By Maureen Flanagan
Escort Inc. designs, manufactures, and distributes radar and laser detectors that keep motorists informed about the presence of radar and laser speed guns. The company leads the market in technological advances in the field and has been issued more patents than all other radar detector manufacturers combined. Sold both domestically and internationally, the company's products outperform those of its competition and are known for their sensitivity, superior performance, and ease of use.
On July 24, 2003, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided a financing package of $42 million to Escort to recapitalize its balance sheet. Greg Blair, the company's president, will continue to lead Escort.
"American Capital is backing an industry and technology leader with strong, widely recognizable brand names," said American Capital Principal Kenneth E. Jones. "A well-established company, Escort has captured significant market share, dominating the higher end market segment, by capitalizing on its sustainable competitive advantages: superior performance, unquestionable reliability, complementary sales channels, strong patents and excellent forward looking engineering design and manufacturing capabilities. We are confident in the leadership abilities of President and CEO Greg Blair, a 2002 winner of the National Ernst & Young Entrepreneur of the Year Award. Mr. Blair has proven his ability to successfully direct a company through his expertise in sales channel management and focus on new product development and continuous technological advancement."
Escort began manufacturing radar detectors in 1977, when the company was launched as a division of Cincinnati Microwave Inc. In 1997, Blair and Matthew Coleman, a private investor, acquired the business. As President, Blair dramatically turned the company around and improved results by focusing on the highly lucrative direct response business. In January 2000, Escort acquired its top competitor, Beltronics, and the combined management team successfully integrated Beltronics' complementary line of products and sales channels with Escort's successful model.
Escort currently produces 22 radar-related products - 19 radar/laser detectors, two laser shifters and a device to measure golf club swing speed. The company also manufactures eight vehicle performance computers, which employ microelectromechanical accelerometers to measure and report acceleration, cornering and braking G-forces and time trials, including 0-60 miles per hour and quarter mile times.
The company sells its products under the Escort, Passport, Bel, Express, Solo and Vector brand names. Its products dominate the $120 to $330 retail price segment. Escort's customer is a more serious, higher income driver who demands the very best technology on the market. As the clear technology leader, the company constantly improves and upgrades its detectors to respond to technology and speed measurement changes in the marketplace. In fact, most of its current products have been introduced in the last two years.
The company maintains its competitive edge by constant product innovation - a critical focus at Escort - and by utilizing a variety of sales and distribution channels. These include direct sales, power electronics merchants such as Best Buy and Circuit City, high end boutique electronics outlets and sales to OEMs. The company also sells through distributors, reaching truck stops, 12 Volt shops, smaller automotive accessory retailers, and Internet marketers. It distributes products internationally through a few select distributors.
In addition to American Capital's financing in the July 2003 recapitalization, GE Capital Funding, a unit of GE Commercial Finance, provided a senior term loan, and Huntington National Bank provided an operating line of credit.
Escort joins American Capital's portfolio of more than 75 investments and approximately $1.8 billion in financing.
For more information about American Capital's portfolio click here.
For more information about Escort Inc., go to http://www.escortradar.com.
First introduced in the early 1960s, radar detectors are now part of the highway landscape, although far more sophisticated and technologically advanced. When Escort first entered the market in the late 1970s, it was making products that detected radar in the X and K bandwidths. In 1988, police started using Ka band radar guns, creating a new hurdle - and opportunity - for detection equipment manufacturers. In 1991, laser guns were approved for speed enforcement, and police also added super wide band Ka radar guns to their arsenal.
According to industry experts, in 2002, the radar/laser detection market accounted for more than $125 million in manufacturing sales, with almost 1.5 million units sold. The radar and laser gun detectors are seen as important adjuncts to a stable segment of motorists who want to avoid the expense and embarrassment of being singled out for additional taxation. Radar detectors are legal for use in private passenger vehicles in the US except in Virginia and the District of Columbia.
With its high-end market share, emphasis on innovation and management of complementary sales channels, Escort offers high-performance detectors that are easy to install and use and highly sensitive to all bands of radar and laser beams used by police enforcement. Most important of all, Escort's detectors keep motorists informed about what lies on the road ahead.
