Sept. 22, 2008 – Finance Digest
September 22, 2008
Filed under Features
Arctic Cat hires president and COO
Arctic Cat Inc. appointed Claude Jordan as its president and chief operating officer, which is effective immediately. He reports to Christopher Twomey, Arctic Cat chairman and CEO, according to a company press release.
Jordan has more than 20 years experience in senior executive positions, including The Home Depot and General Electric.
“Claude has a proven track record of success in executive leadership positions,” Twomey said in the release. “His extensive background in growing global businesses, organically and through mergers and acquisitions, will be strong assets to Arctic Cat and our shareholders. We are pleased to welcome him aboard.”
Jordan stated, “I am excited to be joining the Arctic Cat leadership team. This is a great opportunity to work with a business that has a long history of success, a strong brand, highly innovative products and an outstanding organization. I look forward to working with the Arctic Cat team to build on the company’s strengths and achieve continued success.”
BRP delays plans to go public
The tough economic climate is putting a damper on plans by Bombardier Recreational Products Inc. to go public, according to a story by PR Newswire.
After being spun off by Bombardier Inc. in 2003, plans were to take BRP public within a five-year time span, but the recent economic slowdown has put that idea on hold, says president and chief executive officer José Boisjoli.
Instead, the company is taking aim at its rivals by developing new products to move more aggressively into the high-end, value-added power-sports category, Boisjoli says.
“Over the next two years, we’re going to concentrate on product innovation, winning snowmobile market share in North America and expanding into Russia and Scandinavia and completing our Spyder portfolio,” he said, referring to the lineup of three-wheeler on-road products the company introduced in 2007.
To address sluggish consumer spending, he said the company will be “reducing certain [product] programs and tightening our belt.” He added, however, that the changes won’t be at the expense of developing new products for the marketplace.
“That’s at the core of our strategy to stand out from the pack, especially with globalization and the rise of cheap imports from China and India.”
Fox racing Shox reports strong second quarter
Fox Racing Shox earned $34.4 million in the second quarter of 2008, a nearly 29 percent increase from the year-ago period, according to a report released by Fox’s parent company, Compass Diversified Holdings.
Income from operations was also up, from $1.66 million during the second quarter of 2007 to $3.1 million in 2008.
James Bottiglieri, chief financial officer for Compass, says the higher revenue is attributed to increased sales in Fox’s bicycle and powersports division. Sales in those divisions rose by $5.7 million, while aftermarket and service sales increased by about $2 million, according to a quarterly report filed with the Securities Exchange Commission.
For the first six months of the year, Fox’s revenue was $57.9 million, up 35.5 percent compared to the first six months of 2007.
“Needless to say, we are excited about Fox’s growth for the first six months and are optimistic about the remainder of 2008 as well,” Bottiglieri said. “This performance both reaffirms our decision to acquire this business earlier this year as well as supports many of the initiatives [planned by] management to help them strategically manage their growth.”
Brembo’s first-half motorcycle segment sales rise
Brembo is reporting a significant increase in its first-half revenue.
The Italian brake manufacturer said its first-half revenue of $808 million rose 24.4 percent compared to the year-ago period.
Recent acquistions have partially led to those increased sales. Without those acquisitions, the company said its net sales would have increased 14 percent.
Among the company’s different sectors, the commercial vehicles (up nearly 29 percent) and motorcycle (up 24.4 percent) mainly contributed to sales growth in the first half. The passenger car segment grew by 21.7 percent, thanks to the consolidation of the U.S. company acquired in November 2007. Racing shows a slight decrease (minus 1.6 percent) due to the weakened value of the U.S. dollar.
From a geographic point of view, growth has been driven by Japan (up 97.5 percent) and by the NAFTA area (up 97.3 percent), the latter thanks to the new Harley Davidson platform. Brazil also is up significantly (47.7 percent).
Sparta expands its presence in municipal leasing market
Sparta Commercial Services, provider of consumer financing and leasing solutions, is expanding the asset classes eligible for its Municipal Leasing Program that are currently available to law enforcement agencies, stated a Sparta press release.
The additional classes will be all types of tactical and emergency service vehicles, patrol cars, helicopters and other equipment now required by many jurisdictions.
“At the request of these agencies, we have now added other asset classes to the eligible collateral that qualify for our Municipal Leasing Program,” Anthony Havens, CEO of Sparta, said in the release. “We were also approached by certain specialty vehicle manufacturers asking us to provide terms to the budget constrained municipalities that were having trouble finding plans to meet their needs. We see this as a significant opportunity to further serve this market.
“We see the municipal market as a great opportunity for Sparta, given the advantage of these additional qualifying classes of assets that we now have and we look forward to aggressively serving that market and expect it to have a long-term positive impact.”
MAG acquires Forge-Tec Motorcycle Wheels
The Motorsport Aftermarket Group (MAG) said it has acquired Forge-Tec Motorcycle Wheels and Accessories. Forge-Tec will continue to be marketed and sold under the Forge-Tec brand name.
MAG President and CEO Brian Etter says that his company is looking forward to bringing Forge-Tec on board. “The Forge-Tec team has successfully developed high-quality products and also has a reputation for strong customer support and service,” he said in the release. “Forge-Tec, together with MAG’s strength in innovation, design and its manufacturing resources will help tremendously to enable us to further accelerate our future growth in the industry.”
The MAG’s companies include the following: Vance & Hines, Kuryakyn, Mustang Motorcycle Products, Performance Machine, Renthal, Progressive Suspension, MAG Europe and J&P Cycles.
Arctic Cat enters into new credit agreement
Arctic Cat completed a new credit agreement for a senior secured revolving credit facility that will mature in March, according to a company press release.
The company can borrow a principal amount up to $75 million, reducing it to $60 million as of Oct. 31, and further reducing it to $40 million as of Dec. 31. The savings is planned to go toward general corporate purposes and to repurchase or redeem shares of its outstanding common stock.
The credit agreement with Wells Fargo replaced Arctic Cat’s agreement that it had in place from 2002.