Element 21 Golf Company (OTCBB:ETGF - News) ("Element 21"), the leader in applications of high tech materials in the sports industry announced today record results for its fiscal 2010 second quarter ended December 31, 2009.
The Company generated record revenue of $902,000 in its fiscal 2010 second quarter, an increase of 52% compared to revenue of $431,000 in the same period in fiscal 2009. The increase in revenue was mainly attributable to a ramp in sales of the Company's Carrrot Stix brand of fishing equipment. Management focused its efforts on enlarging its distribution channel for Carrot Stix through a number of larger chain store retailers and anticipates a continued expansion throughout fiscal 2010. Gross margins also improved in the quarter to 51% as compared to 34%, further demonstrating the success of its distribution strategy.
During the first six months of fiscal 2010 the Company also moved to broaden the Company's product offerings beyond the use of Scandium in sports applications such as golf and fishing. Toward that end management entered into negotiations and signed an exclusive agreement in January of 2010 for the licensing and distribution of Zeroloft Aspen Aerogels(TM) Insulation for sports applications including apparel and footwear. Management anticipates that this agreement which has enabled the Company to establish product relationships with companies like Hanesbrands, Camelbak and Russell Outdoors, should lead to a significant acceleration in revenue growth in coming quarters as products are launched using Zeroloft and more products are developed in conjunction with its growing list of OEM partners.
Commenting on the results for the quarter, Dr. Natalya Hearn, President and CEO of Element 21 stated, "The strong growth in revenue in the quarter demonstrates that our strategy of distributing our Carrot Stix products through larger chain store retailers is becoming effective and we anticipate a continued ramp in sales as this roll out continues. Our recent participation in the Bass Master Classic showed strong consumer recognition of the Carrrot Stix brand as it continues to grow in popularity. We are currently expanding our distribution channels in two of the largest markets -- Texas and Florida and are confident that we are heading into a record sales year for Carrot Stix. Furthermore, with the addition of Zeroloft, we believe our sales expansion will accelerate significantly as we enter this vast and growing market. Our current partners spend hundreds of millions of dollars each year on insulation applications and we are excited to work with them to develop innovative solutions to their product needs. We are more confident than ever that our company is positioned for an extended period of rapid growth as we work toward our goal of reaching profitability for the benefit of our shareholders."
The Form 10-Q was filed with the SEC on February 12, 2010 and contains the details of the Q2 results.
About Element 21
Element 21 (www.e21sports.com) is a leader in the application of high tech materials in the sports industry including advanced Scandium Alloy golf products, bio-fiber fishing equipment and Zeroloft Aerogel insulation for apparel and footwear. New materials applications developed by Element 21 are incorporated by manufacturers and OEM into their product lines including Element 21 Sports own line of Scandium Sc TM golf and Carrot Stix TM fishing equipment (www.carrotstix.com) .
Element 21 has developed proprietary Scandium Alloys, bio-fiber composites and ZeroLoft insulation manufacturing paths and product engineering for various sports, apparel and footwear applications. Element 21 secured international recognition by winning several top honors at shows, and recording wins for professional athletes using equipment manufactured by Element 21 or incorporating Element 21 materials.
Forward-Looking Statements
Certain statements in this press release may constitute "forward looking statements" that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions or future events. You should not place undue reliance on these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission. We undertake no obligation to publicly release revisions to these forward-looking statements to reflect future events or circumstances or reflect the occurrence of unanticipated events.
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