Edgar Filing: HOCKEY CO

-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2000 Commission file number 0-19596

THE HOCKEY COMPANY
(Exact name of registrant as specified in its charter)

DELAWARE 13-36-32297
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

C/O MASKA U.S., INC., 929 HARVEST LANE, P.O. BOX 1200, WILLISTON, VT 05495
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (802) 872-4226

Securities registered pursuant to Section 12(b) of the Act:

NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK,
PAR VALUE $.01

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 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 is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 13, 2001 has not been determined due to the extremely
limited trading volume in the Registrant's Common Stock; however, 1,060,286
shares of the voting stock were held by non-affiliates of the registrant on
March 13, 2001.

As of March 13, 2001, 6,500,549 shares of the Registrant's Common
Stock, $.01 par value per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None
-------------------------------------------------------------------------------

TABLE OF CONTENTS

PAGE

PART I

Item 1. Business............................................................3

Item 2. Properties..........................................................9

Item 3. Legal Proceedings...................................................9

Item 4. Submission of Matters to a Vote of Security Holders................10

PART II

Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters....................................11

Item 6. Selected Financial Data............................................11

Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................13

Item 7a. Qualitative and Quantitative Disclosures about Market Risk.........19

Item 8. Financial Statements and Supplementary Data........................20

Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure...........................................48

PART III

Item 10. Directors and Executive Officers of the Registrant.................49

Item 11. Executive Compensation.............................................51

Item 12. Security Ownership of Certain Beneficial Owners and Management.....54

Item 13. Certain Relationships and Related Transactions.....................56

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....56

PART I

ITEM 1. BUSINESS

OVERVIEW OF THE HOCKEY COMPANY

We are the largest manufacturer and marketer of hockey equipment and
hockey related apparel in the world. Our primary brands, CCM, KOHO and JOFA,
are among the most widely recognized brands in hockey. Since the beginning of
the 2000/2001 NHL season, we are the exclusive supplier of hockey jerseys to
every NHL team and have the exclusive worldwide right to market authentic and
replica NHL jerseys. Our jerseys are now worn by every player and referee in
the NHL.

We are one of only two industry participants with worldwide
operations. We solidified our global presence in November 1998 with the
acquisition of Sports Holdings Corp., Europe's largest manufacturer of hockey
equipment. The acquisition made us the world's largest manufacturer of hockey
equipment by combining the world's second and third largest hockey equipment
manufacturers. This strategic acquisition has provided us with extensive
European manufacturing and broader distribution capabilities. In addition,
the acquisition has extended our product lines and strengthened our brand
portfolio with the addition of the well-known JOFA, KOHO, CANADIEN, HEATON
and TITAN brands.

We offer a complete line of hockey equipment and hockey related
apparel. Our comprehensive line of hockey equipment, including skates,
protective equipment, hockey sticks and goaltender equipment, provides a wide
range of choices for both recreational and professional players. Our skates
and other equipment are sold at various price points and range from
entry-level products for the beginner, to intermediate performance products
used by youth league players, to high performance products used by
professionals in the NHL. The hockey related apparel segment of our business
consists of licensed jerseys, non-team identified, or uncrested jerseys and
creative apparel. The creative apparel line includes high quality fleecewear,
pants, shirts, T-shirts, golf shirts, turtlenecks, outerwear and caps
embroidered with the NHL, NCAA and other team and league logos.

INDUSTRY OVERVIEW

We compete in the worldwide wholesale hockey equipment, hockey
jersey and hockey related creative apparel market. The hockey equipment and
hockey related apparel markets are segments of the overall sporting goods
industry in the U.S. alone. Several factors are expected to support the
future growth of the sporting goods industry, including:

o the considerable leisure time and financial resources of the baby
boomer population;

o a heightened awareness of the importance of recreation and
exercise; and

o the growing overseas market for recreational products.

Several specific factors have fueled growth in the hockey industry
and are expected to continue to support the future growth of hockey equipment
and hockey related apparel. Included among these factors are the following:

o increased popularity of hockey.

o the expansion of the NHL.

o development of ice rinks in the U.S.

o favorable demographics.

PRODUCTS

We manufacture and market a fully integrated line of hockey
equipment and apparel. Our equipment product lines include:

o ice hockey, roller hockey and figure skates;

o protective equipment;

o hockey sticks; and

o goaltender equipment.

Our hockey related apparel products include:

o licensed hockey jerseys;

o gamewear;

o creative apparel; and

o private label activewear.

EQUIPMENT

SKATES.

ICE HOCKEY SKATES. We manufacture and market a wide range of ice
hockey skates under the CCM, TACKS, POWERLINE, JOFA and KOHO labels.
The tradition of the flagship CCM brand of skates, first introduced to
the market in 1905, is interwoven throughout the history of ice hockey
and the NHL.

ROLLER HOCKEY SKATES. The construction and production of roller hockey
skates are very similar to ice hockey skates. Because of these
structural similarities, we take advantage of the skate production
infrastructure at our St. Jean facility to produce our roller hockey
skates. We focus on marketing premium roller hockey skates targeted at
high price points.

FIGURE SKATES. We market six different models of figure skates under
the CCM and JOFA labels.

PROTECTIVE EQUIPMENT.

HELMETS. We market our helmets under the CCM and JOFA labels, which
have been two of the leading brands of helmets for over 30 years. More
players in the NHL wear our helmets than any other competitors'
products. Our helmets provide a high level of protection and
prominently display the CCM and JOFA brand names.

BODY PROTECTIVE EQUIPMENT AND GLOVES. We market a variety of body
protective equipment, including shoulder pads, shin guards, elbow pads
and gloves under the CCM, JOFA and KOHO brands. CCM gloves and body
protective equipment are marketed under three sub-brands, including
TACKS, SUPRA and POWERLINE.

PANTS. We manufacture and market hockey pants under the CCM, JOFA and
KOHO labels. CCM branded pants also carry the SUPRA and POWERLINE
sub-brand names.

ACCESSORIES. We market several accessories, such as carry bags,
athletic supporters and referee equipment.

HOCKEY STICKS.

We believe we are the premier manufacturer of hockey sticks and set
the industry standards for quality, innovation and stick performance. We
market a wide range of hockey sticks incorporating various materials,
designs, and performance characteristics. Our sticks are sold under the CCM,
JOFA and KOHO brands. CCM and JOFA sticks are also sub-branded for greater
market segmentation. CCM sub-brands include TACKS, CANADIEN, SUPRA and
POWERLINE for our player, non-goaltender, sticks and TACKS and HEATON for
goaltender sticks. Similarly, the TITAN sub-brand is associated with the JOFA
primary brand. We are also a leading provider of replacement blades, enabling
players to re-use the shaft of their two-piece hockey sticks.

GOALTENDER EQUIPMENT.

We produce a fully integrated line of goaltender equipment. We market
our goaltender facemasks, catch mitts and blockers, goaltender arm and body
protectors and leg pads under the HEATON sub-label of CCM and the

KOHO brand. We market our goaltender pants under the SUPRA and HEATON
sub-labels of CCM and the KOHO brand. We believe our goaltender pants provide
superior fit and durability.

OTHER EQUIPMENT

In addition to our primary hockey and skating related equipment, we
also manufacture and market other equipment including alpine skiing and
equestrian helmets. These products are manufactured and assembled at the
Malung, Sweden facility. In addition, in Finland and Sweden, we are the
exclusive distributor of Merrell footwear, a leading European brand.

HOCKEY RELATED APPAREL PRODUCTS

LICENSED JERSEYS. We have supplied NHL teams with authentic jerseys
for 33 years. Pursuant to a new license agreement with the NHL, we hold the
exclusive right to provide authentic jerseys used "on-ice" by every team in
the NHL and market authentic and replica jerseys of all 30 teams. Our new
agreement with the NHL extends through the 2003/2004 season. In addition,
under our license agreement with the NHL Players Association, we have the
right to market these jerseys with the names and numbers of NHL players. In
addition to supplying jerseys to the NHL, we also maintain agreements to
provide jerseys to professional teams in other leagues as well as most major
NCAA teams.

Although we generate revenue from the sale of authentic jerseys to
the consumer market, replica jersey sales into the consumer market account
for an estimated 95% of our licensed jersey revenue. Replica jerseys are
similar to authentic jerseys and may also display team names and crests but
incorporate different fabrics and features than authentic jerseys. Our
authentic jerseys incorporate Pro-Weight Air-Knit and Ultrafil fabric, high
quality crests, a fighting strap and reinforced stitching on all seams and
hems. Youth and adult replica jerseys feature Mid-Weight Air-Knit fabric and
child/toddler jerseys feature traditional Suprafil fabric.

GAMEWEAR. We sell non-team identified gamewear hockey jerseys that
are primarily used by organized leagues, amateur hockey associations and
schools. The majority of these jerseys is of replica quality and is sold
through retail channels. We also produce hockey socks for both professional
and recreational markets.

CREATIVE APPAREL. We manufacture a high quality line of fleecewear,
pants, shirts, T-shirts, golf shirts, turtlenecks, outerwear and caps
embroidered with the NHL, NCAA and other team and league logos. We market
these products pursuant to several license agreements with a variety of
organizations, including the NHL, major colleges and universities, the NCAA
and the International and American Hockey Leagues. We outsource the
production of all of our creative apparel products.

In addition to sports apparel and accessories displaying
professional and collegiate team logos and designs, we also sell our line of
caps, T-shirts, and fleecewear to corporations and other organizations. Our
products include custom embroidered and screen printed T-shirts and polo
shirts bearing corporate and organizational logos.

SALES AND MARKETING

NORTH AMERICAN SALES. Our equipment sales organization is comprised
of a group of representatives that exclusively sell CCM branded equipment and
another group of independent representatives dedicated to selling KOHO and
JOFA equipment. Throughout the U.S. and Canada, we employ regional managers
and utilize independent sales people in the field who sell our products
exclusively. Sales representatives are charged primarily with selling
equipment, products and jerseys to our smaller hockey specialty accounts.
Regional managers are charged with overseeing the sales representative
organization and also maintaining our larger accounts across all brands. We
believe that our establishment of separate sales teams dedicated to specific
brands will result in increased brand differentiation in the marketplace and
increased market penetration.

We have a separate sales force for our creative apparel, comprised
of a vice president of sales, a key account manager and independent
representative organizations. Our apparel sales team possesses extensive
industry experience. Our sales representatives are responsible for selling
apparel, including licensed jerseys, and creative apparel, to large sporting
goods retailers and department stores in the U.S.

INTERNATIONAL SALES. In Sweden, Finland and Norway, we sell our
equipment and apparel directly to retailers and teams, through our in-house
sales team in Scandinavia. Except for Sweden, Finland and Norway, we sell our
products through 35 distributors located in Europe, Russia and Japan and the
rest of the world. These distributors, in turn, sell our products to teams
and retailers. Our European sales activities are managed by the director of
business development located in our Paris sales office. South America,
Central America, and Pacific Rim sales are also coordinated by the sales
office in Paris, France.

NHL AGREEMENTS

LICENSES. Our license agreement with NHL Enterprises, LP, the
marketing affiliate of the NHL, extends through June 30, 2004 and gives us
the exclusive right to supply authentic game jerseys used "on-ice" by the 30
NHL teams, including playoff and all-star jerseys. Authentic game jerseys are
supplied under the CCM and KOHO brand names, while authentic practice jerseys
are supplied under the JOFA brad name. We are also the exclusive supplier of
"on-ice" jerseys and pants for NHL officials under the JOFA brand name. Our
brand names are placed, pursuant to the agreement, on the outside rear neck
of the jersey, to provide brand name exposure. We also have the right to use
the names, logos, and other indicia of the NHL and the NHL member teams on an
exclusive basis in connection with the manufacture, supply and sale of
replica game and practice jerseys of the 30 NHL teams. Pursuant to a separate
agreement with the National Hockey League Players Association we are entitled
to market authentic and replica game and practice jerseys identified with the
names and numbers of NHL players. Since the beginning of the 2000/2001 NHL
season, the CCM logo appears on every "home" NHL jersey, the KOHO logo
appears on every "away" and "third" NHL jersey and the JOFA label is on all
NHL referee uniforms. The agreement also grants us the exclusive right to
market T-shirts, golf shirts, workout wear, outerwear and activewear bearing
NHL logos, names and designs under the NHL's Center-Ice(R) trademark, which
are worn by the trainers NHL teams during games. We also have the
non-exclusive right to use the NHL team logos on headwear. We market all of
the foregoing products to North American retailers for resale as well as to
European and Asian distributors.

Pursuant to the license agreement we are required to pay a license
fee and royalties to the NHL based on our net sales, with minimum royalty
amounts guaranteed to be paid by us each license year. In addition to these
costs, we have agreed to purchase a fixed dollar amount of marketing assets
from the NHL and from each of the NHL teams.

We also manufacture and market JOFA hockey protective equipment
under license from NHL Enterprises. The premium products in the protective
equipment line (shoulder, shin and elbow pads) is co-branded with the
Center-Ice trademark, also referred to as "the official equipment worn by the
NHL.' The NHL reserves this mark for products with overwhelming usage by NHL
players. Other JOFA products are co-branded with the NHL shield.

NHL "ON-ICE" PROMOTION. Our brands are permitted to appear on
equipment used by NHL player "on-ice" pursuant to our On-Ice Equipment
License with the NHL. The extensive use of our products by NHL players
significantly promotes the high visibility of our brands among consumers. All
of our products prominently display their respective brand and sub-brand
logos, resulting in significant and cost-effective exposure in arenas, on
television and in newspapers, magazines and other printed media. Our market
research indicates that NHL use of a particular brand of equipment is among
the key factors in a consumers purchase decision. Our products enjoy
widespread usage among NHL players without paid endorsement. We do, however,
have endorsement agreements with several high visibility players including,
among others, Martin Brodeur (CCM HEATON) of the New Jersey Devils, Mark
Recchi (CCM) of the Philadelphia Flyers, Patrick Roy (KOHO) of the Colorado
Avalanche, Daniel Sedin (JOFA) and Henrik Sedin (JOFA) of the Vancouver
Canucks and Mats Sundin (CCM) of the Toronto Maple Leafs.

RESEARCH AND DEVELOPMENT

We believe we are the industry's leader in product innovation and
have dedicated significant resources to ensure our future technological
leadership. The majority of our products are developed and commercialized in
our two dedicated research and development centers located in St. Jean,
Quebec and Malung, Sweden. These facilities employ designers, engineers and
model makers and feature comprehensive testing equipment, woodworking, spray
painting, molding and sculpting capabilities and have creative services
departments which are responsible for packaging, catalogue design and
development.

Our research and development team works closely with each of our
four product business units to enhance the quality and performance of
existing products and to introduce new products into the marketplace. The
majority of our products are developed internally through our research
efforts and continued feedback from professional and recreational players as
well as from retail customers. Our university affiliation will support our
efforts to develop equipment performance benchmarks, as well as new materials
and equipment designs.

MANUFACTURING

EQUIPMENT MANUFACTURING PROCESSES

We believe we have developed the industry's most advanced hockey
equipment manufacturing processes, featuring proprietary technologies and
extensive automation. We believe that we operate the industry's most
automated hockey stick production facility at our Cowansville, Quebec
facility. In addition, we produce all of our ice hockey and roller hockey
skates using common infrastructure and almost identical manufacturing
processes, resulting in production efficiencies. We outsource the production
of the majority of our protective equipment line, except for our helmets and
high and mid-range pants, which are produced in-house. In addition, we source
some products from Asia and the Czech Republic.

HOCKEY RELATED APPAREL MANUFACTURING PROCESSES

We are a vertically integrated manufacturer of hockey related
apparel and utilize extensive automatic technology. We knit our own jersey
fabric and hockey socks and cut and assemble the components for our jerseys.

In addition, we have developed sophisticated sewing equipment that facilitates
the labour-intensive finishing process of jersey production. We have recently
implemented several initiatives that have dramatically increased throughput and
the overall efficiency of our jersey manufacturing lines. For our creative
apparel line, we source blank jackets, fleecewear and other apparel from third
parties and in turn have them embellished by other third parties with team
crests and logos and our brand names.

COMPETITION

Our principal competitor in the hockey equipment market is Bauer
Nike Hockey Inc., a subsidiary of Nike, Inc. In addition to Bauer Nike, we
compete with several smaller companies that typically do not offer full
product lines, including Easton Sports, Inc., Mission Hockey Company,
Sherwood Drolet Ltd. and ITECH Sport Products Inc. Although Bauer Nike and
ourselves together control a significant portion of the worldwide hockey
equipment market, the remaining market is highly fragmented. We compete on
the basis of brand image, price, quality and performance of our products,
technology, method of distribution, style and intellectual property
protection.

