Elkhart, Indiana Vincent Bach Music Instrument UAW364 Workers Fight For Justice

Make Music With
Solidarity Caravan On 12/16 to Elkhart, Indiana To Support
UAW364 Conn-Selmer Strikers
"They'll Never Break Us Down"


Dear Brothers and Sisters,

The 230 members and their families of UAW 364 of Conn-Selmer's Vincent Bach musical instrument factory in Elkhart, Indiana have been on strike for over 7 months. It is time to rally to their support and help them with food, funds and solidarity.
On Saturday December 16, 2006 there will be caravans from throughout the mid-west going to Elkhart, Indiana to join the picket line and rally for their struggle.
Picketing will take place before 3:00 PM when a rally will be held. Collections are being taken to purchase toys for the kids so they can have a happy holiday and efforts are also being made to expand the struggle to all musicians in the US and internationally. Please contact the AFM musicians union in your area and ask that they boycott all Steinway Inc. products by themselves and their students until the striking workers return to their jobs and the 120 scabs are removed from the plant.

You can also call these phone numbers a ask why this union busting company continues to seek to break the union with scabs. It has also been reported that the Sheriff is now using prisoners to do the work of some of the strikers.
Steinway Inc has total sales of $375 million a year and is the largest seller of professional trumpets and horns in the world.




Steinway PI Long IL, NY 718-721-2600

Steinway Piano 305-774-9878

Steinway, DM News 212-344-8759

Steinway and Sons 617-426-1900

Owner Messina Irish Stock


Send Contributions of food or money to the Food Bank at
Food 4 Strikers
58558 Ardmore Dr.
Elkhart, IN 46517

Endorsed by UAW364 Strike Support Committee, Labor Action Coalition and other unionists.



http://www.southbendtribune.com/apps/pbcs.dll/article?AID=/20061031/Biz/610310382/-1/BIZ/CAT=Biz

October 31. 2006 6:59AM
Striking union members in Elkhart reject 'last, best offer'
Bach workers will stay on strike into 7th month.


ED RONCO
Tribune Staff Writer

ELKHART -- Monday's contract proposal from musical instrument maker Conn-Selmer was labeled as the company's "last, best and final offer."

Striking union members called it the worst offer to date, and rejected it handily, voting 168 to 23 to stay on the picket line.

More than 200 people have been on strike at Conn-Selmer's Vincent Bach musical instrument factory since April 1.

They've voted on four contracts altogether: one on March 31, which put them on strike in the first place, and three additional offers in the months since.

Tomorrow, the union will have been on strike for seven months.

"They'll just have to shut us out," said Lutie Davis, a 14-year employee before the strike. "It's unreal the stuff they're wanting."

That stuff includes higher insurance premiums and lower wages.

Under the agreement rejected Monday, employees would contribute from their paychecks between $29 and $35 a week for single-person insurance, and between $48 and $60 a week for family coverage.

By 2008, single-person coverage would range from $37 to $43 per week. Family coverage would run between $64 and $76 per week.

At the same time, the company asked for a three year wage freeze, and cut hourly pay to between $13.68 and $21.73.

Prior to the strike, the average hourly wage was $21.01.

Steinway Musical, Conn-Selmer's parent company which has been handling reporter inquiries during the entire strike, had no comment on Monday's events.

Next step unknown

Monday's vote means it's back to the picket line for union members, although it's uncertain beyond that what could happen.

If it really is the company's "last, best and final" offer, union members could see permanent replacements doing their jobs inside the plant while they sit indefinitely on a heavily curtailed picket line.

Last week, Conn-Selmer obtained a restraining order against the union, limiting it to three striking workers at each of the plant's four entrances and forbidding them from yelling at replacement workers.

Many of the striking workers already have been declared permanently replaced inside the plant, which allows them to receive government unemployment assistance.

Others have found new jobs, and some are still looking, although that's challenging when it comes time to explain why you left your previous job.

"As soon as you put down 'labor dispute,' you might as well forget it," said Kathy Harris, who worked in the plant 33 years before the strike.

Employers are hesitant to hire workers they think will go back to their old positions when the labor dispute is settled, she said.

