Overall DD on ETMO,
Compliments of VLFtrader :)
DD for New Folks, INFORMATION, BACKGROUND......
The information listed...
below is compiled of Notes talking to Alan
over the past 6 months, News Releases,
Magazines and Articles, Xtreme's Customers
and personal opinion which is stated, so there
isnt any question what is fact, and what is my opinion.
ETMO Some Personal Background Information...
Alan McCaa is one of three owners of Xtreme Motorsports. They are a family owned business that involves the McCaa Family.
Alan is the CEO. He is involved with the Managment, Marketing and Design aspect of the company.
His father has been building off road racecars and dunebuggies for over 25 years.
Seven years ago when Alan became involved with the company, they decided to focus solely on Long Travel Cars & Racecars. They started advertising and business has been very successful. These last three years have been awesome as they have been involved with some of the greatest people in the industry.
Now, Xtreme Sandcars have become Monster's of the Sand, and Xtreme holds the title of Best of the Best Sandcar Manufacturers. Thus the "World's Greatest" Television Special and the opportunity to bid with China's 2008 Proposal. The Baidan Desert outside of Beijing is becoming the country's fastest growing sport. The desert is massive with dunes as high 200 feet.
They are a dealer for Tatum Racing and carry all their race/muscle/rail cars as well as parts & accessories. In addition they offer many services related to the off road industry including Class 1 & Class 10 Race Car Fabrication, race car & sand car prep services, shock dial in services, parts & accessories, custom fab services and more. They are also a Polaris Off-Road seller.
They are selling on average 2-4 Sandcars per week, at an average of $29,900.00 each. Do keep in mind each Car is specially made for each customer, and some take longer than others. One car last year sold for $98,000.00. They are already looking at another 30K to 50K square feet building, as they have already out-grown the recent building in December. With the additional orders, 24/24 dealer Program, and specialty wholesale sales, they need the room to assemble at least double the output currently.
They recently purchased a plasma machine to do all the precision cutting of the frame and body, which will save them over $250K from the previous year. Maybe you guys that took Shop in High-School can inform us how that machine operates.
They have special negotiated shipping rates to Europe, the Middle East, Africa & Australia. They have a full line of Mid Travel cars that they carry and are very competitively priced. Their goal is to offer the best customer service available along with quality products and competitive pricing.
Before Alan was involved in Xtreme Motorsports he owned a large electrical construction and electrcial sign company that was a leader in the commercial market in Central California. He mainly was involved with structural engineering along with the Sales & Marketing aspect of the company. Alan and his partner decided to sell as it was simply too large.
Alan has a degree in Marketing as well as Structural Engineering & Design.
I hope this helps in understanding where the Company is coming from, and some background to better understand the Company as a whole...
DOES ETMO HAVE MUCH DEBT?
Like most Companies, there are several lines of credit for inventory and parts. However, Xtreme is happy to have leased its building over the past several years, and kept its debt low. Current debt for all of Xtreme's operation is under $100K.
Of course this will change with the fullfilment of the even
larger New 30K - 50K Sq. Foot facility, that will bring Xtreme's sales and assembly 2-3 X its current operation.
OUR NEW ASSEMBLY PLANT...
The Current Assembly Plant...
The building consists of...
several areas that are not shown in the pictures.
The pictures you see in the IBOX were taken right after the buiding was finished in January. They had actually just rolled those rail-frames into place you see in the pics that day. Of course it is going to be clean, when it hadnt even been used at the time of the pics taken...
Secondly, as Ive stated from previous posts, the pics you see are very misleading to how big the new building is. What you dont see is the second area just as big as the one in the pics that wasnt completely finished at that time. Plus, if you see the exsisting area they already had, you would see an area roughly 4-5 times as much space that is shown in the pics...
Take a picture of it now, and Im sure youll find a much more used and "dirtier" area...Maybe not. The 5 different areas are being used as an assembly line type process. The first area is for framing and welding. The second area is for motor, tranny and wiring process. Third is parts and accessories, and fourth is painting and inspection. The fifth area is used for storage and parts.
