Derby First Quarter Results Down 13%

WASHINGTON, USA (May 23) - During the first three months of this year the Derby Cycle Corporation saw its bike sales drop by 13%. Net revenues dropped with 6.7% while the net loss increased by 102%. The Derby Cycle Corporation recently filed its first quarter results at the US Securities and Exchange Commission in Washington. The results present a grim picture with a net loss that doubled from US$ 4.6 to 9.3 million. Especially Derby USA and Raleigh Canada showed poor results with a 24.5% drop in net revenue for Derby USA while Raleigh Canada showed and even bigger decrease of 26.6%. Also Raleigh UK and Derby Germany showed decreasing net revenues of respectively 9.8% and 7.9%. Only Derby's moneymaker Gazelle in The Netherlands performed excellent during the first three months of this years with a 16.4% increase in net earnings. The total revenue of Derby Cycle Corporation dropped from US$ 144.5 million to 134.8 million. Looking at bike sales at the individual Derby companies it is striking to note that despite the 10% drop in net revenue Raleigh UK sold about 6% more bikes during the first quarter of 2001 compared to the same period of 2000. Total sales amounted 71,000 bicycles (2000: 67,000). Sales at Derby USA were, according to Derby, hard hit by poor market conditions and dropped from 97,000 units to 72,000. Derby USA switched from own production in Kent to importing bicycles from Asian sources. Bike sales at Derby Germany dropped from 218,000 units to 187,000. According to Derby the decrease in bikes sales at its German subsidiary was caused by the German buying group ZEG which switched more of its products from domestic to foreign sources. During the January - March 2001 period Derby Cycle Corporation sold 579,000 bicycles, a drop of 13% compared to the 666,000 units sold during the same period last year. According to the recently filed first quarter results at the US Securities and Exchange Commission, Derby's total long term debts amount US$ 171 million. The for May 15, 2001 scheduled interest payments on these loans were not made by the Derby Cycle Corporation. The troubled bike maker has a 30-day grace period to make the payments. In view of this grace period it is expected that before June 15 Derby will announce details about its financial restructuring plans. (JO)