETIC GOODS, NEC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
------------------------

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 1-13042

RIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

<TABLE>
<S> <C>
WASHINGTON 91-1571027
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

8160 304TH AVENUE SOUTHEAST
PRESTON, WASHINGTON 98050
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 222-6015
------------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------------------------------------------------------
<S> <C>
Common Stock NASDAQ National Market
</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. Yes __ No X

As of March 14, 1997, the aggregate market value of the registrant's common
stock held by nonaffiliates of the registrant was $38,336,310 based on the
closing sale price of the registrant's Common Stock on the Nasdaq Stock Market.

As of March 14, 1997, the number of shares of the registrant's Common Stock
outstanding was 10,771,352.

DOCUMENTS INCORPORATED BY REFERENCE:

(1) Portions of the Registrant's Definitive 1997 Proxy Statement to be filed
with the Securities and Exchange Commission are incorporated by reference
into Part III hereof.
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TO THE EXTENT THAT THIS ANNUAL REPORT ON FORM 10-K DISCUSSES FINANCIAL
PROJECTIONS, INFORMATION OR EXPECTATIONS ABOUT THE COMPANY'S PRODUCTS OR
MARKETS, OR OTHERWISE MAKES STATEMENTS ABOUT THE FUTURE, SUCH STATEMENTS ARE
FORWARD LOOKING AND ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE STATEMENTS MADE. SUCH
FACTORS INCLUDE, AMONG OTHERS, THOSE DISCUSSED IN ITEM 1 BELOW UNDER THE HEADING
"RISK FACTORS" AND ELSEWHERE IN THIS ANNUAL REPORT AND DOCUMENTS INCORPORATED BY
REFERENCE HEREIN.

PART I

ITEM 1. BUSINESS

INTRODUCTION

Ride, Inc. ("the Company") is a leading designer, manufacturer and marketer
of snowboards and related products through its subsidiaries: Ride Snowboard
Company ("Ride Snowboards"), Ride Manufacturing, Inc. ("Ride Manufacturing,"
formerly known as Thermal Snowboards, Inc.), Ride Canada, Inc. ("Ride Canada")
and SMP Clothing, Inc. ("SMP"). The Company was founded in September 1992 and
acquired Ride Manufacturing in September 1995 and SMP in October 1995. The
Company also acquired 5150 Snowboards, Inc. ("5150") in September 1995 and later
merged 5150 with and into Ride Snowboards. Finally, the Company acquired C.A.S.
Sports International, Inc. and C.A.S. Sports Agency, Inc. (collectively, "CAS")
in August 1994. In October 1996, the Company transferred substantially all of
the Canada-based operating assets and liabilities of CAS, other than fixed
assets, into Ride Canada, a newly formed corporation, and all of the US-based
operating assets and liabilities of CAS into Ride Snowboards, and sold the CAS
entities.

Ride Snowboards sells premium to mid-range snowboards and related products
primarily through specialty snowboard and ski shops and regional sporting goods
stores, under the "Ride," "5150", "Liquid," Preston," and "Cappel" brand names.
Ride Manufacturing is a manufacturer of premium snowboards which are produced
principally for Ride Snowboards. Ride Manufacturing also produces a limited
number of snowboards for other snowboard companies on an OEM basis. SMP designs
and manufactures snowboard, surf, skate, motocross and street apparel which is
sold through specialty shops under the "SMP" brand name. Ride Canada acts as the
Company's Canadian distributor for its "Ride," "5150", "Liquid," Preston,"
"Cappel" and "SMP" branded products. Until its disposition in October 1996, CAS
marketed entry-level snowboards and related products under various brand names,
including "Marvel," "Slim," "Burnt," and "PL" and on a private label basis,
primarily to regional sporting goods stores and large-format sporting goods
retailers. In addition, CAS sold snowboards and related products on an OEM basis
to other snowboard companies and bought excess snowboard and sporting goods
inventories from manufacturers and sold such products to retailers throughout
the world. The OEM and excess inventory portions of the CAS business were sold
in October 1996 while the branded and private label portions of the business
were retained by the Company and are being operated as the Company's Special
Products Group ("SPG").

In September 1996, the Company reorganized its businesses along functional
lines and created six operating divisions: Winter Sports, Apparel,
International, Manufacturing, Finance and Administration. The Winter Sports
division includes the Company's development efforts for snowboards, boots,
bindings and skateboards (collectively, "hard goods") and the marketing and sale
of those products in the United States. Winter Sports includes the Company's SPG
business, which sells its products worldwide. The Apparel division includes the
development of apparel and accessories (collectively, "soft goods") and the
marketing and sale of such products in the United States. The International
division, which includes Ride Canada, is primarily responsible for sales and
marketing of the Company's products (except for SPG products) outside of the
United States. The Manufacturing division, which includes Ride Manufacturing,
manages the Company's snowboard and snowboard binding production as well as
certain product research and development. The Finance division encompasses the
finance, accounting, legal, credit and MIS functions of the Company. The

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Administration division includes the Company's distribution, customer service,
human resources and inventory control functions.

INDUSTRY BACKGROUND

Tracing its roots to surfing and skateboarding, snowboarding was invented
in the late 1970's. The first products available commercially were
unsophisticated in design, were made almost entirely by small "backyard"
manufacturers and were meant largely for use outside of established ski areas.
In the early 1990's, snowboard design advanced to higher performance standards
and the sport began to attract broader demographic participation.

The Company believes that the growth of snowboarding is attributable in
large part to advantages that the sport holds over alpine skiing. Many people
find that snowboarding not only is more natural and easier to learn than alpine
skiing, but also provides a greater degree of excitement over more diverse
terrain. Snowboarding may also involve less risk of knee injury than alpine
skiing because both of the rider's feet are mounted on a single board. For many,
snowboarding equipment is also less cumbersome and more comfortable than alpine
ski equipment; poles are unnecessary and the boots are softer and lighter than
ski boots.

While the majority of snowboarders are males between the ages of 13 and 24,
the sport is growing in popularity among females and older sports enthusiasts.
In 1996, industry statistics show the average age of the sport's participants
increased from 21 years to 24 years. Ski resorts are taking an active role in
the development and promotion of the sport. In 1996, approximately 96% of the
ski areas in the United States offered snowboarding. Consistent with the sport's
increasing appeal, the International Olympic Committee has designated
snowboarding as a full medal event at the 1998 Winter Olympic Games in Nagano,
Japan.

The snowboard industry today is highly fragmented with scores of
competitors. The Company anticipates the industry may experience consolidation
in the future as weaker brands are either absorbed or cease business operations.
The Company believes that a single competitor has a significant market share,
four companies (including the Company) have smaller but substantial market
shares and over 100 other companies share in the remainder of the market.
Historically, most large ski companies have had limited success in penetrating
the snowboard market with their established ski brands. The Company anticipates
this condition may change, however, depending on a number of factors, including
without limitation, the effectiveness of the ski companies' marketing campaigns,
cross-over skiers entering the sport and snowboarders' acceptance of those
companies' brands.

Industry data has shown growth in retail sales of snowboards, boots and
bindings in North America. The Company believes similar retail growth occurred
in the European and Japanese markets. However, the Company believes industry
sales at the wholesale level have outpaced retail growth, creating a current
oversupply of product. This condition is especially prevalent in the Japanese
market. The Company anticipates current oversupply conditions may adversely
affect worldwide sales growth opportunities in the 1997-1998 season.

BUSINESS STRATEGY

The Company's goal is to capture a significant share of the market for
snowboards and related products. The key elements of the Company's strategy are
as follows:

Brand Marketing. The Company believes that a strong brand focus is critical
for long-term success in the snowboard industry. Beginning in 1997, the Company
is positioning the "Ride" brand to be a full-line supplier of technical, high
quality snowboards, boots, bindings, apparel and accessories rather than as a
snowboard-only brand. Boots, formerly offered by the Company under the "Preston"
brand, will now bear the "Ride" brand. "Preston" brand bindings will bear the
"Ride" logo and the "Ride Manufactured" tagline. The Company also introduced a
high-end "Ride" brand binding in 1997. "Cappel" apparel will also bear the
"Ride" logo and the "Ride Manufactured" tagline. The Company believes that
extending the "Ride" name into these other related areas and focusing more
marketing dollars on this brand will not only increase brand awareness and
strengthen the "Ride" image but provide efficiencies in marketing and selling
efforts. The

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Company will continue to market and sell its "5150", "SMP," and "Liquid" brands,
which the Company believes have solid followings.

The Company's marketing strategy promotes "Ride" and "5150" as aggressive,
counter-culture brands on the cutting edge of snowboarding. The Company focuses
its advertising on major industry magazines, as well as "underground"
publications, in North America, Europe and Japan. A key element of the Company's
marketing strategy is the involvement of the "Ride," "5150" and "Liquid"
professional snowboard teams in numerous snowboarding events and promotions.

Targeted Distribution. The Company employs a tiered distribution strategy,
with distinct brands targeted at each major distribution channel within the
snowboard industry. At the high end of the snowboard market, the Company
distributes products primarily to specialty snowboard and ski shops under its
premium "Ride" and "5150" brand names. The "Ride" and "5150" brand distribution
strategy is centered around a policy of limited distribution through carefully
selected snowboard-oriented retailers. For 1997, the Company has added lower
price points to the "Ride" line-up in order to capture a larger share of the
market with the core brand. The Company's "Liquid" brand snowboards are aimed at
middle price points with more conservative graphics and product designs, and are
distributed through a wider network of snowboard and sporting goods retailers as
well as certain large-format sporting goods retailers. SPG brands are aimed at
lower price-points and are distributed through large-format sporting goods
retailers, which cater to the mainstream consumer market.

Innovative Product Design. The Company's progressive image is complemented
by its product development strategy. Unlike many other snowboard companies,
which rely largely on third-party design technicians and engineers, the Company
uses its in-house product development team in collaboration with the Company's
team riders to develop high-performance products that incorporate the most
advanced snowboarding technology. The Company has introduced several innovative
products and designs, such as aircraft-grade aluminum binding components and
Thermal(TM) Cap snowboard construction. For 1997, the Company introduced three
new snowboard construction styles, including the "Misty Cap" whose wood core is
up to 35% lighter than prior year offerings. The Company continues to develop
additional designs and products to enhance riding performance and the stature of
the Company's brand names.

Manufacturing Capability. In order to improve its margins, reduce reliance
on suppliers and enhance product development efforts, the Company acquired Ride
Manufacturing in September 1995. In 1996, approximately 45% of the Company's
branded snowboards were produced in this facility, compared to just 10% in 1995.
The Company's 1997 goal is to produce 65% of its snowboards in-house at the Ride
Manufacturing factory, with additional increases expected in 1998.

Soft Goods Business. The Company believes the soft goods business
represents a significant growth opportunity. In order to take advantage of this
potential growth area, the Company bought SMP in 1995 and has developed the
"Cappel" brand apparel line. For 1997, the "Cappel" brand will be tied more
directly to the "Ride" brand to benefit from the "Ride" technical image, to more
efficiently utilize marketing resources and to extend the "Ride" brand into the
soft goods side of the business. The Company is also placing more emphasis on
the accessories business (gloves, bags, hats, etc.) as a means of extending its
brands and growing its revenue base.

International Sales and Marketing. The Company believes that markets
outside of the United States represent opportunities for growth. The Company's
International division was created to more effectively manage and develop these
markets. Ride Canada, which acts as the Company's Canadian distributor of
"Ride," "Liquid," "Preston," "Cappel" and "SMP" was formed in 1996 to maximize
growth opportunities in Canada with more focused marketing and sales efforts.
The International division is also focusing its efforts on the European market
by partnering with its distributors on team, advertising and promotional areas
to strengthen the Company's brands.

PRODUCTS

The Company offers a full line of snowboards, bindings, boots, accessories
and snowboard-related apparel at a variety of price-points.

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SNOWBOARDS

The following table details the Company's tiered distribution and brand
marketing strategy:

<TABLE>
<CAPTION>
RIDE & 5150 LIQUID SPG BRANDS
-------------------- --------------- ---------------
<S> <C> <C> <C>
Suggested $199 - $499 $199 - $375 $199 - $249
Retail Price
Primary Specialty Snowboard Regional and Large-Format
Retail
Outlets and Ski Shops Large-Format Sporting Goods
Sporting Goods Retailers
Retailers
</TABLE>

"Ride" and "5150." Designed for high performance, "Ride" and "5150"
snowboards incorporate the most advanced technology and have historically been
positioned at the high end of the snowboard market. For 1997, additional price
point snowboards have been added to the "Ride" line-up to target additional
levels of snowboard enthusiasts. The Company's most advanced snowboards are
offered exclusively under the "Ride" label. Suggested retail prices range from
$199 to $499. The Company currently offers 55 sizes of snowboards under the
"Ride" brand name within ten board series. The Company currently offers 20 sizes
of snowboards under the "5150" brand name within four board series.

"Liquid." Introduced in 1994, "Liquid" snowboards are aimed at riders who
require a quality board at a competitive price. Suggested retail prices for the
6 "Liquid" series in 27 sizes range from $199 to $375. Incorporating proven
technology, these snowboards are suitable for advanced snowboarders as well as
novices.

SPG Brands. SPG offers a line of snowboards which include the "Mercury,"
"Burnt," "PL," "Tucker" and "Wicked" brands. These snowboards retail from
approximately $199 to $249 and are targeted at price-sensitive beginning and
intermediate riders. The Company also markets snowboards with trademarks and
copyrighted images licensed from Marvel Comics.

BINDINGS

The Company and its SPG unit offer snowboard bindings primarily under the
"Preston" and "Slim" brand names, respectively. "Preston" bindings come in four
models -- "EX," "LX," "LS" and "KS" -- that are targeted to different levels of
experience and performance. Beginning in 1997, the "Preston" brand will also
bear the "Ride" logo and will be directly associated with the "Ride" brand via
the tagline "Ride Manufactured." "Preston" bindings retail at a range of $75 to
$155. "Slim" bindings retail at a range of $60 to $100. For 1997, the Company
has introduced a new high end "Ride" pro model binding which retails for $170.
The mounting features of the Company's bindings are compatible with the
Company's snowboards and those offered by virtually all competitors.

BOOTS

The Company currently offers five snowboard boots under the "Ride" brand
name for beginner through expert level riders. "Ride" boots retail from $129 to
$250. SPG offers four snowboard boots under the "Custom" brand name which retail
from $60 to $120.

APPAREL

The Company believes that clothing is an important element of the
snowboarding subculture and that the demand for snowboarding apparel will grow
with the popularity of the sport. In addition, snowboard apparel has crossed
over into everyday fashion, thereby increasing the potential market for the
Company's apparel products.

"SMP" is the brand of apparel developed by the Company's San Diego-based
SMP Clothing subsidiary. The product line includes clothing and accessory items
needed for snowboarding, surfing, skateboarding, and motocross, as well as
pants, shirts, sweaters and other street and beach wear. "Cappel" is a line of
high technology snowboarding and street apparel developed in 1993. The
merchandise includes snowboard parkas, jackets, pants and hats, as well as knit
shirts and sweaters for everyday wear. Beginning in 1997, the "Cappel"

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brand will also bear the "Ride" logo and will be directly associated with the
"Ride" brand via the tagline "Ride Manufactured." "Cappel" brand apparel is
geared more towards the technical end of the snowboard apparel business, while
SMP focuses more on the fashion aspects of the business.

ACCESSORIES

The Company offers a variety of snowboarding accessories, including gloves,
bags, packs, hats and caps under the "Ride," "5150," "Liquid," "Preston" and
"Cappel" brands. In addition, the Company offers a line of "Slim" snowboard
tools for adjustment of snowboard bindings and maintenance during use.

The following table sets forth the contribution to net sales (in thousands)
attributable to each of the Company's product groups for the year ended December
31, 1996.

<TABLE>
<S> <C> <C>
Snowboards.................................................. $39,926 53%
Bindings.................................................... 12,241 16
Boots....................................................... 4,458 6
Apparel..................................................... 13,597 18
Accessories, skate and other................................ 5,506 7
------- ---
Net sales................................................... $75,728 100%
======= ===
</TABLE>

DISTRIBUTION

The Company's worldwide distribution strategy is centered around a policy
of limited distribution and market segmentation. Although more rapid sales
growth could be achieved in the short term by selling all brands across all
distribution channels, management believes continued growth and brand loyalty
can be best achieved by selling each of the Company's brands primarily through
those retailers that, in management's judgment, best serve the market segment to
which the particular brand is targeted.

The three main retail channels of distribution for the Company's branded
products in North America are as follows:

Specialty Snowboard and Ski Shops. These retailers primarily sell the
Company's premium and mid-priced snowboards, including "Ride," and "5150",
"Preston" bindings, "Ride" boots and "Cappel" and "SMP" apparel. These shops
cater to experienced riders, a majority of whom are repeat buyers, as well as
intermediate riders, cross-over skiers and other winter sports enthusiasts.

Regional Sporting Goods Stores. These stores primarily sell the Company's
"Liquid" and, to a lesser extent, SPG-branded snowboards, as well as "Custom"
boots and "Preston" and "Slim" bindings. Regional sporting goods stores target
customers who are less experienced or first-time snowboarders.

Large-Format Sporting Goods Retailers. These retailers primarily offer the
Company's entry-level snowboards and related products, including SPG-branded
snowboards, certain "Liquid" snowboard models, as well as "Custom " boots,
"Slim" bindings and entry-level "Preston" bindings. Large-format sporting goods
retailers sell primarily to first-time and price-sensitive buyers.

