TUNING UP BUSINESS PLAN; BIKER PUBLISHER RESTRUCTURED.

Byline: Deborah Adamson Staff Writer

The engine behind Easyriders Inc., a company known for its biker magazines, has been sputtering.

Since last September, the magazine publisher, retailer and restaurateur has experienced a free fall in its stock price: From a debut of $4, it is now trading in the low $1 range.

It's no surprise. In its last fiscal year, the Agoura Hills company needed red ink for $12 million or $1.04 per diluted share. The loss almost equaled sales of $13.8 million.

But Bill Prather, president and chief executive officer, said the tide is turning. In the first quarter, the company slashed net operating losses by 60 percent. The rest of the year should show further improvement, he said.

Easyrider is revving up its engines with an ambitious restructuring effort combining an expanded franchising operation, e-commerce initiatives and a play for the attention of less-hard-core bikers.

The company, which merged with two other companies last fall, has hired BSMG Worldwide to handle its public relations and corporate positioning.

``We have aggressive growth plans in place,'' Prather said.

To turn the company around, Easyrider plans to increase its 28 franchised stores to 75 by the end of next year, and it has plans to open five restaurants. It is beefing up its Web site to attract more online retail and ad business. The company reached an agreement to sell its ``Metal Hammer'' and ``Tattoo'' magazines at 7-11 convenience stores.

Last year's red ink - $7.7 million in selling, general and administrative expenses and $4.4 million in other operating expenses - was related in part to mergers. Interest expenses were $2.5 million, thanks to long-term debt of $38 million.

Indeed, the company had a cash flow problem as recently as April, according to filings with the Securities and Exchange Commission. Prather said lender restrictions disallowed getting money from the publications unit.

To raise capital, Easyrider sold common shares to the board chairman, John Martin, and major shareholder Joseph Teresi for $1.5 million each. Martin, the former chief executive for Taco Bell, paid cash while Teresi forgave debt owed by the company.

Founded in May 1998, Easyriders is the successor to the merger among Newriders, Paisano Publications and M&B Restaurants.

Paisano publishes Easyriders, Hot Rod, Tattoo and other magazines aimed at the biker and tattoo-enthusiasts markets. M&B Restaurants operates four El Paso Bar-B-Que eateries, all outside of California.

CAPTION(S):

Photo, Chart

PHOTO (Color) Bill Prather, chief executive officer of Easyriders Inc., looks for a turnaround in company stock that has raced downhill since September.

Phil McCarten/Daily News

CHART: NOT SO EASY

Shares of Agoura Hills-based Easyriders Inc have lost approximately 63% of their value since the company want public in September.

SOURCE: Wine Institute

Bradford Mar/Daily News