8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date Of Report (Date of earliest event reported): June 16, 2004

K2 INC.

(Exact name of the registrant as specified in its charter)

Delaware	1-4290	95-2077125
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

2051 PALOMAR AIRPORT ROAD, CARLSBAD, CA 92009

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (760) 494-1000

N/A

(Former name or former address, if changed since last report)

Item 2. Acquisition of Disposition of Assets.

Proposed Acquisitions of Völkl and Marker.

On June 16, 2004, K2 entered into a Stock and Loan Purchase Agreement (the “Völkl Purchase Agreement”) among K2, Clarance S.à.r.l., a Luxembourg limited liability company and an indirect wholly-owned subsidiary of K2 (“Clarance”), Cavoma L.P., a Cayman Island limited partnership and an indirect wholly-owned subsidiary of K2 (“Cavoma”), and the stockholders of Völkl Sports Holding AG (“Völkl”). Pursuant to the Völkl Purchase Agreement, K2, through its subsidiaries, will acquire all of the outstanding shares of Völkl together with certain notes payable by Völkl to one of its stockholders for a purchase price consisting of €32,374,696 in cash and 1,394,864 shares of K2 common stock. Concurrently with the execution of the Völkl Purchase Agreement, K2 entered into a Stock and Loan Purchase Agreement (the “Marker Purchase Agreement”) among K2, Clarance, Cavoma, Tecnica S.p.A. and the stockholders of CT Sports Holding AG (“Marker”). Pursuant to the Marker Purchase Agreement, K2, through its subsidiaries, will acquire all of the outstanding shares of Marker together with certain notes payable by Marker to its stockholders for a purchase price consisting of €20,035,085 in cash and 426,209 shares of K2 common stock. Founded in 1889, Völkl is a well established and recognized brand in the worldwide alpine ski market. Marker was founded in 1952, and, since then, Marker has gained worldwide recognition for its patented ski-bindings. In their fiscal years ended March 31, 2004, Völkl generated approximately €105.0 million in net sales and Marker generated approximately €62.9 million in net sales.

The shares of K2 common stock to be issued in the Völkl and Marker transactions will be issued in compliance with Regulation S under the Securities Act of 1933, and, accordingly, the shares may not be resold into the United States for a period of one year following the closing, and thereafter may only be sold in compliance with the restrictions of Rule 144 under the Securities Act of 1933. In addition, the shares will be subject to a “lock up” agreement prohibiting the sale or transfer of such shares by the former Völkl and Marker stockholders for a period of 18 months following the closing.

In the acquisition agreements for both Völkl and Marker, K2, its subsidiaries and the stockholders of Völkl and Marker, respectively, have made customary representations and warranties and have made certain other customary agreements. The acquisition agreements also contain certain covenants applicable to the operations of Völkl and Marker following the closing, including a restriction on K2’s ability to make distributions out of retained earnings of Völkl and Marker generated prior to March 31, 2004. The Völkl and Marker stockholders will indemnify K2 and its subsidiaries for breaches of representations and warranties, transaction expenses in excess of an agreed upon amount, pre-closing taxes, certain environmental matters and certain other matters, all subject to limitations specified in the acquisition agreements. K2, Clarance and Cavoma have also agreed to indemnify the Völkl and Marker stockholders for any breaches of their representations and warranties subject to specified limitations. A portion of the purchase price in each transaction (consisting of cash and shares of K2 common stock) will be placed in escrow to serve as a source of recovery for indemnity claims, if any, by K2 and for other matters.

2

The consummation of the Völkl and Marker acquisitions are subject to the satisfaction or waiver of a number of conditions, including among other customary conditions, as well as obligations to be undertaken at the time of closing:

• approvals required by, and the expiration of the waiting periods under, applicable competition regulations;

• the concurrent consummation of the acquisitions of Völkl and Marker;

• the absence of any material adverse change with respect to the Völkl or Marker businesses;

• the consummation of financings sufficient to fund the purchase price in the acquisitions;

• the execution of employment and non-competition agreements by specified persons; and

• the receipt of consents to the transaction under certain material agreements.

Although certain pro forma financial information reflecting the acquisition of Völkl and Marker is included in this Form 8-K, the acquisitions of Völkl and Marker are not yet complete and there can be no assurance that the transactions will be consummated.

In connection with the Völkl and Marker acquisition agreements, K2 also intends to enter into a Stock Purchase Agreement (the “Völkl America Purchase Agreement”) among K2, Tecnica S.p.A., Tecnica U.S.A. Corp., a New Hampshire corporation, and Völkl Sports America Corporation, a New Hampshire corporation. Pursuant to the Völkl America Purchase Agreement, K2 will acquire 60% of the issued and outstanding shares of Völkl Sports America from Tecnica for cash. K2 will acquire the remaining 40% interest through the acquisition of Völkl, which currently holds such interest. The consummation of this transaction is conditional upon the closings under the Völkl and Marker acquisition agreements.

Proposed Acquisition of Marmot.

On June 2, 2004, K2 entered into an Agreement and Plan of Merger (the “Marmot Merger Agreement”) among K2, Maca Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of K2 (“Maca”), Marmot Mountain Ltd., a Nevada corporation (“Marmot”) and certain of Marmot’s stockholders. Pursuant to the Marmot Merger Agreement, Marmot will be merged into Maca, with Maca surviving as a wholly-owned subsidiary of K2. In the merger, K2 will pay an aggregate of $83,782,000, half in cash and half in shares of K2 common stock, valued based on the 30-day average price of K2 common stock as of the third day prior to the consummation of the merger, for all of the outstanding capital stock of Marmot. The shares of K2 common stock to be issued in the transaction will be registered under the Securities Act of 1933. K2 has also agreed to assume all options to purchase Marmot common stock that have not been exercised as of the consummation of the merger. Marmot designs, manufactures, markets and distributes technical apparel and equipment, including outerwear, rainwear, skiwear, gloves, sleeping bags, backpacks, tents and related accessories sold under the Marmot brand name. In its fiscal year ended December 31, 2003, Marmot generated approximately $63.2 million in net sales, and, for the three month period ended

3

March 31, 2004, Marmot generated approximately $11.4 million in net sales. If the Marmot acquisition is consummated, K2 will have a new Technical Apparel platform consisting of the Marmot and Ex Officio product lines.

In the Marmot Merger Agreement, K2 and Marmot have made customary representations and warranties and have made certain other customary agreements. The Marmot stockholders will indemnify K2 for breaches of representations and warranties, Marmot transaction expenses, pre-closing taxes and certain intellectual property matters, all subject to limitations specified in the merger agreement. K2 has also agreed to indemnify the Marmot stockholders for any breaches of its representations and warranties subject to specified limitations.

The consummation of the Marmot acquisition is subject to the satisfaction or waiver of the following conditions, among other customary conditions:

• the expiration of the waiting periods under antitrust regulations;

• the execution of employment and non-competition agreements by specified employees of Marmot;

• the receipt of opinions regarding the tax treatment of the transaction; and

• the receipt of consents to the transaction under material agreements.

There can be no assurance that the Marmot transaction will be consummated.

The closing of the Völkl and Marker acquisitions is not contingent upon the closing of the Marmot acquisition, and the closing of the Marmot acquisition is not contingent upon the closing of the Völkl and Marker acquisitions.

K2 intends to fund the cash portion of the purchase price for the proposed acquisitions of Völkl, Marker and Marmot out of one or more alternative financing sources, which may include offerings by K2, in public or private transactions, of $150 million of senior notes and $75 million of shares of K2 common stock and/or the refinancing of K2’s existing bank credit facilities. K2 also intends to assume certain outstanding indebtedness of Völkl, Marker and Marmot (including seasonal working capital debt) in connection with the acquisitions, which totalled approximately $45.3 million as of March 31, 2004 on a U.S. dollar converted basis.

4

Item 5. Other Events and Required FD Disclosure.

Other Acquisitions.

As previously announced, on April 19, 2004, K2 completed the purchase of substantially all of the assets of Worr Game Products, Inc., a leader in the design, manufacturing, selling and distribution of premium paintball markers incorporating its proprietary Autococker^® technology. Also, on April 19, 2004, K2 completed the purchase of substantially all of the assets of Innovative Products, a business engaged in the design, manufacture, sale and distribution of gun and bow mounting systems, and other products and accessories for all-terrain vehicles. On May 12, 2004, K2 completed the purchase of Ex Officio, a division of Orvis Company, Inc. Ex Officio is engaged in the business of designing, manufacturing, selling and distributing high-end travel, adventure and outdoor clothing and accessories. The aggregate purchase price for Worr Game Products, Inc., Innovative Products and Ex Officio was $38.8 million, which included 630,441 shares of K2 common stock.

Certain Financing Arrangements.

K2 intends to fund the cash portion of the purchase price for the proposed acquisitions of Völkl, Marker and Marmot out of one or more alternative financing sources, which may include offerings by K2, in public or private transactions, of $150 million of senior notes and $75 million of K2 common stock and/or the refinancing of K2’s existing bank credit facilities.

Among other things, K2 currently intends to amend and restate its existing three-year, $205 million senior secured revolving credit facility expiring on March 25, 2006 (the “Facility”). Among other things, the proposed terms would give the amended Facility a new five-year term and increase the amount available to K2 from $205 million to $250 million, with an option to expand the Facility to $350 million subject to certain conditions, including the consent of the lenders increasing their commitment thereunder. The proposed terms of the amended Facility also would provide for the issuance of letters of credit under the Facility up to a sublimit of $100 million.

K2 expects that borrowings under the proposed amended Facility would continue to be secured by substantially all of K2’s United States assets and the stock of K2’s Canadian and United Kingdom subsidiaries, and actual borrowing availability under the amended Facility will also continue to be based on K2’s trade receivable and inventory levels in the United States, Canada and England, subject to eligibility criteria and defined advance rates.

5

We expect that borrowings under the amended Facility will bear interest at an initial rate equal to the prime rate plus 0.50% per year, or LIBOR plus 2.00% year, with an unused commitment fee of 0.375% per year. There would be no term loan under the amended Facility. The closing of the amended and restated Facility is conditioned upon, among other things, the successful completion of an offering of senior notes and/or common stock.

Summary Historical and Pro Forma Financial Data.

Exhibit 99.1 hereto entitled “Summary Historical and Pro Forma Financial Data” contains certain financial data related to K2 Inc.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Financial Statements of Business Acquired.

This Form 8-K includes as exhibits audited financial statements of Völkl and Marker as set forth on the exhibit list in Item 7(c).

No financial statements of Marmot are required by this Item.

(b) Pro Forma Financial Information.

This Form 8-K includes as exhibits unaudited pro forma condensed combined financial data for K2, Völkl and Marker for the year ended December 31, 2003 and as of and for three months ended March 31, 2004.

No pro forma financial information including Marmot is required by this Item.

6

(c) Exhibits.

The following exhibits are filed with this report on Form 8-K:

Exhibit No.	Item
99.1	Summary of Historical and Pro Forma Financial Data
99.2	K2 Inc, Völkl Sports Holding AG and CT Sports Holding AG unaudited pro forma condensed combined financial Data.
99.3	Audited Financial Statements of Völkl Sports Holding AG as of March 31, 2004 and for each of the two years in the period ended March 31, 2004.
99.4	Audited Financial Statements of CT Sports Holding AG as of March 31, 2004 and 2003 and for the years then ended.
99.5	Consent of Treuhand und Revisions AG.

Item 12. Disclosure of Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 12, “Disclosure of Results of Operations and Financial Condition.” On June 16, 2004, K2 issued a press release setting forth certain forward-looking statements relating to 2004. A copy of K2’s press release is attached hereto as Exhibit 99.6 and is incorporated into this Item 12 by this reference. The information in this Item (and in such press release) shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

7

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 16, 2004	K2 INC.
	By:	/s/ JOHN J. RANGEL
		John J. Rangel Senior Vice President and Chief Financial Officer

8

EXHIBIT INDEX

Exhibit No.	Item
99.1	Summary of Historical and Pro Forma Financial Information
99.2	K2 Inc, Völkl Sports Holding AG and CT Sports Holding AG unaudited pro forma combined condensed financial information.
99.3	Audited Financial Statements of Völkl Sports Holding AG as of and for the fiscal year ended March 31, 2004.
99.4	Audited Financial Statements of CT Sports Holding AG as of and for the fiscal year ended March 31, 2004.
99.5	Consent of Treuhand und Revisions AG.
99.6	Press Release, dated June 16, 2004.

