Marker International ("Marker" or the "Company") is a leading designer,
developer, manufacturer and marketer of alpine ski bindings in the United States
and throughout the world. Marker had total annual sales equal to $126.4 million
in fiscal 1997, compared to $16.0 million in 1984, when Henry E. Tauber, the
Company's Chairman of the Board and President, acquired the Company. Marker
International is a holding company which operates through its subsidiaries,
Marker Deutschland GmbH ("Marker Germany"), Marker USA, Marker Japan Co., Ltd.
("Marker Japan"), Marker Austria GmbH ("Marker Austria") and Marker Canada, Ltd.
("Marker Canada"). Substantially all of the Company's ski bindings are
manufactured by Marker Germany, which also distributes bindings in Germany, to
subsidiaries of the Company, and to independent distributors in countries where
the Company does not have a distribution subsidiary. Marker Ltd., also a
subsidiary of the Company, designs, distributes and sells to retailers the
Company's clothing, gloves and luggage products for skiing and other
recreational activities. The principal markets for the Company's products are
North America, Europe and Asia.
In addition, Marker International, through its 80% owned subsidiary, DNR
Sportsystem Ltd. ("DNR"), and its newly created and wholly-owned subsidiaries,
DNR USA, Inc.("DNR USA"), DNR North America, Inc. ("DNR North America") and DNR
Japan Co., Ltd. ("DNR Japan"), is a leading designer, developer, manufacturer
and marketer of snowboards, Interface Step-in SYSTEMSTM, traditional snowboard
bindings and snowboard boots. DNR Sportsystem Ltd. designs, develops and
distributes snowboards and related products throughout the world. DNR USA
manufactures snowboards for distribution worldwide under the Santa CruzTM and
DNRTM brand names. DNR North America and DNR Japan, through their own sales
force market snowboards, Interface Step-in SystemsTM, snowboard bindings and
boots directly to retailers in the United States and Japan, respectively.
In June of 1995, the Company acquired a 25% equity interest in DNR. In
June of 1996, the Company acquired an additional 55% of the common shares of
DNR, bringing its total ownership in DNR to 80%. The Company's 80% interest in
DNR is held by the Company's wholly-owned subsidiary, Marker AG.
In July of 1996, the Company closed a secondary public offering of the
Company's Common Stock. In connection therewith, the Company issued 2,680,000
shares of Common Stock, including 180,000 shares issued in connection with the
closing of the underwriters over-allotment option. The Company received
aggregate net proceeds of approximately $14.8 million and utilized such net
proceeds to partly finance the purchase of the additional shares of DNR.
During fiscal 1997, the Company formed DNR USA, to manufacture snowboards
at a state-of-the-art snowboard production facility in Salt Lake City, Utah. In
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addition, the Company formed DNR North America and DNR Japan, as distribution
companies for snowboards and related products in the United States and Japan,
respectively.
In January of 1997, the Company completed construction of its 56,608
square foot snowboard manufacturing facility located in Salt Lake City, Utah.
Products
Ski Bindings
The Company designs, develops, manufactures and distributes ski bindings
consisting of more than 30 high quality models. The models range from high
performance racing models, such as the Logic M9.1 Turbo SC RacingTM and other
top-end models featuring the Company's patented Selective Control SystemTM,
BiometricTM Programmed Upward Release and Comshock PistonTM, to the children's
M9 model. Suggested retail prices in the United States of such models range from
$115 to $395. Each model is available in a variety of colors selected by the
Company based on an analysis of consumer preferences.
In addition to a ski binding's primary function of attaching a ski to a
ski boot, the binding serves as a safety mechanism. The timing of a binding's
release mechanism is significant in both its retention and release functions.
When a skier applies an amount of force to a ski binding that exceeds the safety
setting of the binding, the binding is designed to release the ski boot from the
ski in order to decrease the risk of injury to the skier. Therefore, a binding
must be designed to recognize specific levels of force exerted against it.
Marker bindings feature LogicTM, TwincamTM, and Gliding AFDTM technology.
