Management's Discussion and Analysis of
Financial Condition and Results of Operations
For the three month period ended August 31, 2014


INTRODUCTION		1
FIRST QUARTER FISCAL 2015 HIGHLIGHTS		2
COMPANY OVERVIEW		3
SEGMENT INFORMATION		3
INDUSTRY OVERVIEW		3
RECENT EVENTS		7
FINANCIAL PERFORMANCE		9
SEGMENT RESULTS		15
OUTLOOK		15
LIQUIDITY AND CAPITAL RESOURCES		16
INDEBTEDNESS		17
CAPITAL EXPENDITURES		20
CONTRACTUAL OBLIGATIONS		21
OFF-BALANCE SHEET ARRANGEMENTS		21
RELATED PARTY TRANSACTIONS		22
CONTINGENCIES		22
QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET AND OTHER FINANCIAL RISKS		22
CRITICAL ACCOUNTING ESTIMATES		23
STANDARDS ADOPTED		24
FUTURE ACCOUNTING STANDARDS		24
NON-IFRS FINANCIAL MEASURES		25
CONTROLS AND PROCEDURES		28
CAUTION REGARDING FORWARD-LOOKING STATEMENTS		28
MARKET AND INDUSTRY DATA		29
RISK FACTORS		30
ADDITIONAL INFORMATION		30
COMMON SHARE TRADING INFORMATION		30
GLOSSARY OF TERMS		31

This management's discussion and analysis ("MD&A") dated October 9, 2014 of Performance Sports Group Ltd. (the "Company", "PSG", "we", "us", or "our") is intended to assist the readers in understanding the Company, its business environment, strategies, performance, and risk factors. It should be read in conjunction with our unaudited condensed consolidated interim financial statements, including the related notes, for the three month period ended August 31, 2014 and our audited annual consolidated financial statements, including the related notes, for the fiscal year ended May 31, 2014. Financial data has been prepared in conformity with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). The unaudited condensed consolidated interim financial statements and the audited annual consolidated financial statements, and related MD&A, are available on the Company's website at www.performancesportsgroup.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

On April 15, 2014, the Company completed the acquisition of the Easton baseball and softball business ("Easton Baseball/Softball")and the assets formerly used in Easton-Bell Sports, Inc.'s lacrosse business (the "Easton Baseball/Softball Acquisition") from Easton-Bell Sports, Inc. (now named BRG Sports, Inc. ("BRG Sports")).

On June 25, 2014, the Company completed its initial public offering of common shares in the United States and public offering of common shares in Canada ("U.S. IPO") of 8,161,291 common shares at a price to the public of $15.50 per share, for total gross proceeds of approximately $126.5 million, including the exercise in full of the over-allotment option. The Company used the net proceeds of the Offering to reduce leverage and repaid $119.5 million of the New Term Loan Facility (as defined in the "Indebtedness" section) which was used to finance the Easton Baseball/Softball Acquisition. The repayment was first applied against the outstanding amortization payments and as such no further amortization payments are due for the life of the facility. The Company's common shares are now dual listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol "PSG".

As of August 31, 2014, the Company directly or indirectly owns all of the equity interests in each of Bauer Hockey, Inc., Bauer Hockey Corp., Easton Baseball / Softball Corp., Easton Baseball / Softball Inc., Performance Lacrosse Group Inc. (formerly Bauer Performance Lacrosse Inc.), Performance Lacrosse Group Corp. (formerly Bauer Performance Lacrosse Corp.), Bauer Performance Sports Uniforms Corp., Bauer Performance Sports Uniforms Inc., BPS Diamond Sports Corp., and BPS Diamond Sports Inc. The Company, together with its consolidated subsidiaries, is referred to as the "Company", "we", "us", or "our".

All references to "Fiscal 2015" and "Fiscal 2014" are to the Company's fiscal year ending May 31, 2015 and fiscal year ended May 31, 2014, respectively. Unless otherwise indicated, all references to "$" and "dollars" in this MD&A mean U.S. dollars. Any references to market share data and market size are based on wholesale revenues unless otherwise indicated.

Certain measures used in this MD&A do not have any standardized meaning under IFRS. When used, these measures are defined in such terms as to allow the reconciliation to the closest IFRS measure. It is unlikely that these measures could be compared to similar measures presented by other companies. See "Financial Performance" and "Non-IFRS Financial Measures."

Forward-looking statements are included in this MD&A. See "Caution Regarding Forward-Looking Statements" for a discussion of risks, uncertainties, and assumptions relating to these statements. For a description of the assumptions relating to market and industry data statements included in this MD&A, see the "Market and Industry Data" section. For a detailed description of risk factors associated with the Company, refer to the "Risk Factors" section of this MD&A and the "Risk Factors" section of the Company's Annual Information Form dated August 27, 2014, available on the Company's website at www.performancesportsgroup.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Please refer to the "Glossary of Terms" section for a list of defined terms used herein but not otherwise defined.

RESULTS FOR THE QUARTER	Q1 Fiscal 2015	Q1 Fiscal 2014	Change 2015 vs. 2014

Revenues	$197.1	$154.0	28.0%
Gross profit	$63.9	$59.7	7.0%
Adjusted Gross Profit⁽¹⁾	$73.4	$61.5	19.3%
Adjusted Gross Profit %⁽¹⁾	37.2%	39.9%	(2.7)%
Adjusted EBITDA⁽¹⁾	$39.9	$36.9	8.2%
Net income	$11.3	$21.3	(46.9)%
Adjusted Net Income⁽¹⁾	$22.6	$23.1	(2.2)%
PER SHARE ($) — DILUTED
Diluted EPS	$0.26	$0.57	(54.4)%
Adjusted EPS⁽¹⁾	$0.51	$0.63	(19.0)%
FINANCIAL RATIOS
Leverage Ratio	3.61	2.70	33.7%

All comparisons are to the same quarter in the prior fiscal year unless otherwise stated.

Revenues in the fiscal first quarter of 2015 increased 28.0% to $197.1 million compared to $154.0 million in the same year-ago quarter. On a constant currency basis, revenues were up 30.9%. The increase was due in part to strong growth in sales of ice hockey equipment and lacrosse, as well as the addition of revenues generated by Easton Baseball/Softball, partially offset by an unfavorable impact from foreign exchange.

Excluding the results of Easton Baseball/Softball, as well as the impact from foreign exchange, revenues grew organically by 10.5%.

Adjusted Gross Profit in the first quarter increased by 19.3% to $73.4 million compared to $61.5 million in the year-ago quarter. As a percentage of revenues, Adjusted Gross Profit was 37.2% compared to 39.9% in the same year-ago period. The decrease in Adjusted Gross Profit margin was primarily driven by the unfavorable impact from foreign exchange and a shift in hockey sales mix weighted towards sticks and team equipment. These factors more than offset improvements in production costs for uniforms and the addition of Easton Baseball/Softball.

Selling, general and administrative expenses in the first quarter increased by 38.8% to $36.1 million compared to $26.0 million in the year-ago quarter, primarily due to the addition of Easton Baseball/Softball as well as higher share-based compensation, acquisition-related charges and sales and marketing costs. As a percentage of revenues and excluding acquisition-related charges, and share-based payment expenses, selling, general and administrative expenses were 16.0% compared to 15.1% in the year-ago quarter.

Research & development expenses in the first quarter increased by 39.7% to $5.8 million compared to $4.1 million in the year-ago quarter due to continued focus on product development and the addition of Easton Baseball/Softball. As a percentage of revenues, research & development expenses were 3.0% compared to 2.7% in the year-ago quarter.

Adjusted EBITDA increased 8.2% to $39.9 million compared to $36.9 million in the year-ago quarter. The increase was primarily due to higher Adjusted Gross Profit and a favorable realized gain on derivatives.

Adjusted Net Income in the first quarter was $22.6 million or $0.51 per diluted share, compared to $23.1 million or $0.63 per diluted share in the year-ago quarter. The decrease in Adjusted EPS was almost entirely driven by the additional shares outstanding as a result of the underwritten public offering completed on June 25, 2014.

On August 31, 2014, working capital was $363.7 million compared to $267.7 million on August 31, 2013, primarily due to the Easton Baseball/Softball Acquisition. Excluding the acquisition, working capital was $306.2 million as of August 31, 2014, an increase of 14.4% versus the year-ago quarter. Total debt was $420.0 million compared to $206.6 million at August 31, 2013. The Company's leverage ratio, defined as average net indebtedness divided by trailing twelve months EBITDA, stood at 3.61x as of August 31, 2014 compared to 2.70x one year ago. The increase reflects the Company's financing of the Easton Baseball/Softball Acquisition.

For further detail on our financial measures, please refer to the "Financial Performance" section.

PSG is a fast growing sports equipment and apparel company. We design, develop, manufacture and sell performance sports equipment, apparel, and accessories for ice hockey, roller hockey, lacrosse, baseball and softball, and soccer. Our model is simple. We combine authentic brands and sport-specific employee expertise with our platform strengths, particularly our high performing R&D and game changing product creation processes, to grow our overall revenue, market share and profitability annually. We strive to grow our revenues each year faster than the total market for each of our sports and to grow our profitability faster than revenues. We have the most recognized and strongest brands in ice hockey, roller hockey, baseball, and softball, and hold top market share positions in these sports, with an expanding presence in the fast growing lacrosse market. Our products are marketed under the BAUER, CASCADE, COMBAT, EASTON, INARIA, MISSION, and MAVERIK brand names and are sold by sales representatives and independent distributors throughout the world. Our brands have a rich history of innovation, authenticity and market leadership, with the BAUER and EASTON brands dating back to 1927 and 1922, respectively.

BAUER is the most recognized and strongest brand in ice hockey with an estimated 54% overall worldwide market share. MISSION is the leading brand in roller hockey with an estimated 55% market share. EASTON is one of the most iconic diamond sports brands with the #1 market share in North America, estimated at 28%. In the lacrosse category, our MAVERIK and CASCADE brands combined have an estimated 26% market share. Our market leadership within each sport extends across multiple product categories through a full product suite that provides high performance equipment and apparel for players of all ages and abilities.

We have achieved our leadership position and growth profile in ice hockey, roller hockey and lacrosse by leveraging our world-class performance sports platform, and are using this platform to expand our performance equipment and apparel categories in diamond sports with our COMBAT brand and the addition of the EASTON baseball and softball brand in April 2014. Additionally, with the Inaria Acquisition in October 2012, the Company greatly expanded its capabilities to provide team apparel along with its high performing sports equipment, establishing the Company as a "one-stop shop" for teams and associations across all of our sports.

The Company has two reportable operating segments: (i) Hockey and (ii) Baseball/Softball. The remaining operating segments do not meet the criteria for a reportable segment and are included in Other Sports. The Hockey segment includes the BAUER and MISSION brands. The Baseball/Softball segment includes the EASTON and COMBAT brands. Other Sports includes the Lacrosse and Soccer operating segments, which include the MAVERIK, CASCADE, and INARIA brands. The Hockey segment sales channels include: (i) direct sales to retailers in North America and the Nordic countries, (ii) distributors throughout the rest of the world (principally, Western Europe, Eastern Europe, and Russia), and (iii) direct sales to teams. The Baseball/Softball segment sales channels primarily include retailers and distributors in North America. The Other Sports segment sales channels primarily include retailers and distributors in North America, and direct sales to teams and sports associations.

These operating segments were determined based on the management structure established in the fourth quarter of the year ended May 31, 2014 and the financial information, among other factors, reviewed by the Chief Operating Decision Make ("CODM") to assess segment performance. The Company is currently in the process of further modifying its management structure and transforming its internal financial reporting to support the Company's operations and additional segment information, beyond revenues, will be provided as this process is completed. These changes are modifying how information is used by the CODM to allocate resources and assess performance.

For further detail on our operating segments, please refer to the "Segment Results" section and the notes to the unaudited condensed consolidated interim financial statements for the three month period ended August 31, 2014.

The following provides an overview of the sports equipment and apparel markets we serve.

We design, develop, manufacture and sell performance sports equipment and related apparel for ice hockey and roller hockey, baseball and softball, lacrosse, and soccer. We operate in the global sporting goods industry with a primary focus on North America and Europe. We believe this global industry is growing, including in the United States where from 2009 to 2013, manufacturers' wholesale sales of sporting goods increased from $48.3 billion in 2009 to $55.0 billion in 2013, representing a compound annual growth rate of 3%.

The growing sporting goods-focused retail channel reflects resilient qualities with stable performance through the recent global economic downturn and continued broad market size growth. According to IBISWorld Inc., retail sales of United States sporting goods stores, including specialty retailers such as Total Hockey, Lacrosse Unlimited and Baseball Express, and "big box" retailers such as Dick's Sporting Goods and The Sports Authority, were estimated to be $42.3 billion in 2013 and are forecasted to grow at a 2.3% compound annual growth rate to reach $47.5 billion by 2018. Specialty retail is the main retail outlet for our market and accounts for the majority of our sales. We also sell to "big box" retailers, which are exhibiting growth and expansion.

Ice hockey is a team sport played in over 80 countries by more than an estimated six million people. While ice hockey is played around the world, the largest and most significant markets for ice hockey are Canada, the United States and a number of European countries, including the Nordic countries (principally, Sweden and Finland), Central European countries (principally, the Czech Republic, Germany, Switzerland, Austria and Slovakia) and Eastern European countries (principally, Russia).

Global registered hockey participation has grown, on average, 2% annually over the last eight years, and according to a 2014 report by the Sports and Fitness Industry Association ("SFIA"), ice hockey participation in the United States experienced a 5.1% average annual increase from 2008 to 2013. We believe that the global industry is currently growing at an annual rate in the low-to-mid single digits. Growth rates in Eastern European countries (principally, Russia) and women's hockey have exceeded that of the global average.

