| 09/16/2001 | Huffy Corporation Reduces Earnings ForecastHuffy Corporation announced that it expects to report a loss from continuing operations for the third quarter of 2001, in the $0.26 - $0.30 range per share of common stock, compared to earnings from continuing operations of $0.48 per share of common stock reported for the same period last year. For the full year 2001, estimated earnings from continuing operations are now expected to be in the range of $0.00 to $0.12 per share of common stock, compared to earlier estimates of $0.50 - $.0.70 per share of common stock.
Commenting on the reduction in earnings estimates, Don Graber, Chairman, President and CEO said, "The second half of 2000 was one of the strongest in our history. We were fortunate to have recognized the market potential of the micro-scooter very early in the cycle. The success of the Huffy Micro(R) scooter made a significant contribution to both sales and earnings in the second half of last year. We now foresee that the challenges of the first half of 2001 will continue throughout the year. Despite repeated cuts in interest rates and the recent tax rebate, the overall economy softness continues and the retail environment remains a challenge. Back-to-school sales were disappointing. Many retailers are predicting a weak selling season during the coming holidays and have moderated their buying patterns to reflect lower sales expectations.
"Additionally, to our great sorrow, the unprecedented terrorists attacks on America and the uncertainty of the longer-term impact of these unconscionable actions is concerning. Although the actions taken over the past two years have positioned Huffy to weather economic down cycles, the instability of the political and economic environment make future projections difficult.
"The agreement related to potential purchase of the Schwinn/GT cycling assets provided for payment of a break-up fee to Huffy Corporation should Huffy not be the successful bidder. We anticipate that the expenses incurred since the sale process started in April 2001 for legal fees, due diligence and financing commitments will exceed the break-up fee and are factored into our reduced earnings forecast.
"While we are disappointed in both sales and earnings, our balance sheet remains strong, with cash and short-term investments anticipated to be in excess of $25.0 million at year-end. In the current economic environment, we will continue to see a variety of opportunities to add to our existing portfolio of products and services. With a debt free balance sheet, we are well positioned to pursue opportunities to add to shareholder value. Our business model, our continuing emphasis on cost control and strong focus on cash generation continue to serve us well in a soft economy. We will continue to work with our external financial advisors as we evaluate additional alternatives."www.huffy.com
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