Posted: Sun Apr 04, 2010 5:51 pm
Ive been doing a lot of research lately and I came across Cannondales financial statements. After looking thruogh the mounds of documents, In my opinion I think the motorsports division had very little to do with the losses in 2001 and 2002. It looks like Cannondale was blaming lack of bike sales. Also failure to ship bikes due to parts problems and the economy. They were selling nearly $40,000,000 less bikes in 2002 than they were in 1999. They actually sold $22,000,000 in quads/motorcycles for 2002 as opposed to only $5,000,000 in 2001.
They made a profit of $6 million in 1999
lost $2.5 million in 2000
lost $20 million in 01
lost $15 million 02
So in 2002 when bike sales went down $40 million dollars and motorsports increased $15 million dollars, what division should they have focused on selling more of? When quad and motorcycle sales triple in one year that was a good indicator that had they been able to continue the motorsport division could have potentially (at the rate of increasing sales) at least broke even in 2003. When 2004 rolled around and the 450 quad market took off, look at the position Cannondale quads would have been in to compete. The jap quads didn't catch up to the technology for another 5 years. That's if they quit losing sales money in the bicycle division.
On a side note here are some funny stastistics they published:
R@D costs Motorsports Bicycles
2000 4.7 mil 3.8mil
2001 3.7mil 2.9mil
2002 2.5mil 3.3mil
How complicated are bicycles that they cost the same to R@D as 2 separate lines of quads and atv's? Atv money was less in 2002 due to them being done with initial R@D.
Another side note the report also listed some of the interest free loans for executives to buy houses when they relocated and purchases of aircraft and property which were far in excess of what they spent on R@D. Did they really need a 3 million dollar jet to ferry the handfull of executives between the plants? Maybe they should have thrown that $3 million towards figuring out what was failing in the cranks and a couple drums of locktite. LOL
They made a profit of $6 million in 1999
lost $2.5 million in 2000
lost $20 million in 01
lost $15 million 02
So in 2002 when bike sales went down $40 million dollars and motorsports increased $15 million dollars, what division should they have focused on selling more of? When quad and motorcycle sales triple in one year that was a good indicator that had they been able to continue the motorsport division could have potentially (at the rate of increasing sales) at least broke even in 2003. When 2004 rolled around and the 450 quad market took off, look at the position Cannondale quads would have been in to compete. The jap quads didn't catch up to the technology for another 5 years. That's if they quit losing sales money in the bicycle division.
On a side note here are some funny stastistics they published:
R@D costs Motorsports Bicycles
2000 4.7 mil 3.8mil
2001 3.7mil 2.9mil
2002 2.5mil 3.3mil
How complicated are bicycles that they cost the same to R@D as 2 separate lines of quads and atv's? Atv money was less in 2002 due to them being done with initial R@D.
Another side note the report also listed some of the interest free loans for executives to buy houses when they relocated and purchases of aircraft and property which were far in excess of what they spent on R@D. Did they really need a 3 million dollar jet to ferry the handfull of executives between the plants? Maybe they should have thrown that $3 million towards figuring out what was failing in the cranks and a couple drums of locktite. LOL