Share the fun2012 Annual Report

Blast Off

Blast Off Main Office:

Blast Off3718 East Star RoadSyracuse, NY 13210

1-800-543-8633 | www.blastoff.com

Please contact our office with any questions or to request additional copies of our 2009 Annual Report.

2 From the Top Letter from Krista D’Amore

4 Along the Way Looking back at the year

6 Moving Together Letter to stockholders

8 Crunching Numbers Financial Information

Flipping Through

2 | Blast Off 2012

Krista D’AmoreBlast Off President

7 Blast Off 2012 |

When I wake up each morning, I am excited to go to work, to brainstorm with creative designers, to spread the joy of our products to distributors, to share the fun with our moonshoe users. It is the smiles I see on children of all ages’ faces that drive our operation from ideas to design to production. Thank you for all of your contagious smiles! They truly do spill over into each step that goes into bringing you your moonshoes. This year has been especially exciting for us. We couldn’t contain our creativity anymore, so we moved to a new location with more space for all of our new ideas. In addition to our move, we continued to make changes to make our moonshoes even more fun. For our all-terrain users, we added a better tread to the bottom of our shoes to ensure a safe landing. We expect even more improvements in the year to come! In addition to our successful product improvements, Blast Off saw significant financial improvements in 2012. We experienced a 4.4 percent increase in sales that reflects a continued trend of increasing sales. We achieved this progress by consistently striving to make widespread improvements to increase moonshoes sales. Our sales throughout the world grew as well, with higher sales in North America, Europe, and Asia. I am confident that with the changes that are to come in 2013 Blast Off will continue to grow and better serve you.

From the Top

4 | Blast Off 2012

9 Blast Off 2012 |

Along the Way

This year has been a year of great growth at Blast Off. Our products have continued to grow and evolve, in addition to our efforts to reduce waste, spread joy throughout the world, and expand our company.

SustainabilityJust as sustainability becomes a more pressing concern for our world, it has become a concern for Blast Off as well. This year, we introduced more earth-friendly packaging. We use less plastic to wrap the parts included with each set of moonshoes, use recycled paper for the instruction manual included in each box, and use recycled cardboard to construct each box. We are now researching new production methods to reduce our carbon footprint.

PhilanthropyEach day we spread smiles to children throughout the world. We have continued our partnership with schools throughout the United States to promote children’s fitness. This year, we brought Bounce-a-thons to 750 schools throughout the country, teaching children fun ways to stay in shape and eat healthier.

New BuildingSince its beginning in 1996, Blast Off has been a growing company, with new improvements, products, and ideas. This year, we decided our headquarters could no longer accommodate all of the creativity and production our company now requires. We have now moved to a new location in Syracuse, NY that can better support all of our work.

6 | Blast Off 2012

11 Blast Off 2012 |

Dear Shareholder,

As our country continued to struggle economically in 2012, Blast Off saw a year of accomplishments, fueled by our commitment to bring fun and smiles to children of all ages and in all places. To ensure our success in 2012, Blast Off has continued to offer unique products to its customers. We have also worked with our retailers to promote our moonshoes, striving to emphasize the children’s health benefits bouncing on Blast Off moonshoes can provide. For our efforts, Blast Off saw a 4.4 percent increase in sales during the year. At the same time, dividends paid per share continued to increase as they have for the past three years. Just as we have continued to share fun with our consumers, we are continuing to share information with our shareholders and investors. Our financial department has worked to ensure the integrity and objectivity of the subsequent financial statements and information. We are committed to accurately reporting and sharing our financial data that helps our shareholders and investors fully understand it. Throughout the year, we have maintained consistent and clear internal accounting information so we can better analyze our progress and report our financial information to shareholders and investors. The financial statements and data included here are presented following accounting principles that are generally accepted in the United States. We are committed to providing you with comprehensive information in a way that is clear and understandable. Thank you for your continued support of Blast Off. We look forward to future successes together!

Moving Together

8 | Blast Off 2012

U.S. and International Sales for 5 years(in billions of dollars)

Sales by Geographic Region(in billions of dollars)

U.S. Sales International Sales

2012

2011

2010

2009

2008

U.S. Sales Asia Pacific, Africa SalesEurope Sales

2012

2011

2010

32 30

27 21

23 13

17 13

12 12

34 18 8

32 16 7

30 13 5

13 Blast Off 2012 |

Cost of Products Sold and Selling, Marketing and Administrative Expenses(*Presented as a percent to sales)

Percent of Sales 2012 2011 2010

Cost of Products Sold* 29.1% 29.1% 28.2%Percent point increase over the previous year — 0.9% 0.5%Selling, marketing, and administrative expenses* 33.7% 33.5% 32.7%Percent point increase over the previous year 0.2% 0.8% -1.4%

Common Stock Market PricesComposite stock market prices for Blast Off stock during 2009 and 2008 were:

2012 2011

High Low High Low

First Quarter $68.85 $61.17 $68.22 $59.87Second Quarter $68.32 $63.40 $65.45 $59.95Third Quarter $72.76 $63.10 $65.75 $59.72Fourth Quarter $69.86 $52.06 $68.75 $63.55Year-end Close $58.56 $67.38

Crunching Numbers