Thursday, October 21, 2004
Bicycle maker Huffy seeks shield
Longtime Ohio company restructuring
By James Hannah
The Associated Press
This vintage 1960s Huffy bicycle was still going strong in Dayton this year. Huffy bicycles are now made overseas.
Associated Press file
DAYTON - Bicycle maker Huffy Corp. filed Wednesday for Chapter 11 bankruptcy protection, citing losses largely from a Canadian sports equipment company that it has partially sold.
Huffy lost $7.5 million in 2003 after losing $1.4 million in 2002.
The company's stock plummeted from $6.80 a share in December 2003 to 58 cents in August.
The New York Stock Exchange then suspended trading because the company's market value had fallen too low.
"We are focused on restructuring our operations around our bicycle and golf product lines, and I am confident that Huffy will emerge as a stronger and more competitive organization, well-positioned to succeed," said John Muskovich, president and chief operating officer.
Huffy recently sold its basketball-backboard unit, its customer service division and part of its Canada-based Gen-X business, which makes equipment for golf, snowboarding, inline skating, skiing and hockey. Huffy also sold the Gen-X name.
Huffy said other reasons for the filing include the increasing costs of complying with federal financial reporting regulations and mounting costs associated with former operations, such as the cleanup of a polluted site in California.
The company has said its bicycle division has been performing solidly and has increased its share of the U.S. bike market the past two years. It holds about 30 percent of the market.
The filing in U.S. Bankruptcy Court is meant to protect the company from creditors while it reorganizes. Huffy said daily operations would continue at its U.S. and Canadian subsidiaries.
The company expects to pay its employees in the usual manner and has sought permission from the bankruptcy court to pay vendors, suppliers and other business partners during the reorganization.
Huffy said it has obtained $50 million in financing for operating, supplier and employee expenses.
The company said suppliers have agreed to ship products for the holiday season and it is confident it can meet its commitments to customers through 2005.
Huffy employs about 140 workers and has offices or warehouses in Miamisburg and nearby Springboro as well as Toronto and Carson, Calif. Hundreds of jobs were cut when Huffy sold its customer service division in March.
Huffy imports its bicycles, wagons and three-wheeled vehicles for children from southeast Asia, including China and Taiwan, and sells them through high-volume retailers that account for about 85 percent of all wheeled products sold in the United States.
Huffy began in 1892 when George Huffman, owner of the Davis Sewing Machine Co., oversaw production of the company's first bicycle. Horace Huffman sold the company in 1925 and formed the Huffman Manufacturing Co., which eventually became Huffy Corp.
In the 1960s, Huffy began to diversify and entered the emerging discount-store market.
By the late 1990s, foreign competition began to take its toll and Huffy had closed its last U.S. bicycle plants.
http://www.enquirer.com/editions/2004/10/21/biz_huffy21.html