Exhibit 99.1
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CASE NAME: Cannondale Corporation
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CASE NUMBER: 03-50117 ACCRUAL BASIS
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JUDGE: The Xxxxxxxxx Xxxx X.X. Xxxxx
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
BRIDGEPORT DIVISION
MONTHLY OPERATING REPORT
MONTH ENDING FEBRUARY 22, 2003
IN ACCORDANCE WITH TITLE 00, XXXXXXX 0000 XX XXX XXXXXX XXXXXX CODE I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT (ACCRUAL BASIS - 1 THROUGH ACCRUAL BASIS -7) AND THE ACCOMPANYING
ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT
AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY) IS
BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ Xxxx Xxxxxxxx Assistant Treasurer
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ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE
Xxxx Xxxxxxxx April 23, 2003
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PRINTED NAME OF RESPONSIBLE PARTY DATE
PREPARER:
/s/ Xxxxx X. Xxxxxx Manager of Reporting
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ORIGINAL SIGNATURE OF PREPARER TITLE
Xxxxx X. Xxxxxx April 23, 2003
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PRINTED NAME OF PREPARER DATE
CASE NAME: Cannondale Corporation (See Note 1) ACCRUAL BASIS -1
CASE NUMBER: 03-50117
COMPARATIVE BALANCE SHEET
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JAN. 25, 2003
ASSETS SCHEDULE AMT. FEB. 22, 2003
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1. UNRESTRICTED CASH (51,855) 359,815
2. RESTRICTED CASH -
3. TOTAL CASH (51,855) 359,815
4. ACCOUNTS RECEIVABLE (NET) 24,272,857 24,559,474
5. INVENTORY 29,269,047 26,656,286
6. NOTES RECEIVABLE (EMPLOYEE) 84,322 82,881
7. PREPAID EXPENSES 957,590 853,424
8. OTHER (ATTACH LIST) - -
9. TOTAL CURRENT ASSETS 54,531,961 52,511,880
10. PROPERTY, PLANT AND EQUIPMENT - See Note a 62,686,492 73,089,995
11. LESS: ACCUMULATED DEPRECIATION (40,964,355) (45,846,436)
12. NET PROPERTY, PLANT AND EQUIPMENT 21,722,137 27,243,559
13. DUE FROM INSIDERS 336,297 336,297
14. OTHER ASSETS - NET OF AMORTIZATION - See Note b 1,915,763 2,894,528
15. OTHER (ATTACH LIST) - See Note c - 5,233,608
16. TOTAL ASSETS 78,506,158 88,219,872
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POST PETITION LIABILITIES
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17. ACCOUNTS PAYABLE 102,558
18. TAXES PAYABLE 780
19. NOTES PAYABLE -
20. PROFESSIONAL FEES - See Note d -
21. SECURED DEBT - See Note e 393,852
22. OTHER (ATTACH LIST) - See Note f 1,424,063
23. TOTAL POST PETITION LIABILITIES 1,921,253
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PREPETITION LIABILITIES
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24. SECURED DEBT 52,023,857 51,777,973
25. PRIORITY DEBT - See Note g 288,903 49,875
26. UNSECURED DEBT - See Note h 29,046,776 28,970,451
27. OTHER (ATTACH LIST) - See Note i - 2,848,572
28. TOTAL PRE PETITION LIABILITIES - See Note j 81,359,536 83,646,871
29. TOTAL LIABILITIES 81,359,536 85,568,124
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EQUITY
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30. PRE PETITION OWNERS' EQUITY 5,720,636
31. POST PETITION CUMULATIVE PROFIT OR (LOSS) (1,972,769)
32. DIRECT CHARGES TO EQUITY - See Note k (1,096,118)
33. TOTAL EQUITY 2,651,749
34. TOTAL LIABILITIES AND OWNERS' EQUITY 88,219,872
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Note 1: The financial statements and attached notes reflect the results of
Cannondale Corporation USA only.
Note 2: As of February 22, 2003, no impairment analysis had been performed on
long-lived assets relating to motorsports. The motorsports plant is no longer
operational.
Note 3: Certain amounts originally filed in the Bankruptcy Schedules and
Statement of Assets and Liabilities as of January 29, 2003 are in the process of
being amended.
