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12-12-02, 09:26 PM
Get one before they're gone!!
From Bicycleretailer.com
Cannondale Struggles Amidst Layoffs, Dwindling Cash
DECEMBER 12, 2002 -- BETHEL, CT (BRAIN)--With Christmas around the
corner,
Cannondale furloughed most of its manufacturing staff--upwards of 600
people--at its two Bedford, Pennsylvania, factories this week.
Continued losses in the company's motorsports division, fueling an
on-going
cash crunch, are in part to blame for the widespread layoffs. The
plants
normally employ about 650 people.
Tom Armstrong, a Cannondale spokesman, said the company has
traditionally
cut back its factory operations during December and January, reflecting
low
consumer demand during the winter months. "It's something we've always
done," he said.
However, last year half the employees worked three days one week then
two
days the next. The other half would then work three days on with two
off.
This winter, except for a skeleton crew, most employees will be idle
through
at least mid-January. Cannondale builds motorcycles and bicycles in its
two
Bedford factories.
The short-term layoffs sparked a surge Wednesday in trading volume.
Some
231,910 shares changed hands yesterday, far above its daily average of
13,400. Cannondale's stock price fluctuated from the day's opening bid
of
$1.03, dipping to 97 cents, and then closing up at $1.11--an 11 percent
gain
on a modest $1. Its 52-week high back in March was $4.60.
Cash is hard to find at Cannondale. A number of companies in the
industry
are stuck with long overdue bills with no indication from Cannondale
when
they will be paid. And few companies are shipping Cannondale products
without being paid first, or they are offering only a limited line of
credit.
And financial losses are mounting. Cannondale ended its fiscal year
last
June, posting a $15.4 million loss. In the first three months of its
2003
fiscal year (July through September), the company reported a net loss
of
$8.4 million--a rate almost three times faster than all of last year.
Blame it on the motorsports division. The company's decision to enter
the
motorsports business meant tackling the likes of Harley Davidson,
Honda,
Suzuki, Yamaha and others.
Last year, the bicycle division generated more than $134 million in
sales,
compared to $22 million from motorcycles and ATVs. Yet every motorcycle
and
ATV sold in 2002 was sold at a loss, according to Cannondale's annual
report.
Cannondale's decision to move into motorsports has caused resentment
among
some long-time employees as the division has drained millions from the
company's coffers and sucked resources from its bicycle division.
Robin Hartfiel, editor and publisher of DealerNews, a motorcycle trade
magazine, said he sees no dramatic turnaround ahead for the company's
motorcycle sales.
"They are yesterday's news on the motorcycle front," Hartfiel said,
adding
that the company apparently can no longer afford to advertise them.
Hartfiel said the motorcycles received reams of hype from consumer
magazines
before they were delivered. And when they were delivered--late--the
first
batch had to be recalled.
"It's not a bad bike, but it's not a world beater either," he said.
If there's a bright spot, it's Cannondale's high-end competition ATV,
which
sells for more than $12,000. Dealers can sell them if they can get
them. But
again, parts suppliers are refusing to deliver unless they get paid,
complicating assembly and ultimately delivery to dealers.
Cannondale also is using its ATVs to leverage its motorcycle sales,
spawning
some dealer resentment. For example, dealers are being asked to take
upwards
of four motorcycles before getting one ATV, and few dealers who listen
to
their customers want to stock Cannondale motorcycles, Hartfiel said.
From Bicycleretailer.com
Cannondale Struggles Amidst Layoffs, Dwindling Cash
DECEMBER 12, 2002 -- BETHEL, CT (BRAIN)--With Christmas around the
corner,
Cannondale furloughed most of its manufacturing staff--upwards of 600
people--at its two Bedford, Pennsylvania, factories this week.
Continued losses in the company's motorsports division, fueling an
on-going
cash crunch, are in part to blame for the widespread layoffs. The
plants
normally employ about 650 people.
Tom Armstrong, a Cannondale spokesman, said the company has
traditionally
cut back its factory operations during December and January, reflecting
low
consumer demand during the winter months. "It's something we've always
done," he said.
However, last year half the employees worked three days one week then
two
days the next. The other half would then work three days on with two
off.
This winter, except for a skeleton crew, most employees will be idle
through
at least mid-January. Cannondale builds motorcycles and bicycles in its
two
Bedford factories.
The short-term layoffs sparked a surge Wednesday in trading volume.
Some
231,910 shares changed hands yesterday, far above its daily average of
13,400. Cannondale's stock price fluctuated from the day's opening bid
of
$1.03, dipping to 97 cents, and then closing up at $1.11--an 11 percent
gain
on a modest $1. Its 52-week high back in March was $4.60.
Cash is hard to find at Cannondale. A number of companies in the
industry
are stuck with long overdue bills with no indication from Cannondale
when
they will be paid. And few companies are shipping Cannondale products
without being paid first, or they are offering only a limited line of
credit.
And financial losses are mounting. Cannondale ended its fiscal year
last
June, posting a $15.4 million loss. In the first three months of its
2003
fiscal year (July through September), the company reported a net loss
of
$8.4 million--a rate almost three times faster than all of last year.
Blame it on the motorsports division. The company's decision to enter
the
motorsports business meant tackling the likes of Harley Davidson,
Honda,
Suzuki, Yamaha and others.
Last year, the bicycle division generated more than $134 million in
sales,
compared to $22 million from motorcycles and ATVs. Yet every motorcycle
and
ATV sold in 2002 was sold at a loss, according to Cannondale's annual
report.
Cannondale's decision to move into motorsports has caused resentment
among
some long-time employees as the division has drained millions from the
company's coffers and sucked resources from its bicycle division.
Robin Hartfiel, editor and publisher of DealerNews, a motorcycle trade
magazine, said he sees no dramatic turnaround ahead for the company's
motorcycle sales.
"They are yesterday's news on the motorcycle front," Hartfiel said,
adding
that the company apparently can no longer afford to advertise them.
Hartfiel said the motorcycles received reams of hype from consumer
magazines
before they were delivered. And when they were delivered--late--the
first
batch had to be recalled.
"It's not a bad bike, but it's not a world beater either," he said.
If there's a bright spot, it's Cannondale's high-end competition ATV,
which
sells for more than $12,000. Dealers can sell them if they can get
them. But
again, parts suppliers are refusing to deliver unless they get paid,
complicating assembly and ultimately delivery to dealers.
Cannondale also is using its ATVs to leverage its motorcycle sales,
spawning
some dealer resentment. For example, dealers are being asked to take
upwards
of four motorcycles before getting one ATV, and few dealers who listen
to
their customers want to stock Cannondale motorcycles, Hartfiel said.