Some painting is done in another small building for frame painting as some framing is built for other option like a "KIT" Sandrail they carry where you can get all the parts from Xtreme and you build the car yourself...
Its already outgrown. IMO, a 30K to 50K Sq. Foot Building in the very near future will be needed to meet the demand of incoming orders.
WHY/HOW HAVE WE OUTGROWN OUR SPACE ALREADY?
“First, we want to meet the needs of tens of thousands of sandcar enthusiasts by providing custom sandcars in the area in which they live. Currently, we have customers flying in, or driving long distances, just to see the vehicles before the purchase is finalized. With local dealerships, they will be able to receive local sales assistance, have their questions answered and choose from a selection of prepackaged cars that the dealers will stock.
“Second, a lengthy wait time will be eliminated. In the past, custom orders from our Bakersfield facility could typically take anywhere from six to twelve months to be delivered, depending on the options the customer choses. Often, our full, build-to-order custom vehicles cost more than a new pre-packaged custom sandcar,” McCaa continued. “With the dealerships having ready-to-purchase inventory in stock, the consumer can now have a custom built sandcar immediately. The dealer will be able to install options and upgrades on site. We want to simplify the process and to eliminate the wait time, offering our customers the best possible buying experience.”
Dealers folks, are you getting it yet?
DOES ETMO HAVE POTENTIAL?
Why XTMS has Potential.........
CNBC completed a 3 day market analysis in early 2005 focusing on the off-road racing industry, directly relating to the Sandcar market. There analysis compared it to the next NASCAR craze to hit America. In California, Arizona, Nevada, Washington, Oregon, Michigan, Oklahoma, Utah and Idaho this recreational activity is HUGE. NASCAR produces billions of dollars is sales every year and the Sandcar market is at the beginning stages of this craze. There are several opportunities that are available that have not been focused on and our goal is to take advantage of these lucrative opportunities. Off Road Retailer magazine recently published an article on the growth of the Sandcar market and emphasized that its just at its beginning stages before explosive growth. The market is badly in need of someone to build and stock cars, so customer's can make an immediate purchase without waiting for a custom car to be built.
CNBC recently completed a 3 day market analysis focusing on the off-road racing industry, directly relating to the Sandcar market. Their analysis compared it to the next NASCAR craze to hit America. In California, Arizona, Nevada, Washington, Oregon, Michigan, Oklahoma, Utah and Idaho this recreational activity is huge. NASCAR produces billions of dollars is sales every year and the Sandcar market is at the beginning stages of this craze.
49.6 million people have ridden or driven off-road vehicles at least once during the fall 2003/spring 2004 season. This represents almost 23% of the entire U.S. population. 18.2 million of these participants were under 30, while 21.7 million were 30 to 50 years of age, demonstrating the market’s broad appeal.
"Xtreme Motorsports is part of the multi-billion dollar off-road recreational and professional racing market. Off-road vehicle ("ORV") racing is one of the fastest growing sports in the U.S. According to industry estimates, 49.6 million people have ridden or driven off-road vehicles at least once during the fall 2003/spring 2004 season. This represents almost 23% of the entire U.S. population."
From Alan.......
With our family run facility we have many advantages. One of the most important is our low overhead which gives us a huge advantage over our competitors, especially in the Southern California market. In many cases we can build an identical car for tens of thousands less and still make a fair profit to ourselves. Also, and probably the most exciting, is in addition to having amazing fabrication skills within our structure we have great marketing and business management skills, whereas many companies have great fabricators they lack the customer services skills and/or business management skills to KEEP the business running and profitable. Finally another large advantage is our location within the Bakersfield, CA community. It allows us to be centrally located in the heart of California. We're able to ship anywhere on the west coast within just a matter of days. Our location also is right in the middle of a heavily traveled freeway that heads to some of the most popular dunes in California.
Also......
CNBC doesn't usually release financial suggestions unless they have some pretty good info. With the release of dust to glory, all the buildups on TV like Speedtrap, Worlds Greatest and other exciting News I'm confident it's going to explode. Think too, there are thousands of places to go other than local spots like Glamis, Pismo and Dumont. All over the country they are building off road parks, Arizona / Nevada is almost limitless riding area. We have customer's locally that take their cars out to the foothills (100 square miles) every weekend.
