Hayes Bicycle Group Announces Integration Strategy Following Recent Acquisitions

Mequon, Wis. (March 15, 2007) – Hayes Bicycle Group, a division of HB Performance Systems Inc., announced its integration plans for the company in light of its acquisition of select bicycle component companies, including Manitou in November 2006.

OPERATIONS

According to Rhonda Kirkwood, vice president and general manager, the decision has been made by Hayes Bicycle Group’s parent company HB Performance Systems to combine all Hayes Bicycle Group divisions in southeastern Wisconsin. By year end, all research and development, marketing and sales, and U.S. manufacturing will be operating from facilities in Mequon and Milwaukee. Asian sourcing and manufacturing operations will be in located in Taipei, Taiwan, and mainland China.

Chris Smith, formerly of Answer Products, has been named global director of sales & marketing for the Hayes Bicycle Group and will set the strategy for the combined brands. Smith will report to Kirkwood.

“We are fortunate to have someone with Chris’ industry knowledge and experience in all the sales channels guiding the team,” said Kirkwood. “It is important for us to reach out to all levels of customers - from the consumer to the OEM - and I am confident that Chris and his team will get it done.”

Reporting to Smith will be Len Cabaltera, senior sales manager, Joel Richardson, marketing manager, and Eric Taylor, senior product analyst. In addition, Bernd Pflueger will head the European operations from Frankfurt, Germany and Thomas Hochstrasser will report to Pflueger as European OEM sales manager.
PRODUCTS – CURRENT, NEW AND FUTURE
Besides its Hayes™ brand of disc brakes, Hayes Bicycle Group now owns the brands Manitou™, Sun Ringlé™, and Wheelsmith™. In addition, Hayes Bicycle Group will continue to utilize the Answer™ brand. Its product line currently offers:

Hayes – Disc brakes
Manitou – Suspension forks and shocks
Sun Ringlé – Wheels, rims and hubs
Wheelsmith – Spokes and wheel-building services
Answer – Handle bars, stems and shoes

Because of Hayes Bicycle Group’s strong commitment to developing high performance products for the bicycle industry, a product management team has been added to champion the products and brands.

New products for MY08 include a brake platform (Stroker), a rim family (Equalizer), two MRD designated fork models that are the lightest available in their respective categories as well as a fork for the 29in wheel market.. Also in 2008, Hayes Bicycle Group will focus on Manitou’s high-end product line in order to incorporate its superior-level engineering expertise and product manufacturing processes in the production of suspension forks and shocks. Lower-end products will be re-added to the product mix when uncompromised quality and delivery standards have been achieved.

“We have purposely reduced our product offering for the upcoming model year in order to maintain better control over the processes – from engineering through manufacturing,” said Kirkwood. “It is critical that we deliver quality products, on-time to our customers throughout the world. Integrating operations will enable us to utilize the engineering discipline and processes already in place at HB.”

Product Planning for 2009 and 2010 is under way and is made up of cross-functional teams from all brands. These teams are focusing on voice of customer, field testing, extensive laboratory testing and industrial design. Customers can expect to see integrated products and systems that will work together and have a similar look.

“The ability to design brakes, wheels and suspension components simultaneously, with the focused vision of improving compatibility and performance, allows for the development of truly innovative product,” Smith said.

ACQUISITION HISTORY

Answer Products was the third acquisition of HB Performance Systems and its bicycle division in the past 20 months. HB Performance Systems purchased Sun Metal Products in July 2005 and Wheelsmith Fabrication Inc. in September 2006. These acquisitions followed the June 2005 management buyout that created HB Performance Systems Inc., formerly Hayes Brake. At that time, President and CEO Rand McNally stated that the management team had plans to grow the company and acquisitions were a part of that strategy.

ABOUT HAYES BICYCLE GROUP / HB PERFORMANCE SYSTEMS

Hayes Bicycle Group was formed in 1997 and entered the bicycle market with a disc brake under the name Hayes Disc Brake. It followed the same breakthrough design and performance strategy of its parent company at the time (Hayes Brake). The revolutionary products that this group introduced set a new standard for hydraulic bicycle disc brakes worldwide.

In 2006, 120 worldwide distributors provided Hayes Bicycle Group products to customers in more than 50 countries. More than 200 worldwide bicycle original equipment manufacturers (OEMs) are supplied by Hayes Bicycle Group. Its products are well known and respected in the mountain bike market. Hayes Bicycle Group provides products for all segments, especially race, cross country, freeride, and gravity

HB Performance Systems Inc., a leader in the design, manufacture and sales of non-automotive custom-engineered brake systems for more than 60 years, offers a comprehensive range of products for recreational, construction, agricultural and military vehicles, motorcycles, bicycles, as well as other types of mobile and stationary equipment.