July 23, 2007 – Finance Digest
July 23, 2007
Filed under Features
Schwinn maker reports stable scooter sales
The maker of Schwinn scooters is reporting increased sales in its recreational division, although its gas-powered scooter sales are only stable.
Dorel Industries Inc. said its recreational division increased its revenue by nearly 8 percent to $89.7 million in the first quarter over the previous year period.
Overall, the company said its first-quarter sales increased by 1 percent to $455.7 million and its after-tax earnings increased 15.5 percent to $27.9 million.
DealerTrack completes Arkona Acquisition
DealerTrack Holdings Inc., a provider of on-demand software and data solutions for the U.S. automotive retail industry, recently completed the acquisition of Arkona Inc.
“With Arkona on board, DealerTrack now offers a full spectrum of dealership solutions,” Mark O’Neil, chairman and chief executive officer of DealerTrack, said in a news release. “We also believe Arkona can play a key role in building our business with independent dealers, and expanding into the powersports, marine and specialty markets.”
Richard Holland, founder of Arkona Inc., said, “We are very pleased to join forces with DealerTrack, which will provide increased financial and administrative support and enable us to integrate their industry-leading sales and finance applications with the Arkona DMS to create the most powerful dealership solution in the marketplace. Our senior management team is excited about this opportunity and is staying on to pursue our long-term goal of becoming the preeminent DMS provider in automotive retailing.”
ADP’s dealer services revenue grows in third quarter
ADP’s dealer services department saw increased sales in its third quarter, the company reported.
Overall, its third-quarter revenue grew by 14 percent to $2.2 billion for the third quarter that ended March 31. Its dealer services division increased its sales by 8 percent.
Acquisitions will help the company further grow its revenue later this year, ADP’s Gary Butler said in a press release.
“In March we completed the acquisition of Intuit’s fully outsourced payroll business, which we anticipate will contribute approximately $12 million in revenues in the current fiscal year,” Butler said. “The Employer Services’ acquisitions completed in fiscal 2007 year-to-date contributed 1 percent of revenue growth in the third quarter.”
Net earnings for the company grew 16 percent.
Piaggio’s long-term corporate credit rating raised
Standard & Poor’s Ratings Services said it raised Piaggio & C SpA’s long-term corporate credit rating, saying it continued improvement in the company’s profitability and cash generation. The outlook is stable, according to a press release.
S&P said the Italian manufacturer has proven its capability to generate a sound free-operating cash flow and has used a large part of it to repay debt.
Reducing its reliance on European markets and turning around the motorcycle business are important targets if Piaggio is to strengthen its risk profile, the release added.
Polaris completes reselling shares to KTM
Polaris Industries Inc. announced its Austrian subsidiary has completed the second and final closing of its sale of shares of KTM Power Sports AG (KTM) to a subsidiary of KTM’s largest shareholder, Cross Industries AG. Under the terms of a previously announced agreement, approximately 0.27 million shares were delivered for about 11.5 million Euros, according to a press release from the company.
Polaris intends to utilize the proceeds generated from the second closing to reduce the outstanding balance of the company’s revolving credit facility. Polaris now holds approximately 0.34 million KTM shares, representing slightly less than 5 percent of KTM’s current outstanding shares.
As a result of the second closing completed, Polaris expects to record in 2007’s second quarter a gain on the sale of the KTM investment of approximately $1.3 million pre-tax or about $0.02 per diluted share, as previously announced. The gain is due to previously unrealized translation gains, according to the article.
Sparta having success with municipal lease program
Sparta Commercial Services Inc., the New York-based financial services company dedicated to the powersports industry, recently reported that a relatively new lease program has exceeded the company’s initial projections.
The Municipal Lease Program, launched Feb. 15 and aimed at governments that use cycles for law enforcement, produced more than $4 million in originations during its first three months, according to a press release.
The company also reported that despite the fact that its second three-month period for the program began May 15, the volume of contracts that are in various stages of processing exceeds that of the initial three months.
“Given the fact that the program had to appeal to the government agencies that utilize motorcycles as a necessary part of their responsibilities, which are mostly law enforcement, and also to the retail motorcycle dealers who provide the vehicles to those agencies, we thought that the marketing cycle might take more time,” Anthony Havens, Sparta’s CEO, said in the release.