The global ice hockey equipment and related apparel industry has significant barriers to entry and is stable in certain regions and growing in others, such as the United States, Eastern Europe and Russia. Ice hockey equipment and related apparel sales are driven primarily by global ice hockey participation rates (registered and unregistered). Other drivers of equipment sales include demand creation efforts, the introduction of innovative products, a shorter product replacement cycle, general macroeconomic conditions, and the level of consumer discretionary spending. Management estimates that the global ice hockey equipment market (which excludes related apparel, such as performance apparel, team jerseys and socks) totaled approximately $650 million in calendar 2013. Skates and sticks are the largest contributors to equipment sales, accounting for an estimated 60% of industry sales in calendar 2013, according to management estimates.

Management estimates that over 85% of the ice hockey equipment market is attributable to three major competitors: Bauer Hockey, Reebok (which owns both the REEBOK and CCM brands) and Easton Hockey (which utilizes the EASTON brand under a trademark license from the Company), each of whom offers consumers a full range of products (skates, sticks and full protective equipment). The remaining equipment market is highly fragmented among many smaller equipment manufacturers offering specific products, catering to niche segments within the broader market. These competitors include, but are not limited to, WARRIOR, GRAF, VAUGHN, and SHER-WOOD/TPS.

The following table shows our estimated ranking of the three major competitors referenced above, in total and by major product category:

Management estimates that the global ice hockey-related apparel market for calendar 2013 (which includes such items as performance apparel, team jerseys and socks) was approximately $390 million in size, and is growing at an annual rate which we believe exceeds that of the ice hockey equipment market. Included in the ice hockey-related apparel market is licensed apparel, which represents approximately one-third of the market. The related apparel market is more fragmented than the equipment market and includes a variety of larger and smaller participants. We expect consolidation in this market to occur in the coming years, in a manner similar to what has occurred in the ice hockey equipment industry.

Roller hockey is a team sport played principally in the United States, particularly in warmer regions such as California. According to a 2014 SFIA report, roller hockey participation in the United States experienced a 3.4% decrease from 2008 to 2013.

The roller hockey equipment and related apparel industry shares similar characteristics to the ice hockey equipment and related apparel industry given the similarity of the sports. Management estimates that the wholesale roller hockey equipment market generated approximately $20 million in sales in calendar 2013. Through our Company's MISSION and BAUER brands, we hold the number one and two market share positions in the roller hockey equipment market, respectively, and have a substantial lead over our primary competitors, including Reebok, Tour and a few competitors in niche categories such as wheels and accessories.

Street hockey is a team sport played throughout the world, primarily in the largest ice hockey markets. According to management estimates and industry sources, there are approximately 93,000 registered players in Canada, approximately 48,000 registered players in the United States, and approximately 50,000 registered players in the rest of the world. Youth players represent approximately 50% of the registered participants. Management believes that registered participation represents only a small portion of the overall consumer base for street hockey products and that unregistered participants far exceed the registered participants.

The street hockey equipment industry shares similar characteristics to the ice hockey equipment and related apparel industry given the similarity of the sports. Management estimates that the wholesale street hockey equipment market generated approximately $25 million in sales in calendar 2013. The Company has not yet entered the street hockey market but intends to do so in the fourth quarter of Fiscal 2015.

Baseball and softball are team sports played principally in the United States, Japan, certain other Asian countries (such as South Korea) and Latin America. Global baseball/softball participation is estimated to be approximately 65 million, according to the World Baseball Softball Confederation ("WBSC"). Baseball is experiencing growth in participation globally and remains one of the most popular team sports by participation in the United States, second only to basketball, according to SFIA. A 2014 SFIA report found that baseball/softball participation in the United States experienced a 3.7% average annual decrease from 2008 to 2013. While participation for baseball and slow-pitch softball in the United States has declined in recent years, the market continues to grow as innovation, particularly in bats, has driven rising prices.

Management estimates that in calendar 2013, the North American and global baseball and softball equipment and related apparel (excluding uniforms) wholesale markets were approximately $600 million and $1 billion in size, respectively, one-third of which is attributable to bat sales. Management estimates that the global wholesale baseball/softball-related apparel market for 2013 (which includes uniforms) was approximately $300 million in size. With 65 million participants globally we believe the enthusiast base in these sports will experience continued growth, driven by increasing popularity of travel ball, club baseball and softball, and more frequent play.

The baseball and softball equipment market is fragmented and is currently led by five major players: our EASTON brand, Hillerich & Bradsby-owned LOUISVILLE SLUGGER, Jarden-owned Rawlings Sporting Goods, Amer Sports-owned Wilson Sporting Goods and Mizuno Corp. Similar to our Easton baseball and softball business ("Easton Baseball/Softball"), our major competitors offer a full line of baseball and softball products and varying degrees of related apparel. In total, we compete with over a dozen brands in the baseball and softball equipment market including, in addition to those above, Amer Sports-owned DEMARINI, MARUCCI, Jarden-owned MIKEN and WORTH, NOKONA, ZETT and SSK.

The following table shows our estimated ranking in North America of the five major competitors referenced above, in total and by major product category:

Lacrosse is a team sport played principally in the United States and Canada. According to U.S. Lacrosse, lacrosse has been one of the fastest growing team sports in the United States, with participation growing at 10.8% from 2008 to 2013 on an average annual basis, with over 750,000 registered players in the United States in calendar 2013. In Canada, we estimate that there are currently 150,000 participants. The drivers of this growth include: (i) the establishment and popularity of the National Lacrosse League ("NLL") and Major League Lacrosse ("MLL"), (ii) the rapid expansion of high school and youth programs, (iii) emerging growth outside of key lacrosse markets in the Mid-Atlantic and Northeastern United States, (iv) enhanced funding and popularity of the NCAA lacrosse programs, and (v) increased visibility of the sport in media and advertising.

Approximately 93% of lacrosse participants in the United States are under the age of 20, with 54% of participants in the youth (15 and under) category and 39% of participants in the high school category. Similar to ice hockey, the high representation of youth in the sport provides the industry with a more frequent product replacement cycle as players outgrow their equipment.

Management estimates that in calendar 2013, the United States lacrosse equipment wholesale market was approximately $110 million in size while the Canadian market was estimated to be approximately $10 million in size. Management estimates that the lacrosse market will continue to grow in the range of high single digits to low double digits for the next several years. The lacrosse equipment market is made up of four primary equipment categories: sticks (shafts and heads), gloves, helmets and protective equipment. Representing approximately 35% of calendar 2013 industry-wide United States sales, sticks currently make up the largest segment of the lacrosse equipment market. Helmets currently make up approximately 25% of calendar 2013 industry-wide United States sales. Management estimates that the lacrosse apparel market in North America for calendar 2013 was approximately $30 million in size.

The North American lacrosse equipment and related apparel market is a high growth, emerging sports equipment market underpinned by strong growth in participation rates. The lacrosse equipment market is currently led by six major brands: New Balance-owned WARRIOR and BRINE, our MAVERIK and CASCADE brands, STX, and Jarden-owned DEBEER (women's only). The Company's three major competitors all offer full lines of lacrosse equipment products, while Cascade's product offering is primarily focused on helmets.

Team apparel and uniforms make up a large and growing market characterized by high fragmentation and competition, which provides significant competitive advantages to companies that can offer one-stop shopping for high quality products and a unified look (equipment and apparel) under authentic brands. Most of our major competitors in the sports markets that we address offer related apparel to varying degrees but since the Inaria Acquisition, we are able to offer teams, associations and clubs one-stop access for our high performing equipment and all segments of apparel: team, performance and lifestyle.

We currently offer all segments of apparel under the BAUER brand in hockey. We have recently launched MAVERIK-branded uniforms in lacrosse and will be looking to expand our apparel presence in lacrosse in the future. We expect to expand our apparel presence in baseball/softball using the strength of the EASTON and COMBAT brands to grow this category in the future.

We participate in the soccer uniform market through our INARIA brand, which offers a wide variety of soccer apparel, including uniforms, as well as related accessories. As the most popular and widely played sport in the world, global soccer participation is estimated to be approximately 265 million, according to the Fédération Internationale de Football Association ("FIFA"). In 2011, similar reports estimated that there were nearly one million registered soccer players in Canada and more than 4.5 million registered players in the United States. A 2014 SFIA report found soccer (indoor and outdoor) participation in the United States to be relatively

flat on an average annual basis over the last five years. The Canadian and United States soccer uniform market is estimated to be in excess of $300 million, including both registered and recreational players.

The Company announced the appointment of Paul Gibson to the newly-created position of Chief Supply Chain Officer for PSG. A 26-year Company veteran who most recently held the position of Executive Vice President of Product Creation and Supply Chain, Gibson will lead a significant, multi-year initiative to enhance the overall effectiveness of the Company's supply chain, with a particular focus on efficiency, product cost reductions and inventory quality improvements. This new initiative is expected to also increase service levels throughout the Company's supply chain.

Through this initiative, PSG is targeting improvements to its current annualized pre-tax profitability of approximately $30 million over the next five years. This estimate assumes that unit volumes remain constant, and that certain macro-economic factors such as currency rates, labor, raw material and other input costs remain at or near current levels. The estimated increase in pre-tax profitability excludes certain one-time costs that may be required to implement this initiative. Approximately two-thirds of the target benefit is from anticipated cost reductions, while approximately one-third relates to expected incremental margin growth from improved service levels and inventory quality. While the Company expects to realize cost reductions starting in Fiscal 2016, the majority of these benefits are expected to be realized in the latter stages of this initiative.

The Company previously disclosed that it expects to achieve approximately $2 million of synergies as a result of the Easton Baseball/Softball Acquisition. That amount is incremental to this initiative's $30 million targeted improvement.

The Company's stated goal of improving its annual profitability is a forward looking statement within the meaning of applicable securities laws and is qualified in its entirety by the section "Caution Regarding Forward-Looking Statements" contained in this MD&A. There can be no assurances that the Company will achieve its stated goal and investors should not unduly rely on such forward looking statement. See "Risk Factors."

Bauer Hockey And Hockey Canada Launch New Learn-To-Play Hockey Program Across Canada

Bauer Hockey and Hockey Canada today launched The First Shift, a new learn-to-play hockey program designed to introduce kids and families to the game in a fun, convenient and practical way. Changing the way hockey is offered, The First Shift will be available in 30 markets across Canada and is part of Bauer Hockey's global Grow the Game initiative to add 1 million new families to the game by 2022.

The First Shift is a six-week program for kids ages 6-10 who have never played hockey. The cost is $199, which includes equipment and enrollment. In partnership with Bauer Hockey and Hockey Canada, each community program will host a welcome event for families and kids who have enrolled, which is easy to do at www.TheFirstShift.ca. At the welcome event, participants will receive their gear, learn how to put it on and find out more about the program's on-ice goals.

In partnership with local minor hockey associations, which provide resources and execution support, Bauer Hockey and Hockey Canada are changing the way the game is introduced to new families. Current program offerings across Canada will continue to successfully meet the needs of elite and competitive hockey players, while The First Shift will offer entry-level players an easy way to try the game.

The Company has extended its exclusive partnership with Cocona Natural Technologies, maker of patented 37.5™ technology. The partnership provides the Company exclusive use of the advanced fast-drying moisture management technology in hockey, lacrosse, baseball and softball, and non-exclusive use in soccer. The Company's products are marketed under the BAUER, MISSION, MAVERIK, CASCADE, INARIA, COMBAT and EASTON brand names.

Apparel with 37.5™ technology dries up to five times faster than competitive products. While other fabrics simply wick moisture around the garment, trapping humidity near the athlete's skin, 37.5™ technology harnesses the athlete's body heat to evaporate moisture and move it away from the skin. Unlike wicking apparel, airflow is not needed, which allows 37.5™ technology to work well underneath equipment. In fact, the use of 37.5™ technology in multiple layers — performance apparel, protective equipment and uniforms — increases the overall effectiveness and evaporation process.

The Company recently released 37.5™ technology in its hockey base layer, team apparel and elite protective equipment, and unveiled the 37.5™ technology in its lacrosse protective equipment and gloves. The Company will also look to incorporate 37.5™ technology in a wide-range of products in its other brands, including EASTON, the Company's latest addition to its brand portfolio.

By utilizing 37.5™ technology, athletes have the ability to direct more of their energy to the game, rather than to core temperature management. Unlike other moisture management technologies, 37.5™ technology is permanent and naturally derived. An added benefit is that clothing made with 37.5™ technology does not retain odors.

The Company loaned $4.0 million in New York's Kingsbridge National Ice Center, a project that would create the world's largest indoor ice center. The $350 million Kingsbridge complex, which is being developed in the Bronx, the city's poorest borough and overseen by former New York Rangers captain Mark Messier, is scheduled for completion in 2017. The 750,000-square-foot project includes nine ice rinks, a health and training facility and a 50,000-square foot community center.

The Company recently concluded its annual global showcase during which it unveiled its next-generation products and demonstrated the Company's industry-leading research & development platform. Previously named BauerWorld, this industry-leading retail and partner event was renamed MOMENTUM to better align with PSG's multi-sports portfolio that includes seven consumer-facing brands across six sports. Last year for the first time the event expanded beyond hockey to include all of the brands within the PSG portfolio. This year, the event expanded to include the products and technology of Easton Baseball/Softball, the Company's most recent acquisition.

Each business delivered industry-specific presentations and provided a unique hands-on experience. Over 750 attendees from around the world descended upon Amelia Island, Florida, and were able to interact with the Company's key product developers and designers to receive an in-depth explanation of the research & development behind the Company's products.

In addition to the many product presentations and ability to interact with the Company's employees, attendees were able to try out all of the latest product innovations in the Performance Sports Group sportsplex. On the grounds of the Florida resort, the Company built an entire recreation facility, complete with batting cages, roller hockey court, lacrosse fields, soccer fields and hockey rink.