In North America, the Company distributes its branded products to retailers
through its independent sales representatives and a limited number of employee
sales representatives. Outside North America, the Company sells its products
exclusively to independent distributors that in turn market and sell such
products to retailers in those markets. The Company through its International
and Apparel divisions works closely with its international distributors to
promote its policies of limited distribution and market segmentation worldwide.

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SPG distributes its products worldwide through its in-house sales force. The
Company's North American and export sales (in thousands) are set forth below for
the year ended December 31, 1996.

<TABLE>
<S> <C> <C>
United States............................................... $31,744 42%
Japan....................................................... 27,996 37
Other....................................................... 15,988 21
------- ---
Net sales................................................... $75,728 100%
======= ===
</TABLE>

Two of the Company's Japanese distributors respectively accounted for 17%
and 12% of 1996 net sales. Given the current excess inventory environment in
Japan, the Company expects sales in that market to decrease in 1997. See "Risk
Factors - Competition and Risks of International Business."

MARKETING

The Company established its flagship "Ride" brand name as an aggressive,
counterculture brand on the cutting edge of snowboarding. The Company has
established different brand names for other target markets and seeks to increase
consumer awareness of these brands without jeopardizing the "Ride" brand image.
An important element of this strategy is the Company's "Ride," "5150," "Liquid"
and "SMP" professional snowboard riders, who are prominently featured in the
Company's print advertising in leading industry magazines and several
"underground" snow/surf/skate publications. Snowboarding approximately 250 days
a year, the Company's professional teams provide significant brand exposure
through photographic and editorial coverage in major industry magazines and at
organized snowboarding events.

Through its "grass roots" programs, the Company sponsors top local riders
in various markets with free products. Additionally, the Company's product demo
program, "Ride More Talk Less," provides trial rides to customers and potential
customers at ski areas around the country through the Company's five demo vans.
These programs are designed to improve the visibility of the Company's products
while enhancing the high-performance reputation of the "Ride," "5150" and
"Liquid" brands. The Company also markets its snowboarding products through
regular attendance at winter sports trade shows. The Company anticipates the
expected participation of certain team riders in the 1998 Winter Olympics
snowboarding events will further improve the visibility and image of the
Company's products.

MANUFACTURING

The Company's September 1995 acquisition of Ride Manufacturing has expanded
the Company's snowboard development and production capabilities. In 1996, the
Company manufactured approximately 45% of the snowboards it sold worldwide in
the Ride Manufacturing facility. The Company expects to grow that number in 1997
to approximately 65%. In 1996, the Company devoted the majority of the Ride
Manufacturing production efforts toward construction of "Ride," "5150" and
"Liquid" brand snowboards, and a limited number of OEM snowboards. The Company
expects a similar production mix in 1997 with the addition of certain
SPG-branded snowboards.

PRODUCT DEVELOPMENT

The Company's strategy is to be the industry leader in technologically
innovative product design. Unlike many other snowboard companies, which rely
largely on third-party design technicians and engineers, the Company uses its
in-house product development teams, in collaboration with its team riders and
product testers, to develop high-performance products that incorporate advanced
snowboard, boot and binding construction and product technology. The Company
continues to make advances in the use of light weight, durable materials in the
construction of its snowboards. A pioneer in the use of aircraft-grade aluminum
in bindings, the Company's binding products lead the industry in performance and
durability. Approximately $39,000, $217,000 and $417,000 were specifically
allocated to research and development expenses in 1994, 1995 and 1996,
respectively. In addition to direct product development expenditures, the
Company's research efforts benefit from extensive testing of products by the
Company's team riders. Furthermore, the Company's product development programs
are augmented by research and development efforts contributed by the

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Company's principal suppliers. The Company expects to spend comparable amounts
in 1997 on research and development efforts.

SUPPLIERS

Pale Ski & Sport GmbH & Co. KG of Austria ("Pale") was the Company's
largest third-party manufacturer of snowboards, producing approximately 34% of
the Company's snowboards in 1996. For 1997, the Company anticipates decreasing
its external sourcing of snowboards from Pale and other third party
manufacturers as it increases its in-house production levels. The Company
assembled all of its Preston bindings in 1996 in its Preston, Washington
facility from parts sourced through a variety of U.S. and foreign suppliers. For
1997, the Company moved its binding production offshore to a single supplier to
capitalize on lower cost opportunities. The Company's apparel, boot and
accessory products will continue to be sourced through a variety of U.S. and
foreign manufacturers.

Although there remains the potential for shortages in certain raw materials
used in the manufacture of its various products, the Company believes that its
current suppliers will be in a position to meet its needs for snowboards,
snowboard boots, bindings and apparel through the 1997-98 season. See "Risk
Factors -- Dependence on Outside Manufacturers."

COMPETITION

The snowboarding business is highly competitive and has relatively few
technological or manufacturing barriers to entry. The Company's technology is
generally not proprietary. The Company believes that Burton Snowboards has the
leading global market share, four companies (including the Company) have smaller
but substantial market shares and over 100 other manufacturers, including large
ski manufacturers, share in the remainder of the market. The Company competes
with a number of established manufacturers and distributors whose brand names
enjoy recognition that exceeds that of the Company's brand names. In addition,
there are several manufacturers and large ski and sporting goods companies that,
although they are not currently active in the snowboard business, could pose a
significant competitive threat to the Company by developing new snowboard brands
or acquiring other snowboard companies. The Company may also face competition
from new entrants in each of the Company's other product categories. In all its
product categories, the Company competes with numerous manufacturers and
distributors that have significantly greater financial, distribution,
advertising and marketing resources than the Company. Although the Company
believes that its products are well positioned to compete successfully in their
respective categories, there can be no assurance that the Company will be able
to continue to compete successfully in the future. See "Risk
Factors -- Competition."

INTELLECTUAL PROPERTY

The Company aggressively seeks to protect its intellectual property rights
such as trademarks, product designs and new concepts. These rights are protected
through trademark registrations, the maintenance of trade secrets, the
development of trade dress and, when necessary, appropriate action against those
who are, in the Company's opinion, unfairly competing. In addition, the Company
is seeking and will continue to seek in the future where appropriate, patent
protection for product function and design innovations.

The Company has applied for or been granted trademark registration in the
United States and certain foreign jurisdictions for "Ride," "Liquid," "5150,"
"Preston," "Cappel" and "SMP." The Company also claims rights to the foregoing
and to various other trademarks arising out of use of such marks. Although the
Company believes these marks are enforceable, there can be no assurance that any
of these trademarks are enforceable or are otherwise capable of protecting the
goodwill associated with them. The Company believes that the failure to protect
any of these trademarks could have a material adverse effect on the Company's
business. See "Risk Factors -- Limited Protection of Technology."

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RECENT DEVELOPMENTS

Inventory Write-down and Restructuring Charges. In December 1996, the
Company's Board of Directors approved a plan to write down excess inventories
and restructure the Company's manufacturing operations. Due primarily to
canceled commitments from the Company's principal Japanese distributor and an
industry oversupply of snowboards, the Company recognized a $6.5 million
write-down of its inventories. In addition, the Company recognized a $2.5
million restructuring charge in connection with moving the Company's binding
production offshore and the withdrawal of snowboard production from two outside
snowboard manufacturers used in 1996. The primary components of this charge are
write-offs of abandoned equipment, tooling and leasehold improvements,
cancellation fees paid to U.S. vendors and future lease costs.

Class Action Lawsuit. On March 14, 1997, a securities class action
complaint (the "Complaint") was filed against the Company and four of its
directors and former directors in the United States District Court for the
Western District of Washington at Seattle. The Complaint was filed on behalf of
parties who purchased shares of the Company's common stock during the period
beginning August 10, 1995 and ending on December 30, 1996. The Complaint alleges
the Company and its founders issued misleading reports and information to the
investing public. The Company intends to vigorously defend this lawsuit.

EMPLOYEES

As of March 10, 1997, the Company had 286 full-time (including seasonal)
employees. None of the Company's employees are subject to a collective
bargaining agreement. The Company considers its employee relations to be good.

RISK FACTORS

Competition. The snowboarding business is highly competitive and has
relatively few technological or manufacturing barriers to entry. The Company's
technology is generally not proprietary. The Company competes with a number of
established manufacturers and distributors whose brand names enjoy recognition
that exceeds that of the Company's brand names. In addition, there are several
manufacturers and large ski and sporting goods companies that, although they are
currently engaged in only limited activity in the snowboard business or not at
all, could pose a significant competitive threat to the Company by developing
new snowboard brands or acquiring other snowboard companies. The Company may
also face competition from new entrants in each of the Company's other product
categories. In all its product categories, the Company competes with numerous
manufacturers and distributors that have significantly greater financial,
distribution, advertising and marketing resources than the Company. Although the
Company believes that its products are well positioned to compete successfully
in their respective categories, there can be no assurance that the Company will
continue to compete successfully in the future. Moreover, future events
affecting the Company or its competitors, consumer buying patterns, the
introduction of new products by the Company or its competitors, weather patterns
that may affect the demand for the Company's products, product supply
fluctuations in the Company's markets, regulations affecting the Company's
products, and the entry of additional competitors in the Company's markets,
among other factors, could result in insufficient or excess inventory levels,
missed market opportunities or higher markdowns, any of which would have a
material adverse effect on the Company's financial condition and results of
operations.

Industry and Product Concentration. The Company's current product offerings
consist predominantly of snowboards and related products. As a result of this
concentration, the Company's future success will depend in large part on the
continued growth of the snowboard market. Snowboarding is a relatively new
sport, and there can be no assurance that the sport will continue to grow at the
rate experienced in recent years, or that its popularity will not decline.
Moreover, the market for snowboards is characterized largely by image-conscious,
brand-driven younger consumers, and the Company's future success depends on its
ability to regularly update its products and maintain its progressive,
cutting-edge image, particularly with respect to its flagship "Ride" brand. Any
failure by the Company to accurately predict and target future trends or to
maintain its progressive image could have a material adverse effect on its
results of operations. The Company believes that controlling

9
<PAGE> 10

its channels of distribution is critical to maintaining the premium image of its
brands. While the Company can control the initial wholesale distribution of its
products, it has limited ability to monitor or control the resale of its
products through alternative channels. Failure to adequately control
distribution of its products could have an adverse effect on its brand image and
sales which in turn could have a material impact on the Company's financial
position and results of operations. In addition, supply and demand imbalances in
the snowboard industry could also have a material adverse effect on the
Company's growth prospects, financial condition and results of operations. The
Company's sales growth has been attributable in part to its introduction of new
products. The Company believes that its future success will depend, among other
things, on its continued ability to introduce innovative, well-received
products, and there can be no assurance of its ability to do so. In addition, a
major innovation by one or more of the Company's competitors could have a
negative effect on the sales of one or more of the Company's product lines or
brands.

Dependence on Third-Party Selling Efforts. The Company primarily relies on
third parties to sell, and in some cases to distribute, its products to
retailers. In the United States and Canada, the Company generally uses
independent sales representatives, who work under contract. Generally, such
contracts may be terminated by either party upon 30 days' notice.
Internationally, the Company uses distributors under long- term contractual
arrangements. Loss of services, poor performance or difficulties encountered
with any of the Company's independent sales representatives or distributors
could each have a material adverse effect on the Company's results of
operations. The Company's principal Japanese distributor accounted for
approximately 17% of the Company's net sales in 1996. A second distributor in
Japan accounted for 12% of 1996 net sales. The Company believes there is
currently a significant over-supply of snowboard-related products at the
distribution level in Japan. Due to performance considerations, the Company
believes is unlikely that it will continue its relationship with its principal
distributor in 1997 and may seek to find a new distributor or sell certain
products directly to Japanese retailers. The loss of the services of either of
the Company's principal Japanese distributors without replacement of such
services or continued over-supply of products in Japan could have a material
adverse effect on the Company's results of operations.

Excess Inventory. At December 31, 1996, the Company took a $6.5 million
write-down in its inventories. The Company plans to sell this product during
1997 at reduced prices primarily through its normal distribution channels. The
sale of this excess product could negatively effect the Company's ability to
sell new product into these same distribution channels which could have a
material adverse impact on the Company's future operating results and financial
position.

Seasonality; Fluctuations in Quarterly Operating Results. Because
snowboarding traditionally is a winter sport and the Company's sales are
concentrated in the northern hemisphere, sales of the Company's products
predominantly occur in the third and fourth quarters. Net sales in the second
half of 1996 accounted for approximately 65% of net sales for the full year. The
Company expects that for the foreseeable future the majority of net sales will
continue to be generated in the third and fourth quarters. Since much of the
Company's operating expense is fixed in nature and is budgeted based on higher
third and fourth quarter net sales, a decline in net sales relative to internal
expectations would have a significant adverse effect on results of operations.
Because relatively lower net sales are realized in the first and second quarters
of each year, the Company expects to incur operating losses in such quarters for
the foreseeable future. Apart from seasonal factors, demand for the Company's
products fluctuates in response to consumer buying patterns, weather conditions,
discretionary spending habits, general economic conditions in the United States
and abroad, product supply fluctuations in the United States and abroad and
other factors. In addition to seasonal fluctuations, the Company's operating
results fluctuate from quarter to quarter as a result of the timing of order
shipments, new product introductions and new retailer openings. Furthermore, the
Company's gross margins will fluctuate with product mix, the timing of product
price adjustments, the mix of international and domestic sales and in-house
production cost fluctuations. The Company's operating results for any interim
period may not be indicative of the results for the entire year. While the
Company expects to experience future growth, it is unlikely that the Company's
growth will continue at its historical rate, and there can be no assurance that
the Company can continue to grow sales or maintain profitability.

Legal Proceedings. The Company is engaged in legal proceedings against
Switch Manufacturing, Inc. and Wide Ride, Inc. alleging patent and trademark
infringement by those companies, respectively. While the

10
<PAGE> 11

Company intends to vigorously prosecute both lawsuits, there can be no assurance
that the Company will prevail in either action. An award of damages pursuant to
Switch's counterclaims, an adverse ruling in the Wide Ride case, or the
expenditure of significant sums in the prosecution of either action could have a
material adverse effect on the Company's financial condition and results of
operations. On March 14, 1997, a shareholder filed a lawsuit against the Company
and four of its current or former officers and directors, styled Murray v. Ride,
Inc. et al The lawsuit alleges violations of certain federal securities laws and
state laws, and purports to seek damages on behalf of a class of shareholders
who purchased the Company's common stock during the period of August 10, 1995
through December 30, 1996. The Company intends to defend itself vigorously,
however, there can be no assurance the Company will be successful in its defense
against the action. An award of damages against the Company in excess of
applicable insurance, if any, the expenditure of significant sums in the defense
thereof or diversion of management's attention from other business concerns,
could each have a material adverse effect on the Company's financial condition
and results of operations.

Acquisition-Related Risks. In 1995, the Company acquired Ride
Manufacturing, a manufacturer of snowboards, 5150 Snowboards, Inc., a marketer
of snowboards, and SMP an apparel supplier. The Company may, when and if the
opportunity arises, acquire other businesses involved in activities or having
product-lines that are compatible with the Company's business. Acquisitions
involve numerous risks, including difficulties in the assimilation of the
operations, technologies and products of the acquired companies, the diversion
of management's attention from other business concerns, risks associated with
entering markets or conducting operations with which the Company has no or
limited direct prior experience, and the potential loss of key employees of the
acquired company. Moreover, there can be no assurance that the anticipated
benefits of an acquisition will be realized. The acquisitions described above
have placed significant demands on the Company's management, working capital and
financial and management control systems. Future acquisitions by the Company
could result in potentially dilutive issuances of equity securities, the
incurrence of debt and contingent liabilities and amortization expenses related
to goodwill and other intangible assets, all of which could materially adversely
affect the Company's financial condition and results of operations.

Manufacturing. As a manufacturer of certain of the Company's products, the
Company continually faces risks regarding the availability and cost of raw
materials and labor, the potential need for additional capital equipment,
increased manufacturing costs, potential organized labor issues, plant and
equipment obsolescence, worker's safety and compensation issues and quality
control. A disruption in the Company's production or distribution could have a
material adverse effect on the Company's results of operations. Like certain of
the Company's suppliers, the Company has experienced delays in the receipt of
raw materials used in the manufacturing process.

Risks of International Business. The Company's business is subject to the
risks generally associated with doing business internationally, such as
fluctuations in exchange rates, foreign governmental regulation, product
distribution patterns and changes in economic conditions. These factors, among
others, could influence the Company's ability to sell its products in
international markets, as well as its ability to procure products or components.
The Company purchases many of its products and components from sources outside
of the United States, with purchase prices often denominated in foreign
currencies. Although the Company enters into certain currency-hedging
arrangements, unanticipated changes in the value of the U.S. dollar relative to
that of certain foreign currencies could have a material adverse effect on the
Company's results of operations. In addition, the Company's business is subject
to the risks associated with the imposition of legislation and regulation
relating to imports, including quotas, duties or taxes and other charges,
restrictions or retaliatory actions on imports to the United States and other
countries in which the Company's products are sold or manufactured. The Company
cannot predict whether the foregoing legislation and regulation will be imposed
by the United States or other countries, nor can it predict what effect such
imposition would have on its business or results of operations.

