Element 21 Golf Company reported revenues grew 52% in its second quarter ended Dec. 31, to $902,000 from $431,000. The increase in revenue was mainly attributable to a ramp in sales of the company’s Carrrot Stix brand of fishing equipment.
The company said 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 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.”
