| 08/13/2002 | Cannondale Corporation (Nasdaq: BIKE) today announced results for the fourth quarter and fiscal year 2002, the period ended June 29, 2002. For the three months ended June 29, 2002, net sales were $45,551,000, a $2,770,000, or 6%, increase over the $42,781,000 recorded for the same period last year. This growth in sales primarily occurred in our motorsports line with shipments of $7,519,000 during the fourth quarter of fiscal 2002 compared to $2,136,000 for the fourth quarter of fiscal 2001. In addition, there was a favorable foreign exchange impact on net sales for the fourth quarter of fiscal 2002 of approximately $1,141,000 compared to the prior-year quarter. Bicycle shipments were $38,032,000 in the fourth quarter of fiscal 2002 compared to $40,645,000 for the fourth quarter of fiscal 2001. This decrease in bicycle sales was primarily attributable to an increase in unfilled open orders at the end of June over the prior year as a result of orders not shippable due to late delivery of componentry from suppliers for the new 2003 bicycle models. For fiscal year 2002, net sales were $156,655,000 compared to $146,791,000 for fiscal year 2001, reflecting an increase of $9,864,000, or 7%, during fiscal year 2002. For fiscal year 2002, motorsports sales grew 314% to $22,022,000 compared to sales of $5,316,000 for fiscal 2001. In addition to this growth in motorsports production and shipments, the Company also expanded its dealer network and achieved improved efficiencies and lowered costs at its Bedford, Pennsylvania motorsports factory. This motorsports sales growth during fiscal year 2002 was partially offset by decreased volume of both domestic and international bicycle shipments.
Bicycle shipments during fiscal 2002 were $134,633,000 compared to $141,475,000 for fiscal 2001.
The net loss for the fourth quarter of fiscal 2002 was $5,666,000 compared to the net loss of $2,769,000 recorded during the prior-year quarter. For fiscal year 2002, the net loss was $15,440,000 compared to the net loss of $20,319,000 recorded during the prior fiscal year. The fiscal year 2002 amount includes a tax benefit of approximately $2.0 million as a result of the Job Creation and Worker Assistance Act of 2002, which allowed the Company to carry back certain net operating losses over a five year period. The net loss for fiscal year 2001 includes an extraordinary loss of $552,000 relating to the early extinguishment of long-term debt.
The Company's bicycle business continued to be profitable in the fourth quarter of fiscal 2002 with pre-tax income of $1,903,000 compared to bicycle business pre-tax income of $3,662,000 for the fourth quarter of fiscal 2001. Bicycle margins increased to 32.0% for the fourth quarter of fiscal 2002 from 30.2% in the prior-year quarter as a result of production efficiencies and more favorable product mix. Lower volume, coupled with higher operating expenses such as bad debt, insurance, amortization of deferred financing costs, and research and development costs contributed to the reduced pre-tax income during the fourth quarter of fiscal 2002. For fiscal year 2002, the bicycle business produced pre-tax income of $9,555,000, a 16% increase over the pre-tax income of $8,210,000 for fiscal year 2001. The increase in pre-tax profits resulted from stronger bicycle margins; the bicycle margin for fiscal year 2002 was 33.8% compared to the margin of 31.8% for fiscal year 2001. This margin increase is attributable to production efficiencies and more favorable product mix.
The net loss per share for the fourth quarter of fiscal 2002 was $0.75 per share compared to the net loss per share of $0.37 recorded for the same period last year. For fiscal year 2002, the net loss per share was $2.04 compared to the net loss per share of $2.70 (inclusive of an extraordinary loss per share of $0.07) recorded for fiscal year 2001.
In July 2002, the Company secured a new financing facility with Pegasus Capital Advisors, L.P., and amended its existing credit facility with The CIT Group/Business Credit, Inc. Cannondale sold to Pegasus $25.0 million of senior notes and warrants to purchase an aggregate of 2,944,552 shares of Cannondale's common stock. The net proceeds were used to pay down approximately $10.3 million of term debt, and the remaining net proceeds of approximately $11.7 million were available for working capital needs. The amended credit facility with CIT provides the Company with a five year revolving line of credit. The amount of the revolving line of credit is the lesser of $35.0 million or a percentage of eligible receivables and inventories. In accordance with the refinancing, the Company wrote-off approximately $1.8 million of deferred financing costs associated with the retired debt during July 2002.
In other news from the fourth quarter, the June issue of "Dirt Rider" magazine contained the most favorable review of a Cannondale motorcycle yet published. "Our initial ho-hum attitude underwent a radical about-face when we saw the new bike," wrote Dirt Rider's editors about the Cannondale E440 enduro. "The fit, finish and execution of the machine are at least 100 percent improved over our last bike."
Regarding the E440's performance, the editors made these observations: "(It) stormed out of turns and gobbled the choppy straight bits ... The E440 gearbox is as flexible as a Yamaha or Honda five-speed ... The suspension was impressively adept at absorbing the muddy roots and small-to-medium logs as well as braking chop ... We abused the battery with all the stopping and starting and never had a problem." The editors concluded by stating that "this new Cannondale will have no shortage of willing riders now ... It looks as though there is hope for serious riders who want to ride American."
The Nac's/Cannondale ATV racing team received equally good publicity in the fourth quarter, including a three-page article in the May issue of
"Dirtwheels" and a five-page feature in the May/June edition of "ATV Sport." Besides generating exposure, the team has accumulated 30 top-ten finishes in 46 races, with 13 podium appearances and five wins. Also in the fourth quarter, the Company began shipping its first 2003
model-year bicycles. One such model, the 2003 R1000, dominated a test of several lightweight, high-performance road bikes in the June 29th issue of England's "Cycling Weekly" magazine. After noting that "the bike was very responsive and never hesitated when being powered out of a corner at full steam -- it often produced a smile it was so quick," the magazine's editors concluded that "the Cannondale proved to be the most suited to the racer as the rear end was the most direct we've tested, and placed it ahead of the rest." Cannondale's 2003 model year bicycles have been well received by the market. Based on orders to date, the domestic bicycle orders for the first quarter of fiscal 2003 are running in excess of 10% ahead of the same period last year.
A very positive test of Cannondale's recumbent model appeared in "Recumbent Cyclist News" in the fourth quarter. "It's a spectacular new
recumbent with the finest recumbent suspension we've ever tried," was the opinion of the test's author. "This is the most finely-crafted recumbent I've reviewed in 12 years." In grading the Cannondale in six different categories, the magazine awarded the bike four A marks, and two A-plus grades.www.canondale.com
|
|
|