Washington, Oregon, Texas, Oklahoma, South America, Africa, the middle east, etc. are exploding in growth for Sandcars.
24/24 Dealer Program......
Is a plan to on-ramp 24 dealerships of its one-of-a-kind sandcars in 24 months. Currently Xtreme has signed 5 Dealers, with 3 coming on board, and 9 potential dealers in the initial agreement stage, and is on schedule to complete the 24/24 Program.
They are currently in talks with 3 Countries initiating Dealer Programs that could bring in HUGE Revenue due to their location and its Sand/Dune/Dirt geography...
Dealers are the Key......
DOES EXTREME HAVE FINANCING?...
Financing on all of their vehicles especially now that they have the more moderate priced unit. With this new financing they can reach a wider range of buyers offering an affordable
down payment and monthly payment to make every unit more attractive to the market.
Financing on new vehicles only. Rates start from 7.49% and up to 180 months. No prepayment penalties and no need to pull money out of your equity. Cars come with a title, a 17 digit Vin # specific to Xtreme Motorsports and a green sticker. Cars can also be insured by any insurance company.
They also now have a line of mid travel cars in both beam and A arm (18" of travel on A arm and 14" on beam) both are very affordable. The entire chassis with Chromoly A arms, Heim joints and 3 X 3 rear trailing arms is only a little over $4,500. Complete with shocks tabs. They use 1835 - 1915 VW Dual Carb motors in their four seat cars all the time and they work great.
They have about 4 running around in the Arizona desert and a ton more in California. All of which have run flawlessly with that combo. They sell these cars turnkey for around $23,000 with aluminum work, King Shocks, PRP suspension seats, powdercoated.
They have also started a enonomy line of Cars for the Novice starting at $9995.00. They will be called Standard Travel Cars, or STC's for short.
[b}NEW AND UPCOMING...
Another thing new and upcoming...
They are working on 2 less expensive models, to make them affordable for everyone. One we know about via the P.R.'s, and another even less expensive for more of the "Dune Buggy" experience, which a large portion of these will be manufactured and sold to Dealers in their 24/24 Dealer program.
This enables the Company to sell less expensive units, but have the opportunity to show and sell their more sophisticated......"bells and whistles" models.
What Competition does Xtreme have?
20 major manufacturers across the country. Many others are smaller type makers that only make 1 Car type, and produce only a handful per year.
Of the 20 manufacturers about 10 actually offer their cars as assembly line type vehicles. Most of these however, only make 2-3 types, and some offer more along the lines of a Dune-Buggy style Car...There are 4-5 Id say that carry a full-line of Cars.
What separates Xtreme from the rest of the pack, is they have 6 types of Cars and Rails. They will/can make the Cars to your specs, and add or delete what you order. They also can start and stop the assembly process where-ever you wish, so that if you want to put sweat equity into it, you can. Also, Extreme makes/sells their frames for other companies, and also offers a KIT CAR that can be sold to a customer, where they can build the Car themselves...
Also...Xtreme is ONE STOP shopping. They make the Car, sell and install the tires and wheels, create and add the Graphics, and actually take the car you want from creation to finished product. Why this is important is most all other manufacturers have to contract out these services, where Extreme can offer the Car from start to finish...
They have a new automated machine shop, in house powdercoating, in house fiberglass and carbon fiber, in house fabrication, and more. CNC capabilities and automated plasma cutting. Show room can house up to 16 complete cars ready to buy at any given time.
With their new facility, they are able to work their 5 phase assembly line much faster, cheaper, and more efficiently than before. This enables them to open up each phase to a wholesale market which brings in Revenue quickly, and helps maintain Volume which in turn produces a more cost-effective bottom line...
I have talked to at least 15 Customers of Xtreme Cars
when I first did my DD on this back in December. I knew
this Company was for real when I talked to actual
customers, buying the products, sending me pictures,
and praising the Company's product.
This is a real Company.