Product Liability. The Company's products are often used in relatively
high-risk recreational settings. Consequently, the Company is exposed to the
risk of product liability claims in the event that users of the Company's
products are injured in connection with such use. In many cases, users of the
Company's products may engage in imprudent or even reckless behavior while using
such products, thereby increasing the risk of injury. The Company maintains
product liability, general liability and excess liability insurance coverage.

11
<PAGE> 12

There can be no assurance that such coverages will continue to be available on
acceptable terms, or will be available in sufficient amounts to cover one or
more large claims, or that the insurer will not disclaim coverage as to any
future claim. The successful assertion of one or more large claims against the
Company that exceed available insurance coverage or changes in the Company's
insurance policies, including premium increases or the imposition of large
deductible or co-insurance requirements, could have a material adverse effect on
the Company's financial condition and results of operations.

Dependence on Key Individuals; Conflicts of Interest. The Company's future
success will be highly dependent on the services of its management team. The
loss of the services of any of the Company's officers could have a material
adverse effect on the Company's business. Further, the Company believes that the
market for key personnel in its industry is highly competitive. There can be no
assurance that the Company will be able to attract and retain key personnel with
the skills and expertise necessary to manage the Company's business, both in the
United States and abroad. Although Robert E. Hall, the Company's President and
Chief Executive Officer commits his full time to the affairs of the Company, he
continues to have business interests outside of the Company. Accordingly, he may
encounter conflicts of interest in allocating his attention among various
business activities.

Limited Protection of Technology. Most of the Company's products are not
based on proprietary technology. As a result, there are relatively few
technological or other barriers to entry, and the Company's products may be
replicated by competitors. There can be no assurance that current or future
competitors will not offer products substantially identical to the Company's
products, or competing products to customers at lower prices. The Company has
filed for trademark and patent registration in the United States and certain
foreign countries for certain of the Company's trademarks and product designs
and/or functions. There can be no assurance that trademark or patent protection,
as the case may be, will be granted in any or all of the countries in which
applications are currently pending, or granted on the breadth of the current
description of goods or designs. The Company has substantial international
sales; the laws of foreign countries treat the protection of proprietary rights
and intellectual property differently from, and may not protect the Company's
proprietary or intellectual property rights to the same extent as do, the laws
in the United States.

Volatility of Stock Price. The market price of the Common Stock has
fluctuated substantially in the past two years. There can be no assurance that
the market price of the Common Stock will not significantly fluctuate from its
current level. Future announcements concerning the Company or its competitors,
quarterly variations in operating results, the introduction of new products or
changes in product pricing policies by the Company or its competitors, weather
patterns that may be perceived to affect the demand for the Company's products,
changes in earnings estimates by analysts, changes in accounting policies,
future inventory supply situations and events in current or future legal
proceedings, among other factors, could cause the market price of the Common
Stock to fluctuate substantially. In addition, stock markets have experienced
extreme price and volume volatility in recent years. This volatility has had a
substantial effect on the market prices of securities of many smaller public
companies for reasons frequently unrelated to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of the Company's Common Stock.

Dependence on Outside Manufacturers. Many of the Company's products are
manufactured by outside suppliers. For 1997, the Company expects approximately
35% of its snowboards to be manufactured by third party suppliers. Also in 1997
it is expected that a single supplier will be manufacturing all of the Company's
"Preston" and SPG-branded binding products from component parts manufactured by
that and other suppliers. Both of the Company's apparel lines and its snowboard
boots are manufactured to the Company's specifications by independent
contractors. With recent exception, the Company generally does not have
contracts with its manufacturing sources and competes with other companies for
the production capacity of certain manufacturers. Although the Company believes
that it has established close relationships with its principal manufacturing
sources, its future success may depend on its ability to maintain such
relationships. If the Company's relationship with any of its snowboard, boot,
apparel, binding or other product manufacturers were interrupted, the Company
could find it difficult to locate another source with sufficient production
capacity to meet the Company's short-term needs, and the Company could miss the
retailing season for that product. Since the establishment of new manufacturing
relationships involves numerous uncertainties,

12
<PAGE> 13

including those relating to payment terms, costs of manufacturing, adequacy of
manufacturing capacity, quality control and timeliness of delivery, the Company
is unable to predict whether such relationships would be on terms that the
Company regards as satisfactory. The Company would likely experience increased
costs, as well as substantial disruption and resulting loss of sales, should an
unexpected change in snowboard, boot, apparel, binding or other product
suppliers become necessary. In addition, growth in the snowboard industry and
other factors have resulted in shortages and, in some cases, price increases in
certain raw materials necessary for the production of the Company's products,
and such shortages or price increases may recur. At times, the Company has also
experienced delays in the receipt of products from its suppliers as a result of
shortages in raw materials, including fiberglass and P-Tex. Although the Company
believes that it is well-positioned to minimize the impact of raw material
shortages and delays in supplier shipments, such shortages and delays could have
a material adverse affect on the Company's business, financial condition and
results of operations.

Limited Operating History; Ability to Manage Growth. Since its inception in
September 1992, the Company has experienced rapid and substantial growth in its
net sales, operations and employee base, and has undergone substantial changes
in its business that have placed significant demands on the Company's
management, working capital and financial and management control systems.
Failure to continue to improve and upgrade the Company's operating, management
and financial control systems or difficulties encountered during such
improvements and upgrades could adversely affect the Company's business and
results of operations. There can be no assurance that its systems, controls or
personnel will be adequate to meet the demands of future growth. Inadequacies in
these areas could have a material adverse effect on the Company's business,
financial condition and results of operations.

Risks Associated With the Apparel Business. In late 1993, the Company
introduced its "Cappel" line of snowboarding and street apparel. In October
1995, the Company acquired "SMP," a line of snowboard, skate, surf, street and
motocross apparel. Fashion trends are volatile, and there can be no assurance
that the Company will accurately anticipate shifts in fashion trends and adjust
its merchandise mix to appeal to changing consumer tastes in a timely manner. If
the Company is unsuccessful in responding to changes in fashion trends or market
demand, the Company could experience insufficient or excess inventory levels,
missed market opportunities or higher markdowns, any of which would have a
material adverse effect on the Company's financial condition and results of
operations.

Potential Adverse Effect of Environmental Regulations. The Company is
subject to federal, state and local governmental regulations relating to the
storage, use, discharge and disposal of toxic, volatile or otherwise hazardous
chemicals used in its manufacturing process. There can be no assurance that
changes in environmental regulations or in the kinds of raw materials used by
the Company will not impose the need for additional capital equipment or other
requirements. Any failure by the Company to control the use of, or adequately
restrict the discharge of, hazardous substances under present or future
regulations could subject the Company to substantial liability or could cause
its manufacturing operations to be suspended. Such liability or suspension of
manufacturing operations could have a material adverse effect on the Company's
results of operations.

Antitakeover Effects. The Company's Restated Articles of Incorporation
authorize the issuance of 10,000,000 shares of "blank check" Preferred Stock
with such designations, rights and preferences as may be determined from time to
time by the Board of Directors. The Company has designated 100,000 such shares
as Series A Preferred Stock and, as of the date of this Prospectus, there were
100,000 shares of Series A Preferred Stock outstanding. Holders of Series A
Preferred Stock are not entitled to vote on any matters upon which the holders
of Common Stock have the right to vote, except with respect to special matters
on which the holders of the Series A Preferred Stock are entitled to vote as a
class. The Board of Directors may, without shareholder approval, issue
additional Preferred Stock with dividend, liquidation, conversion, voting or
other rights that could adversely affect the voting power and other rights of
the holders of the Common Stock. In the event of additional issuances, the
Preferred Stock could be utilized, under certain conditions, as a method of
delaying, deterring or preventing a change in control of the Company. Although
the Company has no current plans to issue any additional shares of Preferred
Stock, there can be no assurance that it will not do so in the future.

13
<PAGE> 14

ITEM 2. PROPERTIES

Ride Snowboards leases approximately 82,400 square feet of office and
warehouse space in Preston, Washington, under a lease that expires December 31,
2003. The Company is attempting to sublease approximately 13,400 square feet of
this facility formerly used for assembly of snowboard bindings.

Ride Canada leases approximately 13,000 square feet of warehouse and office
space in Etobicoke, Ontario, pursuant to a lease that expires on November 30,
2001.

Ride Manufacturing occupies a 25,000 square foot manufacturing and office
facility in Corona California under a lease expiring August 31, 2001. Ride
Manufacturing also leases 19,925 feet of warehouse space in Corona pursuant to a
lease that expires March 31, 1998.

SMP leases approximately 26,250 square feet of office, warehouse and light
manufacturing space in Chula Vista, California, pursuant to a lease that expires
June 30, 1999.

The Company anticipates that its current facilities will satisfy its needs
through at least 1997.

ITEM 3. LEGAL PROCEEDINGS

On March 14, 1997, a shareholder filed a lawsuit against the Company and
four of its current or former officers and directors in the United States
District Court for the Western District of Washington at Seattle, styled Murray
v. Ride, Inc. et al., Civil Action No. C97-0402-Z. The lawsuit alleges
violations of certain federal securities laws and state laws, and purports to
seek damages on behalf of a class of shareholders who purchased the Company's
common stock during the period August 10, 1995 through December 30, 1996. The
Company believes the lawsuit is without merit and intends to defend against it
vigorously. However, there can be no assurance the Company will be successful in
its defense against the action. An award of damages against the Company in the
Murray action in excess of applicable insurance, if any, the expenditure of
significant sums in the defense thereof, or both, could have a material adverse
effect on the Company's financial condition and results of operations.

In 1996, the Company initiated legal proceedings against Switch
Manufacturing, alleging infringement by Switch of certain of the Company's
patented binding technologies. Switch has counterclaimed in the lawsuit,
alleging misuse of patent and unfair business practices by the Company, which
claims the Company believes it has meritorious defenses to. The case is pending
in the United States District Court for the Northern District of California as
Raines, et al. v. Switch Manufacturing v. Ride, Inc., Civil Action No.
C96-2648-DLJ. Also in 1996, the Company initiated legal proceedings against Wide
Ride, Inc. in Federal District Court for the District of Colorado, styled Ride
Snowboard Company v. Wide Ride, Inc., Civil Action No. 96-D-2003. The suit
alleges infringement of the Company's registered "Ride" trademark by Wide Ride.
The Company intends to vigorously prosecute both lawsuits. However, there can be
no assurance that the Company will prevail in either action. An award of damages
or the expenditure of significant sums in the prosecution of the Switch action
could have a material adverse effect on the Company's financial condition and
results of operations. Similarly, an adverse ruling on the Wide Ride
infringement claim or the expenditure of significant sums in the prosecution
thereof could have a material adverse effect on the Company's financial
condition and results in operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the holders of the Company's securities during
the fourth quarter of the Company's fiscal year ended December 31, 1996.

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<PAGE> 15

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

STOCK TABLE

The following table sets forth for the calendar quarters indicated the high
and low closing bid prices as reported by NASDAQ (adjusted for stock splits):

<TABLE>
<CAPTION>
1995 1996
------------------- --------------------
HIGH LOW HIGH LOW
------- ------- -------- -------
<S> <C> <C> <C> <C>
Quarter Ended:
March 31......................................... $ 7.813 $ 5.125 $ 33.500 $13.875
June 30.......................................... 14.813 7.125 14.188 10.375
September 30..................................... 21.000 13.563 13.375 9.250
December 31...................................... 34.875 18.750 12.438 5.813
</TABLE>

The prices quoted reflect inter-dealer quotations, without retail mark-ups,
mark-downs or commissions, and do not necessarily represent actual transactions.
As of March 6, 1997, there were 542 record holders of the Company's common
stock. For description of the Company's dividend policy, see "Management's
Discussion and Analysis -- Liquidity and Capital Resources."

ITEM 6. SELECTED FINANCIAL DATA.

SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
DECEMBER 31, ------------------------------------------
1992(1) 1993 1994(2) 1995(3) 1996(4)
------------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS
DATA:
Net sales............................ $ 208 $5,877 $25,349 $74,850 $75,728
Cost of goods sold................... 149 3,879 18,398 54,988 61,641
---- ------ ------- ------- -------
Gross profit......................... 59 1,998 6,951 19,862 14,087
Selling, general and administrative
expenses.......................... 267 1,373 4,022 10,868 20,487
Restructuring charges................ -- -- -- -- 2,500
---- ------ ------- ------- -------
Operating income (loss).............. (208) 625 2,929 8,994 (8,900)
Interest expense..................... (1) (130) (1) (18) (268)
Interest income...................... -- 2 72 406 333
Gain on sale of subsidiary........... -- -- -- -- 482
---- ------ ------- ------- -------
Income (loss) before income taxes and
extraordinary item................ (209) 497 3,000 9,382 (8,353)
Income taxes provision (benefit)..... -- -- 1,134 3,427 (2,863)
---- ------ ------- ------- -------
Income (loss) before extraordinary
item.............................. (209) 497 1,866 5,955 (5,490)
Extraordinary item................... -- (83) -- -- --
---- ------ ------- ------- -------
Net income (loss).................... $ (209) $ 414 $ 1,866 $ 5,955 $(5,490)
==== ====== ======= ======= =======
Pro Forma net income (loss)(5)....... $ (209) $ 343
==== ======
NET INCOME (LOSS) PER SHARE:
Primary.............................. -- -- $ 0.29 $ 0.60 $ (0.52)
Fully diluted........................ -- -- $ 0.27 $ 0.57 $ (0.52)
Pro forma............................ $(0.05) $ 0.08 -- -- --
</TABLE>

15
<PAGE> 16

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------
1992 1993 1994 1995 1996
----- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital (deficit)................. $(216) $1,046 $ 7,663 $26,104 $20,713
Total assets.............................. 246 2,431 15,718 57,599 50,655
Long-term debt............................ -- -- -- -- 604
Shareholders' equity (deficit)............ (209) 1,152 11,524 46,495 42,309
</TABLE>

- ---------------
(1) Period from September 8, 1992 (inception) to December 31, 1992.

(2) Results for the year ended December 31, 1994 reflect the Company's August
18, 1994 acquisition of CAS Sports.

(3) Results for the year ended December 31, 1995 reflect the Company's September
1, 1995 acquisitions of Thermal Snowboards, Inc. and 5150 Snowboards, Inc.
and the October 20, 1995 acquisition of SMP Clothing, Inc.

(4) Results for the year ended December 31, 1996 include the CAS Sports excess
inventory and OEM businesses from January 1, 1996 through October 11, 1996,
the date those businesses were sold.

(5) From September 8, 1992 (inception) through December 31, 1993, the Company
was exempt from the payment of federal income taxes as a result of its
election to be treated as an S Corporation. The pro forma net income (loss)
per share for these periods include pro forma provisions for income taxes as
if the Company had been subject to such taxes for the periods presented.
Historical net income (loss) per share data is not presented because per
share amounts of an S Corporation may not be meaningful.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

To the extent that this annual report discusses financial projections,
information or expectations about our products or markets, or otherwise makes
statements about the future, our statements are forward looking and are subject
to a number of risks and uncertainties that could cause actual results to differ
materially from the statements made. These factors include the timely
availability and acceptance of new products, the Company's dependence on outside
manufacturers, the management of growth and the other risks detailed in the
Company's reports on Forms 10-K and 10-Q, including the Form 10-K that will be
filed in connection with this annual report for the year ended December 31,
1996. Certain forward looking statements included in the following discussion
are more specifically identified with the symbol (*).

OVERVIEW

Ride Snowboards sells premium to mid-range snowboards and related products
primarily through specialty snowboard and ski shops and to regional sporting
goods stores under the "Ride," "5150," "Liquid,"

16
<PAGE> 17

"Preston," and "Cappel" brand names. Ride Manufacturing is a manufacturer of
premium snowboards which are produced principally for Ride Snowboards. Ride
Manufacturing also produces a limited number of snowboards for other snowboard
companies on an OEM basis. SMP designs and manufactures snowboard, surf, skate,
motocross and street apparel which is sold through specialty shops under the
"SMP" brand name. Ride Canada acts as the Company's Canadian distributor for its
"Ride," "5150," "Liquid," "Preston," "Cappel" and "SMP" branded products. Until
its disposition in October 1996, CAS marketed entry-level snowboards and related
products under various brand names, including "Marvel," "Slim," "Burnt," and
"PL" and on a private label basis, primarily to regional sporting goods stores
and large-format sporting goods retailers. In addition, CAS sold snowboards and
related products on an OEM basis to other snowboard companies and bought excess
snowboard and sporting goods inventories from manufacturers and sold such
products to retailers throughout the world. The OEM and excess inventory
portions of the CAS business were sold in October 1996 while the branded and
private label portions of the business were retained by the Company and are
being operated as the Company's Special Products Group ("SPG").

Because snowboarding traditionally is a winter sport and the Company's
sales are concentrated in the northern hemisphere, sales of the Company's
products predominantly occur in the third and fourth quarters. Since much of the
Company's operating expense is fixed in nature and is budgeted based on higher
third and fourth quarter net sales, a decline in net sales relative to internal
expectations would have a significant adverse effect on results of operations.
Because relatively lower net sales are realized in the first and second quarters
of each year, the Company expects to incur operating losses in the first two
quarters of the year for the foreseeable future.* In addition to seasonal
fluctuations, the Company's operating results fluctuate from quarter to quarter
as a result of the timing of order shipments, new product introductions, new
retailer openings, consumer buying patterns, weather conditions, discretionary
spending habits, general economic conditions in the United States and abroad and
other factors. Furthermore, the Company's gross margins will fluctuate with
product mix, the timing of product price adjustments and the mix of
international and domestic sales.

