I found this article about C-dale and was wondering if anyone else has heard anymore news. The article reads:
Headlines
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.
Anyone have anything to add?
Woodsy
© 2002 VNU eMedia Inc
Headlines
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.
Anyone have anything to add?
Woodsy
© 2002 VNU eMedia Inc
