<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GLOBAL MOTORSPORT GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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[LOGO OF GMG MOTORSPORT GROUP, INC.]
GMG MOTORSPORT GROUP, INC.
INVESTOR PRESENTATION
April 1998
Global Motorsports Group, Inc. cautions that any statements in this
presentation as to future business results are forward looking statements and by
their nature are necessarily subject to uncertainties concerning events beyond
the Company's control, and no assurances can be given that such results will be
achieved.
<PAGE>
MANAGEMENT TEAM
Joseph Keenan
Chairman
. Director since July 1993, Chairman since September 1998
. Former President of Data East, U.S.A., Pizza Time Theatre, Inc. and Atari,
Inc.
Joseph Piazza
President & CEO
. Director since April, 1996, President & CEO since September 1997
. Former EVP of Lacy Diversified Industries and President of Rocky Cycle Co., a
motorcycle parts and accessories distribution company
Jim Kelly
EVP, Finance & CFO
. EVP, Finance since November, 1995, CFO since March 1992 and Director since
July 1993
. Former VP, Finance and CFO of Canadian Marconi Company
[Logo of Global Motorsport Group, Inc.]
1
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RECENT EVENTS
SEPTEMBER 1997
. Acquired Chrome Specialties for $38.5 million cash
. Changed name to Global Motorsport Group, Inc.
NOVEMBER 1997
. Elected Joe Piazza President and CEO
. Elected Joe Keenan Chairman
DECEMBER 1997
. Pre-tax charge of $3.1 MM relating to Panzica employment agreement -- Total
fiscal 1998 "one-time" charges of $4.0 - $5.0 million or $0.45 - $0.55/share.
MARCH 1998
. Q3 & Q4 results disappointing (customs issue, UPS strike, acquisition
integration)
. Letter from Alex Grass/Golden Cycle to acquire Company
. Q1 sales and earnings on track with "plan"
[Logo of Global Motorsport Group, Inc.]
2
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INDUSTRY
[Harley Davidson Motorcycle Production Capacity bar graph reflecting 13-year
compound growth rate of 11.9% from '86 to '99E; Source: Harley Davidson (Oct
1997)]
[1997 North American 651 + CC Market Share pie chart reflecting the following
market shares: Harley-Davidson 48%, Honda 19%, Kawasaki 10%, Suzuki 13%, Yamaha
6%, BMW 2%, Other 2%; Source: Cleary Gull estimates]
. HDI production goals increasing
. 1999E production 160,000 units --
Up from 105,000 units in 1995
. 200,000 production goal by 2003
. Over 1.3 million HDI motorcycles on road
. HDI gained market share in 1997
. Lower rate of model change than competition
. Over 30 year average life
. Significant customization by owners
. Demographics continue to favor motorcycles
. Lifestyle statement targeted at 40+ year old
males with household annual income $68,000+
. Significant international opportunities
[Logo of Global Motorsport Group, Inc.]
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GROWTH STRATEGIES
FOCUS ON THE BASICS
. Grow core business 10%-15%
. Expand into new markets including Japanese cruiser market
. Offshore manufacturing should stabilize and improve gross margins
. Reduce inventory from 1.7 turns to 2.0-2.5 turns --
$20+ million of free cash flow
. Reduce fixed asset base through sale of real estate
. Target logical 2-4 acquisition candidates
[Logo of Global Motorsport Group, Inc.]