The Company accumulates a backlog of orders beginning in February as a
result of preseason orders placed in connection with winter sports trade shows.
The backlog decreases beginning in late spring as product begins to be shipped
and is usually insignificant by the end of the year. Backlog in the snowboarding
industry is subject to delay or cancellation.

During the first quarter of 1996, the Company's principal Japanese
distributor requested a decrease in its contractual purchase commitment due to
excess inventory conditions in the Japanese market. The Company agreed to accept
the lower order from this distributor in exchange for that distributor releasing
its exclusive rights in Japan for certain brands. Subsequently, the Company
entered into agreements with two other Japanese companies for exclusive
distribution of the "5150" and "Cappel" brands and non-exclusive distribution of
"Preston" brand boots and bindings. In the first quarter of 1997, the Company
terminated its agreement with its Japanese distributor of the "Ride" and
"Liquid" brands and announced that such brands will be sold directly to
retailers in Japan in 1997 rather than through distributors. Historically, a
significant percentage of the Company's sales have been to the Japanese market.
Given the excess inventory conditions in this market, management expects this
percentage to decrease significantly in 1997.*

RESULTS OF OPERATIONS

Year ended December 31, 1995 compared with year ended December 31, 1996

Net sales increased 1% in 1996 from $74.9 million in 1995 to $75.7 million
in 1996. Ride Manufacturing, 5150 and SMP contributed a total of $7.6 million to
net sales in 1995, subsequent to their respective acquisition dates, and $16.1
million in 1996. The remaining difference is due to the inclusion of the CAS
excess inventory and OEM businesses for the full year in 1995 as opposed to 1996
when they were included only through their October 11, 1996 disposition date.

Net sales of hard goods (defined as snowboards, skateboards, boots and
bindings) represented 80% of total sales in 1996 while soft goods (apparel and
accessories) made up 20%. In 1995, hard goods comprised 90% of total sales and
soft goods 10%. The increase in soft goods sales is attributable primarily to
the inclusion

17
<PAGE> 18

of SMP for the entire year in 1996 as opposed to 1995 when SMP was included only
from its October 20, 1995 acquisition date. Management expects soft goods sales
to continue to increase as a percentage of sales in future periods.* In 1996,
net sales in North America made up 59% of total sales with international sales
making up the remaining 41%. In 1995, North American sales comprised 67% and
international sales 33%. The increase in international sales in 1996 was
attributable primarily to the addition of SMP for the entire year in 1996 as a
majority of that company's sales are to international markets. With the
disposition of the CAS businesses and the excess inventory situation in the
Japanese market, management expects North American sales to comprise a larger
percentage of total sales in 1997.*

Gross profit decreased from $19.9 million in 1995 to $14.1 million in 1996
while gross margins dropped from 27% in 1995 to 19% in 1996. These decreases are
due to a $6.5 million inventory write down taken by the Company in December
1996. This write down was necessitated by excess inventories resulting primarily
from canceled commitments from the Company's principal Japanese distributor.
Without the inventory write down, gross margins would have remained at 27% in
1996 due to offsetting factors. First, the addition of Ride Manufacturing
towards the end of 1995 allowed the Company to manufacture 45% of its branded
snowboards in 1996 compared to only 10% in 1995. Cost savings from this change
had a positive impact on gross margins. In addition, the inclusion of a full
year of higher-margin SMP sales in 1996 also served to increase gross margins.
Offsetting these gains was an aggressive fourth quarter discounting program
offered by the Company in an attempt to reduce the amount of excess inventory on
hand.

As competition in the snowboard industry increases, management expects
there to be downward pressure on prices in future periods, especially in the
mid-to-low price points.* In an effort to offset the effect of this trend on
margins, the Company will seek to increase the percentage of snowboards it
manufactures in its own factory and to focus more emphasis on the mid-to-upper
price points in the market.* In addition, the Company moved its Preston binding
operations offshore for 1997 to benefit from lower cost of materials and labor
outside of the U.S.

<TABLE>
<CAPTION>
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
OPERATING EXPENSES:
Selling, general & administrative...................... $10,868 $19,487
Restructuring charges.................................. -- 2,500
Management transition.................................. -- 1,000
------- -------
Total operating expenses....................... $10,868 $22,987
======= =======
</TABLE>

Selling, general and administrative expenses increased 79% from $10.9
million in 1995 to $19.5 million in 1996. The increase was due to the inclusion
of the operations for Ride Manufacturing and SMP for the entire year in 1996 as
well as the increased scope of the Company's operations in 1996. The primary
components of selling, general and administrative expenses were salaries, wages,
commissions and other compensation ($5.5 million in 1995 and $8.6 million in
1996), advertising, promotion and team ($1.9 million in 1995 and $4.3 million in
1996) and occupancy, depreciation and amortization expense ($735,000 in 1995 and
$1.9 million in 1996). Management expects selling, general and administrative
expenses to increase somewhat in 1997 as the Company invests in growing its key
brands and with increased competition as the industry continues to mature.*

Also included in operating expenses in 1996 are $2.5 million in
restructuring charges and $1.0 million in management transition expenses. The
restructuring charges are associated with the move of the Preston binding
operations offshore and the withdrawal of snowboard production from two outside
snowboard manufacturers used in 1996. The primary components of the
restructuring charges are write-offs of abandoned equipment, tooling and
leasehold improvements, accrual of future lease costs and vendor cancellation
fees. The management transition expenses are associated with the 1996 change in
top management and include contractual severance packages for the Company's
former Chief Executive Officer, President and Senior Vice President as well as
relocation expenses for new executives.

18
<PAGE> 19

Interest income decreased from $406,000 in 1995 to $333,000 in 1996. The
decrease was due to higher cash balances on hand in 1995 from the Company's
secondary stock offering in August of 1995 and the proceeds from exercise of
common stock warrants. Interest expense increased from $18,000 in 1995 to
$268,000 in 1996. This increase was due to principally to seasonal utilization
of the Company's line of credit for working capital purposes. Also included in
the 1996 results is a gain of $482,000 on the disposition of the CAS excess
inventory and OEM businesses.

The provision for income taxes represents a 36.5% effective tax rate for
1995 compared with a 34.3% effective rate for 1994. The decrease is due
primarily to expense for state income tax purposes lowering the overall tax
benefit of the 1996 loss.

As a result of the foregoing factors, including the non-recurring
restructuring charges, inventory write down and management transition expenses,
the Company's net income decreased from $6.0 million in 1995 to a net loss of
$5.5 million in 1996.

Pro Forma Discussion

The following discussion compares, on a pro forma basis, the 1995 and 1996
results of operations of the Company as if the disposition of the CAS excess
inventory and OEM businesses took place prior to January 1, 1995.

Pro forma net sales increased 11% from $54.7 million in 1995 to $60.5
million in 1996. The increase is attributable to the inclusion of the Ride
Manufacturing, 5150 and SMP operations for the full year in 1996 and increased
acceptance and penetration of Ride Snowboards' brands, offset by decreases in
the retained CAS branded and private label businesses due to increased
competition at the lower distribution levels targeted by these products.

Pro forma net sales of hard goods represented 74% of total sales in 1996
while soft goods comprised 26%. In 1995, hard goods made up 85% of pro forma net
sales and soft goods represented 15%. The increase in soft goods sales is
attributable primarily to the inclusion of SMP for the entire year in 1996. In
1996, pro forma net sales in North America comprised 50% of total sales with
international sales making up the remaining 50%. In 1995, North American sales
represented 67% of the total and international sales 33%. The increase in
international sales in 1996 was attributable primarily to the inclusion of SMP
for the full year as a significant portion of that company's sales are to
international markets.

Pro forma gross margins dropped from 30% in 1995 to 19% in 1996. Again,
this decrease was due to the $6.5 million inventory write down in 1996. Without
the inventory write down, pro forma gross margins would have remained at 30% in
1996.

The pro forma net loss for 1996, adjusted for the operations of the sold
CAS businesses and the gain on the sale, would have been $6.2 million compared
to net income of $5.2 million in 1995.

Year ended December 31, 1994 compared with year ended December 31, 1995

Net sales increased 195% in 1995 from $25.3 million in 1994 to $74.9
million in 1995. Ride Manufacturing, 5150 and SMP contributed a total of $7.6
million to net sales in 1995 subsequent to their respective acquisition dates.
The remainder of the increase reflects continued growth across Ride Snowboards'
and CAS's brands as well as continued growth in the overall snowboarding market.
CAS contributed approximately $34.7 million to net sales in 1995 compared with
$10.1 million in 1994 subsequent to its August 1994 acquisition by the Company.

Gross profit increased 186% in 1995 from $7.0 million in 1994 to $19.9
million in 1995. Ride Manufacturing, 5150 and SMP contributed a total of $3.3
million to gross profit in 1995 subsequent to their respective acquisition
dates. Consolidated gross margins remained at 27% for both 1994 and 1995 due to
offsetting factors. Gross margins for 1995 were positively impacted by
relatively higher gross margins contributed by Ride Manufacturing, 5150 and SMP,
offset by a full year of operations of CAS, which has relatively lower margins.
Gross margins for Ride Snowboards decreased slightly from 31% in 1994 to 30% in

19
<PAGE> 20

1995 due primarily to the introduction of additional products at lower
price-points under the Liquid brand during 1995 and higher international sales.
Gross margins on sales to international distributors are lower than gross
margins on sales to North American dealers.

Selling, general and administrative expenses increased 170% in 1995 from
$4.0 million, or 15% of net sales, in 1994 to $10.9 million, or 15% of net
sales, in 1995. The dollar increase was due to the increased scope of Ride
Snowboards' and CAS's operations in 1995, the inclusion of CAS's operations for
the full period as well as the inclusion of the operations for Ride
Manufacturing, 5150 and SMP from their respective dates of acquisition. The
primary components of selling, general and administrative expenses were
salaries, wages, commissions and other compensation ($2.2 million in 1994 and
$5.5 million in 1995), advertising, promotion and team ($927,000 in 1994 and
$1.9 million in 1995) and occupancy, depreciation and amortization ($203,000 in
1994 and $735,000 in 1995).

Interest income, net of interest expense, increased from $71,000 in 1994 to
$388,000 in 1995. The increase was due to overall higher cash balances on hand
in 1995 stemming from the increased scope and profitability of the business, as
well as capital supplied by the Company's secondary stock offering in August and
the exercise of outstanding warrants.

The provision for income taxes represents a 36.5% effective tax rate for
1995 compared with a 37.8% effective rate for 1994. The decrease is due
primarily to a decrease in state income taxes attributable to CAS moving its
California operations to Washington state where there are no state income taxes.

As a result of the foregoing factors, the Company's net income increased
from $1.9 million in 1994 to $6.0 million in 1995. Net income for 1995 included
approximately $1.2 million generated by Ride Manufacturing, 5150 and SMP
subsequent to their respective acquisition dates.

LIQUIDITY AND CAPITAL RESOURCES

The Company requires capital for the development of its technology and
products, procurement of raw materials and finished goods manufactured by
others, and capital equipment. The Company financed its 1996 operations through
cash and securities remaining from its 1995 secondary stock offering and from
seasonal borrowings under its lines of credit. The Company financed its 1995
operations through its August 1995 secondary stock offering and the exercise of
warrants issued in its May 1994 initial public offering. Net cash used in
operating activities totaled $10.8 million in 1996 compared with $732,000 in
1995. The increase in cash used in operations was attributable primarily to the
non-recurring restructuring charges, inventory write down and management
transition expenses incurred in 1996. Due to the seasonal nature of its
business, the Company's need for cash has been greater in its third and fourth
quarters, when working capital has been invested in accounts receivable and
inventories.

Net cash used in investing activities totaled $1.2 million in 1996 compared
to net cash used of $18.9 million in 1995. Net cash used in investing activities
in 1996 included $5.4 million in capital expenditures, offset by liquidation of
securities and investments $3.8 million and $884,000 in net cash received from
the sale of the CAS businesses. Cash used in investing activities in 1995
included approximately $13.0 million expended in the Company's 1995 acquisitions
of Ride Manufacturing, 5150 and SMP and $1.9 million in capital expenditures.
Principal capital expenditures in 1996 included snowboard and snowboard binding
manufacturing equipment, leasehold improvements, warehouse equipment, computers,
office equipment and molds and tooling for snowboards and snowboard bindings.
The Company expects to invest approximately $2.0 million in capital expenditures
during 1997 including additional manufacturing equipment to increase production
capacity and efficiency and additional computers and business software.* The
Company intends to finance its 1997 capital expenditures from funds on hand,
through leasing or from borrowings under its existing line of credit.*

The Company's capital resources include a $30 million credit facility with
a U.S. bank. This facility allows the Company to take advances under a revolving
line of credit and to establish import letters of credit for inventory
purchases. Advances under the line of credit bear interest at the bank's prime
rate or at a LIBOR option. At December 31, 1996, the Company had outstanding
letters of credit aggregating approximately $1.0

20
<PAGE> 21

million under this facility. No cash advances were outstanding on the line as of
December 31, 1996. The line of credit expires March 31, 1997 and has certain
operating covenants, including financial ratios, working capital restrictions
and restrictions on the payment of dividends on common stock. The line is
collateralized by substantially all of the assets of the Company. The Company is
currently in the process of renewing this facility.

The Company believes that cash on hand, collection of year-end accounts
receivable and seasonal borrowings under its line of credit, will be sufficient
to meet its operating needs in 1997.*

Certain of the Company's purchase and sales commitments are denominated in
foreign currencies. Because a change in the value of such currencies relative to
the U.S. dollar will affect the Company's net sales, gross profit and net
income, the Company enters into forward currency contracts in order to hedge
against adverse changes in the value of such currencies relative to the U.S.
dollar. Although the Company believes that these contracts decrease the
Company's overall exposure to gains and losses from currency fluctuations, such
exposure cannot be entirely eliminated. During 1996, international sales of
certain of the Company's snowboards were denominated in Deutsche Marks, which
provided a natural hedge against DEM denominated obligations.

Although the Company cannot accurately anticipate the effects of inflation,
the Company does not believe inflation has had or is likely to have a material
effect on its results of operations or liquidity.*

Except for distributions paid to shareholders when the Company was an S
Corporation, the Company has never paid dividends on its common stock. The
Company's present policy is to retain earnings to finance the Company's
business. Any future dividends will be dependent upon the Company's financial
condition, results of operations, current and anticipated cash requirements,
acquisition plans and plans for expansion, and any other factors which the
Company's Board of Directors deems relevant. The Company's bank loan agreement
restricts the payment of dividends. The Company has no present intention of
paying dividends on its common stock in the foreseeable future.

21
<PAGE> 22

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Ride, Inc.

We have audited the accompanying consolidated balance sheets of Ride, Inc.
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1996. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Ride, Inc. and subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule when considered in relation to the basic financial statements taken as
a whole, presents fairly, in all material respects, the information set forth
therein.

ERNST & YOUNG LLP

Seattle, Washington
February 28, 1997, except
for Note 14, as to which
the date is March 14, 1997

22
<PAGE> 23

RIDE, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................. $14,271 $ 3,232
Securities available-for-sale.......................................... 3,840 --
Accounts receivable, less allowance for doubtful accounts of $359 in
1995 and $655 in 1996............................................... 13,556 14,193
Inventories (Note 5)................................................... 4,409 5,986
Prepaid expenses and other current assets.............................. 782 450
Income taxes receivable................................................ -- 2,836
Deferred tax assets (Note 8)........................................... 281 1,423
------- -------
Total current assets........................................... 37,139 28,120
Plant and equipment, net (Note 6)........................................ 3,649 5,757
Notes receivable, net of $116 discount (Note 3).......................... -- 1,884
Goodwill, net of accumulated amortization of $220 in 1995 and $514 in
1996................................................................... 16,489 14,292
Other assets............................................................. 322 602
------- -------
Total assets................................................... $57,599 $50,655
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable....................................................... $ 7,696 $ 4,631
Accrued expenses and other current liabilities......................... 1,559 2,161
Accrued restructuring charges (Note 4)................................. -- 615
Accrued bonuses........................................................ 613 --
Notes payable.......................................................... 938 --
Income taxes payable................................................... 229 --
------- -------
Total current liabilities...................................... 11,035 7,407
Long-term debt, less current portion (Note 7)............................ -- 604
Deferred income taxes (Note 8)........................................... 69 335
Commitments and contingencies (Note 12)
Shareholders' equity:
Preferred stock without par value:
Authorized shares -- 10,000
Issued and outstanding shares -- 100
Aggregate liquidation preference of $500.......................... 500 500
Common stock, without par value:
Authorized shares -- 20,000
Issued and outstanding shares -- 10,518 in 1995, and 10,760 in
1996............................................................. 38,244 39,583
Retained earnings...................................................... 7,751 2,226
------- -------
Total shareholders' equity.......................................... 46,495 42,309
------- -------
Total liabilities and shareholders' equity..................... $57,599 $50,655
======= =======
</TABLE>

See accompanying notes.

