RANTOUL – Easton-Bell Sports reported a net loss of $4.1 million for its recently completed fiscal year, compared with $13.4 million in net income the previous year.

Net sales dropped to $716 million in 2009, down from $775 million in 2008, the Van Nuys, Calif.-based company stated in its annual report this week.

Easton-Bell, which has a major production facility east of Rantoul, makes products for a variety of sports, including football, baseball, softball, ice hockey, cycling and snowboarding.

The sales drop came as schools cut their sports budgets and recession-hit consumers trimmed purchases and looked for cheaper goods.

The company said the retail market for sports equipment slowed during the worldwide slump and "is extremely competitive," with retailers pressing for lower prices.

Looking ahead to this year, Easton-Bell predicted lower net sales as a result of slowing consumer demand. It also forecasted tighter inventory management by retailers and reduced profit margins as consumers buy less expensive products.

The company said it fears specialty retailers will face a lack of credit availability.

Easton-Bell said that over several years, it has moved production of some products to third-party vendors in Asia and "other cost-efficient sources of labor."

But it noted a downside to moving production overseas: "We may become more vulnerable to higher levels of product defects, as well as increased sourced-product costs."

Easton-Bell is divided into two product segments:

– Team Sports, which makes products for baseball, softball, football and ice hockey.

– Action Sports, which makes helmets, equipment, components and accessories for cycling, snowboarding and motor-scooter riders.

In 2009, Team Sports had sales of $387 million, down 10.8 percent from 2008, while Action Sports had sales of $329 million, down 3.7 percent.

Easton-Bell had 2,348 employees as of Jan. 2, with 1,545 of them employed in manufacturing and distributing operations. The company has 20 facilities in the United States, three in Canada, two in Mexico, one in Europe and three in Asia.

Among its 12 principal facilities, the Rantoul facility – which includes offices, manufacturing and warehousing – is by far the largest, with 753,696 square feet leased there.

The company makes hockey sticks in Tijuana, Mexico, and hockey skates and gloves in Quebec, Canada. Aluminum and composite baseball bats are now made in Asia.

Some cycling, football, snowboarding and other helmets are assembled and packaged in Rantoul and Elyria, Ohio, while others are "sourced from outside the U.S.," the report said.

Wal-Mart is the company's biggest customer, accounting for nearly 14 percent of net sales.

Easton-Bell said its net debt as of Jan. 2 was $382 million, down from $415 million a year earlier. Total debt stood at $420 million, of which $350 million comes due in 2016.

The company saw fit to state in the annual report that "our substantial indebtedness could adversely affect our financial health." That was among 51 risk factors listed in the report in the interest of full disclosure.

Of the 51 risk factors listed, 26 addressed the company's indebtedness and what might happen in the event of bankruptcy.

Elsewhere in the report, Easton-Bell warned the amount of cash flow it has for working capital, acquisitions, capital expenditures and other purposes "could be limited" because a "substantial" portion of cash flow is needed to service debt payments.

Easton-Bell's chief executive is 48-year-old Paul E. Harrington, who joined the company in April 2008 after being president and CEO of Reebok International Ltd. from 2006 to 2008.

His salary was $715,385 in 2009, up from $576,923 in 2008.

His total compensation package in 2009 was $2.55 million, up from $2.38 million in 2008.