"It's very frustrating," Harris said. "Your life is in limbo."

The union members say they're sticking together still, despite the seemingly endless dispute.

After previous votes, union members gathered outside the polling place to talk and laugh together, sharing jokes about management or talking about sports scores.

That happened Monday, but to a lesser extent. Fewer members waited to hear the results of the vote. They've done enough of these that they can gauge what the result is going to be from the discussion before the vote, and from talking to each other. The rest is just numbers.

They're resolute in their stance against the company and in their belief that they are more expensive than what company officials say.

But it's getting old, too.

"I'm at a point right now where I'm getting sick and tired of the whole mess," Harris said. "I'm a baby boomer. It's time to move on."

Chuck Miller agreed. He hired on at Bach the same year as Harris. Today is his 57th birthday.

"I don't know where my life is going to be tomorrow," Miller said.

Significance

It's too early to tell whether Monday's rejection is the fatal blow to the union, said Teresa Ghilarducci, professor of economics at the University of Notre Dame.

Ghilarducci is director of Notre Dame's Higgins Labor Research Center.

"What I do know is that publicly traded companies have a lot more pressure to get the maximum rate of return," she said. "They may actually be taking a more long-term view that taking the losses now, and not having a union, would be worth it."

In other words, the strike is costing the company money now. Steinway said it lost $4.9 million in band instrument sales during the second quarter because of the strike.

But if the dispute ends badly for the union, and the company can continue to operate the Vincent Bach plant with nonunion replacement workers, it will be cheaper in the long run.

"What the employer wants to do is break the union," Ghilarducci said. "The workers have lost so much that voting down this contract must be very important for them to make the point that they don't come cheap."

If that's the message the union is sending, its president, Jerry Stayton, isn't so sure it's been received. The latest offer gives him the impression the company doesn't care if union workers ever come back, he said.

But he's holding out hope that the company's "last, best offer" was anything but.

"I'm not as optimistic as I used to be," he said. "But weirder things have happened."

Staff writer Ed Ronco:
eronco [at] sbtinfo.com
(574) 235-6467



http://www.wndu.com/news/102006/news_53530.php

Conn Selmer


Striking Conn- Selmer Bach-Steinway UAW 364 Members Need Support
On Strike Over 7 Months

Send Contributions of food or money to the Food Bank at
Food 4 Strikers
58558 Ardmore Dr.
Elkhart, IN 46517


Workers of UAW Local 364 in Elkhart Indiana have been on strike for seven months at the Conn-Selmer's Vincent Bach musical instrument factory. Conn-Selmer is a subsidary of Steinway Inc. There has been no gate collections to assist these workers no food banking the most basic of survival skills for striking workers. There are 230 workers on strike they ask us to call these numbers at let them no we support them and the story is getting out



Steinway PI Long IL, NY 718-721-2600

Steinway Piano 305-774-9878

Steinway, DM News 212-344-8759

Steinway and Sons 617-426-1900

Owner Messina Irish Stock


Send Contributions of food or money to the Food Bank at
Food 4 Strikers
58558 Ardmore Dr.
Elkhart, IN 46517


http://www.southbendtribune.com/apps/pbcs.dll/article?AID=/20061031/Biz/610310382/-1/BIZ/CAT=Biz

October 31. 2006 6:59AM
Striking union members in Elkhart reject 'last, best offer'
Bach workers will stay on strike into 7th month.


ED RONCO
Tribune Staff Writer

ELKHART -- Monday's contract proposal from musical instrument maker Conn-Selmer was labeled as the company's "last, best and final offer."

Striking union members called it the worst offer to date, and rejected it handily, voting 168 to 23 to stay on the picket line.

More than 200 people have been on strike at Conn-Selmer's Vincent Bach musical instrument factory since April 1.

They've voted on four contracts altogether: one on March 31, which put them on strike in the first place, and three additional offers in the months since.

Tomorrow, the union will have been on strike for seven months.

"They'll just have to shut us out," said Lutie Davis, a 14-year employee before the strike. "It's unreal the stuff they're wanting."

That stuff includes higher insurance premiums and lower wages.