Key performance indicators which we use to manage our business and evaluate our financial results and operating performance include revenues, gross profit, selling, general and administrative ("SG&A") expenses, research and development ("R&D") expenses, net income, diluted earnings per share, Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income/Loss, and Adjusted EPS. We evaluate our performance on these metrics by comparing our actual results to management budgets, forecasts, and prior period results on a reported and constant dollar basis. Adjusted Net Income/Loss, Adjusted EPS, Adjusted EBITDA and Adjusted Gross Profit are non-IFRS measures that we use to assess the operating performance of the business. See the "Non-IFRS Financial Measures" section for the definition and reconciliation of Adjusted Net Income/Loss, Adjusted EPS, Adjusted EBITDA and Adjusted Gross Profit used and presented by the Company to the most directly comparable IFRS measures.

Our business demonstrates substantial seasonality, although this seasonality has been reduced as a result of the Easton Baseball/Softball Acquisition.

Generally, our highest sales volumes for hockey occur during the first quarter of our fiscal year. Our next highest sales volumes for hockey occur during the second quarter of our fiscal year. Our lowest sales volumes for hockey occur during the third quarter of our fiscal year. In ice hockey, we have three sub-brands of products — VAPOR, SUPREME and NEXUS. In certain fiscal years, we launch new products under more than one sub-brand. The launch timing of our products may change in future periods.

In baseball/softball, our highest sales volumes for EASTON and COMBAT products occur in the third and fourth fiscal quarters. The seasonality of our baseball/softball businesses will substantially reduce the seasonality of our overall business as compared to prior to the Easton Baseball/Softball Acquisition.

In lacrosse, our highest sales volumes for MAVERIK and CASCADE products occur in the second and third fiscal quarters.

The shipment of INARIA soccer products occurs substantially in the first and fourth fiscal quarters. We expect our team apparel revenues, including uniforms for ice hockey, roller hockey, lacrosse and other team sports, to align with the underlying sports' selling seasons as we expand our team apparel offering.

We generate revenues from the sale of performance sports equipment and related apparel and accessories. We offer various cooperative marketing incentive programs to assist our sales channels with the marketing and selling of our products. These costs are recorded as a reduction of revenues.

Our current sales channels include (i) retailers in North America and the Nordic countries, (ii) distributors throughout the rest of the world (principally, Western Europe, Eastern Europe, and Russia), and (iii) direct sales to teams. Based on the regional mix, our revenues are generated in multiple currencies. For revenues, we are exposed to fluctuations of the U.S. dollar against the Canadian dollar, the euro, the Swedish krona, Norwegian krona and Danish krona.

Our cost of goods sold is comprised primarily of: (i) the cost of finished goods, materials and components purchased from our suppliers, manufacturing labour and overhead costs in our manufacturing facilities; (ii) inventory provisions and write-offs; and (iii) warranty costs and supply chain-related costs, such as freight and tariff costs and warehousing. Our warranty costs result from a

general warranty policy providing coverage against manufacturing defects. Warranties range from 30 days to one year from the date sold to the consumer, depending on the type of product. Our warranty costs are primarily driven by sales of composite ice hockey sticks and baseball bats. Amortization associated with certain acquired intangible assets, such as purchased technology and customer relationships, is also included in cost of goods sold. We also include charges to cost of goods sold resulting from the fair market value adjustment to inventory associated with certain acquired inventories.

We source the majority of our products in China and Thailand and agree to buy such products in U.S. dollars. Therefore, our cost of goods sold is impacted by the fluctuations of the Chinese renminbi and the Thai baht against the U.S. dollar and the fluctuation of the U.S. dollar against other Asian currencies, such as the Taiwanese new dollar. We do not currently hedge our exposure to fluctuations in the value of the Chinese renminbi and the Thai baht and other Asian currencies to the U.S. dollar. Instead, we enter into supplier agreements ranging from six to twelve months with respect to the U.S. dollar cost of our Asian-sourced finished goods. See also "Outlook" section.

As the Company generates significant revenues in Canadian dollars, yet purchases the majority of its inventory in U.S. dollars, we use foreign currency forward contracts to hedge part of our exposure to fluctuations in the value of the U.S. dollar against the Canadian dollar. The resulting realized gain/loss on derivatives is reported in Finance Costs/Income and is an economic offset to the cost of goods sold recorded in Gross Profit.

Our SG&A expenses consist primarily of costs relating to our sales and marketing activities, including salaries, commissions and related personnel costs, customer order management and support activities, advertising, trade shows, and other promotional activities. Our marketing expenses include promotional costs for launching new products, advertising, and athlete endorsement costs. Our administrative expenses consist of costs relating to information systems, legal and finance functions, professional fees, insurance, and other corporate expenses. We also include share-based payment expense, costs related to share offerings, and acquisition costs, including rebranding and integration costs, in SG&A expenses. We expect our SG&A expenses to increase as a result of the Easton Baseball/Softball Acquisition and as we continue to grow our business, but we expect these expenses as a percentage of revenues to remain similar to our historical range.

R&D expenses consist primarily of salaries and related consulting expenses for technical personnel, contracts with leading research facilities, as well as materials and consumables used in product development. To date, no development costs have been capitalized. We incur most of our R&D expenses in Canada and are eligible to receive Scientific Research and Experimental Development investment tax credits for certain eligible expenditures. R&D expenses are net of investment tax credits. We currently expect our R&D expenses to grow as a result of the Easton Baseball/Softball Acquisition and as we focus on enhancing and expanding our product lines.

Finance costs consist of interest expense, fair value losses on financial assets, impairment losses recognized on financial assets (other than trade receivables), losses on derivative instruments, and losses related to foreign exchange revaluation on recorded assets and liabilities.

Finance income consists of interest income on bank balances and past due customer accounts, fair value gains on financial assets, gains on derivative instruments, and gains related to foreign exchange revaluation on recorded assets and liabilities.

Interest expense is derived from the financing activities of the Company. In the first quarter of Fiscal 2014, the Company's former credit facilities consisted of a $130.0 million Amended Term Loan, denominated in both Canadian dollars and U.S. dollars and a $145.0 million Amended Revolving Loan, denominated in both Canadian dollars and U.S. dollars, the availability of which was subject to meeting certain borrowing base requirements. In the first quarter of Fiscal 2015, the Credit Facilities consist of a $450 million New Term Loan, denominated in U.S. dollars, of which approximately $119.5 million was repaid from the net proceeds of the U.S. IPO, and a $200 million New ABL Facility, denominated in both Canadian dollars and U.S. dollars, the availability of which is subject to meeting certain borrowing base requirements. Please see the "Indebtedness" section for a more detailed discussion of the Credit Facilities.

Interest income primarily reflects interest charged to our customers on past due receivable balances.

The Company is exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to attempt to manage financial exposures that occur during the normal course of business. The Company's hedging strategy can employ foreign exchange swaps, interest rate contracts, and foreign currency forwards as economic hedges, which are recorded on the consolidated statements of financial position at fair value. The Company primarily uses foreign currency forward contracts to hedge the effect of changes in currency exchange rates on its product costs (see "Financial Performance —

Factors Affecting Our Performance — Cost of Goods Sold"). The resulting realized gain/loss on derivatives reported in finance costs/income are an economic offset to the cost of goods sold that are recorded in the Company's Gross Profit. The Company has not elected hedge accounting; therefore, the changes in the fair value of these derivatives are recognized as unrealized gains and losses through profit or loss each reporting period.

The Company's reporting currency is the U.S. dollar. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) in equity. Transaction gains and losses generated by the effect of foreign exchange on recorded assets and liabilities denominated in a currency different from the functional currency of the applicable entity are recorded in finance costs/income in the period in which they occur. Balances on the statements of financial position are converted at the month-end foreign exchange rates or at historical exchange rates, and all profit and loss transactions are recognized at monthly average rates.

The majority of our transactions are processed in Canadian dollars, euros, Swedish kronas and U.S. dollars.

In this MD&A, we provide the impact of foreign exchange on our various financial measures. These amounts reflect only the impact of translating the current period results at the monthly foreign exchange rates of the prior year period. This translation impact does not include the impact of foreign exchange on our direct material costs or our gains/losses on derivatives described above.

The following table summarizes the change in the reported U.S. dollars versus constant currency U.S. dollars for the three month period ended August 31, 2014:

The following table summarizes the average of the monthly exchange rates used to translate profit or loss transactions for the periods indicated, as reported by the Wall Street Journal:

The Company is subject to cash taxes in the United States, Canada and Europe for federal, state, and provincial income taxes, as applicable. The Company utilizes its tax loss carry forwards, tax credits and other tax assets, as available, to offset its taxable income.

The selected consolidated financial information set out below for the three month periods ended August 31, 2014 and August 31, 2013 has been derived from our unaudited condensed consolidated interim financial statements and related notes.

	Three Months Ended

(millions of U.S. dollars, except for percentages and per share amounts)	August 31, 2014		August 31, 2013
Revenues		$197.1		$154.0
Cost of goods sold		133.2		94.3
Gross profit		$63.9		$59.7
Operating expenses:
Selling, general & administrative		36.1		26.0
Research & development		5.8		4.1
Operating income (loss)		$22.0		$29.6
Finance costs (income)		6.6		(0.7	)
Income tax expense (benefit)		4.1		9.0
Net income (loss)		$11.3		$21.3
Basic earnings (loss) per share		$0.27		$0.61
Diluted earnings (loss) per share		$0.26		$0.57
Adjusted Gross Profit⁽¹⁾		$73.4		$61.5
Adjusted EBITDA⁽¹⁾		$39.9		$36.9
Adjusted Net Income (Loss)⁽¹⁾		$22.6		$23.1
Adjusted EPS⁽¹⁾		$0.51		$0.63
Total assets		$877.6		$478.8
Total long-term liabilities		$325.6		$165.4
As a percentage of revenues:
Revenues		100.0%		100.0%
Cost of goods sold		67.6%		61.2%
Gross profit		32.4%		38.8%
Operating expenses:
Selling, general & administrative		18.3%		16.9%
Research & development		3.0%		2.7%
Operating income (loss)		11.2%		19.2%
Finance costs (income)		3.3%		(0.5)%
Income tax expense (benefit)		2.1%		5.8%
Net income (loss)		5.7%		13.8%
Adjusted Gross Profit⁽¹⁾		37.2%		39.9%
Adjusted EBITDA⁽¹⁾		20.2%		24.0%
Adjusted Net Income (Loss)⁽¹⁾		11.5%		15.0%

Three months ended August 31, 2014 compared to three months ended August 31, 2013

Revenues in the three month period ended August 31, 2014 increased by $43.1 million, or 28.0%, to $197.1 million due to the addition of $31.4 million of Easton Baseball/Softball revenues, 8.4% growth in hockey revenues and 6.9% growth in lacrosse.

Excluding the impact of foreign exchange, revenues increased by 30.9%, and excluding the impact of foreign exchange and the impact of the Easton Baseball/Softball Acquisition, revenues increased by 10.5%. Overall revenues in North America grew by 35.2% and increased by 10.6% in the rest of the world. The translation impact of foreign exchange in the three month period ended August 31, 2014 decreased our reported revenues by $4.4 million compared to the prior year.

For further detail on our revenues, please refer to the "Segment Results" section.

Gross profit in the three month period ended August 31, 2014 increased by $4.2 million, or 7.0%, to $63.9 million driven by higher revenues, partially offset by higher purchase accounting related amortization and non-cash charges to cost of goods sold resulting

from the fair value adjustment of inventories related to the Easton Baseball/Softball Acquisition, and an unfavorable impact from foreign exchange.

As a percentage of revenues, gross profit decreased to 32.4% for the three month period ended August 31, 2014 from 38.8% in the three month period ended August 31, 2013 driven by an unfavourable impact from foreign exchange, the addition of Easton Baseball/Softball (including the aforementioned purchase accounting related amortization and non-cash charges to cost of goods sold resulting from the fair value adjustment of inventories), and product mix in ice hockey equipment as a result of higher sales of composite sticks and team equipment, partially offset by a favorable impact from improvements in production costs for uniforms. The translation impact of foreign exchange in the three month period ended August 31, 2014 decreased gross profit by $2.5 million compared to the prior year. See "Financial Performance — Factors Affecting our Performance — Cost of Goods Sold" and the "Outlook" section of the MD&A for more detail on our product costs.

Adjusted Gross Profit in the three month period ended August 31, 2014 increased by $11.9 million, or 19.3%, to $73.4 million. Adjusted Gross Profit as a percentage of revenues decreased to 37.2% for the three month period ended August 31, 2014 from 39.9% for the three month period ended August 31, 2013 driven by the factors described above, except for the purchase accounting impacts and fair value adjustments to inventory which are removed from Adjusted Gross Profit. Please see the Adjusted Gross Profit table for the reconciliation of gross profit to Adjusted Gross Profit in the "Non-IFRS Financial Measures" section.

SG&A expenses in the three month period ended August 31, 2014 increased by $10.1 million, or 38.8%, to $36.1 million, due to the addition of Easton Baseball/Softball, higher share-based compensation expense, higher acquisition-related charges, and higher sales & marketing costs. Excluding the impact of acquisition-related costs and share-based payment expense, our SG&A expenses increased by $8.4 million, or 36.0%, to $31.6 million driven by the addition of Easton SG&A and higher sales and marketing costs.

As a percentage of revenues, our SG&A expenses (including acquisition-related charges and share-based payment expense) increased to 18.3% for the three month period ended August 31, 2014 from 16.9% of revenues for the three month period ended August 31, 2013. Excluding acquisition-related charges and share-based payment expense, SG&A expenses as a percentage of revenue increased to 16.0% for the three month period ended August 31, 2014 from 15.1% of revenues for the three month period ended August 31, 2013. The translation impact of foreign exchange for the three month period ended August 31, 2014 decreased our reported SG&A expenses by $0.4 million compared to the prior year.

R&D expenses in the three month period ended August 31, 2014 increased by $1.7 million, or 39.7%, to $5.8 million, due to the addition of Easton Baseball/Softball and our continued focus on product development efforts. As a percentage of revenues, our R&D expenses increased to 3.0% for the three month period ended August 31, 2014 from 2.7% for the three month period ended August 31, 2013. The translation impact of foreign exchange for the three month period ended August 31, 2014 did not have a significant impact on reported R&D expenses.

