Cannondale Sales Down 10 Percent For Fiscal 2001
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Wed August 22 2001
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Posted Aug 21, 2001
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BETHEL, CT Cannondale's fiscal 2001 sales were down $15.6 million, declining from $162.45 million to $146.8 million.
Despite the drop, the motorsports division contributed $5.3 million to the bottom line. Last year the motorsports division contributed only $162,450 in net sales.
Almost half its fiscal 2001 motorsports sales—$2.1 million—came in the company's final quarter. Even with the slowdown in sales the company still had cash on hand to pay down $15 million, or 24 percent, of its long-term debt. The company freed up most of this cash by cutting $5.4 million in general expenses and trimming its account receivables by $7 million. "Since so much of our business is overseas we will always be vulnerable when the dollar is strong.
But note that in spite of spending close to $50 million on our motorsports development program over the last few years, and our drop of in net sales, we still paid our debt down 24 percent. Without motorsports we would be rolling in cash now, but we think we made a good investment and we have aggressively managed the company and kept our cash situation strong," said Dan Alloway, Cannondale's vice president sales and European operations.
Another result of Cannondale cutting general expenses is that it increased the profitability of its bicycle business. The company achieved pre-tax earnings of $3,662,000 for the fourth quarter compared with $2,931,000 in pre-tax earnings during the same period last year.
For its fiscal year 2001 the bike division's pre-tax earnings were up $1.4 million to $8.21 million, compared to $6.83 million last year.