Within the hockey apparel segment, our competitors for licensed
jerseys have included Bauer Nike, Starter Corporation and Pro Player, Inc.
These companies have recently exited the market for licensed NHL jerseys. In
the gamewear market, our competitors include Bauer Nike, Athletic Knit and
Kobe. Although the creative apparel market is highly fragmented, we compete
with companies such as Lee Sports, Logo Athletic, Antigua Sportswear,
Spotlight Apparel and Pro Player.

PATENTS AND TRADEMARKS

PATENTS

We currently hold patents and industrial designs in multiple
countries. The patents encompass various product innovations and designs.
Many of our patents represent what have become industry standards in
performance and quality. Examples include the Hyper X Locking Mechanism and
Joint Discharge Principle that are featured in our protective equipment
product line.

TRADEMARKS

We own a substantial number of trademarks. All of our trademarks are
owned by us except for the CCM trademark which is owned by CCM Holdings
(1983) Inc., which in turn is 50% owned by us through some of our
subsidiaries. The remaining 50% of CCM Holdings is owned by an unaffiliated
Canadian bicycle company. We have the exclusive and perpetual right to use
the CCM trademark royalty free in connection with skates, hockey equipment
and hockey related apparel. This arrangement is pursuant to a license
agreement with CCM Holdings which is subject to a nominal annual fixed fee,
which is not based on sales, of Canadian $10,000 payable to CCM Holdings.

EMPLOYEES

As of December 31, 2000, the Company employed 1,806 persons. 1,517
are employed in Canada, 80 are employed in the United States and the balance
are employed in Europe. None of the Company's employees in the United States
are unionized, while 359 of its employees at its St. Jean, Quebec facility,
55 employees at its Drummondville, Quebec facility and 55 employees of the
Harrow, Ontario facility are unionized. The collective bargaining agreements
with the unions expire in 2001 for Drummondville and in 2003 for St. Jean and
Harrow.

ITEM 2. PROPERTIES

We believe that our existing manufacturing and distribution
facilities have sufficient capacity to support our business without the need
for significant additional or upgraded equipment or capital expenditures. The
following table summarizes each of our principal facilities for its
operations.

LOCATION USE APPROXIMATE LEASE/
SQUARE FEET OWN

UNITED STATES
Bradford, Vermont U.S. apparel distribution 84,000 Own
Georgia, Vermont Cross-dock and warehouse 16,500 Lease
Williston, Vermont U.S. equipment distribution center and administrative 70,000 Lease
offices
Branford, Connecticut U.S Apparel offices 2,500 Lease

CANADA
Cowansville, Quebec Hockey stick manufacturing 45,500 Own
Drummondville, Quebec Hockey stick manufacturing 63,000 Own
St. Jean, Quebec Hockey equipment and skate manufacturing 138,000 Lease
St. Hyacinthe, Quebec Hockey apparel cutting and sewing 78,000 Lease
St. Hyacinthe, Quebec Canadian equipment distribution center and administrative
offices 200,000 Lease
Cap de la Madeleine,
Quebec Hockey apparel sewing 12,000 Lease
Westmount, Quebec Executive and administrative offices 23,000 Lease
Mt. Forest, Ontario Apparel manufacturing 125,000 Own
Harrow, Ontario Goaltender equipment manufacturing 15,000 Lease
Richmond, Quebec Hockey apparel sewing 11,500 Lease

EUROPE
Paris, France European sales office 1,200 Lease
Forssa, Finland Warehouse 39,000 Lease
Tammela, Finland Hockey stick factory, warehouse and offices 50,000 Lease
Helsinki, Finland Sales office 1,500 Lease
Malung, Sweden Protective equipment factory, warehouse and offices 97,000 Lease
Fredrikstad, Norway Office and warehouse 14,500 Lease

ITEM 3. LEGAL PROCEEDINGS

A. ENVIRONMENTAL LITIGATION

the note. Copeland asserted the right to recover from us as a secured claim,
the difference between the aggregate value of the common stock and the amount
of the promissory note. In October 1998, Copeland's claim in the Bankruptcy
Court to recover this difference was disallowed without an evidentiary hearing.
Copeland filed an appeal of this decision. On May 1, 2000, the District Court
overruled the Bankruptcy Court's decision and remanded the claim to the
Bankruptcy Court for an evidentiary hearing. In February 2001, we reached an
agreement with Copeland, subject to Bankruptcy Court approval, to settle this
claim for $1 million in cash.

B. PRODUCT LIABILITY LITIGATION

We are unaware of any personal injury claims for which there is
inadequate insurance coverage.

C. OTHER LITIGATION

On October 16, 1997, ZMD Sports Investments Inc. and 2938201
Canada Inc., landlords of our properties located in St. Jean, Quebec and
St. Hyacinthe, Quebec, brought motions against us requiring us to
undertake certain repairs to the properties for an estimated $630,000. We
believe these motions to be without merit.

Other than certain legal proceedings arising from the ordinary course
of business, which we believe will not have a material adverse effect, either
individually or collectively, on the financial position, results of
operations or cash flows, there is no other litigation pending or threatened
against us.

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

None

PART II

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

A. PRICE RANGE OF COMMON STOCK

On April 11, 1997, the effective date of the Company's Plan of
Reorganization, the Company's Old Common Stock ("Old Common Stock") was
extinguished and the holders of the Old Common Stock received a total of
300,000 five-year warrants to purchase an aggregate of 300,000 shares of
common stock at an exercise price of $16.92 per share (subject to adjustments
for stock splits, stock dividends, recapitalizations and similar
transactions). Each holder of 67 shares of Old Common Stock received one
warrant to purchase, for cash, one share of common stock, with no fractional
warrants issued. Also on that date, the Company issued an aggregate of
6,500,000 shares of common stock, $0.01 par value (as adjusted to take
account of fractional interests). Common stock and warrants are quoted on the
OTC Bulletin Board under the trade symbols "THCX" and "THCXW", respectively.
The range of closing prices of the Common stock is not provided, as there has
been a limited amount of trading activity in the Company's common stock.

B. APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

The approximate number of record holders of common stock as of March
13, 2001 was 303. There are also 279 warrant holders who are eligible to
convert those warrants into common stock under certain conditions. The
Company did not pay dividends on its common stock and has no current plans to
pay cash dividends in the foreseeable future.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial
statements and related notes thereto included elsewhere in this Form 10-K.
The selected consolidated financial data as of and for the years ended
December 31, 2000, 1999, 1998, 1997, and 1996 are derived from the
consolidated financial statements of the Company. For the presentation of
this statement, 1997 pre and post reorganization results have been combined.

EBITDA is a measure of the cash generated from operations and has
been included in the selected income statement highlights, because management
believes that it would be a useful indicator for readers. EBITDA is defined
as the earnings (net income) before interest, income and capital taxes,
depreciation and amortization, and unusual items. EBITDA is not a measure of
performance or financial condition under generally accepted accounting
principles, but is presented because it is a widely accepted indicator of a
company's ability to source and incur debt. EBITDA should not be considered
as an alternative to net income as an indicator of the company's operating
performance or as an alternative to cash flows as a measure of liquidity.

Note that the pro-forma results presented here will differ from
those previously presented in the Company's Form 8-K, incorporated by
reference, given that the latter were only for the nine-month period ended
September 30, 1998.

YEARS ENDED DECEMBER 31
(in thousands)

2000 1999 1998(1) 1998 1997(2) 1996

PRO FORMA
UNAUDITED

INCOME STATEMENT HIGHLIGHTS:

Net sales $ 194,463 $ 190,603 $ 183,158 $ 110,817 $ 123,754 $ 140,321
Cost of goods sold 117,221 109,778 108,637 65,026 73,775 92,613
---------- --------- --------- --------- --------- ---------
GROSS PROFIT 77,242 80,825 74,521 45,791 49,979 47,708
Gross profit margin (%) 39.7% 42.4% 40.7% 41.3% 40.4% 34.0%

Selling, general and administrative
expenses 65,080 58,990 58,484 35,272 38,237 45,831
% 33.5% 30.9% 31.9% 31.8% 30.9% 32.7%

OPERATING INCOME (LOSS) 7,662 17,263 11,585 6,013 3,715 (2,156)

Interest expense 13,599 12,025 11,400 4,108 3,922 9,555
NET INCOME (LOSS) BEFORE TAXES (6,798) 3,502 842 6,493 (2,162) (19,170)

Income taxes 1,293 5,276 2,875 4,603 4,665 (448)
Extraordinary gain on discharge of debt - - - - 58,726 -

NET INCOME (LOSS) (8,091) (1,774) (2,033) 1,890 51,899 (18,722)
Earnings per Share(3) (Basic) (1.53) (0.54) (0.31) 0.25

EBITDA 18,248 27,319 23,474 15,893 14,316 5,401

BALANCE SHEET HIGHLIGHTS:

Working capital $ 51,647 $ 60,416 $ 51,149 $ 45,736 $ 50,678
TOTAL ASSETS 195,579 209,611 207,178 118,780 124,925
Short-term debt 12,282 14,055 8,572 2,966 45,404
Long Term debt 91,252 94,171 88,568 30,064 -
STOCKHOLDERS' EQUITY 52,262 63,637 69,238 68,882 (97,189)

CASH FLOW STATEMENT HIGHLIGHTS:

Cash provided by Operations $ 5,241 $ 876 $ 19,118 $ 18,258 $ 18,948
Cash provided (used) by Investing
Activities (4,799) (4,649) (66,267) 422 3,478
Cash provided (used) by Financing
Activities (1,269) 4,696 41,775 (46,010) (5,414)
TOTAL CASH INCREASE (DECREASE) (1,096) 926 (5,458) (27,538) 16,984

(1) Effective November 19, 1998, the Company acquired all of the issued and
outstanding share capital of Sports Holdings Corp. The results of
operations related to the acquisition have been included in the above table
of selected consolidated financial data as if the acquisition had taken
place on January 1, 1998.

(2) For presentation purposes, 1997 pre and post reorganization results have
been combined.

(3) EPS for years before 1998 are not presented because they are not
meaningful.

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

INTRODUCTION

COMPANY OVERVIEW

See Part I, Item 1 Overview

The following discussion provides an assessment of the Company's
results of continuing operations, financial condition and liquidity and
capital resources, and should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto included elsewhere
herein. (All references to "Note(s)" refer to the Notes to the Consolidated
Financial Statements.) The consolidated financial information presented below
should be read in conjunction with the Results of Operations included in this
Form 10-K. For the presentation of this statement, certain pro forma
financial comparisons of the year ended December 31, 1998 are based on
results for that year compared to combined results of THC as if the
acquisition of Sports Holdings Corp. ("SHC") had taken place on January 1,
1998.

RESULTS OF OPERATIONS

The Company's results of operations as a percentage of net sales for
the periods indicated were as follows:

2000 1999 1998
PRO FORMA (A)
% % UNAUDITED
%

Net sales 100.0 100.0 100.0
GROSS PROFIT 39.7 42.4 40.7
----- ----- -----
Selling, general and administrative expenses 33.5 30.9 31.9
Amortization of excess reorganization value and
goodwill 2.3 2.4 2.4
Restructuring and unusual charges - 0.4 -
----- ----- -----
OPERATING INCOME 3.9 9.1 6.3
Other (income) expense, net 0.4 0.9 (0.4)
Interest expense 7.0 6.3 6.2
----- ----- -----
INCOME (LOSS) BEFORE INCOME TAXES (3.5) 1.8 0.5

Income taxes 0.7 2.8 1.6
----- ----- -----
NET INCOME (LOSS) (4.2) (0.9) (1.1)

EBITDA 9.4 14.3 12.8

(a) Effective November 19, 1998, the Company acquired all of the issued and
outstanding share capital of SHC. The results of operations related to the
acquisition have been included in the above table of selected consolidated
financial data as if the acquisition had taken place on January 1, 1998.

2000 COMPARED TO 1999

Net sales grew by 2.0% in 2000 to $194.5 million, from $190.6
million in 1999. The increase is due to higher apparel sales offset by
reduced hockey equipment sales, primarily inline skates, protective equipment
and sticks. Equipment sales, especially protective equipment, were
significantly lower in the fourth quarter as the market was saturated with an
unusually high level of closeout goods liquidated by a key competitor.
Revenues from our Nordic operations were adversely affected by currency
translation adjustments due to the depreciation of their currencies (the
Swedish Krona and Finnish Markka) against the U.S. dollar. Equipment sales
were most affected by the foreign exchange impact as they represent over 70%
of our revenues from Sweden and Finland.

Apparel sales were especially strong with an increase of 24.8%
($10.6 million) over 1999, due to the strong market acceptance of our new
creative apparel line and the exit of our only remaining competitor from the
licensed jersey market. Notwithstanding our current exclusivity in the jersey
market, sales have been hampered to some degree by the liquidation of our
previous competitors' remaining inventory into the marketplace.

Despite the negative effect of the depreciation of the Swedish Krona
and Finnish Markka, we experienced strong growth of our non-hockey product
line due to improved sales of Merrell footwear that is distributed by us in
Sweden and Finland. Measured in the domestic currencies of those countries,
sales of Merrell footwear is up almost 55% over last year.

Gross profit was $77.2 million in 2000 compared to $80.8 million in
1999, a decrease of 4.5%. Measured as a percentage of net sales, gross margin
decreased to 39.7% in 2000 from 42.4% in 1999. The decrease is attributable
to a higher proportion of sales to key customers with corresponding increases
in discounts offered and a different mix of products sold in the periods.
Gross profit from our Nordic operations was also adversely affected by
currency translation. Finally, efforts to reduce overall inventory levels at
year-end had an adverse effect on our gross profit.

Selling, general & administrative expenses increased as a percentage
of sales to 33.5 % of 2000 sales, from 30.9% of total 1999 sales. In dollar
terms, there was an increase to $65.1 million in 2000 from $59.0 in 1999.
This increase is attributed to (i) the continued investment in the promotion
of the Company's principal brands, (ii) the additional royalties paid to
National Hockey League Enterprises, LP pursuant to a new license agreement
beginning in July 2000 and (iii) additional NHL team marketing expenses
related to having the right to produce and market authentic team jerseys for
all 30 NHL teams compared to just 15 teams in the same period of 1999. These
additional marketing expenses have been incurred with a lower than
anticipated sales increase due to the inventory liquidation of our previous
competitors mentioned above, and to the continued presence in 2000 of hockey
jerseys liquidated by both Pre Player and Starter.

Operating income for the year ended December 31, 2000 was $7.7
million compared to $17.3 million in the year ended December 1999.

Interest expense was $13.6 million and $12.0 million for 2000 and
1999, respectively.

Net loss before taxes was $6.8 million in 2000 versus net income
before taxes of $3.5 million for 1999.

The Company's net loss for the year ended December 31, 2000 was
$8.1 million compared to a $1.8 million loss for the year ended December 31,
1999.

1999 COMPARED TO PRO FORMA 1998

EFFECTIVE NOVEMBER 18, 1998, THE COMPANY ACQUIRED ALL THE ISSUED AND
OUTSTANDING CAPITAL STOCK OF SHC. THIS TRANSACTION RESULTED IN SIGNIFICANT
INCREASES TO THE COMPANY'S SALES AND COST OF SALES, AS WELL AS TO OPERATING
EXPENSES (SELLING, GENERAL AND ADMINISTRATIVE, GOODWILL AMORTIZATION AND
INTEREST). THE RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 ARE
THEREFORE BEING COMPARED TO THE UNAUDITED PROFORMA RESULTS OF OPERATIONS FOR
THE YEAR ENDED DECEMBER 31, 1998. THIS COMPARES 1999 RESULTS TO 1998 RESULTS
AS IF THE ACQUISITION OF SHC HAD TAKEN PLACE ON JANUARY 1, 1998. THE COMPANY
BELIEVES THAT THIS COMPARISON IS MORE MEANINGFUL THAN A COMPARISON TO ACTUAL
1998 RESULTS.

Net sales grew by 4.1% in 1999 to $190.6 million, from $183.2
million in 1998. Factors contributing to this growth include strengthening
apparel sales, an increase in average selling price of the Company's
goaltender equipment, and stronger stick sales that were offset, in part, by
the anticipated continuing softness in roller hockey skate sales. Apparel
sales were fueled in part by the withdrawal of Starter Corporation
("Starter") and Nike, Inc. ("Nike") from the replica jersey business and the
increased number of NHL teams for which THC provides authentic on-ice jerseys
pursuant to its license with the NHL.