Under the agreement rejected Monday, employees would contribute from their paychecks between $29 and $35 a week for single-person insurance, and between $48 and $60 a week for family coverage.

By 2008, single-person coverage would range from $37 to $43 per week. Family coverage would run between $64 and $76 per week.

At the same time, the company asked for a three year wage freeze, and cut hourly pay to between $13.68 and $21.73.

Prior to the strike, the average hourly wage was $21.01.

Steinway Musical, Conn-Selmer's parent company which has been handling reporter inquiries during the entire strike, had no comment on Monday's events.

Next step unknown

Monday's vote means it's back to the picket line for union members, although it's uncertain beyond that what could happen.

If it really is the company's "last, best and final" offer, union members could see permanent replacements doing their jobs inside the plant while they sit indefinitely on a heavily curtailed picket line.

Last week, Conn-Selmer obtained a restraining order against the union, limiting it to three striking workers at each of the plant's four entrances and forbidding them from yelling at replacement workers.

Many of the striking workers already have been declared permanently replaced inside the plant, which allows them to receive government unemployment assistance.

Others have found new jobs, and some are still looking, although that's challenging when it comes time to explain why you left your previous job.

"As soon as you put down 'labor dispute,' you might as well forget it," said Kathy Harris, who worked in the plant 33 years before the strike.

Employers are hesitant to hire workers they think will go back to their old positions when the labor dispute is settled, she said.

"It's very frustrating," Harris said. "Your life is in limbo."

The union members say they're sticking together still, despite the seemingly endless dispute.

After previous votes, union members gathered outside the polling place to talk and laugh together, sharing jokes about management or talking about sports scores.

That happened Monday, but to a lesser extent. Fewer members waited to hear the results of the vote. They've done enough of these that they can gauge what the result is going to be from the discussion before the vote, and from talking to each other. The rest is just numbers.

They're resolute in their stance against the company and in their belief that they are more expensive than what company officials say.

But it's getting old, too.

"I'm at a point right now where I'm getting sick and tired of the whole mess," Harris said. "I'm a baby boomer. It's time to move on."

Chuck Miller agreed. He hired on at Bach the same year as Harris. Today is his 57th birthday.

"I don't know where my life is going to be tomorrow," Miller said.

Significance

It's too early to tell whether Monday's rejection is the fatal blow to the union, said Teresa Ghilarducci, professor of economics at the University of Notre Dame.

Ghilarducci is director of Notre Dame's Higgins Labor Research Center.

"What I do know is that publicly traded companies have a lot more pressure to get the maximum rate of return," she said. "They may actually be taking a more long-term view that taking the losses now, and not having a union, would be worth it."

In other words, the strike is costing the company money now. Steinway said it lost $4.9 million in band instrument sales during the second quarter because of the strike.

But if the dispute ends badly for the union, and the company can continue to operate the Vincent Bach plant with nonunion replacement workers, it will be cheaper in the long run.

"What the employer wants to do is break the union," Ghilarducci said. "The workers have lost so much that voting down this contract must be very important for them to make the point that they don't come cheap."

If that's the message the union is sending, its president, Jerry Stayton, isn't so sure it's been received. The latest offer gives him the impression the company doesn't care if union workers ever come back, he said.

But he's holding out hope that the company's "last, best offer" was anything but.

"I'm not as optimistic as I used to be," he said. "But weirder things have happened."

Staff writer Ed Ronco:
eronco [at] sbtinfo.com
(574) 235-6467



http://www.wndu.com/news/102006/news_53530.php

Conn Selmer employees vote down contract

It is back to the picket line for Vincent Bach workers in Elkhart.

It is back to the picket line for Vincent Bach workers in Elkhart.


Posted: 10/30/2006 09:50 pm

Elkhart, IN It is
back to the picket line for Vincent Bach workers in Elkhart.

"The vote one the contract is 23 yes and 168 no," an employee announced
to the cheers of his co-workers.

80% of employees voted down a new contract today proposed by Conn Selmer.

This is the fourth vote since the union decided to strike seven months ago.

Conn Selmer says this is the company's last, best and final offer.

