Fast Struggles with debt, plans new vehicle

After selling close to 500 of its high-end snowmobiles during the past five years, Minnesota-based sled and suspension manufacturer FAST, Inc., says it is updating its business formula to adapt to what has become a sluggish market.
In business for 16 years, first as a suspension specialist and then, in 1998, as a builder, the company is slowing its snowmobile production, focusing on parts and accessories development and a future that may include “a new form of all-terrain vehicle.”
Although its initial coup came with the introduction of its M-10 suspension, now licensed for use by Polaris, FAST came into its own when it began to produce 600cc, 700cc and 800cc twin cylinder BLADE snowmobiles in both 121 and mountain versions. Last year, joining the Polaris-powered BLADE in the FAST lineup, was the four-stroke Outlaw, powered by a 100 cu. in. V-twin engine from S&S Cycle, Inc., the Viola, Wis., manufacturer best known for its motorcycle engines.
David Karpik, director of marketing at FAST, says the firm has struggled in recent years due to “poor snow conditions, a weakened economy and an over production of commodity-based snowmobiles.” A recent article by a consumer snowmobile magazine that inaccurately reported the closing of the company did not help either, he said.
He said the article published in a snowmobile consumer magazine was based on misinformation and “really pertains to old debt — a payback plan.”
“We are negotiating the restructure of debt with our creditors and business partners, and we continue to seek investors to help us meet the growing demand for product and our future product developments,” Karpik said. “I don’t think I’ve ever given anyone the impression that we’ve been doing anything but struggling, and we have struggled. But at the end of the day, we are still manufacturing BLADE snowmobiles, and we do intend to continue to do so.”
Karpik said the firm spent the past year making offers to creditors for restitution, and says 70% of the creditors participated “in one offer or another,” while “probably another 25% to 30% held out or just didn’t care.”
“But, all of that was predicated on the fact that this one creditor would release the liens on some of our personal property — an R&D facility that is personally owned, and that we wanted to sell for funds to pay off creditors and move the business plan along,” he explained. Karpik would not identify the creditor.
FAST and the one creditor have been unable to reach a deal, however, and so Karpik says he believes the company may be headed for court. “Payment can’t be refused,” Karpik said, “but what could happen is that we could make payment, or restitution, and then not receive the lien satisfaction. Then we’d have to go to court, and that takes a minimum of four months.
“Had I known I would be at this stage again today, four months ago in July, instead of offering the last deal, we likely would have opted to go to court. But you never want to go there, and you try everything possible not to go there.”
Searching For A Solution
So what’s the plan for FAST’s future?
“We’re trying to find a solution to getting back to doing good business,” Karpik said. “We don’t have a strong balance sheet, but one of the plans with the creditors out there is that if we can get a reduction of this debt, we do have investors waiting to invest.
“We’ve been in a knot for the past year with this creditor issue, and since winter has not cooperated with us or with anybody, we just haven’t been able to be profitable. So, what we’ve done is go to a build-as-you-pay basis with our sleds.
“Basically, what we’re saying is that those people who want ’04 BLADEs can have them built, but we’re not going to go out and market them or push them,” he further explained. “We’re going to wait for Mother Nature to come back to us, which is a hard thing to do because then you don’t have any income. So we’re relying on the aftermarket side of our business to keep things moving forward and to help support development of our new counter season product, the ASSV (an internal name).”
Unwilling to share many details about the ASSV, Karpik did say FAST decided to go ahead with the project last spring, and said the machine — “not quite as good as a snowmobile in the winter, but better than a four-wheeler in the counter seasons” — has been “on the ground for quite some time.”
With the ASSV, FAST plans to diversify its product line, diversify its customer base, and diversify the geographical region it’s used to operating in.
“The BLADE line is a premium snowmobile — you can’t buy better, but it costs a lot and so it’s not for everybody. This ASSV is not in that same price structure, rather a lower priced vehicle designed to be available to the masses. So, it’s really a product to counter the snow season and that will counter the traditional consumers of our product.
“We were actually hoping to have it ready for this fall, but due to obvious financial reasons, we were unable to get it to that stage. So, we should be looking to have something maybe next spring to summer,” he said. “If we can get through this, we have many new proprietary designs and products that will again leap frog even our own designs. But we have hurdles yet to pass.”