23
<PAGE> 24

RIDE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Net sales..................................................... $25,349 $74,850 $75,728
Cost of goods sold (Note 4)................................... 18,398 54,988 61,641
------- ------- -------
Gross profit.................................................. 6,951 19,862 14,087

Selling, general and administrative expenses.................. 4,022 10,868 20,487
Restructuring charges (Note 4)................................ -- -- 2,500
------- ------- -------
Operating expenses............................................ 4,022 10,868 22,987
------- ------- -------
Operating income (loss)....................................... 2,929 8,994 (8,900)

Interest expense.............................................. (1) (18) (268)
Interest income............................................... 72 406 333
Gain on sale of subsidiary (Note 3)........................... -- -- 482
------- ------- -------
Income (loss) before income taxes............................. 3,000 9,382 (8,353)
Income tax expense (benefit) (Note 8)......................... 1,134 3,427 (2,863)
------- ------- -------
Net income (loss)............................................. $ 1,866 $ 5,955 $(5,490)
======= ======= =======
Net income (loss) per share:
Primary..................................................... $ 0.29 $ 0.60 $ (0.52)
======= ======= =======
Fully diluted............................................... $ 0.27 $ 0.57 $ (0.52)
======= ======= =======
Weighted average common shares outstanding:
Primary..................................................... 6,409 9,932 10,614
======= ======= =======
Fully diluted............................................... 6,828 10,455 10,614
======= ======= =======
</TABLE>

See accompanying notes.

24
<PAGE> 25

RIDE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
----------------- ------------------ RETAINED
SHARES AMOUNT SHARES AMOUNT EARNINGS TOTAL
------ ------ ------ ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1994........ 100 $500 4,400 $ 652 $ 0 $ 1,152
Net income for the year.......... 1,866 1,866
Preferred stock dividends........ (35) (35)
Initial public offering of common
stock, net of offering
costs......................... 2,300 4,652 4,652
Common stock issued in CAS
acquisition................... 800 3,100 3,100
Exercise of common stock
warrants...................... 210 789 789
--- ---- ------ ------- ------- -------
Balances at December 31, 1994...... 100 500 7,710 9,193 1,831 11,524

Net income for the year.......... 5,955 5,955
Preferred stock dividends........ (35) (35)
Secondary public offering of
common stock, net of offering
costs......................... 1,465 23,311 23,311
Exercise of common stock
warrants...................... 1,239 4,515 4,515
Common stock issued in SMP
acquisition................... 28 593 593
Stock option exercises and
related tax benefits.......... 72 571 571
Issuance of common stock under
stock purchase plan........... 4 61 61
--- ---- ------ ------- ------- -------
Balances at December 31, 1995...... 100 500 10,518 38,244 7,751 46,495
Net loss for the year............ (5,490) (5,490)
Preferred stock dividends........ (35) (35)
Stock option exercises and
related tax benefits.......... 231 1,258 1,258
Issuance of common stock under
stock purchase plan........... 11 81 81
--- ---- ------ ------- ------- -------
Balances at December 31, 1996...... 100 $500 10,760 $39,583 $ 2,226 $42,309
=== ==== ====== ======= ======= =======
</TABLE>

See accompanying notes.

25
<PAGE> 26

RIDE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1994 1995 1996
------ -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Reconciliation of net income to net cash provided by (used
in) operations:
Net income (loss).......................................... $1,866 $ 5,955 $ (5,490)
Depreciation............................................... 40 196 1,288
Amortization............................................... 31 190 421
Deferred income tax benefit................................ (43) (27) (876)
Non-cash restructuring charges............................. -- -- 2,397
Gain on sale of subsidiary................................. -- -- (482)
Amortization of discount on notes receivable............... -- -- (34)
Changes in operating assets and liabilities:
(Increase) in accounts receivables...................... (973) (8,076) (637)
(Increase) in inventories............................... (696) (1,316) (1,577)
(Increase) decrease in prepaid expenses................. (90) (590) 294
(Increase) in income taxes receivable................... -- -- (2,894)
Increase (decrease) in accounts payable................. (543) 3,649 (3,065)
Increase (decrease) in accrued expenses and other
current liabilities................................... 422 698 (102)
Increase (decrease) in income taxes payable............. 470 (15) --
------ -------- --------
Net cash provided by (used in) operating
activities....................................... 484 (732) (10,757)
INVESTING ACTIVITIES
Purchases of plant and equipment............................. (399) (1,910) (5,364)
Acquisitions, net of cash acquired........................... (337) (13,039) --
Sales of (purchases) of securities available-for-sale........ -- (3,840) 3,840
Proceeds from sale of subsidiary, net of costs............... -- -- 884
Increase in other assets..................................... (87) (157) (532)
------ -------- --------
Net cash used in investing activities.............. (823) (18,946) (1,172)
FINANCING ACTIVITIES
Proceeds from exercise of common stock options............... -- 267 1,087
Proceeds from sale of common stock........................... 4,698 23,372 --
Proceeds from exercise of common stock warrants.............. 789 4,515 --
Proceeds from Employee Stock Purchase Plan................... -- -- 81
Proceeds from long-term borrowings........................... -- -- 750
Repayments of notes payable and long term borrowings......... -- -- (993)
Dividends paid............................................... (213) (35) (35)
------ -------- --------
Net cash provided by financing activities.......... 5,274 28,119 890
------ -------- --------
Net increase (decrease) in cash and cash
equivalents...................................... 4,935 8,441 (11,039)
Cash at beginning of period.................................. 895 5,830 14,271
------ -------- --------
Cash at end of period........................................ $5,830 $ 14,271 $ 3,232
====== ======== ========
SUPPLEMENTAL DISCLOSURE
Cash paid for interest....................................... $ 1 $ 8 $ 275
====== ======== ========
Cash paid for income taxes................................... $ 703 $ 3,505 $ 910
====== ======== ========
NONCASH INVESTING AND FINANCING ACTIVITIES
Common Stock issued in acquisitions.......................... $3,100 $ 593 $ --
Notes payable issued in acquisitions......................... -- 938 --
Tax benefit of stock option exercises........................ -- 304 171
</TABLE>

See accompanying notes.

26
<PAGE> 27

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES

Description of Business

The consolidated financial statements include the accounts of Ride, Inc.
("Ride" or "the Company") and its subsidiaries: Ride Snowboard Company ("Ride
Snowboards"), Ride Manufacturing, Inc. ("Ride Manufacturing," formerly known as
Thermal Snowboards, Inc.), Ride Canada, Inc. ("Ride Canada") and SMP Clothing,
Inc. ("SMP"). The Company was founded in September 1992 and acquired Ride
Manufacturing in September 1995 and SMP in October 1995. The Company also
acquired 5150 Snowboards, Inc. ("5150") in September 1995 and later merged 5150
with and into Ride Snowboards. Finally, the Company acquired C.A.S. Sports
International, Inc. and C.A.S. Sports Agency, Inc. (collectively, "CAS") in
August 1994. In October 1996, the Company transferred substantially all of the
operating assets and liabilities of CAS into Ride Canada, a newly formed
corporation, and Ride Snowboards and sold the CAS entities. The results of
operations of these acquired subsidiaries are included in the Company's
financial statements from their respective dates of acquisition through their
applicable dates of disposition. See Notes 2 and 3.

Ride Snowboards sells premium to mid-range snowboards and related products
primarily through specialty snowboard and ski shops. Ride Manufacturing is a
manufacturer of premium snowboards which are produced principally for Ride
Snowboards. Ride Manufacturing also produces a limited number of snowboards for
other snowboard companies on an OEM basis. SMP designs and manufactures
snowboard, surf, skate, motocross and street apparel which is sold through
specialty shops. Ride Canada acts as the Company's Canadian distributor for the
Company's branded products. Until its disposition in October 1996, CAS marketed
entry-level snowboards and related products under various brand names and on a
private label basis primarily to regional sporting goods stores and large-format
sporting goods retailers. In addition, CAS sold snowboards and related products
on an OEM basis to other snowboard companies and bought excess snowboard and
sporting goods inventories from manufacturers and sold such products to
retailers throughout the world. The OEM and excess inventory portions of the CAS
business were sold in October 1996 (see Note 3) while the branded and private
label portions of the business were retained by the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. Intercompany transactions have been
eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Foreign Currency

Accounts receivable and accounts payable denominated in foreign currencies
are translated to U.S. dollars at the exchange rate on the balance sheet date.
Revenues, costs and expenses are translated at the prevailing exchange rate at
the time the transaction occurs. Adjustments resulting from foreign exchange
transactions are recorded in the consolidated income statements.

The Company enters into foreign currency forward contracts, generally with
terms of 270 days or less, as a hedge against some of its foreign currency
commitments. Offsetting gains and losses on these contracts are recognized
concurrently with the exchange gains and losses stemming from the associated
commitments. The Company is exposed to certain losses in the event of
nonperformance by the counterparties to the forward contracts. The Company's
exposure, however, is not considered significant.

27
<PAGE> 28

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Cash Equivalents and Securities Available-for-Sale

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Securities
available-for-sale represent high-quality, short-term investments with
maturities of three to six months. As of December 31, 1995, the amortized cost
of securities available-for-sale was comprised of $2,935,000 of commercial paper
and $905,000 of tax exempt securities. The fair value of these securities
approximates their recorded value.

Concentration of Credit Risk

The Company performs ongoing credit evaluations of its customers. Based on
the Company's assessment of credit risk, sales in the United States and Canada
are made on open credit, C.O.D, cash in advance, or by postdated check.
International sales are generally made on a cash in advance or letter of credit
basis. In 1994, 1995 and 1996, sales outside North America comprised
approximately 28%, 33% and 41% respectively, of net sales. In 1994, 1995 and
1996, sales to the Company's principal Japanese distributor accounted for
approximately 18%, 22% and 17% of net sales, respectively. In 1996, sales to
another of the Company's Japanese distributors accounted for 12% of net sales.

Inventories

Inventories are carried at the lower of cost or market using the first-in,
first-out method.

Plant and Equipment

Plant and equipment is stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally
five to ten years. Leasehold improvements are amortized over the lesser of the
estimated useful life of the asset or the term of the related lease. Snowboard
and snowboard binding molds are amortized to cost of goods sold over one to
three years based on the number of related snowboards and bindings sold.

Goodwill

Goodwill is being amortized over 40 years using the straight-line method.
The Company periodically reviews the carrying value of goodwill to determine if
the facts and circumstances suggest that the value may be impaired. If it
appears that the value of goodwill will not be fully recoverable, the Company's
carrying value will be reduced by the estimated shortfalls of cash flows. No
such reduction was considered necessary in 1996.

Revenue Recognition

The Company recognizes revenue from the sale of its products when the
products are shipped to customers.

Research and Development Costs

Research and development costs are charged to expense as incurred and
totaled approximately $39,000 in 1994, $217,000 in 1995 and $417,000 in 1996.

Advertising Costs

The Company expenses the production costs of advertising the first time the
advertising takes place. Advertising expense totaled $271,000 in 1994, $528,000
in 1995 and $847,000 in 1996.

28
<PAGE> 29

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Warranty Costs

The Company generally offers a one-year warranty on its products from the
time of retail sale. Anticipated net costs associated with warranties are
charged to expense at the time of the sale of its products. The Company is
reimbursed for a portion of the cost of defective products by the manufacturers.

Income Taxes

The Company uses the liability method for recording income taxes. Deferred
tax assets and liabilities are determined based on the differences between
financial reporting and tax bases of assets and liabilities and are measured
using the tax rates that will be in effect when the differences are expected to
reverse.

Net Income (Loss) Per Share

Primary net income per share has been computed by dividing net income,
after reduction for Preferred Stock dividends, by the weighted average number of
common shares and equivalents outstanding. Common share equivalents included in
the computation represent shares issuable upon assumed exercise of stock options
and warrants having exercise prices below the average market price of the Common
Stock using the treasury stock method. Fully diluted net income per share has
been computed by dividing net income by the weighted average number of common
shares and equivalents outstanding assuming the conversion of convertible
Preferred Stock occurred at the beginning of the period. The number of common
share equivalents included in the fully diluted computations represent shares
issuable upon exercise of stock options and warrants having exercise prices
below the higher of the average or the ending market price of the Common Stock
using the treasury stock method. Net loss per share has been computed by
dividing the net loss, after reduction for Preferred Stock dividends, by the
weighted average number of common shares outstanding. Common equivalent shares
are excluded from the net loss computation because their effects are
antidilutive.

Stock Based Compensation

The Company follows Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" for its stock option plans. Accordingly, no
compensation expense has been recognized for its stock-based compensation plans.
Effective January 1, 1996, the Company adopted the disclosure requirements of
FAS Statement No. 123, "Accounting for Stock-Based Compensation" (See Note 10).

Reclassifications

Certain reclassifications have been made to prior year balances to conform
with current year presentation.

2. ACQUISITIONS

Ride Manufacturing and 5150

On September 1, 1995, the Company acquired all of the capital stock of Ride
Manufacturing, a snowboard manufacturer, and 5150, a marketer of snowboards, for
$11.9 million in cash. The acquisition has been accounted for as a purchase with
the excess of the purchase price over the fair value of the assets acquired
allocated primarily to goodwill.

SMP

On October 20, 1995, SMP, a newly-formed, wholly owned subsidiary of the
Company acquired certain assets (primarily inventories, fixed assets, trademarks
and other intangibles) of Sex Money Power Clothing, Inc., a manufacturer of
snowboard, surf, skate and street apparel. The aggregate purchase price of $2.46
million was comprised of $937,500 in cash, $937,500 in short-term notes payable,
and 28,409 newly-issued

29
<PAGE> 30

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shares of Common Stock valued at $593,000. The transaction has been accounted
for as a purchase with the excess of the purchase price over the fair value of
the assets acquired allocated primarily to goodwill.

CAS

On August 18, 1994, the Company purchased the stock of C.A.S. Sports
International, Inc. of Toronto, Canada, and the stock of its wholly owned
subsidiary, C.A.S. Sports Agency, Inc. from a significant shareholder of the
Company for 800,000 shares of the Company's Common Stock (valued at $3.1
million) and approximately $350,000 in cash. The acquisition has been accounted
for as a purchase, with excess of the purchase price over the fair value of the
assets received allocated to goodwill.

Summarized unaudited pro forma results of operations, assuming the CAS
acquisition took place on January 1, 1994 and the Ride Manufacturing, 5150 and
SMP acquisitions took place on January 1 of each year, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Net sales........................................ $37,954 $84,345
Net income....................................... 2,101 6,716
Net income per share -- primary.................. $ 0.30 $ 0.67
</TABLE>

3. DISPOSITION

On October 11, 1996, the Company sold the excess inventory and OEM portions
of its CAS subsidiary to two former Company executives and a number of CAS
employees. The $3 million sales price was comprised of $1,000,000 in cash and
short-term notes and $2 million in long-term notes. The Company recognized a
pre-tax gain of $482,000 in connection with this sale.

The long-term notes are secured by the stock of the sold corporations and
bear interest at prime. No interest or payments are due until December 1997 at
which time payments of $100,000 plus interest will be due quarterly through
September 2002.

4. RESTRUCTURING AND INVENTORY WRITE-DOWN

On December 12, 1996 the Company's Board of Directors approved a plan to
writedown excess inventories and restructure the Company's manufacturing
operations. Due to canceled commitments from the Company's principal Japanese
distributor and an oversupply of snowboards from other manufacturers, the
Company recognized a $6.5 million write-down of its inventories. This amount has
been included in cost of sales. In addition, the Company recognized a $2.5
million restructuring charge in connection with moving the Company's binding
production offshore and the withdrawal of snowboard production from two outside
snowboard manufacturers used in 1996. The primary components of this charge are
write-offs of abandoned equipment, tooling and leasehold improvements,
cancellation fees paid to U.S. vendors and future lease costs. The Company
anticipates future cash outlays will not exceed $615,000 and will be funded
through normal operating cash flows.

30
<PAGE> 31

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INVENTORIES

Inventories consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1996
------ -------
(IN THOUSANDS)
<S> <C> <C>
Finished goods.................................... $2,852 $ 9,415
Work in process................................... 98 96
Raw materials and supplies........................ 1,559 2,391
Obsolescence reserve.............................. (100) (5,916)
------ -------
$4,409 $ 5,986
====== =======
</TABLE>

6. PLANT AND EQUIPMENT

Plant and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1995 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Office equipment................................... $1,046 $1,364
Production equipment and tooling................... 2,178 2,674
Leasehold improvements............................. 622 2,126
Vehicles and other................................. 87 588
Construction in process............................ 156 --
------ ------
4,089 6,752
Accumulated depreciation........................... (440) (995)
------ ------
$3,649 $5,757
====== ======
</TABLE>

7. LINE OF CREDIT AND LONG-TERM DEBT

Ride has a $30 million revolving credit line arrangement with a bank to
finance import letters of credit and working capital needs. Advances on the line
bear interest at the bank's prime rate or at a LIBOR option. At December 31,
1996, the Company had approximately $1.0 million in outstanding import letters
of credit drawn against this line. The line of credit expires on March 31, 1997
and has certain operating covenants, including financial ratios, working capital
restrictions and restrictions on payment of dividends on the Company's Common
Stock. The line is collateralized by substantially all the assets of the
Company.

During 1996, the Company's landlord loaned the Company $750,000 to fund a
portion of the expansion and improvement of the Company's Preston, Washington
office and warehouse facilities. The loan has an effective interest rate of
approximately 3% and is due in monthly payments of principal and interest of
$9,100 through December 2003.