9

EX-99.1

EXHIBIT 99.1

Summary historical and pro forma financial data

The summary consolidated financial data set forth below of K2 should be read in conjunction with “Unaudited pro forma condensed combined financial data,” and the historical financial statements of K2, Völkl and Marker and accompanying notes. We derived the historical summary consolidated financial data for the years ended December 31, 2001, 2002 and 2003 from our consolidated financial statements which have been audited by Ernst & Young LLP and which have been included and incorporated by reference in this offering memorandum. The historical results presented are not necessarily indicative of future results.

The accompanying unaudited interim information for K2 as of and for the three months ended March 31, 2003 and 2004 have been derived from our unaudited consolidated financial statements. The unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the U.S. and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals necessary for a fair presentation, are included. The results of operations for the three months ended March 31, 2004 for K2 may not indicate the results for the full fiscal year.

The actual unaudited consolidated statement of operations and other unaudited consolidated data for the twelve months ended March 31, 2004 are calculated by subtracting the data for the three months ended March 31, 2003 from the data for the year ended December 31, 2003 and then adding the appropriate data for the three months ended March 31, 2004. The pro forma unaudited consolidated statement of operations and other unaudited consolidated data for the twelve months ended March 31, 2004 gives effect to the acquisition of Brass Eagle, the proposed acquisitions of Völkl and Marker, the proposed offering of notes and the proposed offering of approximately $75.0 million of common stock. During the pro forma periods presented, K2 also completed the acquisitions of Worth, Winterquest, Fotoball, Worr, IPI and Ex Officio and has signed a definitive agreement to acquire Marmot. The results of operations of these businesses are not reflected in the unaudited pro forma data because they are not required to be reflected under the SEC’s rules and regulations.

Pro forma adjustments to the financial statements do not reflect potential cost saving opportunities, including the elimination of duplicative selling, general and administrative expenses.

The unaudited consolidated other financial data set forth below include calculations of EBITDA and pro forma EBITDA. These measures should not be construed as alternatives to our operating results or cash flows as determined in accordance with accounting principles generally accepted in the U.S. Please see footnote (d) below for further discussion of these measures.

1

	Year Ended December 31,									Three months ended March 31,					Twelve months ended March 31,
(Dollars in thousands)	2001(a)			2002			2003			2003		2004			2004			2004
															(actual)			(pro forma)(f)
Statement of Operations Data:
Net sales	$	589,519		$	582,159		$	718,539		$	157,120	$	277,364		$	838,783		$	1,086,709
Cost of products sold		429,338			411,620			498,620			109,976		190,731			579,375			726,185
Gross profit		160,181			170,539			219,919			47,144		86,633			259,408			360,524
Selling, general and administrative expenses		158,900			143,256			187,867			38,390		67,111			216,588			298,798
Operating income		1,281			27,283			32,052			8,754		19,522			42,820			61,726
Interest expense		13,631			8,966			9,950			1,794		3,302			11,458			24,095
Debt extinguishment costs(b)		—			—			6,745			6,745		—			—			—
Other (income) expense, net(c)		(375	)		(253	)		(2,218	)		4		(53	)		(2,275	)		(2,216	)
Income (loss) from operations before provision (credit) for income taxes		(11,975	)		18,570			17,575			211		16,273			33,637			39,847
Provision (credit) for income taxes		(4,271	)		6,500			6,151			74		5,533			11,610			13,847
Net income (loss)	$	(7,704	)	$	12,070		$	11,424		$	137	$	10,740		$	22,027		$	26,000
Basic earnings (loss) per share of common stock:	$	(0.43	)	$	0.67		$	0.46		$	0.01	$	0.31		$	0.75		$	0.67
Diluted earnings (loss) per share of common stock:	$	(0.43	)	$	0.67		$	0.44		$	0.01	$	0.27		$	0.65		$	0.63
Basic shares outstanding of common stock		17,940			17,941			24,958			18,262		34,353			29,233			38,952
Diluted shares outstanding of common stock		17,940			17,994			28,750			18,471		43,099			36,288			46,554
Cash flow data:
Net cash provided by operations	$	15,633		$	21,264		$	32,668		$	4,034	$	6,477		$	35,111			31,260
Net cash used in investing activities		15,941			9,004			41,170			1,247		4,891			44,814			77,419
Net cash provided by (used in) financing activities		8,550			(12,448	)		18,530			2,702		(3,056	)		12,772			121,439
Depreciation of property, plant & equipment		13,525			13,237			15,518			3,320		4,779			16,977			23,803
Amortization of intangibles		2,397			688			1,405			42		690			2,053			2,053
Other data:
EBITDA(d)	$	17,578		$	41,461		$	51,193		$	12,112	$	25,044		$	64,125		$	89,798
Capital expenditures		12,604			8,281			20,759			2,135		6,782			25,406			29,821

2

	Twelve months ended March 31, 2004
	(actual)	(pro forma)(f)
Selected ratios (unaudited):
Earnings to fixed charges(e)	3.7x	2.6x
EBITDA to interest expense	5.6x	3.7x
Total debt to EBITDA	3.3x	3.2x

(Dollars in thousands)	March 31, 2004
	(actual)		(pro forma)(f)
Balance sheet data (at end of period):
Cash	$	19,786	$	64,085
Working capital		306,995		457,188
Total assets		882,627		1,107,536
Total debt		209,209		288,948
Shareholders’ equity		465,760		564,317

(a) Operating income and net loss include downsizing costs totaling $18,000 ($11,700 net of taxes) of which $15,650 was charged to cost of goods sold and $2,350 was charged to selling, general and administrative expenses.

(b) Represents $4,667 of a make-whole premium and $2,078 for the write-off of capitalized debt costs.

(c) For the year ended December 31, 2003, the twelve months ended March 31, 2004 (actual) and the twelve months ended March 31, 2004 (pro forma), other income includes a $2,222 gain related to the sale of the composite utility and decorative light poles product lines.

3

(d) EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not a recognized term under GAAP and EBITDA does not represent net income or cash flows from operations, as these terms are defined under GAAP, and should not be considered an alternative to net income as an indicator of our operating performance or to cash flows as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow available for management or discretionary use, as such measure does not consider certain cash requirements such as capital expenditures, tax payments and debt service requirements. We present EBITDA because we believe that EBITDA provides useful information regarding our ability to service and/or incur indebtedness. EBITDA as presented herein is not necessarily comparable to similarly titled measures reported by other companies. EBITDA is calculated as follows:

	Year ended December 31,									Three months ended March 31,						Twelve months ended March 31,
(Dollars in thousands)	2001			2002			2003			2003			2004			2004			2004(f)
																(actual)			(pro forma)
EBITDA	$	17,578		$	41,461		$	51,193		$	12,112		$	25,044		$	64,125		$	89,798
Add (subtract):
Provision for income taxes		4,271			(6,500	)		(6,151	)		(74	)		(5,533	)		(11,610	)		(13,847	)
Interest expense(1)		(13,631	)		(8,966	)		(16,695	)		(8,539	)		(3,302	)		(11,458	)		(24,095	)
Depreciation		(13,525	)		(13,237	)		(15,518	)		(3,320	)		(4,779	)		(16,977	)		(23,803	)
Amortization of intangibles		(2,397	)		(688	)		(1,405	)		(42	)		(690	)		(2,053	)		(2,053	)
Net income (loss)		(7,704	)		12,070			11,424			137			10,740			22,027			26,000
Add (subtract):
Gain on sale of operating division		—			—			(2,222	)		—			—			(2,222	)		(2,222	)
Depreciation		13,525			13,237			15,518			3,320			4,779			16,977			23,803
Amortization of intangibles		2,397			688			1,405			42			690			2,053			2,053
Amortization of deferred debt costs		286			632			3,249			2,272			604			1,581			1,581
Deferred income taxes		(3,298	)		(2,135	)		2,980			(2,008	)		4,489			9,477			9,813
Long-term pension liabilities		(244	)		8,828			(1,380	)		—			—			(1,380	)		(1,380	)
Changes in operating assets		10,671			(12,056	)		1,694			271			(14,825	)		(13,402	)		(28,388	)
Net cash provided by operations	$	15,633		$	21,264		$	32,668		$	4,034		$	6,477		$	35,111		$	31,260

(1) Interest expense for the year ended December 31, 2003 and the three months ended March 31, 2003 includes $6,745 of debt extinguishment costs.

(e) Ratio of earnings to fixed charges is calculated by dividing earnings (earnings from operations before taxes, adjusted for fixed charges from operations), by fixed charges from operations for the periods indicated. Fixed charges from operations include (i) interest expense and amortization of debt discount or premium on all indebtedness, and (ii) a reasonable approximation of the interest factor deemed to be included in rental expense.

(f) The historical statement of operations, cash flow and other data for the twelve months ended March 31, 2004 has been prepared based upon K2’s historical audited statements of operations and cash flow for the twelve months ended December 31, 2003, and by adding thereto K2’s unaudited results of operations for the three months ended March 31, 2004 and subtracting therefrom K2’s unaudited results of operations for the three months ended March 31, 2003. The pro forma statement of operations, cash flow and other data for the twelve months ended March 31, 2004 has been prepared based upon K2’s unaudited pro forma condensed combined statement of operations for the fiscal year ended December 31, 2003 (See “Unaudited pro forma condensed combined financial data”), and by adding thereto K2’s unaudited results of operations for the three months ended March 31, 2004 and subtracting therefrom K2’s unaudited results of operations for the three months ended March 31, 2003 and the unaudited results of operations of Rawlings and Brass Eagle for the three months ended March 31, 2003 that were included in the pro forma condensed combined statement of operations for the fiscal year ended December 31, 2003. The unaudited pro forma condensed combined balance sheet as of March 31, 2004 has been prepared by giving effect to the proposed acquisitions of Völkl and Marker, this offering and the proposed common stock offering as though they had been consummated on that date.

4

EX-99.2

EXHIBIT 99.2

Unaudited pro forma condensed combined financial data

K2 has presented below unaudited pro forma condensed combined financial information that reflects the acquisitions of Rawlings and Brass Eagle and the proposed acquisitions of Völkl and Marker. K2’s acquisitions of Rawlings on March 26, 2003 and Brass Eagle on December 8, 2003 were, and its proposed acquisitions of Völkl and Marker will be, accounted for as purchases. The unaudited pro forma condensed combined financial information also gives effect to the proposed $150.0 million offering of notes and the proposed offering of approximately $75.0 million of K2 common stock. This information is intended to give you a better understanding of what the businesses of K2 combined with the recent acquisitions of Rawlings and Brass Eagle and the proposed acquisitions of Völkl and Marker might have looked like if each of the respective acquisitions and the offerings had occurred on January 1, 2003, the first day of the first period for which unaudited pro forma condensed combined financial information is presented.

During the pro forma periods presented, in addition to the completed acquisitions of Rawlings and Brass Eagle during 2003, and the proposed acquisitions of Völkl and Marker, K2 also completed the acquisitions of Worth, Winterquest, Fotoball, Worr, IPI and Ex Officio and signed a definitive agreement to acquire Marmot. The results of operations of these businesses are not reflected in the unaudited pro forma condensed combined financial statements because they are not required to be reflected under the SEC’s rules and regulations.

The unaudited pro forma financial information presented below is derived from the audited and unaudited combined consolidated financial statements of K2, Rawlings, Brass Eagle, Völkl and Marker.

To derive the unaudited historical condensed combined statements of operations and balance sheets of Völkl and Marker presented below from the audited financials of Völkl and Marker included herein, K2: (1) translated the audited financial statements for each of Völkl and Marker as of and for the twelve months ended March 31, 2004 and the unaudited financial statements as of and for the three months ended March 31, 2004 from their local currencies to U.S. dollars. The income statements were translated at the average Euro/U.S. dollar rate with respect to Völkl, and the average Swiss franc/U.S. dollar rate with respect to Marker for the periods presented and the balance sheets were translated at the spot rates of the Euro/U.S. dollar and Swiss franc/U.S. dollar, as applicable, as of March 31, 2004; and (2) then added the U.S. dollar translated Völkl and Marker unaudited condensed financial statements, consolidating unaudited adjustments to eliminate intercompany transactions between Völkl and Marker, and made certain unaudited adjustments to present the Völkl and Marker combined condensed financial statements in accordance with accounting principles generally accepted in the U.S.