4
<PAGE>
SUMMARY OF FINANCIAL RESULTS
<TABLE>
<CAPTION>
$ Thousands Actual Fiscal Year Ended January 31. /1/ Estimated 1994-1999
-------------------------------------------------------------------- Fiscal Cmp. Growth
Income Statement Summary 1994 1995 1996 1997 1998 PF1998/2/ 1999/3/ Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $67,252 $74,904 $93,906 $108,557 $122,725 $145,894 $159,346 18.8%
Sales Growth 0.0% 11.4% 25.4% 15.6% 13.1% NA 29.8%
Gross Profit 28,669 31,571 39,127 43,723 45,009 53,072 60,196
Gross Margin 42.6% 42.1% 41.7% 40.3% 36.7% 36.4% 37.8%
EBITDA 11,520 12,902 15,565 16,857 10,448 18,392 23,854 15.7%
EBITDA Margin 17.1% 17.2% 16.6% 15.5% 8.5% 12.6% 15.0%
Net Income 5,508 6,416 7,921 7,872 2,283 4,606 8,646
Net Income Margin 8.2% 8.6% 8.4% 7.3% 1.9% 3.2% 5.4%
Earnings Per Share $1.10 $1.27 $1.52 $1.48 $0.44 $0.88 $1.60 7.8%
Shares Outstanding 5,019 5,053 5,209 5,327 5,234 5,234 5,400
Other Data
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Interest Expense 827 701 1,637 1,915 2,964 4,907 4,907
Depreciation & Amortization $1,513 $1,561 $1,612 $1,896 $3,087 $4,536 $4,536
Capital Expenditures $1,544 $3,331 $4,659 $3,601 $4,100 $4,200 $3,726
Free Cash Flow/(4)/ $5,477 $4,646 $4,874 $6,167 $1,170 $4,932 $9,457 11.5%
</TABLE>
Notes
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/1)/ Represents reported CSTM performance 1994-1998.
/2)/ Includes full year Chrome Specialties performance and excludes Panzica
compensation charge and other one-time expenses.
/3)/ As estimated by CSTM.
/4)/ EBITDA less capital expenditures less interest expense less taxes.
[Logo of Global Motorsport Group, Inc.]
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<PAGE>
Fiscal 1998 vs 1999 Estimated Quarterly Performance
<TABLE>
<CAPTION>
($ Thousands) Fiscal Year Ended January 31, 1998
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Income Statement Summary Q1 Q2 Q3 Q4 Total
- ------------------------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Net Sales $31,707 $32,297 $30,450 $28,270 $122,724
Gross Profit 11,835 12,333 10,952 9,888 45,008
EBITDA 4,889 5,220 1,898 (1,560) 10,447
Net Income 2,343 2,524 82 (2,667) 2,282
--------
EPS /(1)/ $0.45 $ 0.49 $ 0.02 ($0.52) $ 0.44
--------
Gross Margin 37.3% 38.2% 36.0% 35.0% 36.7%
EBITDA Margin 15.4% 16.2% 6.2% -5.5% 8.5%
Net Margin 7.4% 7.8% 0.3% -9.4% 1.9%
Notes:
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/1)/ Assumes 5.2 million shares outstanding.
<CAPTION>
Budgeted Fiscal Year Ended January 31, 1999
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Q1 Q2 Q3 Q4 Total
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Net Sales $43,814 $44,734 $40,852 $29,946 $159,346
Gross Profit 16,044 16,698 16,081 11,786 60,609
EBITDA 6,977 7,299 6,696 2,886 23,858
Net Income 2,707 2,949 2,636 361 8,653
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EPS/(1)/ $0.50 $0.55 $0.49 $0.07 $ 1.60
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Gross margin 36.6% 37.3% 39.4% 39.4% 38.0%
EBITDA Margin 15.9% 16.3% 16.4% 9.6% 15.0%
Net Margin 6.2% 6.6% 6.5% 1.2% 5.4%
Comparison to 1998
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Sales Increase 38.2% 38.5% 34.2% 5.9% 29.8%
Gross Profit Increase 35.6% 35.4% 46.8% 19.2% 34.7%
EBITDA Increase 42.7% 39.8% NMF NMF 128.4%
Net Income Increase 15.5% 16.8% NMF NMF 279.2%
</TABLE>
Notes:
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/1)/ Assumes 5.4 million shares outstanding.
[LOGO OF GLOBAL MOTORSPORT GROUP, INC.]
