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Cycle
Country Accessories Corp. – continuing to develop new products and grow as the ATV
industry grows
Capital Goods
Capital Goods-Misc.
(ATC - AMEX)
Cycle Country Accessories Corp.
2188 Highway 86
PO Box 239
Milford, IA 51351
Phone: 712 338 2701
Ronald Hickman
President and
Chief Executive Officer
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
September 2003
BIO:
Ron Hickman
President and CEO
Ron’s areas of
Expertise include: Accounting, Management, and Education. He holds a Bachelor
of Science in Public Accounting from St. Cloud State University and a College Teaching
Certificate from the State of Iowa. He has been a Certified Public Accountant for
the past 27 years.
Perhaps Ron’s greatest strength is his ability to lead. He is a trained leader
and a people person. He is also a visionary which people around him quickly
recognize.
Ron was the General Manager and Vice President of Cycle Country for 6 years before
becoming its President and CEO in 2001. He was also a college instructor at Iowa
Lakes Community College for 5 years and owned his own CPA Firm for 15 years. At
Cycle Country Ron supervises all areas of the business. These areas included:
sales and marketing, manufacturing, engineering, accounting and finance, purchasing,
quality control, shipping, research and development, and plant operations.
Company Profile:
Cycle Country Accessories Corp., (AMEX: ATC) with over 50% of the worldwide market in
several product categories, is the industry leader in the design, engineering and
manufacturing of custom-fitting accessories for the utility all-terrain vehicle (ATV).
Since 1981, Cycle Country has developed an extensive line of branded products of
snowplows, lawnmowers, spreaders, sprayers, hitches and many other utility equipment items
along with recreational accessories. The Company's products custom fit virtually every
brand of ATV on the market, which are distributed to essentially all ATV and motorcycle
dealers in North America.
The Company has 19 international distributors that sell Cycle Country products in 35
countries throughout Asia, Europe, Central and South America. Additionally, Cycle Country
dominates the golf car wheel cover market by manufacturing approximately 90% of all wheel
covers sold to original equipment manufacturers worldwide. The Company sells
high-performance premium oil filters for motorcycles and ATVs throughout the U.S. under
the brand name Perf-form Products. They also manufacture heavy-duty garden equipment
attachments for garden tractors, ATVs and other utility vehicles within the Lawn &
Garden industry under their brand name Weekend Warrior. Cycle Country has "Preferred
Manufacturing Vendor" status with John Deere and currently manufactures many
equipment products for their utility vehicles.
CEOCFOinterviews: Mr.
Hickman, please give us a brief history of Cycle Country Accessories.
Mr. Hickman: “Cycle
Country was founded in 1981 and it was started when Jim Danbom, the founder of our
company, developed a front blade for the Suzuki 125 ATV. Suzuki was the first ATV to come
out with reverse. Jim looked at that machine and thought that it would be capable of
operating with a blade on the front of it. He designed a front blade, which made the
Suzuki 125 capable of plowing snow and pushing dirt and sand. That was our first product
and our company has grown ever since. Blades are still our largest selling product and we
make blades for all makes and models of utility type ATVs. We have designed all sorts of
accessories over the years as well, such as mowers, spreaders, sprayers, winch kits, and
winches and baskets; all sorts of things to allow a person to use his or her ATV as a
practical tool to take care of the lawn, garden, driveway or whatever it is that needs to
be done.”
CEOCFOinterviews: Please
explain who your customers are.
Mr. Hickman: “We
sell our products primarily through aftermarket ATV distributors. These distributors
then sell our products to ATV dealers. The dealers sell our products to ATV
owners. So, our customer can be the distributor, the ATV dealer, or the final
consumer. ATV’s can be used for a wide variety of purposes. Our
accessories enable the ATV to be used for plowing snow, pushing dirt or sand, spreading
seed or fertilizer, mowing grass, plus many other uses. Our accessories enable the ATV
owner to use the ATV for all kinds of practical purposes and still have a machine that can
go trail riding on demand.
CEOCFOinterviews: How do
you reach your customers?
Mr. Hickman: “We do
quite a bit of advertising, much of it aimed at consumers. An example of our
consumer advertising would be - The Outdoor Channel has a show called ATV Television. Many
ATV enthusiasts watch these various shows, so we attract consumers that way. We also
advertise in some consumer publications such as ATV magazine. This type of advertising
drives the consumer into the ATV dealership, looking for our products.
Our goal is also to reach the distributor and the
dealer. We use publications such as ATV Industry magazine, Power Sports Business magazine
and Dealer News magazine to reach those dealers and distributors.”
CEOCFOinterviews: Does
your brand name make a difference to the consumer?
Mr. Hickman: “
Absolutely! Cycle Country is known extremely well by ATV dealers all over the
country and they know that our products are going to fit very well and that is important
to us. If you were to buy a new ATV, it is important to us that when you purchase our
accessories for that machine, that they will bolt right onto the machine without
welding, drilling or damage to the ATV. Dealers know that our products are made very well
and if they ever have any problem with warranty or service or replacement parts, we have
people on the phone that take care of those problems instantly. Cycle Country is a well
known and respected name in the industry.”
CEOCFOinterviews: Tell
us about your R&D efforts, and how you work with dealers.
