Dec. 26, 2005 – Finance Digest
December 26, 2005
Filed under Features
MIC: Cycle sales up, ATV sales down
The sales of new motorcycles and ATVs during the first nine months of 2005 increased 0.5% compared to the same period in 2004, based on Motorcycle Industry Council’s retail sales data that includes 17 brands.
The MIC reports motorcycle sales increased 3.8% while ATV sales were down 4%. Motorcycle and scooters represented 60% of new unit sales through September, while ATVs accounted for 40%.
Dual-sport sales were up 29% for the nine-month period, scooter sales were up 13.8%, and on-highway motorcycle sales were up 6.1%. Off-road motorcycle sales fell 6.3%.
In other MIC news, the organization says the MIC 2005 Motorcycle Retail Outlet Audit, the 24th annual such audit, indicates that there are 12,000 motorcycle retail outlets in the United States. The MIC says 7,200 of the dealerships are franchised while 4,800 are non-franchised.
Giant Motorsports Earnings Up 10.5%
Giant Motorsports Inc. said revenue for the nine-month period ended September 30, 2005, was $83.8 million, up from $60.2 million for the same nine months in 2004. Pre-tax earnings for the period were $1.29 million, up 10.5% for the same period in 2004.
Giant Motorsports operates two wholly-owned subsidiaries, W.W. Cycles, doing business as Andrews Cycles; and Chicago Cycle, Inc., doing business as Chicago Cycles.
“Although the consumer has been hit with high gas prices and increasing interest rates, we see continuing enthusiasm for motorcycles, scooters and all-terrain vehicles,” said Greg Haehn, President of Giant Motorsports, Inc. “During the same period we completed the sale of approximately $2.8 million in convertible Preferred Stock, which has reinforced our balance sheet, provided us the ability to move forward with our business plan to acquire additional brands and moved us closer to listing on a national exchange.”
Proton Posts 2Q Loss
Proton Holdings Bhd reported a loss of 154.3 million ringgit ($40.8 million) for its second quarter ended September 30, compared with a profit of 199 million ringgit a year earlier, and is expected to announce further losses through the fourth quarter as it continues to incur debt stemming from its acquisition of a majority of MV Agusta in 2004.
Proton, which also owns car-maker Lotus Group International, announced a $3.3 million dollar net loss in its first quarter ended June 30. It was the company’s first quarterly loss since March 2004.
Proton purchased a 58% stake in MV Agusta Motor SpA in October 2004 for an estimated 70 million euro by underwriting the Italian company’s loan from Citibank. The new financing saved MV Agusta when a court in Italy subsequently dropped bankruptcy proceedings against it.
Proton’s two straight quarterly losses, the cost of its acquisition of MV Agusta, a declining auto market share at home, and an as-of-yet unclear relationship with Volkswagen all weigh heavily on the company’s portfolio.
Proton chairman Datuk Mohammed Azlan Hashim announced the appointment of three new company officials on November 29. Syed Zainal Abidin Tahir joins Proton as managing director and chief executive officer after being recruited from local rival Perodua Auto Corp Sdn Bhd, where he was executive director in charge of manufacturing; Datuk Kisai Rahmat was named executive director of Proton’s engineering and manufacturing division; and Datuk Kamarulzaman Darus became director of manufacturing. All the appointments take affect January 1, 2006.
The search for a new Proton CEO started in September when Tengku Mahaleel Tengku Ariff’s contract was not renewed. Tengku Mahaleel Tengku Ariff was responsible for leading Proton’s investment in MV Agusta.