K2’s fiscal year ends on December 31 and the fiscal years of Völkl and Marker end on March 31. In accordance with SEC rules, the pro forma information for K2’s fiscal year ended December 31, 2003 includes information of Völkl and Marker for their respective fiscal years ended March 31, 2004. Following the completion of the acquisitions, K2 intends to change the fiscal year end of Völkl and Marker to December 31.

These unaudited pro forma condensed combined financial statements are presented based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed combined statements of operations do not purport to represent what our results of operations actually would have been if the events described above had occurred as of the dates indicated or what such results would be for any future periods. Pro forma adjustments to the unaudited pro forma condensed combined financial statements do not reflect potential cost

1

saving opportunities, including the elimination of duplicative selling, general and administrative expenses. The unaudited pro forma condensed combined financial statements are based upon assumptions and adjustments that we believe are reasonable. Assumptions regarding the value of K2 common stock and the resulting number of shares of K2 common stock to be issued in connection with the acquisitions of Völkl and Marker and in connection with the common stock offering are based on the last reported sale price of K2 common stock on the New York Stock Exchange on June 10, 2004 and the reported value of the Euro as compared to the U.S. dollar as reported in the Wall Street Journal as of June 10, 2004, and may be materially different from their values at the time the acquisitions or the common stock offering are completed. The unaudited pro forma condensed combined financial statements, and the accompanying notes, should be read in conjunction with the historical financial statements and related notes of K2, Völkl and Marker.

2

Unaudited pro forma condensed combined balance sheet

as of March 31, 2004^(a)

(Dollars in thousands)	K2			Völkl			Marker			Völkl/Marker adjustments			Völkl/Marker combined			Pro forma adjustments			Pro forma combined
Assets
Current assets:
Cash and cash equivalents	$	19,786		$	185		$	1,250		$	—		$	1,435		$	78,419	(3)	$	64,085	(15)
																	(35,555	)(3)
Accounts receivable, net		244,103			24,990			13,527			—			38,517			—			282,620
Inventories, net		215,774			30,558			12,432			(192	)(1)		42,798			3,424	(4)		261,996
Deferred taxes		36,971			—			1,538			—			1,538			—			38,509
Prepaid expenses and other current assets		16,393			1,114			1,518			(124	)(2)		2,508			—			18,901
Total current assets		533,027			56,487			30,265			(316	)		86,796			46,288			666,111
Property, plant and equipment, net		94,477			7,555			6,067			5,405	(2)		19,027			—			113,504
Intangibles, including goodwill, net		239,965			385			7,344			683	(2)		8,412			(8,412	)(5)		297,970
																	58,005	(5)
Other assets		15,158			11,582			106			(3,720	)(2)		7,968			6,825	(6)		29,951
Total assets	$	882,627		$	76,369		$	43,782		$	2,052		$	122,203		$	102,706		$	1,107,536
Liabilities and shareholders' equity
Current liabilities:
Bank loans	$	5,554		$	—		$	3,883		$	—		$	3,883		$	—		$	9,437
Accounts payable		56,784			5,510			7,937			—			13,447			—			70,231
Accrued liabilities		101,065			22,196			5,847			147	(2)		28,190						129,255
Current portion of long-term debt		62,629			—			—			—			—			(62,629	)(3)		—
Total current liabilities		226,032			27,706			17,667			147			45,520			(62,629	)		208,923
Long-term debt		42,842			36,132			28,967			1,685	(2)		66,784			107,256	(3)		181,327
																	(35,555	)(3)
Long-term pension liabilities		11,173			—			—			—			—			—			11,173
Deferred taxes		38,636			4,976			—			—			4,976			—			43,612
Convertible subordinated debentures		98,184			—			—			—			—			—			98,184
Shareholders' equity:
Common stock		35,673			789			3,902			—			4,691			1,825	(5)		42,387
																	(4,691	)(5)
																	4,889	(7)
Additional paid-in capital		332,511			—			—			—			—			26,170	(5)		424,354
																	70,111	(7)
																	(4,438	)(8)
Retained earnings		118,357			6,960			(6,340	)		(192	)(1)		840			(840	)(5)		118,357
											398	(2)
											14	(2)
Employee stock ownership plan and stock option loans		(1,160	)		—			—			—			—			—			(1,160	)
Treasury shares		(9,107	)		—			—			—			—			—			(9,107	)
Accumulated other comprehensive loss		(10,514	)		(194	)		(414	)		—			(608	)		608	(5)		(10,514	)
Total shareholders' equity		465,760			7,555			(2,852	)		220			4,923			93,634			564,317
Total liabilities and shareholders' equity	$	882,627		$	76,369		$	43,782		$	2,052		$	122,203		$	102,706		$	1,107,536

(a) The unaudited pro forma condensed combined balance sheet as of March 31, 2004, has been prepared giving effect to the proposed acquisitions of Völkl and Marker, this offering and the common stock offering as though they had been consummated on that date.

See accompanying notes to unaudited pro forma condensed combined financial statements

3

Unaudited pro forma condensed combined

statement of operations

For the year ended December 31, 2003^(a)

	K2			Rawlings		Brass Eagle						K2			Völkl		Marker						Völkl/Marker Combined					K2
(In thousands, except per share data)	Twelve months ended December 31, 2003			Three months ended March 31, 2003		Eleven months ended November 30, 2003			Pro forma adjustments			Pro forma combined			Twelve months ended March 31, 2004		Twelve months ended March 31, 2004			Adjustments			Twelve months ended March 31, 2004		Pro forma adjustments(b)			Pro forma combined twelve months ended December 31, 2003
Net sales	$	718,539		$	61,013	$	93,124		$	—		$	872,676		$	123,561	$	74,020		$	(25,677	)(1)	$	171,904	$	(3,264	)(11)	$	1,041,316
Cost of products sold		498,620			42,741		61,837			—			603,198			73,209		49,199			(25,486	)(1)		96,922		(3,264	)(11)		696,856
Gross profit		219,919			18,272		31,287			—			269,478			50,352		24,821			(191	)		74,982		—			344,460
Selling, general and administrative expenses		187,867			10,724		23,006			538	(9)		222,135			42,499		21,921			124	(2)		64,259		—			286,394
										—											(683	)(2)				—
										—											398	(2)				—
Operating income		32,052			7,548		8,281			(538	)		47,343			7,853		2,900			(30	)		10,723		—			58,066
Interest expense		9,950			686		899			—			11,535			2,924		2,710			147	(2)		5,781		5,595	(12)		22,911
Debt extinguishment costs		6,745			—		—			—			6,745			—		—			—			—		—			6,745
Other (income) expense, net		(2,218	)		—		(18	)		—			(2,236	)		77		—			—			77		—			(2,159	)
Income before provision for income taxes		17,575			6,862		7,400			(538	)		31,299			4,852		190			(177	)		4,865		(5,595	)		30,569
Provision (benefit) for income taxes		6,151			2,502		2,810			(189	)(10)		11,274			1,498		216			—			1,714		(2,288	)(13)		10,700
Net income (loss)	$	11,424		$	4,360	$	4,590		$	(349	)	$	20,025		$	3,354	$	(26	)	$	(177	)	$	3,151	$	(3,307	)	$	19,869
Basic earnings per share	$	0.46										$	0.63															$	0.51
Diluted earnings per share(c)	$	0.44										$	0.59															$	0.50
Basic shares outstanding		24,958								6,979	(14)		31,937													6,714	(14)		38,651
Diluted shares outstanding		28,750								8,939	(14)		37,689													6,714	(14)		44,403

(a) The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2003 combines the audited statement of income for K2 for the year ended December 31, 2003, the Rawlings unaudited statement of income for the three month period ended March 31, 2003, the Brass Eagle unaudited statement of income for the eleven months ended November 30, 2003 and the unaudited combined statement of income of Völkl and Marker for the year ended March 31, 2004, as if the acquisitions had occurred on January 1, 2003. The unaudited statement of income for Rawlings for the three month period ended March 31, 2003 was included in this unaudited pro forma condensed combined statement of operations for the year ended December 31, 2003 because K2’s acquisition of Rawlings did not occur until March 26, 2003. The unaudited statement of income for Brass Eagle for the eleven month period ended November 30, 2003 was included in this unaudited pro forma condensed combined statement of operations for the year ended December 31, 2003 because K2’s acquisition of Brass Eagle did not occur until December 8, 2003.

(b) Pro forma adjustments to the financial statements do not reflect potential cost saving opportunities, including the elimination of duplicative selling, general and administrative expenses.

(c) The table below outlines the calculation of diluted earnings per share for year ended December 31, 2003.

	Year ended December 31, 2003
(In thousands, except per share data)	As reported		Pro forma combined		K2 pro forma combined
Calculation of diluted earnings per share:
Net income	$	11,424	$	20,025	$	19,869
Add: interest component on assumed conversion of subordinated debentures, net of taxes		1,354		2,385		2,385
Net income, adjusted	$	12,778	$	22,410	$	22,254
Number of diluted shares		28,750		37,689		44,403
Diluted earnings per share	$	0.44	$	0.59	$	0.50

See accompanying notes to unaudited pro forma condensed combined financial statements

4

Unaudited pro forma condensed combined

statement of operations

For the three months ended March 31, 2004^(a)

(In thousands, except per share data)	K2			Völkl			Marker			Adjustments			Völkl/Marker combined			Pro forma adjustments(b)			K2 Pro forma combined
Net sales	$	277,364		$	20,966		$	11,033		$	(3,936	)(1)	$	28,063		$	(426	)(11)	$	305,001
Cost of products sold		190,731			15,262			8,943			(3,943	)(1)		20,262			(426	)(11)		210,567
Gross profit		86,633			5,704			2,090			7			7,801			—			94,434
Selling, general and administrative expenses		67,111			5,976			5,803			130 (180 105	(2) )(2) (2)		11,834			—			78,945
Operating income (loss)		19,522			(272	)		(3,713	)		(48	)		(4,033	)		—			15,489
Interest expense		3,302			670			901			39	(2)		1,610			1,399	(12)		6,311
Other income, net		(53	)		(113	)		—			—			(113	)		—			(166	)
Income (loss) before provision for income taxes		16,273			(829	)		(4,614	)		(87	)		(5,530	)		(1,399	)		9,344
Provision (benefit) for income taxes		5,533			395			54			—			449			(2,805	)(13)		3,177
Net income (loss)	$	10,740		$	(1,224	)	$	(4,668	)	$	(87	)	$	(5,979	)	$	1,406		$	6,167
Basic earnings per share	$	0.31			—			—			—			—			—		$	0.15
Diluted earnings per share(c)	$	0.27			—			—			—			—			—		$	0.14
Basic shares outstanding		34,353															6,714	(14)		41,067
Diluted shares outstanding		43,099															6,714	(14)		49,813

(a) The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2004 combines the unaudited statement of income for K2, Völkl and Marker for such three month period as if the acquisitions of Völkl and Marker occurred on January 1, 2004.

(b) Pro forma adjustments to the financial statements do not reflect potential cost saving opportunities, including any potential product cost savings and the elimination of duplicative selling, general and administrative expenses.

(c) The table below outlines the calculation of diluted earnings per share for three months ended March 31, 2004.

	Three months ended March 31, 2004
(In thousands, except per share data)	As reported		K2 pro forma combined
Calculation of diluted earnings per share:
Net income	$	10,740	$	6,167
Add: interest component on assumed conversion of subordinated debentures, net of taxes		904		904
Net income, adjusted	$	11,644	$	7,071
Number of diluted shares		43,099		49,813
Diluted earnings per share	$	0.27	$	0.14

See accompanying notes to unaudited pro forma condensed combined financial statements

5

Notes to the pro forma condensed combined

financial information (unaudited)

Basis of presentation

The pro forma condensed combined financial statements included herein have been prepared by K2, without audit, under the rules and regulations of the Securities and Exchange Commission. Some information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted under these rules and regulations. However, K2 believes that the disclosures are adequate to make the information presented not misleading.

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

Pro forma income per share

The pro forma combined net income per share is based on the weighted average number of shares of common stock and the dilutive impact of stock options outstanding of K2 with additional shares of K2 common stock presumed issued at the beginning of the period presented based upon the number of shares of K2 common stock issued in exchange for shares of Rawlings and Brass Eagle upon completion of the mergers on March 26, 2003 and December 8, 2003, respectively, additional shares of K2 common stock based upon the assumed shares of K2 common stock to be issued in connection with the acquisitions of Völkl and Marker and the additional shares of K2 common stock to be issued in connection with the proposed offering of K2 common stock.

