Cannondale Announces Financial Results For Its Q2 of Fiscal 2000
1 February 2000
Cannondale Corporation Announces Financial Results For Its Second Quarter of Fiscal 2000
BETHEL, Conn., Jan. 31 -- Cannondale Corporation
today announced results for the second quarter and first six
months of fiscal 2000, the period ended January 1, 2000.
For the three months ended January 1, 2000, net sales were $41,150,000, a
14% decrease from the $47,901,000 recorded for the same period last year. Net
income for the second quarter of fiscal 2000 was $654,000, a $1,195,000
reduction from net income of $1,849,000 recorded during the prior-year
quarter. The decreased sales and earnings were primarily a result of
inventory adjustments in the European market and the resulting increase in the
seasonality of shipments to European retailers.
Diluted earnings per share was 9 cents for the second quarter of fiscal
2000, a decrease of 15 cents compared to diluted earnings per share of
24 cents recorded for the same period last year.
For the six months ended January 1, 2000, net sales were $77,159,000, a
decrease of $12,960,000 or 14% from the $90,119,000 recorded for the same
period last year. The net loss for the first six months of fiscal 2000 was
$831,000, a $3,475,000 reduction from net income of $2,644,000 recorded during
the prior-year period. The decreased sales and earnings were primarily a
result of the increasing seasonality of shipments to retailers in the European
market, and of component shortages in the first quarter caused by the
September earthquake in Taiwan.
The net loss per share was 11 cents for the first six months of fiscal
2000, a decrease of 45 cents compared to diluted earnings per share of
34 cents recorded for the same period last year.
Cannondale has begun manufacturing sub-assemblies for its MX400 motorcycle
at the Company's motorcycle facility in Bedford, Pennsylvania, and will begin
shipping the MX400 in the third quarter of fiscal 2000 (January through
March). Currently, MX400 orders from motor-sport dealers exceed the MX400
sales forecast for fiscal 2000. The Company also plans to unveil several
additional motorized recreational vehicles at next month's motorcycle industry
trade show in Indianapolis. These vehicles will use the same engine featured
in the MX400.
Interest in the MX400 continues to be strong among consumers and the press
alike, and the new motorcycle was featured recently on the Speedvision
network's "Motorcyclist" show. Dirt Rider magazine editor Ken Faught was
interviewed during the "Motorcyclist" segment on the MX400 and commented on
the impact the MX400 is already having on the motorcycle industry. "The
Cannondale MX400 is a monumental bike since it has convinced other
manufacturers to rethink their current technology," observed Dirt Rider's
Faught. "Never before have we seen another company come into the market so
aggressively that it has other manufacturers concerned."
Dirt Rider magazine named the MX400 its "Bike of the Year" in its May,
1999 issue, and a new Cannondale bicycle was recently awarded a similar honor.
The Company's Jekyll 900 SL, introduced in December of calendar 1999, has been
named Mountain Biking magazine's 2000 "Bike of the Year." Dubbed "a
manufacturing masterpiece," "a masterful work of art," and "an outstanding
achievement in lightweight, dual-suspension performance," the Jekyll has a
unique frame design that can be adjusted easily to suit the handling
preferences of its rider.
The Cannondale Raven with HeadShok Lefty fork has also attracted
considerable attention. The Raven/Lefty combination has been featured in the
pages of USA Today, Sports Illustrated, Popular Science, Popular Mechanics,
Worth, Men's Fitness, Design News, Stuff, Outdoor Explorer, and other
mainstream magazines in recent months.
This press release contains forward-looking statements, as defined under
the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from those anticipated as a result of various risks and
uncertainties, including risks and uncertainties described in this press
release, as well as those detailed from time to time in the Company's periodic
reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. The
Company undertakes no obligation to publish revised forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Cannondale Corporation is the world's leading manufacturer of
high-performance aluminum bicycles. The Company's bicycles and bicycle
accessories, which include clothing, packs and bags, HeadShok suspension forks
and CODA components, are marketed under the Cannondale brand name and
"Handmade in USA" logo, and are sold in the U.S. and in more than 60 foreign
countries.
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data)
January 1, December 26,
2000 1998
(Unaudited) (Unaudited)
Assets
Current assets:
Cash $1,212 $879
Trade accounts receivable,
less allowances of $9,573
and $10,238 59,681 70,465
Inventory 37,303 40,284
Deferred income taxes 5,256 3,310
Prepaid expenses and other
current assets 6,175 5,277
Total current assets 109,627 120,215
Property, plant and
equipment, net 40,576 38,522
Other assets 16,470 15,891
Total assets $166,673 $174,628
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $16,295 $13,296
Revolving credit advances 1,632 4,997
Income taxes payable -- 1,568
Warranty and other accrued
expenses 6,756 8,259
Current installments of
long-term debt 519 478
Total current liabilities 25,202 28,598
Long-term debt, less current
installments 65,552 69,288
Deferred income taxes 1,593 1,575
Other noncurrent liabilities 440 275
Total liabilities 92,787 99,736
Stockholders' equity:
Common stock, $.01 par value
Authorized shares-40,000,000
Issued shares - 8,794,517
and 8,741,579 88 87
Additional paid-in capital 57,866 57,460
Retained earnings 40,497 38,049
Less 1,292,900 shares in
treasury at cost (20,162) (20,162)
Accumulated other
comprehensive income (4,403) (542)
Total stockholders' equity 73,886 74,892
Total liabilities and
stockholders' equity $166,673 $174,628
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except for per-share data)
Second Second Six Months Six Months
Quarter Quarter Ended Ended
Fiscal 2000 Fiscal 1999 Fiscal 2000 Fiscal 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $41,150 $47,901 $77,159 $90,119
Cost of sales 28,662 31,719 54,398 59,333
Gross profit 12,488 16,182 22,761 30,786
Expenses:
Selling, general and
administrative 9,603 10,326 18,951 20,868
Research and development 1,765 2,820 4,189 4,973
11,368 13,146 23,140 25,841
Operating income (loss) 1,120 3,036 (379) 4,945
Other income (expense):
Interest expense (1,362) (1,106) (2,404) (1,945)
Other income 513 255 734 391
(849) (851) (1,670) (1,554)
Pretax income (loss) 271 2,185 (2,049) 3,391
Income tax (expense)
benefit 383 (336) 1,218 (747)
Net income (loss) $654 $1,849 $(831) $2,644
Diluted income
(loss) per share $.09 $.24 $(.11) $.34
Weighted average common and
common equivalent shares
outstanding 7,626 7,575 7,492 7,709
Basic income (loss)
per share $.09 $.25 $(.11) $ .35
Weighted average common
shares outstanding 7,492 7,449 7,492 7,565