CONTACT:
WILLIAM A. LUCA
CHIEF FINANCIAL OFFICER
(203) 749-7000
FOR IMMEDIATE RELEASE
CANNONDALE CORPORATION
ANNOUNCES FINANCIAL RESULTS FOR
THE THIRD QUARTER OF FISCAL YEAR 2002
Bethel, CT (May 1, 2002) - Cannondale Corporation (Nasdaq: BIKE) today announced results for the third quarter and
first nine months of fiscal 2002, the period ended March 30, 2002.
For the three months ended March 30, 2002, net sales were $39,167,000, a $6,531,000, or 20%, increase over the
$32,636,000 recorded for the same period last year. This growth in sales primarily occurred in our motorsports line
with shipments of $8,183,000 during the third quarter of fiscal 2002 compared to $1,737,000 for the third quarter of
fiscal 2001. The remainder of the sales increase for the third quarter of fiscal 2002 of $861,000 primarily relates to a
volume increase in domestic bicycle shipments, which was substantially offset by an unfavorable foreign exchange
impact of approximately $776,000 on international bicycle sales. For the first nine months of fiscal 2002, net sales
were $111,104,000 compared to $104,010,000 for the same period last year, reflecting an increase of $7,094,000, or 7%,
during the current year. For the year-to-date period, motorsports sales grew 356% to $14,503,000, compared to sales
of $3,180,000 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 for the first nine months of fiscal 2002 was partially offset by
lower year-to-date bicycle shipments, which occurred in the first two quarters of fiscal 2002.
The net loss for the third quarter of fis cal 2002 was $2,245,000 compared to the net loss of $5,351,000 recorded during
the prior-year quarter. For the first nine months of fiscal 2002, the net loss was $9,774,000 compared to the net loss of
$17,549,000 recorded during the prior year period. These quarterly and year-to-date amounts for fiscal 2002 include a
tax benefit of approximately $2.0 million as a result of the Job Creation and Worker Assistance Act of 2002, which
allows the Company to carry back certain net operating losses over a five year period. The net loss for the first nine
months of fiscal 2001 includes an extraordinary loss of $552,000. Additionally, the quarterly and nine-month periods
for fiscal 2001 include a deferred tax asset valuation provision of $2,287,000 and $10,890,000, respectively. Excluding
these items, the loss for the third quarter and first nine months of fiscal 2001 was $3,064,000 and $6,107,000,
respectively.
The Company's bicycle business continued to be profitable in the third quarter of fiscal 2002 with pre-tax income of
$1,632,000, a 192% increase over the bicycle business pre-tax income of $559,000 for the third quarter of fiscal 2001.
The increase in third quarter pre-tax profits resulted from significantly stronger bicycle margins, which increased to
35.0% for the third quarter of fiscal 2002 from 30.4% in the prior-year quarter as a result of production efficiencies and
more favorable product mix. For the first nine months of fiscal 2002, the bicycle business produced pre-tax income of
$7,652,000, a 68% increase over the pre-tax income of $4,548,000 from the prior year period. The increase in year-to-
date pre-tax profits also resulted from stronger bicycle margins as well as reduced operating expenses. The bicycle
margin for the first nine months of fis cal 2002 was 34.5% compared to the margin of 32.4% for the prior year period;
this margin increase is attributable to production efficiencies and more favorable product mix.
The net loss per share for the third quarter of fiscal 2002 was $0.30 per share compared to the net loss per share of
$0.71 (inclusive of a deferred tax asset valuation provision of $0.30 per share) recorded for the same period last year.
For the first nine months of fiscal 2002, the net loss per share was $1.29 compared to the net loss per share of $2.33
(inclusive of an extraordinary loss per share of $0.07 and a deferred tax asset valuation provision of $1.45 per share)
recorded for the prior year period.
