Exhibit 99.2
NEWS RELEASE Contact: Tom Armstrong
For Immediate Release 203/749-7174
or ta@cannondale.com
Cannondale Files Voluntary Chapter 11 Petition,
Announces Plans To Resume Bicycle Production,
Dealers Voice Their Support
(Bethel, CT - 1/30/03) Cannondale Corporation (Nasdaq: BIKE) filed a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code late
yesterday. The Company had announced its plans to file earlier in the week.
Today the Bankruptcy Court approved the interim post-petition financing from the
Company's lenders, The CIT Group/Business Credit, Inc. and Pegasus Partners II,
L.P. ("Pegasus"), that will be used to continue the operation of Cannondale's
bicycle business. The Company can use the financing to pay vendors for goods and
services received after the filing in the ordinary course of business. The
Company's foreign subsidiaries are not included in the bankruptcy. Business done
through Cannondale subsidiaries in Europe, Japan and Australia accounted for
approximately 42% of the Company's total sales in fiscal 2002.
Under the terms of an agreement still subject to court approval, Pegasus has
agreed to act as the "stalking horse" in a Section 363 sale of substantially all
of the Company's assets on a going concern basis. That bid is subject to higher
and better offers at an auction anticipated to occur in mid-March.
Cannondale filed in the U.S. Bankruptcy Court in the District of Connecticut
(Bridgeport Division). Zeisler & Zeisler, PC is acting as debtor's counsel and,
subject to court approval, Alvarez & Marsal, Inc. is providing the Company's
Chief Restructuring Officer. Legg Mason Wood Walker, Incorporated has been
retained as Cannondale's financial advisor and exclusive sales agent during the
auction process.
WORKERS SLATED TO RETURN TO FACTORY; DEALERS VOICE SUPPORT
Cannondale officials also announced today that a first wave of workers is
scheduled to return to its Bedford, Pennsylvania bike factory in two weeks to
resume production. A second wave of workers is slated to return in early March.
The workers had been idled during a recent factory shutdown. During the shutdown
Cannondale has continued to ship bikes and other products from inventory while
also assisting dealers and customers with normal service and warranty issues.
Cannondale's dealers have voiced their support of the Company following Monday's
Chapter 11 announcement. Jay Wolff of Helen's Cycles, a six-store chain in
southern California and one of
Cannondale's largest dealers, said: "Helen's Cycles is proud to be a Cannondale
dealer. We believe Cannondale's future will remain strong, and we will continue
to support it as we have in years past."
Long-time Cannondale dealer George Gatto of Gatto Cycle Shop, a two-store
operation in the Pittsburgh area expressed similar sentiments. "I certainly wish
Cannondale the best, and we'll definitely continue to support them as they work
through this challenge," said Gatto. "We've been a Cannondale dealer for more
than 20 years. I have great relationships with the people there, and they've
always treated us well."
John Crandall of Old Town Bike Shop in Colorado Springs noted that he's glad to
have Cannondale again focusing exclusively on bicycles. "After 19 years with
Cannondale, and with the best product line-up ever in 2003, I'm looking forward
to Cannondale giving its full attention to bicycles," said Crandall.
The Company also received heartening news yesterday when it learned that its
sponsored road racing team, the Italian Saeco squad, had been invited to compete
at the 2003 Tour de France following a two-year absence. The Tour de France is
regarded as the premier event in cycling competition, and the Saeco team is
sponsored through Cannondale's European subsidiary.
This press release contains forward-looking statements, as defined by the
Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from those anticipated as a result of various risks and
uncertainties, including, but not limited to, the following: the ability of the
Company to continue as a going concern; the ability of the Company to maintain
sufficient debtor-in-possession financing to fund its operations and the
expenses of the Chapter 11 process; the outcome and timing of the Company's
efforts to restructure and/or sell certain of its assets, including the ability
of the Company to execute and close a definitive agreement with Pegasus Partners
II, L.P. or any other purchaser; the Company's ability to obtain court approval
with respect to motions in the Chapter 11 proceeding prosecuted by it from time
to time; the ability of the Company to develop, prosecute, confirm and
consummate a plan of reorganization with respect to the Chapter 11 proceeding;
risks associated with third parties seeking and obtaining court approval to
terminate or shorten the exclusivity period for the Company to propose and
confirm a plan of reorganization, to appoint a Chapter 11 trustee or to convert
the case to a Chapter 7 proceeding; the ability of the Company to obtain and
maintain normal terms with its vendors and dealers; the Company's ability to
maintain contracts that are critical to its operations; the potential adverse
impact of the Chapter 11 proceeding on the Company's liquidity or results of
operations; the ability of the Company to fund and execute its business plan;
the ability of the Company to attract, motivate and/or retain key executives and
employees; the ability of the Company to attract and retain customers; risks and
uncertainties relating to market acceptance of the Company's products;
competition; the effectiveness of the Company's dealer networks and sales teams;
changes in the level of discretionary consumer spending; the timing of future
parts receipts, which may impact the Company's ability to fill orders; as well
as those risks and uncertainties discussed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking statements which
speak only as of the date hereof. The Company undertakes no obligation to
publish revised forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events,
except as required by law.
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