Thursday, December 4, 2003

Escort finds profit in new product

By Mike Boyer
The Cincinnati Enquirer

[IMAGE] Greg Blair, president of Escort Inc., in West Chester, with the company's Passport G-Timer.
(Gary Landers photo)
WEST CHESTER - Escort Inc. is proving there's life after bankruptcy.

Six years after being created from the bankruptcy remnants of Cincinnati Microwave Inc., the radar detector-maker is thriving with new ownership and a new product line.

Earlier this year, Escort, which employs 70 here, launched its Passport G-timer line of vehicle performance computers, its first diversification away from its radar detector business.

Aimed at car-buffs who like to tinker with their vehicles, the Passport G-timer, which starts at $149.95, is a self-contained unit that plugs into a lighter socket and measures a vehicle's horsepower, acceleration, cornering and braking during timed runs.

In July, American Capital Strategies Ltd., a publicly traded investment firm specializing in midsized companies, invested $42 million in Escort, buying out Chicago investor Matthew Coleman, who had acquired assets of Cincinnati Microwave in 1997 along with president Greg Blair.

Blair, a former Procter & Gamble Co. manager who joined Cincinnati Microwave in 1984, won't disclose Escort's sales. But he said the company, which has been profitable since being formed, is looking to grow.

That growth, he said, will come from expanding the market for its radar detectors, developing new products aimed at the mobile electronics market and possibly acquisitions.

With the backing of Bethesda, Md.-based American Capital, which has invested more than $800 million in a variety of midsized businesses over the last year, "our acquisition tolerance is higher and broader,'' Blair said.

"What attracted us to Escort was its market-leading brand. Its technology. They make the best radar detector in the market. And they have a good track record on revenue and profits," said Ken Jones, a principal of American Capital.

Three years ago, Escort acquired rival Beltronics, a Mississauga, Ontario, radar detector maker that was also going through bankruptcy reorganization. Both the Escort and BEL brand detectors are assembled at the Ontario plant, which employs about 170.

"Greg and his team have done an amazing job of putting the two companies together,'' said Jones. Last year, Blair was named Ernst & Young's national entrepreneur of the year.

Blair estimates Escort sells about 25 percent of the roughly 1.5 million radar detector units purchased annually. The market is down from its peak of 3 million units in the late 1980s.

The combination of higher speed limits and a federal ban on use of detectors in large trucks has hurt the market.

Premium units

Although not its biggest market, the fastest-growing part of Escort's radar detector business is premium units permanently installed by dealers and after-market shops.

Tom Olson, parts manager at Performance Lexus in the Kings Auto Mall in Deerfield Township, says his dealership does three or four installations a month.

Permanent installation in the vehicle dash can cost up to $1,800 and takes about eight hours, but makes the unit practically invisible.

The person spending $50,000 or more on a luxury vehicle like a Lexus, Porsche or Audi, typically has all the latest electronic gear, and a radar detector fits right in, Olson said.

"We have one dealer down in Florida who installs them in every car he sells," says Ron Gividen, Escort marketing manager.

Critics say radar detectors encourage speeding. But Blair says the devices allow motorists to avoid being singled out for enforcement when police are operating radar.

Performancce computers

To broaden Escort's product offerings and build on its brand name, the company began studying the market for vehicle performance computers several years ago.

Unlike radar detectors, which are typically bought by older, higher-income motorists, vehicle performance computers are aimed at car buffs who race or tinker with their vehicles and want to measure performance.

The target market for G-timers, Blair said, is typically a male under 30 with money to spend.

The devices, which measure acceleration forces through tiny solid-state sensors, are part of a broad category know as automotive performance and jewelry, items from computers to fancy exhaust pipes.

The overall category tops $1.5 billion, larger than the traditional car audio market, he said.

Blair won't discuss G-timer sales, but he said orders are growing.

"I'll tell you I'm glad we did it," he added.


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