Adjusted EBITDA in the three month period ended August 31, 2014 increased by $3.0 million, or 8.2%, to $39.9 million from $36.9 million due to higher Adjusted Gross Profit and a favourable change in the realized gain on derivatives, which are included in finance income, partially offset by higher R&D and SG&A expenses. As a percentage of revenues, Adjusted EBITDA decreased to 20.2% for the three month period ended August 31, 2014 from 24.0% for the three month period ended August 31, 2013 driven by the unfavourable impact of foreign exchange and the addition of Easton Baseball/Softball for which the first fiscal quarter is a seasonally low EBITDA period. Please see the Adjusted EBITDA table for the reconciliation of net income to Adjusted EBITDA in the "Non-IFRS Financial Measures" section.

Finance costs increased $7.3 million from finance income of $0.7 million to finance costs of $6.6 million due to higher interest expense of $3.4 million driven by the new debt issued to fund the Easton Baseball/Softball Acquisition, an unfavourable change in the unrealized (gain)/loss on derivatives of $2.1 million, and an unfavourable change in the foreign exchange (gains) and losses of $2.6 million. These items were partially offset by a $0.7 million increase in the realized gain on derivatives.

Income tax expense in the three months ended August 31, 2014 decreased by $4.9 million from $9.0 million to $4.1 million. Current income tax expense for the period was $4.0 million and deferred income tax expense was $0.1 million. The Company's effective tax rate was 26.9% compared to 29.8% for the same period in the prior year. The reduction in the effective tax rate was due in part to the financing of the Easton Baseball/Softball Acquisition.

Net income in the three month period ended August 31, 2014 decreased by $10.0 million, or 46.9%, to $11.3 million from net income of $21.3 million in the three month period ended August 31, 2013 driven by the operating results described above in the Adjusted EBITDA section and a lower tax rate, which were more than offset by higher share-based compensation expense, higher acquisition-related charges, higher interest expense, an unfavourable change in the unrealized (gain)/loss on derivatives, and an unfavourable change in the foreign exchange (gain)/loss. The translation impact of foreign exchange for the three month period ended August 31, 2014 decreased our net income by $1.7 million compared to the prior year.

Adjusted Net Income in the three month period ended August 31, 2014 decreased by $0.5 million, or 2.2%, to $22.6 million from $23.1 million in the three month period ended August 31, 2013 driven by the operating results reflected in the Adjusted EBITDA section which was offset by higher interest expense resulting from the Easton Baseball/Softball Acquisition. Adjusted Net Income/Loss removes unrealized foreign exchange gains/losses, acquisition-related charges, share-based payment expense, and other one-time or non-cash expenses. Please see the Adjusted Net Income/Loss table in "Non-IFRS Financial Measures" section for the reconciliation of net income (loss) to Adjusted Net Income/Loss and Adjusted EPS.

The following table summarizes the unaudited quarterly financial results and major operating statistics for the Company for the last eight quarters:

(millions of U.S. dollars, except for percentages and per share amounts)

Revenues	$197.1	$112.9		$62.2		$117.1	$154.0		$86.7		$54.9		$109.6
Cost of goods sold	133.2	75.1		43.4		79.1	94.3		52.9		40.2		71.2
Gross profit	$63.9	$37.8		$18.8		$38.0	$59.7		$33.8		$14.7		$38.4
Operating expenses:
Selling, general & administrative	36.1	27.4		24.5		27.3	26.0		23.4		19.4		24.6
Research & development	5.8	5.3		4.7		4.2	4.1		4.6		4.0		4.0
Operating income (loss)	$22.0	$5.1		($10.4	)	$6.5	$29.6		$5.8		($8.7	)	$9.8
Finance costs (income)	6.6	5.6		(3.4	)	1.5	(0.7	)	0.6		(3.8	)	0.5
Other expense (income)	—	0.2		0.1		—	—		(1.2	)	0.1		—
Income tax expense (benefit)	4.1	(1.0	)	(2.2	)	1.6	9.0		0.3		(2.1	)	3.2
Net income (loss)	$11.3	$0.3		($4.9	)	$3.4	$21.3		$6.1		($2.9	)	$6.1
Basic earnings (loss) per share	$0.27	$0.01		($0.14	)	$0.10	$0.61		$0.18		($0.08	)	$0.18
Diluted earnings (loss) per share	$0.26	$0.01		($0.14	)	$0.09	$0.57		$0.17		($0.08	)	$0.16
Adjusted Gross Profit⁽¹⁾	$73.4	$43.8		$19.8		$39.6	$61.5		$35.9		$16.4		$39.7
Adjusted EBITDA⁽¹⁾	$39.9	$21.3		($3.0	)	$13.9	$36.9		$14.0		($3.8	)	$14.2
Adjusted Net Income (Loss)⁽¹⁾	$22.6	$10.8		($4.2	)	$7.5	$23.1		$9.7		($4.2	)	$7.3
Adjusted EPS⁽¹⁾	$0.51	$0.29		($0.11	)	$0.20	$0.63		$0.26		($0.11	)	$0.20
As a percentage of revenues:
Revenues	100.0%	100.0%		100.0%		100.0%	100.0%		100.0%		100.0%		100.0%
Cost of goods sold	67.6%	66.5%		69.8%		67.5%	61.2%		61.0%		73.2%		65.0%
Gross profit	32.4%	33.5%		30.2%		32.5%	38.8%		39.0%		26.8%		35.0%
Operating expenses:
Selling, general & administrative	18.3%	24.3%		39.4%		23.3%	16.9%		27.0%		35.3%		22.4%
Research & development	3.0%	4.7%		7.6%		3.6%	2.7%		5.3%		7.3%		3.6%
Operating income (loss)	11.2%	4.5%		(16.7)%		5.6%	19.2%		6.7%		(15.8)%		8.9%
Finance costs (income)	3.3%	5.0%		(5.5)%		1.3%	(0.5)%		0.7%		(6.9)%		0.5%
Other expense (income)	0.0%	0.2%		0.2%		0.0%	0.0%		(1.4)%		0.2%		0.0%
Income tax expense (benefit)	2.1%	(0.9)%		(3.5)%		1.4%	5.8%		0.3%		(3.8)%		2.9%
Net income (loss)	5.7%	0.3%		(7.9)%		2.9%	13.8%		7.0%		(5.3)%		5.6%
Adjusted Gross Profit⁽¹⁾	37.2%	38.8%		31.8%		33.8%	39.9%		41.4%		29.9%		36.2%
Adjusted EBITDA⁽¹⁾	20.2%	18.9%		(4.8)%		11.9%	24.0%		16.1%		(6.9)%		13.0%
Adjusted Net Income (Loss)⁽¹⁾	11.5%	9.6%		(6.8)%		6.4%	15.0%		11.2%		(7.7)%		6.7%

The following table provides revenue by segment for the three month periods ended August 31, 2014 and August 31, 2013:

Three months ended August 31, 2014 compared to the three months ended August 31, 2013

Hockey revenues in the three month period ended August 31, 2014 increased by $12.4 million, or 8.4%. driven by growth in key equipment and apparel categories. Excluding the unfavourable impact from foreign exchange, this growth was driven primarily by 22.1% growth in composite sticks, 8.5% growth in helmets and facial, and 41.4% growth in apparel which was driven by the launch of new performance apparel products including products incorporating 37.5™ fabric technology and 89.5% growth in uniforms, partially offset by a 2.9% decline in skate sales due to the timing of shipments occurring later in Fiscal 2015. Excluding the impact of foreign exchange, Hockey revenues increased 11.4%.

Baseball/Softball revenues in the three month period ended August 31, 2014 increased by $30.6 million, from $1.7 million to $32.3 million due to the addition of Easton Baseball/Softball revenues, partially offset by a decrease in COMBAT revenues due to the timing of shipments occurring later in Fiscal 2015.

Revenues in our Other Sports segment in the three month period ended August 31, 2014 increased by $0.1 million, or 2.3%, to $4.4 million due to an increase in lacrosse sales of 6.9% driven by strong demand for the new MAVERIK line of products, including the OPTIK head which launched in July 2014, partially offset by a slight decline in soccer uniforms sales.

Forward-looking statements are included in this MD&A, including this "Outlook" section. See "Caution Regarding Forward-Looking Statements" for a discussion of risks, uncertainties, and assumptions relating to these statements. For a description of the risks relating to the Company, refer to the "Risk Factors" section of this MD&A and the "Risk Factors" section of the Company's Annual Information Form dated August 27, 2014, available on the Company's website at www.performancesportsgroup.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Our objective is to grow our revenues each year faster than the total market for each of our sports. Our visibility into our future revenues varies for each sport based on the factors described below. We believe we are currently well-positioned to deliver on this stated objective for Fiscal 2015.

Our Company's revenues are generated from: (i) booking orders, which are typically received several months in advance of the actual delivery date or range of delivery dates, (ii) repeat orders, which are for at-once delivery, and (iii) other orders. The seasonality of our business and the manner in which we solicit orders could create quarterly variations in the percentage of our revenues that are comprised of booking orders. Although our booking orders give us some visibility into our future financial performance, there may not be a direct relationship between our booking orders and our future financial performance given several factors, among which are: (i) the timing of order placement compared to historical patterns, (ii) our ability to service demand for our product, (iii) the willingness of our customers to commit to purchasing our product, and (iv) the actual sell-through of our products at retail driving changes in repeat orders. As a result, there can be no assurances that our booking orders will translate into realized sales. Historical disclosure regarding our hockey booking orders was intended to provide visibility into the demand for our products by our customers. We have limited visibility to orders other than booking orders. Booking orders for our upcoming hockey season, spanning our second and third fiscal quarters, have exceeded our expectations. Booking orders and initial sell-in for Easton Baseball/Softball, including the launch of the revolutionary new MAKO TORQ bat, have also exceeded our expectations. Our lacrosse bookings for this season are in line with our expectations driven by the launch of new innovative MAVERIK products including the OPTIK and TANK heads, a new line of shafts, and the M3 line of protective products as well as continued strength in the CASCADE "R" Helmet. In addition, the feedback from our customers at our Momentum customer event was extremely positive across all of our brands which we expect will drive continued growth in our orders.

CASCADE branded lacrosse helmet sales are primarily custom orders with a 48-hour turnaround time, so the visibility to these orders is limited.

Our team apparel orders, including uniforms for ice hockey, roller hockey, lacrosse, soccer and other team sports, are typically fulfilled within a 30 to 60 day turnaround time, so the visibility to customer orders in advance is limited. Our Hockey team apparel orders were extremely strong in our first fiscal quarter and the remainder of this season's demand will be fulfilled primarily in our fiscal second quarter. Team apparel and uniforms are an important part of our growth in baseball/softball and lacrosse, and we anticipate that these products will be drivers of our revenue growth in these sports in future fiscal years. Orders for our INARIA soccer team apparel will occur later this fiscal year for delivery in our fourth fiscal quarter and the first quarter of Fiscal 2016.

As a result of the Easton Baseball/Softball Acquisition, we expect the seasonality of our revenues and profitability to be reduced compared to our historical seasonality. The highest sales volumes for EASTON products occur in our third and fourth fiscal quarters, with the third fiscal quarter being the most significant.

Our gross profit margins are susceptible to change due to higher or lower product costs, the mix of sales between product categories or different price points, fluctuations in our non-U.S. dollar revenue currencies, as well as other factors. During Fiscal 2014 and the first quarter of Fiscal 2015, our gross profit margins were unfavorably impacted by a weaker Canadian dollar against the U.S. dollar. Should this continue, our gross profit margins will be further unfavourably impacted. The Company mitigates this risk with economic hedges, the benefit of which is recorded in finance costs/income. We currently expect continued increases in our cost of goods sold due to, among other factors, unfavorable fluctuations in certain Asian currencies and the Canadian dollar against the U.S. dollar, increases in labour rates, and increases in raw material and freight costs. To help mitigate this cost inflation, we intend to continue our cost reduction and supply chain initiatives as well as evaluate alternative strategies as needed. Current initiatives include working with our manufacturing partners to develop lower cost materials and to assemble products more efficiently. We also currently intend to continue our investment in R&D, and review our internal and external distribution structure to lower costs and improve services. We expect our margins to improve in future quarters as a result of more favorable product mix in our hockey business, the addition of Easton Baseball/Softball revenues, and our recently announced profitability enhancement initiatives.

Our operating expenses can fluctuate due to increased investments in personnel, marketing and product development programs, and other functional initiatives. As a result of the Easton Baseball/Softball Acquisition, and our dual listing on the Toronto Stock Exchange and the New York Stock Exchange, we expect certain public company and other functional costs to increase over historical levels. Also, over time, we expect to increase the investment in R&D for Baseball/Softball.

Our objective is to also grow profitability faster than revenues. Despite significant currency-driven headwinds in Fiscal 2015, we believe this is an achievable goal.

We believe that ongoing operations and associated cash flows, in addition to our cash resources and New ABL Facility (defined herein), provide sufficient liquidity to support our business operations for at least the next 12 months. Furthermore, as of August 31, 2014, the Company held cash and cash equivalents of $5.8 million and had availability of $83.5 million under the New ABL Facility, which provides further flexibility to meet any unanticipated cash requirements due to changes in working capital commitments or liquidity risks associated with financial instruments. Such changes may arise from, among other things, the seasonality of our business (see the "Financial Performance — Factors Affecting our Performance — Seasonality" and "Outlook" sections), the failure of one or more customers to pay their obligations (see the "Quantitative and Qualitative Disclosures About Market and Other Financial Risks — Credit Risk" section) or from losses incurred on derivative instruments, such as foreign exchange swaps, interest rate contracts, and foreign currency forwards (see the "Financial Performance — Factors Affecting our Performance — Finance Costs/Income" section).