Transaction related expenses

K2 estimates that it will incur transaction-related expenses, consisting primarily of costs for underwriters, investment banker fees, bank amendment fees, attorneys, accountants, financial printing and other related charges, of approximately $13.2 million in connection with the acquisitions of Völkl and Marker, the issuance of the notes, the common stock offering and the amendment and restatement of the Facility. This estimate is preliminary and is therefore subject to change. The costs incurred in connection with the acquisitions of Völkl and Marker are added to the purchase price of the acquisition. The costs incurred in connection with the issuance of the notes will be capitalized to other assets and amortized over the term of the notes and the amended and restated Facility. The costs incurred in connection with K2’s common stock offering will be shown as a reduction of shareholders’ equity.

6

The following sets forth the adjustments contained in the unaudited pro forma condensed combined financial information:

(1) Adjustments to reflect the elimination of intercompany sales, profits, accounts receivable, inventories, accounts payable and the results from transactions between Völkl and Marker as of and for the periods presented.

(2) Adjusting entries to convert the combined unaudited Völkl and Marker U.S. dollar translated financial statements into a presentation made in accordance with accounting principles generally accepted in the U.S. Adjustments consist of the following:

	Increase (decrease) to income before provision for income taxes
(Dollars in thousands)	Year ended December 31, 2003			Three months ended March 31, 2004
Prepaid advertising(a)	$	(124	)	$	(130	)
Goodwill amortization(b)		683			180
Loss on interest rate swaps(c)		(147	)		(39	)
Gain on sale of assets(d)		(398	)		(105	)
Total	$	14		$	(94	)

(a) Represents payments for ads and tradeshows that cannot be capitalized under U.S. GAAP.

(b) Goodwill is not amortized under U.S. GAAP.

(c) Loss recognized as interest expenses under U.S. GAAP.

(d) Represents a gain that would have been recognized under U.S. GAAP prior to January 1, 2003. Accordingly, the adjustment reflects an increase to retained earnings for prior periods and a decrease in current period income.

In addition, the following additional adjustment was recorded to the unaudited pro forma condensed combined balance sheet as of March 31, 2004 to capitalize a manufacturing facility, accrue related loan payable and eliminate receivable due from related entity as follows:

(Dollars in thousands)
Capitalize manufacturing facility	$	4,458
Eliminate receivable from related entity		(3,720	)
Accrue related loan payable		1,685

(3) Reflects sources and uses of cash in connection with the transactions as follows:

(Dollars in thousands)	Cash			Current portion of long- term Debt			Long- term debt			Shareholders’ equity
Proceeds of notes offering	$	150,000		$	—		$	150,000		$	—
Proceeds of K2’s common stock offering		75,000			—			—			75,000
Cash outlay for Völkl and Marker acquisitions		(27,995	)		—			—			—
Repayment of K2 term loan		(13,333	)		(6,667	)		(6,666	)		—
Repayment of K2 revolving credit facility		(92,040	)		(55,962	)		(36,078	)		—
Cash paid for costs and fees in connection with the transactions		(13,213	)		—			—			—
	$	78,419		$	(62,629	)	$	107,256		$	75,000

7

$35,555 represents the purchase of stockholder loans payable by Völkl and Marker to certain stockholders, which will be acquired by K2 in connection with the acquisitions of Völkl and Marker and which will be eliminated in consolidation on a going forward basis.

(4) A preliminary pro forma adjustment was made to adjust Völkl and Marker’s assets and liabilities to fair market value at March 31, 2004. The adjustment consisted of increasing inventories by $3,424 to reflect the inventory at its fair market value, net of costs of disposal and a reasonable profit for the remaining selling effort.

The increase to inventory values will result in cost of goods sold being higher when the related inventories are sold in future periods after the acquisitions are completed. Such charge is not reflected in the unaudited condensed combined statements of operations.

(5) Under the purchase method of accounting, assets and liabilities acquired have been adjusted to their estimated fair market values, the historical Völkl and Marker shareholder equity accounts of $4,691, $840 and $608 and intangible assets of $8,412 have been eliminated and the issuance of 1,825 shares K2 Common stock in connection with the acquisitions of Völkl and Marker have been reflected. The allocation of the aggregate purchase price for the equity of $57,940 below is preliminary and does not include the purchase price of $35,555 to be paid by K2 for the stockholder loans payable by Völkl and Marker to certain stockholders. The preliminary allocation assumes that the excess purchase price will be allocated entirely to goodwill, and is thus not amortized, however the final allocation could include identifiable intangible assets with definite and indefinite lives separate from goodwill. Should there be an allocation to assets with definite lives, those assets would be amortized, resulting in additional amortization expense. The final allocation will be based on estimates and appraisals that will be completed after the completion of the acquisitions and based on managements’ final evaluation of such assets and liabilities. The final allocation of purchase cost and the resulting effect on net income may differ significantly from the pro forma amounts included herein.

(Dollars in thousands)	As of March 31, 2004
Assumed value of K2 common stock to be issued	$	27,995
Cash outlay by K2 for acquisitions		27,995
Acquisition related expenses		1,950
Aggregate purchase price		57,940
Add: Estimated fair value of excess liabilities assumed over net assets acquired		65
Excess of cost over preliminary estimate of fair value of net tangible assets acquired	$	58,005

The purchase price assumes a $15.34 share price for K2 common stock at the time of the acquisition and assumes one Euro = 1.2112 U.S. dollars. The stock price assumption is based on the last reported sale price of K2 common stock on the New York Stock Exchange on June 10, 2004. The assumption of the Euro/US$ Equivalent is based on the quoted rate in the Wall Street Journal as of June 10, 2004. The actual value of the stock and the US$/Euro equivalent may be materially different at the time the acquisitions are completed.

8

The calculation of the estimated fair value of excess liabilities assumed over assets acquired of Völkl and Marker is as follows:

(Dollars in thousands)	As of March 31, 2004
Völkl and Marker combined total assets	$	120,518
Add: Adjustment to increase inventories to fair value		3,424
Less: Völkl and Marker combined intangibles		(8,412	)
Less: Völkl and Marker combined total liabilities		(115,595	)
Estimated fair value of excess liabilities assumed over assets acquired	$	(65	)

The adjustment to shareholders’ equity is based on the issuance of shares in connection with the acquisitions of Völkl and Marker.

(In thousands, except for per share data)
Shares of K2 common stock to be issued in the acquisitions of Völkl and Marker		1,825
Multiplied by: Assumed stock price	$	15.34
Assumed value of K2 stock to be issued	$	27,995

(6) Pro forma adjustment reflects costs and fees capitalized in connection with the issuance of the notes and K2’s amendment and restatement of the Facility.

(7) Pro forma adjustment reflects shares issued in connection with K2’s common stock offering for $75,000 at an assumed $15.34 share price for K2 common stock at the time of the offering. The stock price assumption is based on the last reported sale price of K2 common stock on the New York Stock Exchange on June 10, 2004.

(8) Pro forma adjustment reflects costs and fees incurred in connection with K2’s common stock offering.

(9) Pro forma adjustment reflects K2’s additional amortization expense based on the identified intangible assets acquired with finite lives resulting from the merger with Rawlings on March 26, 2003 and Brass Eagle on December 8, 2003.

(10) Pro forma adjustment reflects the decrease in income tax expense as the result of the pro forma adjustment to reflect the additional amortization expense resulting from the mergers with Rawlings and Brass Eagle above.

(11) Pro forma adjustment reflects elimination of net sales and cost of products sold for sales of products made by Völkl and Marker to K2 and its subsidiaries during the periods presented.

9

(12) Pro forma adjustment reflects the increase in interest expense for the periods presented resulting from the issuance of the $150,000 in notes at an assumed interest rate of 8.00%, which have a higher interest rate as compared to K2 and Völkl and Marker’s weighted average interest rate on its borrowings during the periods presented. The increase was calculated by multiplying the difference between the applicable, weighted average interest rates on the notes and K2 and Völkl and Marker’s borrowings during the periods presented.

The calculations of the pro forma adjustments are as follows:

						Increase (Decrease) to Interest Expense
(In thousands, except interest rates)	Average Outstanding Balance			Average Interest Rate		For the twelve months ended December 31, 2003			For the three months ended March 31, 2004
New Debt
Notes Offering	$	150,000		8.00	%	$	12,000		$	3,000
Repayment of Debt
K2’s revolving credit facility		(92,040	)	5.00	%		(4,602	)		(1,150	)
Völkl and Marker long-term debt		(36,054	)	5.00	%		(1,803	)		(451	)
Pro forma adjustment, net						$	5,595		$	1,399

(13) Pro forma adjustment to reflect the pro forma income tax expense for the combined companies at 35% for the twelve months ended December 31, 2003 and 34% for the three months ended March 31, 2004.

(14) Pro forma adjustments were made to the number of basic and diluted shares outstanding based on the number of shares of K2 common stock and stock options (under the treasury stock method) that were issued in connection with the merger with Rawlings on March 26, 2003 and Brass Eagle on December 8, 2003 and based on the preliminary number of shares of K2 common stock that are expected to be issued in connection with the acquisitions of Völkl and Marker and the proposed offering of K2 common stock.

10

(In thousands)	Year ended December 31, 2003		Three months ended March 31, 2004
Basic:
Weighted average effect of additional shares of K2 common stock issued for Rawlings shares of common stock at time of merger	2,709	(a)	—
Weighted average effect of additional shares of K2 common stock issued for Brass Eagle shares of common stock at time of merger	4,270	(b)	—
Pro forma adjustment	6,979		—
Shares of K2 common stock to be issued for Völkl and Marker shares	1,825		1,825
Shares of K2 common stock to be issued in connection with K2’s common stock offering	4,889		4,889
Pro forma adjustment	6,714		6,714
Diluted:
Weighted average effect of additional shares of K2 common stock issued for Rawlings shares of common stock at time of merger	2,709	(a)	—
Weighted average effect of additional shares of K2 common stock issued for Brass Eagle shares of common stock at time of merger	4,270	(b)	—
Additional diluted shares assuming conversion of K2’s convertible subordinated debentures	1,835	(c)	—
Options to purchase K2 common stock under the treasury stock method	125	(d)	—
Pro forma adjustment	8,939		—
Shares of K2 common stock to be issued for Völkl and Marker shares	1,825		1,825
Shares of K2 common stock to be issued in connection with K2’s common stock offering	4,889		4,889
Pro forma adjustment	6,714		6,714

(a) Amount represents the additional impact on weighted average basic and diluted shares for the period resulting from the issuance of approximately 8.8 million shares of K2 common stock in exchange for Rawlings shares on March 26, 2003.

(b) Amount represents the additional impact on weighted average basic and diluted shares for the period resulting from the issuance of approximately 4.5 million shares of K2 common stock in exchange for Brass Eagle shares on December 8, 2003.

(c) Amount represents additional shares from the assumed conversion of K2’s 7.25% convertible subordinated debentures.

(d) Amount represents the impact on weighted average diluted shares for the period, under the treasury stock method, resulting from the issuance of K2 stock options issued in connection with the mergers with Rawlings on March 26, 2003 and Brass Eagle on December 8, 2003.

(15) The pro forma cash and cash equivalents amount does not include $52,700 that we expect to spend in connection with the acquisition of Marmot, including repayment of debt and transaction related expenses.

11

EX-99.3

EXHIBIT 99.3

Report of the Group Auditor to the Annual Meeting of Shareholders

of VÖLKL SPORTS HOLDING AG, BAAR

As basis of our audit, we examined the accounting records and the consolidated annual accounts (balance sheet, profit and loss statement, cash flow statement and notes to the financial statements) of Völkl Sports Holding AG for the financial year ended 03/31/2004.

The Board of Directors is responsible for preparing the consolidated annual accounts, while our task is to examine and express and opinion on these. We confirm our fulfilment of the legal requirements regarding professional qualification and independence in this regard.

Our audit was conducted according to the principles of the Swiss accounting profession, by which an audit is to be so planned and carried out that significant false statements in the consolidated annual report can be detected with reasonable certainty. We examined the items and statements contained in the consolidated annual report on the basis of analytical testing methods and collecting of representative samples. Furthermore, we have evaluated the significant accounting principles used, and consolidation and valuation decisions made, as well as the presentation of the entire financial statements as a whole. We believe that our audit provides a sufficient basis for our opinion.