Gross profit was $80.8 million in 1999 compared to $74.5 million in
1998, an increase of 8.5%. Measured as a percentage of net sales, gross
margin increased to 42.4% in 1999 from 40.7% in 1998. This increase is
largely attributable to (i) the positive effects of the Company's new product
introductions and focus on branding, allowing it to target higher price
points for its equipment products; (ii) a favorable product mix; (iii) the
benefits realized from previous investments in the Company's manufacturing
infrastructure; and (iv) the discontinuation of low margin product lines. In
addition to lower standard costs resulting from capital investments, THC's
growing production volumes continue to improve overhead absorption.
Improvements in gross margin were offset, in part, by temporary softness in
apparel prices resulting from the high volumes of Starter and Nike closeout
merchandise associated with their exit from the replica market.

Selling, general & administrative expenses decreased as a percentage
of sales to 30.9 % of 1999 sales, from 31.9% of total 1998 sales. In dollar
terms, there was a slight increase to $59.0 million in 1999 from $58.5 in
1998. The decrease in SG&A as a percentage of total sales was due to
administrative cost synergies realized from THC's acquisition of SHC offset
by higher dollar marketing expenditures in accordance with THC's focus on
developing its sales and marketing infrastructure.

Operating income for the year ended December 1999 was $17.3
million compared to $11.6 million in the year ended December 1998.

Interest expense approximated $12.0 million and $11.4 million for
1999 and 1998, respectively.

Net income before taxes was $3.5 million in 1999 versus $0.8 million
for 1998. Income taxes increased in 1999 due to the U.S. tax consequences of
(i) the initial effect of the pledging of the shares of the Company's
European subsidiaries as security for the U.S. debt incurred in the
acquisition of SHC and (ii) increased amount of non-deductible goodwill (52
weeks in 1999 compared to 5 weeks in 1998), again relating to the acquisition
of SHC. The majority of these taxes were non-cash.

The Company's net loss for the year ended December 31, 1999 was $1.8
million compared to a $2.0 million loss in the results for the year ended
December 31, 1998.

INCOME TAXES

The Company's income tax provision is comprised of both United
States and foreign tax components. Due to changes in the relative
contribution of income or loss by country, differences in the effective tax
rates between countries (principally the U.S. and Canada) and permanent
differences in effective tax rates between income for financial statement
purposes and tax purposes, the consolidated effective tax rates may vary
significantly from period

to period. The Company and its U.S. subsidiaries consolidate their income for
U.S. federal income tax purposes. However, gains and losses of certain
subsidiaries may not be available to other subsidiaries for tax purposes.

Deferred income taxes are recognized for the tax consequences in
future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts at each year-end based on enacted tax
laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount
expected to be realized.

Fresh-start reporting requires the Company to report a provision in
lieu of income taxes when there is a book taxable income and utilization of a
pre-reorganization net operating loss carry-forward. This requirement applies
despite the fact that the Company's pre-reorganization net operating loss
carry-forward and other deferred tax assets would substantially reduce the
related federal income tax payable. The current and future year tax benefit
related to the carry-forward is recorded as a reduction of reorganization
value in excess of amounts allocable to identifiable assets until exhausted
and then as a direct increase to paid in capital. The amount of income tax
provision that has been used to reduce the reorganizational value in excess
of amounts allocable to identifiable assets is reflected as a provision in
lieu of income taxes in the Company's Consolidated Statements of Operations.

LIQUIDITY AND CAPITAL RESOURCES

Management expects to finance the Company's working capital and
capital expenditures requirements through cash generated by its operations
and through its new credit facilities established on November 19, 1998 and
extended on March 14, 2001 (See Note 6 and 19).

In November 19, 1998, two of the Company's subsidiaries, Maska U.S.
Inc. and SHC Hockey Inc. entered into a credit agreement with the lenders
referred to therein and with General Electric Capital Corporation, as Agent
and Lender. Simultaneously, two of the Company's Canadian subsidiaries, Sport
Maska Inc. and Tropsport Acquisitions Inc., entered into a credit agreement
with the lenders referred to therein and General Electric Capital Canada
Inc., as Agent and Lender. The maximum amount of loans and letters of credit
that may be outstanding under the two credit agreements is U.S. $70 million
(reduced to $60 million in March 2001). Each of the credit agreements is
subject to a minimum excess requirement of $1.75 million. The credit
agreements are collateralized by eligible accounts receivable and inventories
of the borrowers and are further collateralized by a guarantee of the Company
and its other subsidiaries.

Total borrowings outstanding (excluding outstanding letters of
credit) under the credit agreements at December 31, 2000 amounted to $12.3
million.

Borrowings under the U.S. Credit Agreement bear interest at rates
between U.S. prime plus 0.25% to 1.00% and LIBOR plus 1.50% to 2.50%
depending on the borrowers' Operating Cash Flow Ratio, as defined in the
agreement. Borrowings under the Canadian credit agreement bear interest at
rates between the Canadian prime rate plus 0.75% to 2.00% and LIBOR plus
0.75% to 2.00% depending on the borrowers' Operating Cash Flow Ratio, as
defined in the agreement. In addition, the borrowers are charged a GECC
monthly commitment fee at an annual rate of up to 3/8 of 1% on the unused
portion of the revolving credit facilities under the Credit Agreements and
certain other fees.

On November 19, 1998, in connection with its acquisition of SHC, the
Company and Sport Maska Inc. entered into a credit agreement with the Caisse
de depot et placement du Quebec to borrow the Canadian dollar equivalent of
$87.5 million. The loan is for a period of two years, maturing November 19,
2000. On November 20, 2000 the Company obtained a three-month extension of
the Caisse loan. On March 14, 2001, an amended and

restated credit agreement was entered into by the Company and Sport Maska
Inc. with respect to the Caisse loan. This renewed Caisse loan is made up of
2 facilities (Facility 1 - Canadian $90 million and Facility 2 - Canadian
$45.8 million) each facility bears interest equal to the Canadian Banker's
Acceptance Rate plus 6% and Facility 2 bears additional interest of 3.5%
which is to be capitalized, subject to Caisse's right to collect certain
additional fees during the extension period. At December 31, 2000 the
interest rate was 12.5% (1999-11.0%) (See Note 19).

The loan is collateralized by all of the tangible and intangible
assets of the Company subject to the prior ranking claims on accounts
receivable and inventories by the lenders under the Company's revolving
credit facilities. The loan is guaranteed by the Company and all of its
subsidiaries.

The loan contains customary negative and affirmative covenants
including those relating to capital expenditures, total indebtedness to
EBITDA and minimum interest coverage.

The Company's anticipated financing requirements for long-term
growth, future capital expenditures and debt service are expected to be met
through cash generated from its operations and borrowings under its credit
facilities. During the year ended December 31, 2000, the Company's operations
provided $5.2 million of cash compared to $0.9 million provided in 1999. The
Company had a net loss of $7.8 million in 2000, compared to $1.8 million in
1999. Earnings before interest, taxes, depreciation, amortization,
restructuring and unusual charges and debt related fees (EBITDA) was $18.3
million for the year ended December 31, 2000 compared to $27.3 million for
the previous year. Included in EBITDA is a non-cash charge of $ 0.2 million
related to foreign exchange conversion in the year ended December 31, 2000
compared to a non-cash cash charge of $0.8 million in 1999.

Cash used in investing activities during the year ended December
31, 2000 was $4.8 million compared to $4.6 million in 1999.

Net cash flow used by financing activities during 2000 was
approximately $1.3 million compared to $4.7 million provided in 1999.

The Company follows the customary practice in the sporting goods
industry of offering extended payment terms to creditworthy customers on
qualified orders. The Company's working capital requirements generally peak
in the second and third quarters as it builds inventory and makes shipments
under these extended payment terms.

RESTRUCTURING RESERVES

Effective January 24, 2001, the Company embarked on a plan to
rationalize its operations. This rationalization involved the elimination of
certain redundancies, both in terms of personnel and operations as well as
the consolidation of facilities including the closure of its Mount Forest,
Ontario plant. Accordingly, the Company will set up reserves of approximately
$3,000 for the expected cost of the rationalization. Of this amount,
approximately $1,800 will be accrued to cover the cost of severance packages
to affected employees, with the remainder representing transport and other
closure costs.

Effective November 19, 1998, the Company acquired all of the issued
and outstanding capital stock of SHC. Following the acquisition, the Company
embarked on a plan to integrate and rationalize the operations of SHC into
its own. This rationalization involved the elimination of certain
redundancies, both in terms of personnel and operations as well as the
consolidation of facilities. Accordingly, the Company set up reserves for the
expected cost of the integration.

The Company originally estimated that the restructuring charges capitalized
as part of the acquisition would total $5.0 million as follows:

An amount of $2.8 million had been accrued for severance packages
and a facility closing in Canada. Some

administrative departments including many accounting, credit, MIS, human
resource and customer service positions, were made redundant following the
acquisition. Also the former SHC head office in Lachine, Quebec was closed
with the warehouse operations being transferred to the Company's existing
distribution center in St. Hyacinthe, Quebec. To date $2.3 million has been
spent.

An amount of $0.6 million has been accrued to cover U.S. severance
packages (primarily in sales, credit and customer service) and the
restructuring of warehouse operations. To date this entire reserve has been
realized. The Company has also spent $0.3 million on restructuring and
rationalizing European operation, of an original estimate of $1.6 million.

The Company has reversed, within the one-year time frame from the
acquisition date, $1.3 million of accrued restructuring expenses and
consequently reduced the goodwill recognized on the acquisition by the same
amount.

In addition, the Company recognized $1.9 million in restructuring
expenses related to 1999 that consisted of $1.5 million to reflect the impact
(primarily employee severance costs) of re-organizing the operations with
those of the acquired company. As at December 31, 2000, no amounts remained
unpaid. A further $0.4 million was charged reflecting expenses incurred from
the January 1998 ice storm. No amounts remain unpaid at year-end.

INTANGIBLE ASSETS

The Company has a significant amount of intangible assets on its
balance sheet. As at December 31, 2000 the Company had $82.9 million
(1999-$85.7 million) representing 42.3% (1999- 40.9%) of total assets. This
goodwill is comprised of several components. Upon the acquisition of SHC the
Company recognized $53.1 million of goodwill. This amount, being the
difference between the purchase price and the amount of tangible net assets
acquired, represents the value to the Company of the brands acquired.
JOFA(R), KOHO(R), CANADIEN(TM), TITAN(R) and HEATON(R) are world class hockey
brands and management believes that there is significant long-term earning
potential to be realized from the brands. Accordingly, the amortization of
this goodwill is over 25 years.

In connection with a re-organization and fresh-start accounting, the
Company recognized $49.0 million of excess reorganization value, which is
another component of goodwill. This amount arose primarily as debt
forgiveness in the reorganization. It is included in goodwill because it
represents among other things the value of its premier CCM(R) brand. Again
management believes that significant long-term earning potential exists and
is amortizing the excess reorganization value over 20 years.

Also included in intangible assets are the financing costs related
the debt incurred in relation to the acquisition of SHC, which is being
amortized over the life of the debt.

EURO CONVERSION

On January 1, 1999, eleven of the fifteen member countries of the
European Union established fixed conversion rates between their existing
sovereign currencies and the Euro. The participating countries agreed to
adopt the Euro as their common legal currency on that date. Fixed conversion
rates between these participating countries' existing currencies (the legacy
currencies) and the Euro were established as of that date. The legacy
currencies are scheduled to remain legal tender as denominations of the Euro
until at least January 1, 2002 (but not later than July 1, 2002). During this
transition period, parties may settle transactions using either the Euro or a
participating country's legacy currency. The Company is addressing the
potential impact resulting from the Euro conversion, including competitive
implications related to pricing and foreign currency considerations.

Management currently believes that the introduction of the Euro will
not have a material impact related to pricing or foreign currency exposures.
Finland and Sweden, which are the locations of the Company's foreign
subsidiaries, are not member countries of the European Union, and as a
result, did not adopt the Euro. The subsidiaries' transactions and debt are
denominated in their local currencies. However, uncertainty exists as to the
effects the Euro will have on the marketplace.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company, in the normal course of doing business, is exposed to
market risk from changes in foreign currency exchange rates and interest
rates. The Company's principal currency exposures relate to the Canadian
dollar and to certain European currencies. Management's objective, regarding
foreign currency risk, is to protect cash flows resulting from sales,
purchases and other costs from the adverse impact of exchange rate movements.

The European and Canadian subsidiaries each have operating credit
facilities denominated in their respective local currencies; these debt
facilities are hedged by the operating revenues generated in the local
currencies of the subsidiaries. The Company's long-term debt is denominated
in Canadian dollars (Cdn$135.8 million). The Company's equity investment in
its Canadian subsidiary is effectively hedged by the Canadian dollar
denominated debt. Similarly, as the Company holds either long term or
operating debt facilities denominated in the currencies of its European
subsidiaries, its equity investments in those entities are hedged against
foreign currency fluctuations. The Company does not engage in speculative
hedging activities.

The Company is exposed to changes in interest rates primarily as a
result of its long-term debt and operating credit facilities used to maintain
liquidity and fund capital expenditures. Management's objective, regarding
interest rate risk, is to limit the impact of interest rate changes on
earnings and cash flows and to reduce overall borrowing costs. To achieve
these objectives the Company maintains the ability to borrow funds in
different markets, thereby mitigating the effect of large changes in any one
market.

REPORT OF INDEPENDENT ACCOUNTANTS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE

Reports of Independent Accountants

Ernst & Young L.L.P. 21
PriceWaterhouseCoopers 22
KPMG 23

Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2000 and 1999 24

Consolidated Statements of Operations
for the years ended December 31, 2000, 1999 and 1998 25

Consolidated Statements of Stockholders' Equity (Deficit)
for the years ended December 31, 2000, 1999 and 1998 26

Statement of Comprehensive Income (Loss)
for the years ended December 31, 2000, 1999 and 1998 26

Consolidated Statements of Cash Flows
for the years ended December 31, 2000, 1999 and 1998 27

Notes to Consolidated Financial Statements 28-47

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
THE HOCKEY COMPANY

We have audited the accompanying consolidated balance sheets of THE HOCKEY
COMPANY as of December 31, 2000 and 1999, and the related consolidated
statements of operations, comprehensive income (loss), stockholders' equity,
and cash flows for each year in the three year period ended December 31,
2000. These financial statements 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 did not audit the financial
statements of KHF Sports Oy or Jofa Holdings Group, wholly-owned subsidiaries
acquired in 1998, which statements reflect total assets of $31.2 million as
of December 31,1998 and net sales of $4.3 million for the year then ended.
Those statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to data included for
KHF Sports Oy and Jofa Holdings Group, is based solely on the reports of
other auditors.

We conducted our audits in accordance with United States 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 and the
reports of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the consolidated financial position of The Hockey Company at
December 31, 2000 and 1999, and the consolidated results of its operations
and its cash flows for each year of the three year period ended December 31,
2000, in conformity with United States generally accepted accounting
principles.

Montreal, Canada, /s/ Ernst & Young LLP
March 21, 2001.
Chartered Accountants

REPORT OF INDEPENDENT AUDITORS

To The Board of Directors and Stockholders of Jofa Holding Group.

We have audited the consolidated balance sheet of Jofa Holding Group as
December 31, 1998 and the related consolidated statements of operations,
stockholders' equity and cash flows for the year ended December 31, 1998.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audit.

In our opinion, based on our audits, the financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Jofa Holding Group and Subsidiaries as of December 31, 1998, and
the consolidated results of their operations and their cash flows for the
year then ended in conformity with United States generally accepted
accounting principles.

Borlange
February 12, 1999

PriceWaterhouseCoopers

REPORT OF INDEPENDENT AUDITORS

To The Board of Directors and Stockholders of KHF Sports Oy

We have audited the consolidated balance sheet of KHF Sports OY as of
December 31, 1998 and the related consolidated statements of operations,
stockholder's equity and cash flows for the year ended December 31, 1998.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audit.

In our opinion, based on our audits, the financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of KHF Sports OY and Subsidiaries as of December 31, 1998, and the
consolidated results of their operations and their cash flows for the year
ended December 31, 1998 in conformity with United States generally accepted
accounting principles.

