Rocks and Boulders

K2's net sales for the first quarter of 2006 were $348.1 million, reflecting sales growth of 9.4% from the first quarter 2005. The increase in sales was due to increased sales in Team Sports and Marine and Outdoor segments offset by a decline in the Action Sports segment.

K2's gross profit as a percentage of sales in the first quarter of 2006 stayed constant at 32.3% compared to the first quarter of 2005. K2's operating profit, as a percentage of net sales for the first quarter of 2006 increased to 3.6% compared to 3.1% in the comparable 2005 period. The increase in operating margin for the quarter was due to decreased selling, general and administrative expenses as a percentage of sales in the Team Sports segment. For the first quarter of 2006 consolidated selling, general and administrative expenses, as a percentage of consolidated net sales decreased to 28.7% compared to 29.2% of net sales for the first quarter of 2005.