Smiley Hats has been providing high quality fashion and performance head and neck wear for winter sports enthusiasts for over 30 years. Galena Creek Trading Company is majority owned by Robert Hall, CEO of Ride, Inc. The purchase price was comprised of $550,000 in cash and 320,000 shares of Ride common stock. The cash portion of the purchase price will be used to pay Smiley's creditors. "The acquisition of Smiley Hats escalates Ride's financial and strategic strengths by expanding the breadth and profitability of our Apparel division," stated Scott Stewart, Ride's Chief Financial Officer.* "Bob Hall now becomes a significant stakeholder in Ride's success, allowing him to focus his attentions on a single company."*

Ride, Inc.'s sales for the second quarter were $2.5 million compared to $13.5 million for the same period in 1996. Pro-forma 1996 sales for the same period without the C.A.S. Sports close-out and brokered O.E.M. businesses sold in October 1996 amounted to $9.1 million. Sales for the six months ended June 30, 1997 were $7.6 million compared to $26.3 million for the same period in 1996. Pro-forma 1996 sales for the same period without the C.A.S. businesses amounted to $18.8 million. The decline in sales was due to reduced shipments to the Company's Japanese distributors arising from the excess inventories currently in the Japanese marketplace and the Company's transition from a distributor distribution network to direct distribution to key retailers in that marketplace. The Company's shipments to Japan in the quarter and six months ended June 30, 1997 declined by $7.2 million and $10.7 million, respectively, compared to the same periods in 1996.

The net loss for the quarter was $2.3 million ($0.21 per share) compared to net income of $0.4 million ($0.04 per share) for the same period in 1996. The net loss for the six months ended June 30, 1997 was $4.4 million ($0.41 per share) compared to a net loss of $0.6 million ($0.06 per share) for the same period in 1996.

"As we enter into the shipping season for the 1997/98 winter, we are especially pleased with the quality and performance of our new Misty Cap snowboards," stated Bob Hall, Chief Executive Officer.* "Dealer deliveries are on schedule and consumers will soon see a new era of snowboarding performance from Ride."*

Established in 1992, Ride is headquartered at the foothills of the Cascade Mountains, in Preston, Washington. As a leading manufacturer of snowboard equipment and apparel under the brand names: Ride, Liquid, 5150, Preston, Device, Cappel, Smiley Hats and SMP Clothing, Ride, Inc. has set the standard for the highest quality performance and function in snowboard design.

RIDE, INC.
Financial Highlights
(in thousands, except per share data)
RESULTS OF OPERATIONS:
               Three Months Ended        Six Months Ended
                          June 30,                 June 30,
                          1997      1996     1997     1996
Net sales               $2,525   $13,501   $7,559  $26,278
    Cost of goods sold   1,861     9,337    5,567   18,727
    Gross profit           664     4,164    1,992    7,551
Selling, general and
 administrative expenses 3,683     3,596    8,392    8,671
 Operating income (loss)(3,019)      568   (6,400)  (1,120)
Interest income, net        14        76       60      251
  Income (loss) before
  taxes                 (3,005)       644  (6,340)    (869)
  Income tax expense
  (benefit)               (751)       233  (1,904)    (298)
 Net income (loss)     ($2,254)      $411  $4,436)   ($571)
   Per share:
   Primary              ($0.21)     $0.04  ($0.21)  ($0.06)
   Fully Diluted        ($0.21)     $0.04  ($0.21)  ($0.06)
Weighted average common
  shares outstanding:
  Primary               10,879    11,222   10,826   10,538
  Fully Diluted         10,879    11,422   10,826   10,538
         
BALANCE SHEET DATA:
                         June 30, 1997   December 31, 1996
Cash and cash equivalents       $2,742         $3,232
Accounts receivable, net        $6,339        $14,193
Inventories, net               $10,111         $5,986
Working capital                $15,644        $20,713
Total assets                   $50,728        $50,655
Long term debt                    $555           $604
Total shareholder's equity     $39,627        $42,309