CASE NAME: Cannondale Corporation ACCRUAL BASIS -2
CASE NUMBER: 03-50117
INCOME STATEMENT
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JAN. 26 THRU JAN. 30 THRU
REVENUES JAN. 29, 2003 FEB. 22, 2003 TOTAL
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1. GROSS REVENUES 41,788 3,563,011 3,604,799
2. LESS: RETURNS AND DISCOUNTS 21,957 192,752 214,709
3. NET REVENUE 19,831 3,370,259 3,390,090
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COST OF GOODS SOLD
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4. MATERIAL 46,879 2,098,854 2,145,732
5. DIRECT LABOR 5,207 233,109 238,316
6. DIRECT OVERHEAD 233,999 1,037,803 1,271,802
7. TOTAL COST OF GOODS SOLD 286,084 3,369,766 3,655,850
8. GROSS PROFIT (266,253) 493 (265,760)
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OPERATING EXPENSES
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9. OFFICER/INSIDER COMPENSATION 18,865 125,769 144,634
10. SELLING AND MARKETING 36,744 773,107 809,851
11. GENERAL AND ADMINISTRATIVE ## (475,130) 164,819 (310,311)
12. RENT AND LEASE 17,304 108,742 126,046
13. OTHER - RESEARCH AND DEVELOPMENT ## (126,751) 113,481 (13,270)
14. TOTAL OPERATING EXPENSES (528,968) 1,285,918 756,950
15. INCOME BEFORE NON-OPERATING INCOME AND EXPENSES 262,715 (1,285,425) (1,022,710)
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OTHER INCOME AND EXPENSE
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16. NON-OPERATING INCOME (ATTACH LIST) - See Note l 189,567 262,545 452,112
17. NON-OPERATING (EXPENSE) (ATTACH LIST) - See Note l (209,496) (8,892) (218,388)
18. INTEREST (EXPENSE) ## 53,381 (374,545) (321,164)
19. DEPRECIATION (EXPENSE) (27,261) (163,567) (190,828)
20. AMORTIZATION (EXPENSE) (8,130) (5,699) (13,829)
21. OTHER (ATTACH LIST) - - -
22. NET OTHER INCOME AND (EXPENSE) (1,938) (290,158) (292,096)
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REORGANIZATION EXPENSES
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23. PROFESSIONAL FEES |XX| (42,156) (197,844) (240,000)
24. U.S. TRUSTEE FEES - - -
25. OTHER (ATTACH LIST) - See Note m - (198,772) (198,772)
26. TOTAL REORGANIZATION (EXPENSES) (42,156) (396,616) (438,772)
27. INCOME TAX ## (359,578) 570 (359,008)
28. NET PROFIT (LOSS) 578,199 (1,972,769) (1,394,570)
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|XX| CIT paid a $200,000 retainer on behalf of the Company to Xxxxxxx & Xxxxxxx
in anticipation of the Bankruptcy filing. Of this amount, $42,146 was incurred
prior to the filing. The remaining retainer credit of $157,844 is subject to
Bankruptcy Court approval before being applied by Xxxxxxx & Xxxxxxx.
## Negative expense amounts are a result of reversals of pre-petition accruals
no longer needed.
