April 5, 2010: Financial Digest

Piaggio Group’s sales, earnings outlined for 2009
The Piaggio Group’s two-wheel business declined nearly 10 percent in 2009, but the company did report improved net income, according to its latest earnings report.
The Italian manufacturer, which also sells three- and four-wheel commercial vehicles, sold 410,000 two-wheel vehicles worldwide in 2009. The company’s sales, in terms of total revenue, decreased 17 percent in Europe. However, in terms of market share, the company saw improvement as it now has 20 percent market share in Europe.
The company’s annual report did not cite North American sales figures.
Overall, the company’s net income rose to $64.4 million, a 9 percent increase over a year ago.
The Piaggio Group’s earning report noted the company will concentrate this year on development and new investments, including the building of new diesel engines at a new production site in India.

Polaris continues employee pay program
Polaris Industries Inc. continued its annual tradition of profit sharing with its employees, the company announced.
The company said it was distributing nearly $10 million of its profits from the 2009 calendar year among its approximately 2,200 hourly and non-salaried employees. On average, each of these employees will receive nearly 15 percent of their annual pay base. In addition, Polaris will distribute profit-sharing payments to each of its full-time salaried employees as well.
“Profit-sharing is something that is very important and fundamental to the culture at Polaris, especially as we continue to outperform the industry,” Polaris CEO Scott Wine said in the press release. “We understand that Polaris’ success is built on a foundation of dedication, innovation and hard work from our employees. To acknowledge and reward that extra effort is something we are proud to continue.”
Polaris began sharing its profits with employees in 1982. Since its inception, Polaris’ profit-sharing program has shared cumulatively more than $200 million with its employees.

Affinity Announces $144 Million Financing Deal
Affinity, the parent company of Powersports Business and the nation’s largest provider of outdoor recreation clubs, services, media and events, has completed the refinancing of its senior bank debt, the company announced in a press release.
Affinity has entered into a new $144 million loan agreement that allows the company to restructure its existing debt, which was set to mature on March 31.  
“We’re very pleased with this direction and the stability it gives Affinity as we grow our core business to new heights,” said Mike Schneider, CEO of Affinity. “As we begin to exit a major financial downturn, this financing puts us in a strong position to capitalize on new revenue growth opportunities and continue our commitment to leadership in the outdoor recreation marketplace.”
A multi-media company, Affinity is known for managing several membership clubs, including the Good Sam Club, the world’s largest RV owner’s organization. Affinity also operates numerous consumer and business Web sites, publications and shows for powersports, marine, RV and outdoor enthusiasts.  
The company also owns Camping World, the largest aftermarket retailer in the RV industry with more than 75 locations throughout the United States.
Moelis & Co. acted as exclusive financial advisor and sole placement agent to Affinity in connection with the refinancing.
GMAC Insurance Personal Lines gets new owner
GMAC Insurance Personal Lines completed its transition to new ownership by American Capital Acquisition Corp. (ACAC). Under the deal, GMAC Insurance’s U.S. consumer property and casualty insurance business, which includes automobile, commercial vehicle, motorcycle and RV insurance offerings, will continue normal daily operations as it identifies key development initiatives to advance its competitive position, according to GMAC Insurance.
GMAC Insurance’s headquarters will remain in Winston-Salem, N.C. and, effective immediately, the company will transition leadership from interim CEO Mary Hennessey to Larry Pentis, who joins GMAC Insurance from The Commerce Group, where he ran all operations outside of Massachusetts.
As part of the deal, GMAC Insurance Personal Lines has retained the right to use the name GMAC Insurance in association with its remaining insurance operations for some time. GMAC Insurance will continue to be used in all operations while a strategic review of all brand marketing is conducted.

Cycle Country Accessories replaces board member
Cycle Country Accessories Corp. elected Paul DeShaw to its board of directors, filling the vacancy created by the resignation of L.G. Hancher, Jr., the company announced in a press release.
DeShaw was elected as a Class II director, subject to re-election at the 2010 shareholder meeting. Effective immediately, DeShaw will serve as an independent director and has been appointed to serve on the Audit Committee of the Board. His appointment to these positions cures Cycle Country’s noncompliance with certain NYSE Amex listing requirements caused by Hancher’s resignation.
DeShaw is a long-standing investor in Cycle Country. He’s currently a board member of BDFSC Holdings Corp. DeShaw is also a vice president of Broker Dealer Financial Services Corp.
Commenting on the election of DeShaw, Jeff Tetzlaff, Cycle Country’s CEO, stated in a press release, “I am very pleased that we have attracted an individual of Paul’s high caliber to our board. Our objective is to grow and strengthen the board by adding individuals with unique and diverse backgrounds who are committed to the success of Cycle Country.”

Cooper tire sees slight sales decline in north america
Cooper Tire, which includes motorcycle tire brand Avon Tyres, reported worldwide revenue of $2.8 billion in its recent fiscal year, a drop of 3.5 percent compared to the previous year.
The company’s North American sales also decreased slightly, down approximately 5 percent, according to a Cooper Tire earnings report. The company’s international sales, which totaled $1 billion last year, were stable compared to the prior year.
The company believes raw material prices in the first quarter of this year will be elevated over last year. Raw material prices, the company said, have increased each of the past two quarters after decreasing in early 2009.
Some of the company’s 2010 strategies, as outlined in a March earnings presentation, include new product introductions, continued growth in Mexico and Canada, fill rate improvements and enhanced product offerings in Europe.

Bridgestone expecting improved 2010 tire sales
Bridgestone Corp. reported its worldwide tire sales decreased 18 percent in 2009 compared to the previous year.
The company’s fiscal-year earnings report also indicated its “Americas” revenue dropped by a similar amount.
Bridgestone’s net income dropped to $11 million, a 90 percent decrease compared to 2008.
In response to decreasing sales, Bridgestone said each of its companies in its group has implemented initiatives like streamlining investment, curbing expenses and reducing inventories.
Bridgestone says it does expect a better sales climate for 2010. The company is forecasting a 10 percent growth in sales, as well as an increase in tire sales in the “Americas.”

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