In our opinion, the consolidated financial statements present an accurate picture of the asset, financial and earning situation in accordance with professional accounting standards (Swiss GAAP FER) and Swiss legal requirements.

We recommend the approval of these consolidated annual statements demonstrating a group profit of EUR 2,849,000.

Naters, June 09, 2004

TREUHAND UND REVISIONS AG
Accountant in Charge
Albert Bass	Mischa Imboden
dipl. Buchhalter	lic. oec. HSG
& Controller	dipl. Wirtschaftsprüfer

Appendix

- Balance Sheet

- Profit and Loss Statement

- Cash Flow Statement

- Notes to the Financial Statements

1

Völkl Sports Holding AG

Consolidated balance sheet as of March 31, 2004

			March 31, 2004		March 31, 2003
		Notes	T-EUR	T-EUR	T-EUR	T-EUR
Assets
A.	Fixed assets
I	Intangible assets	3.1
	Intangible assets		318		270
	Formation and start-up costs		—	318	—	270
II	Tangible assets	3.2
	Real estate, buildings		1,092		1,092
	Technical equipment		2,452		2,983
	Other equipment		2,500		2,203
	Downpayment & plants under constr.		186	6,230	988	7,266
III	Financial assets
	Other lendings	3.4	3,068		3,068
	Reinsurance claims	3.5	919	3,987	1,157	4,225
IV	Shareholdings	3.3
	DNR Sportsystem AG		—		—
	BIL Grundstücksverw. GmbH+Co. KG		24		24
	Völkl Sport America Corp.		1,901	1,925	2,065	2,089
Total fixed assets				12,460		13,850
B.	Current assets
I	Stocks on hand	3.6		25,198		24,969
II	Receivables
	Goods and services	3.7	18,424		17,601
	Affiliated companies	3.8	2,183		2,754
	Other assets	3.9	2,250	22,857	2,058	22,413
III	Liquid assets			153		132
Total current assets				48,208		47,514
C.	Deferred items	3.10		2,306		1,975
Total assets				62,974		63,339

2

Völkl Sports Holding AG

Consolidated balance sheet as of March 31, 2004

			March 31, 2004		March 31, 2003
		Notes	T-EUR	T-EUR	T-EUR	T-EUR
Liabilities
A.	Equity	3.11
	Group share			6,229		3,765
Total Equity				6,229		3,765
B.	Silent partnership	3.12		205		256
C.	Special reserves with equity portion	3.13		1,776		2,114
D.	Provisions
	Provisions for pensions	3.14		3,753		3,809
	Tax provisions	3.15		4,104		3,878
	Other provisions	3.16		4,980		5,236
Total provisions				12,837		12,923
E.	Debts	3.17
	Banks	3.18	14,674		12,726
	Goods and services		4,398		7,438
	Affiliated companies	3.19	145		199
	Other liabilities	3.20	7,589	26,806	8,176	28,539
	Shareholder loan	3.21
	—  without letter of subordination		7,264		7,895
	—  with letter of subordination		7,857	15,121	7,847	15,742
Total debts				41,927		44,281
Total liabilities				62,974		63,339

3

Völkl Sports Holding AG

Consolidated profit and loss account 2003/2004

		2003/2004	2002/2003
	Notes	T-EUR	T-EUR
Sales proceeds	4.1	104,965	94,435
Increase/reduction in inventories
of finished and unfinished products		1,428	153
Total output		106,393	94,588
Other activated company-manufactured items		324	365
Other operating income	4.2	3,871	3,979
Material expenditure		-51,226	-46,067
Raw materials and supplies		-51,158	-45,972
Expenditure for services received		-68	-95
Material expenditures as %age of total output		-48.1%	-48.7%
Gross profit		59,362	52,865
Gross profit as a %age of total output		55.8%	55.9%
Personnel expenditure		-23,864	-22,708
Payroll		-19,380	-18,472
Social security contributions		-4,484	-4,236
Personnel expenditure as a %age of total output		-22.4%	-24.0%
Depreciation	4.3	-4,390	-3,803
On fixed assets		-2,635	-2,806
On current assets		-1,755	-997
Other operating expenditure	4.4	-24,437	-20,940
Operational result		6,671	5,414
Operating results as a %age of total output		6.3%	5.7%
Result of companies not fully consolidated		251	606
Other interest and similar income		58	55
of which from affiliated companies		49	43
Interest and similar expenditure		-2,542	-2,534
of which to affiliated companies		—	-288
Profit shares of silent partners		-20	-24
Result of customary business activities		4,418	3,517
Extraordinary income	4.5	25	684
Extraordinary expenditure	4.6	-321	-382
Extraordinary result		-296	302
Taxes on income and profit	4.7	-1,063	-728
Other taxes		-210	-57
Surplus/deficit for the year		2,849	3,034

4

Consolidated cash-flow statement

	2003 / 2004
	Source of funds	Application of funds
	in thousands of EURO
Sales turnover (total output)	106,393
Material expenditure		-51,226
Change in receivables from goods and services		-823
Change in payables from goods and services		-3,040
Change in stocks on hand (excl. Depreciation)		-1,984
Activated company-manufactured items	324
Other operating income	3,871
Personnel expenditure		-23,864
Other operating expenditure		-24,437
Interest income	58
Interest expense		-2,542
Extraordinary result		-296
Taxes		-1,273
Changes in deferred charges to expense		-331
Changes in other assets		-192
Changes in other liabilities		-587
	110,646	-110,595
Cash-flow from operations		51
Investment activity
Investment in fixed assets		-2,951
Disinvestment	1,542
Exch. rate differences in fixed assets		0
	1,542	-2,951
Cash-flow from investment activity		-1,409
Financing activity
Change in claims against affiliated companies	571
Change in liabilities to affiliated companies		-54
Change in shareholder's loan		-621
Silent partner's share of profit		-20
Result of companies not fully consolidated	251
Profit distribution by Völkl Sports Holding AG		-191
Equity cons. Völkl Sports America	164
Exch. rate difference in consolidation of equity		-194
Change in silent partnership		-51
Change in special reserve with equity portion		-338
Reduction of provisions		-86
	986	-1,555
Cash-flow out of financial activity		-569
Total source of funds/application of funds	113,174	-115,101
DIMINUTION OF FINANCIAL ASSETS		-1,927
Change in financial assets	2003 / 2004	2002 / 2003
Liquid funds	153	132
Banks	-14,674	-12,726
Book value liquid funds	-14,521	-12,594
DIMINUTIONS OF FINANCIAL ASSETS		-1,927

5

Völkl Sports Holding AG

Notes to the Consolidated Financial Statements as of March 31, 2004

1. General

Reference can be made to the “Völkl Group Consolidated Financial Statements as of March 31, 2004” for the evaluation of the earning and asset situation of the Völkl Group companies. The presentation of the annual accounts is in accordance with German accounting standards. The classification in ordinary and extraordinary items was adopted from the audited financial statements without any changes needing to have been made. The individual financial statements were issued an unqualified audit opinion, with the exception of the note on the consolidation of BIL KG in accordance with 2.4.

2. Consolidation Principles

2.1 Consolidation Time Period

The time period for consolidation is the financial year commencing on April 1 and ending on March 31 of the subsequent year. The financial statements of all companies are in each case prepared as of March 31, with the following exceptions:

—  Völkl Sport America Corp.	Calendar year
—  Zero Degree Manufacturing AG	Calendar year

2.2 Accounting and Valuation

The individual financial statements included in consolidation were prepared and evaluated in accordance with uniform accounting standards. The financial statements of Swiss companies prepared in accordance with the laws of Switzerland were adjusted for undisclosed reserves in order that the financial statements included in consolidation would present a picture of the asset, financial and earnings situation corresponding to the actual situation of the companies.

2.3 Currency Conversion

For the Swiss companies, currency translation was performed for items contained in the balance sheets using the rates prevailing at the closing dates of March 31, 2004 and 2003, and for items contained in the profit and loss accounts using the average of the annual rates for internal accounting purposes (recorded rate of exchange). Differences arising from the use of different conversion rates for balance and profit and loss accounts were credited or offset against the balance contained in profit reserves. Since financial year 2000/01, the annual statements of German companies as well as the group have been prepared using EURO. The rates of exchange used for the conversion of Swiss financial statements are:

100 SFr. = EUR	Balance Statement Rate	Profit and Loss Account Rate
Annual Accounts 2002/03	68.02	68.52
Annual Accounts 2003/04	63.81	68.01

6

2.4 Consolidated entities

The following companies were included in the group’s consolidated annual financial statements:

	Proportion of Group’s Equity Participation
	3/31/2004	3/31/2003
Full consolidation
Völkl Sports Holding AG	100%	100%
(until 4/1/1999 Benviro AG)
Zero Degree Manufacturing AG	100%	100%
Rad Air Snowboards AG	100%	100%
Völkl Groupp
—    Völkl Sports GmbH & Co. KG, Straubing	100%	100%
(until 1/20/2000 Franz Völkl GmbH & Co. Ski and Tennis Sportartikelfabrik KG (sporting goods manufacturer)
—    Völkl GmbH, Straubing	100%	100%
(until 1/20/2000 Franz Völkl GmbH)
—    Völkl Snowboard Verwaltungs-GmbH, Straubing	100%	100%
—    Völkl-Vertriebs GmbH, Straubing	100%	100%
—    Völkl (International) AG, Baar	100%	100%
—    Marker Völkl Austria GmbH, Andorf	100%	100%
Proportional Consolidation
Völkl Tennis GmbH, Baar	50 %	50 %
Inclusion of the financial statement has been made on a proportional basis at 50%.
Equity Accounting
Völkl Sport America Corp. USA	40 %	40 %
The difference between equity and purchase values is considered goodwill and reflected under participating interests.
Participating interests accounted by the purchase value
BIL Grundstückverwaltungs-GmbH & Co WEDA KG	95 %	95 %

Immobiliengesellschaft BIL Grundstücksverwaltungs-GmbH & Co WEDA KG (referred to nore succinctly as BIL KG), in which Völkl KG holds 95% of investments, was not included in consolidation, since Völkl KG does not hold a voting majority in this company. The auditors, Fasselt & Partner, inserted a qualification in their report on the consolidated group financial statement of Völkl KG regarding this decision.

Völkl of America Ltd., which is held by Völkl KG, was not included in the financial statements as a consequence of its inactivity. This company is not to be confused with the company, Sport America Corp., actively engaged in commercial operations.

2.5 Affiliated Companies

Affiliated companies are those companies which are included in the consolidated group accounting of Völkl Sports Holding AG.

2.6 Capital Consolidation

Participating interests within the consolidated companies were eliminated according to 2.4.

7

2.7 Consolidation Adjustments

Internal turnover, expenses and income as well as trade debtors among the consolidated companies as well as interim profits arising due to transacting internally in goods and services were eliminated.

3. Notes to the Balance Sheet as of 3/31/2004

3.1 Intangible Assets

Mio. EUR	03/31/2004	03/31/2003
Supersport brand name trademark	0.1	0,1
Software	0.2	0,2
Total	0.3	0,3

In financial year 2002 / 03, Völkl International AG purchased the “Supersport” brand name trademark, an acquisition valued at an amount of EUR 50,000.00. This brand name will be written off over a period of 5 years.

3.2 Tangible Assets

Tangible assets are principally valued according to purchase value, i.e. at the expense of purchase or production less any necessary depreciation.

The changes are shown in the Asset Movement Table contained in the Appendix.

3.3 Participating Interests

This item contains the following not fully consolidated participating interests:

Mio. EUR	03/31/2004	03/31/2003
BIL Grundstückverwaltungs-GmbH & Co WEDA KG (TEUR 24)	0.0	0.0
Völkl Sport America Corp, USA —    Proportional capital and reserves for 40 %	1.9	2.1
Total	1.9	2.1

3.4 Other Lendings

These items, as in the prior year, contain a non-interest bearing loan in the amount of EUR 3,067,751.29 granted by Völkl KG to BIL KG This loan was granted in connection with the realisation of the new Straubing-Sand building.

Interest payments were dispensed with based on the agreed lower rent payments offered.

3.5 Reinsurance claims

The item relates to the capitalised value of an insurance policy covering the company’s pensions scheme costs purchased from the Berlinische Lebensversicherung AG to cover the pension commitments to employees of Völkl Sports GmbH & Co. KG and Völkl Vertriebs GmbH.

3.6 Stocks on hand

Inventories are valued at either the average purchase or production cost or the lower of cost or market taking into account market prices and inventory risks.