CASE NAME: Cannondale Corporation ACCRUAL BASIS -3
CASE NUMBER: 03-50117
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JAN. 30, 2003 TO
CASH RECEIPTS AND DISBURSEMENTS FEB. 22, 2003
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1. CASH - BEGINNING OF MONTH - See Note n 175,871
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RECEIPTS FROM OPERATIONS
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2. CASH SALES -
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COLLECTION OF ACCOUNTS RECEIVABLE
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3. PRE PETITION 1,871,326
4. POST PETITION - See Note o 649,796
5. TOTAL OPERATING RECEIPTS 2,521,122
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NON-OPERATING RECEIPTS
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6. LOANS AND ADVANCES 2,555,764
7. SALE OF ASSETS -
8. OTHER (ATTACH LIST) - See Note p 155,123
9. TOTAL NON-OPERATING RECEIPTS 2,710,887
10. TOTAL RECEIPTS 5,232,009
11. TOTAL CASH AVAILABLE 5,407,880
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OPERATING DISBURSEMENTS
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12. NET PAYROLL ^^ 1,035,985
13. PAYROLL TAXES PAID 103,319
14. SALES, USE AND OTHER TAXES PAID 782
15. SECURED RENTALS AND LEASES -
16. UTILITIES 420
17. INSURANCE (including medical claim reimbursements) ^^ 349,246
18. INVENTORY PURCHASES 284,881
19. VEHICLE EXPENSES -
20. TRAVEL 117,092
21. ENTERTAINMENT -
22. REPAIRS AND MAINTENANCE -
23. SUPPLIES 12,414
24. ADVERTISING -
25. OTHER (ATTACH LIST) - See Note q 128,512
25a. LOAN REPAYMENTS TO CIT (DAILY SWEEPS) 2,516,642
26. TOTAL OPERATING DISBURSEMENTS 4,549,293
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REORGANIZATION EXPENSES
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27. PROFESSIONAL FEES ^^ 300,000
28. U.S.TRUSTEE FEES -
29. OTHER (ATTACH LIST) - See Note r 198,772
30. TOTAL REORGANIZATION EXPENSES 498,772
31. TOTAL DISBURSEMENTS 5,048,065
32. NET CASH FLOW 183,944
33. CASH - END OF MONTH 359,815
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^^ CIT disbursed $688,868 on behalf of Cannondale Corporation to certain parties
in anticipation of the Bankruptcy filing on January 29, 2003, but charged the
Company's post-petition DIP financing line. Included in this amount was payroll
of $310,122, employee insurance and medical claim reimbursements of $78,746,
professional fees of $200,000, and other reorganization expenses of $100,000.
Such amounts are included in the disbursement totals above. A portion of these
payments, set forth above, were applied to pre-petition balances, but are
included herein in order to reconcile the post-petition DIP loan balance.
CASE NAME: Cannondale Corporation ACCRUAL BASIS -4
CASE NUMBER: 03-50117
ACCOUNTS RECEIVABLE AGING FEBRUARY
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1. Future 10,626,527
2. Current 5,541,605
3. 0-30 2,409,950
4. 31-60 2,810,122
5. 61-90 1,117,408
6. 91+ 4,767,405
7. TOTAL ACCOUNTS RECEIVABLE 27,273,018
8. AMOUNT CONSIDERED UNCOLLECTIBLE (2,713,544)See Note s
9. ACCOUNTS RECEIVABLE (NET) 24,559,474
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AGING OF POSTPETITION TAXES AND PAYABLES FOR FEBRUARY
TAXES PAYABLE 0-30 DAYS 31-60 DAYS 61-90 DAYS 91+ DAYS TOTAL
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1. FEDERAL - - - - -
2. STATE 12,092 - - - 12,092
3. LOCAL - - - - -
4. OTHER (ATTACH LIST) - - - - -
5. TOTAL TAXES PAYABLE 12,092 - - - 12,092
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6. ACCOUNTS PAYABLE 102,558 - - - 102,558
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STATUS OF POST PETITION TAXES
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FEDERAL BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX
LIABILITY ACCRUED PAID LIABILITY
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1. WITHHOLDING - 107,607 107,607 -
2. FICA - EMPLOYEE - 67,317 67,317 -
3. FICA - EMPLOYER - 67,317 67,317 -
4. UNEMPLOYMENT - 4,490 4,490 -
5. INCOME - - - -
6. OTHER (ATTACH LIST) - - - -
7. TOTAL FEDERAL TAXES - 246,731 246,731 -
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STATE AND LOCAL
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8. WITHHOLDING - 32,138 32,138 -
9. SALES TAXES ACCRUED - 224 - 224
10. EXCISE - - - -
11. UNEMPLOYMENT - 31,512 31,512 -
12. REAL PROPERTY TAXES ACCRUED - 11,868 - 11,868
13. PERSONAL PROPERTY - - - -
14. OTHER (ATTACH LIST) - - - -
15. TOTAL STATE AND LOCAL TAXES - 75,742 63,650 12,092
16. TOTAL TAXES - 322,473 310,381 12,092
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CASE NAME: Cannondale Corporation ACCRUAL BASIS -5
CASE NUMBER: 03-50117
The debtor-in-possession must complete the reconciliation below for each bank
account, including all general, payroll and tax accounts, as well as all savings
and investment accounts, money market accounts, certificate of deposit,
government obligations etc. Accounts with restricted funds should be identified
by placing an asterisk next to the account number. Attach additional sheets if
necessary.
