Growing Pains Hit Excelsior

GROWING PAINS HIT EXCELSIOR

EXCELSIOR-HENDERSON stock dropped 23 percent in early April following the start-up company’s announcement that its losses for 1999 will be significantly higher than expected. Per

share price fell from $7.69 to $5.69 before rallying to just under $6.

“We weren’t too surprised (by the losses),” said a spokesman. “We did have some delays in production, but we’re producing bikes, we’re shipping bikes, customers are riding Super X motorcycles.”

Still, the company is faced with raising an additional $10 to $15 million so production can be ramped up to full capacity. The goal is to produce between 3500 and 4500 units this year. Until then, earnings are scarce.

“When you’re late on production, you’re late on revenue,

plus some of our costs have been higher than budgeted for,” said co-founder Dave Hanlon. “It’s a problem, but not a critical problem-unless we don’t solve it. We’ll solve it.”

To date, Excelsior-Henderson has raised $85 million, and despite the bad news most investment analysts remain bullish on the company’s long-term outlook and are maintaining “buy” recommendations on its stock.

“We look at this as another challenge,” Hanlon said. “We’re upbeat.”

In other Excelsior news, marketing man Steve Wilhite has left the company after less than two months on the job. Hired with much fanfare, Wilhite was credited with launching Volkswagen’s

wildly popular new Beetle before moving on to E-H. Company officials attributed the separation to personal and professional reasons. At presstime, Wilhite could not be reached for comment.

“Early on in some relationships you get an idea if things are going to work out or not,” said Hanlon of Wilhite’s leaving. “Both parties decided it was better to unhook early-that’s just the way it worked out.”

Hanlon said the company’s marketing role will be taken inhouse for the near future.

David Edwards