CANNONDALE: NOW A CANADIAN COMPANY?

SOURCE: CANNONDALE

New Division established exclusively for Independent Bicycle Dealer channel – Pacific Cycle to concentrate on mass merchant category.

Dorel Industries Ltd. (TSX: DII.A, DII.B) today announced it is re-organizing its Recreational/Leisure segment to create two distinct bicycle divisions to deal separately with the Independent Bicycle Dealer (IBD) and mass merchant channels. The changes are being made to coincide with today’s announced acquisition of the Bethel, Connecticut-based Cannondale Bicycle Corporation. The purchase also includes the Sugoi Performance Apparel Company.
A new Dorel Independent Bicycle Dealer (IBD) Division, the Cannondale Sports Group, is being established and will devote all of its energies and resources exclusively to this channel. The Cannondale Sports Group will encompass Cannondale, Sugoi, GT and other premium-oriented brands, and will seek acquisitions in similar high quality, performance bicycle companies.

Jeff Frehner, who has been President of Pacific Cycle for three years is leaving that position immediately to return to his roots in the bike business and will oversee the Cannondale Sports Group as President. The current Cannondale management team, headed by President and CEO, Matt Mannelly, will continue to run Cannondale within that group. “I’m a diehard biking enthusiast. I love this space and am thrilled to be able to focus all of my energy on the IBD channel. With Cannondale and Dorel’s resources, the sky is the limit. High quality, innovation and passion, this will be the DNA of our new division,” said Jeff.

“This is an excellent strategic fit for Cannondale and a testament to all the hard work of Cannondale employees worldwide. This provides us with tremendous resources to continue to build our innovative brand. It also creates long term stability that will help us achieve our leadership goals in the IBD channel. We’re excited to be the leading brand in Dorel’s new IBD division. The end result will be a continuous flow of innovative product to our Dealers and consumers,” commented Matt.

“Dorel recognizes that doing business with the IBD and mass merchant categories is two very different things and requires distinct
strategies and specialized people selling the best products for those channels. We clearly realize this and are making the necessary adjustments to best meet the needs of our customers,” stated Dorel President and CEO, Martin Schwartz.

Pacific Cycle, purchased by Dorel in 2004, will now be a stand-alone division focused on the mass merchant channel. Alice Tillett, who has
been Executive Vice President, Mass and Sporting Goods Channel at Pacific Cycle, has been named President. With 18 years experience in the sector, 10 of those in the bike industry, Alice has a thorough knowledge of the mass and sporting goods sector and has engineered Pacific’s growth in this channel. Mr. Schwartz said the Cannondale transaction underlines the Company’s plan to further unlock shareholder value by concentrating on Dorel’s core Recreational/Leisure and Juvenile segments, which provide the greatest potential. “We are committed to pursuing this strategy, and this important transaction positions us globally in a most material way. Dorel recognizes
the importance and potential of the Independent Bicycle Dealer channel and is purchasing Cannondale as the first step to become the world’s number one IBD player.”

Profile:

Dorel Industries (TSX: DII.B, DII.A) is a global consumer products company engaged in the designing, manufacturing and marketing of a
diverse portfolio of powerful consumer brands, sold through its Juvenile, Recreational/Leisure and Home Furnishings segments. Headquartered in Montreal and with significant operations in the United States and Europe, Dorel employs approximately 4,700 people in 15 countries. Annual sales are US$1.8 billion and are made in over 60 countries worldwide. US operations include Dorel Juvenile Group, which markets the Cosco and Safety 1st brands as well as Eddie Bauer and Disney Baby licensed products; Pacific Cycle, which markets several brands including Schwinn, Mongoose, GT, InSTEP, Playsafe and Roadmaster; and Ameriwood Industries, which markets ready-to-assemble furniture products under the Ameriwood, Carina, SystemBuild, Altra Furniture and Ridgewood brands; Cosco Home & Office, which markets home/office products under the Cosco brand and Samsonite license as well as home healthcare products under the Cosco Ability Essentials and Adepta brands.

In Canada, Dorel operates Dorel Distribution Canada, Ridgewood Industries and Dorel Home Products. Dorel Europe markets juvenile products throughout Europe, under the Bebe Confort, Maxi-Cosi, Quinny, Safety 1st, Babideal, Mon Bebe and Baby Relax brands. Dorel Asia sources and imports home furnishings products. Dorel is the majority owner of In Good Care (IGC), a manufacturer and distributor of juvenile products
in Australia, whose two principal brands are Bertini and Mother’s Choice. Dorel also has eight offices in China, headquartered in Shanghai, which oversee the sourcing, engineering and logistics of the Company’s Asian supplier chain.

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