The following table summarizes our net cash flows provided by and used in operating, investing and financing activities:

	Three Months Ended

(millions of U.S. dollars)	August 31, 2014			August 31, 2013

Net cash flows from (used in) operating activities		($13.0	)		($29.9	)
Net cash flows from (used in) investing activities		(1.2	)		(1.4	)
Net cash flows from (used in) financing activities		13.2			37.2
Effect of exchange rate changes on cash		(0.1	)		(0.2	)
(Decrease) / increase in cash		(1.1	)		5.7
Beginning cash		6.9			4.5

Ending cash		$5.8			$10.2

Our largest source of operating cash flows is cash collections from the sale of inventory. Our primary cash outflows from operating activities are inventory purchases, personnel related expenses, occupancy costs, payment of interest and payment of taxes. Net cash used in operating activities for the three month period ended August 31, 2014 was $13.0 million, an improvement of $16.9 million compared to net cash used in operating activities of $29.9 million for the three month period ended August 31, 2013, primarily driven by the following:

Our cash outflows from investing activities are primarily for acquisitions and the purchase of property, plant and equipment and intangible assets. Net cash used in investing activities for the three month period ended August 31, 2014 was $1.2 million, a decrease of $0.2 million compared to net cash used of $1.4 million for the three month period ended August 31, 2013, primarily due to the following:

Our cash flows from financing activities consist primarily of proceeds from and repayment of debt, proceeds from the issuance of Common Shares and share issuances under stock option plans. Net cash from financing activities for the three month period ended August 31, 2014 was $13.2 million, a decrease of $24.0 million compared to net cash flows from financing activities of $37.2 million for the three month period ended August 31, 2013, primarily due to the following:

Concurrently with the closing of the Easton Baseball/Softball Acquisition, the Company entered into the New Term Loan Facility (as defined herein) and the Company and certain of its subsidiaries entered into the New ABL Facility (as defined herein). The New Term Loan Facility and the New ABL Facility (referred to herein together as the "Credit Facilities") replaced the Company's existing credit facilities.

As of August 31, 2014, $330.5 million was drawn under the New Term Loan Facility and $105.4 million was drawn under the New ABL Facility. Following completion of the U.S. IPO on June 25, 2014, the Company used the net proceeds of the U.S. IPO and repaid approximately $119.5 million under the New Term Loan Facility. The repayment was first applied against the outstanding amortization payments and as such no further amortization payments are due for the life of the facility.

The following is a summary of certain provisions of the Credit Facilities, which summary is not intended to be complete. For a complete description, and the full text of their provisions, which are available on SEDAR at www.sedar.com.

Concurrently with the closing of the Easton Baseball/Softball Acquisition, the Company entered into an amortizing term credit facility in the principal amount of $450 million U.S. dollars by and among the Company, as borrower, Bank of America, N.A., as administrative agent and collateral agent, Bank of America, N.A., J.P. Morgan Securities LLC, RBC Capital Markets and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, Bank of America, N.A., J.P. Morgan Securities LLC, and RBC Capital Markets, as bookrunners, JP Morgan Chase Bank, N.A. and RBC Capital Markets, as syndication agents, and the lenders party thereto from time to time (the "New Term Loan Facility"). The New Term Loan Facility matures on April 15, 2021. The New Term Loan Facility contains representations and warranties, affirmative and negative covenants and events of default customary for credit facilities of this nature.

The New Term Loan Facility may be prepaid at any time in whole or in part without premium or penalty, upon written notice, at the option of the Company, other than (i) reimbursement of the New Term Loan Facility lenders for any funding losses and redeployment costs (but not loss of margin) resulting from prepayments of LIBOR advances in certain circumstances, and (ii) a 1% soft-call premium for certain voluntarily prepayments (not including the approximately $119.5 million repayment from the net proceeds of the U.S. IPO) made during the six month period following the closing of the Easton Baseball/Softball Acquisition. Any amounts prepaid under the New Term Loan Facility may not be reborrowed. In certain circumstances, the Company is permitted to add one or more incremental term loan facilities under the New Term Loan Facility. As well, in certain circumstances and from time to time, the Company is permitted to refinance loans or incremental term loans under the New Term Loan Facility, in whole or in part.

The interest rates per annum applicable to the New Term Loan Facility equal the sum of (a) the applicable margin percentage (as described below), plus, at the Company's option, (b) either (x) LIBOR, subject to a 1% floor or (y) the U.S. base rate (each as determined in accordance with the terms of the New Term Loan Facility). The applicable margin is 3.50% per annum in the case of LIBOR advances and 2.50% per annum in the case of U.S. base rate advances. The Company's $119.5 million repayment from the net proceeds of the U.S. IPO activated the Leverage Step-Down Trigger (as defined in the New Term Loan Facility). Effective July 1, 2014, the applicable margin is 3.00% per annum in the case of LIBOR advances and 2.00% per annum in the case of U.S. base rate advances for so long as the Consolidated Total Net Leverage Ratio (as defined in the New Term Loan Facility) remains less than 4.25:1.00.

The obligations of the Company under the New Term Loan Facility are guaranteed by certain subsidiaries of the Company, including each of the existing and future direct and indirect wholly-owned material Canadian and U.S. subsidiaries of the Company (collectively, the "Term Loan Guarantors"). The New Term Loan Facility is secured by a perfected first priority security interest (subject to permitted liens and certain exceptions) in: (a) all present and future shares of capital stock of each present and future subsidiary of the Company (subject to certain exceptions); (b) all present and future debt owed to the Company or any Term Loan Guarantor; and (c) all present and future property and assets, real and personal (other than assets constituting ABL Priority Collateral (as defined herein)) of the Company and each Term Loan Guarantor, and all proceeds and products of the property and assets described above (collectively, the "Term Priority Collateral"). The New Term Loan Facility is further secured by a perfected second priority security interest in the ABL Priority Collateral (as defined herein), subject to permitted liens and certain exceptions.

Concurrently with the closing of the Easton Baseball/Softball Acquisition, the Company and certain of its subsidiaries entered into a revolving, non-amortizing asset-based credit facility in an amount equal to the lesser of $200 million U.S. dollars (or the Canadian dollar equivalent thereof) and the Borrowing Base (as defined herein) by and among Bauer Hockey Corp. and its Canadian subsidiaries from time to time party thereto, as Canadian borrowers (collectively, the "Canadian ABL Borrowers"), Bauer Hockey, Inc. and its U.S. subsidiaries from time to time party thereto, as U.S. borrowers (collectively, the "U.S. ABL Borrowers", and collectively with the Canadian ABL Borrowers, the "ABL Borrowers"), the Company as parent, Bank of America, N.A., as administrative agent and collateral agent, JP Morgan Chase Bank, N.A. and an affiliate of RBC Dominion Securities Inc., as syndication agents, Bank of America, N.A., J.P. Morgan Securities LLC, RBC Capital Markets and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, Bank of America, N.A., J.P. Morgan Securities LLC, and RBC Capital Markets, as bookrunners, and the various lenders party thereto (the "New ABL Facility"). The ABL Borrowers are permitted under the New ABL Facility to solicit the lenders to provide additional revolving loan commitments in an aggregate amount not to exceed $75 million U.S. dollars (or the Canadian dollar equivalent thereof). The New ABL Facility matures on April 15, 2019 and may be drawn in U.S. dollars by the U.S. ABL Borrowers and either U.S. dollars or Canadian dollars by the Canadian ABL Borrowers, as LIBOR loans, CDOR loans, U.S. base rate loans, Canadian prime rate loans, as applicable, or letters of credit or swingline loans (with a sublimit of up to $25 million U.S. dollars available for letters of credit and up to $20 million U.S. dollars for swingline loans (or, in each case, the Canadian dollar equivalent thereof)), each as determined in accordance with the terms of the New ABL Facility. The New ABL Facility contains representations and warranties, affirmative and negative covenants, and events of default customary for credit facilities of this nature.

Under the New ABL Facility, the ABL Borrowers were permitted to draw up to $25 million U.S. dollars (or the Canadian dollar equivalent thereof) to partially finance the Easton Baseball/Softball Acquisition and drew approximately $22 million in connection therewith. The ABL Borrowers are permitted to use the undrawn amount under the New ABL Facility from time to time for ordinary course working capital and for general corporate purposes. Voluntary reductions of the unutilized portion of the New ABL Facility commitments and voluntary prepayments under the New ABL Facility are permitted at any time, without premium or penalty, subject to reimbursement of the Lenders' redeployment costs in the case of prepayments of LIBOR advances in certain circumstances. Voluntary prepayments under the New ABL Facility may be reborrowed.

The borrowing base (the "Borrowing Base") under the New ABL Facility for the interim period up until the 90^th day following the Closing Date (subject to extension at the discretion of the Agent) is deemed to be the greater of $100 million or as calculated by adding the net book value of (a) Accounts of the Borrowers, multiplied by the advance rate of 50%, plus (b) the net book value of Inventory of the Borrowers located in the United States or Canada multiplied by the advance rate of 45%.

After the interim period the Borrowing Base equals the sum of the Canadian Borrowing Base (as defined herein) and the U.S. Borrowing Base (as defined herein).

The "Canadian Borrowing Base" means, subject to customary reserves and eligibility criteria, the sum of: (a) 85% of the Canadian ABL Borrowers' eligible accounts receivable; plus (b) the lesser of (x) 70% of the cost (valued on a first in, first out basis) of the Canadian ABL Borrowers' eligible inventory, or (y) 85% of the appraised net orderly liquidation value of the Canadian ABL Borrowers' eligible inventory.

The "U.S. Borrowing Base" means, subject to customary reserves and eligibility criteria, the sum of: (a) 85% of the U.S. ABL Borrowers' eligible accounts receivable; plus (b) the lesser of (x) 70% of the cost (valued on a first in, first out basis) of the U.S. ABL Borrowers' eligible inventory, or (y) 85% of the appraised net orderly liquidation value of the U.S. ABL Borrowers' eligible inventory.

At the option of the ABL Borrowers, until August 31, 2014, the interest rates under the New ABL Facility are (i) LIBOR or CDOR, as applicable, plus 1.75% per annum or (ii) the U.S. base rate or Canadian prime rate, as applicable, plus 0.75% per annum. Following August 31, 2014, interest rate margins under the New ABL Facility are determined with reference to the following grid, based on the average availability, as a percentage of the aggregate commitments, during the immediately preceding quarter:

The ABL Borrowers may elect interest periods of one, two, three or six months (or 12 months if agreed to by all the Lenders) for LIBOR or CDOR loans.

A per annum fee equal to the interest rate margin for LIBOR or CDOR loans under the New ABL Facility will accrue on the average daily amount of the aggregate undrawn amount of outstanding letters of credit, payable in arrears on the first day of each quarter. In addition, the ABL Borrowers shall pay (a) a fronting fee equal to 0.125% on the average daily amount of the aggregate undrawn amount of outstanding letters of credit, and (b) customary issuance and administration fees.

The ABL Borrowers will initially pay a commitment fee of 0.50% per annum on the average daily unused portion of the New ABL Facility. From and after August 31, 2014, the commitment fee is to be determined by reference to the following grid based on the average utilization of the commitments under the New ABL Facility during the immediately preceding fiscal quarter:

Upon the occurrence and during the continuance of a payment event of default, the outstanding amounts under the New ABL Facility are subject to an additional 2% per annum of default interest.

The interest rate on the Credit Facilities for the three month period ended August 31, 2014 ranged from 1.90% to 4.50%. As of August 31, 2014, there are three letters of credit totaling $1.5 million outstanding under the New ABL Facility.

On March 18, 2014, the Company received a corporate credit rating of "B+" (with a "Stable" outlook) from Standard & Poor's Rating Services ("S&P"). The Company obtained the rating in connection with its New Term Loan Facility, but the rating is for the Company as a whole and is not limited to the New Term Loan Facility or any one class of securities of the Company. The "B+" corporate credit rating reflects S&P's assessment of the Company's "aggressive" financial risk profile and "weak" business risk profile. The "Stable" outlook reflects S&P's view that the Company will sustain adequate liquidity and continue to increase sales and EBITDA, resulting in maintenance of adjusted debt-to-EBITDA below 5x by Fiscal 2015. Concurrently, S&P assigned a "B+" issue-level rating to the Company's New Term Loan Facility and a "4" recovery rating to the New Term Loan Facility. A "4" recovery rating to the New Term Loan Facility indicates average (30% to 50%) recovery in the event of a payment default. On June 10, 2014 S&P indicated that the Company's announcement that it will raise $110 million of equity in a public offering will not change the Company's corporate credit rating or issue-level rating. The U.S. IPO was completed on June 25, 2014. For more information on the rating method used by S&P, please visit S&P's website at www.standardandpoors.com

On March 18, 2014, Moody's Investor Service ("Moody's") assigned an initial corporate family rating of "B1" and a "B1-PD" probability of default for the Company. Concurrently, Moody's also assigned a "B2" credit rating to the New Term Loan Facility with a "speculative grade" liquidity rating of "SGL" 2. Moody's also assigned a "Stable" outlook. The "Stable" outlook reflects Moody's view that the Company will steadily reduce leverage through a combination of debt repayments and modest earnings growth. The "Stable" outlook also reflects Moody's expectation that the Company will integrate Easton Baseball/Softball without significant disruptions. On June 11, 2014 Moody's indicated that the Company's announcement that it will raise $110 million of equity via a public offering was credit positive but does not affect its "B1" rating or "Stable" outlook rating. The U.S. IPO was completed on June 25, 2014. For more information on the rating method used by Moody's, please visit Moody's website at www.moodys.com.

Prior to the Easton Baseball/Softball Acquisition, the Company's former credit facilities consisted of a (i) $130.0 million term loan, denominated in both Canadian dollars and U.S. dollars, and (ii) $145.0 million revolving loan, denominated in both Canadian dollars and U.S. dollars.