Workers claim this contract is the worst yet, because there are now more
than 100 replacement workers who will keep their jobs. Nobody is happy
to be out here, but I'm pleased with the strength of the vote. But we
couldn't put half of our people out on the street. That's what it boiled
down to, said Vincent Bach worker, Jim Klein.

Of the contract, employee Chuck Miller said, It was worse. It was
worse. It was a slap in the face. The company is like, its our way or
no way.


http://www.fortwayne.com/mld/newssentinel/15890075.htm



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Newt B. Doebel (Offline)
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Bach Strike-REAL MARKETPLACE-FACTS! - 10-11-2006, 08:50 AM
------------------------------------------------------------------------

The facts and only the facts, forget the propaganda that Conn-Selmer Corp. are posting here. The Bach reputation was built long before Dana Messina ever came along, the employees made Bach what it is today, not Dana Messina like he thinks! The Bach plant/line has the highest quality reputation in the music industry and sets the pace and price for those horn lines by all competitors. The Bach lines deep rooted asset is their skilled workforce which on average (230 employees) has a total combined 4,700 years of experience at crafting/building of these fine instruments that lead the market place. The savvy pro musicians and pro horn buyers as well as dealers already understand this fact and they happen to be the marketplace. The new reputation for Dana Messina and Conn-Selmer with their replacement workers that have been there for 3 months, not 4,700 years mind you is of very low quality instruments/tolerance issues/performance problems/defects/cosmetic/finish problems of returned instruments that is producing a boom market for Bach's competitors, this is just giving your competition your market share that you'll never hold on to or get back!. In Corporate management you have to differentiate between delusional arrogance and the reality of the real world! Dana Messina thinks the Bach market will always be there even with workers that have only been there a few months which is contrary to what really takes place in the real world marketplace! To put it in laymen's terms, the pilot on your air flight has massive/years of experience which is why an airline makes money and has a good reputation for quality in the marketplace. In Messina's world, your pilot would be a guy that just got done flipping hamburgers at Burger King! Even though this delusional arrogance makes sense to Steinway and Conn-Selmer, in the end in the marketplace, IT JUST WON'T FLY!




http://www.steinwaymusical.com/About.html

STEINWAY MUSICAL INSTRUMENTS, through its operating subsidiaries, is a
world leader in the design, manufacture and marketing of high quality
musical instruments. The Company has one of the most valuable
collections of brands in the music industry. Through a worldwide network
of dealers, Steinway Musical Instruments’ products are sold to
professional, amateur and student musicians, as well as orchestras and
educational institutions. The company employs a workforce of over 2,300
and operates 14 manufacturing facilities in the United States and Europe.

SIGNIFICANT EVENTS

STEINWAY & SONS
Piano Operations
Headquarters:
Long Island City, NY
Factory Locations:
Long Island City, NY
Hamburg, Germany

Michael Anesta
Director, Personnel
Steinway & Sons
One Steinway Place
Long Island City
NY 11105
Phone: 718-721-2600
Fax: 718-932-4332
MAnesta [at] steinway.com <mailto:MAnesta [at] steinway.com>

CONN–SELMER
Headquarters: Elkhart, IN
Factory locations:
Elkhart, IN
Eastlake, OH
Cleveland, OH
LaGrange, IL
Monroe, NC

Human Resources
Conn-Selmer, Inc.
600 Industrial Parkway
Elkhart, IN 46516
Phone: 574-522-1675
Fax: 574-295-5405
HRResumes [at] conn-selmer.com
<mailto:HRResumes [at] conn-selmer.com>


<mailto:HRResumes [at] conn-selmer.com> <mailto:HRResumes [at] conn-selmer.com>

Board of Directors

Dana D. Messina
Chief Executive Officer

Dana Messina has served as a director of the Company since 1993 and as
Chief Executive Officer since 1996. He has been a principal of Kirkland
Messina, Inc. since 1994. From 1990 to 1994, Dana was a Senior Vice
President of a Los Angeles-based investment bank where he was
responsible for all of its corporate finance and merchant banking
activities. From 1987 to 1990, he was employed by an investment banking
firm in its High Yield Bond Department.

Dana received his BS degree in engineering from Tufts University and his
MBA from Harvard Business School. Age: 44.


