More on Cannondale : Cannondale Completes Auction Of Bicycle And

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  1. *From http://www.cannondale.com/company/investor/032103.html

    Cannondale Completes Auction Of Bicycle And Motorsports Divisions *

    (BETHEL, CT -- March 21, 2003) Cannondale (BIKEQ.PK) today announced the results of yesterday's
    separate auctions of its bicycle and motorsports divisions. The auctions for the assets of both
    divisions were conducted under Section 363 of the United States Bankruptcy Code at the Company's
    Bethel, Connecticut headquarters, pursuant to the March 3rd, 2003 order by the Bankruptcy Court.
    Cannondale filed a voluntary petition for chapter 11 protection in the U.S. Bankruptcy Court in the
    District of Connecticut (Bridgeport Division) on January 29th, 2003.

    After a vigorous auction, the assets of the Company's bicycle and motorsports divisions are to be
    purchased by an affiliate of Pegasus Partners II, L.P. ("Pegasus"), subject to the approval of the
    Bankruptcy Court. The terms of the winning bids were not disclosed. Cannondale's largest secured
    creditor, Pegasus had agreed in late January to act as the "stalking horse" bidder in the sale. At
    that time, Pegasus stated its commitment to working with current management and operating the
    bicycle business as a going concern. Pegasus has indicated that it does not intend to operate the
    motorsports division.

    Cannondale's founder Joe Montgomery was pleased with the outcome of the auction. "This is a huge
    step toward successfully realizing our three key objectives: ensuring a quick emergence from chapter
    11, restoring focus and adding resources to the bike division so it can continue to thrive and
    prosper, and preserving our employees' jobs in Connecticut and Pennsylvania." Besides its
    Connecticut and Pennsylvania locations, the Company also operates subsidiaries in Europe, Japan and
    Australia. Although included in the sale, the subsidiaries had not been included in or affected by
    the Chapter 11 filing.

    Montgomery was also eager to thank the many groups who have supported Cannondale through the Chapter
    11 process. "Our dealers, suppliers, customers and employees have really stood by us, and we're
    extremely grateful." said Montgomery. "I'd also like to thank the many state officials in
    Pennsylvania who have been so cooperative and supportive, particularly the Governor's Action Team
    and the Department Of Community And Economic Development. I'm confident that the senior management
    team, led by Dan Alloway and Scott Montgomery, will continue to uphold the culture and values that
    have made Cannondale a great company."

    Scott Montgomery and Alloway voiced their eagerness to move forward as Cannondale begins to emerge
    from bankruptcy. "The successful auction and the speedy resolution now enables us to focus on
    bicycle delivery and service as we enter the busy spring selling season," said Alloway, Cannondale's
    Vice President of Sales and European Operations. Scott Montgomery, Cannondale's Vice President of
    Marketing, concurred. "We're happy to be able to concentrate on the bike business again, and we're
    feeling great about the future with Pegasus as our partner," said Montgomery. "We're producing and
    shipping 2003 product every day, and the 2004 line is loaded with new innovations."

    David Uri, a Partner at Pegasus explained its bid for Cannondale. "Cannondale is one of the world's
    premium bicycle brands," said Uri. "The fact that the bike division has remained profitable despite
    the distraction and costs of its now closed motorsports business clearly demonstrates the strength
    of the brand. Our job now is to let Cannondale concentrate on what Cannondale does best - designing,
    manufacturing and marketing lightweight, high-performance bicycles for the specialty retail market."

    Jeffrey R. Manning of Legg Mason Wood Walker, Inc, the Baltimore, Maryland-based financial firm that
    assisted Cannondale in the sale process, stated that there was a great deal of interest in the
    Company, despite the uncertain economy and events in the Middle East. "Cannondale is an
    internationally recognized brand, the bike business is profitable, and has always been profitable,"
    Manning added. "With the ability to focus exclusively on its bike business, the Company should do
    very well as it emerges from bankruptcy."

    The auction marks Cannondale's continued rapid progression through the chapter 11 process. Earlier
    this month workers returned to the Company's Bedford, Pennsylvania bike factory to resume production
    of bicycles and cycling accessories, ending a temporary work furlough. It is expected that
    Cannondale will officially emerge from chapter 11 within the next several weeks, following the
    Court's anticipated approval of yesterday's auction and the subsequent closing of the sale.
    Elizabeth Fox of Fox Racing Shox, Chairperson of the Official Committee of Unsecured Creditors,
    stated that in connection with the auction process, the Committee reached a favorable agreement with
    Pegasus and fully supports the sale to Pegasus. Fox commented that she hoped this agreement would
    pave the way for the continuation of the supportive relationship between Cannondale and its vendors.

    Cannondale is the world's leading manufacturer of innovative, high-performance, lightweight aluminum
    bicycles, successfully marketing its bicycles and cycling accessories in more than 70 countries
    worldwide.

    Pegasus Capital Advisors, L.P., based in Greenwich, Connecticut, is a private equity investment firm
    with approximately $800 million under management.
     
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