The interest rates per annum applicable to the loans under the former credit facilities is equal to an applicable margin percentage, plus, at the Borrowers' option depending on the currency of borrowing, (i) the U.S. base rate/Canadian base rate, or (ii) LIBOR/Bankers Acceptance rate. The applicable margin percentages are subject to adjustment based upon the Company's Leverage Ratio (as defined under the former credit facilities) as follows:

The Amended Credit Facility and the Credit Facilities define Leverage Ratio as Net Indebtedness divided by EBITDA. Net Indebtedness includes such items as the Company's term loan, capital lease obligations, subordinated indebtedness, and average revolving loans for the last 12 months as of the reporting date, less the average amount of cash for the last 12 months as of the reporting date. EBITDA is defined in both the Amended Credit Facility and Credit Facilities. The following table depicts the Company's Leverage Ratio:

In the three month period ended August 31, 2014 and the three month period ended August 31, 2013, we incurred capital expenditures of $2.0 million and $1.4 million, respectively. As a percentage of revenues, our capital expenditures for the trailing

twelve months ended August 31, 2014 were 1.3% of revenues compared to 2.0% of revenues for the trailing twelve months ended August 31, 2013. The capital investments were incurred for R&D, information systems to assist in streamlining our growing organization, tooling, and investments in retail marketing assets. The year-over-year increase is driven by higher retail marketing asset investment as compared to the prior year. Our ordinary course of operations requires minimal capital expenditures for equipment given that we manufacture most of our products through our manufacturing partners. Going forward, to support our growth and key business initiatives, we currently anticipate moderately higher levels of capital expenditures and investment.

The following table summarizes our material contractual obligations as of August 31, 2014:

(millions of U.S. dollars)


Operating lease obligations⁽¹⁾	$25.0	$8.5	$8.0	$4.3	$4.2
Endorsement contracts⁽²⁾	14.6	6.8	5.8	0.9	1.1
Long-term borrowings:⁽³⁾
Revolving loan	105.4	105.4	—	—	—
Term loan due 2021	330.5	—	—	—	330.5
Inventory purchases⁽⁴⁾	77.7	77.7	—	—	—
Non-inventory purchases⁽⁴⁾	2.7	2.4	0.2	0.1	—

Total	$555.9	$200.8	$14.0	$5.3	$335.8

(1): Future lease obligations are not recognized in our Condensed Consolidated Interim Statements of Financial Position (Unaudited). The operating lease obligations for buildings and equipment expire at various dates through the fiscal year ended May 31, 2030. Certain of the leases contain renewal clauses for the extension of the lease for one or more renewal periods. Capital lease obligations are immaterial to the Company's financial statements.
(2): The amounts listed for endorsement contracts represent approximate amounts of base compensation and minimum guaranteed royalty fees the Company is obligated to pay athletes, sports teams, and other endorsers of the Company's products. Actual payments under some contracts may be higher than the amounts listed as these contracts provide for bonuses to be paid to the endorsers based upon certain achievements and/or royalties on product sales in future periods. Actual payments under some contracts may also be lower as these contracts include provisions for reduced payments if certain performance criteria are not met. In addition to the cash payments, the Company is obligated to furnish the endorsers with products for their use. It is not possible to determine how much the Company will spend on this product on an annual basis as the contracts do not stipulate a specific amount of cash to be spent on the product. The amount of product provided to the endorsers will depend on many factors including general playing conditions, the number of sporting events in which they participate, and the Company's decisions regarding product and marketing initiatives. In addition, the costs to design, develop, source, and purchase the products furnished to the endorsers are incurred over a period of time and are not necessarily tracked separately from similar costs incurred for products sold to customers.
(3): Amounts represent principal payments on outstanding debt. For more information, please refer to the "Indebtedness" section and the notes to the unaudited condensed consolidated interim financial statements for the three months ended August 31, 2014.
(4): Inventory and non-inventory purchase obligations include various commitments in the ordinary course of business that would include the purchase of goods or services that are not recognized in our unaudited condensed consolidated interim statements.

We enter into agreements with our manufacturing partners on tooling requirements for our manufactured products. These agreements form an important part of the Company's supply chain strategy and cash flow management. The following table summarizes our vendor tooling commitments as of August 31, 2014 and Fiscal 2015:

(millions of U.S. dollars)							Open purchase orders amortization value

Vendor	Tooling acquisition value		Cost paid		Owed amounts as of August 31, 2014		Open purchase orders amortization value		Outstanding liability Fiscal 2015
Supplier A	$	5.9	$	4.1	$	1.8	$	0.1	$	1.7
Supplier B		5.3		4.6		0.7		0.1		0.6
Supplier C		1.0		0.5		0.5		—		0.5
Supplier D		0.5		0.4		0.1		—		0.1
Supplier E		0.4		0.2		0.2		—		0.2
Supplier F		0.2		0.1		0.1		—		0.1
Supplier G		0.1		0.1		—		—		—
Supplier H		0.1		—		0.1		—		0.1

Total	$	13.5	$	10.0	$	3.5	$	0.2	$	3.3

As of August 31, 2014 there were no outstanding balances with any of the Kohlberg Funds. The Kohlberg Funds include Kohlberg TE Investors VI, LP, Kohlberg Investors VI, LP, Kohlberg Partners VI, LP, and KOCO Investors VI, LP, each of which is advised or managed by Kohlberg Management VI, L.L.C.

In connection with the Business Purchase from Nike, a subsidiary of Kohlberg Sports Group Inc. ("KSGI") agreed to pay additional consideration to Nike in future periods based upon the attainment of a qualifying exit event. As of August 31, 2014, the maximum potential future consideration pursuant to such arrangements, to be resolved on or before the eighth anniversary of April 16, 2008, is $10.0 million. As a condition to the acquisition in connection with the IPO, the Existing Holders entered into a reimbursement agreement with the Company pursuant to which each such Existing Holder has agreed to reimburse the Company, on a pro rata basis, in the event that the Company or any of its subsidiaries are obligated to make such a payment to Nike.

The Company previously entered into employment agreements with the former owners of Inaria in connection with the closing of the Inaria Acquisition. Included in the employment agreements are yearly performance bonuses payable in the event Inaria achieves gross profit targets in the period one to four years following the closing. These amounts will be accrued over the required service period. As of August 31, 2014 the potential undiscounted amount of the future payments that the Company could be required to make is between $0 and $2.0 million Canadian dollars.

In addition to the matters above, during the ordinary course of its business, the Company is involved in various legal proceedings involving contractual and employment relationships, product liability claims, trademark rights and a variety of other matters. The Company does not believe there are any pending legal proceedings that will have a material adverse impact on the Company's financial position or results of operations.

QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET AND OTHER FINANCIAL RISKS

Foreign currency risk is the risk we incur due to fluctuating foreign exchange rates impacting our results of operations. We are exposed to foreign exchange rate risk driven by the fluctuations against the U.S. dollar of the currencies in which we collect our revenues: the Canadian dollar, euro, Swedish krona, Norwegian krona, and Danish krona. Our exposure also relates to debt held in Canadian dollars and purchases of goods and services in foreign currencies. While we purchase a majority of our products in U.S. dollars, we are exposed to cost variability due to fluctuations against the U.S. dollar of certain foreign currencies, primarily: the Canadian dollar, Chinese renminbi, Taiwanese new dollar and Thai baht. We continuously monitor foreign exchange risk and have entered into various arrangements to mitigate our foreign currency risk.

The Company is exposed to interest rate risk on its Credit Facilities, as the rates are based on an index rate. The New Term Loan Facility is subject to a 1% floor when choosing the LIBOR rate. The Company actively monitors its risk and will enter into agreements to minimize risk accordingly.

Credit risk is when the counterparty to a financial instrument or a customer fails to meet its contractual obligations, resulting in a financial loss to the Company. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the Company's exposure to credit risk with these institutions. This credit risk is generally limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. To manage this risk, the Company has established strict counterparty credit guidelines that are continually monitored and reported to senior management according to specified guidelines.

We sell to a diverse customer base over a global geographic area. We evaluate collectability of specific customers' receivables based on a variety of factors including currency risk, geopolitical risk, payment history, customer stability, and other economic factors. Collectability of receivables is reviewed on an ongoing basis by management and the allowance for doubtful accounts is adjusted as required. Account balances are charged against the allowance for doubtful accounts when we determine that it is probable that the receivable will not be recovered. We believe that the geographic diversity of the customer base, combined with our established credit approval practices and ongoing monitoring of customer balances, mitigates the counterparty risk.

Liquidity risk is the risk that we will not be able to meet our financial obligations. We continually monitor our actual and projected cash flows. We believe our cash flows generated from operations combined with our New ABL Facility provide sufficient funding to meet our obligations.

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, and expenses. The judgments and estimates are reviewed on an ongoing basis and estimates are revised and updated accordingly. Actual results may differ from these estimates. Significant areas requiring the use of judgment in application of accounting policies, assumptions, and estimates include fair value determination of assets and liabilities in connection with business combinations, fair valuation of financial instruments, impairment of non-financial assets, valuation allowances for receivables and inventory, amortization periods, provisions, employee benefits, share-based payment transactions, and income taxes.

We believe our critical accounting estimates are those related to acquisitions, valuation of derivatives, share-based payments, warranties, retirement benefit obligations, depreciation and amortization, income taxes, and impairment of non-financial assets. We consider these accounting estimates critical because they are both important to the portrayal of our financial condition and operating results, and they require us to make judgments and estimates about inherently uncertain matters.

The fair value of assets acquired and liabilities assumed in a business combination is estimated based on information available at the date of the acquisition. The estimate of fair value of the acquired intangible assets (including goodwill), property, plant and equipment, and other assets, and the liabilities assumed at the date of acquisition, as well as the useful lives of the acquired intangible assets and property, plant and equipment is based on assumptions. The measurement is largely based on projected cash flows, discount rates and market conditions at the date of acquisition.

In the valuation of the Company's outstanding derivatives, foreign currency forward contracts and foreign exchange swaps, the fair value is based on current foreign exchange rates at each reporting date. Since the Company recognizes the fair value of these financial instruments on the consolidated statements of financial position and records changes in fair value in the current period earnings, these estimates will have a direct impact on the Company's net income or loss for the period.

Accounting for the grant date fair value of stock option awards and the number of awards that are expected to vest is based on a number of assumptions and estimates, including the risk-free interest rate, expected share volatility, expected dividend yield, estimated forfeiture rates, and expected term. The calculation of the grant date fair value requires the input of highly subjective assumptions and changes in subjective input assumptions can materially affect the fair value estimate.

Estimated future warranty costs are accrued and charged to cost of goods sold in the period in which revenues are recognized from the sale of goods. The recognized amount of future warranty costs is based on management's best information and judgment and is based in part upon the Company's historical experience. An increase in the provision for warranty costs, with a corresponding charge to earnings, is recorded in the period in which management estimates that additional warranty obligations are likely.

Accounting for the costs of the defined benefit obligations is based on actuarial valuations. The present value of the defined benefit obligation recognized in the consolidated statements of financial position and the net financing charge recognized in the consolidated statements of comprehensive income is dependent on current market interest rates of high quality, fixed rate debt securities. Other key assumptions within this calculation are based on market conditions or estimates of future events, including mortality rates. Since the determination of the costs and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process.

Management is required to make certain estimates and assumptions when determining the depreciation and amortization methods and rates, and residual values of equipment and intangible assets. Useful lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. Management reviews amortization methods, rates, and residual values annually and adjusts amortization accordingly on a prospective basis.

The measurement of income taxes payable and deferred income tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant authorities, which occurs subsequent to the issuance of the financial statements. Judgments are also made by management to determine the likelihood of whether deferred income tax assets at the end of the reporting period will be realized from future taxable earnings.

Management exercises judgment in assessing whether there are indications that an asset may be impaired. In determining the recoverable amount of assets, in the absence of quoted market prices, impairment tests are based on estimates of discounted cash flow projections and other relevant assumptions. The assumptions used in the estimated discounted cash flow projections involve estimates and assumptions regarding discount rates, royalty rates, and long-term terminal growth rates. Differences in estimates could affect whether goodwill or intangible assets are in fact impaired and the dollar amount of that impairment.

The following standards and amendments to existing standards have been adopted by the Company on June 1, 2014:

The IASB issued amendments to IAS 32, Financial Instruments: Presentation ("IAS 32"). IAS 32 applies to the classification of financial instruments, from the perspective of the issuer, into financial assets, financial liabilities and equity instruments; and the right for offsetting financial assets and financial liabilities. A right to offset may be currently available or it may be contingent on a future event. An entity must have a legally enforceable right of set-off. The adoption of the amendments to IAS 32 did not have a material impact on the Company's financial statements.

In May 2013, International Financial Reporting Standards Interpretations Committee Interpretation 21, Levies ("IFRIC 21") was issued. IFRIC 21 provides guidance on when to recognize a liability to pay a levy imposed by a government that is accounted for in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The adoption did not have an impact on the Company's financial statements.

The IASB issued amendments to IAS 36, Recoverable Amount Disclosures for Non-Financial Assets ("IAS 36"). IAS 36 clarifies the IASB's original intention to require the disclosure of the recoverable amount of impaired assets as well as additional disclosures about the measurement of the recoverable amount of impaired assets. The adoption of the amendments to IAS 36 did not have an impact on the Company's financial statements.

The IASB issued IFRS 9, Financial Instruments ("IFRS 9"). IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2009), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. IFRS 9 (2010) introduces additional changes relating to financial liabilities. The IASB currently has an active project to make limited amendments to the classification and measurement requirements of IFRS 9 and add new requirements to address the impairment of financial assets and hedge accounting. IFRS 9 (2013) introduces new requirements for hedge accounting that align hedge accounting more closely with risk management. The requirements also establish a more principles-based approach to hedge accounting and address inconsistencies and weaknesses in the hedge accounting model in IAS 39, Financial Instruments: Recognition and Measurement. The mandatory effective date of IFRS 9

is not specified but will be determined when the outstanding phases are finalized. However, application of IFRS 9 is permitted. The Company is currently assessing the impact of, and when to adopt, IFRS 9.