31
<PAGE> 32

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. INCOME TAXES

Deferred tax assets and (liabilities) consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1996
---- ------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Allowance for bad debts........................... $121 $ 213
Warranty reserves................................. 84 119
Inventory reserves................................ 37 1,016
Restructuring reserves............................ -- 122
Other accruals.................................... 39 55
---- ------
Total deferred tax assets...................... 281 1,525
Deferred tax liabilities:
Amortization of goodwill.......................... (69) (301)
Depreciation...................................... -- (136)
---- ------
Total deferred tax liabilities................. (69) (437)
---- ------
Net deferred tax assets................... $212 $1,088
==== ======
Balance sheet classification:
Current assets.................................... $281 $1,423
Noncurrent liabilities............................ (69) (335)
---- ------
$212 $1,088
==== ======
</TABLE>

Significant components of the provision (benefit) for income taxes are as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994 1995 1996
------ ------ -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal....................................... $1,033 $3,147 $(1,713)
State......................................... 120 164 106
Canada........................................ 24 143 (380)
------ ------ -------
1,177 3,454 (1,987)
------ ------ -------
Deferred:
Federal....................................... (43) (48) (928)
State......................................... -- 21 52
------ ------ -------
(43) (27) (876)
------ ------ -------
Total provision (benefit)....................... $1,134 $3,427 $(2,863)
====== ====== =======
</TABLE>

32
<PAGE> 33

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's effective income tax rate varied from the U.S. federal
statutory tax rate as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1995 1996
---- ---- -----
<S> <C> <C> <C>
U.S. federal statutory tax rate....................... 34.0% 34.0% (34.0%)
Change in tax rate resulting from:
State income taxes, net of federal benefit.......... 2.6 1.3 1.2
Foreign taxes....................................... 0.2 0.8 0.5
Nondeductible goodwill amortization................. 0.4 0.3 0.3
Benefit of foreign sales corporation................ -- -- (1.1)
Other............................................... 0.6 0.1 (1.2)
---- ---- -----
Effective tax rate.................................... 37.8% 36.5% (34.3%)
==== ==== =====
</TABLE>

9. SHAREHOLDERS' EQUITY

Initial Public Offering

On May 6, 1994, the Company sold 575,000 Units in an initial public
offering at $10.00 per Unit. Each Unit consisted of four shares of Common Stock
and one detachable Class A Warrant to purchase two shares of Common Stock at
$3.75 per share. In addition, the Underwriter received 50,000 Underwriter
Warrants to purchase Underwriter Units at an exercise price of $12.00 per Unit.
Each Underwriter Unit consists of four shares of Common Stock and one Underlying
Underwriter Warrant to purchase two shares of Common Stock at $4.50 per share.
All Class A, Underwriter and Underlying Warrants were exercised or redeemed
during 1995.

Stock Purchase Plan

In May 1995, the Company adopted an Employee Stock Purchase Plan which
allows eligible employees to buy Company stock at a 15% discount from market
price utilizing payroll deductions. A total of 100,000 shares have been reserved
for issuance under this Plan. During 1995 and 1996, 3,971 and 11,123 shares of
Common Stock were purchased by employees under this Plan, respectively. As of
December 31, 1996, 84,906 shares were available for future sale under the Plan.

Secondary Offering

In August 1995, the Company completed the sale of 1,465,000 shares of
Common Stock to the public at a price of $17.00 per share. The Company received
net proceeds of approximately $23.3 million from this offering.

Preferred Stock

On December 31, 1993, the Company issued 100,000 shares of Series A 7%
cumulative convertible nonvoting preferred stock for $500,000. Dividends on the
Preferred Stock accrue quarterly and must be paid before dividends can be
declared and paid on the Company's Common Stock. In the event of liquidation,
the holders of the Preferred Stock will be entitled to $5.00 per share plus
unpaid dividends before any payments are made to the holders of Common Stock.
The Preferred Stock is convertible at the holder's option into 200,000 shares of
Common Stock. The Preferred Stock may be redeemed by the Company at $5.00 per
share beginning January 1, 1999 and ending December 31, 2004. The Company has
reserved 200,000 shares of Common Stock for issuance upon the conversion of the
Preferred Stock.

33
<PAGE> 34

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. STOCK-BASED COMPENSATION

The Company adopted two stock option plans in 1994 that provide for the
grant of incentive and nonqualified stock options to the Company's employees,
officers, and directors. At December 31, 1996, the Company had 2,197,000 shares
of Common Stock reserved for issuance pursuant to these plans. Options generally
vest over a four-year period commencing one year from the date of grant.

On January 1, 1996, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." As allowed
by SFAS No. 123, the Company applies APB Opinion 25 and related Interpretations
in accounting for its stock option plans and, accordingly, does not recognize
compensation cost. If the Company had elected to recognize compensation cost
based on the fair value of the options granted at the grant date as prescribed
by SFAS No. 123, net income (loss) and net income (loss) per share would have
been reduced to the pro forma amounts indicated in the table below (in thousands
except per share amounts):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1996
------ -------
<S> <C> <C>
Net income (loss) -- as reported.......................... $5,955 $(5,490)
Net income (loss) -- pro forma............................ 5,459 (6,731)
Net income (loss) per share (fully diluted) -- as
reported................................................ $ 0.57 $ (0.52)
Net income (loss) per share (fully diluted) -- pro
forma................................................... $ 0.52 $ (0.64)
</TABLE>

The weighted average fair value of options granted during 1995 and 1996 is
$3.05 and $4.91 per share, respectively. The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option-pricing model with
the following assumptions:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Expected dividend yield................................ 0% 0%
Expected stock price volatility........................ 37.6% 48.5%
Risk-free interest rate................................ 6.9% 6.1%
Expected life of options............................... 4.5 years 3.1 years
</TABLE>

A summary of options granted and outstanding are as follows:

<TABLE>
<CAPTION>
SHARES WEIGHTED AVERAGE
(IN THOUSANDS) EXERCISE PRICE
--------------- ----------------
<S> <C> <C>
Options outstanding at January 1, 1994.......... 0 --
Granted....................................... 1,064 $ 3.60
Exercised..................................... 0 --
Forfeited/Canceled............................ (90) $ 3.10
-----
Options outstanding at December 31, 1994........ 974 $ 3.65
Granted....................................... 1,067 $ 8.54
Exercised..................................... (72) $ 4.01
Forfeited/Canceled............................ (114) $ 5.70
-----
Options outstanding at December 31, 1995........ 1,855 $ 6.32
Granted....................................... 278 $13.43
Exercised..................................... (231) $ 4.80
Forfeited/Canceled............................ (222) $ 9.94
-----
Options outstanding at December 31, 1996........ 1,680 $ 7.21
=====
</TABLE>

34
<PAGE> 35

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information concerning currently outstanding
and exercisable options:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
-------------------------------------------- OPTIONS EXERCISABLE
WEIGHTED ----------------------------
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
OF PRICES (IN THOUSANDS) LIFE PRICE (IN THOUSANDS) PRICE
- ------------------ --------------- ----------- -------- --------------- --------
<S> <C> <C> <C> <C> <C>
$3.00 - $4.50 529 7.3 years $ 3.20 389 $ 3.20
$4.50 - $6.75 698 8.1 years $ 5.55 323 $ 5.41
$6.75 - $10.125 119 9.2 years $ 9.07 6 $ 8.50
$10.125 - $15.188 87 9.5 years $11.33 26 $10.81
$15.188 - $22.78 234 8.9 years $17.55 56 $17.84
$22.78 - $33.50 13 9.0 years $29.08 1 $25.73
----- ---
1,680 801
===== ===
</TABLE>

At December 31, 1996 options to purchase 517,000 shares were available for
future grant. In January 1997, approximately 370,000 options granted to
employees were repriced to $6.50 per share.

11. FOREIGN CURRENCY TRANSACTIONS

The Company recognized approximately $194,000, $646,000 and in gains on
foreign currency futures and forward contracts, during the years ended December
31, 1994 and 1995. During 1996, the Company recognized losses on foreign
currency contracts totaling approximately $160,000. These amounts are included
in cost of goods sold in the accompanying statements of operations.

At December 31, 1996, the Company had the following open forward contract
positions (in thousands):

<TABLE>
<CAPTION>
FOREIGN CURRENCY DOLLAR
CURRENCY TYPE OF CONTRACT AMOUNT EQUIVALENT MATURITY DATES
------------------------------- ---------------- ---------------- ---------- --------------
<S> <C> <C> <C> <C>
Deutsche Mark.................. Purchase 2,060 $1,369 Jan-Sept 97
Canadian Dollar................ Sell 700 514 Jan 97
</TABLE>

The net loss on these forward contracts as of December 31, 1996 of
approximately $36,000 has been deferred and will be recognized when the related
commitments are settled.

12. COMMITMENTS AND CONTINGENCIES

Leases

The Company is committed under noncancelable operating leases expiring at
various dates through 2003 for warehouse, manufacturing and office facilities.
The leases generally require that the payments of taxes, insurance and
maintenance are the responsibility of the Company.

35
<PAGE> 36

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Approximate future minimum lease payments for all of the Company's
noncancelable operating leases are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1997................................................... $ 956
1998................................................... 880
1999................................................... 791
2000................................................... 753
2001................................................... 743
Thereafter............................................. 1,329
------
$5,452
======
</TABLE>

Rent expense for the years ended December 31, 1994, 1995 and 1996 was
approximately $124,000, $406,000 and $1,042,000, respectively.

13. EMPLOYEE BENEFIT PLANS

Beginning January 1996, the Company provided a 401(k) plan covering
substantially all of its U.S. employees. Under this plan, participating
employees may defer up to 15% of their pre-tax earnings, subject to certain
Internal Revenue Service limitations. The Company provides matching
contributions which vest 20% annually over a five year period equal to 25% of
each employee's contribution. The Company's 1996 matching contributions for this
plan were approximately $31,000.

14. SUBSEQUENT EVENT

On March 14, 1997, a securities class action complaint (the "Complaint")
was filed against the Company and four of its founders in the United States
District Court for the Western District of Washington at Seattle. The Complaint
was filed on behalf of parties who purchased shares of the Company's common
stock during the period beginning August 10, 1995 and ending on December 30,
1996. The Complaint alleges the Company and its founders issued misleading
reports and information to the investing public. The Company intends to
vigorously defend this lawsuit, however, it is unable to predict the outcome of
this action at this time.

36
<PAGE> 37

RIDE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1995:
Net sales............................................ $ 4,985 $12,278 $31,896 $25,691
Gross profit......................................... 845 3,232 9,101 6,684
Net income (loss).................................... (409) 914 3,578 1,872
Net income (loss) per share (fully diluted).......... (0.05) 0.09 0.33 0.16
Balance sheet data (at end of quarter):
Accounts receivable, net.......................... 2,880 9,036 22,898 13,556
Inventories....................................... 614 2,526 4,372 4,409
Working capital................................... 7,218 9,803 26,669 26,104
1996:
Net sales............................................ $12,777 $13,501 $35,329 $14,121
Gross profit (loss).................................. 3,387 4,164 11,344 (4,808)(1)
Net income (loss).................................... (982) 411 3,642 (8,561)(2)
Net income (loss) per share (fully diluted).......... (0.09) 0.04 0.32 (0.80)
Balance sheet data (at end of quarter):
Accounts receivable, net.......................... 9,404 13,993 28,257 14,193
Inventories....................................... 6,153 11,865 16,302 5,986
Working capital................................... 23,584 23,411 26,920 20,713
</TABLE>

- ---------------
(1) Includes $6.5 million inventory write-down. See Note 4.

(2) Includes $6.5 million inventory write-down and $2.5 million restructuring
charge. See Note 4.

37
<PAGE> 38

RIDE, INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
--------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE AT
BEGINNING COSTS AND ACCOUNTS -- DEDUCTIONS -- END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- ---------------------------------------- ---------- ---------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1996
Reserves and allowances deducted from
asset accounts
Allowance for bad debts............ $359 $ 495 $199(2) $ 655
Inventory reserves................. $100 $6,500 $684(3) $5,916
YEAR ENDED DECEMBER 31, 1995
Reserves and allowances deducted from
asset accounts
Allowance for bad debts............ $143 $ 253 $ 44(1) $ 81(2) $ 359
Inventory reserves................. $ -- $ 60 $ 130(1) $ 90(3) $ 100
YEAR ENDED DECEMBER 31, 1994
Reserves and allowances deducted from
asset accounts
Allowance for bad debts............ $ 57 $ 107 $ 21(2) $ 143
Inventory reserves................. $ -- $ -- $ -- $ --
</TABLE>

- ---------------

(1) Amounts acquired in purchase acquisitions.

(2) Uncollectible accounts written off, net of recoveries.

(3) Cost of goods sold in excess of net realized value and obsolete inventories
written off, net of recoveries.

38
<PAGE> 39

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this Item is included in the Company's
definitive Proxy Statement for the Company's 1997 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission, under the
heading "Proposal One -- Election of Directors" and is incorporated herein by
this reference.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this Item is included in the Company's
definitive Proxy Statement for the Company's 1997 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission, under the
heading "Executive Compensation" and is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by this Item is included in the Company's
definitive Proxy Statement for the Company's 1997 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission, under the
heading "Voting Securities and Principal Holders" and is incorporated herein by
this reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this Item is included in the Company's
definitive Proxy Statement for the Company's 1997 Annual Meeting of
Shareholders, to be filed with the Securities and Exchange Commission, under the
heading "Certain Relationships and Related Transactions" and is incorporated
herein by this reference.

39
<PAGE> 40

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report:

1. Financial Statements.

<TABLE>
<CAPTION>
FORM 10-K
PAGE NUMBER
-----------
<S> <C>
A. Report of Ernst & Young LLP, Independent Auditors...............
B. Consolidated Balance Sheets as of December 31, 1995 and 1996....
C. Consolidated Statements of Operations for the years ended
December 31, 1994, 1995 and 1996................................
D. Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1994, 1995 and 1996..........................
E. Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996................................
F. Notes to Consolidated Financial Statements......................
</TABLE>

2. Financial Statement Schedules.

<TABLE>
<CAPTION>
FORM 10-K
PAGE NUMBER
-----------
<S> <C>
Schedule II -- Valuation and Qualifying Accounts...................
</TABLE>

Financial statements and schedules not included herein have been
omitted because of the absence of conditions under which they are required
or because the required information, where material, is shown in the
consolidated financial statements or notes thereto.

3. Exhibits.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------------------------
<C> <C> <S>
3.1 -- Restated Articles of Incorporation and Certificate of Designation of Relative
Rights and Preferences of the Series A 7% Cumulative Nonvoting Preferred
Stock(1)
3.2 -- Bylaws of the Company(1)
3.3 -- Articles of Amendment to Articles of Incorporation(11)
3.4 -- Articles of Amendment to Articles of Incorporation(12)
3.5 -- Articles of Correction(14)
4.1 -- Article VI of the Articles of Incorporation regarding Shareholder Rights (See
Exhibit 3.1)(1)
4.2 -- Article VIII of the Articles of Incorporation regarding Voting Rights (See
Exhibit 3.1)(1)
4.4 -- Specimen Stock Certificate(2)
10.10 -- Exclusive Distributorship Agreement dated December 7, 1992, by and between Ride
Snowboard Company and Far East Trading Co., Ltd.(4)
10.24 -- Exchange Agreement dated December 31, 1993, between Ride Snowboard Company and
Mark M. Salter(1)
10.25 -- Employment Agreement, dated August 18, 1994, by and between Ride Snowboard
Company and James J. Salter(5)
10.26 -- Form of Employment Agreement between Ride Snowboard Company and Roger B.
Madison, Jr.(1)
</TABLE>

40
<PAGE> 41

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------------------------
<C> <C> <S>
10.27 -- Employment Agreement, dated January 1, 1995, by and between Ride Snowboard
Company and Timothy G. Pogue(9)
10.28 -- Form of Ride Snowboard Company 1994 Stock Option Plan(1)
10.29 -- Form of Ride Snowboard Company 1994 Directors' Nonqualified Stock Option Plan(1)
10.30 -- Lease Agreement with Teachers Insurance & Annuity Association dated January 10,
1994(1)
10.32 -- Amended Form of Underwriting Agreement(6)
10.34 -- Standard Form Multiple Occupancy Lease, dated November 29, 1994, by and between
Ride Snowboard Company and BDC Preston Properties One Limited Partnership(8)
10.35 -- Business Loan Agreement, dated June 10, 1996, by and between Ride, Inc. and U.S.
Bank of Washington, N.A., expiring March 31, 1997(23)
10.36 -- Stock Purchase Agreement, dated August 18, 1994, between Ride Snowboard Company
and James J. Salter, the James Salter Family Trust, Kenneth Finkelstein Family
Trust, The Snow Trust, Robert Marcovitch, Kerry Wasserman, Rick Clarfield,
Howard Cohen, Gary Kell, Sandra Pelegrin, Alan Langer, Dan Opyc, C.A.S. Sports
International, Inc. and C.A.S. Sports Agency, Inc.(10)
10.37 -- Retail Section Lease, dated January 14, 1994, by and between Dufferin Business
Centre Inc. and C.A.S. Sports International, Inc.(8)
10.38 -- Retail Section Lease, dated January 11, 1995, by and between Dufferin Business
Centre Inc. and C.A.S. Sports International, Inc.(8)
10.45 -- Ride Snowboard Company 1995 Employee Stock Purchase Plan(11)
10.46 -- Ride Snowboard Company 1995 Foreign Subsidiary Employee Stock Purchase Plan(11)
10.47* -- Exclusive OEM Agreement, dated July 26, 1995, by and between Ride Snowboard
Company and Straight Line Water Sports, Inc.(13)
10.48 -- Employment Agreement, dated September 1, 1995, between the Company and David A.
Janes, Jr.(15)
10.49 -- Employment Agreement, dated September 1, 1995, between the Company and Bernard
Gervasoni(15)
10.50 -- Employment Agreement, dated October 19, 1995, between the Company and David Milo
Myers(16)
10.51 -- Registration Rights Agreement dated October 19, 1995, between the Company and
David Milo Myers, Lawrence Kraus and Michael Wise(16)
10.52 -- Stock Purchase Agreement, dated September 1, 1995, between the Company and the
shareholders and option holders of 5150 Snowboards, Inc. and Thermal Snowboards,
Inc.(17)
10.53 -- Asset Purchase Agreement, dated October 19, 1995, among the Company, Sex Money
Power Clothing, Inc., David Milo Myers, Lawrence Kraus and Michael Wise(18)
10.54 -- Form of Underwriting Agreement by and between the Company and Hambrecht & Quist
LLC and Dain Bosworth Incorporated(19)
10.55* -- Amendment No.1 to Exclusive Distributorship Agreement, dated October 24, 1995,
by and between Ride Snowboard Company, 5150 Snowboards, Inc., SMP Clothing, Inc.
and Far East Trading Company Ltd.(20)
10.56 -- Employment Agreement, dated October 14, 1995, by and between the Company and
Kenneth J. Finkelstein(21)
10.57 -- Employment Agreement, dated January 1, 1996, by and between C.A.S. Sports
International, Inc. and Robert F. Marcovitch(21)
</TABLE>

