EAST COAST

RIMS

J I L L I A N G E D D E S , A U S T I N C A R T E R , C A R Y K O N O P K A , B A I L E Y

P E N N E Y

Rolling in all

Weather

OVER VIEW OF RESULTS

• East Coast Rims serves as a bike retailer with a high price, large awareness and high quality rating.

• Results for 2018• Sales of $37,218,240 (increase of 16.6%)• 25,588 units sold (Decrease of 1.58% in mountain bike industry) • Highest units sold in road and youth bikes• Costs of $15,279,437 (decrease of 2.39%)• A profit of $11,904,440 (increase of 51.6%)• Shareholder value of $110.88 (increase of 86%)• Earnings per share of $16.15

• East Coast Rims market strategy involved high price, and high awareness

• East Coast Rims is in direct competition with Whistler Bikes.

A STATEMENT OF THE FIRMS STRATEGY

• East Coast Rims road and mountain bikes are high quality, high price bikes.

• Youth bikes are low price, high quality and quantity

• East Coast Rims shareholder value $110.88 and EPS of $16.15

• In direct competition with Whistler Bikes who has a shareholder value of $102.42

2011

2012

2013

2014

2015

2016

2017

2018

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

SHV Comparison

Whistler BikesEast Coast Rims

Share

hold

er

Valu

e

FIRMS FINANCIAL RESULTS

• East Coast Rims had Wholesale sales of 37,218,240• Mountain bike sales of 25,588 • Road bike sales of 7,400• Youth bike sales of 64,000

• 2018 COGS of $15,279,437 with a decrease in costs of 2.45% from 2017-2018

• 2018 profits of $11,904,440 seeing a 52% increase from 2017

2011

2013

2015

2017

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

Profit after Tax

Whistler BikesEast Coast Rims

Dollars

FINANCIAL ANALYSIS • Average sales growth 29%

• Ability to reduce cost of production-management COGS 41% compared to IA 56%

• Profitability, highlight 2015 capital spending

• Return on sales

• 5 year EPS growth 70.8%

• Cash position

• Financing

• P/E 6.04, 7.88

• PEG .085 Year 2018 2017 2016 2015 2014 2013 2012 2011

Sales 37218 31911 25394 18184 9293 8370 7782 7150

Cogs 15279 15654 13007 11442 4339 3842 3824 3820

% of sales 41.05% 49.06% 51.22% 62.92% 46.69% 45.90% 49.14% 53.43%

$1000'sYear 2018 2017 2016 2015 2014 2013 2012 2011Sales 37218 31911 25394 18184 9293 8370 7782 7150Net Income

11904 7852 3421 1436 2107 1783 1413 985

Net Income Growth 51.60%

129.52%

138.23% -31.85% 18.17% 26.19% 43.45%

% of Sales

31.98% 24.61% 13.47% 7.90% 22.67% 21.30% 18.16% 13.78%

MARKETING ANALYSIS• Marketing = branding, public relations and advertising

• Branded as high quality high price

• Match target for each dimension of marketing

• Aimed above target youth and road bike market because of high price sensitivity

• Youth bike market high price high quality vastly under producing, then making the executive decision to drop price and increase production

• Youth bike market, awareness rating of.33 , slightly higher than the recommended

• Distribution rating of .54 in the road bike market compared to the .51 of whistler

• East Coast Rims highly effective and efficient marketing = dominating all markets

• Posting the highest total sales in all markets since 2015

OPERATIONS ANALYSIS

• Decrease in COGS by 16%, giving East Coast Rims a COGS percentage of 41.1%. • 15.9% lower than the industry average

• Highest capacity in the industry, due to the demand for our products. With 46,000 standard capacity units.

• Quality rating of 0.83, the highest within the industry.

• High wastage of 21%, due to the large amount of capacity.

• Working at full capacity, creating no idle time.

SWOT ANALYSIS

Strengths

• Efficient and effective marketing strategy

• Generate sales $.13/$1 of sales, Whistler Bikes $.193/$1

• COGS

• Distribution strategy

• Ability to anticipate competitor’s decisions

• Financial management

SWOT ANALYSIS

Weaknesses

• Underproduction causing loss of:• Youth bike sales: 42.3%, 22.7%, 3%• Road bike sales: 14.1% 8.9% 4.5%

• Future distribution

Opportunities

• Cash position of competitors and profitability of competitors

• Rest of youth bike market

• Product Improve

SWOT ANALYSIS

Threats

• Whistler Bike’s COGS and marketing strategy

• New bike launch by competition

RECOMMENDATIONS FOR THE FUTURE

• Increase average retailer margin• Bike shops: 40%• Sport stores: 35%• Discount stores: 35%

• Capitalize on all markets• 16% in youth bike market• 21% in road bike market• 7% in mountain bike market

• Increase capacity for expected future demand

• Maintain dividend, and quality index

RECOMMENDATIONS FOR THE FUTURE• Wholesale sales increase of 21% in 2019

• Supply of sales to bike market by 2020• 23% in mountain bike• 44% in road bike• 59% in youth bike

2017 2018 2019 20200

20000

40000

60000

80000

100000

120000

140000

Overall Sales

Bik

e S

ale

s

2017 2018 2019 2020

Ad4 26000 25588 30274 32418

Quickshifta 7500 7400 8434 8814

Digimonsta 52112 64000 78672 88112

10000

30000

50000

70000

90000

Future Sales

Bik

e S

ale

s

CONCLUSION• Consistent high sales, driven by high awareness, high price

• Highest SHV $110.88

• Highest Earnings per share $16.150

• Lowest COGS in 2018

• Biggest threats include direct competitor Whistler Bikes, very close SHV with a similar price and product strategy but lower quality, distribution, and wholesales.

• Be future oriented in order to ensure that East Coast Rims remains a successful company