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BANK RECONCILIATIONS FEBRUARY
ACCOUNT 1 ACCOUNT 2 ACCOUNT 3 ACCOUNT 4 ACCOUNT 5
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A. BANK XX Xxxxxx Chase First Union XX Xxxxxx Xxxxx XX Xxxxxx Xxxxx Scotiabank
B. ACCOUNT NUMBER 323-069428 0000000000000 323-892027 590-007300 80002 04054 18
C. PURPOSE (TYPE) Main Operating Payroll CIT Lockbox FX Transactions Canadian Disbursemt
1. BALANCE PER BANK STATEMENT 12,314 48,176 - 839 8,859
2. ADD: TOTAL DEPOSITS NOT CREDITED - 82,436 5,661 -
3. SUBTRACT: OUTSTANDING CHECKS - - - (6,539)
4. OTHER RECONCILING ITEMS (20,127) 10,705 3,242 - (1,462)
5. MONTH END BALANCE PER BOOKS (7,813) 58,881 85,678 6,500 858
6. NUMBER OF LAST CHECK WRITTEN n/a n/a n/a n/a 970
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BANK RECONCILIATIONS FEBRUARY
ACCOUNT 6 ACCOUNT 7 ACCOUNT 8 ACCOUNT 9 ACCOUNT 10
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A. BANK Scotiabank XX Xxxxxx Chase First Union First Union First Union
B. ACCOUNT NUMBER 80002 04104 11 6301-466904-509 2088200001269 2030154707706 2020000442727
C. PURPOSE (TYPE) Canadian Receipt Cash Disbursements Payroll Tax Payroll Dental Payroll Deductions
1. BALANCE PER BANK STATEMENT 66,766 843 - - -
2. ADD: TOTAL DEPOSITS NOT CREDITED - - - - -
3. SUBTRACT: OUTSTANDING CHECKS - (164,241) - - -
4. OTHER RECONCILING ITEMS - See Note t 233,950 69,226 - - -
5. MONTH END BALANCE PER BOOKS 300,716 (94,172) - - -
6. NUMBER OF LAST CHECK WRITTEN n/a 177730 n/a n/a n/a
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BANK RECONCILIATIONS FEBRUARY
ACCOUNT 11 TOTAL
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A. BANK M & T BANK
B. ACCOUNT NUMBER 584714
C. PURPOSE (TYPE) Operating
1. BALANCE PER BANK STATEMENT 20,567
2. ADD: TOTAL DEPOSITS NOT CREDITED -
3. SUBTRACT: OUTSTANDING CHECKS (11,801)
4. OTHER RECONCILING ITEMS -
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5. MONTH END BALANCE PER BOOKS 8,766 359,415
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6. NUMBER OF LAST CHECK WRITTEN 11141
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INVESTMENT ACCOUNTS DATE OF TYPE OF PURCHASE CURRENT
BANK ACCOUNT NAME AND NUMBER PURCHASE INVESTMENT PRICE VALUE
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7. None
8. None
9. None
10. None
11. TOTAL INVESTMENT 0
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CASH
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12. CURRENCY ON HAND - XXXXX CASH 400
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13. TOTAL CASH - END OF MONTH 359,815
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CASE NAME: Cannondale Corporation ACCRUAL BASIS -6
CASE NUMBER: 03-50117
Of the total disbursements listed for the month, list the amount paid to
insiders (as defined in section 101 (31) (A)-(F) of the US Bankruptcy Code) and
to professionals. Also, for payments to insiders, identify the type of
compensation paid (e.g. salary, bonus, commissions, insurance, housing
allowance, travel, car allowance, etc.). Attach additional sheets if necessary.
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PAYMENTS TO INSIDERS
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Total - See Note u 135,853
---------------------------------------------------
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PROFESSIONALS
DATE OF TOTAL
COURT AMOUNT AMOUNT TOTAL PAID INCURRED
NAME ORDER APPROVED PAID TO DATE & UNPAID
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1. Xxxx Xxxxx 1/29/2003 40,000 40,000 40,000 -
2. Xxxx Xxxxxxxx 2/6/2003 60,000 60,000 60,000 -
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A $200,000 retainer to Xxxxxxx & Xxxxxxx was paid by CIT prior to the Company's
bankruptcy filing on January 29, 2003. CIT charged the Company's DIP financing
line post-petition for this retainer, and accordingly such amount is included on
the Cash Flow Statement for February.
