Shareholder Statement
MBA Holdings' traditional and ongoing business is the marketing of vehicle service contracts and mechanical breakdown protection for automobiles and recreational vehicles for large insurance companies and adjudicates and pays all claims associated with these policies. MBA is also a marketer and administrator for insurance firms like Old Republic, Fireman's Fund, Kemper, Heritage and Allstate. Plans to expand the market for MBA warranty products include current negotiations to offer MBA warranties as promotional incentives to the hundreds of thousands of monthly oil change and lube customers of national auto service centers and chains, auto auctions and direct sales to consumers.
MBA's experience in the insurance field plus the company's existing operations infrastructure have provided the network and tools to build the NMDA rapidly from its formation in early Fall 2004. Partners and program members of the NMDA already include American Modern, Geico, Aon, Aegon, Zurich, the Van Tuyl Group and many additional service providers.
Current programs offered include consumer financing, motorcycle warranties, liability and GAP insurance, F&I training, the NMDA roadside assistance motor club, GPS motorcycle tracking systems, credit card processing, human resources and payroll Services.
Pending programs include dealer wholesale floor planning and financing, garage/open lot liability insurance, group health and life insurance, wholesale parts volume discounts and internet help wanted employment listings for the motorcycle industry. The NMDA's website is being expanded to service association members with plans for a dual internet consumer gateway to market NMDA programs and partners to the public. Companies like Universal Underwriters, who is a founding member of the NMDA provide Garage/Open Lot Liability Insurance.
Two primary NMDA programs are motorcycle leasing and rentals. The NMDA has partnered with leasing companies to market motorcycle leasing. With a higher resale value after lease expiration, motorcycles represent a more lucrative market opportunity than the thin margins currently found in auto leasing. Leasing is a highly undeveloped area in the motorcycle industry, unlike auto leasing, and until now has not had the backing of a major company on a national scale. The NMDA believes the opportunities to grow their leasing program are considerable.
Motorcycle rentals is a core program for MBA and the NMDA. The growth and revenue opportunities for motorcycle rentals are considerable and largely untapped. MBA owner of Blue Sky Motorcycle Rentals, Street Eagle, Worldwide and Rent 2 Ride Motorcycle Rentals rapidly expanding motorcycle rental license chain adding new rental locations every month. The NMDA is also developing a parallel rental program in the Rent 2 Ride program to service existing dealers wishing to convert existing bikes or lease fleet bikes for a rental program. We have a licensee that plan to open 12 new stores in Florida, expansion into the Florida Keys by another Licensee and Deals going in Texas, California, Illinois, Iowa, and etc.
Through its Worldwide Motorcycle Rentals, the NMDA has developed a proprietary motorcycle rental software program which is soon to be updated to a fully modernized web based reservation system designed to serve the all of the rental programs and rent all forms of sports and recreational vehicles online. Most insurance carriers have been unwilling to offer the rental insurance coverage required for this important segment of the motorcycle industry. The NMDA has instituted the compliance controls required for the participation of a major insurer and through their partnership with American Modern Home Insurance Company are now able to deliver to motorcycle dealers a viable and insurable rental program. MBA and the NMDA aim to become the market leader in motorcycle rentals. NMDA latest deal with Google to deliver motorcycle reservations to our licensees has put Street Eagle Motorcycle Rentals at the top of the list. Google: Motorcycle Rentals, Harley Rentals, Harley Davidson Rental, Motorcycle Rental.
The NMDA is actively developing comprehensive inventory management opportunities for motorcycle dealers via partnership with a growing motorcycle dealer internet wholesale marketplace and vehicle auctioneers, such as "Go Dealer to Dealer". The NMDA is establishing itself as the primary coordinator of and inventory supplier for motorcycle auction sales with major vehicle auction houses. Motorcycle auction sales are growing and the NMDA is already delivering to auction dealer surplus bikes while successfully building new sales channels for American motorcycle manufacturers.
The NMDA business model is built on growing diverse and recurring revenue streams derived from fees, partnership program commissions and primary vendor revenues through businesses such as motorcycle rentals. The association is on target to reach the first 1,000 dealership association membership mark in the first half of 2005 which will further maximize the NMDA's ability to leverage wholesale pricing advantages for association members. The projection is to achieve a large number of new members by the end of 2005 with further membership growth in 2006.
With approximately 14,000 dealerships and affiliated companies in North America and no prior motorcycle association organized to effectively serve this constituency with a full slate of commercial services, the NMDA has positioned itself to become a motorcycle industry leader by filling this market void. The motorcycle industry is positioned for significant additional growth with baby boomers purchasing motorcycles in record numbers and gasoline prices ensuring the future economic viability of motorcycle usage. The motorcycle industry and its dealership network had not previously been serviced to the same extent as the matured automobile industry and provides superior sector growth opportunities for the NMDA.
MBA is ready for rapid top line growth and the reasonable expectation of achieving profitability and growth in 2006. The company is free of any equity financing relationships and expects to fuel its expansion primarily through anticipated 2006 cash flow. The company intends to only use shares for expansion capitalization judiciously and thus minimize the dilution of its current share count. There is reasonable expectation that MBA Holdings and its NMDA subsidiary will produce significant membership and revenue growth in 2006.