Cannondale Corporation Announces Financial Results for The First Quarter of Fiscal Year 2001
24 October 2000
Cannondale Corporation Announces Financial Results for The First Quarter of Fiscal Year 2001
BETHEL, Conn., Oct. 24 Cannondale Corporation
today announced results for the first quarter of fiscal 2001,
the period ended September 30, 2000.
For the three months ended September 30, 2000, net sales were $36,687,000,
including $1.5 million in motorsports sales, a 1% increase from the
$36,473,000 recorded for the same period last year. The net loss for the
first quarter of fiscal 2001 was $1,627,000 million compared to the net loss
of $1,485,000 million recorded during the prior-year quarter. The Company's
bicycle business continued to be profitable for the first quarter of fiscal
2001 with pre-tax earnings of $1,416,000, compared to the bicycle business
pre-tax loss of $480,000 for the first quarter of fiscal 2000. Shipments of
bicycles and cycling-related products in the U.S. market increased 7.4%
compared to the prior-year quarter. In the first quarter of fiscal 2001
European bicycle shipments increased 0.3%, excluding the effect of foreign
exchange, reflecting improvements in that market. Global bicycle gross
margins increased to 32.9% from 29.8% in the prior year primarily as a result
of a more favorable product mix.
The net loss per share was 22 cents for the first quarter of fiscal 2001
compared to the net loss per share of 20 cents recorded for the same period
last year.
Prior year net sales and selling, general and administrative expenses have
been restated pursuant to EITF Issue 00-10, Accounting for Shipping and
Handling Fees and Costs. In accordance with such, all shipping and handling
billings to customers have been included in net sales, and all freight costs
paid to carriers have been included in selling, general and administrative
expenses. Previously, the Company offset shipping and handling charges billed
to customers and the related freight costs within selling, general and
administrative expenses. For the quarterly periods ended September 30, 2000
and October 2, 1999, shipping and handling billings of approximately $492,000
and $464,000, respectively, have been included in net sales.
The Company's strong presence in bicycle racing continued throughout the
first quarter, as Cannondale-sponsored riders won both a silver and a bronze
medal at the 2000 Summer Olympic Games in Sydney, two U.S. National Champion
titles, and three World Cup mountain bike racing titles. For the second
consecutive year, the Volvo/Cannondale mountain bike racing team was also
named the top-ranked squad in two of the three off-road racing disciplines:
cross-country and dual slalom.
Production and shipments of Cannondale's MX400 motorcycle are on hold
while the Company completes testing of some improved components. At this
time, a specific date for resuming shipments has not yet been determined.
Development of the FX400 ATV (All-Terrain Vehicle) is going well with
shipments expected in the first half of calendar 2001.
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 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. The
Company has also entered the motorsports industry with its MX400 motocross
motorcycle. Two additional motorcycle models and a four-wheeled ATV are
currently in development.
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
September 30, 2000 July 1, 2000
(unaudited)
Assets
Current assets:
Cash $2,748 $5,064
Trade accounts receivable, less allowances of
$10,537 and $10,076 42,249 50,224
Inventory 41,092 40,413
Deferred income taxes 5,715 5,571
Prepaid expenses and other current assets 3,152 4,618
Total current assets 94,956 105,890
Property, plant and equipment, net 38,824 40,114
Other assets 20,765 18,903
Total assets $154,545 $164,907
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $14,429 $15,912
Revolving credit advances 1,384 2,235
Income taxes payable 783 307
Warranty and other accrued expenses 6,713 7,403
Current installments of long-term debt 4,393 4,577
Total current liabilities 27,702 30,434
Long-term debt, less current installments 58,467 63,363
Other noncurrent liabilities 415 424
Total liabilities 86,584 94,221
Commitments and contingencies -- --
Stockholders' equity:
Common stock, $.01 par value:
Authorized shares - 40,000,000
Issued shares - 8,808,125 88 88
Additional paid-in capital 57,935 57,935
Retained earnings 37,175 38,802
Less shares in treasury at cost - 1,292,900 (20,162) (20,162)
Accumulated other comprehensive loss (7,075) (5,977)
Total stockholders' equity 67,961 70,686
Total liabilities and stockholders' equity $154,545 $164,907
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
First Quarter First Quarter
Fiscal Fiscal
2001 2000
(Unaudited) (Unaudited)
Net sales $36,687 $36,473
Cost of sales 26,725 25,736
Gross profit 9,962 10,737
Expenses:
Selling, general and administrative 9,469 9,812
Research and development 1,962 2,424
11,431 12,236
Operating loss (1,469) (1,499)
Other income (expense):
Interest expense (1,788) (1,042)
Other income 274 221
(1,514) (821)
Pretax loss (2,983) (2,320)
Income tax benefit 1,356 835
Net loss $(1,627) $(1,485)
Basic and diluted loss per share $(0.22) $(0.20)
Weighted-average common shares outstanding 7,515 7,503