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POSTPETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE PROTECTION PAYMENTS
SCHEDULE AMOUNTS TOTAL
MONTHLY PAID DURING UNPAID
NAME OF CREDITOR PMT DUE MONTH POSTPETITION
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1. CIT Business Credit Inc. n/a - 39,121
2. Pegasus Partners II, LP n/a - 354,731 &&
3. Connecticut Development Authority 12,699 - 12,699
4. Department of Economic and Community
Development - Connecticut 3,417 - 3,417
5. Pennsylvania Industrial Development Authority 32,615 - 32,615
6. Leases 86,721 - 86,721
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&& Pegasus post-petition debt is comprised of cash and PIK accrued interest.
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Accrual Basis
Note a: The value used for Real Property in the Bankruptcy Schedules and
Statement of Assets and Liabilities filed with the Bankruptcy Court as
of January 29, 2003 ("Schedules") represented current market value
(per recent appraisals), and the value used for Personal Property
represented net book value, as follows:
January: Total Real Personal
--------------------------------------------------
Basis used 62,686,492 13,400,000 49,286,492
Accumulated Depreciation (40,964,355) - (40,964,355)
--------------------------------------------------
Value per Schedules 21,722,137 13,400,000 8,322,137
==================================================
Had the net book value of Real Property been used, the values would be
as follows:
January: Total Real Personal
--------------------------------------------------
Original cost 72,173,571 22,887,079 49,286,492
Accumulated Depreciation (45,318,037) (4,353,682) (40,964,355)
--------------------------------------------------
Net Book Value 26,855,534 18,533,397 8,322,137
==================================================
Net book value will be used in all monthly operating reports:
February: Total Real Personal
--------------------------------------------------
Original cost 73,089,995 22,887,079 50,202,916
Accumulated Depreciation (45,846,436) (4,414,934) (41,431,502)
--------------------------------------------------
Net Book Value 27,243,559 18,472,145 8,771,414
==================================================
The increase in the cost of Personal Property during February
primarily relates to the $858,000 claim from SSA for software license
fees/penalty.
Note b: Other Assets: As of February
Filing Date 2003
------------------------------
Investment in Cannondale Australia 607,999 607,999
Investment in Cannondale Europe 250,000 250,000
Investment in Cannondale Japan 75,959 1,047,440
Goodwill 214,992 214,992
Patents, net 766,813 774,097
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1,915,763 2,894,528
=============================
The increase in the investment in Cannondale Japan during February
reflects the recording of the Company's guarantee of Cannondale
Japan's bank debt.
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Note c: The following "Other" items as of the filing date were inadvertently
excluded from the Schedules filed with the Bankruptcy Court. The
Schedules are in the process of being amended to include the items.
The Company deems that these "Other" items have no significant fair
market value.
Book Value
As of Book Value
Filing Date Feb. 22, 2003
------------------------------
Bike samples 152,698 131,736
Moto samples 169,229 169,516
Prepaid Tradeshow 35,324 5,961
Prepaid Catalog 7,007 (22,153)
Prepaid Advertising 80,093 73,219
Prepaid Advertising Production 2,162 1,838
Prepaid Insurance 683,572 1,512,605
Prepaid Other 183,873 108,036
Employee Tool Purchase 617 18
------------------------------
1,314,575 1,980,776
==============================
Prepaid Maint - Pro Engineering Software 82,403 79,436
Deferred Financing Cost, net ** 3,099,575 3,180,931
NR reserve (7,535) (7,535)
------------------------------
3,174,443 3,252,832
==============================
Current Deferred Tax Asset 4,136,806 4,136,806
Valuation - CDTA (4,136,806) (4,136,806)
Non-Current Deferred Tax Asset 17,724,054 17,724,054
Valuation -NCDTA (17,724,054) (17,724,054)
------------------------------
- -
==============================
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Total NBV of Other Assets 4,489,018 5,233,608
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** Net deferred financing costs represent various legal and financing
fees incurred in connection with the outstanding pre-petition debt.
Such costs will be expensed when the Pegasus asset purchase is
consummated.
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Note d: The Company is represented by several professionals, which have been
approved by the Bankruptcy Court. Such professionals may have incurred
fees and expenses, which are subject to Bankruptcy Court approval, in
excess of any retainers paid by Cannondale. Accordingly, the Company
has not accrued any such fees and expenses at this time as it lacks
sufficient information to do so.