Helsinki
April 8, 1999

KPMG Wideri Oy Ab

THE HOCKEY COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)

Dec. 31, 2000 Dec. 31, 1999
------------- -------------

ASSETS

Current assets
Cash and cash equivalents $ 2,423 $ 3,519
Accounts receivable, net (See Notes 2 and 6) 39,376 42,998
Inventories (See Notes 3 and 6) 42,110 48,955
Prepaid expenses 3,931 2,622
Income taxes and other receivables 4,043 2,963
-------- --------
Total current assets 91,883 101,057
Property, plant and equipment, net of accumulated depreciation (See Note 4) 21,142 22,860
Intangible and other assets, net of accumulated amortization (See Note 5) 82,554 85,694
-------- --------
Total assets $195,579 $209,611
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Short-term debt (See Note 6) $ 12,282 $ 14,055
Accounts payable 7,607 7,779
Accrued liabilities 11,902 11,855
Accrued restructuring expenses (See Notes 8 and 17) 488 1,482
Accrued dividends payable 3,676 1,815
Current portion of long term debt 264 -
Income taxes payable 3,322 2,957
Other current liabilities (see Note 17) 698 698
-------- --------
Total current liabilities 40,239 40,641
Long-term debt (See Note 6) 91,252 94,171
Deferred income taxes (See Note 12) 495 66
-------- --------
Total liabilities 131,986 134,878
-------- --------
Commitments and Contingencies (See Notes 10,11 and 15)

13% Pay-In-Kind redeemable preferred stock (See Note 7) 11,333 11,096

Stockholders' equity
Common stock, par value $0.01 per share, 15,000,000 shares
authorized, 6,500,549 shares issued and outstanding 65 65
Re-organization warrants, 300,000 issued and 299,451 outstanding (See Note 7) - -
Common stock purchase warrants, 159,127 issued and outstanding (See Note 7)
1,665 1,665
Additional paid-in capital 66,515 66,515
Retained earnings (9,290) 899
Accumulated other comprehensive loss (6,695) (5,507)
-------- --------
Total stockholders' equity 52,260 63,637
-------- --------
Total liabilities and stockholders' equity $195,579 $209,611
======== ========

The accompanying notes are an integral part
of the consolidated financial statements.

THE HOCKEY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31
(In thousands, except share data)

2000 1999 1998
--------- --------- --------

Net sales $194,463 $190,603 $110,817
Cost of goods sold 117,221 109,778 65,026
--------- --------- --------
GROSS PROFIT 77,242 80,825 45,791
Selling, general and administrative expenses 65,080 58,990 35,272
Amortization of excess reorganization
value and goodwill 4,500 4,572 2,606
Restructuring and unusual charges (See Note 8) - - 1,900
--------- --------- --------
OPERATING INCOME 7,662 17,263 6,013
Other (income) expense, net 861 1,736 (4,588)
Interest expense 13,599 12,025 4,108
--------- --------- --------
INCOME (LOSS) BEFORE INCOME TAXES (6,798) 3, 502 6,493
Income taxes (See Note 12) 1,293 5,276 4,603
--------- --------- --------
NET (LOSS) INCOME $(8,091) $(1,774) $ 1,890
========= ========= ========
Preferred stock dividends 1,861 1,625 190
Accretion of 13% Pay-In-Kind preferred Stock 237 226 35
--------- --------- --------
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(10,189) $ (3,625) $ 1,665
========= ========= ========
Basic (loss) earnings per share
(See Note 13) $ (1.53) $ (0.54) $ 0.25
Diluted (loss) earnings per share
(See Note 13) $ (1.53) $ (0.54) $ 0.25

The accompanying notes are an integral part
of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31
(In thousands)

Common Stock Common Additional Retained Accumulated Total
# of Stock Amount Stock Paid-in Earnings Other
Purchase Capital (Deficit) Comprehensive
Warrants Loss

----------------------------------------------------------------------------------------------
Balance at December 31, 1998 6,501 $ 65 $ 1,665 $ 66,515 $ 4,524 $ (3,531) $ 69,238
----------------------------------------------------------------------------------------------
Net loss (1,774) (1,774)
Dividend on preferred stock (1,625) (1,625)
(See Note 7)
Accretion of 13% Pay-in-Kind (226) (226)
preferred stock
Foreign currency translation (1,976) (1,976)
adjustment
----------------------------------------------------------------------------------------------
Balance at December 31, 1999 6,501 $ 65 $ 1,665 $ 66,515 $ 899 $ (5,507) $ 63,637

Net loss (8,091) (8,091)
Dividend on preferred stock (1,861) (1,861)
(See Note 7)
Accretion of 13% Pay-in-Kind (237) (237)
preferred stock
Foreign currency translation (1,188) (1,188)
adjustment
----------------------------------------------------------------------------------------------
Balance at December 31, 2000 6,501 65 1,665 66,515 (9,290) (6,695) 52,260
==============================================================================================

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Years ended December 31
(In thousands)

2000 1999 1998
--------------------------------------------

Net (loss) income $ (8,091) $ (1,774) $ 1,890
Foreign currency translation adjustments (1,188) (1,976) (2,982)
--------------------------------------------
Comprehensive income (loss) for the year (9,279) (3,750) (1,092)
============================================

The accompanying notes are an integral part
of the consolidated financial statements.

THE HOCKEY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31
(In thousands)

2000 1999 1998
--------------------------------------------

OPERATING ACTIVITIES:
Net (loss) income $ (8,091) $ (1,774) $ 1,890
Adjustments to reconcile net (loss) income to net cash (used
in) provided by operating activities:
Depreciation and amortization 11,070 10,664 7,145
Change in provisions for inventory, doubtful accounts 7,815 6,352 2,623
and other
Deferred income taxes 274 (245) (258)
Provision in lieu of taxes - 3,519 3,418
(Gain) loss on sale and disposal of property, plant & (17) 24 (71)
equipment
(Gain) loss on foreign exchange (297) 1,475 (1,373)
Restructuring charges - - 1,453
Change in operating assets and liabilities:
Accounts receivable (3,036) (10,899) 6,456
Inventories 2,843 (7,087) 1,448
Prepaid expenses (466) 916 (511)
Income taxes receivable (973) 249 (447)
Other receivables 4 1,191 (1,755)
Accounts payable and accrued liabilities (4,617) (2,893) (1,752)
Interest payable 404 (699) 117
Income taxes payable 328 174 378
Other - (91) 357
--------------------------------------------
Net cash provided by operating activities $ 5,241 $ 876 $ 19,118
--------------------------------------------
INVESTING ACTIVITIES:
Business acquisition, net of cash acquired - - (62,933)
Deferred expenses (1,271) - -
Purchases of property, plant & equipment (3,558) (4,821) (3,480)
Proceeds from sales of property, plant & equipment 30 172 146
--------------------------------------------
Net cash used in investing activities $ (4,799) $ (4,649) $ (66,267)
--------------------------------------------
FINANCING ACTIVITIES:
Net change in short-term borrowings (1,404) 5,428 2,979
Principal payments on debt (138) (300) (70,924)
Proceeds from long-term debt 1,139 - 102,500
Exercise of warrants - - 8
Issuance of redeemable preferred stock - - 10,835
Issuance of common stock purchase warrants - - 1,665
Deferred financing costs (866) - (5,288)
Liabilities subject to compromise - (432) -
--------------------------------------------
Net cash (used in) provided by financing activities $ (1,269) $ 4,696 $ 41,775
--------------------------------------------
Effects of foreign exchange rate changes on cash (269) 3 (84)
--------------------------------------------
(Decrease) Increase in cash $ (1,096) $ 926 $ (5,458)
Cash and cash equivalents at beginning of year 3,519 2,593 8,051
--------------------------------------------
Cash and cash equivalents at end of year $ 2,423 $ 3,519 $ 2,593
============================================
SUPPLEMENTAL INFORMATION
Income taxes paid 2,050 2,714 100
Interest paid 11,168 12,153 4,000

The accompanying notes are an integral part
of the consolidated financial statements.

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. DESCRIPTION OF BUSINESS, CHANGE OF CORPORATE NAME AND PRINCIPLES
OF CONSOLIDATION:

The Hockey Company was incorporated in September 1991 and reorganized in
April 1997.

On January 31, 1999, the Board of Directors of The Hockey Company ("THC")
unanimously adopted an amendment to the Company's Certificate of Incorporation
to change the name of the Company from SLM International Inc. to The Hockey
Company. The amendment was filed with the Secretary of the State of the State of
Delaware on February 9, 1999.

The consolidated financial statements include the accounts of THC and
its wholly-owned subsidiaries (collectively, the "Company"). The Company
designs, develops, manufactures and markets a broad range of sporting goods.
The Company manufactures hockey and hockey related products, including hockey
uniforms, hockey sticks, protective equipment, hockey, figure and inline
skates as well as street hockey products, marketed under the CCM(R), KOHO(R),
JOFA(R), TITAN(R), CANADIEN(TM) and Heaton(R) brand names, and private label
brands and licensed sports apparel under CCM(R) and #1 APPAREL(TM) brand
names. The Company sells its products worldwide to a diverse customer base
consisting of mass merchandisers, retailers, wholesalers, sporting goods
shops and international distributors. The Company manufactures and
distributes most of its products at facilities in North America, Finland and
Sweden and sources products internationally.

B. BASIS OF PRESENTATION:

The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

C. CASH EQUIVALENTS:

Cash equivalents consist of highly liquid short-term investments with
original maturities of three months or less. The Company invests excess funds in
bank term deposits, Canadian Government promissory notes and in U.S. Treasury
bills. At December 31, 2000, the Company had nil (1999-$1,185) invested in bank
term deposits.

D. CONCENTRATION OF CREDIT RISK:

Financial instruments that potentially subject the Company to
concentration of credit risk consist primarily of temporary cash investments and
accounts receivable. The Company restricts its cash investments to temporary
investments in institutions with high credit standing and to short-term
securities backed by the full faith and credit of the United States and Canadian
and Quebec Governments. The Company sells its products principally to retailers
and distributors and, in accordance with industry practice, grants extended
payment terms to qualified customers. Concentration of accounts receivable
credit risk is mitigated due to the performance of credit reviews that are
considered in determining credit policies and allowances for doubtful accounts.
The Company provides allowances

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

for expected sales returns, net of related inventory cost recoveries,
discounts, rebates and cooperative advertising. The Company does not
collateralize its receivables, except with respect to its debt agreements as
described in Note 6 in the Notes to Consolidated Financial Statements. As at
December 31, 2000 and 1999, no single account receivable represented more
than 10% of the Company's consolidated accounts receivable and no single
customer accounted for more than 10% or more of the Company's consolidated
net sales for each of the years in the three year period ended December 31,
2000.

E. REVENUE RECOGNITION:

Revenue is recognized when products are shipped to customers.

F. INVENTORIES:

Inventories are stated at the lower of cost or net realizable value for
finished products and work in process, and replacement cost for raw materials
and supplies. Cost is determined using the first-in, first-out method. The
Company provides allowances for excess, obsolete and slow moving inventories.

G. RESEARCH & DEVELOPMENT EXPENSES:

Costs for new product research and development as well as changes to
existing products are expensed as incurred and totaled $2,259, $2,289 and $1,171
for the years ended December 31, 2000, 1999, and 1998, respectively.

H. PREPAID EXPENSES:

The Company expenses advertising and promotion costs incurred when the
advertising takes place. Royalty payments are deferred to the extent that the
related sales have not yet been recorded. Such costs are included in prepaid
expenses.

I. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. Depreciation and
amortization are provided for in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives using
principally the straight-line method of depreciation.

The estimated service lives of the respective assets are as follows:

YEARS
------
Buildings and improvements 5 - 40
Machinery and equipment 3 - 10
Tools, dies and molds 3 - 5
Office furniture and equipment 3 - 10

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

Accelerated methods of depreciation are used for tax reporting purposes
where required. Significant additions or major improvements are capitalized,
while normal maintenance and repair costs are expensed. When assets are sold,
retired or otherwise disposed of, the applicable costs and accumulated
depreciation are removed from the accounts, and the resulting gain or loss is
recognized.

The Company periodically reviews property, plant and equipment for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. When such circumstances occur, the
Company estimates future cash flows expected to result from the use and eventual
disposition of the assets. If the expected future cash flows are less than the
carrying amount, the Company recognizes an impairment loss (see Note 8).

J. INCOME TAXES:

Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year-end based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense consists of both the tax payable for the period and the
change during the period in deferred tax assets and liabilities.

The Company does not provide for witholding income taxes on the
undistributed earnings of its non-U.S. subsidiaries, since such earnings are not
expected to be remitted to the Company in the foreseeable future. The Company
has provided, in its U.S. tax provision, taxes on all of the unremitted earnings
of its non-U.S. subsidiaries to December 31, 2000.

Fresh-start reporting requires the Company to report a provision in lieu
of income taxes when there is a book taxable income and utilization of a
pre-reorganization net operating loss carry-forward. This requirement applies
despite the fact that the Company's pre-reorganization net operating loss
carry-forward and other deferred tax assets would eliminate the related federal
income tax payable. The current and future year tax benefit related to the carry
forward is recorded as a reduction of reorganizational value in excess of
amounts allocable to identifiable assets until exhausted and then as a direct
increase to paid-in capital.

K. FOREIGN CURRENCY TRANSLATION:

The balance sheets of the Company's non-U.S. subsidiaries are translated
into U.S. dollars at the exchange rates in effect at the end of each year.
Revenues, expenses and cash flows are translated at weighted average rates of
exchange. Gains or losses resulting from foreign currency transactions are
included in earnings, while those resulting from translation of financial
statement balances are shown as a separate component of stockholders' equity.
The functional currencies of the Company's non-U.S. subsidiaries, which are
primarily located in Canada, Finland and Sweden, are the respective local
currencies in each foreign country.

The net investment in the Canadian subsidiary is being hedged up to the
extent of the Company's Canadian dollar denominated debt.

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

L. INTANGIBLE ASSETS:

Intangible assets are recorded at cost and are amortized on a
straight-line basis. These amounts include the excess purchase price over
fair values assigned ("goodwill"), reorganizational value in excess of
amounts allocable to identifiable assets ("excess reorganizational value")
(see Note 5) and deferred financing costs (amortized over the life of the
financing). Goodwill is amortized on a straight-line basis over twenty-five
years.

Excess reorganizational value is amortized on a straight-line basis over
twenty years and is being reduced by the realization of deferred tax assets.

The Company periodically reviews intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. When such circumstances occur, the Company estimates
future cash flows expected to result from the use and eventual disposition of
the intangibles. If the expected future cash flows are less than the carrying
amount, the Company recognizes an impairment loss.

M. EARNINGS PER SHARE:

Basic earnings per share is calculated using the weighted average
number of shares of common stock outstanding during the year. Diluted
earnings per share is computed based on the average number of shares of
common stock assumed to be outstanding during each year. Common stock
equivalents are included when dilutive (see Notes 7, 13 and 14).

2. ACCOUNTS RECEIVABLE

Net accounts receivable include:

2000 1999
------ ------

Allowance for doubtful accounts $2,022 $2,237
Allowance for returns, discounts,
rebates and cooperative advertising 5,607 5,541
------ ------
$7,629 $7,778
====== ======

Bad debt expense (recovery) for the years ended December 31, 2000,
1999, and 1998 was $670, $480, and ($1,387), respectively.

3. INVENTORIES

Inventories consist of:

2000 1999
------- -------

Finished products $29,745 $36,344

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

Work in process 2,727 2,679
Raw materials and supplies 9,638 9,932
------- -------
$42,110 $48,955
======= =======

Allowances for excess, obsolete and slow moving inventories were
$3,890 and $2,369 at December 31, 2000 and 1999, respectively.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of:

2000 1999
------- -------

Land and improvements $ 241 $ 247
Buildings and improvements 6,901 6,612
Machinery and equipment 17,487 15,960
Tools, dies and molds 3,178 3,173
Office furniture and
equipment 5,645 4,504
------- -------
33,452 30,496
Less accumulated depreciation and
amortization 12,310 7,636
------- -------
$21,142 $22,860
======= =======

Depreciation and amortization expense for the years ended December 31,
2000, 1999, and 1998, was $4,502, $4,330, and $2,585, respectively.

5. INTANGIBLE AND OTHER ASSETS

Net intangible and other assets consist of:

2000 1999
------- -------

Goodwill 46,643 49,615
Excess reorganizational value 30,052 32,639
Deferred financing costs 2,084 3,349
Other 3,775 91
------- -------
$82,554 $85,694
======= =======

Amortization expense for intangible assets was $ 6,569, $6,334 and
$4,560 at December 31, 2000, 1999 and 1998, respectively.

Excess reorganizational value was reduced by $2,574 for the
year ended December 31, 1999 by the realization of deferred tax assets.

Goodwill was also reduced by $2,315 for the year ended 1999 by the
realization of $945 of deferred tax assets and the reversal of $1,370 for a
restructuring provision taken at the time of the acquisition of SHC.