Mr. Hickman: “We
have a very active research and development department. We get every make and model of ATV
into our R&D department every year. We work with many of the local dealers in our
area, such as Yamaha, Honda, Kawasaki, etc. They let us know when new models of machines
are in. We bring these machines into our R&D shop, and fit up our
line of accessories to all these machines every year. Sometimes the machines
don’t change from year-to-year and sometimes they do. There are always new models
coming out. Last year, we had 83 different models of ATVs pass through our R&D
facility here. We have a very active R&D facility that will make sure that our
accessories are going to fit right on every machine.”
CEOCFOinterviews: Will
you tell us a little about the ATV market in general?
Mr. Hickman: “The
ATV market has been growing rapidly throughout the years. Seven or eight years ago, there
were two to three hundred thousand ATVs sold in the United States. This last year, the
dealer publications have indicated that there were over eight hundred thousand ATVs sold
in the United States. The market has been growing at double digit levels over the last
many years. The numbers of ATVs that are sold every year are staggering.”
CEOCFOinterviews: Do you
also have international business?
Mr. Hickman: “Yes
we do. ATVs are sold throughout the world; however the strongest market for ATVs is right
here in the U.S. There are many ATVs sold in Canada and throughout Europe. The
Scandinavian countries and the U.K. are especially strong in ATV sales. We have
distribution in 35 countries outside of North America. Our accessories sales are strongest
in countries where there are high volumes of ATVs being sold. The biggest areas right now
are the areas that are not affected so much by the high value of the U.S currency over the
last few years. When our dollar is strong against foreign currency, it makes the ATVs and
our accessories very expensive in the countries that have weak currency. Historically the
ATV sales have been stronger in countries that have a strong currency.”
CEOCFOinterviews: Will
you tell us about the financial condition of the company?
Mr. Hickman: “We
have been in business since 1981, and have been profitable every year that we have been in
business. We have just now qualified to be listed on the American Stock Exchange. When we
became a public company, we were listed on the NASDAQ Over-The-Counter Bulletin Board for
the first 20 months or so that we were a public company. June 19th of 2003 was
the first day that we traded on the AMEX. We have always made money, and have had steady
growth throughout the years. With new accessories, products and acquisitions, we see
continues growth well into the future.”
CEOCFOinterviews: Why
did you make the decision to go to the AMEX as opposed to the NASD?
Mr. Hickman: One of the
reasons we felt that the AMEX fit our company very well is that AMEX has quite a few
services available to its members that we felt that we could use and that they could
provide for us. We also knew that the AMEX is one of the most trusted and respected
organizations in the free market enterprise system. It was a very good fit for our
company.”
CEOCFOinterviews: What
are you looking for in terms of growth and what are you looking for in acquisitions?
Mr. Hickman: “We
don’t have a specific company or product targeted for an acquisition. What we would
be looking for is a company that would fit well into our product line. When we acquired,
Per-Form Products, that fit well because the Per-Form oil filters were sold through many
of the same distributors that we already deliver products to in the ATV market. I t
allowed us to expand our product line to those same distributors. The
acquisition of Weekend Warrior allowed us to expand our product line into the lawn and
garden industry.
The nice part about the Per-Form and the Weekend Warrior acquisitions is that they allowed
us to fill in the time of the year that has traditionally been a little bit slower for us.
Our primary products are blades and blades have a selling season that goes from June
through February. March through May have been slower for us, so with the oil filters and
the Weekend Warrior products, we have been able to increase our manufacturing during the
slow months of the year, and use some of our excess capacity. That has worked out well for
us and we would consider that again with any future acquisitions.”
CEOCFOinterviews: How do
you as CEO handle rapid growth, and see to it that growth continues?
Mr. Hickman: “The
key to success is to surround yourself with good people and listen to them. You can’t
be afraid to give up some of the authority and responsibility that you have, if you are
confident that whomever you are giving it up to is going to handle it properly. We have a
great management team, and they are all willing to take on more responsibility and do more
things and they have been good at hiring the people they need to work with them. We have
been successful because of the people that we have.”
CEOCFOinterviews: Why should potential investors be
interested and what should they know that perhaps they don’t realize when they first
look at the company?
Mr. Hickman: “We
are in a growing industry, and it has grown through the years when many industries have
suffered. If we look at ATV sales, our business has mirrored the number of ATVs that are
sold and those sales just keep going up every year. We have been able to continue to
develop new products for the ATV industry, and we feel that as these products hit the
market, our company will benefit financially. We have been successful at developing some
strategic alliances with OEMs in the lawn and garden industry, which is going to allow us
to expand beyond our traditional ATV industry. Further, our entrance onto the AMEX, opens
our stock to many more brokers and potential investors. That is going to be a good
thing for us, for the value of our stock, and long-term investments in our company.”
CEOCFOinterviews: In
closing, please give us a look into the future for Cycle Country.
Mr. Hickman: “I am looking forward to the future of the ATV
industry. I believe the industry has the potential to expand in the international market.
We have our accessories with proper distribution all over the world, and in some cases, we
are waiting for the ATVs to have a more significant influence in certain countries. When
the ATVs get to those countries, we will be there. We are already there. As the
international ATV market grows, that could be a strong thing for us because we are going
to grow right along with that international market. Cycle Country will continue to
develop new accessories, to make ATV’s more useful and we will continue to develop
strategic alliances that will help us to expand our company.”
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