41
<PAGE> 42

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------------------------
<C> <C> <S>
10.58 -- First Amendment, dated August 4, 1995, to Lease Agreement by and between Ride
Snowboard Company and BDC Preston Properties One Limited Partnership(21)
10.59 -- Second Amendment, dated November 21, 1995, to Lease Agreement by and between
Ride Snowboard Company and BDC Preston Properties One Limited Partnership(21)
10.60 -- Third Amendment, dated March 26, 1996, to Lease Agreement by and between Ride
Snowboard Company and BDC Preston Properties One Limited Partnership(21)
10.61 -- Amendment No. 2 to Exclusive Distributorship Agreement, dated March 1996, by and
between Ride Snowboard Company, SMP Clothing, Inc. and Far East Trading Company
Ltd.(22)
10.62 -- Letter agreement for commitment of credit facilities, dated April 30, 1996, by
and between Hongkong Bank of Canada and C.A.S. Sports International, Inc.(22)
10.63 -- Agreement, dated May 7, 1996, by and between Ride, Inc. and James J. Salter(23)
10.64 -- Agreement, dated August 2, 1996, by and between Ride, Inc. and Kenneth J.
Finkelstein(23)
10.65 -- Agreement, dated August 7, 1996, by and between Ride, Inc. and Robert E.
Hall.(23)
10.66 -- Stock Purchase Agreement, dated October 11, 1996, by and between Ride, Inc. and
Gen-X Equipment, Inc.(24)
10.67 -- Amendment No. 1 to Resignation Agreement, dated October 11, 1996, by and between
Ride, Inc. and James J. Salter.(24)
10.68 -- Amendment No. 1 to Resignation Agreement, dated October 11, 1996, by and between
Ride, Inc. and Kenneth J. Finkelstein.(24)
10.69 -- Resignation and Release Agreement, dated October 28, 1996, by and between Ride,
Inc. and Timothy G. Pogue.
10.70 -- Letter agreement, dated December 6, 1996, by and between Ride Inc. and Straight
Line Water Sports, Inc.
10.71 -- Letter agreement, dated December 12, 1996, by and between Ride Inc. and Straight
Line Water Sports, Inc.
11.1 -- Computation of Earnings Per Share
21.1 -- Schedule of Subsidiaries of Ride, Inc.
23.1 -- Consent of Ernst & Young LLP, Independent Auditors
27.1 -- Financial Data Schedule
</TABLE>

- ---------------
(1) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form SB-2, file no. 33-75770-LA.

(2) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 1 to Registration Statement on Form SB-2, file
no. 33-75770-LA.

(3) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Amendment No. 1 to Registration Statement on Form SB-2, file
no. 33-75770-LA, with confidential portions omitted and filed separately
with the Commission pursuant to a Request of Confidential Treatment under
Rule 406 of the Securities Act of 1933.

(4) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form SB-2, file no. 33-75770-LA,
with confidential portions omitted and filed separately with the Commission
pursuant to a Request of Confidential Treatment under Rule 406 of the
Securities Act of 1933.

42
<PAGE> 43

(5) Exhibit is incorporated by reference to Exhibit No. 10.1 to the Company's
Current Report on Form 8-K, dated August 31, 1994.

(6) Exhibit is incorporated by reference to Exhibit No. 1.1A to the Company's
Amendment No. 1 to Registration Statement on Form SB-2, file no.
33-75770-LA.

(7) Exhibit is incorporated by reference to Exhibit No. 1.2A to the Company's
Amendment No. 1 to Registration Statement on Form SB-2, file no.
33-75770-LA.

(8) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994.

(9) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Post-Effective Amendment No. 1 to the Registration Statement
on Form SB-2, file no. 33-75770-LA.

(10) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Post-Effective Amendment No. 2 to the Registration Statement
on Form SB-2, file no. 33-75770-LA.

(11) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Registration Statement on Form S-1, file no. 33-94814.

(12) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 1 to the Company's Registration Statement on Form S-1, file
no. 33-94814.

(13) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 1 to the Company's Registration Statement on Form S-1, file
no. 33-94814, with confidential portions omitted and filed separately with
the Commission pursuant to a Request of Confidential Treatment under Rule
406 of the Securities Act of 1933.

(14) Exhibit is incorporated by reference to an identically numbered exhibit to
Amendment No. 2 to the Company's Registration Statement on Form S-1, file
no. 33-94814.

(15) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated September 1, 1995.

(16) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated October 20, 1995.

(17) Exhibit is incorporated by reference to Exhibit No. 2.1 to the Company's
Current Report on Form 8-K, dated September 1, 1995.

(18) Exhibit is incorporated by reference to Exhibit No. 2.2 to the Company's
Current Report on Form 8-K, dated October 20, 1995.

(19) Exhibit is incorporated by reference to Exhibit No. 1.1 to the Company's
Registration Statement on Form S-1, file no. 33-94814.

(20) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Quarterly Report on Form 10-Q, for the fiscal quarter ended
September 30, 1995.

(21) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.

(22) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1996.

(23) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996.

(24) Exhibit is incorporated by reference to an identically numbered exhibit to
the Company's Current Report on Form 8-K, dated October 11, 1996.

43
<PAGE> 44

* Certain portions of this exhibit have been omitted and filed separately
with the Commission pursuant to an Application for Confidential Treatment.

(b) Reports on Form 8-K

The Company filed a report on Form 8-K, dated October 11, 1996, related
to the sale of C.A.S. Sports International, Inc. and C.A.S. Sports Agency, Inc.

44
<PAGE> 45

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

RIDE, INC.
- ------------------------------------
(Registrant)

<TABLE>
<S> <C>
/s/ ROGER B. MADISON, JR. /s/ ROBERT E. HALL
- --------------------------------------------- ---------------------------------------------
Roger B. Madison, Jr. Robert E. Hall
Chairman of the Board Chief Executive Officer and President
</TABLE>

DATE: March 31, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dated indicated

<TABLE>
<C> <S> <C>
/s/ ROGER B. MADISON, JR. Chairman of the Board and Date: March 31, 1997
- ------------------------------------------ Director
Roger B. Madison, Jr.

/s/ ROBERT E. HALL Chief Executive Officer, Date: March 31, 1997
- ------------------------------------------ President and Director
Robert E. Hall (Principal Executive
Officer)

/s/ G. SCOTT STEWART Sr. Vice President and Chief Date: March 31, 1997
- ------------------------------------------ Financial Officer (Principal
G. Scott Stewart Financial and Accounting
Officer)

/s/ MARK M. SALTER Director Date: March 31, 1997
- ------------------------------------------
Mark M. Salter

/s/ CORY J. HECHLER Director Date: March 31, 1997
- ------------------------------------------
Cory J. Hechler

/s/ GERALD B. WASSERMAN Director Date: March 31, 1997
- ------------------------------------------
Gerald B. Wasserman
</TABLE>

45
<PAGE> 46

EXHIBIT INDEX

<TABLE>
<CAPTION>
MANUAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- --------------------------------------------------------------------------- --------
<C> <S> <C>
10.69 -- Resignation and Release Agreement, dated October 28, 1996, by and
between Ride, Inc. and Timothy G. Pogue.................................
10.70 -- Letter agreement, dated December 6, 1996, by and between Ride Inc. and
Straight Line Water Sports, Inc.........................................
10.71 -- Letter agreement, dated December 12, 1996, by and between Ride Inc. and
Straight Line Water Sports, Inc.........................................
11.1 -- Computation of Earnings Per Share.......................................
21.1 -- Schedule of Subsidiaries................................................
23.1 -- Consent of Ernst & Young LLP, Independent Auditors......................
27.1 -- Financial Data Schedule.................................................
</TABLE>

<PAGE> 1

Exhibit 10.69

RESIGNATION AND RELEASE AGREEMENT

Timothy G. Pogue ("Pogue") and Ride, Inc. and its related entities
(collectively "Ride") wish to amicably terminate Pogue's employment with Ride
and his status as a member of the Board of Directors of Ride, and to clearly
set forth the terms and conditions of Pogue's departure from his employment and
Board membership. Therefore, in consideration of the mutual promises and
undertakings in this Resignation and Release Agreement ("Agreement"), Pogue and
Ride agree as follows:

1. RESIGNATION. Pogue resigns from his employment as Senior Vice
President, effective December 31, 1996 ("Date of Resignation"). Pogue further
resigns as a member of the Board of Directors of Ride and any Ride subsidiary
for which Pogue currently serves as a Director, effective immediately.

2. SEVERANCE PAYMENT. Commencing the Date of Resignation, Ride shall pay
Pogue's current salary for a three (3) month period through and including March
31, 1997 (the "Severance Period"), less any lawful withholding. Such severance
shall be paid at normal bi-monthly payroll intervals or pursuant to a payment
schedule that is mutually agreeable to the parties. Pogue shall also be paid
any unused vacation pay accrued as of the Date of Resignation, as reflected in
Ride's records, to be paid at the end of the payroll period next following the
Date of Resignation, or pursuant to a payment schedule that is mutually
agreeable to the parties. Pogue shall not be entitled to vacation pay accrual
during the Severance Period.

3. EMPLOYEE PROGRAMS AND OTHER BENEFITS.

A. STOCK OPTIONS. All options granted to Pogue and his wife,
Stephanie Pogue, under Ride's 1994 Stock Option Plan ("Plan") are hereby
amended insofar as such options are now fully vested and immediately
exercisable. Stephanie Pogue's options shall remain exercisable for a period
of ten (10) years from the date of grant. Pogue's options shall remain
exercisable for a period of ten (10) years from the date of grant. The
remaining terms of the options shall be those set forth in the Plan.

B. STOCK PURCHASE PLAN. To the extent Pogue is participating in
the Ride Employee Stock Purchase Plan (" Stock Purchase Plan"), his
participation therein shall be terminated and all contributions by Pogue to the
Stock Purchase Plan as of the Date of Resignation shall be repaid to Pogue, all
in conformance with the terms and conditions of the Plan.

C. COBRA. At his election, Pogue may continue to participate in
Ride's medical and dental benefit plans governed by the Comprehensive Omnibus
Budget Reconciliation Act ("COBRA") for the time period provided in COBRA.
Ride will pay the cost of such coverage at the level in effect for Pogue as of
the Date of Resignation during the Severance Period. Pogue will pay the entire
cost of such coverage thereafter.

E. CHEVROLET SUBURBAN. On the Date of Resignation, Ride shall
transfer to Pogue clear title to the 1996 Chevrolet Suburban currently in
Pogue's possession, VIN # _____________________________, together with such
documentation as may be required to effect such transfer.

F. PERSONAL PROPERTY. Upon Ride's prior consent, which Ride
shall not unreasonably withhold, Pogue may purchase such items of personal
property belonging to Ride currently in Pogue's possession for the depreciated
cost of such property as reflected on the books of Ride as of the Date of
Resignation. Within 10 days from the date hereof, Pogue shall present to Ride
a schedule itemizing those items of personal property Pogue desires to
purchase. Ride shall have 10 days from receipt of such schedule to identify
those items of personal property, if any, that Ride does not consent to sell to
Pogue. Failure by Ride to timely object to any of such scheduled items shall
constitute Ride's acceptance of same. Pogue shall pay Ride for the agreed
items of personal property on or before the Date of Resignation. Upon
<PAGE> 2
payment, Ride shall execute such documentation, if any, required to effect
transfer of title in the property to Pogue. Pogue shall return to Ride within
10 days of the date hereof, or of the date Ride gives notice of its intention
not to sell a scheduled item of property, as the case may be, those items of
personal property belonging to Ride currently in Pogue's possession that,
respectively, Pogue does not desire to purchase or Ride does not desire to
sell, all as provided herein.

G. EXPENSE REPORTS. Ride shall reimburse all expenses incurred
by Pogue on behalf of Ride through the Date of Resignation in accordance with
Ride's expense reimbursement policy.

4. TRANSITION. Pogue will work in good faith with Ride management
through the Date of Resignation to effect the orderly transition of his job
responsibilities to such individuals as Ride may designate. Pogue will not be
required to be regularly present in his headquarters office. Rather, Pogue
shall make himself available for consultation to Ride on an "as needed" basis.
Ride shall attempt in good faith to give Pogue 24-hour prior notice of any
required meeting or project, and seven (7) day prior notice of any required
travel. Pogue's sole contact with Ride through the Date of Resignation shall
be Bob Hall.

5. REFERENCES. Upon request, Bob Hall on behalf of Ride will provide a
letter of recommendation for Pogue containing his dates of employment, pay
confirmation and general endorsement of his abilities. Unless authorized by
Pogue in writing, Ride's response to any inquiry from third parties shall be
limited to this same information.

6. NON-DISPARAGEMENT. For a three year period from the Date of
Resignation, Pogue agrees not to make any disparaging or derogatory remarks,
comments or statements about Ride and its subsidiaries, and their respective
officers, directors, shareholders, employees, products, business practices, or
any of them, at any time. For the same three year period, Ride agrees not to
make any disparaging or derogatory remarks, comments or statements about Pogue
at any time.

7. CONFIDENTIALITY AND NON-SOLICITATION.

A. NON-DISCLOSURE. Except as required by applicable law or
regulation and except as may be required to insure compliance with the terms of
this Agreement, Ride and Pogue agree to keep the terms of this Agreement
confidential; provided, that Pogue may share its provisions with his spouse,
and his attorneys and professional advisors, and Ride may share its provisions
with its senior management, attorneys, and professional advisors. Pogue agrees
not to use or disclose any non-public financial, technical, marketing,
operating, or other proprietary information of Ride and its subsidaries, or any
of them, which information Pogue acknowledges is the proprietary and
confidential property of Ride and constitutes Ride trade secret information.
Pogue further agrees to return all tangible items containing such confidential
information, wherever located and in whatever form, in addition to all other
property belonging to Ride, on or before the Date of Resignation; provided,
however, Pogue may retain the personal property in conformance with paragraph
3.f. hereof upon payment therefor. Pogue will transfer to Ride and delete from
electronic storage on any computer purchased from Ride any Ride confidential
information stored therein..

B. NON-COMPETITION; NON-SOLICITATION. Pogue and Ride shall
continue to be bound by the terms of the non-competition and non- solicitation
provisions of paragraph 6 of his Employment Agreement with Ride, dated January
1, 1995, which terms are incorporated herein by this reference as though fully
set forth. Nothing in this paragraph 7.b. shall prohibit Pogue and Ride from
engaging in such business transactions as the parties may agree.

8. VIOLATION. Pogue and Ride each acknowledges that their respective
nondisparagement, confidentiality, non-competition and non- solicitation
obligations under paragraphs 6 and 7 hereof are material inducements to Ride
and Pogue, respectively, in entering into this Agreement, that any violation
thereof shall constitute a material breach of this Agreement, and that any
statement, disclosure or action in violation of such paragraphs will cause
serious and irreparable injury to the other party for which there is
<PAGE> 3
no adequate remedy at law. If, upon investigation, a party reasonably
determines that the other party is in violation of paragraphs 6 or 7, as the
case may be, then such party may obtain immediate and permanent injunctive
relief without objection by the other party. The rights and remedies set forth
in this paragraph 8 are in addition to all other legal, equitable and
contractual rights and remedies available to the parties.

9. REPRESENTATIONS AND WARRANTIES.

A. BY POGUE. Pogue represents and warrants as follows:

(i) That he has reviewed this Agreement with independent
legal counsel or has waived the opportunity to do so, that the terms of this
Agreement have been negotiated in good faith at arms length, that he has read
and understands the terms of this Agreement and the consequences thereof, and
that he enters in to this Agreement as his free, voluntary and independent act.