<mailto:HRResumes [at] conn-selmer.com>

<http://www.steinwaymusical.com>

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Steinway Musical Instruments, Inc. (ticker: LVB, exchange: New York
Stock Exchange (.N)) News Release - 11/2/06

------------------------------------------------------------------------
Steinway Reports Solid Q3 Results Despite Continuing Labor Strike

WALTHAM, Mass., Nov. 2 /PRNewswire-FirstCall/ -- Steinway Musical
Instruments, Inc. (NYSE: LVB), one of the world's leading manufacturers
of musical instruments, today announced results for the quarter and nine
months ended September 30, 2006.

Revenues decreased 5% for the quarter, to $91 million, due to the loss
of an estimated $6.8 million in band instrument sales caused by a labor
strike. The strike also negatively impacted gross profit for the quarter
by approximately $3 million. Despite these factors, overall gross
margins held steady at 28.7%.

Operating expenses increased 5% as compared to the prior year period
primarily as a result of an increase in bad debt expense, recruiting
costs and stock-based compensation. Net interest expense decreased 25%
as compared to the third quarter of 2005, as a result of continued debt
reduction and the Company's successful debt refinancing earlier in the year.

For the quarter, the Company posted Basic EPS of $0.12 compared to Basic
EPS of $0.46 in the prior year period. Adjusted Basic EPS was $0.14
compared to Adjusted Basic EPS of $0.48 in the third quarter of 2005.
Adjustments, which are comprised primarily of costs associated with a
labor strike, are detailed in the attached financial tables.

Band Operations

Band sales for the quarter decreased $5 million, or 11%, due to the lost
sales caused by a labor strike at one of the Company's manufacturing
facilities. Gross margins for the quarter remained stable at 20.7%
despite the negative impact of the strike.

Sales for the nine-month period ended September 30, 2006 declined only
$2 million, or 2%, as strong sales of other instruments nearly offset
the $12 million in lost sales from the strike. Gross margins declined
from 21.1% to 19.3% as a result of strike-related unabsorbed overhead.

Piano Operations

Worldwide piano sales for the quarter increased slightly, to $49
million, as strong demand overseas offset a decrease in sales in the
United States. Third quarter unit shipments of Steinway grand pianos
overseas rose 8%. Domestically, Steinway grand unit shipments pulled
back from the 21% increase experienced in the second quarter, declining
10% in the third quarter, but ending the nine-month period slightly
ahead of the prior year. Third quarter shipments of the Company's
mid-priced pianos climbed 26% worldwide after the June re-launch of the
Essex brand. Gross margins decreased to 35.4% primarily as a result of
the shift in mix toward lower margin mid-priced pianos and a lower
proportion of retail sales in the quarter.

Year-to-date piano sales were up 3% despite the negative impact of
approximately $1 million of foreign currency translation. Gross margins
declined from 36.1% to 34.3% as a result of additional plant shutdowns
and a shift in product mix.

Comments

Discussing third quarter results of the piano segment, CEO Dana Messina
stated, "Overall, our piano business posted very solid results.
Overseas, we had a fantastic quarter. We saw solid increases in
virtually all product categories, with Steinway grand unit shipments up
8%. In the U.S., while business remains a bit choppy from one quarter to
the next, we are tracking ahead of last year. On a year-to-date basis,
with our strong overseas performance, unit shipments of Steinway grands
are up 3% worldwide."

Turning to the mid-priced segment, Messina noted, "We couldn't be more
pleased with the results of the re-launch of our Essex piano line. Order
flow continued to be strong through the third quarter and the feedback
on the pianos from our dealers has been very positive."

Regarding band operations, Messina said, "Our Elkhart brass workers
remain out on strike. In the meantime, we began hiring replacement
workers in July and now have more than 130 individuals producing
instruments. At this point, we are spending a great deal of time on
training but we expect output from this facility to at least double in
the fourth quarter as our new workers reach more productive levels. Bach
trumpets and trombones are the number one selling professional
instruments in their categories and we expect to begin 2007 with a very
large backlog of orders. We feel that, once we have ramped up
production, we will be able to improve the quality of these instruments
from historic levels. Also, greater flexibility from cross-training the
workforce and better product flow will help us reduce our costs. Our
goal remains to satisfy our customers in a profitable manner and we are
very excited about the potential of our new workforce."

