<color><param>0000,0000,ffff</param>INNER CIRCLE NEWSLETTER
Inner Circle Vol 3 No.106 October 5, 1998
Inner Circle Publications Inc. Editor: Bill Ridley
</color>Inner Circle Special Report -October '98
Bill Ridley, Investment Journalist, www.stockhouse.com/innercircle
A Free Trial subscription is available by calling toll free
1-877-622-6333 or
e-mail innercircle@sunshine.net Subject: Free Trial
TITAN MOTORCYCLE CO. of AMERICA (TMOT-OTC BB)
Shares Outstanding 16.4 million
Float about 3 million
For Investor information call 1-800-773-7317
PRODUCT OVERVIEW
Founded in 1994, Titan Motorcycle Company is a manufacturer of
high-end,
custom designed, heavy weight performance motorcycles. This is a niche
market
where motor cycle enthusiasts will pay U.S.24,000 to $43,000 for their
personalized
dream motorcycles.
The demand for custom heavy weight motorcycles has been very strong
throughout the 1990's. The market leader in this category is Harley
Davidson
who has dominated the market but has not been able to keep up with
demand
nor have they completely satisfied their buyers with their finished
product.
THE HEAVY BIKE MARKET
Presently, the market shortfall for heavy bikes is about 40,000 units.
Harley plans on
increasing production by 9% per year which will only keep up with the
market growth
but not meet the backlog of unfilled orders which can take six to twelve
months to fill.
Even though Harley Davidson has dominated the market, their customers
have not
been entirely satisfied with the end product. Many Harley owners will
spend an
additional 50% over the purchase price in order to customize the bikes
with parts or
custom paint work to meet their particular design taste or to increase
power.
Titan has filled this need for a heavy weight customized bike which can
be ordered
directly from the factory. Consequently, many former Harley Davidson
owners are
purchasing custom factory built bikes which can be delivered in eight to
ten weeks.
Titan now dominates this segment of the premium priced heavy weight
market.
This is not a price sensitive market. Most customers are "baby boomer"
professionals who have a high disposable income and will spend the
U.S. $23,000 or more needed to obtain these machines.
Titan's highest priced motorcycle, the Gecko, accounts for 50% of the
sales
although it is priced 30% more than the top of the line Harley. What this
means for
the company, shareholders, and distributors is that better profit margins
can be
obtained.
SATISFYING THE MARKET NICHE
The company uses a cell production technique which is popular with
premium car
manufacturers in Europe. Highly skilled craftsmen work on their own or in
groups to
build these machines from start to finish.
Customers can choose specific custom parts or paint requirements which
will create
a personalized art form for the motorcycle enthusiast. Titan also has the
added
prestige of having twice the horsepower and 15 to 20% less weight than
Harley
Davidson motorcycles.
The end result is a very high quality motorcycle which has won them high
marks from
industry opinion leaders and media.
"Titan Motorcycles has positioned itself to fill a special market niche
that places a
demand for machines that go beyond Harley." September 1996 edition of
Hot Bikes
The demand for heavy weight motorcycles is estimated to keep growing over
the next
10 years as the "baby boomers" will continue to drive this market.
The distributor network for Titan bikes is growing to meet this demand
both in the U.S.
and internationally with 62 domestic and 20 international retail outlets.
Each distributor
must have technicians trained at Titan's Phoenix plant, state of the art
diagnostic
equipment, and an inventory of components.
FINANCIAL
Titan has had a good year so far having posted its first profit.
Titan's revenues for F1995 came to $625,000 and by F1997 they jumped
significantly to $13 million. Halfway through 1998, the company has
already
recorded revenues of $12.9 million, setting another record growth year.
Earnings growth has followed revenues. Net income for the first 6 months
of
1998 is up 128% to $326,000 or $0.02 per share.
Sales and Earnings Estimates
Year 1998******** 1999**** 2000******E2002
Bikes Sold 1,100*******1,900****3000******7500
Net Sales $27.5 M****$49.4M***$78 M*****$195M
Net Income $723,500**$ 2.49M***$5.69M****25.9M
Avg. Shares 17.5 M*****20 M*******20 M*******20 M
EPS $.04*******$.12********$.28********$.83
Share Price^ $1.80 $4.20 $12.45
(^based on a multiple of 15)
THE MOVE TO A NASDAQ SMALL CAP LISTING
On October 5th 1998, the company announced that its form 10-SB
registration
statement had been cleared with the SEC and now Titan is a fully
reporting company
under 12(g) of the Securities Exchange Act of 1934. The 12(g) paves the
way for
Titan shares to be quoted on the Nasdaq SmallCap market which is expected
to
occur by the end of 1998.
This will give the company greater recognition, improved liquidity, and a
greater ability to
raise capital. In anticipation of a move to NASDAQ SmallCap, the stock
seems to have
firmed up in price which could suggest greater investor confidence.
SUMMARY
Titan has created a potentially very profitable product niche within the
under supplied
heavy weight, twin engine motorcycle market. Titan's target market is
growing and
has the needed disposable income to sustain positive sales growth for
many years
to come.
The revenue and earnings figures to date show that Titan is on track.
Currently, sales
are supporting a production of 35 motorcycles a week which if sustained,
would put
them in a strong position to hit the estimated 1999 sales and earnings
estimates.
An institutional report written in May of 1998 by CL King and Associates
concluded
that Titan was a strong buy. "The company's current growth trajectory
should enable it
to increase earnings exponentially over the next six to seven years."
Based on the growth possibilities of Titan, this may be a good time to
start a due
diligence of your own. The company will provide you with the CL King
report and
other pertinent information. Give them a call at 1-800-773-7317
********************************************************************
Please be aware that the Inner Circle newsletter is not an investment
advisory
service, it is recommended that you consult with a licensed financial
advisor before
making any investment decisions. The focus of the Inner Circle is to
discuss the
usage of technical buy and sell indicators and how they can be applied by
using
examples of high potential stocks. None of the information herein should
be
construed as an offer to buy or sell securities. The information is taken
from
sources thought to be accurate but there is no guarantee.
All due diligence should be done by the reader or their financial
advisor. E.&O.E.
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