Bullhide Liner launches initial public offering
Company hopes to add 40 licensed dealers, grow revenues five-fold in 1998January 29th, 1998
Bullhide Liner Corp., a Spokane maker of a spray-on, pickup truck bed liner, is planning an aggressive expansion, fueled in part by money its attempting to raise in an initial public offering launched in December.
Ron Grossman, Bullhides president, says the company:
Hopes in the next 12 months to add 40 licensed dealersand a total of 250 over the next five yearsthat would handle its spray-on material. Bullhide now has 17 such dealers, including one in Saudi Arabia, besides its Spokane operation.
Projects a five-fold increase in revenues to $5.1 million for the 12 months ending March 31, 1999, compared with an expected $900,000 in revenues for the year ending March 31, 1998. The company expects that each new licensed dealer will add $60,000 to Bullhides revenues annually by buying materials for the spray-on liners, Grossman says. That figure is in addition to start-up purchases of equipment.
Plans to step up promotion of additional uses for the patent-pending polyurethane elastomer material with which it lines truck beds.
Expects to become profitable in its coming fiscal year. For the year ending March 31, 1998, it expects to post a loss of about $300,000.
The small company, which was incorporated in 1993, has yet to make a profit and has been in a developmental stage since its inception, Grossman says. While the companys shop operation in Spokane has turned a profit, thats not been true of the entire corporation, which is now preparing for growth, he says.
Six months ago, Bullhide set up an East Coast headquarters in Fort Lauderdale, Fla. In the last six weeks, it has expanded its staff in its Spokane corporate offices to nine people from four, not including Grossman. It probably will add two or three more employees during 1998, Grossman says.
At the first of the year, Bullhide consolidated its offices and shop here into one location at 525 N. Fancher. It previously had offices at 1000 N. Argonne and its shop at 521 N. Ella Road.
That consolidation followed the launch of its stock offering in December. The company expects to raise $775,000 through the sale. Its stock will be traded on the NASDAQ OTC Bulletin Board under the symbol BULH, Grossman says.
That money is critical to Bullhides expansion plans, he says. The company plans to use it for national marketing to attract licensed dealers.LicensingUnder its licensing agreements, the company licenses the use of its process and product, Grossman says, adding that the idea is to sell more Bullhide material. The company doesnt charge licensees franchise fees or royalties.
With 17 licensed dealers already and some 5,000 trucks now on the road with the Bullhide liner, the concept of lining a pickup bed with a spray-on material is more readily accepted now than it was when the company first went into business, Grossman says. Gradually, it becomes easier to sell it.
The company usually recommends that its licensees also sell other after-market auto accessories; a Bullhide license also can complement an existing business, such as an auto-body or repair shop, he says.
Bullhides liner, which was developed by Grossman, a polymer chemist, is created when its two liquid chemical components are joined together as theyre sprayed onto a pickup bed. The thick coating, which includes a top coat of the material thats intentionally splattered to create a non-slip surface, sets up in only a few minutes.
The material comes in eight standard colors, and four metallic colors will be introduced soon, Grossman says.
A private manufacturer in Virginia makes the chemical components on a contract basis, and Bullhide itself makes the machine used to spray on the materials. Grossman says the company began making the device about a year ago, after spending four months designing it. With its own machine, Bullhide can ensure that its product is metered and mixed correctly, he says.
In the past, when the company used machines made by other manufacturers, we had problems with consistency, he says.
Bullhides machine can be adapted to other two-product mixes, such as coatings used on parking decks and bridges, Grossman says. In addition, it can be modified so that it can spray material in different volumes.The competitionThe biggest competition for Bullhides liner are drop-in, hard plastic truck bed liners, Grossman says. Bullhide liners cost moreabout $450 on average compared with $150 to $200 for a drop-in liner. Grossman contends, however, that Bullhides product is superior to hard plastic liners in a number of ways.
Since the Bullhide liner is sprayed onto the surface, it doesnt shift and move, he says. A Bullhide liner also doesnt let in water, avoiding the rust problems sometimes associated with hard liners, he says. In addition, the Bullhide liner wont crack in the cold, and it has a non-slip surface so loads dont slide around.
We think our main markets are in the Southeast, Midwest, and Northwest, Grossman says. In regions where there isnt as much rain and humidity, the company hasnt found as much interest in its product.
Although Grossman says the pickup bed liner market is the most obvious use for Bullhides material, there are other uses. He says the company has lined horse trailers, vans, and boats with the material. It has sprayed wooden outdoor decks and interior floors with it. In Saudi Arabia, two-thirds of the licensees business is in flooring and parking applications, he says.
Kaiser Aluminum & Chemical Corp. added the material to recycling bins to provide sound-deadening qualities, Grossman says. Bullhide sprayed the stuff on bumper cars at a childrens ride at Riverfront Park to seal up the cars cracking fiberglass and also coated bathroom floors and walls at a local tavern.
Bullhide also has been asked to use the material to refurbish the sidewalk around the Tomlinson Black building at the southeast corner of First Avenue and Howard Street downtown. It plans to spray two coats of the polyurethane material in a gray color, then add aggregate, and finally spray on a thin top coat. The material will keep moisture out of the sidewalk, preventing it from breaking up, and also will keep water from dripping into storage space below the sidewalk, Grossman says.
We get some really unusual requests, he says.