PowerSports Business

April 3, 2017

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FINANCIAL Company updates 2017 offerings BY KATE SWANSON ASSISTANT EDITOR Western Service Contract, fueled by McGraw Powersports, has big plans for the rest of 2017. For nearly 40 years the company has provided extended protection for powersports products. This year, Western Service Contract has set goals to grow the number of states under its coverage, promises new product and offers an online platform to better serve its dealers. In the past 12 months, the company has undergone changes to its back-end system to help streamline the process of submitting and approving claims from dealers. "We under- went this entire trans- formation with this new system. The goal is to provide the dealers with just the best ease of use experience that they can have," said Kyle Phelps, director of marketing for The McGraw Group of Affiliated Companies. The new platform allows for claims to be instantaneously submit- ted to Western Service Contract once they are filed, so payment can be made more quickly. "Within this product, we can look at the claim, approve it and have payment made right then and there through the system to the dealer. You could have one-day resolution from submittal of a claim to payment back to the dealership," Phelps said. The platform is fully online and cloud- based. Phelps said that the company commu- nicated with dealers during the development process of the platform: "What we try to do is use the input from the dealers to make some- thing and tailor it to what they need. That was the focus of this platform. We really wanted to be this one-stop shop for dealers so they didn't have to go to different systems or places." While part of the platform is already acces- sible, Phelps says the entire platform is set to launch through Western Service Contract in June. Through beta testing with its dealers, the company has been able to gain insight into what its dealers are looking for and how to best suit their needs. "With this new platform and this new technology, it really allows us to make changes to our products much more quickly," Phelps said. In addition to the online platform, Western Service Contract added three new states at the end of March: Washington, New Mexico and Oklahoma. "Our goal by the end of 2017 is to have a 50-state footprint," said Phelps. "We really want to be able to have products and ser- vices in all 50 states, so that we can get the deal- ers into this new system and writing contracts on all their powersports units whatever state they may be in." With the addition of those three states, the company now covers 48 of the 50, with only Florida and Louisiana remaining. Phelps said the company is currently in the process of working with Florida and is hopeful that Loui- siana will follow shortly thereafter. From a product standpoint, Western Ser- vice Contract also launched its Polaris Sling- shot Priority Maintenance Program in 2017. The recipient of a 2017 Nifty 50 award, the pro- gram was developed using input from dealers who carry the Polaris Slingshot. The program is a way for dealerships to increase their deal prof- itability while also providing their customers with a value that locks in current maintenance costs. In addition, Western Service Contract does not cap dealer markup so the profit margin is variable. "We sat down with dealerships and created this product with the dealers," said Phelps. "We wanted to tailor the coverage and the rates to fit exactly what they are looking for. When they sold the unit, they felt like there was a gap in what they could provide the end customer." "We are, at the end of the day, powers- ports enthusiasts. We're consumers of the products that dealers sell. We're continuing to evolve and innovate and we're listening," said Phelps. PSB 10 • April 3, 2017 • Powersports Business www.PowersportsBusiness.com Maintaining protection through innovation STOCK MARKET WATCH Stock Price Percent Company Ticker 3/10/17 Change Harley-Davidson, Inc. HOG $60.05 4.3% Universal Technical Institute UTI $3.46 2.4% ARI Network Services, Inc. ARIS $5.24 2.2% Bridgestone Corp. ADR BRDCY $20.43 1.9% Polaris Industries, Inc. PII $90.20 1.8% MarineMax, Inc. HZO $22.35 -4.3% Dover Corporation DOV $76.81 -5.1% Intl. Speedway Corp. Cl. A ISCA $36.25 -5.7% Speedway Motorsports, Inc. TRK $18.87 -13.8% Spy Inc. XSPY $0.05 -16.7% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 3/10/17 from 2/22 % Change Powersports Business Index 267.171 2.82 1.07% Dow Jones Index 181.811 1.32 0.73% S&P 500 Index 161.484 0.80 0.50% Source: Wells Fargo Securities LLC 0 50 100 150 200 250 300 7/22/16 8/12/16 9/9/16 10/14/16 11/11/16 12/2/16 12/30/16 1/20/17 2/24/17 3/10/17 PSB INDEXED DOW JONES INDEXED S&P 500 INDEXED STOCK MARKET ACTIVITY DEALER FINANCIAL SNAPSHOT FEBRUARY 2017 Same Stores Sales for 1,628 of CDK Global Recre- ation dealers were up 1.2 percent overall in February 2017, in comparison to the same period in 2016. Parts sales saw the largest increase, up 17.7 percent nationwide. Both the Midwest and the Northeast increased in all four categories, with the Midwest up 5.3 percent overall and the Northeast growing 12.1 percent overall. The Northwest had the biggest decline in overall sales, down 9.2 percent. PARTS SALES In parts, 916 dealers were up, while 712 were down. SERVICE SALES 762 dealers were up in service, and 810 were down. MAJOR UNIT SALES Major unit sales saw 671 dealers up and 711 down. NORTHWEST 8.4% Parts Department -13.3% Service Department -12.0% Major Units -9.2% Overall MIDWEST 21.2% Parts Department 5.3% Service Department 3.3% Major Units 5.3% Overall NORTHEAST 29.9% Parts Department 0.4% Service Department 10.4% Major Units 12.1% Overall SOUTH 21.8% Parts Department -3.8% Service Department 0.0% Major Units 1.7% Overall WEST 7.2% Parts Department -3.7% Service Department -7.4% Major Units -4.8% Overall UNITED STATES 17.7% Parts Department -2.5% Service Department -0.9% Major Units 1.2% Overall FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices KYLE PHELPS

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