Note e: Post-petition secured debt:
February
----------------
CIT DIP Financing line 39,122
Pegasus PIK and cash accrued interest 354,730
----------------
393,852
================
Note f: Other post-petition liabilities:
February
----------------
Salaries 42,296
Holiday/Vacation 578,735 includes pre-petition priority claims
Property Tax (55,018)
General Insurance 125,986
Self-Insured Retention - Product Liability 57,284
Workers Compensation Insurance 4,522
Bank charges (402)
Postage 5,027
Freight 15,828
Race Team 60,615
Coop Advertising 9,156
Month end accrual 255,173
DE franchise fee 8,571
Inventory Received not Vouched accrual 18,184
Inventory In transit accrual 256,864
Payroll Liabilities 41,242
----------------
Total 1,424,063
================
Note g: The decrease in pre-petition priority debt resulted from a
reclassification of customs duty broker invoices to unsecured
non-priority debt in February.
Note h: Components of Unsecured Liabilities:
As of
Filing Date February
------------------------------
Accounts Payable 23,188,851 23,140,970
Subordinated Debenture to X.Xxxxxxxxxx 2,000,000 2,000,000
Subordinated Debenture to X. Xxxx 2,028,444 2,000,000
Guarantee of Mizuho Bank Debt - CJ 971,481 971,481
Claim from SSA for License Fees/Penalty 858,000 858,000
------------------------------
29,046,776 28,970,451
==============================
The guarantee of the CJ Mizuho debt ($971,481) and the claim for the
SSA License/Penalty ($858,000) were not accrued in the Company's books
at the time of the original bankruptcy filing.
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Note i: Other pre-petition liabilities:
As of
Filing Date February
-------------------------------
Accrued Accounting Fees 146,346 -
Salaries 269,260 -
Holiday 575,175 -
Fair Value of FX contracts 156,462 -
Property Tax (49,747) -
Medical Insurance (IBNR) 600,000 600,000
Self-Insured Retention - Product Liability 923,298 922,297
Workers Compensation Insurance 374,599 362,580
Bank charges (2,919) -
Postage 10,444 -
Legal 45,569 -
Duty 11,082 -
Freight 179,764 -
Race Team 150,151 28,835
Tax audit 21,201 -
Public Company (684) -
Video Production (4,765) -
Coop 109,907 110,271
Month end accrual 977,598 865,008
X. Xxxxxxxxxx sub debt interest accrual 98,620 -
Delaware franchise fee 61,325 -
Warranty 2,191,187 2,156,915
Inventory Received not Vouched accrual 702,035 322,805
Inventory In-transit accrual 267,747 -
Deferred Taxes Payable 380,265 15,598
Payroll Liabilities 165,351 (7,495)
Other Long-Term Liability 283,883 142,629
Deferred Gain 80,212 -
Pegasus debt discount (1,104,207) -
-------------------------------
7,619,159 5,519,443
===============================
Adjustments for items reported elsewhere:
Priority payments included in AP/Accruals (288,903) (49,875)
AFCO Insurance included in Secured (801,181) - $495,951 recorded in AP, $364,935 accrued in
February
Taxes included in Secured Debt (46,426) (46,426) (See Note 3 on page "Accrual Basis - 1")
SSA Software included in Unsecured (858,000) - accrued in Unsecured Debt in February
CJ Mizuho Guarantee in Unsecured (971,481) - accrued in Unsecured Debt in February
AP unallocated payments and revaluation (3,135,849) (2,672,628)
Credit balances in AP 144,314 138,352
Payments booked but not mailed (33,534) (40,294)
-------------------------------
(5,991,060) (2,670,871)
===============================
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Total other pre-petition liabilities 1,628,099 2,848,572
-----------------------------------------------------------------------------------
The above accruals were not included in the original bankruptcy
schedules due to the emergency filing. The information was compiled
subsequently.
Note j: All pre-petition amounts are subject to contingent, unliquidated,
and/or disputed debts.
Note k: Direct charge to equity recorded in February reflects the write-off of
warrants issued to Pegasus in June 2002.
