Cannondale resumes bike production

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This report filed March 3, 2003

Employees began returning to Cannondale's bike factory in Bedford, Pennsylvania, on Monday as the
company resumed full-scale bike production after the company declared bankruptcy in January.

A Cannondale press release issued Monday noted that employees had worked sporadically over the past
several weeks building frames for the Connecticut-based company's European subsidiary, but Monday's
shift signaled that the company is well on its way to resuming full production.

After taking a risky dive into the motorcycle business, Cannondale was forced into bankruptcy in
January as the company and its lenders agreed to present a bankruptcy court with a plan to provide
the company with interim financing to fund operating expenses and to meet supplier and employee
commitments. That recovery plan, however, also represented an end to the company's production of
motorcycles and ATVs.

"The interim financing will be used to continue the operation of our bicycle business," Cannondale
founder and president Joe Montgomery said at the time.

"The motorsports division was threatening the bicycle division. Although we believe in the value of
our motorsports products, we did not have sufficient financial resources to make the additional
investments necessary. We look forward to bringing a renewed focus to our core bicycle business and
to working through this present challenge with the greatest possible speed."

Monday's resumption of production will continue department-by-department for the next week.

Cannondale's Scott Montgomery said that given the fact that the shut-down occurred in mid-winter, it
should minimize the long-term impact on the company's dealer network.

"We're very, very excited to have full production coming back on-line," said Montgomery. "It's
fortunate that we went into the factory shutdown with a good inventory of bikes.... Now that
production is up and running, we're looking forward to attacking the busy spring season with a
single focus, renewed purpose, and a steady stream of Cannondale product."

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