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

6. REVOLVING CREDIT FACILITIES AND LONG-TERM DEBT

A) REVOLVING CREDIT FACILITIES

Revolving credit facilities consist of the following:

2000 1999
------- -------

Revolving credit facilities with
General Electric Capital Inc. $12,282 $11,421
Revolving credit facilities with
MeritaNordBanken Sweden - 2,634
------- -------
$12,282 $14,055

i) Effective November 19, 1998, two of the Company's U.S.
subsidiaries, Maska U.S. Inc. and SHC Hockey Inc. entered into a credit
agreement with the lenders referred to therein and with General
Electric Capital Corporation as Agent and Lender. Simultaneously, two
of the Company's Canadian subsidiaries, Sport Maska Inc. and Tropsport
Acquisitions Inc. entered into a credit agreement with the lenders
referred to therein and General Electric Capital Canada Inc. ("GECC")
as Agent and Lender. The maximum amount of loans and letters of
credit that may be outstanding under the two credit agreements is U.S.
$70 million (reduced to $60 million in March 2001). Each of the credit
agreements is subject to a minimum excess requirement of $1,750. The
credit agreements are collateralized by eligible accounts receivable
and inventories of the borrowers and are further collateralized by a
guarantee of the Company and its other subsidiaries. Total
borrowings outstanding (excluding outstanding letters of credit) under
the credit agreements at December 31, 2000 amount to $12,282 (1999 -
$11,421). As at December 31, 2000 the Company had letters of credit
outstanding of $927 (1999-$2,454).

Borrowings under the U.S. credit agreements bear interest at rates of
either U.S. prime rate (9.50% at December 31, 2000) (1999-8.50%) plus
0.25%-1.00% or LIBOR plus 1.50%-2.50% (there were no LIBOR-based
borrowings at year end) depending on the borrower's Operating Cash Flow
Ratio, as defined in the agreement. Borrowings under the Canadian Credit
Agreement bear interest at rates of either the Canadian prime rate (7.50%
at December 31, 2000) (1999-6.50%) plus 0.75%-2.00% or LIBOR plus
0.75%-2.00% (there were no LIBOR-based borrowings at year end) depending
on the borrower's Operating Cash Flow Ratio, as defined in the agreement.
In addition, the borrowers are charged a monthly commitment fee at an
annual rate of up to 3/8 of 1% on the unused portion of the revolving
credit facilities under the credit agreements and certain other fees.

On November 20, 2000, the GECC credit agreements were amended and
extended to March 15, 2001. (See Note 19)

The credit agreements contain customary negative and affirmative
covenants including those relating to capital expenditures, total
indebtedness to EBITDA, minimum interest coverage and fixed charges
coverage ratio. As at December 31, 2000, the Company was in default of
certain covenants. On March 14, 2001 the GECC credit agreements were
amended and the defaults occurring under the earlier credit agreement
were waived (See Note 19).

ii) Effective March 18, 1999, Jofa AB, a Swedish subsidiary of the Company,
entered into a credit agreement with MeritaNordbanken in Sweden. The
maximum amount of loans and letters of credit that may

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

be outstanding under the agreement is SEK 50 million ($6 million). The
facility is collateralized by the assets of the Company, excluding
intellectual property, bears interest at a rate of STIBOR (4.0% at
December 31, 2000) plus 0.65% and is renewable annually. Total borrowings
as at December 31, 2000 were nil. December 31, 1999 borrowings were SEK
22.4 million ($2,634) at STIBOR (3.95%) plus 0.65%.

Effective July 14, 1999, KHF Sports Oy, a Finnish subsidiary of the
Company, entered into a credit agreement with MeritaNordbanken in
Finland. The maximum amount of loans and letters of credit that may be
outstanding under the agreement is FIM 30 million ($5.3 million). The
facility is collateralized by the assets of the Company and bears
interest at a rate of EURIBOR (4.75% at December 31, 2000) plus 2.0% and
is renewable annually. There were no borrowings as at December 31, 2000
and 1999.

(iii) During March 1998, the Company amended its credit agreements (the
"Amended Credit Agreements") to take advantage of its improved borrowing
capacity. In completing the amendments the Company redeemed, in full, its
Senior Secured Notes and all amounts outstanding under the $4,000 Term
Loan under its U.S. credit agreement. The redemptions were affected by
the Amended Credit Agreements (additional revolving credit loan
borrowings under the Amended Credit Agreements and the Amended
Term Loan as defined, hereafter) and use of the Company's cash on
hand. The maximum amount of loans that may have been outstanding
under the Amended Credit Agreements was $60.0 million, consisting of
$45.0 million revolving credit loans and a $15.0 million term loan
(the "Amended Term Loan"). Borrowings under the Amended Credit Agreements
bore interest at an alternate base rate per annum or at an interest rate
based on LIBOR plus 1 3/4% per annum on Amended U.S. revolving credit
loans, at Chase Canada's prime rate or at an alternate base rate per
annum on Canadian revolving credit loans, and an alternate base rate
plus 1/4 per annum or at an interest rate based on LIBOR plus 2% per
annum on the Amended Term Loan. Interest and principal on the Amended
Term Loan were payable in quarterly installments ($0.6 million principal)
through April 2000, beginning in April 1998.

These credit agreements were fully repaid and the Amended Credit
Agreements were canceled when the Company entered into the credit
agreements with GECC.

The weighted average interest rate on short-term debt outstanding at December
31, 2000, 1999 and 1998 was 8.49%, 8.32% and 11.3%, respectively.

B) LONG-TERM DEBT

The Company's long-term debt at December 31 was as follows:

2000 1999
------- -------

Secured loans from Caisse de depot et
placement du Quebec (Canadian $135,800) $90,521 $94,092
Other long-term debt 995 79
------- -------
91,516 94,171
Less: amounts contractually due within
one year 264 -
------- -------
Total long-term debt, excluding
current portion $91,252 $94,171
======= =======

SECURED LOANS

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

On November 19,1998, in connection with its acquisition of Sports
Holdings Corp., the Company and Sport Maska Inc. entered into a Secured Loan
Agreement with the Caisse de depot et placement du Quebec ("Caisse") to
borrow a total of Canadian $135,800. The loan was for a period of two years,
renewable on November 19, 2000 at the Company's option. On November 20, 2000
the Company obtained a three-month extension of the Caisse loan on payment of
a Canadian $1 million extension fee. The Caisse loan was once again extended
and matured on March, 14, 2001 upon the Company entering into an amended and
restated credit agreement. This amended and restated Caisse loan is made up
of 2 facilities (Facility 1 - Canadian $90 million and Facility 2 - Canadian
$45.8 million) each facility bears interest equal to the Canadian Banker's
Acceptance Rate plus 6% and Facility 2 bears additional interest of 3.5%
which is to be capitalized. At December 31, 2000 the interest rate was 12.5%
(1999-11.0%). (See Note 19)

The loan contains customary negative and affirmative covenants
including those relating to capital expenditures, total indebtedness to
EBITDA, minimum total EBITDA and minimum interest coverage. The amended and
restated credit agreement revised the covenants from the earlier agreement
and accordingly the covenants in default were cured as at December 31, 2000.
(See Note 19)

In May 2000, Jofa AB, a subsidiary of the Company, entered into a
loan agreement with MeritaNordBanken Sweden to borrow SEK 10,000 ($1,100).
The loan is for 4 years with annual principal repayments of SEK 2,500 ($275).
The loan is secured by a chattel mortgage on the assets of the subsidiary and
bears an interest rate of STIBOR plus 1.25%.

Based on the borrowing rates currently available to the Company for
bank loans and other financing with similar terms, the Company estimated that
the fair value of its short-term debt and long-term debt at December 31, 2000
and 1999 was equivalent to the carrying values in the financial statements.
These values represent a general approximation of possible value and may
never be realized.

7. COMMON STOCK, WARRANTS AND PREFERRED STOCK

The Company has authorized 15,000,0000 shares of common stock of which
of 6,500,549 are issued and outstanding.

On April 11, 1997, in connection with a re-organization, THC's old
common stock was extinguished and the holders received a total of 300,000
five-year warrants to purchase an aggregate of 300,000 shares of common stock
at an exercise price of $16.92 per share (subject to adjustments for stock
splits, stock dividends, recapitalizations and similar transactions). Each
holder of 67 shares of old common stock can receive one warrant to purchase,
for cash, one share of common stock, with no fractional warrants issued.

On November 19, 1998, the Company issued 100,000 shares of 13%
Pay-In-Kind redeemable, $0.01 par value per share, cumulative preferred stock
together with warrants to purchase 159,127 common shares of the Company at a
purchase price of $0.01 per share, for cash consideration of $12,500 (par
value).

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

The fair value of the warrants was determined to be $1,665 and has
been recorded in Stockholder's Equity as common stock purchase warrants. The
balance of the proceeds, $10,835, has been recorded as 13% Pay-In-Kind
preferred stock. The difference between the redemption value of the preferred
stock and the recorded amount is being accreted on a straight-line basis over
the seven-year period ending November 19, 2005, by a charge to retained
earnings.

Dividends, which are payable semi-annually from November 19, 1998, may
be paid in cash or in shares of the 13% Pay-In-Kind preferred stock, at the
Company's option. The preferred stock is non-voting. If the Company fails to
redeem the preferred stock on or before November 19, 2005 and for a sixty day
period or more after being notified of its failure to redeem the preferred
stock, then the preferred stockholders, as a class of stockholders, have the
option to elect one director to the Company's Board of Directors with the
provision that the preferred stockholders are to elect 28% of the Company's
directors. At December 31, 2000 unpaid dividends of $3,676 (1999-$1,815) have
been accrued on the preferred stock and are included in accrued liabilities.

The preferred stock is redeemable, at any time after November 19,
2000, in whole or in part, at the option of the Company, at a redemption
price (together with all accumulated and unpaid dividends) as follows:

YEAR PERCENTAGE OF PAR VALUE

2000 106.500%
2001 104.333%
2002 102.166%
2003 and thereafter 100.000%

The preferred stock must be redeemed by the Company upon a change of
control or by November 19, 2005.

8. RESTRUCTURING AND UNUSUAL CHARGES

During 1998, as a result of the acquisition of Sports Holdings Corp.,
the Company recorded significant restructuring charges totaling $1,453 to
reflect the impact of reorganizing its operations with those of the acquired
company. The costs consist primarily of employee and related severance costs
that have been accounted for as an unusual item.

EXPENSE

Total restructuring charges recorded at November 19, 1998 1,453
Amount of restructuring costs paid for the period November 19, 1998 to December 31, 1998 (101)
--------------------------------------------------------------------------------------------------------
Unpaid Charges as at the December 31, 1998 1,352
Translation Effects 97
Amount of restructuring costs paid for the period January 1 to December 31, 1999 (1,010)
--------------------------------------------------------------------------------------------------------
Unpaid Charges as at the December 31, 1999 439
Amount of restructuring costs paid for the period January 1 to December 31, 2000 (439)
--------------------------------------------------------------------------------------------------------
Unpaid Charges as at the December 31, 2000 -

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

Also during 1998, some unrecoverable costs totaling $447 resulting
from a severe ice storm that struck the northeastern parts of North America
were accounted for as an unusual item.

9. RELATED PARTY TRANSACTIONS

In 2000, the Company paid the controlling shareholder, Wellspring
Capital Management, LLC a fee of $180 for services performed in connection
with the extension of the Caisse loan. (See Note 6b)

In 1998, the Company paid its controlling shareholder, Wellspring
Capital Management LLC a fee of $975 for investment banking services provided
in connection with the acquisition of Sports Holdings Corp. and related
acquisition financing. During 1998 the Company issued 100,000 shares of 13%
Pay-In-Kind preferred stock to Phoenix Home Life Mutual Insurance Company, a
common stockholder (see Note 7).

10. LEASES

Certain of the Company's subsidiaries lease office and warehouse
facilities and equipment are under operating lease agreements. Some lease
agreements provide for annual rent increases based upon certain factors
including the Consumer Price Index.

The following is a schedule of future minimum lease payments under
non-cancelable operating leases with initial terms in excess of one year at
December 31, 2000:

2001 $ 3,577
2002 2,836
2003 2,522
2004 2,381
2005 and beyond 1,710
-------
$13,026
=======

Rental expense for the years ended December 31, 2000, 1999 and 1998
was approximately $3,376, $3,293 and $2,724, respectively.

11. ROYALTIES AND ENDORSEMENTS

Certain of the Company's subsidiaries have entered into agreements
that call for royalty payments generally based on net sales of certain
products and product lines. Certain agreements require guaranteed minimum
payments over the royalty term. The Company pays also certain professional
players and teams an endorsement fee in exchange for the promotion of the
Company's brands. The following is a schedule of the future minimum payment
and annual obligations under these contracts.

2001 $10,535
2002 12,087
2003 10,263

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

2004 8,623
2005 and beyond 3,563
-------
$45,071
=======

Royalty and endorsement expenses for the years ended December 31,
2000, 1999 and 1998 was $10,461, $7,436 and $3,247, respectively. In the
2001-2002 license year, if the earned royalties are less than 50% of the
minimum royalties in force for that year ($6,900) then a penalty of $1,000
must be paid to National Hockey League Enterprises.

12. INCOME TAXES

The components of income taxes are:

2000 1999 1998
----- ------ ------

Current: U.S. $ 229 $ 468 $ 140
Non-U.S. 790 1,534 1,303
----- ------ ------
1,019 2,002 1,443
----- ------ ------
Deferred: U.S. - (352) -
Non-U.S. 274 107 (258)
----- ------ ------
274 (245) (258)
----- ------ ------

Provision in Lieu of Taxes: U.S. - 3,201 2,400
Non-U.S. - 318 1,018
----- ------ ------
- 3,519 3,418
----- ------ ------
$1,293 $5,276 $4,603
====== ====== ======

The 2000 non-U.S. current tax provision is presented net of tax
benefits in the amount of $845 resulting from the carry-back of a current
year's loss.

The Company's effective income tax rate from continuing operations
differed from the federal statutory rate as follows:

2000 1999 1998
---- ---- ----

Income taxes based on U.S. federal tax rate 34% 34% 34%
Non-U.S. and state tax rates 1% (4%) 1%
Valuation allowance (7%) (52%) (15%)
Goodwill amortization (27%) 48% 14%
Deemed dividend under subpart F, net of foreign tax credit (16%) 112% 26%
Other, net (4%) 12% 11%
---- ---- ----
Effective income tax rate (19%) 150% 71%
==== ==== ====

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at December 31, 2000 and
1999 are as follows:

2000 1999
------------------------ ------------------------
U.S. NON-U.S. U.S. NON-U.S.
-----------------------------------------------------------------------------------------------------------------------------

Accounts receivable, principally due to allowance for
doubtful accounts $ 1,461 $ - $ 1,400 $ -
Inventories, principally due to additional costs inventoried
for tax purposes 390 - 540 -
Accrued interest and royalties 2,355 - 2,705 -
Other, net 109 - 134 -
---------------------------------------------------------
4,315 - 4,779 -
Valuation allowance (4,315) - (4,779) -
---------------------------------------------------------
Total current deferred tax assets (liabilities) $ - $ - $ - $ -
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Net operating loss and investment tax credit carry-forwards 20,556 438 $ 20,040 $ -
Plant, equipment and depreciation (81) (2,422) (100) (2,273)
Restructuring accruals - 677 - 1,041
Other, net - 1,250 45 1,616
---------------------------------------------------------
20,475 (57) 19,985 (66)
Valuation allowance (20,475) (438) (19,985) -
---------------------------------------------------------
Total non-current deferred tax assets (liabilities) $ - $ (495) $ - $ (66)
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------

Realization of deferred tax assets is dependent on future earnings,
the timing and amounts of which are uncertain. Accordingly, the net deferred
tax assets have been fully offset by a valuation allowance. The valuation
allowance increased by $464 (1999- decreased by $1,818) during the year.

Fresh-start reporting requires the Company to report a provision in
lieu of income taxes when there is a book taxable income and utilization of a
pre-reorganization net operating loss carry-forward. This requirement applies
despite the fact that the Company's pre-reorganization net operating loss
carry-forward and other deferred tax assets would eliminate the related
federal income tax payable. The current and future year tax benefit related
to the carry-forward is recorded as a reduction of reorganizational value in
excess of amounts allocable to identifiable assets until exhausted and then
as a direct increase to paid in capital. The amount of income tax provision
which has been used to reduce the reorganizational value in excess of amounts
allocable to identifiable assets has been reflected as a provision in lieu of
income taxes in the Company's Consolidated Statements of Operations.