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Note l: Detail of Non-Operating Income (Expense):
Jan. 26 thru
Jan. 29, 2003 February
-------------------------------
Foreign Exchange 388 18,830
Intercompany Royalty/Rent Income 108,967 243,715
Deferred Gain on Sale-Leasebacks 80,212 -
-------------------------------
Other Income 189,567 262,545
===============================
Franchise/Sales Taxes (161,444) (8,892)
Royalty Expense (48,052) -
-------------------------------
Other Expense (209,496) (8,892)
===============================
Note m: Detail of Reorganization Expenses:
February
--------------
CIT Facility Fee (100,000)
Xxxxxxx & Marsal (100,000)
Outside Services - Phase I Environmental (6,200)
Return of Xxxxxxx, Xxxxxx Finger unused retainer 7,428
--------------
Total Reorganization Expense (198,772)
==============
Note n: Difference between $(51,855) schedule amount and $175,871 beginning
balance represents 4 days of activity prior to the filing date.
Note o: Post-petition cash receipts include $500,000 from Cannondale Europe as
payment of intercompany trade receivables.
Note p: Non-Operating Cash Receipts
February
--------------
Return of Xxxxxxx, Xxxxxx Finger unused retainer 60,000 amount was sent directly to Xxxx Xxxxxxxx by Xxxxxxx Xxxxxx
Non-AR Cash 95,123
--------------
Total 155,123
==============
Note q: Other Operating Disbursements:
February
--------------
Bank fees 44,720
Freight 64,466
Garbage/recycling 1,952
Snowplowing 2,495
Race team 11,294
Tuition/training 285
Outside Services - Lien filing 3,300
--------------
Total Other Disbursements 128,512
===============
Note r: Other Reorganization Expenses
February
--------------
CIT Facility fee 100,000
Xxxxxxx & Marsal 100,000
Outside Services - Phase I Environmental 6,200
Return of Xxxxxxx, Xxxxxx Finger unused retainer (7,428)
--------------
198,772
==============
Cannondale Corporation Case Number 03-50117
Notes to February Operating Report
Note s: Detail of Accounts Receivable Aging:
Future/
Account Type Current 0-30 days 31-60 days 61-90 days 91+ days Total
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Trade Accounts Receivable, 3rd party 15,290,533 2,368,767 2,265,548 1,274,965 5,210,755 26,410,568
Intercompany Trade Accounts Receivable 877,600 58,519 727,637 691,201 19,592,186 21,947,143
Intercompany Trade Accounts Payable (17,336) (183,063) (848,758) (21,764,187) (22,813,344)
Intercompany Non-Trade Receivable 1,728,651 1,728,651
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Total Accounts Receivable Aging 16,168,132 2,409,950 2,810,122 1,117,408 4,767,405 27,273,018
===============================================================================
Reserves for Uncollectibility - Third party (5,170,977)
Revaluation of foreign currency AR 457,750
Revaluation of Intercompany AP 1,537,937
Suspense account 374,262
Customer Notes Receivable 87,484
--------------
Total adjustment (2,713,544)
--------------
Net Accounts Receivable 24,559,474
==============
Note t: Detail of Other Reconciling items:
Scotia Bank (Account 6) other reconciling items of $233,950 relate to
transfers of funds held by Xxxxxx International, Inc which were not
forwarded to the bank.
Chase Bank (Account 7) other reconciling items of $69,226 related to
returned NSF checks.
Note u: Payments to Insiders:
TYPE OF AMOUNT TOTAL PAID
NAME TITLE PAYMENT PAID TO DATE
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Xxxxxx X. Xxxxxxxxxx Chairman, President, CEO Salary 38,462 38,462
Xxxxxx X. Xxxxxxx Vice President of Sales Salary 19,231 19,231
Xxxxxx X. Xxxxxxx Expense Xxxx. 1,892 1,892
Xxxxx Xxxxx Xxxxxxxxxx Vice President of Marketing Salary 11,538 11,538
Xxxxx Xxxxx Xxxxxxxxxx Expense Xxxx. 4,115 4,115
Xxxxxxx Hoboken Treasurer Salary 9,615 9,615
Xxxx X. Xxxxxxxx Chief Accounting Officer and Asst. Treasurer Salary 9,154 9,154
Xxxx Xxxxxx Assistant Secretary Salary 7,692 7,692
Xxxx Xxxxxx Expense Xxxx. 180 180
Xxxxxxx X. Xxxxxxx Vice President of Purchasing Salary 11,462 11,462
Xxxxxxx X. Xxxxxxx Expense Xxxx. 397 397
Xxxxxxx X. Xxxxx Vice President of Information Technology Salary 10,923 10,923
Xxxxx X. Xxxxxx Vice President of Manufacturing Salary 7,692 7,692
Cannondale Japan KK Trade AP pmt. 3,500 3,500
-------------------------------
135,853 135,853
===============================
Note v: Product Liability, Property, D&O, EPL, FDLB, International Property
and Casualty, Workers' Compensation and Automobile insurance
installments are payable to an insurance financing company. Marine
Cargo and Business Travel insurance premiums are payable directly to
Xxxxx Insurance Company.
