Ducati Motor Holding Announces Record 1999 First-Half Results / First-Half Net Income Rises to Lit. 11.8 Billion (US$6.3 million) / EBITDA Increases 36.5% to Li

BOLOGNA, Italy (PROTEXT) - Ducati Locks in 1999 World Superbike Championship Ducati Motor Holding S.p.A. (NYSE: DMH; Borsa Italiana S.p.A:), a leading manufacturer of high performance motorcycles, today announced record financial results for the six months ended June 30, 1999, with net income at an all-time high of Lit. 11.8 billion (US$6.3 million). As previously reported, the Company announced six-month consolidated sales of Lit.330.9 billion (US$176.5 million), a 23.0% increase over the Lit. 268.9 billion (US$143.4 million) for the first half of last year. For the first six months, gross margin increased to 38.7% from 37.7% as robust sales of high-margin accessories and apparel and stronger distribution efficiencies offset pressure on average motorcycle margins resulting from the continuing success of the Monster family which carries a lower-than-average margin. First- half EBITDA (earnings before interest, tax, depreciation and amortization) increased 36.5% to Lit. 64.7 billion (US$34.5 million) from Lit. 47.4 billion (US$25.3 million) in the comparable period last year. EBITDA as a percent of sales increased to 19.5% from 17.6%, making Ducati's margin one of the highest EBITDA margins in the industry. Net income for the six months was Lit.11.8 billion (US$6.3 million) compared to Lit. 0.5 billion (US$0.2 million) in the prior year period. The Company noted that net income for the first half of 1999 was impacted by foreign exchange losses equivalent to Lit. 4.6 billion pre-tax (US$2.5 million) due to a decision in the fall of 1998 to sell forward U.S. Dollars and Pound Sterling to avoid currency risk. Net income for the first half of 1998 was affected by non-recurring charges equal to Lit. 17.5 billion pre-tax (US$9.3 million). "We are extremely pleased with our record first-half results. The growing awareness of the Ducati brand, particularly in key markets, drove strong top-line gains that validate the sustained growth pattern that we achieved over the past three years since the 1996 acquisition," said Carlo Di Biagio, Ducati Chief Financial Officer. "Our brand-building efforts have allowed us to include younger Ducatisti while at the same time maintaining our stronghold with discriminating enthusiasts, all the while preserving the integrity of the Ducati brand. Additionally, we are proving that our strategy of assuming control over our distribution networks ensures a strong Ducati presence at the local level and generates greater profitability. We remain pleased with our success to date and are confident that our strategies position us correctly for sustained future growth." Ducati has experienced a significant rise in registrations, a measure of retail sales, in those regions where the Company has greater control over its distribution network. While final official data are not yet available, during the first six months of 1999, unofficial registrations grew 17% on a global basis, including approximately 37% in the U.S., 26% in Japan and Italy, 23% in Germany, and 38% in the Benelux region. Ducati's net debt decreased to Lit.186 billion (US$99 million) at June 30, 1999 from Lit.290 billion (US$154.7 million) at December 31, 1998. The Company's net debt to total net capitalization ratio was 42.7% as of June 30, 1999. Finally, on Sunday, September 12, at the Hockenheim racetrack in Germany, Ducati locked in the 1999 World Superbike Championship in both the riders' and manufacturers' categories with a stunning year-long performance by Ducati lead rider Carl Fogarty, who won his fourth World Superbike title. Founded in 1926, Ducati builds racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. Ducati has won eight of the last ten World Superbike Championship titles and more individual victories than the competition put together. The Company produces motorcycles in four market segments which vary in their technical and design features and intended customers: Superbike, Supersport, Monster and SportTouring. The Company's motorcycles are sold in more than 40 countries worldwide, with a primary focus in the Western European and North American markets. For more information about the Company, please visit our web site at http://www.Ducati.com. This press release contains statements that are forward- looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, as described in the Company's prospectus dated March 23, 1999. Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Lire in millions, US$ in thousands, except per share and share amounts) Six Months Ended Six Months Ended June 30, June 30, June 30, June 30, Percent 1999 1998 1999 1998 Change Net sales Lit. 330,918 Lit. 268,938 US$176,510 US$143,450 +23.0% Cost of goods sold (202,829) (167,557) (108,188) (89,374) Gross profit 128,089 101,381 68,322 54,076 +26.3% Other operating revenues 3,901 1,237 2,081 660 SG&A expenses (68,710) (54,934) (36,650) (29,302) Other operating income 1,293 -- 690 -- Depreciation & amortization (21,956) (17,803) (11,711) (9,496) Operating income/(loss) 42,617 29,881 22,732 15,938 +42.6% Financing expense, net (17,642) (11,744) (9,410) (6,264) Other non- operating income/ (expense), net(1) 148 (17,789) 79 (9,488) Profit/(loss) before income taxes and min. interest 25,123 348 13,401 186 Income taxes (12,996) 246 (6,932) 131 Minority interest (289) (138) (155) (74) Net profit/ (loss) Lit.11,838 Lit.456 US$6,314 US$243 Earnings per share Lit.74.94 Lit.3.26 US$0.04 US$0.00 Shares outstanding157,962,963 140,000,000 157,962,963 140,000,000 Percent Other Financial Data Change Motorcycles Produced (Units) 19,006 14,270 +33.2% Motorcycles Sold (Units) 20,073 16,704 +20.2% Unofficial Registrations 19,200 16,442 +16.8% (Units) EBITDA 64,721 47,398 34,522 25,282 +36.5% EBITDA Margin 19.5% 17.6% (1) Extraordinary item in 1998 principally related to non- recurring expenses for the cash settled warrant rights granted to the credit institutions that arranged financing prior to the Company's initial public offering and the write-off of debt issuance costs. Note: On June 30, 1999, US$1 = 1,874.78 Italian lire. On January 1, 1999, the conversion rate was fixed such that Euro 1 = 1,936.27 Italian lire. Ducati Motor Holding S.p.A. Reclassified Consolidated Balance Sheet Data (Lire in millions, except per share and share amounts) Periods of six months ended Year ended 6/30/99 6/30/98 12/31/98 Lm % Lm % Lm % Current assets Cash and cash equivalents 41,044 22,964 15,288 Trade receivables, net 120,189 103,334 94,936 Inventories 107,375 76,121 111,110 Other current assets 14,183 20,293 10,824 Total current assets 282,791 42.2% 222,712 35.6% 232,158 38.4% Non current assets Property, plant and equipment - net 90,574 84,292 87,422 Intangible fixed assets, net 294,993 282,479 283,407 Equity investments 163 3 163 Other long-term assets 1,216 35,675 957 Total non current assets 386,946 57.8% 402,449 64.4% 371,949 61.6% Total assets 669,737 100.0% 625,161 100.0% 604,107 100.0% Current liabilities Short-term bank borrowings 10,041 30,289 50,661 Current portion of long-term debt 11,938 9,437 12,738 Accounts payable - trade 127,316 104,289 103,513 Income and other taxes payables 18,095 10,204 5,108 Other current liabilities 16,309 36,272 8,862 Provisions for risks and charges - current portion 14,811 24,999 21,186 Total current liabilities 198,510 29.6% 215,490 34.5% 202,068 33.4% Long-term liabilities Long-term debt, net of current portion 204,791 218,504 242,327 Employees' leaving entitlement 6,558 7,765 8,344 Deferred income taxes 5,262 604 2,475 Other long-term liabilities 57 34,534 62 Provisions for risks and charges - long-term portion 4,50 4,500 9,096 Total long-term liabilities 221,168 33.0% 265,907 42.5% 262,304 43.4% Total liabilities419,678 481,397 464,372 Total Group shareholders' equity 249,170 37.2% 143,223 22.9% 139,056 23.0% Minority interests 889 541 679 Total shareholders' equity 250,059 37.3% 143,764 23.0% 139,735 23.1% Total liabilities and shareholders' equity 669,737 100% 625,161 100% 604,107 100% Ducati Motor Holding S.p.A. Reclassified Consolidated Balance Sheet Data (US$ in thousands, except per share and share amounts) Y ear Periods ended of six months ended 6/30/99 6/30/98 12/31/98 US$ % US$ % US$ % Current assets Cash and cash equivalents 21,893 12,249 8,155 Trade receivables, net 64,108 55,118 50,638 Inventories 57,274 40,603 59,266 Other current assets 7,565 10,824 5,773 Total current assets 150,840 42.2% 118,794 35.6% 123,832 38.4% Non current assets Property, plant and equipment - net 48,311 44,961 46,631 Intangible fixed assets, net 157,348 150,673 151,168 Equity investments 87 1 87 Other long-term assets 649 19,029 510 Total non current assets 206,395 57.8% 214,664 64.4% 198,396 61.6% Total assets 357,235 100% 333,458 100% 322,228 100% Current liabilities Short-term bank borrowings 5,356 16,156 27,022 Current portion of long-term debt 6,368 5,034 6,794 Accounts payable - trade 67,910 55,627 55,213 Income and other taxes payables 9,652 5,443 2,725 Other current liabilities 8,699 19,347 4,727 Provisions for risks and charges - current portion 7,900 13,334 11,301 Total current liabilities 105,885 29.6% 114,941 34.5% 107,782 33.4% Long-term liabilities Long-term debt, net of current portion 109,235 116,549 129,256 Employees' leaving entitlement 3,498 4,142 4,451 Deferred income taxes 2,807 322 1,320 Other long-term liabilities 30 18,421 33 Provisions for risks and charges - long-term portion 2,400 2,400 4,852 Total long-term liabilities 117,970 33.0% 141,834 42.5% 139,912 43.4% Total liabilities 223,855 256,775 247,694 Total group shareholders' equity 132,906 37.2% 76,394 22.9% 74,172 23.0% Minority interests 474 289 362 Total shareholders' equity 133,380 37.3% 76,683 23.0% 74,534 23.1% Total liabilities and shareholders' equity 357,235 100% 333,458 100% 322,228 100% ots Original Text Service: Ducati Motor Holding S.p.A. Internet: http://www.newsaktuell.de Contact: Investors: Lynn Morgen, Carolyn Capaccio, Teresa Kollappallil, 212-850-5600, or Jean-Francois Carminati, Caroline Bruel, Catherine Juillard, 33- 1-47-03-6810, Media: Michael McMullan, Stacy Roth, 212-850-5600, Madeleine Resener, 33-1-47-03-6810, all of Morgen-Walke Associates, for Ducati Motor Holding S.p.A.; or Jason M. Jacobs of Ducati Motor Holding S.p.A., 39-051-6413-222 Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents. PROTEXT