Bad Boy Enterprises gets good news from IRS

By Kevin Cooper (Contact) | The Natchez Democrat

Published Saturday, November 7, 2009

NATCHEZ — Receiving a letter from the Internal Revenue Service is rarely greeted as a good thing.

But for Bad Boy Enterprises, the Natchez manufacturer of all-electric, all-terrain vehicles, an IRS letter was Christmas-come-early — and it wasn’t the only surprise they’ve received in the last week or so.

The IRS just announced that three Bad Boy Buggy models qualify for a $5,590 tax credit.

Each eligible buggy is a street legal, low-speed vehicle model.

Such a tax credit signals a huge new market for Bad Boy, said CEO John Skrabo.

“We’re capitalizing on the IRS certification,” he said. “We’ll start manufacturing those next week. We’ll go into full production.”

In addition to the federal tax credit, Bad Boy also was just approved to meet the Oklahoma state tax credit, too. Oklahoma’s tax credit equals 50 percent of the purchase price. Mississippi has no such state tax credit, Skrabo said.

In addition to the good news from the IRS, Bad Boy also received good news from Bass Pro Shops. The national outdoor retailer entered into a five-store test with Bad Boy in August.

“The test was very successful,” Skrabo said last week. “I went up there on Wednesday to meet with Bass Pro and they want to roll out to an additional 15 stores in the next 90 days.

“Bass Pro is one of the premier brands in terms of sporting goods retailers,” he said. “For Bass Pro to select Bad Boy Buggies as it’s only all-electric all terrain vehicle, it’s really great for us.”

Skrabo said the company is also in negotiations with Cabela’s, another national outdoor retailer, including sending one of the new Bad Boy Buggy XT models to Cabela’s for testing.

“It performed flawlessly for the Cabela’s people,” Skrabo said.

The federal tax certification and the expanded distribution through the Bass Pro Shops partnership will give Bad Boy Enterprises a boost in sales, Skrabo said.

“It looks like our new projection is for an additional $3 million in business,” he said. “Our new project for this year is right at $20 million in revenue.”

The increase in anticipated sales means an increase in production, Skrabo said.

“We have orders for nearly 1,000 vehicles,” he said. “Now it’s time to deliver.

“It looks like we may have to hire some additional assembly line workers. We may have to add a second shift or a third assembly line.”

In addition to the sales activity, Skrabo said the work to repair an issue with older buggies that were part of a voluntary recall last month is going well.

“We’re getting through the recall just fine,” he said. “We have all the kits out to all the dealers. It’s a free repair, shouldn’t take more than an hour.”

The recall was to repair an issue that caused a few of the buggies to accelerate unexpectedly.

“In the original recall, we had a software patch which was about 90 percent successful,” he said. “And we wanted to make sure we fixed the problem to 100 percent success rate.”

Skrabo said their engineers achieved that with the addition of a Zener diode, which is the ultimate fix that is being done to the recalled buggies.