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COMPARABLE PUBLIC COMPANIES
<TABLE>
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(Amounts in millions, except per share amounts)
MARKET VALUATION
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PRICE MARKET FY LTM EQUITY VALUE MULTIPLES
---------------------------------------------------
TICKER COMPANY NAME 4/9/98 CAP. DATE DATE XLTM(1) FY98 FY99 X BOOK
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CATALOG
BYL BRYLANE INC $58.813 $1,021 1/97 10/97 25.6X 20.9X 18.0X 7.4X
CWTR COLDWATER CREEK INC $20.375 $206 2/97 11/97 23.4X 18.5X 15.4X 4.7X
LE LANDS END INC $37.313 $1,158 1/97 10/97 22.3X 20.1X 17.7X 5.5X
LVC LILLIAN VERNON CORP $18.188 $171 2/97 11/97 18.9X 17.0X 13.9X 1.5X
DISTRIBUTION
GPC GENUINE PARTS CO $37.188 $6,649 12/97 12/97 19.6X 18.1X 16.7X 3.6X
GWW GRAINGER (W W)INC $102.750 $5,017 12/97 12/97 22.6X 20.1X 17.9X 3.9X
HERB HERBALIFE INTL INC -CLA $24.688 $718 12/97 12/97 13.6X 12.5X 10.9X 4.6X
PDCO PATTERSON DENTAL CO $30.750 $1,023 4/97 1/98 26.4X 25.0X 20.9X 5.2X
HSIC SCHEIN HENRY INC $42.000 $1,484 12/96 12/97 47.2X 28.6X 22.5X 3.6X
RECREATION/OTHER
BC BRUNSWICK CORP $33.563 $3,339 12/96 12/97 15.5X 13.9X 12.2X 2.5X
ELY CALLAWAY GOLF CO $27.375 $2,044 12/96 12/97 14.0X 13.8X 11.7X 4.2X
EDEL EDELBROCK CORP $18.750 $98 6/97 12/97 17.4X 12.8X 10.3X 1.7X
RAWL RAWLINGS SPORTING GOODS INC $14.875 $116 8/97 11/97 23.6X 17.7X 14.9X 2.8X
MOTORCYCLES
HDI HARLEY DAVIDSON INC $31.000 $4,710 12/96 12/97 27.4X 23.5X 19.9X 5.7X
----------------------------------------------
AVERAGE: $1,983 22.7X 18.8X 15.9X 4.1X
MEDIAN: $1,090 22.5X 18.3X 16.1X 4.1X
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CSTM GLOBAL MOTORSPORT GROUP INC-
CLEARY GULL (7) $18.000 $97 1/97 1/98 19.1X 11.3X 9.7X 1.6X
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</TABLE>
<TABLE>
<CAPTION>
MARKET VALUATION
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ENTERPRISE VALUE MULTIPLES EPS PEG
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TICKER COMPANY NAME X EBIT (3) EBITDA (3) X SALES (3) GROWTH (4) RATIO (5)
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<S> <C> <C> <C> <C> <C> <C>
CATALOG
BYL BRYLANE INC 23.7X 17.7X 1.13X 16.4% 127.9%
CWTR COLDWATER CREEK INC 12.3X 10.2X 0.95X 20.0% 92.6%
LE LANDS END INC 13.5X 11.6X 1.05X 13.4% 149.3%
LVC LILLIAN VERNON CORP 12.7X 9.4X 0.68X 22.4X 75.8X
DISTRIBUTION
GPC GENUINE PARTS CO 12.1X 10.9X 1.14X 8.3% 218.8%
GWW GRAINGER (W W)INC 13.0X 10.8X 1.24X 12.5% 160.5%
HERB HERBALIFE INTL INC -CLA 7.0X 6.2X 0.77X 15.2% 82.3%
PDCO PATTERSON DENTAL CO 16.4X 14.7X 1.36X 19.5% 128.1%
HSIC SCHEIN HENRY INC 25.5X 20.7X 1.05X 27.2% 105.0%
RECREATION/OTHER
BC BRUNSWICK CORP 10.9X 7.6X 1.10X 14.0% 98.7%
ELY CALLAWAY GOLF CO 9.1X 8.4X 2.39X NA 76.0%
EDEL EDELBROCK CORP 9.2X 6.7X 1.08X 24.7% 52.1%
RAWL RAWLINGS SPORTING GOODS INC 15.7X 14.0X 1.15X 19.0% 93.0%
MOTORCYCLES
HDI HARLEY DAVIDSON INC 18.3X 14.5X 2.80X 18.2% 129.2%
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14.2X 11.7X 1.28X 17.8% 113.5%
12.9X 10.9X 1.11X 18.2% 101.9%
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CSTM GLOBAL MOTORSPORT GROUP INC-
CLEARY GULL (7) 8.6X 7.0X 1.04X 15.6% 72.0%
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</TABLE>
NOTES:
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(1) Latest twelve months (LTM) primary EPS, excluding extraordinary items and
discontinued operations.