At December 31, 2000, the Company has net operating loss
carry-forwards related to U.S. operations for income tax purposes of
approximately $54,100 ($53,000 in 1999). The carry-forward balances begin to
expire in 2010 and have been fully reserved by a valuation allowance. Of this
valuation allowance, $20,140 would reduce intangible and other assets if
reversed. The Company's ability to use remaining carry-forwards is limited in
use on an annual basis as a result of a change in control of the Company on
April 11, 1997 in connection with the Reorganization Plan and its acquisition
of SHC in 1998.

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

The Company has post-reorganization foreign tax credit carryover in
the amount of $3,100, which will begin to expire December 31, 2005.

Undistributed earnings from continuing operations of subsidiaries
outside the U.S., for which no provision for U.S. taxes has been made,
amounted to approximately $ nil, $nil and $4,700 at December 31, 2000, 1999
and 1998 respectively.

13. EARNINGS PER SHARE

Net income per share for the year ended December 31, 2000, and 1999:

2000 1999 1988
--------------------- --------------------- --------------------
Basic Diluted Basic Diluted Basic Diluted
----- ------- ----- ------- ----- -------

Net (loss) income attributable to
common stockholders (10,189) (10,189) $ (3,625) $ (3,625) $ 1,665 $ 1,665

Weighted average common and common
equivalent shares outstanding:

Common stock 6,500,549 6,500,549 6,500,549 6,500,549 6,500,507 6,500,507

Common equivalent shares (a) 158,930 158,930 158,977 193,741 158,977 191,203

Total weighted average common and
common equivalent shares outstanding 6,659,479 6,659,479 6,659,526 6,694,290 6,659,710 6,691,710

Net (loss) income per common share (b) $ (1.53) $ (1.53) $ (0.54) $ (0.54) $ 0.25 $ 0.25

(a) Common equivalent shares include warrants and stock options. The Company
used the average book value of its common stock in calculating the common
equivalent shares as required by Statement of Financial Accounting
Standards No. 128 due to the fact that the Company's stock had extremely
limited trading volume during the period.

(b) Common equivalent shares include warrants and stock options when
dilutive. The Company used the average book value of its common stock in
calculating the common equivalent shares as required by statement of
Financial Accounting Standards no. 128 due to the fact that Company's
stock had extremely limited trading volume during the period.

14. STOCK OPTION PLAN

During 2000, no additional stock options were granted. Prior to 2000,
the Company granted stock options to purchase 1,015,455 shares of Common
Stock in the Company at a weighted average exercise price of $11.62 to
certain key employees. The exercise prices of the stock options are not less
than the estimated fair market value of the shares at the time the options
were granted. Generally, these stock options become exercisable over a
five-year vesting period and expire 10 years from the date of the grant.

Options granted for the Common Stock are as follows:

SHARES EXERCISE PRICE
------ --------------

DECEMBER 31, 1999 1,015,455 10.00 - 16.00
Options Granted - -
Options Canceled 33,233 10.00

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

Options Exercised - -
--------- --------------
DECEMBER 31, 2000 982,222 $10.00 - 16.00
========= ==============

The following table summarizes information about stock options
outstanding at December 31, 2000.

OUTSTANDING EXERCISABLE
----------------------------------------------------------- --------------------------------
AVERAGE EXERCISE AVERAGE EXERCISE
EXERCISE PRICE RANGE SHARES AVERAGE LIFE (a) PRICE SHARES PRICE
-------------------- ------ ---------------- ---------------- ------ ----------------

$10.00-11.99 571,112 5.77 $10.00 437,890 $10.00
12.00-14.99 266,666 6.49 13.19 188,333 13.08
15.00-16.00 144,444 5.52 15.50 115,555 15.50
------------ ------- ---- ------ ------- ------
Total 982,222 5.93 $11.67 741,788 $11.64
============ ======= ==== ====== ======= ======

(a) Average contractual life remaining in years.

Given that there has been a limited amount of trading activity in the
Company's common stock, the fair value of each option on the date of grant
has been deemed to be the equivalent of its average book value.

As at December 31, 1999 there were 1,015,455 stock options outstanding with
weighted average exercise price of $11.62 ($10.00 - $16.00 range of exercise
prices), weighted average remaining contractual life of 7.0 years and 572,566
exercisable at December 31, 1999.

The Company applies APB Opinion No. 25 and related Interpretations in
accounting for stock options. Accordingly, no compensation cost has been
recognized. Had compensation cost for the stock options been determined based
on the fair value at the grant dates for awards, consistent with the
alternative method set forth under Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), Accounting for Stock-Based Compensation,
there would have been no change in the Company's net loss and net loss per
share. The impact of SFAS 123 may not be representative of the effect on
income in the future years because options vest over several years and
additional option grants may be made each year.

15. CONTINGENCIES

A. ENVIRONMENTAL LITIGATION

In 1992, T. Copeland & Sons, Inc. (" Copeland "), the owner of a
property adjacent to Maska's former manufacturing facility in Bradford,
Vermont (now used as a US apparel distribution centre), filed an action in
Vermont Superior Court alleging that its property had been contaminated as a
result of the Company's manufacturing activities and seeking compensatory and
punitive damages under the Vermont Groundwater Protection Law and various
common law theories. In June 1995, Maska settled this action for $1,000 cash,
paid in July 1995, and a $6,000 promissory note. Subsequently, Copeland
received a distribution of shares of THC's Common Stock to satisfy the note.
Copeland asserted the right to recover from the Company as a secured claim,
the difference between the aggregate value of the Common Stock and the amount
of the promissory note. In October 1998, Copeland's claim in the Bankruptcy
Court to recover this difference was disallowed without an evidentiary
hearing. Copeland filed an appeal of this decision. On May 1, 2000, the
District Court overruled the Bankruptcy Court's decision and

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

remanded the claim to the Bankruptcy Court for an evidentiary hearing. In
February, 2001, the Company reached an agreement with Copeland, subject to
Bankruptcy Court approval, to settle this claim for $1 million in cash.

B. PRODUCT LIABILITY LITIGATION

The Company is unaware of any personal injury claims for which there
is inadequate insurance coverage.

C. OTHER LITIGATION

On October 16, 1997, ZMD Sports Investments Inc. and 2938201 Canada
Inc., landlords of the Company's properties located in St. Jean, Quebec and
St. Hyacinthe, Quebec, brought motions against the Company which would
require the Company to undertake certain repairs to the properties for an
estimated $630. The Company believes these motions to be without merit.

Other than certain legal proceedings arising from the ordinary course of
business, which we believe will not have a material adverse effect, either
individually or collectively, on the financial position, results of
operations or cash flows, there is no other litigation pending or threatened
against us.

16. SEGMENT INFORMATION

REPORTABLE SEGMENTS

The Company has two reportable segments: Equipment and Apparel. The
Equipment segment derives its revenue from the sale of skates, including ice
hockey, roller hockey and figure skates, as well as protective hockey
equipment and sticks for both players and goaltenders. The Apparel segment
derives its revenue from the sale of hockey apparel, such as authentic and
replica hockey jerseys, as well as a high quality line of licensed and
branded apparel, baseball style caps, and jackets.

MEASUREMENT OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS

The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates performance based on gross profit. Segment assets include only
inventory.

INFORMATION ABOUT SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS

For the year ended and as at December 31, 2000

SEGMENT
EQUIPMENT APPAREL TOTALS
--------- ------- ------

Net sales 141,102 53,361 194,463
Gross profit 55,645 21,597 77,242
Depreciation of property, plant and equipment 2,681 500 3,181
Segment assets 28,653 13,457 42,110
------- ------ ------

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

For the year ended and as at December 31, 1999

Net sales $147,852 $42,751 $190,603
Gross profit 61,679 19,146 80,825
Depreciation of property, plant and equipment 2,593 483 3,076
Segment assets 35,752 13,203 48,955
-------- ------- -------

For the year ended and as at December 31, 1998

Net sales $ 73,983 $36,834 $110,817
Gross profit 29,848 15,943 45,791
Depreciation of property, plant and equipment 861 379 1,240
Segment assets 31,019 11,225 42,244
-------- ------- --------

RECONCILIATION OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS FOR THE YEARS ENDED
DECEMBER 31:

2000 1999 1998
---- ---- ----

SEGMENT PROFIT OR LOSS
Gross Profit $ 77,242 $ 80,825 $ 45,791
Unallocated amounts:
Selling general and administrative expenses 65,080 58,990 35,272
Amortization of excess re-organizational value
and goodwill 4,500 4,572 2,606
Restructuring and unusual charges - - 1,900
Other (income) expense, net 561 1,736 (4,588)
Interest expense 13,599 12,025 4,108
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES $ (6,498) $ 3,502 $ 6,493
======== ======== ========

2000 1999 1998
---- ---- ----

SEGMENT ASSETS
Total assets for reportable segments $ 42,110 $ 48,955 $ 42,244
Unallocated amounts
Cash 2,423 3,519 2,593
Account receivable 39,376 42,998 36,790
Prepaid expenses 3,931 2,622 3,513
Income taxes receivable 2,946 722 971
Other receivables 1,097 2,241 3,358
Property, plant and equipment, net 21,142 22,860 22,063
Intangible and other assets, net 82,854 85,694 91,044
Deferred income taxes - 4,420
-------- -------- --------
TOTAL ASSETS $195,879 $209,611 $206,996
======== ======== ========

GEOGRAPHIC INFORMATION

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

2000 1999 1998
------ ------ -----

NET SALES
United States $ 79,334 $ 76,230 $ 53,101
Canada 77,081 76,728 53,392
Sweden 23,525 23,840 2,738
Finland 14,523 13,805 1,586
-------- -------- --------
$194,463 $190,603 $110,817
======== ======== ========

2000 1999 1998
---- ---- ----

PROPERTY, PLANT & EQUIPMENT & GOODWILL
Canada $ 71,827 $ 77,370 $ 77,150
United States 11,211 11,746 15,360
Sweden 5,414 5,817 7,158
Finland 9,384 10,181 12,793
-------- -------- --------
$ 97,836 $105,114 $112,461
======== ======== ========

17. (A) BUSINESS ACQUISITION - SPORTS HOLDINGS CORPORATION

Effective November 19, 1998, the Company acquired all of the issued
and outstanding capital stock of Sports Holdings Corporation, a privately
held manufacturer and distributor of hockey equipment sold under the
Canadien(R), Heaton(R), Titan(R), Jofa(R) and Koho(R) brand names, with
operations in Canada, the United States, Finland and Sweden. The operations
are carried out through Tropsport Acquisitions Inc. in Canada, SHC Hockey
Inc. (formerly Karhu U.S.A. Inc.) in the United States, KHF Sports Oy in
Finland, and JOFA Holding AB, JOFA AB, and JOFA Norge A/S in Sweden, all of
which were wholly-owned by Sports Holdings Corp. The acquisition has been
accounted for using the purchase method and, accordingly, the purchase price
was allocated to the acquired assets and liabilities based on their estimated
fair value as at the acquisition date. The excess of the purchase price over
the fair value of the identifiable net assets acquired has been recorded as
goodwill and is being amortized on a straight-line basis over a period of 25
years.

The results of operations related to this acquisition have been
included in these consolidated financial statements from the effective date
of acquisition.

Details of the acquired assets and liabilities at fair value are as
follows:

$
--------

Cash 2,727
Current assets net of current liabilities 22,427
Property, plant and equipment 12,244
Long-term debt (24,830)
-------
IDENTIFIABLE ASSETS IN EXCESS OF IDENTIFIABLE LIABILITIES 12,568

CONSIDERATION PAID
Cash consideration 63,553
Acquisition costs 2,107
-------
TOTAL CONSIDERATION PAID 65,660

GOODWILL ON ACQUISITION 53,092
=======

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

In connection with the above acquisition, Sports Holdings Corp.
undertook a rationalization program that included severance and related
employee costs and anticipated costs related to the modification or closure
of certain facilities in North America and Europe.

The restructuring and acquisition-related charges were determined
based on formal plans approved by the Company's management using the best
information available to it at the time. The amounts the Company may
ultimately incur may change as the balance of the Company's initiative to
integrate the businesses related to this acquisition is executed.

The related restructuring costs approximated $5,019 and have been
included in the above purchase price allocation. The disposition of these
amounts to December 31, 2000 can be summarized as follows:

--------------------------------------------------------------------------------------------------------------------
LIABILITY

Total restructuring costs capitalized in the purchase price allocation at November 19, 1998 5,019
1998 Translation adjustments (35)
Amount of restructuring costs paid for the period November 19, 1998 to December 31, 1998 (1,191)
--------------------------------------------------------------------------------------------------------------------

Remaining liability included on the December 31, 1998 Consolidated Balance Sheet 3,793
--------------------------------------------------------------------------------------------------------------------
1999 Translation adjustments 66
Amount of restructuring costs reversed in 1999 (1,370)
Amount of restructuring costs paid for the period January 1 to December 31, 1999 (1,521)
--------------------------------------------------------------------------------------------------------------------

Remaining liability included on the December 31, 1999 Consolidated Balance Sheet 968
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Amount of restructuring costs paid for the period January 1 to December 31, 2000 (480)
--------------------------------------------------------------------------------------------------------------------
Remaining liability included on the December 31, 2000 Consolidated Balance Sheet 488
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

(b) LIABILITIES SUBJECT TO COMPROMISE UNDER REORGANIZATION PROCEEDINGS

Substantially all the Company's liabilities as of October 24, 1995
(the "Petition Date") were subject to compromise under a plan of
reorganization, except as otherwise provided by order of the Bankruptcy
Court. The Company was generally not permitted to make payments with respect
to its pre-Petition Date liabilities until a plan of reorganization was
confirmed by the Bankruptcy Court and consummated.

Liabilities subject to compromise under reorganization proceedings
consist of priority claims, the repayment of which the Company is required to
prioritize under bankruptcy law, which are comprised principally of income
and property tax claims. At December 31, 2000, and 1999, priority claims of
$698 and $698, respectively remain subject to resolution with the Bankruptcy
Court.

18. NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

value. The accounting for changes in the fair value of a derivative (that is,
gains and losses) depends upon the intended use of the derivative and
resulting designation if used as a hedge. SFAS No. 133, as amended by SFAS
No. 137 "Deferral of the Effective Date of SFAS No. 133" and SFAS 138
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities", is effective beginning January 1, 2001. Management has evaluated
the impact of these statements and believes their adoption will not
significantly affect the Company's consolidated financial position or results
of operations.

19. SUBSEQUENT EVENTS

(i) Corporate Re-organization

In January 2001, the Company re-organized causing the closing of three
of its facilities. The Mount Forest, Ontario creative apparel plant was
closed as well as the Bradford and Georgia Vermont warehouses. The Company
also eliminated several executive and administrative positions.

(ii) New Financing Arrangements

On March 14, 2001, an Amended and Restated Credit Agreement was
entered into by the Company and Sport Maska, as borrowers, Caisse de depot et
placement du Quebec ("Caisse") as Agent and Lender, and Montreal Trust
Company, as Paying Agent (the "Amended and Restated Credit Agreement"). On
the terms and subject to the conditions of the Amended and Restated Credit
Agreement, Facility 1 of the Caisse Loan, which is a facility in the maximum
amount of Canadian $90 million, was extended to June 30, 2004, and Facility 2
of the Caisse Loan which is a facility in the Maximum amount of Canadian
$45.8 million, was extended to October 31, 2002. A repayment of Facility 1 in
the minimum amount of Canadian $5 million is due on January 31, 2004.
Facility 1 and Facility 2 have been fully utilized and no new advances are
expected to be made under the Amended and Restated Credit Agreement.

As a condition precedent to the effectiveness of the Amended and
Restated Credit Agreement, the Company entered into a Warrant Agreement.

Pursuant to the Warrant Agreement, dated as of March 14, 2001, between
the Company and Caisse, the Company issued a warrant to Caisse to purchase
539,974 shares of common stock, par value $.01 per share, of the Company,
representing approximately 7.5% of the outstanding common stock, on a fully
diluted basis, at an exercise price of $.01 per share. The number of shares
issuable upon exercise of the warrants are subject to certain adjustments as
provided in the Warrant Agreement and, pursuant to the Warrant Agreement, if
by May 14, 2001, a fully financed firm offer is received by the Company which
would be sufficient to repay Facility 2 and if Facility 2 is so repaid in
full as a result of such offer no later than June 13, 2001, warrants issued
which represent the right to 179,991 common shares shall be cancelled. In
addition, the Company also issued warrants to Caisse to acquire
993,408 shares of common stock, par value $0.01 per share, which are only
exercisable by Caisse if a minimum EBITDA required is not met and if Facility 2
is not repaid in cash on or prior to certain dates.