The Company developed the patented LogicTM, TwincamTM, and Gliding AFDTM
technology, which together tightly couple the ski boot and binding toe-piece,
resulting in a binding system that is designed not to be affected by
contamination between the ski boot and binding. In addition, certain models of
Marker bindings also feature either the Company's BiometricTM, Full SpectrumTM
or V-TECHTM technology. These technologies allow the ski boot to be released
from a binding at any angle in a 180 degree spectrum, thereby increasing skier
safety.
Snowboard, Interface, Bindings and Boots
The Company designs, develops, manufacturers and distributes snowboards
and offers more than 40 models designed for novice to world-class snowboard
riders. The Company's line of snowboards accommodates the needs of a full range
of snowboarding styles, including racers, freeriders, freestylers and
freecarvers. The snowboards range in suggested retail price, in the United
States, from approximately $230 to $500.
The Company seeks to apply innovative technologies to the manufacture of
snowboards. Innovations introduced by the Company include the SplitTM snowboard
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which features two independent Lightweight Sensor Wood Cores with Isocore
connecting the cores. Isocore is used in the Company's top-end models to enhance
edge hold and tracking, making it possible to easily and quickly change the arc
of a turn while on edge. Lightweight Sensor Wood Cores are also used in top-end
models to enhance snowboard durability and performance. The use of torsion frame
and carbon torsion frame construction by the Company increases snowboard edge
pressure.
In addition to providing technologically advanced snowboards, the Company
produces creative graphics for its snowboards. The Company believes that the use
of transparent constructions, three-dimensional topsheets and innovative color
schemes have helped to establish it as a leader in snowboard graphic design. One
of the Company's high performance snowboard models, the H-Type Riders Choice,
which is marketed under the Santa Cruz brand name, has been exhibited for its
design at the Museum of Modern Art in New York City.
Snowboard bindings connect the snowboard rider to the snowboard and can
have a significant affect on the performance of the board. In 1996, the Company
introduced a technologically advanced soft boot Interface Step-in SystemTM for
snowboarders. The Interface Step-in SystemTM was developed by the Company and
Tecnica(R), a leading ski and snowboard boot manufacturer. The Company believes
that the new Interface Step-in SystemTM includes innovative features which
provide entry and exit convenience and incorporates a new soft boot design which
offers comfort, mobility and more precise power transmission and edge pressure
distribution than was previously available in the industry. The Interface
Step-in SystemTM has a suggested retail price, in the United States, ranging
from $250 to $450.
The Company offers more than 15 models of traditional soft boot snowboard
bindings that incorporate lightweight designs and high grade materials. In
developing its traditional snowboard bindings, the Company seeks to provide
durability, comfort, ease of use and performance for riders of all levels.
The Company has developed a wide range of snowboard boots for snowboard
riders of varying riding types, ages and abilities. The Company has more than 15
models that incorporate innovative technologies, including one-piece linerless
softboot construction, laceless liner, gel-cushioned soles and dual-density
shock absorbing soles.
Soft Goods
The Company designs, distributes and markets apparel for adults and
children, gloves and ski and non-ski luggage. The Company's clothing line
features quality, functional and versatile performance wear for year-round
sports and recreational activities available at a wide range of prices.
In October 1995, Marker Ltd. was selected by the Salt Lake Olympic
Organizing Committee for the 2002 Olympic Winter Games ("SLOC") as the licensee
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for the sale in the state of Utah of winter outerwear, polar fleece, luggage and
gloves with the imprint and embroidery of the 2002 Olympic Winter Games. In
February 1996, Marker Ltd. was selected as licensee for the sale in the state of
Utah of T-shirts, sweatshirts, golf shirts and related apparel with the imprint
and embroidery of the 2002 Olympic Winter Games. In January 1997, both of these
contracts were extended through December 31, 1997 and the distribution territory
was expanded to include several states.
The Company's apparel lines, gloves and luggage are sold year round to
retailers mainly in the United States through Marker Ltd.'s own sales force.