CASE NAME: Cannondale Corporation ACCRUAL BASIS -7
CASE NUMBER: 03-50117
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QUESTIONNAIRE YES NO
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1. HAVE ANY ASSETS BEEN SOLD OR TRANSFERRED OUTSIDE THE NORMAL COURSE OF
BUSINESS THIS REPORTING PERIOD? X
2. HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN
POSSESSION ACCOUNT? X
3. ARE ANY POST PETITION RECEIVABLES (ACCOUNTS, NOTES OR LOANS) DUE FROM
RELATED PARTIES? X
4. HAVE ANY PAYMENTS BEEN MADE ON PRE PETITION LIABILITIES THIS REPORTING
PERIOD? X
5. HAVE ANY POST PETITION LOANS BEEN RECEIVED BY THE DEBTOR FROM ANY PARTY? X
6. ARE ANY POST PETITION PAYROLL TAXES DUE? X
7. ARE ANY POST PETITION STATE OR FEDERAL INCOME TAXES PAST DUE? X
8. ARE ANY POST PETITION REAL ESTATE TAXES PAST DUE? X
9. ARE ANY OTHER POST PETITION TAXES PAST DUE? X
10. ARE ANY AMOUNTS OWED TO POST PETITION CREDITORS DELINQUENT? X
11. HAVE ANY PRE PETITION TAXES BEEN PAID DURING THE REPORTING PERIOD? X
12. ARE ANY WAGE PAYMENTS PAST DUE? X
-------------------------------------------------------------------------------------------------------------------
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "YES", PROVIDE A DETAILED
EXPLANATION OF EACH ITEM.
Question 2: The $60,000 paid to Xxxx Xxxxxxxx was transferred directly from
Xxxxxxx, Xxxxxx and Finger, former attorneys to the Company, as a return of
unused retainer.
Question 3: Post petition amounts arising from the ordinary course of business
are due from the Company's subsidiaries.
Question 4: The Company made payments on pre-petition liabilities as a result of
motions filed and approved by the Bankruptcy Court, including Xxxxx Xxxx,
Expeditors, employees, and medical reimbursements.
Question 5: The Company has received advances as necessary on the DIP financing
line with CIT Business Credit, Inc.
Question 11: Various taxes have been paid as a result of motions filed and
approved by the Bankruptcy Court.
-------------------------------------------------------------------------------------------------------------------
INSURANCE YES NO
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
1. ARE WORKERS' COMPENSATION, GENERAL LIABILITY AND OTHER NECESSARY INSURANCE
COVERAGES IN EFFECT? X
2. ARE ALL PREMIUM PAYMENTS PAID CURRENT? X
3. PLEASE ITEMIZE POLICIES BELOW
-------------------------------------------------------------------------------------------------------------------
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "NO" OR IF ANY POLICIES HAVE BEEN
CANCELLED OR NOT RENEWED OR NOT RENEWED DURING THIS REPORTING PERIOD, PROVIDE AN
EXPLANATION BELOW.
Question 2: A court order was approved in March for payment of insurance
premiums, and such premiums were paid at that time.
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INSTALLMENT PAYMENTS
PAYMENT
PERIOD AMOUNT AND
TYPE OF POLICY AND CARRIER COVERED FREQUENCY
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See Note v 319,276 down
50,778 weekly
Product Liability, Property, D&O, EPL, FDLB, International Property and Casualty - AFCO 7/1/02-6/30/03 33,814 final
Workers' Compensation - Travelers 7/1/02-6/30/03 44,583 monthly
Automobile - Travelers 7/1/02-6/30/03 2,183 monthly
Marine Cargo - AIMA 7/1/02-6/30/03 32,199 bal. due
Business Travel - Zurich America 1/1/03-12/31/03 7,440 bal. due
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