In December 2013, the IASB issued narrow-scope amendments to a total of nine standards as part of its annual improvements process. Amendments were made to clarify items including the definition of vesting conditions in IFRS 2, Share-based Payment, disclosures on the aggregation of operating segments in IFRS 8, Operating Segments, measurement of short-term receivables and payables under IFRS 13, Fair Value Measurement, definition of related party in IAS 24, Related Party Disclosures and other amendments. Special transitional requirements have been set for certain of these amendments. Most amendments will apply prospectively for annual periods beginning on or after July 1, 2014, and earlier application is permitted. The Company is in the process of assessing the potential impact of the amendments.

In November 2013, the IASB published amendments to IAS 19, Employee Benefits ("IAS 19"). These amendments are to be applied retrospectively. IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans, and requires such contributions that are linked to service to be attributed to periods of service as a negative benefit. The amendments to IAS 19 provide simplified accounting in certain situations. If the amount of contribution is independent of the number of years of service, an entity is permitted to recognize such contributions as a reduction in the service costs in the period in which the service is rendered, instead of allocating the contributions to the period's service. The effective date for these amendments is annual periods beginning on or after July 1, 2014. The Company is in the process of assessing the potential impact of the amendments.

In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers ("IFRS 15"). The objective of this standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations and recognizing revenue when performance obligations are satisfied. The standard also expands current disclosure requirements. IFRS 15 is effective for annual periods beginning on or after January 1, 2017, and earlier application is permitted. The Company is in the process of assessing the potential impact of IFRS 15.

This MD&A makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. When used, these measures are defined in such terms as to allow the reconciliation to the closest IFRS measure. These measures are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analyses of the Company's financial information reported under IFRS. We use non-IFRS measures, such as Adjusted Net Income/Loss, Adjusted EPS, Adjusted EBITDA and Adjusted Gross Profit, to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. We also use non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and to assess our ability to meet our future debt service, capital expenditure, and working capital requirements.

The definition and reconciliation of Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income/Loss, and Adjusted EPS used and presented by the Company to the most directly comparable IFRS measures follows below.

Adjusted Gross Profit is defined as gross profit plus the following expenses which are part of cost of goods sold: (i) amortization and depreciation of intangible assets, (ii) charges to cost of goods sold resulting from fair market value adjustments to inventory as a result of business acquisitions, (iii) reserves established to dispose of obsolete inventory acquired from acquisitions, and (iv) other one-time or non-cash items. We use Adjusted Gross Profit as a key performance measure to assess our core gross profit and as a supplemental measure to evaluate the overall operating performance of our cost of goods sold.

The table below provides the reconciliation of gross profit to Adjusted Gross Profit:

(1): Upon completion of the Business Purchase from Nike in 2008, the Maverik Lacrosse Acquisition in 2010, the Cascade Acquisition in June 2012, the Inaria Acquisition in October 2012, the Combat Acquisition in May 2013, and the Easton Baseball/Softball Acquisition in April 2014, the Company capitalized acquired intangible assets at fair market value. These intangible assets, in addition to other intangible assets subsequently acquired, are amortized over their useful life and we recognize the amortization as a non-cash cost of goods sold.
(2): Upon completion of the Inaria, Combat Sports and Easton Baseball/Softball acquisitions, the Company adjusted Inaria's, Combat Sports' and Easton Baseball/Softball's inventories to fair market value. Included in the three month periods ended August 31, 2014 and August 31, 2013, are charges to cost of goods sold resulting from the fair market value adjustment to inventory.
(3): Other represents the impact of the Canadian Tariff Reduction for the three month period ended August 31, 2013.

Adjusted EBITDA is defined as net income adjusted for income tax expense, depreciation and amortization, losses related to amendments to the credit facilities, gain or loss on disposal of fixed assets, net interest expense, deferred financing fees, unrealized gains/losses on derivative instruments, and realized and unrealized gains/losses related to foreign exchange revaluation, and before restructuring and other one-time or non-cash charges associated with acquisitions, other one time or non-cash items, pre-IPO sponsor fees, costs related to share offerings, as well as share-based payment expenses. We use Adjusted EBITDA as the key metric in assessing our business performance when we compare results to budgets, forecasts and prior years. Management believes Adjusted EBITDA is an important measure of operating performance and cash flow, and provides useful information to investors because it highlights trends in the business that may not otherwise be apparent when relying solely on IFRS measures, and eliminates items that have less bearing on operating performance and cash flow. It is an alternative to measure business performance to net income and operating income, and management believes Adjusted EBITDA is a better measure of cash flow generation than, for example, cash flow from operations, particularly because it removes cash flow fluctuations caused by extraordinary changes in working capital. Adjusted EBITDA is used by management in the assessment of business performance and used by our Board of Directors as well as our lenders in assessing management's performance. It is also the key metric in determining payments under incentive compensation plans.

The table below provides the reconciliation of net income (loss) to Adjusted EBITDA:

	Three Months Ended August 31,

(millions of U.S. dollars)	2014		2013
	(Unaudited)		(Unaudited)
Net income (loss)	$	11.3	$	21.3

Income tax expense (benefit)		4.1		9.0
Depreciation & amortization		5.0		2.2
Interest expense, net		4.6		1.6
Deferred financing fees		0.7		0.4
Unrealized (gain)/loss on derivative instruments, net⁽¹⁾		1.5		(0.6	)
Foreign exchange (gain)/loss⁽¹⁾		2.0		(0.6	)

EBITDA	$	29.2	$	33.3
Acquisition Related Charges:
Inventory step-up / step-down & reserves⁽²⁾		6.2		0.4
Rebranding / integration costs⁽³⁾		2.4		1.5
Acquisition costs⁽⁴⁾		0.2		0.6

Subtotal	$	8.8	$	2.5
Share-based payment expense		1.9		0.6
Other⁽⁵⁾		—		0.5

Adjusted EBITDA	$	39.9	$	36.9

(1): The unrealized gain/loss on derivatives is the change in fair market value of the foreign exchange swaps, foreign currency forward contracts and interest rate contracts. The Company has not elected hedge accounting and therefore the changes in the fair value of these derivatives are recognized through profit or loss each reporting period. The foreign exchange gain/loss is the realized and unrealized gains and losses generated by the effect of foreign exchange on recorded assets and liabilities denominated in a currency different from the functional currency of the applicable entity, and is recorded in finance costs (income), as applicable, in the period incurred.
(2): Upon completion of the Inaria, Combat Sports and Easton Baseball/Softball acquisitions, the Company adjusted Inaria's, Combat Sports' and Easton Baseball/Softball's inventories to fair market value. Included in the three month periods ended August 31, 2014 and August 31, 2013, are charges to cost of goods sold resulting from the fair market value adjustment to inventory.
(3): The rebranding / integration costs for the three month period ended August 31, 2014 are associated with the integration of the Cascade, Inaria, Combat Sports and Easton Baseball/Softball acquisitions. The rebranding / integration costs for the three month period ended August 31, 2013 are associated with the integration of the Cascade, Inaria and Combat Sports acquisitions.
(4): Acquisition-related transaction costs include legal, audit, and other consulting costs. The three month periods ended August 31, 2014 and August 31, 2013 include costs related to reviewing corporate opportunities. Acquisition-related transaction costs in the three month period ended August 31, 2013 also include costs related to the Combat Acquisition.
(5): Other for the three month period ended August 31, 2013 represent the impact of the Canadian Tariff Reduction.

Adjusted Net Income/Loss is defined as net income adjusted for all unrealized gains/losses related to derivative instruments and unrealized gains/losses related to foreign exchange revaluation, non-cash or incremental charges associated with acquisitions, amortization of acquisition-related intangible assets for acquisitions since the IPO, costs related to share offerings, share-based payment expense and other non-cash or one-time items. Adjusted EPS is defined as Adjusted Net Income/Loss divided by the weighted average diluted shares outstanding. We use Adjusted Net Income/Loss and Adjusted EPS as key metrics for assessing our operational business performance and to assist with the planning and forecasting for the future operating results of the underlying business of the Company. We believe Adjusted Net Income/Loss and Adjusted EPS are useful information to investors because they highlight trends in the business that may not otherwise be apparent when relying solely on IFRS measures.

The table below provides the reconciliation of net income (loss) to Adjusted Net Income/Loss and to Adjusted EPS:

	Three Months Ended August 31,

(millions of U.S. dollars, except share and per share amounts)	2014			2013
	(Unaudited)			(Unaudited)
Net income (loss)	$	11.3		$	21.3

Unrealized foreign exchange loss / (gain)⁽¹⁾		3.0			(1.2	)
Acquisition-related charges⁽²⁾		11.8			3.1
Share-based payment expense		1.9			0.6
Other⁽³⁾		—			0.5
Tax impact on above items		(5.4	)		(1.2	)

Adjusted Net Income (Loss)	$	22.6		$	23.1

Average diluted shares outstanding		44,274,614			36,993,472

Adjusted EPS	$	0.51		$	0.63

(1): The unrealized foreign exchange loss/gain represents the unrealized gain/loss on derivatives and the unrealized portion of the foreign exchange gain/loss from the Adjusted EBITDA table. The unrealized portion of the foreign exchange gain/loss in the three month periods ended August 31, 2014 and August 31, 2013 was a loss of $1.5 million and a gain of $0.5 million, respectively.
(2): Acquisition-related charges include rebranding / integration costs, and legal, audit, and other consulting costs associated with acquisition transactions. In the three month period ended August 31, 2014, these charges relate to the Inaria, Combat acquisitions and costs related to reviewing corporate opportunities. In the three month period ended August 31, 2013 these charges relate to the Cascade, Inaria and Combat Sports acquisitions and costs related to reviewing corporate opportunities. The charges also include amortization of intangible assets in the three month periods ended August 31, 2014 and August 31, 2013 of $3.0 million and $0.6 million, respectively, and charges to cost of goods sold resulting from the fair market value adjustment to inventory in the three month periods ended August 31, 2014 and August 31, 2013 of $6.2 million and $0.4 million, respectively.
(3): For the three month period ended August 31, 2013, other items represent the impact of the Canadian Tariff Reduction.

There were no changes to our internal control over financial reporting that occurred during the three month period ended August 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Certain statements in this MD&A about our current and future plans, expectations and intentions, results, levels of activity, performance, goals, or achievements, or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indicates", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words, or other comparable words or phrases, are intended to identify forward-looking statements. Discussions containing forward-looking statements may be found, among other places, under the "First Quarter Fiscal 2015 Highlights", "Recent Events", and "Outlook" sections. Forward-looking statements are based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct.

Many factors could cause our actual results, level of activity, performance, or achievements, future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors: inability to maintain and enhance brands, inability to introduce new and innovative products on the anticipated timeline, intense competition in the sporting equipment and apparel industries, inability to introduce technical innovation, inability to own, enforce, defend and protect intellectual property rights worldwide, inability to ensure third-party suppliers will meet quality and regulatory standards, infringement of intellectual property rights of others, inability to successfully implement our strategic initiatives, including our profitability improvement initiative, diminution of the goodwill associated with the EASTON and MAKO brands caused by licensed users or unauthorized users, inability to translate booking orders into realized sales, change in the mix or timing of orders placed by customers, seasonal fluctuations in the demand for our products resulting from adverse weather or other conditions, decrease in ice hockey, baseball and softball, roller hockey or lacrosse participation rates, adverse publicity related to or reduced popularity of the National Hockey League ("NHL"), Major League Baseball ("MLB") or other professional or amateur leagues in

sports in which our products are used, reliance on third-party suppliers and manufacturers, disruption of distribution chain or loss of significant customers or suppliers, imposition of new trade restrictions or existing trade restrictions becoming more burdensome, consolidation of our customer base (and the resulting possibility of lower gross margins due to negotiated lower prices), change in the sales mix towards larger customers, cost of raw materials, shipping costs and other cost pressures, risks associated with doing business abroad, inability to expand into international market segments, inability to accurately forecast demand for products, insufficient sell through of our products at retail, inventory shrinkage or excess inventory, product liability claims and product recalls, changes in compliance standards of testing and athletic governing bodies, risks associated with our third-party suppliers and manufacturers failing to manufacture products that comply with all applicable laws and regulations, inability to source merchandise profitably in the event new trade restrictions are imposed or existing trade restrictions become more burdensome, departure of senior executives or other key personnel, including senior management of Easton Baseball/Softball, litigation, including certain class action lawsuits, employment or union-related disputes, disruption of information technology systems, potential environmental liabilities, restrictive covenants in the Credit Facilities, unanticipated levels of indebtedness, inability to generate sufficient cash to service all the Company's indebtedness, inability to successfully integrate new acquisitions, such as Easton Baseball/Softball, inability to realize growth opportunities or cost synergies that are anticipated to result from new acquisitions, such as the Easton Baseball/Softball Acquisition, inability to grow revenues each year faster than the total market for each of our sports, ability to forecast revenue growth for each of our sports, undisclosed liabilities acquired pursuant to recent acquisitions, significant transaction and related costs in connection with the integration of Easton Baseball/Softball, inability to continue making strategic acquisitions, possibility that judgments may be enforced against us, inability to grow market share, volatility in the market price for Common Shares, possibility that we may be declared a passive foreign investment company ("PFIC") for United States tax purposes, possibility that we may need additional capital in the future, assertion that the acquisition of the Bauer business at the time of the IPO was an inversion transaction, conversions and potential future sales of Common Shares or Proportionate Voting Shares, our current intention not to pay cash dividends, conflicts of interests among investors, fluctuations in the value of certain foreign currencies, including the Canadian dollar, Chinese renminbi, euro, Swedish krona, Taiwanese new dollar and Thai baht in relation to the U.S. dollar, inability to manage foreign exchange derivative instruments, general adverse economic and market conditions, changes in consumer preferences and the difficulty in anticipating or forecasting those changes, changes in government regulations, including tax laws and unanticipated tax liabilities, inability of counterparties and customers to meet their financial obligations, and natural disasters, as well as the factors identified in the "Risk Factors" section of this MD&A and the Company's Annual Information Form dated August 27, 2014 and the "Risk Factors" section of this MD&A. Such factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully. The purpose of the forward-looking statements is to provide the reader with a description of management's expectations regarding the Company's financial performance and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements made herein. Unless otherwise stated, the forward-looking statements contained in this MD&A are made as of October 9, 2014, and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement.

