Execute Sports Inc. announced several strategic initiatives for the rest of 2007 and summarized key achievements for the past 18 months including the closures of Eagle Rider clothing, Kampus wakeskates and Collective Development bags as well as office and warehouse reorganization.
Execute Sports CEO Geno Apicella stated, “The Company has made significant advancements over the past 18 months which are highlighted by the hiring of former Body Glove Director of Sales, Celeste Berouty, and contract wins with high profile clients such as Kawasaki and Big 5 Stores.”
Apicella continued, “In January, we acquired Pacific Sports Group which we thought could accelerate our growth leading into 2007 and 2008. In February, Execute Sports began publicly trading which further enhanced the spotlight on our company. In a year that found us hiring one of the best sales executive's in the business along with rep groups that would push our products domestically and internationally, we faced continued change as we witnessed two CEO's and our President resign.”
Mr. Apicella concluded, “However, with 2006 gone and 2007 in full swing, we now firmly believe that we have turned the corner and are progressing toward both stability and profitability. We are actively seeking synergistic strategic acquisition(s) that we hope will both improve top-line growth and bolster our current (product) offerings. As the company pushes forward with its aggressive near-term growth strategy, we will release relevant information regarding our advancement to shareholders, as it becomes publicly available.”
Strategic Initiatives for 2007 include:
* Enhance shareholder value and traction in the equity markets by actively seeking strategic acquisition(s), organic expansion and through collaboration with industry leading financial advisory firms capable of relaying our story to a wider selection of the global investment community; * Expand our international footprint to minimize negative financial impact felt by the seasonality of our North American watersports business; * Expand our current product line by adding new and innovative designs and potentially acquiring synergistic offerings; * Expanding our distribution channels by aggressively adding new dealers and distributors throughout the U.S. - this will include increased placement with major sporting goods retailers, catalogers, pro shops and marine dealers; * Expand our OEM/Private Label design and production; * Continue to expand our brand awareness by magazine advertising, co-op agreements with current and future customers, professional team exposure and further entertainment based product placement; and * Dedicate significant time and effort towards the in-depth due-diligence associated with identifying a strategic acquisition(s) that would both significantly accelerate our top line growth as well as add accretively to earnings. Execute will keep the investment community abreast of all developments as information becomes available.
Key changes and achievements for 2006 and the first half of 2007 include: (International growth)
* The hiring of Celeste Berouty. Ms. Berouty was instrumental in building Body Glove wetsuits to the sales giant they are today. Ms. Berouty brings 19 years of experience and is widely regarded as one of the best sales executives in the business. Since her hire, she has been named to the role of President. In Ms. Berouty's brief tenure, the fourth quarter 2006 watersports sales increased 1125% over the same period in 2005 and production levels reached all time highs for related products. * Significantly improved operational efficiencies. Gross margins for the three months ended March 31, 2007 improved 18% over the corresponding quarter in 2006. Selling, General and Administrative expenses declined $569,148 or approximately 61% during the same period of time while Net Loss from continuing operations decreased $152,419, or 19%. * Increased availability at major sporting goods stores. Execute branded products are now available at Big 5, G.I. Joe's, Boater's World, Overton's and Marine Max stores. * The launch & success of online sales. In March of 2006, Execute products hit the Internet and opened the door to widespread recognition of the brand. Execute branded products are currently available at many on-line retailers including The Sports Authority, Dick's, Sport Chalet, Modell's and Amazon.com. Furthermore, EXCS has decided to expand its online product offering during 2007 in response to strong sales achieved thus far via the web. * International distribution. Execute continued its relationship with its Japanese distributor and is currently increasing its International distribution. By year's end, Execute expects to have launched in Europe, Australia, New Zealand, Singapore and others. Continued international expansion is expected to provide an effective hedge against seasonal North American watersports sales. * The ascension of Geno Apicella to CEO. Mr. Apicella, an original founder of Execute Sports, will provide the critical stability and new direction that the company has needed. Mr. Apicella will continue in his role as head of design and production. * Reorganization of office staff and warehouse. In January of 2007, Execute closed its warehouse in San Clemente and inked a deal with DDWI of Los Angeles to warehouse, ship and receive all Execute products. In April, Execute further developed its relationship with DDWI by agreeing to create additional office staff to completely house all daily operations of the business. The move has proven beneficial already as it allowed Execute to meet ramped up demand for products such as PFDs and Rash guards during early 2007. * Increased pro shop and marine dealer sales. With the hiring of Brian Allred, Execute now has a platform for further domestic distribution into many new pro shops and marine dealers. The increase in these outlets is quickly approaching 100 dealers. * Continued OEM/Private Label design and production. Execute continued to grow its OEM division and will look forward to increasing product availability and distribution in upcoming years as 2007 OEM sales rapidly approach $1 million. * Beneficial transfer of ownership of Academy Snowboards. Execute has recently sold off the rights to the capital intensive Academy brand along with of its liabilities. This transaction will allow the company to focus solely and more efficiently on the growth of its burgeoning watersports business. * Additional closures. Execute will no longer be manufacturing Eagle Rider clothing, Kampus wakeskates or Collective Development bags. These entities were deemed too capital intensive and the lacked proper production and distribution channels to move forward in a profitable manner.
Execute Sports President Celeste Berouty commented, “With all of the changes that occurred in December and January, we are now in a place that will allow us to stabilize the business and grow our product lines. Since October, we have been able to increase orders with current customers and we continue to add new ones each week. We are looking forward to 2008 which will see us launch a completely revamped line and have the opportunities to increase our product placement with some of the major sporting goods stores in the USA.”
She added, “Our products have recently been featured on the cover of industry magazines, various television shows and on line magazines. With the addition of new team riders and airwave exposure, we expect to place our products into more media outlets for continued recognition.”