Marketing
The Company actively advertises and markets its products. The Company
spends the majority of its advertising budget on advertisements in ski and
snowboard magazines, such as Skiing Magazine, Ski Magazine, Snow Country, Powder
Magazine, Snowboarder and Transworld Snowboarding in the United States, and
similar magazines in foreign markets.
To increase brand recognition, in addition to offering technologically
advanced bindings, the Company aggressively markets the Marker brand name. To
influence its presence in retail shops, the Company devotes resources to
maintaining and improving its relationships with retailers and shop personnel so
that they will use Marker products and recommend them to their retail customers.
In this regard, the Company, through its sales force, conducts in-shop sales
clinics. In addition, the Company, as part of the United States Authorized
Retailer Program, requires that all authorized retail shops employ a technician
who has been trained and certified by the Company concerning the installation
and adjustment of Marker bindings. Additionally, the Company sells its bindings
to the sales staff of its retailers and to professional skiers at special prices
so that they will be able to recommend the Company's products as a result of
personal experience.
To foster recognition of the Marker brand name, the Company also
establishes endorsement relationships with national ski teams and racing
professionals. These endorsement contracts typically run from one to two years
and provide for a base payment to the racer, with additional payments for
placing in a competition. Racers using and endorsing Marker bindings have been
among the winners in World Cup, World Championship and Olympic competitions.
Many of the United States' best-known skiers, including 1996 World Alpine
Downhill champion Picabo Street, three-time World Cup Champion and Olympic Gold
medalist Phil Mahre, World Champions Steve Mahre and Tamara McKinney and Olympic
Gold medalist Stein Eriksen, endorse and use Marker bindings.
Many Olympic, World Cup and professional ski competitions have been won by
racers endorsing and using Marker bindings. Skiers endorsing and using Marker
bindings dominated the 1997 FIS World Championships held in Sestrieres, Italy in
February 1997, winning more medals than any other company: 3 Gold, 3 Silver and
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4 Bronze. The 1997 World Championship Gold medalists endorsing and using Marker
bindings included Michael Von Gruenigen of Switzerland in the Alpine Giant
Slalom, Isolde Kostner of Italy in the Alpine Super G and Renate Goetschl of
Austria in the Alpine Downhill.
Skiers endorsing and using Marker bindings also excelled in the season
long 1997 FIS World Cup competition. Marker skiers include Pernilla Wiberg of
Sweden, the 1997 Women's Overall World Cup Champion and Slalom World Cup
Champion, Hilde Gerg of Germany, the Women's 1997 Super G World Cup Champion,
Renate Goetschl of Austria, the Women's 1997 Downhill World Cup Champion, and
Michael Von Gruenigen of Switzerland, the Men's 1997 Giant Slalom World Cup
Champion. Hans Hofer of Austria was the Men's 1997 US Pro Tour Overall Champion.
The Company believes that winning World Cup, World Championship and Olympic
competitions at places like St. Anton, Sestrieres and Nagano increases the
Company's visibility in the marketplace. Marker engineers also use these
competitions as opportunities to work with the Marker skiers to develop new
products and to test and refine prototypes, with the goal of benefiting skiers
of all levels.
For its snowboard products, the Company markets the "Santa Cruz" and "DNR"
brands through the implementation of product advertising programs with its
distribution subsidiaries and its distributors. The Company and certain
distributors also sponsor teams of professional riders as part of the Company's
marketing and communications strategy. These riders typically enter into
endorsement contracts with DNR Sportsystem, with a length of one to two years,
providing for a base payment to the rider, with additional payments for placing
in a competition. These riders are involved in the testing phase of new or
prototype DNR Sportsystem products and often contribute ideas for future
developments. The riders participate in International, World-Cup, Pro Tour and
other events to promote DNR Sportsystem products. Bertrand Denervaud, who rides
"Santa Cruz" snowboards and is the five-time overall World Pro Tour winner,
endorses the Company's products. |
