Total revenues for 1996 were $16.9 million versus $17.1 million reported for 1995. The net loss for 1996 was $5.6 million or $1.37 per share compared to a net income of $35,000 or $.01 per share a year ago. Revenues in the snowboard and in-line skate category were $5.9 million in 1996 compared to $11.0 million in the Company's USA Skate operations. The restructuring and special charges discussed above primarily relate to the Company's in-line and snowboard operations. The charges, a majority of which are non-cash in nature, include adjusting the book values of equipment, trademarks, licenses and other intangibles, as well as costs associated with consolidating warehouse distribution functions.

On a stand-alone basis, USA Skate Corp. was profitable in the Company's eight months of ownership in 1996. Pre-tax profit for the eight months was approximately $210 thousand. In October 1996 the Company hired Jon Hodgins as its President positioning the company for growth. Mr. Hodgins, a seasoned hockey executive, having formerly held senior positions at CCM and Bauer,

has made significant changes to the product line, brand image and management team since his arrival. "USA Skate's sales are tracking ahead of 1996 and backlog is up 20% versus this time last year. Professional player use of our VIC brand is up 55% and the brand is enjoying unprecedented visibility in the market," said Mr. Hodgins.

"Other considerations and discussions are progressing as the Company is considering several alternatives inclusive of potential strategic partner initiatives, the sale of the Company, or an initial public offering for USA Skate Corp. Management believes the successful implementation of one or more of these options will create additional value for the California Pro Sports stockholders," Hodgins further stated.

The combination of California Pro's operational activities with those of USA Skate is an essential step in restructuring the Company to achieve greater shareholder maximization. "This will permit a combination of alternatives that will benefit the California Pro Sports shareholder," said Vice-Chairman Michael Casazza. "These include a distribution to shareholders of a portion of its USA Skate holdings and the flexibility to acquire or enter a new line of business."

The Company said it is in the early stages of evaluating several acquisition opportunities but to date no agreements have been reached. Concurrently, the Company said its Board of Directors is evaluating the feasibility of lowering the exercise price on its common stock purchase warrants at some future date.

California Pro Sports and its majority owned subsidiary, USA Skate, import, manufacture and distribute products in the sporting goods categories of hockey, in-line skating and snowboarding under the brand names Victoriaville(TM), Vic(R), McMartin, California Pro(R), Rolling Thunder(TM) and Kemper(R).