(2) Based on I/B/E/S and Zacks Investment Research Reports.
(3) Numerator includes market value of equity plus most recent reported total
debt minus cash.
(4) Equals estimated EPS growth from FY97 to FY98.
(5) Equal FY97 P/E ratio divided by (EPS growth multiplied by 100).
(6) LTM sales, EBIT, EBITDA and the balance sheet has been adjusted for the
acquisition of Chrome Specialties.
(7) EBIT, EBITDA and Sales multiples are management's 1999 estimates.
SOURCE: Factset Data Systems 4/16/98
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[Logo of Global Motorsport Group, Inc.]
7
<PAGE>
CSTM STOCK STILL INEXPENSIVE
[Forward P/E graph reflecting Rolling 4-Quarter from 30-Oct-92 to 20-Mar-98 with
5-year Average of 14.7x]
. $18.00 represents 12x the 1998 estimate of $1.60
. 14.7x forward P/E implies $22.00 near term trading value
[Logo of Global Motorsport Group, Inc.]
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<PAGE>
NEAR-TERM EARNINGS POWER OF $1.85-$2.25/SHARE
<TABLE>
<CAPTION>
FISCAL 2000 EARNINGS POWER/(1)/
($ Thousands) GROSS MARGIN
--------------------------------
INCOME STATEMENT SUMMARY 36.0% 38.0% 40.0%
<S> <C> <C> <C>
Net Sales $175,000 $175,000 $175,000
Gross Profit $63,000 $66,500 $70,000
EBITDA $22,750 $26,250 $29,750
Net Income $7,969 $10,069 $12,169
Free Cash Flow $8,991 $11,091 $13,191
Shares Outstanding 5,377 5,377 5,377
Earnings Per Share $1.48 $1.87 $2.26
SELECTED FINANCIAL INFORMAITON
Gross Margin 36.00% 38.00% 40.00%
EBITDA Margin 13.00% 15.00% 17.00%
Net Margin 4.55% 5.75% 6.95%
</TABLE>
NOTES
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/(1)/ Assumes 10% sales growth, flat SG&A expense, $3.5 million capital
expenditures and various gross margin assumptions.
[Logo of Global Motorsport Group, Inc.]
9
<PAGE>
Global Motorsport Group, Inc., the members of its Board of Directors, and
certain other employees of the Company may be deemed to be participants in the
solicitation of proxies, as such terms are defined in the rules of the
Securities and Exchange Commission. The Company's Board of Directors consists of
the following persons: Joseph Piazza, President and Chief Executive Officer of
the Company, James J. Kelly, Executive Vice President, Finance, Chief Financial
Officer and Secretary of the Company, Joseph F. Keenan, Chairman of the Board
and a private attorney, and Lionel M. Allan, President of Allan Advisors, Inc.,
a legal consulting firm. The Board currently beneficially owns in the aggregate
approximately 4.7% of the Company's common stock.
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