NEWS – IronHorse Gears Up for Big 2006

swadminNovember 28, 2005

BRASELTON, Ga. – American IronHorse (AIH) dealers meeting at this luxurious resort area for their company’s 10th anniversary didn’t see any new models for 2006, but they heard plenty of good news from CEO Wil Garland. At the same time they heard about several major changes in the way the motorcycle manufacturer does business. Garland and other company managers expanded upon these points in discussions with Powersports Business magazine.
First, the company announced a special 10th Anniversary Edition of its popular Texas Chopper model, the bike that accounts for about half of the unit sales at IronHorse. The limited edition model-only 125 bikes will be available-will carry an MSRP of $49,900.
It features a black/red paint job, plenty of chrome and the 10th Anniversary logo in several places, including the black ostrich leather seat. The chrome frame and diamond cut powder coated heads and cylinders on the S&S 2032cc power plant were especially well received by the estimated 80 dealers in attendance. AIH has about 100 active dealers across the country.
AIH didn’t introduce a new model last year either, even though it made major upgrades across the lineup, but that’s not important, Garland said during an interview with Powersports Business. I don’t have to introduce a new model every year,” Garland said. “I’ve got six good models, and we’ll continue to improved them every year. If you have too many models it just gets confusing.”
MAJOR STEPS TAKEN
Garland took over as CEO in August 2004 following a string of short-term residents in the executive office at the Ft. Worth, Texas, bike maker. In an interview with Powersports Business at that time, Garland said that he needed to fix the company’s supply situation and expand its dealer network.
“We continue to work on (the problem of insufficent frames) everyday,” Garland said last year. Meeting demand is any CEO’s dream challenge,” he said.
Garland told dealers that frame supply is no longer a problem. Daytec Frames now is the company’s major frame supplier going into 2006. Bourget’s Bike Works continues as a secondary supplier. The system seems to be working well-Daytec was named Best Supplier of the year by IronHorse.
In addition to fixing the frame supply problem, IronHorse told dealers that it has launched a special chorme upgrade program that enables dealers to order popular chrome parts and accessories, especially wheels, direct from the factory., Dealers no longer have to spend time swapping out wheels once the bike arrives.
The chrome program is being handled by RC Components of Bowling Green, Ky. RC is a leading machine shop that produces more than 40 styles of custom wheels and runs its own in-house chroming operation.
IronHorse, which had been producing its own wheels in-house, now lets RC handle the wheel cutting and chroming. The personnel and equipment that had been dedicated to wheel production will be shifted elsewhere within the IronHorse operation. “I still have my own (wheel) equipment,” says Garland, “but I hope I don’t have to use it.”
“As I visited dealers last year,” Garland recalled, “all they talked about was the chrome business. Chrome was big; everybody wants chrome. If you work 60/70 hours per week, you want to ride on the weekend, you don’t want to polish your bike.”
Wheels are only the most obvious chrome product, Garland said. “We will have a focus on chrome. What is not currently chromed on the bike, we will sell as aftermarket,” he said.
In other supplier news, Garland told dealers that IronHorse has switched its exhaust supply business to Vance&Hines.
Garland also said he would consider acquiring a supplier if the right situation developed.
Dealers also saw the company’s new upgraded apparel program. Under the program, dealers can have their own logo placed on selected merchandise. Using a single supplier also is expected to provide more consistent quality, Garland said.
The apparel program reflects an increased emphasis on brand development and controls on logo use. “It’s important that dealers understand that our trademarks have significant value,” says Garland, “and people can’t diminish them.”
FINANCIAL REPORT
AIH expects to reach the $100 million mark in sales this year, Garland said, up about 40% over last year. The company is expected to post record earnings, as well, Garland said, but he declined to provide earnings figures for the closely-held company.
Inventories at the factory and dealer network are at about the same level as last September, Garland said, but the inventory mix is made up of more current 2006 models this year. AIH began shipping new models in August for the first time in its history, he said.
AIH is owned by several private investors and investment groups. Frequently, in such situations, investors look for an investment exit strategy within about five years. Given Garland’s past experience as COO of Heritage Partners, a Boston, Mass., venture capital fund, a change in control or an initial public stock offering (IPO) could be on the horizon within the next two years or so.