Exhibit 99.1


The following is  incorporated  by reference into this Quarterly  Report on Form
10-Q from the Company's Annual Report on Form 10-K for the period ended December
31, 1999:

CERTAIN OTHER FACTORS THAT MAY AFFECT FUTURE RESULTS

WE FACE INTENSE COMPETITION

Competition is intense in the markets in which we sell our products.  We compete
with a large number of other  companies,  both domestic and foreign,  several of
which  have  diversified   product  lines,   well-known  brands  and  financial,
distribution  and  marketing  resources  substantially  greater  than ours.  The
principal  competitors for our Saucony products are Nike, New Balance and ASICS.
The principal  competitors for our Hind products are Nike,  Pearl Izumi and TYR.
The principal  competitors for our Quintana Roo, Merlin and Real Design products
are  Cannondale,  Trek and Litespeed.  We compete based on a variety of factors,
including price, quality,  product design, brand image,  marketing and promotion
and  ability  to  meet  delivery  commitments  to  retailers.   A  technological
breakthrough or marketing or promotional success by one of our competitors could
adversely affect our competitive position. The intensity of the competition that
we face constitutes a significant risk to our business.

WE DEPEND ON FOREIGN SUPPLIERS

A number of  manufacturers  located  in Asia,  primarily  in China,  Taiwan  and
Thailand,  supply products and product components to us. During fiscal 1999, one
of our suppliers, located in China, accounted for approximately 62% of our total
purchases  by dollar  volume.  We are  subject to the usual  risks of a business
involving  foreign  suppliers,   such  as  currency   fluctuations,   government
regulation  of fund  transfers,  export and  import  duties,  trade  limitations
imposed by the United  States or foreign  governments  and  political  and labor
instability. In particular, there are a number of trade-related and other issues
creating  significant  friction between the governments of the United States and
China and the  imposition  of punitive  import  duties on certain  categories of
Chinese  products has been  threatened in the past and may be implemented in the
future.  In addition,  we have no long-term  manufacturing  agreements  with our
foreign  suppliers  and compete with other  athletic  shoe,  apparel and bicycle
companies,  including  companies  that are much  larger  than us,  for access to
production facilities.

WE NEED TO ANTICIPATE AND RESPOND TO CONSUMER PREFERENCES AND MERCHANDISE TRENDS

The footwear  and apparel  industries  are subject to rapid  changes in consumer
preferences.  Demand for our products,  particularly  our Originals line, may be
adversely affected by changing fashion trends and consumer style preferences. We
believe  that  our  success  depends  in  substantial  part  on our  ability  to
anticipate, gauge and respond to changing consumer demands and fashion trends in
a timely manner. In addition, our decisions concerning new product designs often
need to be made several months before we can determine consumer acceptance. As a
result, our failure to anticipate, identify or react appropriately to changes in
styles or features could lead to problems such as excess  inventories and higher
markdowns,  lower gross margins due to the  necessity of providing  discounts to
retailers,  as well as the  inability  to sell  such  products  through  our own
factory stores.

OUR QUARTERLY RESULTS MAY FLUCTUATE

Our revenues and quarterly operating results may vary significantly depending on
a number of factors, including:

- the timing and shipment of individual orders;
- market acceptance of footwear and other products offered by us;
- changes in our operating expenses;
- personnel changes;
- mix of products sold;
- changes in product pricing; and,
- general economic conditions.

In addition,  a substantial  portion of our revenue is realized  during the last
few weeks of each  quarter.  As a result,  any delays in orders or shipments are
more  likely to result in  revenue  not  being  recognized  until the  following
quarter, which could adversely impact the results of operations for a particular
quarter.

Our  current  expense  levels  are based in part on our  expectations  of future
revenue. As a result, net income for a given period could be  disproportionately
affected by any reduction in revenue. It is possible that in some future quarter
our revenue or operating  results will be below the expectations of stock market
securities  analysts and investors.  If that were to occur,  the market price of
our common stock could be materially adversely affected.

OUR REVENUES ARE SUBJECT TO FOREIGN CURRENCY EXCHANGE FLUCTUATIONS

We conduct  operations in various  international  countries and a portion of our
sales is transacted in local currencies.  As a result,  our revenues are subject
to foreign exchange rate fluctuations.  From time to time, our financial results
have been adversely affected by fluctuations in foreign currency exchange rates.
We enter into forward currency exchange  contracts to protect us from the effect
of changes in foreign  exchange rates.  However,  our efforts to reduce currency
exchange  losses may not be successful  and currency  exchange rates may have an
adverse impact on our future operating results and financial condition.

OUR BUSINESS IS AFFECTED BY SEASONAL CONSUMER BUYING PATTERNS

The footwear,  apparel and bicycle  industries  are generally  characterized  by
significant seasonality of sales and results of operations. Sales of our Saucony
brand  products have  historically  been seasonal in nature,  with the strongest
sales generally occurring in the first and third quarters. In addition, sales of
our Hind brand products are generally strongest in the third and fourth quarters
due to the  popularity of the Hind winter  apparel  collection.  We believe that
sales of our products will continue to follow this  seasonal  cycle.  Therefore,
our results of operations for any one quarter may not  necessarily be indicative
of the results that we may achieve for a full fiscal year or any future quarter.

WE ARE SUSCEPTIBLE TO FINANCIAL DIFFICULTIES OF RETAILERS

We sell our products primarily to major retailers, some of whom have experienced
financial difficulties,  including bankruptcy. We cannot predict what effect the
future  financial  condition of such  retailers  will have on our  business.  In
particular,  we cannot  guarantee  that our bad debt expenses may be material in
future periods.

WE NEED EFFECTIVE MARKETING AND ADVERTISING PROGRAMS

Because  consumer demand for our products is heavily  influenced by brand image,
our business  requires  substantial  investments  in marketing and  advertising.
Failure of such  investments to achieve the desired effect in terms of increased
retailer  acceptance or consumer purchase of our products could adversely affect
our financial results. In addition,  we believe that our success depends in part
upon our ability to periodically launch new marketing and advertising programs.
If  we  are  unable  to  successfully   design  or  execute  new  marketing  and
advertising, or if such programs are ineffective, our business will suffer.

WE DEPEND ON CERTAIN KEY CUSTOMERS

During 1999, we derived approximately 15% of our consolidated revenue from sales
to a single major  customer,  Venator,  which  operates  Foot Locker,  Lady Foot
Locker,  Kids Foot Locker and Eastbay  Running  stores.  We anticipate  that our
results of operations  in any given period will depend to a  significant  extent
upon sales to major customers.  The loss of or a reduction in the level of sales
to one or more  major  customers  could have a  material  adverse  effect on our
business, financial condition and results of operations. Furthermore, if a major
customer were unable or unwilling to proceed with a large order or to pay us for
a large order on a timely basis, our business,  financial  condition and results
of operations could be materially adversely affected.

CHANGES IN GENERAL ECONOMIC CONDITIONS MAY ADVERSELY AFFECT OUR BUSINESS

Our business is sensitive to  consumers'  spending  patterns,  which in turn are
subject  to  prevailing  regional  and  national  economic  conditions,  such as
interest and taxation rates, employment levels and consumer confidence.  Adverse
changes in these  economic  factors  may  restrict  consumer  spending,  thereby
negatively affecting our growth and profitability.