Giant Motorsports Announces 2004 Year-End Recap
Company Achieves Key Business Milestones, Projects 2005 Revenues To Exceed $100 million
SALEM, Ohio, Jan. 11 -- Giant Motorsports, Inc. (BULLETIN BOARD: GMOS) , implementing the destination retailer business model in the motorcycle and powersports industry, has announced its 2004 year end recap. Greg Haehn, President of Giant Motorsports, made the announcement.
The Company achieved several key strategic milestones during 2004, including strong revenue growth, successful integration of a new subsidiary into the overall business structure, and start of a significant expansion of its sales and inventory capacity at existing subsidiaries. Giant Motorsports employs a "big-box" business model proven successful in other industries, including home building supplies, consumer electronics and computer equipment. This strategy the Company believes, has made it one of the nation's leading sellers of motorcycles, scooters, all terrain vehicles (ATV) and other powersports products.
With 2004 estimates of $78 million in revenue, up substantially from 2003, Giant Motorsports projects it will cross the $100 million revenue threshold in 2005. The Company's strong 2004 third quarter showing, which resulted in a 107% rise in revenues, contributed substantially to the year-end results. Based upon the Company's unaudited financial statements, the company's sales totaled $26.3 million for the third quarter, up from $12.7 million for the same quarter in 2003, and earnings before taxes rose to $529,236, compared to $199,204 in 2003, for a gain of 166% for the third quarter 2004.
"With our strong 2004 revenue numbers continuing to validate the business model we are bringing to the motorcycle and powersports space, we head into 2005 projecting that Giant Motorsports is ready to cross the $100 million revenue mark," said Mr. Haehn. "We are excited about our growth prospects and are confident that the inherent advantages of our unique business model will enable us to continue our success in the powersports industry."
Key achievements in 2004 include: -- Revenue Growth: Based upon the Company's unaudited financial statements, nine-month revenues for 2004 came in at $60.3 million, up from $37.3 million for the comparable period for the previous year, representing an increase of 62%; pre-tax earnings increased 193% to $1.168 million versus $398,500 for the same period in 2003; and revenues for the 2004 fourth quarter are projected at approximately $18 million. -- Successful Integration of New Subsidiary: Giant Motorsports acquired subsidiary Chicago Cycles in the first half of 2004, and subsequently transformed the new unit into an accretive addition. Chicago Cycles generated $40.6 million in revenues in 2003 under previous ownership, and Management believes it will generate significantly greater revenue moving forward as part of Giant Motorsports. -- Expansion of facilities: During fourth quarter 2004, the Company leased a new 93,000-square-foot commercial space in a Chicago retail area to house its Chicago Cycle subsidiary. The new site is currently undergoing a redesign and will represent an approximate three-fold increase in inventory and showroom capacity. Anticipated Achievements for 2005 -- Opening Superstore Facilities: Giant Motorsports anticipates opening the new Chicago Cycle subsidiary location in first quarter 2005. Management expects its design and shopping features will serve as a model for the Company's future superstores, and assist in the further development of systems to improve customer shopping experience, ensure customer loyalty and increase buying power. -- Acquisitions: The Company is developing plans to expand into one or more major regional markets, and to implement its destination retailer business model. Giant Motorsports plans to further increase revenues and shareholder value through accretive acquisition of new subsidiaries. -- Increase Sales: The Company's increased capacity is expected to result in continued growth in sales of both new and pre-owned powersports products, as well as additional revenue through sales of related powersports-related clothing, accessories, parts, service, financing and insurance services.
Giant Motorsports management believes that significant growth and consolidation opportunities exist in the powersports industry, which the Company believes to be recession-resistant over the last decade, marking significant year-over-year unit sales growth. The Motorcycle Industry Council projects total 2004 motorcycle sales in the United States to top 1 million units for the first time in two decades. Demand for ATVs, which has shown a sales increase of 80% over the last four years, remains strong. The motorsports industry remains highly fragmented, with some 4,000 independent stores operating around the country -- many of them limited in inventory and sales capacity. The Company believes its destination retailer model allows it to maintain larger inventories of brand name motorcycles and powersport accessories and apparel to be displayed under one roof. Giant Motorsports' core brands include Suzuki, Yamaha, Honda, Ducati, Kawasaki and Polaris.
"We feel Giant Motorsports, with our 'big box' business model, is positioned to take advantage of the strong consumer demand for powersports products," Mr. Haehn said. "We believe we offer the customer a more complete selection of each manufacturer's ever-expanding product line, and better prices due to the scope and scale of our business. We believe there is a unique combination of consumer demand and retail consolidation opportunities in the motorcycle and powersports industry, and we believe that we are prepared for it. We believe our efforts and strategy through 2005 will enhance both revenue growth and value for our shareholders."
About Giant Motorsports, Inc.
Giant Motorsports Inc., is a destination retailer for motorcycles, all- terrain-vehicles (ATVs) and motor scooters. Through implementation of a business strategy based on a regional "big-box" retailer model, Giant believes it has become a leading multi-brand motorsports retailer in the United States. The Company is attempting to leverage revenue and earnings growth through accretive acquisitions in new regions, through internal growth, and through utilization of rollup and consolidation strategies in the fragmented powersports national dealer environment. The Company has two wholly-owned subsidiaries, W.W. Cycles dba Andrews Cycles and Chicago Cycles. More information is located at http://www.giantcorporate.com/ , http://www.andrewscycles.com/ , http://www.chicagocycle.com/ , or http://www.trilogy-capital.com/ .
Cautionary Statement Regarding Forward-Looking Statements
Certain statements included in this press release may constitute forward- looking statements. Actual results could differ materially from such statements expressed or implied herein as a result of a variety of factors including, but not limited to: sales of its motorcycle and powersports products; the implementation and expansion of Giant Motorsports business strategies; competition and the timing of projects and trends in future operating performance, as well as other factors expressed from time to time in Giant's periodic filings with the Securities and Exchange Commission (the "SEC"). As a result, this press release should be read in conjunction with Giant's periodic filings with the SEC. The forward-looking statements contained herein are made only as of the date of this press release, and Giant undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.