8

Mio. EUR	03/31/2004	03/31/2003
Raw materials and consumable	3.8	3.8
Work in progress	2.3	2.3
Finished goods and goods for resale	19.1	18.9
Total	25.2	25.0

Unrealised interim profits on inventories are eliminated.

Völkl KG, Völkl Vertriebs GmbH and Völkl International AG have surrendered their entire warehouse as collateral for accounts payable to banks in accordance with the collateral pooling agreement entered into with the banking consortium consisting of Deutsche Bank AG, Bayerische Hypo- und Vereinsbank AG and Commerzbank AG.

3.7 Trade Debtors

Mio. EUR	03/31/2004	03/31/2003
Trade debtors
—    gross	19.4	18.5
—    adjustments	-1.0	-0.9
Total	18.4	17.6

The amounts owed are recorded at nominal values less all necessary adjustments in value.

In accordance with the foregoing collateral pooling agreement, Völkl KG and Völkl Vertriebs GmbH have surrendered all present and future amounts owed to them from trade debtors to the heretofore mentioned German banking consortium.

3.8 Amounts owed by affiliated companies

Mio. EUR	03/31/2004	03/31/2003
Amounts owed:
—    Völkl Tennis GmbH (50%)	0.7	0.8
—    Völkl Sport of America	1.5	2.0
Total	2.2	2.8

3.9 Other Assets

The other assets item contains prepaid taxes, VAT credits, short term personnel loans, travel expense advances, cash security deposits, etc.

3.10 Prepayments and Accrued Income

The largest portion of this item is represented by capitalised advertising and development costs for the financial year 2004/05 incurred by Voelkl international and Voelkl Tennis with a total amount of TEUR 1,775 (TEUR 1,456).

9

3.11 Capital and Reserves

The consolidated capital and reserves were composed as follows during the financial year:

Mio. EUR	03/31/2004	03/31/2003
Capital and Reserves per 04/01	3.765	0.917
Distribution of profits Völkl Sports Holding AG	-0.191	-0.102
Exchange rate difference on consolidation of capital and reserves	-0.194	-0.084
Profit for the year	2.849	3.034
Capital and reserves per 03/31	6.229	3.765

3.12 Silent partnership

Völkl KG possesses a silent partnership in the Kapitalbeteiligungsgesellschaft für mittelständige Wirtschaft Bayerns mbH, Munich, which was reduced as planned from TEUR 51 to TEUR 205 during the financial year.

3.13 Special Reserves with equity portion

Classified as special reserves is the income contribution provided in connection with the sale of the Straubing, Steinweg 62 property. The repayment is to be performed over a period of ten years. In accordance with the findings of the tax audit, the income contribution qualifies as taxable income. The special reserves as well as the amount of annual repayment have been adjusted to reflect this.

3.14 Pension Reserves

The reserves for pensions and other obligations encompass pension entitlements as well as current pensions in accordance with commitments made in the framework of employment agreements as well as on the basis of individual commitments. These are determined by the entry age normal method in accordance with § 6a EStG through actuarial calculations on the basis of an interest rate of 6%.

3.15 Tax Reserves

Mio. EUR	03/31/2004	03/31/2003
Reserves for:
—    Taxes	3.0	3.0
—    Deferred taxes	1.1	0.9
Total	4.1	3.9

3.16 Other Reserves

Mio. EUR	03/31/2004	03/31/2003
Guarantee obligations	1.0	1.2
Vacation claims / overtime	1.5	1.2
Outstanding invoices	0.2	0.4
Fixed sum & premiums racing	0.5	0.8
Currency reserve	0.6	0.0
Litigation	0.0	0.1
Interest shareholder loan	0.0	0.4
Sundry	1.2	1.1
Total	5.0	5.2

10

The reserves for guarantee obligations of Völkl KG amount to 0.667 Mio. EUR for still undetermined guarantee obligations, which are valued at 1.2% of average net turnover of the last two financial years, as well as 0.340 Mio. EUR for undetermined warranties.

The reserve for overtime and vacation entitlements increased due to the clear increase in output and expansion in production in financial year 2003 / 04 in comparison with the prior year.

3.17 Creditors—Durations

The remaining terms to maturity amount as of 3/31/2004 to:

Mio. EUR	Total	Up to 1 year	Over 1 year
Banks loans and overdrafts	14.7	14.4	0.3
Trade creditors	4.4	4.4	0.0
Amounts owed to group undertakings	0.1	0.1	0.0
Other creditors	7.6	7.6	0.0
Subtotal	26.8	26.5	0.3
Shareholder loan:
—    without subordination	7.3	1.4	5.9
—    with subordination	7.8	3.3	4.5
Overall total	41.9	31.2	10.7

3.18 Bank Loans and Overdrafts

Mio. EUR	03/31/2004	03/31/2003
Bank loans and overdrafts of:
—    Marker Völkl Austria	2.2	2.2
—    Völkl International	2.3	3.0
—    Völkl Tennis GmbH	0.2	0.1
—    Völkl KG	10.0	7.4
Total	14.7	12.7

The provision of funds by banks was made on the basis of collateral pooling agreements of 09/24, 10/28, 10/30, 11/22, 12/23/2002 against transfer of ownership of the following items:

- All trade debtors of Völkl KG and Völkl Vertriebs GmbH

- Entire warehouse of Völkl KG, Völkl Vertriebs GmbH and Völkl International AG.

3.19 Amounts Owed to affiliated companies

Mio. EUR	03/31/2004	03/31/2003
Völkl Tennis GmbH 50% (TEUR 145)	0.1	0.2
Total (TEUR 145)	0.1	0.2

11

3.20 Other Creditors

Mio. EUR	03/31/2004	03/31/2003
Value added taxes	0.5	1.6
Personnel, social security costs	1.3	1.1
Berlinische Leben	0.2	0.3
Bills of exchange Völkl KG	4.4	4.6
Sundry	1.2	0.6
Total	7.6	8.2

3.21 Shareholder Loan

Mio. EUR	03/31/2004	03/31/2003
Loans from Mr. Hans-Dieter Cleven to:
—    Völkl KG, Straubing	4.7	4.7
—    Völkl Sports Holding AG	6.2	6.6
—    Völkl Tennis GmbH 50%	0.4	0.4
—    Völkl International AG, Baar	3.8	4.1
Total	15.1	15.8
Hereof subordinated loans	7.9	7.8

A loan for 3.323 Mio. EUR was provided by Mr. Hans-Dieter Cleven to Völkl KG by agreement of April 01, 1997. The loan term was lengthend to March 31, 2005.

In connection with the sale of the property, Straubing, Steinweg 62, an additional loan in the amount of 1.4 Mio. EUR was granted by Mr. Hans-Dieter Cleven to Völkl KG.

Mr. Cleven’s loans amounting to 7.9 Mio. EUR (3.3 Mio. EUR to Völkl KG, 3.8 Mio. EUR to International AG, 0.3 Mio. EUR to Völkl Tennis GmbH and 0.5 Mio. EUR to Völkl Sports Holding) are subordinate to the existing and future credit sums granted by banks at which the companies respectively hold accounts.

Collateral for the loans by shareholders was granted in the form of:

- Right of lien to the”Völkl” trademark by International AG, Baar

- Right of lien to the participating interests in Völkl Sports Holding AG

12

4. Notes to the Consolidated Profit and Loss Account 2003/04

4.1 Sales

The turnover amounts to 105.0 Mio. EUR and lies, thereby, around 11.15 % over the previous year’s turnover. The gross turnover is attributable as follows to the individual companies:

Mio. EUR	2003/2004	2002/2003
Turnover Völkl KG	62.8	51.1
Turnover Vertrieb	25.1	26.6
Turnover Völkl International	83.4	71.1
Turnover Marker Völkl Austria	9.5	7.3
Turnover Völkl Tennis	3.4	3.6
Turnover Rad Air	0.0	1.3
Subtotal	184.2	161.0
Elimination of intercompany turnover	-79.2	-66.6
Turnover	105.0	94.4

4.2 Other Operating income

Mio. EUR	2003/2004	2002/2003
Disbursement from expired pension insurance	0.3	0.5
Revenues from trade in goods and services	0.6	0.6
Expense centre allocation/Licensing revenues	1.2	0.4
Partial reversal of special reserves	0.3	0.3
Reversal of reserves	0.1	1.2
Other	1.4	1.0
Total	3.9	4.0

4.3 Depreciation

Mio. EUR	2003/2004	2002/2003
Depreciation:
—    Tangible assets	2.8	3.0
—    Reduction based on investment grants	-0.2	-0.2
—    Subtotal tangible assets	2.6	2.8
—    Inventories, if exceeding normal depreciation	1.8	1.0
Total	4.4	3.8

4.4 Other Operating Expenditure

Mio. EUR	2003/2004	2002/2003
Operating expenses	7.3	7.1
Administrative expenses	3.6	3.8
Sales expenses	9.2	7.3
Losses on debts	0.1	0.1
Sundry	4.2	2.6
Total	24.4	20.9

13

4.5 Extraordinary income

Mio. EUR	2003/2004	2002/2003
Changes in del credere Völkl International AG	0.0	0.6
Revenues relating to a period other than that which is covered by this financial statement / Sundry (TEUR 25)	0.0	0.1
Total	0.0	0.7

4.6 Extraordinary expenditure

Mio. EUR	2003/2004	2002/2003
Extraordinary consulting expenses	0.0	0.2
Liquidation expense Rad Air Snowboards	0.1	0.0
Shareholder interest prior year / Covered capital and reserves	0.0	0.1
Expenses relating to a period other than that which is covered by this financial statement	0.1	0.1
Sundry	0.1	0.0
Total	0.3	0.4

4.7 Taxes

Tax expenses encompass asset income and property taxes for the current financial year, prior year tax adjustments and changes in deferred taxes. We make reference to 3.15 concerning the formation of tax reserves.

5. Other Information

5.1 Contingent Liabilities

According to the collateral pooling agreement of 09/24, 10/28, 10/30, 11/22, 12/23/2002 Völkl KG, Völkl Vertriebs GmbH and Völkl International AG are jointly and severally liable for bank and bill of exchange Liabilities (Balances per 03/31/2003):

Völkl Sports GmbH & Co. KG	Accounts Payable to Banks Bill of Exchange Liabilities	TEUR TEUR	10,024 4,429
Völkl Vertriebs GmbH	Accounts Payable to Banks	TEUR	0
Völkl International AG	Accounts Payable to Banks	TEUR	2,323

14

EX-99.4

EXHIBIT 99.4

Report of the group auditors to the General Meeting of

CT SPORTS HOLDING AG, BAAR

As auditors of the group, we have audited the consolidated financial statements (balance sheet, income statement and notes) of CT Sports Holding AG for the year ended at 31. March 2004.

These consolidated financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with Swiss auditing standards promulgated by the profession, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows in accordance with the Accounting and Reporting Standards (Swiss GAAP FER). Furthermore, the consolidated financial comply with Swiss law and the company’s articles of incorporation.

We recommend that the consolidated financial statements submitted to you be approved.