We have obtained the market and industry data presented in this MD&A from a combination of: (i) internal company surveys and commissioned reports, (ii) third-party information, including from independent industry publications and reports, such as the SFIA, (iii) publicly available sport participation surveys from national sport organizations or governing bodies, including Hockey Canada, the IIHF, USA Hockey, US Lacrosse, USA Baseball, and FIFA, and (iv) the estimates of the Company's management team. As there are limited sources that report on ice hockey, roller hockey, lacrosse, soccer, baseball and softball equipment and related apparel markets, including soccer apparel, much of the industry and market data presented in this MD&A is based on internally generated management estimates by the Company, including estimates based on extrapolations from third-party surveys of ice hockey, roller hockey, lacrosse, baseball and softball equipment and related apparel markets, including soccer apparel, as well as publicly available sport participation surveys. While we believe our internal surveys, third-party information, publicly available sport participation surveys and estimates of our management are reliable, we have not verified them, nor have they been verified by any independent sources. While we are not aware of any misstatements regarding the market and industry data presented in this MD&A, such data involves risks and uncertainties and is subject to change based on various factors, including those factors discussed under "Caution Regarding Forward-Looking Statements" and "Risk Factors". References to market share data and market size in this MD&A are based on wholesale net revenues unless otherwise indicated.

To the extent market and industry data contained in this MD&A is referenced as a "management estimate" or qualified by phrases such as "we believe" or comparable words or phrases, we have internally generated such data by using a variety of methodologies. With respect to unregistered ice hockey player participation, we have relied on a combination of available external sources and assumed registered-to-unregistered player ratios in the major ice hockey markets. With respect to market size and market share data, we have relied on our internal sales figures and have estimated the sales figures of our competitors using the following data: (i) sales data supplied by major suppliers who participate in voluntary surveys, (ii) cross-references to participation rates and estimates of equipment replacement rates by consumers, (iii) available public reports from competitors (such as Easton Hockey and Reebok), largely to confirm industry trends, and (iv) retail surveys. Certain market and industry data estimated by us are based on, or take into account, assumptions made by us in light of our experience of historical trends, current conditions, as well as other factors. Although we believe such assumptions to be appropriate and reasonable in the circumstances, there can be no assurance that such estimates and assumptions are entirely accurate or correct. The purpose of using internal estimates is to provide the reader with important information concerning the industries in which we compete and our relative performance and may not be appropriate for other purposes. Readers should not place undue reliance on internal estimates made herein. The internal estimates contained in this MD&A are expressly qualified by this paragraph.

For a detailed description of risk factors associated with the Company, refer to the "Risk Factors" section of the Company's Annual Information Form dated August 27, 2014. Other than as described below, the Company is not aware of any other significant changes to the Company's risk factors from those disclosed at that time.

Our strategic initiatives are subject to numerous assumptions and factors, many of which are outside our control, and there are no assurances that such initiatives will be realized or on the anticipated timeline

In order to operate our business, achieve our goals and remain competitive, the Company continuously seeks to identify and devise, invest in, implement and pursue strategic, business, technological and other important initiatives. These initiatives, including activities relating to their development and implementation, may be adversely impacted by a wide range of factors, many of which are beyond the Company's control. Such factors include those relating to foreign exchange rates, labor issues or wage increases, liquidity, competition, cost of raw materials and commodities, unanticipated expenses, economic conditions (including inflationary risk), the performance of third parties (including suppliers), the implementation and integration of such initiatives into the Company's other activities and processes as well as the adoption and acceptance of these initiatives by the Company's customers, suppliers, employees and personnel.

The Company is in the process of launching a profitability improvement initiative aimed at securing increased efficiency, product cost reductions, inventory quality improvements and improvements in the overall effectiveness of the Company's supply chain, with the goal of realizing approximately $30 million of increased profitability within five years (excluding certain non-recurring costs or one-time costs that may be required to implement some of these initiatives). Despite the Company's plans and objectives, the Company may not be able to successfully achieve its target goal within the five year time period or fully realize the underlying objectives of its profitability improvement initiative, including those which seek to decrease costs, improve service levels throughout the Company's supply chain or promote efficiencies.

The Company's profitability improvement initiative is based on current market conditions and reasonable assumptions, estimates, analyses, beliefs and opinions of Management, including, but not limited to certain macro-economic factors, such as currency rates, as well as labor, raw material and other input costs remaining at or near current levels, which Management believes to be relevant as of the date hereof, but are subject to inherent risks and uncertainties, which give rise to the possibility that the Company's assumptions, estimates, analyses, beliefs and opinions may not be correct and that the Company's expectations, goals and initiatives will not be achieved.

A delay or failure to sufficiently and successfully identify and devise, invest in or implement any of the Company's strategic initiatives, including the profitability improvement initiative, could adversely affect the Company's ability to operate its business, achieve its goals and remain competitive and could adversely affect our business and financial condition. See "Recent Events — Profitability Improvement Initiative Announced."

Additional information relating to the Company, including continuous disclosure documents, is available on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

The Company's Common Shares are dual listed on the Toronto Stock Exchange and the New York Stock Exchange under the stock symbol "PSG". As of October 9, 2014, the Company had the equivalent of 43,980,440 Common Shares issued and outstanding (39,655,440 Common Shares and 4,325 Proportionate Voting Shares), assuming the conversion of the Proportionate Voting Shares issued to Common Shares on the basis of 1,000 Common Shares for one Proportionate Voting Share. Assuming exercise of all outstanding stock options, there would be the equivalent of 51,435,418 Common Shares issued and outstanding (assuming conversion) on a fully diluted basis as of October 9, 2014.

"Adjusted EBITDA" has the meaning set out under "Non-IFRS Financial Measures".

"Adjusted Gross Profit" has the meaning set out under "Non-IFRS Financial Measures".

"Adjusted Net Income/Loss" has the meaning set out under "Non-IFRS Financial Measures".

"Amended Credit Facility" means the amended senior secured credit facility entered into by the Borrowers with a syndicate of financial institutions, dated June 29, 2012 and comprised of (i) the Amended Term Loan, and (ii) the Amended Revolving Loan, which have subsequently been replaced by the Credit Facilities.

"Amended Revolving Loan" means the $145.0 million revolving loan, denominated in both Canadian dollars and U.S. dollars, which together with the Amended Term Loan comprises the Amended Credit Facility, which has subsequently been replaced by the New ABL Facility.

"Amended Term Loan" means the $130.0 million term loan, denominated in both Canadian and U.S. dollars, which together with the Amended Revolving Loan comprises the Amended Credit Facility, which has subsequently been replaced by the New Term Loan Facility.

"Bauer Business" means the business as currently carried on by Bauer Hockey Corp., Bauer Hockey, Inc. and their respective subsidiaries, consisting of, among other things, the design, development, manufacturing, and marketing of performance sports products for ice hockey, roller hockey, lacrosse, baseball and softball, and related apparel, including soccer apparel.

"Board of Directors" means the board of directors of Performance Sports Group Ltd.

"BRG Sports" means BRG Sports, Inc., formerly Easton-Bell Sports, Inc., and certain of its affiliates.

"Business Purchase from Nike" means the purchase of the Bauer Business by the Existing Holders from Nike on April 16, 2008.

"Canadian ABL Borrowers" means, collectively, Bauer Hockey Corp. and its Canadian subsidiaries.

"Canadian Tariff Reduction" means the reduction of import tariffs on certain hockey equipment effective as of April 1, 2013.

"Cascade" means Cascade Helmets Holdings, Inc., which as a result of the Lacrosse Entities Reorganization completed on December 31, 2012, merged with the Company's other lacrosse subsidiaries and holding entities.

"Cascade Acquisition" means the acquisition of Cascade completed on June 29, 2012.

"Combat Acquisition" means the acquisition of substantially all of the assets of Combat Sports completed on May 3, 2013.

"Company" means Performance Sports Group Ltd., formerly Bauer Performance Sports Ltd.

"Credit Facilities" means the New Term Loan Facility and the New ABL Facility entered into by the Company and certain of its subsidiaries on April 15, 2014.

"Credit Facility" means the amended and restated senior secured credit facility entered into by the Borrowers with a syndicate of financial institutions, dated March 10, 2011, and comprised of (i) the Term Loan and (ii) the Revolving Loan, which have subsequently been replaced by the Amended Credit Facility.

"Easton Baseball/Softball" means the Easton baseball and softball business and the assets formerly used in Easton-Bell Sports, Inc.'s (now named BRG Sports, Inc.) lacrosse business.

"Easton Baseball/Softball Acquisition" means the acquisition of Easton Baseball/Softball.

"Existing Holders" means the former security holders of KSGI who sold KSGI and its subsidiaries to the Company on March 10, 2011 pursuant to the acquisition agreement dated March 3, 2011.

"FIFA" means the Fédération Internationale de Football Association (International Federation of Association Football).

"Grow the Game" means the partnership between Bauer Hockey and Hockey Canada in connection with the global initiative to add 1 million new players to the game of hockey by 2022. Canadian Hockey Association.

"IAS 36" means IAS 36, Recoverable Amount Disclosures for Non-Financial Assets

"IFRIC 21" means International Financial Reporting Standards Interpretations Committee Interpretation 21, Levies

"Inaria Acquisition" means the acquisition of substantially all of the assets of Inaria completed on October 16, 2012.

"IPO" means the initial public offering of Common Shares of the Company in Canada completed on March 10, 2011.

"Kohlberg Funds" means, collectively, Kohlberg TE Investors VI, LP, Kohlberg Investors VI, LP, Kohlberg Partners VI, LP, and KOCO Investors VI, LP, each of which are Existing Holders and funds managed by Kohlberg Management VI, LLC.

"Kohlberg Offerings" means the secondary offerings of Common Shares completed by the Kohlberg Funds on October 17, 2012, February 6, 2013 and November 1, 2013.

"Lacrosse Entities Reorganization" means the reorganization of the Company's lacrosse operating entities and holding bodies, including Cascade Helmets Holdings, Inc. and Maverik Lacrosse LLC, which was completed on December 31, 2012.

"Maverik" means Maverik Lacrosse LLC, which as a result of the Lacrosse Entities Reorganization completed on December 31, 2012, merged with the Company's other lacrosse subsidiaries and holding entities.

"Maverik Lacrosse Acquisition" means the acquisition of Maverik in June 2010.

"MD&A" means this management's discussion and analysis of financial condition and results of operations of the Company for Fiscal 2014.

"New ABL Facility" means the revolving, non-amortizing asset-based credit facility entered into by the Canadian ABL Borrowers and the U.S. ABL Borrowers with a syndicate of financial institutions, dated April 15, 2014.

"New Term Loan Facility" means the amortizing term credit facility entered into by and among the Company with a syndicate of financial institutions, dated April 15, 2014.

"Proportionate Voting Shares" means the proportionate voting shares of the Company.

"Purchase Agreement" means the definitive asset purchase agreement entered into on February 13, 2014 with BRG Sports to acquire substantially all of the assets and assume certain liabilities relating to Easton Baseball/Softball.

"Revolving Loan" means the $100.0 million revolving loan, denominated in both Canadian dollars and U.S. dollars, which together with the Term Loan comprised the former Credit Facility.

"Term Loan" means the $100.0 million term loan, denominated in both Canadian and U.S. dollars, which together with the Revolving Loan comprised the former Credit Facility.

"U.S. ABL Borrowers" means, collectively, Bauer Hockey, Inc. and its U.S. subsidiaries.

"U.S. IPO" means the underwritten public offering of Common Shares in the United States and Canada completed on June 25, 2014.

Company

BAUER	#1	#1	#1	#1	#1	#2
Reebok/CCM	#2	#2	#2	#2	#2	#1
Easton Hockey	#3	#3	#3	#3	#3	n/a

Company								Accessories

Easton	#1	#1	#1	#1	#1	#3	#2	#3	#6
Rawlings	#3	#3	#2	#2	#5	n/a	#1	#5	#1
Mizuno	#4	n/a	#3	#3	n/a	#4	#3	n/a	#2
Hillerich & Bradsby	#5	#4	n/a	n/a	#4	n/a	n/a	n/a	#4
Wilson	#2	#2	n/a	#4	#3	#5	#7	n/a	#3

	Three Months Ended August 31, 2014

	Reported		Constant Currency		Impact of Foreign Exchange
Revenues		$197.1		$201.5		($4.4	)
Gross Profit		$63.9		$66.4		($2.5	)
Selling, general & administrative		$36.1		$36.5		($0.4	)
Research & development		$5.8		$5.9		($0.1	)
Adjusted EBITDA⁽¹⁾		$39.9		$42.1		($2.2	)

	Three Months Ended

	August 31, 2014		August 31, 2013		% Change
CAD / USD		1.083		1.031		(5.0)%
EUR / USD		0.733		0.766		4.3%
SEK / USD		6.675		6.609		(1.0)%

Average Availability (% of Line Cap)

Equal to or greater than 66%	1.50%	0.50%
Less than 66% but equal to or greater than 33%	1.75%	0.75%
Less than 33%	2.00%	1.00%

	Three Months Ended

	Three Months Ended				Period Over Period Growth Rate(1)
(millions of U.S. dollars, except for percentages)	August 31, 2014		August 31, 2013		Period Over Period Growth Rate(1)

Revenues

North America		$147.2		$108.9		35.2%
Rest of world		49.9		45.1		10.6%

Total Revenues		$197.1		$154.0		28.0%

Leverage Ratio

Equal to or greater than 3.00:1.00	1.25%	2.50%	0.50%
Equal to or greater than 2.50:1.00 but less than 3.00:1.00	1.00%	2.55%	0.45%
Equal to or greater than 2.00:1.00 but less than 2.50:1.00	0.75%	2.00%	0.40%
Less than 2.00:1.00	0.50%	1.75%	0.35%