Net sales for the quarter were $2,149,000, compared with $2,038,000 in the second quarter of 1996. The net loss for the second quarter of 1997, which has been anticipated and reflects the normal seasonality of the business, was $830,000 or $0.15 per share.This compares with a net loss of $474,000 or $0.08 per share in the second quarter a year ago.

For the first six months of 1997, net sales were $2,838,000, compared with $2,685,000 in the first half of 1996. The net loss forthe first half of 1997 was $2,067,000 or $0.37 per share, compared with a net loss of $1,371,000 or $0.24 per share in the first half ofthe prior year.

"As anyone who follows us closely knows, our business is highly seasonal," commented David Calapp, chief executive officer of MorrowSnowboards. "Shipments are largest in the third and fourth quarters of the year, while they are relatively low in the first two quarters of the year. We have just begun our peak shipping period as the third quarter starts."

"We continue to receive additional data that confirms Morrow's solid position in the snowboard industry," Calapp continued. "We believe that keeps us in a position to thrive as the current consolidation in the industry proceeds. Participation in snowboarding and retail demand for the products continued to grow substantially in the last year. This year will clearly be a challenging year for the business as the wholesale market comes into balance with retail demand, but we believe Morrow will emerge from this period with a solid opportunity to take advantage of the long- run growth of the industry."

MORROW SNOWBOARDS, INC.
Income Statement
(000, except per share data)
                       Quarter Ended     Six Months Ended
                    6/28/97  6/30/96   6/28/97   6/30/96 
Net sales           $ 2,149  $ 2,038   $ 2,838   $ 2,685 
Cost of goods sold    1,437    1,387     2,231     1,935
Gross profit            712      651       607       750 
Selling, marketing and
 customer service
        expense         949      721     2,081     1,614
Engineering, research
 and development
 expense                265      186       503       365 
General and 
 administrative
 expense                923      587     1,613     1,191
Total operating
 expenses             2,137    1,494     4,197     3,170
Operating loss       (1,425)    (843)   (3,590)   (2,420)
    
Other income (expense):
Interest expense        (12)     (38)      (27)     (120)
Other income             64      122       216       330
Total other income
       (expense)         52       84       189       210
Loss before income 
 tax                 (1,373)    (759)   (3,401)   (2,210)
Income tax benefit      543      285     1,334       839
Net loss             $ (830)  $ (474) $ (2,067) $ (1,371)
Net loss per share  $ (0.15) $ (0.08)  $ (0.37)  $ (0.24)
Average shares 
 outstanding          5,585    5,688     5,609     5,653
                              
Balance Sheets (000)
                                     6/28/97    12/31/96
                                       (unaudited)
    
Cash and cash equivalents            $ 1,046     $ 5,062
Short-term investments                   508       3,700
Accounts receivable, net               4,305       8,736
Inventories                            9,056       4,533
Prepaid expense                          456         536
Deferred income taxes                  1,792         450
Total current assets                  17,163      23,017
Property, plant and equipment, net     9,971       9,183
Other assets                              33          43
Total assets                        $ 27,167   $  32,243
      Accounts payable               $   433   $   1,552
Accrued liabilities                      821       2,009
Current portion of capital
 lease obligations                       151         228
Total current liabilities              1,405       3,789
Capital lease obligations, net of
 current portion                         202         258
Deferred income taxes                    304         304
Total long-term liabilities              506         562
                                    
Common stock                          25,411      25,980
Notes receivable for common stock        (94)        (94)
Retained earnings                        (61)      2,006
                                    
Total shareholders' equity            25,256      27,892
                                    
Total liabilities and               
 shareholders' equity              $  27,167   $  32,243