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2 BI 2 REPORTS LOSS BUT THREEFOLD GROSS SALES HIKE FOR SECOND QUARTER; RETURNS FROM REACQUISITION OF NORTH AMERICAN DISTRIBUTION RIGHTS

 ST. LOUIS, May 24 /PRNewswire/ -- 2 Bi 2, Inc. (NASDAQ: BIKEU) reported a loss but a better than threefold increase in gross sales for the second quarter of its 1993 fiscal year.
 At the same time, the company announced that it reacquired the distribution and warehousing rights for its bicycles for North America and as part of that agreement, repurchased outstanding inventories of its bicycles which substantially reduced its net sales for the period.
 For the three months ended March 31, 1993, 2 Bi 2 reported gross sales of $613,432 compared with $169,895 during the comparable 1992 period. After deducting returns of $445,274 made in conjunction with the company's reacquisition of its North American distribution and warehousing rights, net sales for the 1993 second quarter were $168,158.
 For the 1993 second quarter, the company reported a net loss of $530,864 or 17 cents per share compared to a loss of $202,794 or 9 cents per share in the comparable 1992 second quarter.
 For the six months ended March 31, 1993, the company reported gross sales of $743,586 compared with $305,542 in the 1992 period. After the $445,274 allowance for returns, net sales for the 1993 six month period were $298,312.
 For the six months ended March 31, 1993, the company reported a loss of $1,078,538 or 35 cents per share compared with losses of $428,686 or 18 cents per share in the year ago period.
 Kenneth Beckham, president and chief executive officer, said the company's second quarter and six month losses were in line with expectations but that he was particularly gratified by the company's better than 300 percent increase in gross sales during the second quarter, the majority of which he said was due to strong orders starting to come in from the European distributors. Earlier in the year, 2 Bi 2 had announced the signing of a number of distribution contracts with European distributors that represented purchase requirements for some 72,000 bicycles to be delivered during 1993.
 "Our increased sales for the second quarter are starting to show the results of some of those agreements," Beckham said.
 He noted that prior to the second quarter, sales had also been held back due to management's election to complete some significant engineering advances to the two-wheel drive component system before making shipments. He said the technological improvements were completed in January and deliveries were now going forward on a normal schedule.
 Beckham noted that the reacquisition of distribution and warehousing rights from three U.S. distributors, Cycle Tech of America, Inc., Legacy U.S.A., Inc. and Billie J. Becoat/Bect Enterprises for all of North America "were very positive developments for 2 Bi 2 and represented considerable potential in terms of the company's marketing opportunities for the future."
 The agreement will enable us to better control our marketing in North America and to move forward in line with the sales gains we are already starting to experience in Europe, Beckham said.
 Commenting on the company's loss for the 1993 second quarter, Beckham noted it was slightly less than the 1993 first quarter loss and due largely to anticipated increases in general and administrative, and marketing expenses.
 He said the increased expenses were a necessary part of the company's program to bring its new two-wheel drive bicycle to market and represented the addition of experienced bicycle industry personnel in both marketing and production, increased advertising and promotion expenses, and increased sales expenses, primarily in Europe.
 Beckham said, "The company does not expect general and administrative expenses to increase any further during 1993 despite our anticipation of continued gains in sales.
 "We've taken steps to position the company for continued growth in sales volume without incurring significant additional costs," he noted.
 Beckham said that the company had also initiated an extensive cost- cutting program that should further reduce losses and improve cash flow.
 He said much of the company's increase in its marketing expenses was related to moving ahead with product development for a complete line of lower priced bicycles that will be sold by mass merchandisers under the MacGregor name, as well as the establishment of a major marketing/sales network to launch the line.
 He said the first sales results for this effort are expected to begin during the company's fiscal fourth quarter ending Sept. 30, 1993.
 "During that quarter, we anticipate the presentation of the complete MacGregor bicycle line, having both conventional single wheel drive as well as our patented two wheel drive."
 Beckham said he expects a large majority of the company's sales during the remainder of its fiscal year to be sales of its MacGregor bicycles as compared to Legacy bicycles which comprised approximately 50 percent of its sales through September 1992.
 He characterized the potential market for the lower priced MacGregor bicycles, both domestically and worldwide, as approximately three times the size of the market for higher priced Legacy bicycles.
 Beckham said that 2 Bi 2 management believed that the potential sales increase for MacGregor bicycles would compensate the company for the reduced gross profit margins that would come from selling the lower- priced bicycles.
 Beckham outlined a three point business strategy for 2 Bi 2:
 -- Completion of the development of the MacGregor bicycle line
 with emphasis on marketing to mass merchandisers in the U.S.
 -- Continued expansion of Legacy bicycles worldwide with
 special emphasis continued on the European market following
 the success of those efforts during the current quarter.
 -- The possible selection and awarding of a manufacturer's
 license to build two wheel drive bicycles under an
 established international brand name.
 Beckham said that as a result of the company's initial public offering of common stock last September, 2 Bi 2 continued to have ample capital and was well positioned to pursue its marketing and distribution plans.
 As of March 31, 1993, the company had working capital of $2.4 million compared with $2.9 million at the end of September 1992. He said the company believes that its present working capital will provide it with sufficient cash to carry out its business as planned through the next 12 months.
 2 Bi 2, Inc. is the developer and manufacturer of the world's first two-wheel drive bicycles which it markets under the Legacy and MacGregor brand names. 2 Bi 2, Inc. is headquartered in St. Louis. The company's common stock is traded over-the-counter under the NASDAQ symbol BIKEU, and listed under NASDAQ small cap issues.
 2 BI 2, INC.
 Condensed Consolidated Statement of Operations
 (Unaudited)
 Periods ended Three Months Six Months
 March 31 1993 1992 1993 1992
 Gross Sales $613,432 $169,895 $743,586 $305,542
 Less returns and
 allowances 445,274 -- 445,274 --
 Total 168,158 169,895 298,312 305,542
 Net loss $(530,864)$(202,794) $(1,078,538) $(428,686)
 Net loss per common
 share $ (.17)$ (.09) $ (.35) $ (.18)
 -0- 5/24/93
 /CONTACT: Nicholas G. Biro or Jim Tolan of O'Connor Biro & Associates, 708-498-2284/
 (BIKEU)


CO: 2 Bi 2, Inc. ST: Missouri IN: LEI SU: ERN

SM -- NY055 -- 1665 05/24/93 11:31 EDT
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Date:May 24, 1993
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