Conference Call

Management will be discussing the Company's third quarter results and
outlook for the remainder of 2006 on a conference call today beginning
at 5:00 p.m. ET. A live web cast and an archive of the call will be
available to all interested parties on the Company's web site,
http://www.steinwaymusical.com.

About Steinway Musical Instruments

Steinway Musical Instruments, Inc., through its Steinway and Conn-Selmer
divisions, is one of the world's leading manufacturers of musical
instruments. Its notable products include Bach Stradivarius trumpets,
Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King
trombones, Ludwig snare drums and Steinway & Sons pianos.

Non-GAAP Financial Measures Used by Steinway Musical Instruments

The Company uses the non-GAAP measurement Adjusted EBITDA, which it
defines as earnings before net interest expense, income taxes,
depreciation and amortization, adjusted to exclude non-recurring,
infrequent or unusual items. The Company uses Adjusted EBITDA because it
is useful to management and investors as a measure of the Company's core
operating performance. The Company also believes Adjusted EBITDA is
helpful in determining the Company's ability to meet future debt
service, capital expenditures and working capital requirements. In
addition, certain of the Company's debt covenants are based upon
Adjusted EBITDA calculations and the Company uses Adjusted EBITDA as the
basis for determining bonuses for its managers. However, Adjusted EBITDA
should not be construed as a substitute for operating income or a better
indicator of liquidity than cash flows from operating activities, which
are determined in accordance with GAAP.

The Company has provided other non-GAAP measurements which present
operating results on a basis excluding certain non-comparable items. The
Company has provided Adjusted financial information because management
uses it to make meaningful comparisons of performance between periods.
However, there are limitations in the use of such information because
the Company's actual results do include the impact of these Adjustments.
The non-GAAP measures are intended only as a supplement to the
comparable GAAP measures.

"Safe Harbor" Statement Under the Private Securities Litigation Reform
Act of 1995

This release contains "forward-looking statements" which represent the
Company's present expectations or beliefs concerning future events. The
Company cautions that such statements are necessarily based on certain
assumptions which are subject to risks and uncertainties which could
cause actual results to differ materially from those indicated in this
release. These risk factors include the following: changes in general
economic conditions; recent geopolitical events; increased competition;
work stoppages and slowdowns; exchange rate fluctuations; variations in
the mix of products sold; market acceptance of new product and
distribution strategies; ability of suppliers to meet demand;
fluctuations in effective tax rates resulting from shifts in sources of
income; and the ability to successfully integrate and operate acquired
businesses. Further information on these risk factors is included in the
Company's filings with the Securities and Exchange Commission.

Contact:
Julie A. Theriault
Telephone: 781-894-9770
Email: ir [at] steinwaymusical.com


STEINWAY MUSICAL INSTRUMENTS, INC.
Condensed Consolidated Statements of Income
(In Thousands, Except Per Share Data)
(Unaudited)

Three Months Ended Nine Months Ended
9/30/2006 9/30/2005 9/30/2006 9/30/2005
Net sales $90,876 $95,914 $278,493 $277,017
Cost of sales 64,831 68,418 203,307 197,698
Gross profit 26,045 27,496 75,186 79,319
28.7% 28.7% 27.0% 28.6%

Operating expenses 19,100 18,158 63,125 55,196
Income from
operations 6,945 9,338 12,061 24,123
Interest expense, net 2,665 3,562 8,565 10,397
Other (income)
expense, net (395) (467) 7,833 (873)
(Loss) income before
income taxes 4,675 6,243 (4,337) 14,599
Income tax (benefit)
provision 3,707 2,500 (2,602) 5,840
Net (loss) income $968 $3,743 ($1,735) $8,759

(Loss) earnings
per share - basic $0.12 $0.46 ($0.21) $1.09
(Loss) earnings
per share - diluted $0.11 $0.45 ($0.21) $1.06
Weighted average
common shares -
basic 8,357 8,088 8,280 8,057
Weighted average
common shares -
diluted 8,430 8,284 8,280 8,268



Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)

9/30/2006 9/30/2005 12/31/2005
Cash $17,324 $21,012 $34,952
Receivables, net 93,779 93,424 81,880
Inventories 151,187 173,981 159,310
Other current assets 27,957 21,357 19,589
Total current assets 290,247 309,774 295,731

Property, plant and
equipment, net 95,367 97,502 96,664
Other assets 64,598 61,681 63,260
Total assets $450,212 $468,957 $455,655

Notes payable and
current portion of
long-term debt $4,861 $13,902 $12,977
Other current
liabilities 53,947 56,342 58,904
Total current
liabilities 58,808 70,244 71,881

Long-term debt 187,695 201,816 191,715
Other liabilities 46,310 47,951 43,229
Stockholders' equity 157,399 148,946 148,830
Total liabilities
and stockholders'
equity $450,212 $468,957 $455,655



STEINWAY MUSICAL INSTRUMENTS, INC.
Reconciliation of GAAP Earnings to Adjusted Earnings
(In Thousands, Except Per Share Data)
(Unaudited)

Three Months Ended 9/30/06
GAAP Adjustments Adjusted
Band sales $41,573 $- $41,573
Piano sales 49,303 - 49,303
Total sales 90,876 - 90,876

Band gross profit 8,611 864 (1) 9,475
Piano gross profit 17,434 - 17,434
Total gross profit 26,045 864 26,909

Band GM % 20.7% 22.8%
Piano GM% 35.4% 35.4%
Total GM % 28.7% 29.6%

Operating expenses 19,100 - 19,100

Income from operations 6,945 864 7,809

Interest expense, net 2,665 - 2,665
Other (income) expense,
net (395) -
(395)

Income before income
taxes 4,675 864 5,539

Provision for income
taxes 3,707 685 (2) 4,392

Net income $968 $179 $1,147

Earnings per share -
basic $0.12 $0.14
Earnings per share -
diluted $0.11 $0.14
Weighted average
common shares - basic 8,357 8,357
Weighted average
common shares - diluted 8,430 8,430

Three Months Ended 9/30/05
GAAP Adjustments Adjusted
Band sales $46,943 $- $46,943
Piano sales 48,971 - 48,971
Total sales 95,914 - 95,914

Band gross profit 9,712 274 (3) 9,986
Piano gross profit 17,784 - 17,784
Total gross profit 27,496 274 27,770

Band GM % 20.7% 21.3%
Piano GM% 36.3% 36.3%
Total GM % 28.7% 29.0%

Operating expenses 18,158 - 18,158

Income from operations 9,338 274 9,612

Interest expense, net 3,562 - 3,562
Other (income) expense,
net (467) -
(467)

Income before income
taxes 6,243 274 6,517

Provision for income
taxes 2,500 110 (2) 2,610

Net income $3,743 $164 $3,907

Earnings per share -
basic $0.46 $0.48
Earnings per share -
diluted $0.45 $0.47
Weighted average
common shares - basic 8,088 8,088
Weighted average
common shares - diluted 8,284 8,284

Notes to Reconciliation of GAAP Earnings to Adjusted Earnings
(1) Reflects $864 of unabsorbed overhead associated with a labor
strike.
(2) Reflects the tax effect of Adjustments at the Company's effective
rate for the period.
(3) Reflects charges relating to the step-up of inventory.


STEINWAY MUSICAL INSTRUMENTS, INC.
Reconciliation of GAAP Earnings to Adjusted Earnings
(In Thousands, Except Per Share Data)
(Unaudited)

Nine Months Ended 9/30/06
GAAP Adjustments Adjusted
Band sales $135,398 $- $135,398
Piano sales 143,095 - 143,095
Total sales 278,493 - 278,493

Band gross profit 26,107 2,155 (1) 28,262
Piano gross profit 49,079 - 49,079
Total gross profit 75,186 2,155 77,341

Band GM % 19.3% 20.9%
Piano GM% 34.3% 34.3%
Total GM % 27.0% 27.8%

Operating expenses 63,125 - 63,125

Income from operations 12,061 2,155 14,216

Interest expense, net 8,565 - 8,565
Other (income) expense,
net 7,833 (9,674)(2)
(1,841)

