Boyds Wheels Stock Rolls to 2nd Offering
In an unusual move, custom auto and motorcycle parts maker Boyds Wheels said Monday that it plans to issue a secondary offering of 1 million shares less than a year after going public.
The quick return to the market apparently has been prompted by a 70% increase in the stock’s price and the desire of some of Boyds’ early investors to realize a profit.
The Stanton-based company, started by renowned hot rod builder Boyd Coddington in 1988 to make custom wheels for the high-priced cars built by his privately owned Hot Rods by Boyd, said it will sell 750,000 of the shares. The remaining 250,000 shares will be sold by investors who have not yet been identified.
At today’s prices, the new stock sale would raise about $7.5 million for the company and $2.5 million for the private investors.
A secondary offering within a year of a company’s initial offering is uncommon on the Nasdaq Stock Market, where Boyds Wheels trades. “We see maybe two or three of these a year, out of 5,200 companies” Nasdaq spokesman Stephan Beauchesne said.
But when a stock is hot and a company is looking for more capital, it’s an inexpensive way to raise the needed funding, analysts say. There are no banks to fool with, no interest to pay, no debt to carry on the books.
Coddington has capitalized on the name recognition his hot rods have garnered. He has signed a number of marketing agreements that put the Boyds name on everything from a line of enamel paints for plastic models to the annual release by collectibles maker Franklin Mint of a die-cast model of a Boyds-built hot rod.
Under an agreement with B.F. Goodrich, Boyds custom wheels are to be used by Goodrich in all in-store and auto show displays of Goodrich tires.
Boyds went public in September with an offering of 1.25 million shares priced at $6.25 each. The stock closed Monday at $10.125, down 87.5 cents.
It can take two to six weeks for the prospectus to be cleared by the Securities and Exchange Commission and the shares to be marketed. Boyds Wheels earned $947,000 in 1995, a 40% gain, as sales rose 47% to $17.8 million. Last month, the company posted record first-quarter profit of $360,000, more than double its profit for the first quarter last year, on sales of $5.3 million.
In addition to its aluminum wheels for the specialty automotive and motorcycle aftermarkets, Boyds Wheels markets custom aluminum steering wheels, a line of car care products and a number of machined aluminum customizing parts for Harley-Davidson motorcycles.
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Hot Wheels
Stanton-based Boyds Wheels’ stock debuted on Nasdaq in September at $6.25 a share, but has since vaulted to more than $10. Monthly closing prices:
Monday’s close: $10.13
Source: Dow Jones Information Services