On March 14, 2001, (i) the Second Amendment to the U.S. GECC
Credit Agreement was entered into by Maska U.S., as borrower, the Credit
Parties, the U.S. Lenders and General Electric Capital Corporation, as Agent
and Lender, and (ii) the second Amendment to the Canadian GECC Credit
Agreement was entered into by Sport Maska, as borrower, the Credit Parties,
the Canadian Lenders and General Electric Capital Canada Inc. as Agent and

THE HOCKEY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)

Lender. On terms and subject to the conditions of each of the Second
Amendments, the GECC Credit Agreements were amended to reflect the Amended
and Restated Credit Agreement. The maximum amount of loans and letters of
credit that may be outstanding under the two credit agreements is $60 million.

Borrowings under the U.S. Credit Agreements bear interest at rates of
either U.S. prime rate plus 0.5%-1.25% or LIBOR plus 1.75%-2.75% depending
on the borrower's Operating Cash Flow Ratio, as defined in the agreement.
Borrowings under the Canadian Credit Agreement bear interest at rates of
either the Canadian prime rate plus 0.75%-1.50% or LIBOR plus 1.75%-2.75%
depending on the borrower's Operating Cash Flow Ratio, as defined in the
agreement. In addition, the borrowers are charged a monthly commitment fee at
an annual rate of up to 3/8 of 1% on the unused portion of the revolving
credit facilities under the credit agreements and certain other fees.

Schedule II

THE HOCKEY COMPANY

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Years ended December 31, 2000, 1999, and 1998
(In thousands)

ADDITIONS
-------------------------
BALANCE AT CHARGED TO ACQUISITION BALANCE AT
DECEMBER 31, COSTS AND TRANSLATION DECEMBER
DESCRIPTION 1999 EXPENSES ADJUSTMENTS DEDUCTIONS 31, 2000
------------------------------------------------------------------------------------------------------------------------------

Allowance for doubtful accounts $ 2,237 556 (28) (743)(A) 2,022
Allowance for returns, discounts,
rebates and cooperative
advertising $ 5,541 4,957 (131) (4,760)(B) 5,607
Allowance for excess, obsolete
and slow moving inventories $ 2,369 2,302 (55) (726) 3,890

ADDITIONS
--------------------------
BALANCE AT CHARGED TO ACQUISITION BALANCE AT
DECEMBER 31, COSTS AND TRANSLATION DECEMBER
DESCRIPTION 1998 EXPENSES ADJUSTMENTS DEDUCTIONS 31, 1999
--------------------------------------------------------------------------------------------------------------------------------

Allowance for doubtful accounts $2,444 421 - 100 (728)(A) $ 2,237
Allowance for returns, discounts,
rebates and cooperative
advertising $5,384 4,758 - 188 (4,789)(B) $ 5,541
Allowance for excess, obsolete
and slow moving inventories $3,150 1,173 - 88 (2,042) $ 2,369

ADDITIONS
-------------------------
BALANCE AT CHARGED TO ACQUISITION BALANCE AT
DECEMBER 31, COSTS AND TRANSLATION DECEMBER
DESCRIPTION 1997 EXPENSES ADJUSTMENTS DEDUCTIONS 31, 1998
--------------------------------------------------------------------------------------------------------------------------------

Allowance for doubtful accounts $4,046 (2,109) 455 (75) 127 (A) $2,444
Allowance for returns, discounts,
rebates and cooperative
advertising $5,886 3,388 837 (130) (4,597)(B) $5,384
Allowance for excess, obsolete
and slow moving inventories $3,418 1,344 441 (111) (1,942) $3,150

(A) Accounts written off as uncollectible, net of recoveries
(B) Deductions taken by customers.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

NAME AGE POSITION WITH COMPANY
---- --- ---------------------

Gerald B. Wasserman 64 Chairman of the Board
Paul M. Chute 46 Director
Greg S. Feldman 44 Director
Jason B. Fortin 30 Director
James C. Pendergast 44 Director
Phil Bakes 55 Director
Matthew H. O'Toole 38 President
Russell J. David 42 Chief Operating Officer
Johnny Martinsson 57 Senior Vice President, Europe
David Terreri 47 Vice President, Distribution and Customer Service
Jacques Cordeau 49 Vice President and General Manager, Apparel
T. Blaine Hoshizaki 50 Vice President R&D and General Manager, Goalie
Len Rhodes 37 Vice President, Marketing

Pursuant to an Agreement dated March 14, 2001 among the Company,
Caisse de depot et placement du Quebec ("Caisse") and WS Acquisition LLC,
Caisse has the right, as of March 16, 2001 to appoint two directors.

Gerald B. Wasserman became Chairman of the Board and Director of the
Company in April 1997. He served as Chief Executive Officer and President of
the Company from September 1996 to January 2001. From 1994 until September
1996, Mr. Wasserman was a consultant and from 1993 to 1994 he served as Chief
Executive Officer of Weider Health and Fitness, a fitness and publishing
company. Mr. Wasserman was Chief Executive Officer of Canstar Inc. (c/k/a
Bauer Nike Hockey Inc.), a manufacturer and distribution of hockey related
products, from 1985 through 1993.

Paul M. Chute became a Director of the Company in April 1997. Since
January 1995, Mr. Chute has served as a Managing Director of Phoenix Duff &
Phelps Corp., an investment advisor to its affiliate Phoenix Home Life Mutual
Insurance Company. He was a Managing Director of Phoenix Home Life Mutual
Insurance Company from January 1992 to December 1994.

Greg S. Feldman became a Director of the Company in July 1998. Mr.
Feldman is a co-founder and Managing Partner of Wellspring Associates LLC
("Wellspring") and Wellspring Capital Management LLC. For four years prior
to joining Wellspring, he was a vice president in charge of acquisitions
at EXOR America Inc. (formerly IFINT USA, Inc.) the U.S. investment arm
of Agnelli Group. For two years before joining EXOR, Mr. Feldman was
vice-president and co-founder of Clegg Industries, an investment firm
backed by Drexel Burnham Lambert Inc. that invested in leveraged acquisitions
of middle market manufacturing companies.

Jason B. Fortin became a Director of the Company in December 1998.
Mr. Fortin is a vice president of Wellspring and has been employed by them
since March 1995. From 1992 until 1995, Mr. Fortin was in the corporate
finance department of Donaldson, Lufkin & Jenrette Securities Corporation.

James C. Pendergast became a Director of the Company in April 1997.
Since July 1993, Mr. Pendergast has been a Managing Director of Alliance
Corporate Finance Group Inc., an investment advisor to its affiliate The
Equitable Life Assurance Society of the United States ("Equitable"). From
July 1986 until July 1993, he was employed by Equitable Capital Management
Corp., a subsidiary of Equitable.

Phil Bakes became a Director in October 1999. Mr. Bakes is the
Chairman and Chief Executive Officer of

FAR&WIDE Travel Corp., a leading value-added travel tour operator, which he
founded in 1997. Bakes had been president of Sojourn Enterprises, Inc., a
Miami advisory and merchant banking firm he founded in 1990.

Matthew H. O'Toole, was appointed President in January 2001 having
joined the Company in May 1999 as Senior Vice President, Sales and Marketing.
He previously served as vice-president of world-wide marketing and sales for
the Tear Drop Golf Company. From 1994 to 1997 he served as vice-president of
sales for Tommy Armour Golf Company. Prior to that he spent nine years in
marketing and sales management at Wilson Sporting Goods Company, which
included business manager and marketing director of golf clubs, product
manager and district sales manager.

Russell J. David, Chief Operating Officer, joined the Company in
November 1996 and served as Senior Vice President, Finance & Administration
until January 2001. From July 1994 through November 1996, he was Senior Vice
President and Chief Financial Officer of Peerless Carpet Corporation, an
international carpet and floor covering manufacturer and distributor. From
June 1992 through July 1994, he was Executive Vice President and Chief
Operating Officer of Perrette Inc., a convenience store chain. From 1989 to
1992 he was Executive Vice President and Chief Operating Officer of Gildan
Activewear, a vertically integrated apparel manufacturer.

Johnny Martinsson, Senior Vice President, Europe joined the Company
on the acquisition of Sports Holdings Corp. in 1998. He has had a long and
successful tenure with Jofa AB holding a variety of position over a 30 year
career.

David Terreri became Vice President, Distribution & Customer
Service of the Company in January 1997. Mr. Terreri was employed by Canstar
Inc. (c/k/a Bauer Nike Hockey Inc.) from June 1978 to January 1997
eventually rising to Vice President, Distribution & Logistics.

Jacques Cordeau, Vice President and General Manager, Apparel has
been employed by the Company for 16 years. Since joining in 1984 as an
Industrial Engineering Manager, he has worked at various functions including
Vice president, Manufacturing, Production Manager and Plant Manager.

T. Blaine Hoshizaki, Vice President R&D and General Manager, Goalie
joined the Company in 1997. From 1995 to 1997 he worked as a product
development consultant and from 1989 to 1995 he was Vice-President of
Research and Development at Bauer. Prior to that was an Associate Professor
in the Biomechanics of Sport at McGill University. He holds a PhD from the
University of Illinois.

Len Rhodes became Vice President, Marketing in January 2001 having
joined the Company in September 1999 as Director of Marketing. Prior to that
he spent 11 years at Molson Breweries in various sales and marketing
positions eventually becoming a brand manager.

BOARD OF DIRECTORS

The Board of Directors has responsibility for establishing broad
corporate policies and for overseeing the performance of the Company,
although it is not involved in day-to-day operations. Members of the Board
are kept informed of the Company's business by various reports and documents
sent on a regular basis as well as by operating and financial reports
presented at Board and various Committee meetings. The Board of Directors
held 4 meetings during 2000.

The Board does not have audit, nominating or other corporation
committees, but acts, as a whole, in performing the functions of such
committees.

Directors do not receive any compensation for services rendered in
their capacity as such: however, they do

receive reimbursement of reasonable out-of-pocket expenses in respect of
attendance at meetings.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) of the Securities Exchange Act of 1934, the
Company's Directors, executive officers and holders of more than 10% of the
Common Stock are required to report their initial ownership of the Company's
equity securities and any subsequent changes in that ownership to the
Securities and Exchange Commission ("SEC"). Specific due dates for these
reports have been established, and the Company is required to disclose any
failure to file by these dates with respect to 2000. Based on representations
of its directors and executive officers and copies of the reports they have
filed with the SEC, there were no late reports filed for 2000.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth certain
information for the years ended December 31, 2000, 1999 and 1998 concerning
the cash and non-cash compensation earned by or awarded to the Chairman of
the Board and the four other most highly compensated executive officers of
the Company as at December 31, 1999 and as at the date hereof:

Annual Compensation Long-Term Compensation
--------------------------------------------------------------------
Fiscal Other Annual Stock All Other
Name and position Year Salary Bonus Compensation(1) Options Compensation

Gerald B. Wasserman 2000 $350,000 $ - $ - - $ -
Chairman of the Board 1999 350,000 - - - -
1998 350,000 - - - -

Matthew H. O'Toole(2) 2000 151,670 60,668
President 1999 85,542 - - 25,000 -

Russell J. David(3) 2000 161,863 -
Chief Operating Officer 1999 141,314 - - - -
1998 138,300 25,000 - - -

Gordon T. Halliday(3)(4) 2000 161,863 -
Senior Vice President, 1999 141,314 - - - -
Operations 1998 138,000 25,000 - - -

David Terreri 2000 203,855 -
Vice President, Distribution & 1999 183,855 - - - -
Customer Service 1998 178,500 - - - -

(1) Includes all other annual compensation not properly categorized as salary
or bonus. Certain perquisites that do not exceed 10% of the named
individuals salary are excluded.
(2) Mr. O'Toole earns an annualized salary of Canadian $225,000
(3) Mr. David and Mr. Halliday earn an annualized salary of Canadian $240,120

(4) Mr. Halliday's resigned in January 2001

STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

The following tables set forth certain information concerning the
granting of options to purchase shares of the Company's common stock to each
of the executive officers of the Company named in the Summary Compensation
Table above, as well as certain information concerning the exercise and value
of such stock options for each of the individuals. Options generally become
exercisable over periods of five years and subject to certain exceptions,
expire no later than ten years from the date of grant.

STOCK OPTIONS GRANTED IN 2000

None

OPTIONS EXERCISED IN 2000 AND VALUE OF OPTIONS AT DECEMBER 31, 2000

Shares
acquired on Value Number of Unexercised Value of Unexercised
Name exercise Received Options held at Year End In-the-Money Options at Year End
---- ------------ ---------- -------------------------------------------------------------------
Exercisable Not exercisable Exercisable Not exercisable
-------------- ------------------ --------------- ------------------

Gerald B. Wasserman - - 577,778 144,445 N/A N/A
Russell J. David - - 20,000 5,000 N/A N/A
Gordon T. Halliday - - 52,000 13,000 N/A N/A
Matthew H. O'Toole - - 5,000 20,000 N/A N/A
David Terreri - - 30,000 20,000 N/A N/A

The value of unexercised in-the-money options at year-end has not been
determined due to the extremely limited amount of trading activity in the
Company's common stock.

EMPLOYMENT AGREEMENTS

Effective September 1, 1996, the Company entered into a five-year
employment agreement with Gerald B. Wasserman employing him as President and
Chief Executive Officer of the Company. As compensation for his services
during the term of his employment agreement, Mr. Wasserman is entitled to
receive a base salary at a rate of $350,000 per year, which base salary may
be increased by the Board of Directors on an annual basis. In addition, Mr.
Wasserman was granted options to purchase an aggregate of 722,222 shares of
the Company's Common stock (of such options, options to purchase 650,000
shares were granted in 1996). An option (the "First Option" with respect to
361,111 of such shares) was granted at an exercise price of $10.00 per share,
and an option (the "Second Option", and together with the First Option, the
"Options") with respect to 361,111 such shares was granted at exercise prices
ranging from $12.00 per share through $16.00 per share. Subject to the
provisions of the employment agreement related to early terminations, the
Options have a term of ten years from the date of grant and vest in five
equal annual installments on September 1 of each year, commencing on
September 1, 1997.

In the event the Company terminates Mr. Wasserman's employment
without "cause", as defined, the Company will be obligated to make severance
payments to Mr. Wasserman in an aggregate amount equal to six months of the
then-current base salary for each completed year of service up to an
aggregate amount equal to one-year's of the then-current base salary. In
addition, all granted but unvested First Options will vest immediately and
Mr. Wasserman will be entitled to any options which have vested as of the
date of such termination. In the event the

Company terminates the employment agreement for "cause", as defined, all of
the Company's obligations under the employment agreement will terminate as of
the date of such termination, except that Mr. Wasserman will be entitled to
any Options which have vested as of such date. If Mr. Wasserman resigns by
reason of a Downgrading Event following a Change of Control (both as defined
therein), the Company will be obligated to pay him an aggregate of twelve
months of the then-current base salary. Upon a Change of Control, all Options
will vest immediately.

Mr. Matthew H O'Toole, President joined the Company in May 1999. Mr.
O'Toole receives annual compensation of Canadian $225,000, subject to review
annually, and is eligible to participate in the Company's bonus plan up to a
maximum of 40% of then-current salary, with a bonus of Canadian $90,000
guaranteed in 2000. Mr. O'Toole has also been granted stock options to
purchase 25,000 shares of the Company's Common stock at an exercise price of
$14.00 per share. These options have a term of ten years and vest ratably
over five years, with all options fully vested upon a Change of Control and
ratably upon a termination of Mr. O'Toole's employment without "cause". Upon
three months' notice of termination of employment by the Company, Mr. O'Toole
will be entitled to receive as severance one year's salary.

Mr. Russell J. David, Chief Operating Officer joined the Company
on November 11, 1996. Mr. David receives an annual salary of Canadian
$240,120, subject to annual review, and is eligible to participate in the
Company's bonus plan up to a maximum of 40% of then-current salary pursuant
to such plan, with a guaranteed bonus of 20% of his salary for the first year
of his employment. Mr. David also has been granted stock options to purchase
25,000 shares of the Company's Common stock at an exercise price of $10.00
per share. These options have a term of ten years, vest ratably over five
years and vest immediately upon a Change of Control and ratably upon a
termination of employment of Mr. David without "cause". Upon three months'
notice of termination of employment by the Company, Mr. David will be
entitled to receive as severance one year's salary in the first year of
service with the Company and up to a maximum of fifteen months thereafter.