Naters, June 2004	TREUHAND UND REVISIONS AG
	Auditors in charge
	Albert Bass	Mischa Imboden

Appendix:

- Balance sheet

- Income statement

- Cash Flow Statement

- Notes

1

ANNEX I

Consolidated Balance Sheet

31.03.2004

	31.03.2004	31.03.2003
	Thousand CHF	Thousand CHF
ASSETS
Cash and cash equivalents	1,615	877
Trade receivables	13,198	15,868
Trade receivables due from related companies	2,406	4,545
Other receivables	1,796	2,832
Inventories	16,064	13,611
Prepaid expenses and accrued income	1,245	1,099
Other current assets	799	16
Total current assets	37,123	38,848
Tangible fixed assets	9,019	7,687
Intangible fixed assets	1,208	2,565
Goodwill	7,103	8,642
Other non current assets	138	576
Total non-current assets	17,468	19,470
Total Assets	54,591	58,319
LIABILITIES AND EQUITY
Trade payables	5,257	5,282
Related companies payables	2,280	848
Shareholder payables	2,719	2,257
Other accounts payables	891	1,343
Financial short term loans	9,188	6,827
Accrued expenses / severance indemnities	5,663	7,126
Total current liabilities	25,998	23,683
Long term debt	12,015	17,929
Shareholder Loans	20,027	20,027
Shareholder Loans (subordinated)	2,224	2,224
Deferred income taxes / taxes payables	-1,987	-2,006
Total non current liabilities	32,279	38,174
Total liabilities	58,277	61,857
Share capital	5,000	5,000
Minority Interest (M-CZE)	41	41
Translation adjustments	-535	-421
Retained earnings	-8,159	-8,377
Net result of the year	-33	218
Total equity	-3,686	-3,539
Total Liabilities and Equity	54,591	58,319

2

ANNEX II

Consolidated Income Statement

01.04.2003 - 31.03.2004

	2003 / 2004	2002 / 2003
	Thousand CHF	Thousand CHF
Net sales	92,752	87,357
Cost of sales	-58,906	-54,145
Gross Profit	33,846	33,212
Selling Expenses	-12,444	-12,005
Warehouse and Shipping	-2,421	-2,281
General & Administrative Expenses	-11,270	-12,414
Other operating expenses	-1,191	-1,450
Operating expenses	-27,326	-28,150
Profit from operations	6,520	5,062
Interest Expenses	-3,384	-3,678
Other Expenses / Income	-2,899	-868
Taxes	-270	-298
Net result of the Year	-33	218

3

ANNEX III

Consolidated Balance Sheet

31.03.04

	M-Group	M-Group	CT Sports	Sum	Elimination	Sum	Cap. Cons.	Sum
	EURO	CHF	CHF	CHF	CHF	CHF	CHF	CHF
ASSETS
Cash	955	1,489	126	1,615	0	1,615	0	1,615
Trade Receivables	8,464	13,198	0	13,198	0	13,198	0	13,198
Receivables related persons	1,543	2,406	1,011	3,417	-1,011	2,406	0	2,406
Other Receivables	1,152	1,796	0	1,796	0	1,796	0	1,796
Inventory	10,302	16,064	0	16,064	0	16,064	0	16,064
Accrued Income	798	1,244	0	1,244	0	1,244	0	1,244
Other Current Assets	512	798	0	798	0	798	0	798
Total Current Assets	23,726	36,997	1,137	38,134	-1,011	37,123	0	37,123
Investments	0	0	6,606	6,606	0	6,606	-6,606	0
Loan CT Sports - M. Int.	0	0	22,465	22,465	-22,465	0	0	0
Tangible fixed Assets	5,784	9,019	0	9,019	0	9,019	0	9,019
Intangibles and Goodwill	2,218	3,459	0	3,459	0	3,459	0	3,459
Goodwill	0	0	0	0	0	0	4,853	4,853
Other Non Current Assets	88	137	0	137	0	137	0	137
Total Non Current Assets	8,090	12,615	29,071	41,686	-22,465	19,221	-1,753	17,468
Total Assets	31,816	49,612	30,208	79,820	-23,476	56,344	-1,753	54,591
LIABILITIES AND EQUITY
Trade Payables	3,368	5,252	5	5,257	0	5,257	0	5,257
Related Companies Payables	1,462	2,280	0	2,280	0	2,280	0	2,280
Shareholder Payables	649	1,011	2,719	3,730	-1,011	2,719	0	2,719
Other accounts Payables	572	891	0	891	0	891	0	891
Financial short term loans	5,892	9,188	0	9,188	0	9,188	0	9,188
Severance indemnities	359	560	0	560	0	560	0	560
Accrued Expenses	3,226	5,030	73	5,103	0	5,103	0	5,103
Total current liabilities	15,527	24,212	2,797	27,009	-1,011	25,998	0	25,998
Long term debt	7,705	12,015	0	12,015	0	12,015	0	12,015
Shareholder Loans	0	0	20,027	20,027	0	20,027	0	20,027
Shareholder Loans (PP)	14,408	22,467	2,224	24,691	-22,465	2,226	0	2,226
Income taxes payable	110	172	0	172	0	172	0	172
Deferred income taxes	-1,385	-2,160	0	-2,160	0	-2,160	0	-2,160
Minority Participation	0	0	0	0	0	0	0	0
Total non current liabilities	20,838	32,493	22,251	54,744	-22,465	32,279	0	32,279
Total Liabilities	36,365	56,705	25,048	81,753	-23,476	58,277	0	58,277
Share Capital	1,221	2,000	5,000	7,000	0	7,000	-2,000	5,000
Translation Adjustments M-Group	-1,402	-2,186	0	-2,186	0	-2,186	2,186	0
Translation Adjustments Consolid.	0	-396	0	-396	0	-396	-139	-535
Minority interest	28	41	0	41	0	41	0	41
Retained earnings	-4,624	-6,905	-61	-6,966	0	-6,966	-1,193	-8,159
Net result of the Year	228	353	221	574	0	574	-607	-33
Total Equity	-4,549	-7,093	5,160	-1,933	0	-1,933	-1,753	-3,686
Total Liabilities and Equity	31,816	49,612	30,208	79,820	-23,476	56,344	-1,753	54,591

4

ANNEX IV

Consolidated Income Statement

2003 / 2004

	M-Group	M-Group	CT Sports	Sum	Consolid.	Sum
	EURO	CHF	CHF	CHF	CHF	CHF
Net Sales	59,958	92,752	0	92,752	0	92,752
Cost of Sales	-38,079	-58,906	0	-58,906	0	-58,906
Gross Profit	21,879	33,846	0	33,846	0	33,846
Selling Expenses	-8,044	-12,444	0	-12,444	0	-12,444
Warehouse and Shipping	-1,565	-2,421	0	-2,421	0	-2,421
General and Administrative Exp.	-6,847	-10,592	-71	-10,663	-607	-11,270
Other Operating Expenses	-770	-1,191	0	-1,191	0	-1,191
	-17,226	-26,648	-71	-26,719	-607	-27,326
	4,653	7,198	-71	7,127	-607	6,520
Financial Expenses IC		-1,011	1,011	0	0	0
Financial Expenses Other	-2,144	-2,306	-1,079	-3,385	0	-3,385
Other Income/Expenses IC		-367	367	0	0	0
Other Income/Expenses	-2,109	-2,896	-3	-2,899	0	-2,899
Taxes	-172	-266	-4	-270	0	-270
	228	353	221	574	-607	-33
Minorities	0	0	0	0	0
Net Result of the Year	228	353	221	574	-607	-33

5

ANNEX V

Cash flow statement

in 1'000 CHF

	2003 / 2004
	Cash receipts	Cash payments
Net sales	92,752
Cost of sales		-58,906
Operating expenses (without depreciations)		-20,824
Interest expenses		-3,385
Other expenses		-2,899
Taxes		-270
Changes in receivables	2,670
Changes in inventories		-2,453
Changes in accrued income		-146
Changes in other receivables and current assets	253
Changes in trade payables		-25
Changes in other payables		-452
Changes in accrued expenses and deferred taxes		-1,443
	95,675	-90,803
Cash flow operating activities		4,872
Investments / disposals in fixed assets		-4,500
	—	-4,500
Cash flow investing activities	—	-4,500
Changes in accounts receivables related companies	2,139
Changes in shareholder and related companies payables	1,894
Changes in short and long term loans		-3,553
Changes in shareholder loans		—
Adjustments Equity	—	-114
	4,033	-3,667
Cash flow financial activities		366
Total cash receipts and payments	99,708	-98,970
Increase of Cash		738
Changes in Cash	31.03.04	31.03.03
Cash and cash equivalents	1,615	877
Increase of Cash		738

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General

The consolidated financial statements are based on the following documents:

¨ Consolidated financial statements of Marker Group as of 31.03.2004

¨ Financial statement of CT Sports Holding as of 31.03.2004

2. Consolidation Principles

2.1 Period of consolidation

01.04.2003 – 31.03.2004 / The companies close their books at 31^st of March.

2.2 Accounting Principles, Valuation

The companies use the same principles of valuation. The consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows.

2.3 Foreign Currency Translation Method

The consolidated financial statements are made in CHF (Fr.) At the balance sheet date, monetary assets and liabilities are converted into CHF at year-end rate. Share capital is converted at historical exchange rate. Income statements are converted at average-exchange rate. Exchange differences arising from the conversion of foreign currency financial statements are charged to equity under the item Translation Adjustments.

Exchange rates used

1 EURO = CHF	Balance sh.	Income st.
2002/03	1.4758	1.4649
2003/04	1.5594	1.5471

2.4 Contributed Companies

Company	Capital Share		Interest
CT Sports Holding AG, Baar (CH)	T-Fr.	5’000	Parent Comp.
Marker International GmbH, Baar (CH)	T-Fr.	2’000	100%
Marker-Group	Capital Share		Interest
Marker International GmbH, Baar (CH)	T-Fr.	2’000	Parent company
Marker Deutschland, Eschenlohe (D)	T-EUR	2’556	100%
Marker Cze, Kostelec (CZE)	T-CZK	400	95%
Marker Canada Ltd., Quebec (CAN)	T-CDN	2’250	100%
Marker USA Inc., Salt Lake City (USA)	T-USD	1	100%
Marker Japan Co. Ltd., Tokio (J)	T-JEN	300’000	100%

2.5 Consolidation

In-full elimination of intragroup receivables and payables, income and expenses and all other relevant intragroup transactions, including group dividends, write-downs, and revaluation of

7

consolidated investments, unrealised profits and losses, resulting from intragroup transactions, are offset.

3. Further informations

At April 19^th 2002 CT Sports Holding AG bought the 15% shares of MKR Holdings Inc. (Investments in Marker International GmbH).

In 2002 / 03 Marker Japan had a capital decrease of T-YEN 399’000 and an increase of T-YEN 200’000. So the common stock changed from T-YEN 499’000 into a new amount of T-YEN 300’000.

A part of the production has been transferred in 2002 / 03 to the newly founded subsidiary, Marker CZE in Kostelec. MCZE is a 95% subsidiary of Marker Germany. The capital share is T-CZE 400, additional paid in capital T-CZE 15’600.

Balance sheet

Cash and cash equivalents

Thousand CHF	31.03.04	31.03.03
Cash on hand	39	16
Bank accounts in local currency	1’576	861
Total	1’615	877

Trade receivables

Thousand CHF	31.03.04	31.03.03
Trade receivables	13’611	16’262
Reserve for doubtful accounts	-413	-394
Total	13’198	15’868

Receivables due from related companies

Thousand CHF	31.03.04	31.03.03
Tecnica Group	148	548
Völkl Group	3’109	3’964
Nordica	-948	31
Other related parties	97	2
Total	2’406	4’545

Other receivables

Thousand CHF	31.03.04	31.03.03
Tax authorities	1’059	1’738
Severance Payments	374	354
Consulting	126	341
Other receivables	237	399
Total	1’796	2’832

8

Inventories

Thousand CHF	31.03.04	31.03.03
Raw materials	5’534	4’082
Work in progress	647	1’445
Finished goods	10’800	8’892
Reserve for obsolete or slow moving inventory	-917	-808
Total	16’064	13’611

Prepaid expenses and accrued income

Thousand CHF	31.03.04	31.03.03
Rent / lease installments	83	69
Insurance	90	50
Interests	181	337
Foreign exchange gains	580	593
Other	311	50
Total	1’245	1’099

Other current assets

Thousand CHF	31.03.04	31.03.03
Taxes	617	0
Other	182	16
Total	799	16

Non current assets

Thousand CHF	31.03.04	31.03.03
Tangible assets Marker Group	9’019	7’687
Intangible assets Marker Group	1’208	2’544
Goodwill Marker Group	2’250	3’182
Goodwill 15% Marker Group	4’853	5’460
Other non current assets Marker Group	138	576
Start up costs CT Sports Holding AG	0	21
Total	17’468	19’470

Related companies payables

Thousand CHF	31.03.04	31.03.03
Tecnica Group	1’071	317
Völkl Group	886	496
Nitro	307	35
Other related parties	16	0
Total	2’280	848

9

Shareholder payables

Thousand CHF	31.03.04	31.03.03
H.-D. Cleven	1’359	1’131
Norfin II	1’360	1’126
Total	2’719	2’257

Other interest free payables

Thousand CHF	31.03.04	31.03.03
Employees	309	339
Social security institutions	189	279
Tax payables	324	226
Other	69	499
Total	891	1’343

Accrued expenses and deferred income

Thousand CHF	31.03.04	31.03.03
Accrued expenses Marker Group	5’589	7’079
Accrued expenses CT Sports Holding AG	74	47
Total	5’663	7’126

Financial debts

Creditor	Short term	Long Term	Total
Key Bank	101	0	101
M&T Bank	254	0	254
Tokio Mitsubishi	379	200	579
Shoko Chukin	738	488	1’226
Hypo Vereinsbank	455	5’925	6’380
Deutsche Bank	765	1’659	2’424
LfA	0	3’409	3’409
Laurentian Bank	2’326	0	2’326
Isomura (Bonds)	3’503	0	3’503
Tauber	667	334	1’001
Total (Thousand CHF)	9’188	12’015	21’203
Previous year	6’827	17’929	24’756

Shareholder loans

Thousand CHF	31.03.04	31.03.03
Norfin II - CT Sports Holding AG	10’014	10’014
H.-D. Cleven - CT Sports Holding AG	10’014	10’014
Total	20’027	20’027

10

Shareholder loans (subordinated)

Thousand CHF	31.03.04	31.03.03
Norfin II - CT Sports Holding AG	1’112	1’112
H.-D. Cleven - CT Sports Holding AG	1’112	1’112
Total	2’224	2’224

Deferred income taxes

The tax asset referred to the fiscal benefit due to the losses carried forward in future fiscal periods has been reflected in the consolidated financial statements of Marker Group, as there is a reasonable certainty of realizing fiscal incomes in the near future at Marker Deutschland GmbH. The tax assets value is based on a tax rate of 39%.

