GRASP LIFE BY THE

HANDLEBARS

Agenda

INTRODUCTIONSTRATEGIC

CHANGES

FINANCIALSSECOND

CHANCE

RECOMMENDATIONS

❝Have fun.

Stay fit. Save

money. Enjoy

your ride.❞

E n j o y Y o u r R i d e

Who We Are...

To be the leading low-cost

bike company that best

responds to our customers’

expectations, our

employees’ needs & our

partners’ demands.

E n j o y Y o u r R i d e

Our Vision

By utilizing our lean

production with great

attention to cost control,

we will deliver bikes in a

timely manner to meet the

expectations of our value-

seeking customers.

E n j o y Y o u r R i d e

Our Mission

COST LEADERSHIP

BEFORE

Minimum presence in “specialty”

segments

Multiple product lines in low-tech

segments

Heavy advertising spending

Focus on ROS, ROE, profits

E n j o y Y o u r R i d e

Developing &

marketing low-cost

bikes for our three

market segments.

AFTER

Our Strategy

Our Segments

E n j o y Y o u r R i d e

A

D

V

E

N

T

U

R

E

R

K

I

D

S

L

E

I

S

U

R

E

C

O

M

M

U

T

E

R

Adventurer 6 Splash & Splish Sunbeam &

Moonbeam

Wanderlust,

Wanderer &

Wanderoo

What’s the price?

Is this a quality

product?

Have I heard about

this brand?

Is this bike in stock? Does it look good?

E n j o y Y o u r R i d e

Market Share*

E n j o y Y o u r R i d e

* Based on Retail Dollar Sales

Strategy Canvas - THEN

E n j o y Y o u r R i d e

Strategy Canvas - NOW

E n j o y Y o u r R i d e

Value Curve

E n j o y Y o u r R i d e

Manufacturing2019 DECISIONS

• Decrease workforce size by

41 people

• 10,000 factory units sold

• Batch size: 425

• Setup time reduction

$220,000

• Supplier Relations $350,000

• Raw material stock: 4

weeks

• Average Salary: $24,000

• Training Hours: 51

• Maintenance: $1,300,000

• Quality Systems:

$1,000,000

• Inspection rate: 11%

2022 DECISIONS

• Increase workforce size by

23 people

• Factory size same

• Batch size: 400

• Setup time reduction

$750,000

• Supplier Relations $600,000

• Raw material stock: 6 weeks

• Average Salary: $26,000

• Training Hours: 57

• Maintenance: $1,032,000

• Quality Systems: $1,000,000

• Inspection rate: 10%

E n j o y Y o u r R i d e

Financials

I

N

C

O

M

E

S

T

A

T

E

M

E

N

T

E n j o y Y o u r R i d e

Projections

E n j o y Y o u r R i d e

Actual Revenue Breakdown

E n j o y Y o u r R i d e

SHV Projections

SHV Actual Results

E n j o y Y o u r R i d e

E n j o y Y o u r R i d e

We Learnt That...

General

Research markets, sensitivities,

thresholds

Dominate new markets early

Plan decision ahead

Stick to your chosen markets

Marketing

Reduce retail margins

Don’t overprice

Finance

Sell shares at the

beginning to raise

capital

Track cash flow

Operations

Keep improving

quality

Strive for high

efficiency plant

(increase batch size,

lower inspections)

D&D

Modify your

bikes

Always

consult

customers’

perceptions

Recommendations

Growth in manufacturing to be able to

produce more bikes

Manufacturing costs decrease

Phase out our bicycle in adventurers’

segment

Continuing investing in R&D to produce

new products

E n j o y Y o u r R i d e

We want to stay…

E n j o y Y o u r R i d e

QUESTIONS

?THANK

YOU &

HAVE A

NICE DAY.

Financials Continued2014 2015 2016 2018 2019

Revenue $14,052,800 $15,072,200 $27,072,200 $51,000,000 $55,000,000 $65,000,000

Gross Margin $6,027,486 $6,441,725 $15,441,725 $18,000,000 $33,000,000 $39,000,000

Selling &

Distribution $2,120,629 $5,607,052 $8,607,052 $12,000,000 $15,000,000 $14,000,000

Admin

Expenses$658,000 $714,000 $774,000 $1,000,000 $1,200,000 $1,000,000

Financial

Expenses$144,000 $128,000 $160,000 $100,000 $100,000 $100,000

Total

Expenses($2,922629) ($6,449,052) ($9,541,052) ($13,100,000) ($16,300,000) ($15,100,000)

Other Income $96,631 $106,935 $120,000 $200,000 $300,000 $320,000

Tax

Deductions($960,446) ($29,883) ($1,808,010) ($5,975,976) ($5,015,015) ($6,072,072)

Net Income $2,241,041 $69,726 $4,212,663 $13,924,024 $16,700,000 $14,147,928

2020 2021 2022

Revenue $40,176,000 $41,468,598 $49,613,240

Gross Margin $24,179,480 $23,078,967 $27,774,240

Selling &

Distribution $12,514,099 $16,375,000 $17,000,000

Admin Expenses $2,532,000 $3,000,000 $3,000,000

Financial Expenses $144,000 $90,000 $90,000

Total Expenses ($12,458,099) ($19,465,000) ($20,090,000)

Other Income $200,000 $200,000 $200,000

Tax Deductions (3,516,414) ($1,084,190) ($2,365,272)

Net Income $8,204,967 $2,529,777 $5,518,968