B. BY RIDE. Ride represents and warrants as follows:

(i) That it is a Washington corporation duly authorized,
validly existing and in good standing under the laws of the State of
Washington.

(ii) That this Agreement and the obligations and
undertakings arising hereunder constitute the valid, binding and enforceable
obligations of Ride.

10. RELEASE. In consideration of the benefits and payments provided to
Pogue in this Agreement, and as a material inducement to Ride to enter into
this Agreement, Pogue, individually and for his marital community, if any, and
his heirs, personal representatives, successors and assigns (collectively,
"Pogue Releasees") release and forever discharge Ride, including any and all
affiliates, shareholders, officers, directors, representatives, agents, and
employees, each of their successors and assigns, and each of them
(collectively, "Ride Releasees"), and the Ride Releasees release and forever
discharge the Pogue Releasees, from any and all claims, demands, charges,
liability, causes of action, and damages, including without limitation,
attorneys' fees and costs actually incurred, known or unknown, that either
party may have against the other as of the Date of Resignation; provided,
however, this release shall not apply to: (a) any rights created by this
Agreement; and (b) any right of indemnification or defense of Pogue under
Ride's Articles of Incorporation, Bylaws, and applicable policies of insurance.

11. TAX LIABILITY. Some or all of the payments and benefits which Pogue
may receive hereunder may be deemed income and taxable to Pogue under relevant
provisions of the Internal Revenue Code of 1986 , as amended, and other
federal, state, and local statutes and regulations (collectively, "Codes").
Pogue is advised that Ride does not "gross up" benefits paid to or on behalf of
its employees. Pogue shall have sole responsibility to determine and, to the
extent any withholdings made by Ride hereunder are insufficient, pay, and shall
indemnify and hold Ride harmless from, all taxes coming due under such Codes.

12. NONADMISSION CLAUSE. This Agreement shall not be construed as an
admission by either party of any liability to the other party, breach of any
agreement between the parties, or violation by either party of any statute,
law, rule or regulation.

13. SEVERABILITY AND SURVIVAL. If any of the provision of this Agreement
is held to be invalid or unenforceable, the remaining provisions shall
nevertheless continue to be valid and enforceable. The rights and obligations
under this Agreement that by their terms are continuing, generally, and of
paragraphs 6 through 10 hereof, specifically, shall survive termination of the
Severance Period.

14. ARBITRATION. Any controversy or claim arising out of this Agreement
shall be resolved by arbitration pursuant to this paragraph and the then
current rules of the American Arbitration Association; provided, however, that
the parties may obtain the relief set forth in paragraph 8 hereof pending
resolution of such claim or controversy by arbitration as provided herein. The
arbitration shall be held in Seattle,
<PAGE> 4
Washington before a single arbitrator who is knowledgeable about employment
issues, generally. The arbitrator's decision shall be final and binding and
may be entered in any court having jurisdiction.

15. COMPLETE AGREEMENT. This Agreement contains the entire understanding
and agreement between the parties in connection with its subject matter and
supersedes any and all other prior and contemporaneous oral or written
agreements, understandings, or representations between the parties pertaining
to same. This Agreement cannot be altered except in a writing signed by Pogue
and an authorized representative of Ride.

16. FURTHER ASSURANCES. The parties agree to execute any further
documents and instruments as may be reasonably necessary to fully carry out the
terms and conditions of this Agreement.

17. ENFORCEMENT. In the event either party hereto fails to perform any of
its obligations hereunder, or in the event a dispute arises concerning the
meaning or interpretation of any provision hereof, the defaulting or
non-prevailing party in such dispute, as the case may be, shall pay the costs
and expenses incurred by the other party in enforcing or establishing the
respective rights hereunder, including without limitation, costs and reasonable
attorneys' fees.

18. BINDING AGREEMENT. This Agreement shall bind and inure to the benefit
of the parties and their respective heirs, personal representatives, marital
communities, related entities, shareholders, officers, directors, employees,
agents, attorneys, successors and assigns.

19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, and venue for any
proceeding hereunder shall be in King County, Washington.

IN WITNESS WHEREOF, the parties execute this Agreement as of the____ day of
October, 1996.

RIDE, INC.

- --------------------------------- -----------------------------------
Timothy G. Pogue Robert E. Hall, President and CEO

CONSENT OF SPOUSE

I, Stephanie Pogue, have read the foregoing Agreement and agree to be bound by
its terms.

Date:
----------------------------

-----------------------------------
Stephanie Pogue

<PAGE> 1
Exhibit 10.70

December 6, 1996

VIA FACSIMILE AND U.S. MAIL
Arnold R. Hedeen
Chism Jacobson & Johnson
1420 Fifth Avenue, Suite 3510
Seattle, WA 98101-4013

RE: RIDE, INC./STRAIGHT LINE WATER SPORTS, INC.

Dear Arnie:

The following sets forth the terms of the understanding resolving the issues in
dispute in connection with that certain Exclusive OEM Agreement ("Agreement"),
dated as of July 26, 1995, by and between Ride Snowboard Company ("Ride") and
Straight Liner Water Sports, Inc. ("Straight Line").

1. Board Number. Straight Line shall manufacture, and Ride shall
purchase, a total of 6,000 snowboards (collectively, "Boards") comprised as
follows: (a) 1,500 compact snowboards for which Straight Line currently
maintains top sheets in inventory; (b) 180 Grade B snowboards currently
completed and awaiting delivery; (c) balance as may be determined by Ride in
consultation with Straight Line. The number of Grade B and Grade C Boards that
Ride shall be obligated to accept hereunder shall not collectively exceed 10%
of the total.

2. Delivery. The delivery schedule for the Boards shall be as
reasonably requested by Ride, commencing on or after January 1, 1997. All
other terms of delivery shall be as described in the Agreement.

3. Payment. Ride shall pay Straight Line the current account
receivable balance of $180,079.07, without warranty holdback, on or before
December 15, 1996. No interest shall be due on this sum provided payment is
timely made as described herein. Payment terms for the Boards shall be as
described in the Agreement.

4. Warranty. Straight Line shall warrant the Boards on a one-for-one
basis in conformance with Straight Line's standard board warranty. Straight
Line and Ride shall each appoint a technical representative to review and
approve or reject each warranty claim. In the event the parties' warranty
representatives disagree as to the warranty coverage of a particular claim,
such representatives shall reasonably agree on a neutral third party of
sufficient knowledge to make a binding determination. The warranty obligation
of Straight Line set forth herein shall apply to and be binding upon any third
party that may by assignment, purchase, merger or other form of transfer retain
title or interest in and to all or substantially all of Straight Line's assets
while Straight Line's warranty obligation remains in effect, and Straight Line
shall cause such successor third party to execute such instruments as Ride may
reasonably request acknowledging and agreeing to such warranty obligation.

5. Scheduling. Ride acknowledges Straight Line's desire to
manufacture the Boards in period of 12-weeks without interruption. Straight
Line acknowledges that some or all of the Boards shall bear graphics for the
1997-1998 season, which graphics are currently in the process of completion.
Ride shall make every good faith effort to complete and submit the graphics to
Straight Line in a manner that will not cause material interruption in Straight
Line's manufacturing process; provided, that a brief interruption in
<PAGE> 2
such process shall not be deemed material provided Ride is diligently and in
good faith proceeding with the completion and delivery of said graphics.

6. Molds. Promptly upon completion of the Boards, Straight Line
shall transfer the Board molds, designs, specifications and related tooling, if
any, to Ride in whole and complete condition, normal wear and tear excepted.

7. Good Faith. Straight Line and Ride each shall work with the other
in good faith to insure the terms, purpose and intent of the parties' as
described in this Letter Agreement are achieved.

9. Release. Upon final payment for the Boards and delivery of the
Molds as described herein, each party shall be released from their respective
obligations and liabilities arising under the Agreement and this Letter
Agreement, provided such release shall not apply to Straight Line's warranty
obligation or such other obligations of the parties as may arise in connection
with the use of the Boards by third parties. The parties shall execute a form
of Release memorializing the terms of such release, provided the release
described herein shall be sufficient, effective and enforceable in any court of
competent jurisdiction in the event such form of Release is not so executed.

10. Integration. Except as modified herein, the terms and conditions
of the Agreement shall remain in full force and effect.

Should the foregoing conform to your understanding of the parties' agreement,
kindly sign the subjoined Acknowledgment where indicated and return a duplicate
original form of this Letter Agreement to me in the enclosed self-addressed
envelope. Thank you.

Yours very truly,

/s/ David H. Davis

David H. Davis
General Counsel

DHD/ss
enclosure
cc: Bruce Manke
Jason Kaznits
John O'Connor

ACKNOWLEDGED, UNDERSTOOD AND AGREED TO:

STRAIGHT LINE WASTER SPORTS, INC.

By /s/ Michael P. Gai
------------------------------------
Its CEO
-----------------------------------
Date 12/9/96
----------------------------------

<PAGE> 1
Exhibit 10.71

December 12, 1996

VIA FACSIMILE AND U.S. MAIL
Arnold R. Hedeen
Chism Jacobson & Johnson
1420 Fifth Avenue, Suite 3510
Seattle, WA 98101-4013

RE: RIDE, INC./STRAIGHT LINE WATER SPORTS, INC.

Dear Arnie:

This Amendment sets forth the terms of the understanding resolving the open
issues in connection with that certain Exclusive OEM Agreement ("Agreement"),
dated as of July 26, 1995, by and between Ride Snowboard Company ("Ride") and
Straight Liner Water Sports, Inc. ("Straight Line"), as amended by the Letter
Agreement, dated December 6, 1996, by and between Straight Line and Ride.
Unless otherwise defined herein, capitalized terms shall be as defined in the
Letter Agreement

1. Purchase Order.

a. Upon execution of this Amendment, Ride shall issue a
Purchase Order for a total of 2,500 compact Boards ("Compacts") and
the 180 B Grade Boards currently warehoused by Straight Line ("Grade
B's"), provided that Ride shall be under no obligation to purchase,
and the total number of 6,000 Boards shall be reduced by, those Grade
B's that do not meet insert specifications ("Defects").
b. On or before December 20, 1996, Ride shall issue a
Purchase Order for 3,320 Boards ("SPG Boards"); provided that Ride may
deliver the top sheet graphics for such SPG Boards no later than
January 15, 1997.

2. Delivery. The delivery schedule for the Boards shall be as
follows:

a. All Grade B's, less the Defects, may be delivered
immediately;
b. 750 Compacts may be delivered immediately upon completion;
c. 750 Compacts on March 15, 1997;
d. 1000 Compacts on April 15, 1997;
e. 3,320 SPG Boards on or before May 15, 1997.

All other terms of delivery shall be as provided in the Agreement.

3. Payment. Ride shall make payment as follows:

a. The current account receivable balance of $180,079.07,
without warranty holdback, on or before December 13, 1996. No
interest shall be due on this sum provided payment is timely made as
described herein;

b. Payment for the Grade B's and Compacts delivered as
provided in paragraphs 2.a.-c. hereof net 15 days from receipt of
invoice;

c. Payment for all other Boards shall be net 15 days from the
date of delivery and invoice or May 30, 1997, whichever is later.

All other payment terms shall be as described in the Agreement.
<PAGE> 2
4. Warranty. Warranty shall be as described in the Letter Agreement with the
following modifications:

a. The term of the warranty shall be from the date of this
Amendment through and including December 31, 1998, after which date
all warranty obligations, express and implied, including the implied
warranties of merchantability and fitness for a particular purpose,
shall expire;

b. The warranty shall be secured by a joint escrow ("Escrow")
in the principal amount of $96,600 to be established and funded by
Ride from payment due Straight Line under paragraph 3.c. above no
later than May 30, 1996. The escrow shall require the joint
instructions of Ride and Straight Line, and may terminate on or after
January 1, 1999 at Straight Line's election. Interest, if any,
generated by the escrowed funds shall be for the benefit of Straight
Line.

c. The technical representatives pursuant to paragraph 4 of
the Letter Agreement shall be Dick Lyons for Straight Line, and John
O'Connor for Ride, or their respective successor as may be determined
in the respective parties' sole discretion should such representative
be unavailable for any reason. In the event the technical reps cannot
agree on the applicability of a warranty claim, they shall flip a coin
and the decision of the winner thereof shall control and bind the
parties.

d. The Boards shall be warranted against the following
defects:

- Delaminations, including bubbles
- Bending and breaking
- Major top failure (not to include scratches or
normal cap chipping)
- Insert pull outs or spinning and cracking around
inserts.

5. Grading. Grading of the Boards shall be as described on the
Quality Specifications for 96 Production memorandum, dated January 24, 1996,
attached hereto as Exhibit A.

6. Pricing. Pricing for the Boards shall be as provided in the
Agreement.

7. Molds. Straight Line shall transfer the molds as provided in
paragraph 6 of the Letter Agreement, including the tooling therefor, upon
payment by Ride in the amount of $4,300.

8. Integration. Except as modified herein, the terms of the Letter
Agreement and the Agreement shall remain in full force and effect.

Please indicate your acceptance of the foregoing by signing the subjoined
Acknowledgment. Thank you.

Yours very truly,

/s/ David H. Davis

David H. Davis
General Counsel

DHD/ss
enclosure
cc: Bruce Manke
Jason Kaznits
John O'Connor

ACKNOWLEDGED, UNDERSTOOD AND AGREED TO:

STRAIGHT LINE WATER SPORTS, INC. RIDE SNOWBOARD COMPANY
<PAGE> 3

By /s/ Michael P. Gai By /s/ Bruce Manke
-------------------------- -----------------------------------
Its CEO Bruce Manke, Sr. Vice President
--------------------------
Date 12/12/96 Date 12/12/96
-------------------------- --------------------------------

<PAGE> 1
Exhibit 11.1

COMPUTATION OF EARNINGS PER SHARE

(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Primary:
- --------
Weighted average common shares outstanding 6,231 8,872 10,614
Net effect of dilutive stock equivalents based
on the treasury stock method using average
market price 178 1,060 -
--------------------------------------------

Total weighted average shares outstanding 6,409 9,932 10,614
============================================

Net income (loss) $ 1,866 $ 5,955 $ (5,490)
Less dividends on preferred stock (35) (35) (35)
--------------------------------------------

Adjusted net income $ 1,831 $ 5,920 $ (5,525)
============================================

Net income (loss) per share $ 0.29 $ 0.60 $ (0.52)
============================================

Fully diluted:
- --------------
Weighted average common shares outstanding 6,231 8,872 10,614
Net effect of dilutive stock equivalents based
on the treasury stock method using the higher
of the average or the ending market price 397 1,383 -
Assumed conversion of preferred stock 200 200 -
--------------------------------------------

Total weighted average shares outstanding 6,828 10,455 10,614
============================================

Net income (loss) $ 1,866 $ 5,955 $ (5,490)

Less dividends on preferred stock - - (35)
--------------------------------------------

Adjusted net income $ 1,866 $ 5,955 $ (5,525)
============================================

Net income (loss) per share $ 0.27 $ 0.57 $ (0.52)
============================================
</TABLE>

<PAGE> 1
Exhibit 21.1

Subsidiary List
as of December 31, 1996

The following sets forth the wholly-owned subsidiary corporations of Ride, Inc.
(a Washington corporation):

1. Ride Manufacturing, Inc. (a California corporation) (named changed
from Thermal Snowboards, Inc. in December 1996)

2. SMP Clothing, Inc. (a Washington corporation)

3. Ride Snowboard Company (a Washington corporation)

(a) Preston Binding Company (a Washington corporation)
(a subsidiary of Ride Snowboard Company)

4. Ride Canada, Inc. (an Ontario corporation)

5. Ride International, Inc. (a Barbados corporation)

<PAGE> 1
Exhibit 23.1

Consent of Ernst & Young LLP, Independent Auditors

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-92034) pertaining to the Ride Snowboard Company 1994 Stock
Option Plan and Ride Snowboard Company 1994 Directors~ Nonqualified Stock
Option Plan and in the Registration Statement (Form S-8 No. 33-81029)
pertaining to the Ride, Inc. 1995 Employee Stock Purchase Plan and Ride, Inc.
foreign Subsidiary 1995 Employee Stock Purchase Plan of our report dated
February 28, 1997, except for Note 14 for which the date is March 14, 1997,
with respect to the consolidated financial statements and schedule of Ride,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31,
1996 filed with the Securities and Exchange Commission.

Seattle, Washington
March 28, 1997 ERNST & YOUNG LLP

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 3,232
<SECURITIES> 0
<RECEIVABLES> 14,193
<ALLOWANCES> 655
<INVENTORY> 5,986
<CURRENT-ASSETS> 28,120
<PP&E> 5,757
<DEPRECIATION> (995)
<TOTAL-ASSETS> 50,655
<CURRENT-LIABILITIES> 7,407
<BONDS> 0
0
500
<COMMON> 39,583
<OTHER-SE> 2,226
<TOTAL-LIABILITY-AND-EQUITY> 50,655
<SALES> 75,728
<TOTAL-REVENUES> 75,728
<CGS> 61,641
<TOTAL-COSTS> 61,641
<OTHER-EXPENSES> 22,987
<LOSS-PROVISION> 495
<INTEREST-EXPENSE> 268
<INCOME-PRETAX> (8,353)
<INCOME-TAX> (2,863)
<INCOME-CONTINUING> (5,490)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,490)
<EPS-PRIMARY> (0.52)
<EPS-DILUTED> (0.52)

</TABLE>