Equity

Thousand CHF	31.03.04	31.03.03
Share Capital CT Sports Holding	5’000	5’000
Minority Interest (M-CZE)	41	41
Translation Adjustments	-535	-421
Retained earnings	-8’159	-8’377
Net Result of the Year	-33	218
Equity	-3’686	-3’539

INCOME STATEMENT

Net Sales

Thousand CHF	2003/04	2002/03
Ski bindings	65’035	64’368
Inline skates	587	529
Ski	11’006	10’752
Parts and accessories	6’901	2’004
Ski boots	4’977	5’236
Tennis	962	858
Trekking	1’405	1’389
Völkl Snowboards	923	606
Nitro Snowboards	796	725
Other	160	890
Total	92’752	87’357

Cost of sales

Thousand CHF	2003/04	2002/03
Raw material	28’378	25’969
Finished products	14’857	10’782
Production costs / overheads	15’671	17’394
Total	58’906	54’145

11

Selling expenses

Thousand CHF	2003/04	2002/03
Salaries & benefits	3’286	3’043
Sales commissions	1’717	2’054
Travel & entertainment	562	599
Advertising & promotion	3’572	3’100
Trade shows	387	495
Endorsements / Competition	1’044	1’166
Warranty	774	587
Other	1’102	961
Total	12’444	12’005

Warehouse and shipping

Thousand CHF	2003/04	2002/03
Rent / lease expense / storage	916	989
Shipping expenses	710	545
Other	795	747
Total	2’421	2’281

General & Administrative

Thousand CHF	2003/04	2002/03
Salaries & Benefits	3’926	4’274
Travel and entertainment	190	280
Insurance	213	240
Product liability expense	475	549
Rent / lease expense	851	968
Consulting fees / services	1’629	1’842
Depreciation	2’000	2’252
Depreciation Goodwill 15% Marker Group	607	607
Other	1’379	1’402
Total	11’270	12’414

Other operating expenses

Thousand CHF	2003/04	2002/03
Research & development / other	1’191	1’450
Total	1’191	1’450

Financial expenses

Thousand CHF	2003/04	2002/03
Marker Group	-2’306	-2’598
CT Sports Holding AG	-1’078	-1’080
Total	-3’384	-3’678

12

Other income / expenses

Thousand CHF	2003/04	2002/03
Marker Group (personnel dismissions / losses from asset sales because of transfer to Marker CZE)	-2’896	-1’489
CT Sports Holding AG (exchange differences)	-3	621
Total	-2’899	-868

Taxes

Thousand CHF	2003/04	2002/03
Taxes Marker Group	-266	-293
Taxes CT Sports Holding AG	-4	-5
Total	-270	-298

OTHER NOTES

SPECIAL REMARKS

At the moment this audit report was finished, the auditors of Marker Canada couldn’t give a final opinion of their work because of a pending receipt of a waiver from the Company’s bankers for breach of financial covenants. The financial statements of Marker Canada have been prepared on the assumption that the Company will be successful in obtaining such a waiver. We expect no material changes in the financial statements because of this aspect.

POST CLOSING EVENTS

There are no remarks to make.

COMMITMENTS

The Group is committed with the following lease payments under operating leasing or under other rental contracts:

Year	Amount
2004 / 2005	1’786
2005 / 2006	1’518
2006 / 2007	1’251
2007 / 2008	883
2008 / 2009	878
Thousand CHF	6’316

13

EX-99.5

EXHIBIT 99.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements (including the Form S-8 Nos. 033-57137, 333-89807, 333-87744, 333-104495, 333-102590, 333-11549, 333-112522 and an additional Form S-8 to be filed this week; Form S-3 Nos. 333-104530, 333-107631, 333-108610 and 333-114628; and Form S-4 No. 333-60448) of K2 Inc. and the related Prospectuses of our reports dated June 9, 2004 and June 15, 2004 with respect to the consolidated financial statements and schedules of Völkl Sports Holding and CT Sports Holding AG included in this Current Report (Form 8-K) dated as of June 16, 2004.

Naters/Zug, June 16, 2004	TREUHAND & REVISIONS AG
	Albert Bass	Mischa Imboden
	/s/    ALBERT BASS	/s/    MISCHA IMBODEN

EX-99.6

Exhibit 99.6

[Letterhead of K2, Inc.]

NEWS RELEASE

Contacts:    Dudley W. Mendenhall, 760-494-1000

or

Integrated Corporate Relations, Inc.

Investor Relations:

Andrew Greenebaum/Chad Jacobs

(310) 395-2215/ (203) 222-9013

Media Relations:

John Flanagan/Mike Fox

(203) 222-9013

K2 Inc. Announces the Acquisition of Three Leading Companies in

Winter Sports and Outdoor Apparel

• Völkl Sports—premium skis

• Marker Group—leading ski bindings

• Marmot Mountain Ltd—premium outdoor technical apparel and equipment

Carlsbad, California—June 16, 2004—K2 Inc. (NYSE: KTO) announced the signing of three definitive acquisition agreements in which Völkl Sports Holding AG, The Marker Group and Marmot Mountain Ltd. would become wholly owned subsidiaries of K2. The transactions, which are subject to regulatory review and other customary conditions, are expected to be completed by mid-July, 2004. K2 indicated that it expects the transactions to be accretive to its earnings in 2004 and subsequent years.

“The Völkl and Marker acquisitions are very significant in that they continue our strategy of building a truly global winter products platform for K2,” said Richard Heckmann, K2’s chairman and chief executive officer. “The ski business is increasingly driven by a few global players with integrated ski and binding systems, and this transaction will solidify K2’s leading position on a global basis. K2, Völkl and Marker are leading authentic brands and together they will constitute the most unique and powerful winter products platform in the industry today. The addition of Völkl and Marker’s strong European management team gives us a unique opportunity to combine our significant European operations for the benefit of both customers and employees. Völkl’s outstanding heritage of German engineering excellence will be a strong addition to our worldwide product offering in the ski industry as will their superb manufacturing facilities”.

Mr. Heckmann continued. “Equally exciting is the Marmot acquisition, which positions K2 with a scaleable platform in the outdoor technical apparel market. One of K2’s objectives has been to build a premium technical apparel platform that would complement its reputation for performance products in sporting goods. Combined with the recently announced acquisition of Ex Officio, we are confident that we will be able to successfully grow these businesses and expand K2’s presence in technical outdoor apparel. With 35 major brands across many of the major sporting goods markets, the opportunity to combine the technical high-end apparel expertise of Marmot and Ex Officio with K2’s leading equipment brands and broad retail distribution will present internal growth possibilities for some time.”

Acquisition Overviews

Völkl, established in Germany in 1889, is a leading global manufacturer of premium skis with an average retail price point above $500, and is the #1 ski in the U.S. in dollar terms, while K2 is the #1 ski in the U.S. in units. Völkl has a highly automated manufacturing facility in Straubing, Germany, which K2 intends to maintain.

Marker, founded in 1952, is a worldwide market leader in ski bindings with an estimated market share in excess of 40% in the U.S. Marker has leveraged the strength of the Marker brand and technology to partner with ski manufacturers, including Völkl and K2, to sell integrated ski and binding systems. This partnership has enabled Völkl to establish itself as the leader in the U.S. in ski system sales, growing from an estimated 3% of the U.S. market in the 2000-2001 season to 43% in the 2003-2004 season. In addition, in the past season, a significant percentage of K2’s skis were sold as integrated systems with Marker bindings.

Völkl and Marker are linked by common ownership. The purchase price for the acquisition is approximately $124 million plus the assumption of seasonal working capital debt. The transaction consideration will consist of a combination of K2 stock, cash, and the assumption of debt. On a combined basis, Völkl and Marker generated total sales of $171.9 million (€146.0 million) in their fiscal year ended March 31, 2004.

Marmot, founded in 1971, is a leader in the premium technical outdoor apparel and equipment market. Marmot’s product lines include performance jackets, technical rainwear, expedition garments, fleeces, softshells, skiwear outerwear and accessories, gloves, and expedition quality tents, packs and sleeping bags. Retail price points for Marmot’s products range from $80 to $400, and sales for 2004 are estimated to be $74 million. Marmot produces skiwear under a license with Marker, which will result in additional synergies for K2. The purchase price is approximately $84 million plus the assumption of debt. The transaction consideration will consist of a combination of K2 stock, cash, and the assumption of debt.

K2 plans to finance the acquisitions through a combination of debt and equity.

Outlook for 2004

The Company today also updated guidance for fiscal 2004, and re-confirmed guidance for the second quarter ending June 30, 2004. On a full year basis for fiscal 2004, the Company expects sales of approximately $1.1 billion and basic earnings per share of approximately $0.97, assuming projected average basic shares outstanding of 39.8 million, and diluted earnings per share of approximately $0.86 on projected average diluted shares outstanding of 49.1 million as if the Company’s convertible debt were converted into shares. The share count projections for fiscal 2004 include shares that are projected to be issued in the pending acquisitions and related financings. For the quarter ending June 30, 2004, the Company expects sales in the range of $230 to $240 million and basic earnings per share of approximately $0.18 assuming projected average basic shares outstanding of 34.9 million, and diluted earnings per share of approximately $0.16 assuming projected average diluted shares outstanding of 44.4 million as if the convertible debt were converted into shares.

Investor Conference Call

K2’s will hold a conference call today scheduled to begin at 8:30 a.m. Eastern Daylight Time (USA), on June 16th, 2004. K2 plans to do a live broadcast of the conference call over the Internet. Investors can listen to the live webcast at www.k2inc.net and www.fulldisclosure.com. For those who are not available for the live broadcast, the call will be archived on www.fulldisclosure.com.

About K2 Inc.

K2 Inc. is a premier, branded consumer products company with a portfolio of leading brands including Rawlings, Worth, Shakespeare, Pflueger, Brass Eagle, Worr Games, Stearns, K2, Ride, Olin and Morrow, Tubbs, and Atlas. K2’s diversified mix of products is used primarily in team and individual sports activities such as baseball, softball, fishing, paintball, watersports activities, alpine skiing, snowboarding, snowshoeing, in-line skating and mountain biking. Among K2’s other branded products are K2 Licensing & Promotions, Dana Design backpacks, Planet Earth apparel, and Adio and Hawk skateboard shoes.

2

Rawlings, Worth, Shakespeare, Pflueger, Brass Eagle, Stearns, K2, Ride, Olin, Morrow, Tubbs, Atlas, K2 Licensing and Promotions, Dana Designs, Planet Earth, Adio and Hawk skateboard shoes, JT, and Worr Games are trademarks or registered trademarks of K2 Inc. or its subsidiaries in the United States or other countries.

Safe Harbor Statement

This news release includes forward-looking statements. K2 cautions that these statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including but not limited to K2’s ability to successfully execute its acquisition plans and growth strategy, integration of its recent merger with Rawlings Sporting Goods Company, Inc. and other acquired businesses, weather conditions, consumer spending, continued success of manufacturing in China, global economic conditions, product demand, financial market performance, and other risks described in the company’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and current reports on Form 8-K, each as filed with the Securities and Exchange Commission. The company cautions that the foregoing list of important factors is not exclusive, any forward-looking statements included in this news release is made as of the date of this news release, and the company does not undertake to update any forward-looking statement.

3