(Loss) income before
income taxes (4,337) 11,829 7,492

Income tax (benefit)
provision (2,602) 7,097 (3) 4,495

Net (loss) income ($1,735) $4,732 $2,997

(Loss) earnings per
share - basic ($0.21) $0.36
(Loss) earnings per
share - diluted ($0.21) $0.36
Weighted average
common shares - basic 8,280 8,280
Weighted average
common shares - diluted 8,280 8,407

Nine Months Ended 9/30/05
GAAP Adjustments Adjusted
Band sales $137,878 $- $137,878
Piano sales 139,139 - 139,139
Total sales 277,017 - 277,017

Band gross profit 29,124 1,544 (4) 30,668
Piano gross profit 50,195 - 50,195
Total gross profit 79,319 1,544 80,863

Band GM % 21.1% 22.2%
Piano GM% 36.1% 36.1%
Total GM % 28.6% 29.2%

Operating expenses 55,196 - 55,196

Income from operations 24,123 1,544 25,667

Interest expense, net 10,397 - 10,397
Other (income) expense,
net (873) -
(873)

Income before income
taxes 14,599 1,544 16,143

Provision for income
taxes 5,840 618 (3) 6,458

Net income $8,759 $926 $9,685

Earnings per share -
basic $1.09 $1.20
Earnings per share -
diluted $1.06 $1.17
Weighted average
common shares - basic 8,057 8,057
Weighted average
common shares - diluted 8,268 8,268

Notes to Reconciliation of GAAP Earnings to Adjusted Earnings
(1) Reflects $130 charges relating to the step-up of inventory and
$2,025 of unabsorbed overhead associated with a labor strike.
(2) Reflects loss on extinguishment of debt.
(3) Reflects the tax effect of Adjustments at the Company's effective
rate for the period.
(4) Reflects charges relating to the step-up of inventory.



STEINWAY MUSICAL INSTRUMENTS, INC.
Reconciliation from Cash Flows from Operating Activities to Adjusted
EBITDA
(In Thousands)
(Unaudited)

Three Months Ended
9/30/2006 9/30/2005
Cash flows from operating
activities $(3,014) $12,575
Changes in operating assets
and liabilities 7,407 (6,230)
Stock based compensation expense (325) -

Income taxes, net of deferred
tax benefit 1,755 2,549
Net interest expense 2,665 3,562
Provision for doubtful accounts (172) 143
Other
1,630 11
Non-recurring, infrequent or
unusual cash charges 864 274
Adjusted EBITDA $10,810 $12,884



Nine Months Ended
9/30/2006 9/30/2005

Cash flows from operating
activities
$ 1,375 $ 2,478
Changes in operating assets
and liabilities 10,759 14,420
Stock based compensation expense (891) -


Income taxes, net of deferred
tax benefit 5,673 6,168
Net interest expense 8,565 10,397
Provision for doubtful accounts (4,734) (79)
Other 1,200 156
Non-recurring, infrequent or
unusual cash charges 2,155 1,544
Adjusted EBITDA $24,102 $35,084


SOURCE
Steinway Musical Instruments, Inc.

CONTACT:
Julie A. Theriault of Steinway Musical Instruments, Inc.
+1-781-894-9770
ir [at] steinwaymusical.com


May 1995 Selmer Industries’ acquisition of Steinway Musical Properties
August 1996 Steinway Musical Instruments,’ formerly Selmer Industries, IPO
January 1997 Acquisition of Emerson, flute manufacturer
December 1998 Acquisition of Kluge, piano key manufacturer
March 1999 Acquisition of Steinway Hall, piano showroom in New York
November 1999 Acquisition of O.S. Kelly, piano plate manufacturer
January 2000 Acquisition of Pianohaus Karl Lang, piano showroom
September 2000 Acquisition of United Musical Instruments, band
instrument manufacturer
January 2003 Merger of The Selmer Company and United Musical
Instruments, Inc. into one entity under Conn-Selmer, Inc.
August 2004 Acquisition of G. Leblanc, band instrument manufacturer

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