Cannondale Corporation Announces Earnings and Revenue for Fiscal 1999
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Wednesday August 18, 5:39 pm
Eastern Time
Company Press Release
SOURCE: Cannondale Corporation
Cannondale Corporation
Announces Earnings
and Revenue for Fiscal
1999
BETHEL, Conn., Aug. 18 /PRNewswire/ -- Cannondale Corporation
(Nasdaq: BIKE - news) today announced results for the fourth
quarter and year ended fiscal 1999, the period ended July 3, 1999.
For the three months ended July 3, 1999 net sales were $44,986,000,
a 2% increase from the $44,181,000 recorded for the same period last
year. Net income for the fourth quarter of fiscal 1999 was $909,000, a
$744,000 or 45% decrease from the $1,653,000 recorded during the
prior-year period. Diluted earnings per share were 12 cents for the
fourth quarter of fiscal 1999. Diluted earnings per share for the
fourth quarter of fiscal 1999 include approximately an additional 1
cent related to the adoption of AICPA Statement of Position (SOP)
98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. Exclusive of this 1 cent, diluted earnings
per share were 11 cents for the fourth quarter of fiscal 1999. This
represents a decrease of 45% compared to the 20 cents recorded for
the same period last year and 1 cent above the Company's July 15,
1999 preannounced earnings per share for the fourth quarter of
fiscal 1999. Revenues and earnings for the fourth quarter of fiscal
1999 were adversely affected by equipment problems at the
Company's manufacturing facility related to the introduction of
model Year 2000 products that hindered its ability to produce
sufficient quantities to fill orders. These calculations reflect a 7%
decrease in the weighted average common and common equivalent
shares outstanding primarily as a result of the Company's
repurchase of its common stock.
For the fiscal year ended July 3, 1999, net sales were $176,819,000, a
3% increase over the $171,496,000 recorded for the same period last
year. The increase in sales for fiscal year 1999 was primarily a result
of strong international demand for Cannondale products during the
first two fiscal quarters of the year.
Net income for the fiscal year ended July 3, 1999 was $5,923,000, a
$3,429,000 or 37% decrease from the $9,352,000 recorded for the
same period last year. For fiscal 1999, the lower earnings were
principally the result of the Company's increased investment in
research and development primarily associated with the
development of its motocross motorcycle. Diluted earnings per share
were 77 cents for the fiscal year ended July 3, 1999. Diluted earnings
per share for the year include approximately an additional 4 cents
related to the adoption of SOP 98-1. Exclusive of this 4 cents, diluted
earnings per share for the fiscal year ended July 3, 1999 were 73
cents, a decrease of 32% compared to $1.08 recorded for the same
period last year. These calculations reflect an 11% decrease in the
weighted average common and common equivalent shares
outstanding primarily as a result of the Company's repurchase of its
common stock.
Final development and testing of Cannondale's new MX400
motorcycle continued through the fourth quarter. Production is
scheduled to begin in October and shipments in November. Ten-time
NESC Motocross Champion Keith Johnson, one of Cannondale's
test-riders, is very enthusiastic about the motorcycle. ''The
ergonomics of the bike are excellent, and both the crisp throttle
response and the directional stability are exceptional,'' Johnson said.
Johnson's excitement was recently echoed by Dirt Action, an
Australian motocross magazine. Writing in the July/August issue,
Dirt Action's U.S. correspondent Mark Thompson said, ''The
MX400 contains enough innovation to make everything else with
knobbies appear quaintly antique. The other manufacturers are
going to hate this bike, because it forces them to move motocross
machines into a new technological era.''
In addition, during the fourth quarter Cannondale continued to
implement its strategy of offering differentiated, patent-protected
products in its bicycle product line. In June, Cannondale successfully
introduced two new proprietary technologies: a completely
redesigned version of the award-winning Raven full-suspension
mountain bike, and the radical new HeadShok Lefty fork. Mountain
Bike Daily (Mountain Bike magazine's web site) praised the Lefty's
unique single-legged design for dramatically reducing weight
without compromising the performance for which HeadShok forks
are known. ''The Lefty is the first mass-produced single-sided
bicycle suspension fork on the market,'' wrote Mountain Bike Daily,
''and a few test rides proved that it feels as stiff and solid as any
suspension fork on the market.''
The fourth quarter also saw the successful redesign and relaunch of
the Company's popular web site at cannondale.com. The
revamped site has seen an attendant increase in traffic, and now
averages more than 27 million hits and 325,000 user-sessions each
month.
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 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)
July 3, June 27,
1999 1998
Assets
Current assets:
Cash $3,300 $3,031
Trade accounts
receivable, less
allowances of $10,074
and $8,479 59,379 61,746
Inventory 33,165 39,420
Deferred income taxes 2,749 2,172
Prepaid expenses and other
current assets 5,654 4,449
Total current assets 104,247 110,818
Property, plant and
equipment, net 41,377 35,769
Other assets 16,755 5,690
Total assets $162,379 $152,277
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable $17,329 $16,747
Revolving credit advances 882 2,141
Income taxes payable 2,252 1,732
Warranty and other
accrued expenses 8,434 7,962
Payable to related party -- 2,800
Current installments of
long-term debt 456 461
Total current liabilities 29,353 31,843
Long-term debt, less current
installments 55,997 40,352
Deferred income taxes 1,619 1,569
Other noncurrent liabilities 400 275
Total liabilities 87,369 74,039
Stockholders' equity:
Common stock, $.01 par value
Authorized shares-40,000,000
Issued 8,784,308 and
8,737,088 shares 88 87
Additional paid-in capital 57,815 57,303
Retained earnings 41,328 35,405
Less 1,292,900 and 656,400
shares in treasury at cost (20,162) (12,417)
Accumulated other
comprehensive income (4,059) (2,140)
Total stockholders' equity 75,010 78,238
Total liabilities and
stockholders' equity $162,379 $152,277
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(in thousands, except for per-share data)
Fourth Fourth
Quarter Quarter Year Ended Year Ended
Fiscal 1999 Fiscal 1998 Fiscal 1999 Fiscal 1998
(Unaudited) (Unaudited)
Net sales $44,986 $44,181 $176,819 $171,496
Cost of sales 29,327 28,923 114,627 110,113
Gross profit 15,659 15,258 62,192 61,383
Expenses:
Selling, general and
administrative 10,489 10,243 40,599 39,361
Research and development 2,709 2,481 10,222 6,750
13,198 12,724 50,821 46,111
Operating income 2,461 2,534 11,371 15,272
Other income(expense):
Interest expense (1,375) (749) (4,557) (1,995)
Other income 130 144 1,160 653
(1,245) (605) (3,397) (1,342)
Pretax income 1,216 1,929 7,974 13,930
Income tax expense (307) (276) (2,051) (4,578)
Net income $909 $1,653 $5,923 $9,352
Diluted income per share $.12 $.20 $.77 $1.08
Weighted average common and
common equivalent shares
outstanding 7,668 8,263 7,686 8,682
Basic income per share $.12 $.20 $.79 $1.11
Weighted average common
shares outstanding 7,479 8,117 7,518 8,442
SOURCE: Cannondale Corporation
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