Net sales for the quarter were $689,000, compared with $647,000 in the first quarter of 1996. The net loss for the first quarter of 1997 was $1,238,000 or $0.22 per share, which was anticipated and reflects the seasonality of the business. This compares with a net loss of $897,000 or $0.16 per share in the first quarter a year ago. The company also announced that it has received pre-season orders for shipment later in 1997 of approximately $20 million. This total represents an increase in orders for Japan and reductions in the U.S. and Europe, due to both high market inventories and specific actions taken to eliminate "gray market" diversion of product.

"As anyone who follows us closely knows, our business is highly seasonal," commented David Calapp, chief executive officer of Morrow Snowboards. "A first quarter loss on limited close-out sales is very normal for this time of year, as the comparison with last year's first quarter indicates.

"Our pre-season order level is a result of soft market conditions throughout the industry due to the oversupply of snowboards," Calapp continued. "While our product has sold through well at the retail level, and we continue to get very positive comments from our dealers, purchasers throughout the industry have held back on orders this spring in light of the oversupply from last year. In addition, we have continued our aggressive program to minimize 'gray market' sales of our products throughout the world, and that has reduced this year's orders from some dealers. We believe that control of our distribution strengthens the Morrow brand and will be beneficial to the company in the long run. We are continuing to gain market share in the industry, and the Morrow brand is as strong as it has ever been."

"Looking forward," Calapp concluded, "we are examining all of our operating costs in light of the potential for lower sales this year. At the same time we are continuing to invest in new products and aggressive marketing to continue our position as a leader in the industry. We also continue to explore acquisitions to propel our growth and to take advantage of our solid capitalization and good market position in a time of industry consolidation. While 1997 willclearly be a challenging year for everyone in our business, we believe Morrow will emerge from this period with an improved market position and continued excellent long-run growth potential."

MORROW SNOWBOARDS INC. Income Statement (000, except per share data) (unaudited) Quarter Ended 3/29/97 3/31/96 Net sales $689 $ 647 Cost of goods sold 794 548 Gross profit (loss) (105) 99 Selling, marketing and customer service expense 1,019 893 Engineering, research and development expense 351 179 General and administrative expense 690 604 Total operating expenses 2,060 1,676 Operating loss (2,165) (1,577) Interest expense (16) (82) Other income 152 208 Loss before income tax (2,029) (1,451) Income tax benefit 791 554 Net loss $ (1,238) $ (897) Net loss per share $ (0.22) $ (0.16) Weighted average shares outstanding 5,633 5,617 -0- MORROW SNOWBOARDS Balance Sheets (000) 3/29/97 12/31/96 (unaudited) Cash and cash equivalents $ 3,473 $ 5,062 Short-term investments 2,700 3,700 Accounts receivable, net 3,519 8,736 Inventories 7,302 4,533 Prepaid expense 566 536 Deferred income taxes 1,250 450 Total current assets 18,810 23,017 Property, plant and equipment, net 9,373 9,183 Other assets 33 43 Total assets $ 28,216 $ 32,243 Accounts payable $ 533 $ 1,552 Accrued liabilities 817 2,009 Current portion of capital CONTACT: Morrow Snowboards Inc. Harris Massey Herinckx David Calapp Fletcher Chamberlin 503/375-9300, ext. 187 503/295-1922