Excelsior-Henderson Motorcycle Announces Year-End 1998 Results
5 April 1999
Excelsior-Henderson Motorcycle Manufacturing Company Announces Year-End 1998 Results
BELLE PLAINE, Minn., April 2 -- Excelsior-Henderson
Motorcycle Manufacturing Company today announced financial
results for the fourth quarter and twelve months ended January 2, 1999.
The Company reported a net loss for the fourth quarter of 1998 of
$8,133,187 or $.62 per share compared to a net loss of $2,328,829 or $.18 per
share for the fourth quarter of 1997. The Company reported a net loss for the
twelve months ended January 2, 1999 of $23,909,305 or $1.83 per share compared
to a net loss of $5,872,731 or $.65 per share for the twelve months ended
January 3, 1998. Excelsior-Henderson is a development-stage company and has
recorded no revenues for the fourth quarter or the twelve months ended
January 2, 1999 or January 3, 1998. "We celebrated the conclusion of 1998 with
the production of Excelsior-Henderson 1999 Super X(TM) Commemorative Serial
#0001, which was immediately delivered to the Excelsior-Henderson Heritage
Motorcycle Museum ... and we commenced 1999 with the delivery of the first
revenue Super X in January," stated the Co-Founders, Dan, Dave and Jennie
Hanlon.
The Company also announced that it expects its 1999 net loss to
significantly exceed current investment analyst estimates and that the Company
will need to obtain significant additional debt and equity financing during
1999. "The additional costs associated with the late start in production
combined with the current increased raw material costs of the motorcycle
exceeded our earlier projections for 1999," stated the Hanlons, "but we are
optimistic that our production costs and operating results will be near our
expectations by the end of 1999 and that we will begin the trend of
predictable operations."
The Company stated that 1999 will be the first year of significant revenue
after a five-year development in which the Company has raised nearly
$85 million in financing, built and equipped a 160,000 square foot
manufacturing facility that has the capacity to produce 20,000 motorcycles a
year, hired 180 engineering, production and administrative team members, and
produced the proprietary Super X motorcycle. The Company also announced that
it believed that 1999 results would not be indicative of future results.
The Co-Founders also added, "We are now at the most exciting time in our
six year history of developing the new Excelsior-Henderson company and
products. We are now producing the world's first all new proprietary
motorcycle built on the foundation of a strong American motorcycle brand that
dates back to 1876. Witnessing the over 1,000 demo rides of our new production
motorcycle by bikers at the recent Daytona Beach Bike Week Rally, and hearing
their comments and reviewing their written evaluations furthers our drive to
march forward. The marketplace is just plain excited, and dealers and
customers are enthusiastically taking delivery of the new Super X. It is truly
a rewarding experience to witness the increased encouragement by bikers from
around the world. We have a tremendous amount of gratitude to all those
shareholders, dealers, suppliers, bikers, team members and their families who
have helped us build our foundation for the future. We are having our second
annual Shareholder Reunion and Biker's Bar-B-Que on Saturday, June 5th, and we
invite everyone to come and tour our new factory and have a chance to demo
ride our new Super X."
Excelsior-Henderson Motorcycle Manufacturing Company is a
development-stage company that exclusively manufactures, markets and sells
premium heavyweight American cruiser motorcycles, as well as related parts,
apparel and accessories branded with a name that evokes an authentic American
motorcycling heritage and lifestyle. The Company distributes its products
through a national dealer network. Excelsior-Henderson is one of only two
authentic American motorcycle companies exclusively committed to the
manufacture of motorcycles.
Notes Concerning Forward Looking Statements:
This press release contains forward-looking statements regarding the
Company's transition from development stage to an operating company, future
cost expectations and future results that involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated in
these forward-looking statements. Potential risks and uncertainties include
the ability of the Company to increase production volume, while maintaining
high quality and controlling production costs, and the ability to obtain
additional debt and equity financing. Factors that may affect production
volume include the ability of the Company to maintain adequate quantities of
high-quality components and supplies, to refine its manufacturing processes,
to solve unanticipated problems, and to hire qualified personnel. Factors that
may affect production costs include the ability of the Company to purchase
motorcycle components and supplies at reasonable costs and to effectively
manage its inventory. Investors are also encouraged to review the factors
described from time to time in the Company's reports on file with the
Securities and Exchange Commission, including but not limited to the Company's
Annual Report on Form 10-K for the fiscal year ended January 2, 1999.
Financial Tables Follow
EXCELSIOR-HENDERSON MOTORCYCLE MANUFACTURING COMPANY
(A Development Stage Company)
Condensed Financial Statements
(Unaudited)
Balance Sheets
January 2, January 3,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and short-term investments $4,697,542 $24,249,191
Inventory 1,865,251 --
Other current assets 541,371 113,497
Total current assets 7,104,164 24,362,688
PROPERTY AND EQUIPMENT, net 30,317,118 12,908,770
RESTRICTED CASH 8,065,727 7,275,569
DEPOSITS -- 2,670,675
OTHER ASSETS, net 2,501,123 967,765
$47,988,132 $48,185,467
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $10,221,789 $3,258,636
LONG-TERM DEBT, less current maturities 20,569,409 13,738,615
STOCKHOLDERS' EQUITY:
Invested capital $51,114,758 $41,196,735
Deficit accumulated during the
development stage (33,917,824) (10,008,519)
Total stockholders' equity 17,196,934 31,188,216
$47,988,132 $48,185,467
Statements of Operations
Three Months Ended Fiscal Year Ended
January 2, January 3, January 2, January 3,
1999 1998 1999 1998
PREOPERATING EXPENSES:
Research and
development $6,441,726 $1,115,638 $14,907,976 $2,648,964
Marketing 510,621 382,109 3,797,185 1,673,680
General and
administrative 826,815 1,009,621 4,559,639 2,180,848
Total preoperating
expenses 7,779,162 2,507,368 23,264,800 6,503,492
INTEREST INCOME
(EXPENSE), net (354,025) 178,539 (644,505) 630,761
NET LOSS $(8,133,187)$(2,328,829)$(23,909,305)$(5,872,731)
NET LOSS PER SHARE $(0.62) $(0.18) $(1.83) $(0.65)
WEIGHTED AVERAGE
SHARES OUTSTANDING 13,069,874 13,026,191 13,048,708 9,O73,839