Effective January 27, 1997, Gordon T. Halliday was appointed Senior
Vice President, Operations of the Company. Mr. Halliday receives annual
compensation of Canadian $210,000, subject to annual review, and is eligible
to participate in the Company's bonus plan up to a maximum of 40% of
then-current salary with a bonus of 20% of Mr. Halliday's salary guaranteed
in the first year of his employment. Mr. Halliday has also been granted stock
options to purchase 65,000 shares of the Company's Common stock at an
exercise price of $10.00 per share. These options have a term of ten years
and vest ratably over five years, with all options fully vested upon a Change
of Control and ratably upon a termination of Mr. Halliday's employment
without "cause". Mr. Halliday resigned his employment effective January 31,
2001. Pursuant to his employment contract he will be entitled to receive as
severance fifteen months of salary.

Effective January 9, 1997, David Terreri was appointed Vice
President, Distribution & Customer Service of the Company. He earns a base
salary of $203,855 per year, subject to annual review. Mr. Terreri is also
eligible to participate in the Company's bonus plan up to a maximum of 40% of
then-current salary with a bonus of 20% of Mr. Terreri's salary guaranteed in
the first year of his employment. Mr. Terreri has been granted stock options
to purchase 50,000 shares of the Company's Common stock at an exercise price
of $10.00 per share. These options have a term of ten years, vest ratably
over five years and vest immediately upon a Change of Control and ratably
upon a termination of Mr. Terreri's employment without "cause". Upon three
months' notice of termination of employment by the Company, Mr. Terreri will
be entitled to receive as severance six months' salary per year of service in
the first year of service and twelve months' salary per year of service with
the Company thereafter up to a maximum of fifteen months.

RETIREMENT AND LONG-TERM INCENTIVE PLANS

During 1998 the Company introduced a contributory defined
contribution plan (the "Pension Plan"). The executive officers of the Company
entered into supplementary executive retirement agreements ("SERP"). The

SERP benefit equals 2% of base earnings at retirement times years of service
minus the pension provided by the Company's Pension Plan. These SERPs are
unfunded. During the year ended December 31, 2000, premiums totaling $41,687
(1999 - $41,333) were made by the Company on behalf of these executive
officers.

The Company also maintains a defined contribution plan for certain
of its employees, under which the Company makes a matching contribution of up
to 50% of eligible employee contributions. Matching contributions in 2000
were $41,600 (1999- $40,667).

PERFORMANCE GRAPH

Normally, the Company would present a graph comparing the cumulative
total stockholder return on the Company's Common Stock with that of the
NASDAQ Composite Index for U.S. companies and the Dow Jones Recreation
Products Group that is comprised of toy, entertainment, sporting goods,
recreation and leisure product companies. However, on April 11, 1997, as a
result of the Company's reorganization, all outstanding shares of the
Company's Old Common Stock were converted into warrants to purchase shares of
the Company's Common stock. In addition, since April 11, 1997 there has been
extremely limited trading volume of the Company's Common stock. Therefore, a
performance graph is not presented as it would not be meaningful.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding
beneficial ownership of the Company's Common stock as of March 13, 2001 with
respect to (a) each person known to the beneficial owner of more than 5% of
the outstanding shares of Common stock, (b) each Director of the Company, (c)
the Company's executive officers and (d) all officers and directors of the
Company as a group. (Except as indicated in the footnotes to the table, all
such shares of Common stock are owned with sole voting power and investment
power.)

No. of % of Total number of shares beneficially owned
Name of Beneficial Owner(1) shares Class that can be acquired within 60 days
--------------------------- --------- ------- ------------------------------------------

BENEFICIAL OWNERS OF MORE THAN 5% OF COMMON STOCK
-------------------------------------------------------------------------------------------------------------------
WS Acquisition LLC(2) 3,289,867 49.1%
-------------------------------------------------------------------------------------------------------------------
The Equitable Life Assurance Society of the
United States(3) 1,253,684 18.7%
-------------------------------------------------------------------------------------------------------------------
Phoenix Home Life Mutual Insurance
Company(5) 517,322 7.7% 159,127
-------------------------------------------------------------------------------------------------------------------
The Northwestern Mutual Life Insurance
Company(4) 394,015 5.9%
-------------------------------------------------------------------------------------------------------------------
COMPANY DIRECTORS
-------------------------------------------------------------------------------------------------------------------
Gerald B. Wasserman(6)(8) - 8.8% 577,778
-------------------------------------------------------------------------------------------------------------------
Paul M. Chute(5) - -
-------------------------------------------------------------------------------------------------------------------
Greg S. Feldman(2) - -
-------------------------------------------------------------------------------------------------------------------
Jason B. Fortin(2) - -
-------------------------------------------------------------------------------------------------------------------
James C. Pendergast(3) - -
-------------------------------------------------------------------------------------------------------------------
Phil Bakes(9) - -
-------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
-------------------------------------------------------------------------------------------------------------------
Matthew O'Toole(6)(8) - - 5,000
-------------------------------------------------------------------------------------------------------------------
Russell J. David(6)(8) - - 20,000
-------------------------------------------------------------------------------------------------------------------
Johnny Martinsson(7)(8) - - 10,000
-------------------------------------------------------------------------------------------------------------------
David Terreri(6)(8) - - 30,000
-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------
Jacques Cordeau(6)(8) - - 15,000
-------------------------------------------------------------------------------------------------------------------
T. Blaine Hoshizaki(6)(8) - - 20,000
-------------------------------------------------------------------------------------------------------------------
ALL OFFICERS AND DIRECTORS AS A GROUP
(13 PERSONS) - 10.4% 677,778
-------------------------------------------------------------------------------------------------------------------

(1) Beneficial ownership excludes 538,517 shares of the Company's Common
stock that have not yet been allocated pursuant to the Company's
Reorganization Plan. Such shares will either be issued to the holders of
certain unsecured claims or issued to holders of the Company's outstanding
shares of Common stock. Such holders of unsecured claims may elect to sell
such shares to WS Acquisitions LLC pursuant to a cash option agreement
between the Company and Wellspring Associates LLC, an affiliate of WS
Acquisitions LLC. All percentages are calculated based on 6,693,725 shares of
Common stock outstanding (which excludes the 538,517 aforementioned shares)
but includes 731,693 shares of Common stock which may be acquired within 60
days.

(2) The address for such owners is WS Acquisition LLC, 620 Fifth Avenue, New
York, New York 10020. Greg S. Feldman's beneficial ownership excludes
3,289,867 shares owned by WS Acquisition LLC. Mr. Feldman is a Managing
Partner of Wellspring Associates LLC, an affiliate of WS Acquisition LLC. Mr.
Jason Fortin's beneficial ownership excludes those 3,289,867 shares. Mr.
Fortin is a Vice-President of Wellspring Associates LLC.

(3) The address of such owners is 1290 Avenue of the Americas, New York, New
York 10104. James C. Pendergast's beneficial ownership excludes 1,253,684
shares owned by The Equitable Life Assurance Society of the United States.
Mr. Pendergast is a Managing Director of Alliance Corporate Finance group
Inc., an affiliate of The Equitable Life Assurance Society of the United
States.

(4) The address of such owner is 720 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202

(5) The address of such owners is 1 American Row, Hartford, Connecticut
06115. Paul M. Chute's beneficial ownership excludes 358,195 shares owned by
Phoenix Home Life Mutual Insurance Company. Mr. Chute is a Managing Director
of Phoenix, Duff & Phelps Corp., an affiliate of Phoenix Home Life Mutual
Insurance Company.

(6) The address of such owners is c/o Maska U.S., Inc., 929 Harvest Lane,
Williston, Vermont 05495-8919.

(7) The address of such owner is c/o Jofa AB, S-782 22 Malung, Sweden

(8) Does not include stock options granted but which have not vested as
of March 12, 2001 (see item 11)

(9) The address of such owner is 80 S.W. 8th Street, Miami, FL 33130-3047

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 2000 the Company had no related transactions with shareholders.

PART IV

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

(a)(1) Financial Statements required by Item 14 are included and indexed in
Part II, Item 8.

(a)(2) The financial statement schedules filed as part of this report include
the following:

SCHEDULE PAGE
-------- ----

II Valuation and Qualifying Accounts and Reserves 48

(a)(3) The following is a list of all Exhibits filed as part of this Report:

EXHIBIT NO. DESCRIPTION
----------- -----------

2.1 First Amended Joint Chapter 11 Plan (as modified), dated November 12, 1996, filed with the United
States Bankruptcy Court for the District of Delaware. Filed as Exhibit 1 to the Company's Current
Report on Form 8-K dated December 6, 1996, incorporated herein by reference.

2.2 First Modification, dated January 15, 1997, to First Amended Joint Chapter 11 Plan. Filed as Exhibit
2.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated
herein by reference.

2.3 Second Modification, dated January 23, 1997, to First Amended Joint Chapter 11 Plan (as modified), dated
November 12, 1996. Filed as Exhibit 2.3 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by reference.

2.4 Third Modification, dated March 14, 1997, to First Amended Joint Chapter 11 Plan (as modified), dated
November 12, 1996. Filed as Exhibit 2.4 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by reference.

3.1 Amended and Restated Certificate of Incorporation of the Company dated March 31, 1997. Filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996 and
incorporated herein by reference.

3.2 Amended and Restated By-Laws of the Company. Filed as Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 and incorporated herein by reference.

3.3 Certificate of Amendment to Certificate of Incorporation and Certificate of Designation, dated
November 19, 1998. (Filed herewith)

3.4 Certificate of Amendment to Certificate of Incorporation, dated February 1, 1999. (Filed herewith)

3.5 Certificate of Amendment to Certificate of Incorporation, dated March 14, 2001. (Filed herewith)

10.1 Cash Option Agreement, dated January 6, 1997 between the Company and Wellspring Associates L.L.C.
Filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K/A for the year ended December 31,
1996 and incorporated herein by reference.

10.2 Amendment to Cash Option Agreement, dated April 8, 1997, between the Company and Wellspring Associates
L.L.C. Filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the year

ended December 31, 1996 and incorporated herein by reference.

10.3 Stockholders Agreement, dated as of April 11, 1997, between the Company and the persons set forth on
Schedule A thereto. Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by reference.

10.4 Warrant Agreement, dated as of April 11, 1997, between the Company and American Stock Transfer & Trust
Company, as Warrant Agent. Filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 and incorporated herein by reference.

10.5 Retail License Agreement, dated March 8, 1995, between Maska U.S., Inc. and NHL Enterprises Inc.
Filed as Exhibit 10.30 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994
and incorporated herein by reference.

10.6 Retail License Agreement, dated March 8, 1995, between Sport Maska Inc. and NHL Enterprises Canada
Inc. Filed as Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December
31, 1994 and incorporated herein by reference.

10.7 Retail License Agreement, dated October 6, 1995, between NHL Enterprises and Maska U.S., Inc. Filed
as Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and
incorporated herein by reference.

10.8 Retail License Agreement, dated October 6, 1995, between NHL Enterprises and Sport Maska Inc. Filed
as Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and
incorporated herein by reference.

10.9 Deed of Lease, dated April 11, 1997, between ZMD Sports Investments Inc. and Sport Maska Inc. Filed
as Exhibit 10.38 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996 and
incorporated herein by reference.

10.10 Deed of Lease, dated April 11, 1997, between ZMD Sports Investments Inc. and Sport Maska Inc. Filed
as Exhibit 10.40 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996 and
incorporated herein by reference.

10.11 Deed of Lease, dated April 11, 1997, between ZMD Sports Investments Inc. and Sport Maska Inc. Filed
as Exhibit 10.41 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996 and
incorporated herein by reference.

10.12 Deed of Lease, dated April 11, 1997, between 2938201 Canada Inc. and Sport Maska Inc. Filed as
Exhibit 10.42 to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996 and
incorporated herein by reference.

10.13 Settlement Agreement, dated November 21, 1995, among the Company, certain subsidiaries, the Buddy L
Creditors Committee and certain Lenders. Filed as Exhibit 10.40 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated herein by reference.

10.14 Form of U.S. Debenture Delivery Agreement, dated as of April 1, 1997. Filed as Exhibit 10.44 to the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1996 and incorporated herein by
reference.

10.15 License and sponsorship agreement, dated September 25, 1998, among NHL Enterprises, L.P., NHL
Enterprises Canada, L.P., NHL Enterprises B.V., Sport Maska Inc. and Maska U.S. Inc. Filed as Exhibit
10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated
herein by reference.

10.16 Amendment to license agreement dated October 27, 1998, among NHL Enterprises, L.P., NHL Enterprises
Canada, L.P., NHL Enterprises B.V., Sport Maska, Inc. and Maska U.S., Inc. Filed as Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein
by reference.

10.17 Amended and Restated Credit Agreement, dated as of March 14, 2001, among the Company and Sport Maska Inc.,
as borrowers, Caisse de depot et placement du Quebec, as Agent and Lender, and Montreal Trust Company, as
Paying Agent. Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 26, 2001,
incorporated herein by reference.

10.18 Warrant Agreement, dated as of March 14, 2001, between the Company and Caisse de depot et placement du
Quebec. Filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 26 , 2001,
incorporated herein by reference

10.19 Agreement, dated as of March 14, 2001, among Caisse de depot et placement du Quebec, the Company, WS
Acquisition LLC and certain other stockholders of the Company. Filed as Exhibit 10.3 to the Company's
Current Report on Form 8-K dated March 26 , 2001, incorporated herein by reference.

10.20 Agreement, dated as of March 14, 2001, among Caisse de depot et placement du Quebec, WS Acquisition LLC
and the Company, filed as Exhibit 10.4 to the Company's Current Report on Form 8-K dated March 26,
2001, incorporated herein by reference.

10.21 Registration Rights Agreement, dated as of March 14, 2001, between the Company and Caisse de depot et
placement du Quebec, filed as Exhibit 10.5 to the Company's Current Report on Form 8-K dated March 26,
2001, incorporated herein by reference.

10.22 Second Amendment to Credit Agreement, dated as of March 14, 2001, among Maska U.S., Inc., as the borrower,
the Credit Parties, the Lenders and General Electric Capital Corporation, as Agent and Lender, filed as
Exhibit 10.6 to the Company's Current Report on Form 8-K dated March 26, 2001, incorporated herein by
reference.

10.23 Second Amendment to Credit Agreement, dated as of March 14, 2001, among Sport Maska Inc., as borrower,
the Credit Parties, the Lenders and General Electric Capital Canada Inc., as Agent and Lender, filed as
Exhibit 10.7 to the Company's Current Report on Form 8-K dated March 26, 2001, incorporated herein by
referenced.

21 Subsidiaries of the Company (filed herewith).

(b) Reports on Form 8-K.

On December 5, 2000, the Company filed a Current Report on Form 8-K with
respect to the extension of the credit loan to the Company and Sport Maska
furnished by the Caisse de depot et placement du Quebec. This report was
filed in compliance with Item 5 of Form 8-K.

On March 26, 2001 the Company filed a Current Report on Form 8-K with respect
to the renewal of the credit loans to the Company and Sport Maska furnished
by the Caisse de depot et placement du Quebec and General Electric Capital
Corporation. This report was filed in compliance with Item 5 of Form 8-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Town of
Williston, State of Vermont, on the 30th day of March, 2001.

THE HOCKEY COMPANY

By: /s/ Russell J. David
---------------------------------------
Name: Russell J. David
Title: Chief Operating Officer and Secretary
Principal Financial and Accounting Officer

Pursuant to the requirements of the Securities Act of 1934, this Form 10-K
has been signed by the following persons in the capacities and on the dates
indicated. Each person whose signature to this Form 10-K appears below hereby
appoints Russell J. David as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below and to file all amendments and
post-effective amendments to this Form 10-K, and any and all instruments or
documents filed as part of or in connection with this Form 10-K or the
amendments thereto, and any such attorney-in-fact may make such changes and
additions in this Form 10-K as such attorney-in-fact may deem necessary or
appropriate.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ Gerald B. Wasserman Chairman of the Board March 30, 2001
-------------------------------------
Gerald B. Wasserman

/s/ Matthew O'Toole President March 30, 2001
------------------------------------- Principal Executive Officer
Matthew O'Toole

/s/ Russell J. David Chief Operating Officer and Secretary March 30, 2001
------------------------------------- Principal Financial & Accounting Officer
Russell J. David

/s/ Paul M. Chute Director March 30, 2001
-------------------------------------
Paul M. Chute

/s/ Phil Bakes Director March 30, 2001
-------------------------------------
Phil Bakes

/s/ Greg S. Feldman Director March 30, 2001
-------------------------------------
Greg S. Feldman

/s/ Jason B. Fortin Director March 30, 2001
-------------------------------------
Jason B. Fortin

/s/ James C. Pendergast Director March 30, 2001
-------------------------------------
James C. Pendergast