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Tuesday April 27, 5:34 pm Eastern Time
Company Press Release
SOURCE: Cannondale Corporation
Cannondale Corporation Announces
Earnings and Revenue for the Third
Quarter of Fiscal 1999
BETHEL, Conn., April 27 /PRNewswire/ -- Cannondale Corporation (Nasdaq: BIKE - news) today
announced results for the third quarter and first nine months of fiscal 1999, the period ended March 27,
1999.
For the three months ended March 27, 1999, net sales were $41,714,000, an 8% decrease from the
$45,305,000 recorded for the same period last year. The decrease in sales for the quarter was primarily a
result of inventory reductions by both domestic and international dealers.
Net income for the third quarter of fiscal 1999 was $2,317,000, an $869,000, or 27% decrease from the
$3,186,000 recorded during the prior-year period. The decrease in earnings was primarily the result of
lower sales volume during the third quarter of fiscal 1999. Diluted earnings per share were 30 cents for
the third quarter, a decrease of 19% compared to 37 cents 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.
For the nine months ended March 27, 1999, net sales were $131,833,000, a 4% increase over the
$127,315,000 recorded for the same period last year. The increase in sales for the first nine months of
fiscal 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 first nine months of fiscal 1999 was $4,804,000, a $2,895,000, or 38% decrease from
the $7,699,000 recorded during the prior-year period. For the first nine months of fiscal 1999, the lower
earnings are principally the result of the Company's increased investment in research and development
primarily associated with the development of the motocross motorcycle. Diluted earnings per share
were 62 cents for the first nine months of fiscal 1999, a decrease of 29% compared to 87 cents recorded
for the same period last year. These calculations reflect a 13% decrease in the weighted average
common and common equivalent shares outstanding primarily as a result of the Company's repurchase
of its common stock.
The third quarter of fiscal 1999 was highlighted by the introduction of Cannondale's new MX400
motocross motorcycle at an industry trade show in Indianapolis. Dealer response to the official
unveiling was very enthusiastic, with unit-orders at the trade show surpassing the Company's sales
goal for the three-day exhibition by 80%.
The response of the motorcycle industry press was every bit as positive. Dirt Rider magazine featured
the new Cannondale motocrosser on its cover and voted the MX400 its ''Bike of the Year.'' According
to Dirt Rider, ''the MX400 looks more like a high-dollar project from a secret division of a major
automobile manufacturer than a first attempt from a leader in the pedal power industry.'' The magazine
went on to say that ''Cannondale took an aggressive approach to this project and made monumental
technological advances in areas where others have failed. The twin-spar, aluminum-framed MX400 was
unveiled at the nation's largest dealer convention in Indianapolis, and the $7950 four- stroke stole the
show.'' Dirt Rider wasn't alone in recognizing the MX400 following its third-quarter unveiling. In the
weeks following the Indianapolis trade show the new motorcycle also appeared on the cover of two
additional magazines, Motocross Action and 4 Stroke Dirt Bikes.
Besides the editorial coverage of its motorcycle, Cannondale enjoyed favorable exposure when its
Super V Raven 700 was featured on the cover of Mountain Bike magazine's March issue. In an
accompanying review of the Raven 700, Mountain Bike's Ron Ige concluded that the bike gives ''an
accessible price of entry to the land of exotic Raven frame technology. It offers a solid foundation to
upgrade upon, and provides an efficient ride.'' Cannondale's road bikes were also the subject of praise
in the third quarter, when the British monthly Cycle Sport named Cannondale one of the ''Top 12 Road
Bikes of All Time.'' Recognized alongside several venerated European manufacturers, Cannondale was
cited as ''the first U.S. firm to break into the big league by capturing Mario Cipollini's Saeco team.''
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)
March 27, March 28,
1999 1998
(Unaudited) (Unaudited)
Assets
Current assets:
Cash $2,190 $1,189
Trade accounts receivable, less
allowances of $10,359 and $8,979 77,144 77,484
Inventory 35,832 39,845
Deferred income taxes 2,797 1,903
Prepaid expenses and other current assets 5,249 3,425
Total current assets 123,212 123,846
Property, plant and equipment, net 38,160 30,792
Other assets 16,184 3,051
Total assets $177,556 $157,689
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $15,850 $14,475
Revolving credit advances 3,202 1,484
Income taxes payable 1,933 535
Warranty and other accrued expenses 8,235 8,359
Current installments of long-term debt 470 389
Total current liabilities 29,690 25,242
Long-term debt, less current installments 70,897 53,045
Deferred income taxes 1,320 422
Other noncurrent liabilities 406 275
Total liabilities 102,313 78,984
Stockholders' equity:
Common stock, $.01 par value Authorized
shares-40,000,000 Issued 8,771,161
and 8,711,088 shares 88 87
Additional paid-in capital 57,708 57,196
Retained earnings 40,209 33,752
Less 1,292,900 and 505,000 shares in
treasury at cost (20,162) (10,133)
Cumulative translation adjustment (2,600) (2,197)
Total stockholders' equity 75,243 78,705
Total liabilities and stockholders' equity $177,556 $157,689
CANNONDALE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(in thousands, except for per-share data)
Third Third Nine Months Nine Months
Quarter Quarter Ended Ended
Fiscal 1999 Fiscal 1998 Fiscal 1999 Fiscal 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $41,714 $45,305 $131,833 $127,315
Cost of sales 25,967 28,101 85,300 81,191
Gross profit 15,747 17,204 46,533 46,124
Expenses:
Selling, general and
administrative 9,325 10,277 30,442 29,118
Research and development2,540 1,552 7,513 4,269
11,865 11,829 37,955 33,387
Operating income 3,882 5,375 8,578 12,737
Other income(expense):
Interest expense (1,237) (685) (3,182) (1,246)
Other income 639 229 1,030 509
(598) (456) (2,152) (737)
Pretax income 3,284 4,919 6,426 12,000
Income tax expense (967) (1,733) (1,622) (4,301)
Net income $2,317 $3,186 $4,804 $7,699
Diluted income per share $.30 $.37 $.62 $.87
Weighted average common
and common equivalent
shares outstanding 7,662 8,609 7,693 8,822
Basic income per share $.31 $.38 $.64 $.90
Weighted average common
shares outstanding 7,467 8,343 7,532 8,550
SOURCE: Cannondale Corporation |
