excerpt from video: Cant say I did the work on this, its from a post on google
CEO: Metter:
• We are really a technology company. Even though when you look at it
you believe it to be a sponge, it is a sponge in looks but it is a
delivery system in nature. Anything put into this sponge will stay in
the sponge until it is activated with water and mechanically
[squeezed]
• Look at this sponge as an alternative to bottles. Anything that is
water-based can be put into the sponge.
• Technology is called “Super Absorbent Polymer”
• Acquired the technology about 10 years ago.
• When we started the company we were involved in heavy-duty focus
groups, conducted by Lysol. They realized because it was a delivery
system, there is a mass appeal to the product line that could meet
many, many applications.
• Really started rolling out the company about 2 years ago. The first
quarter we did $67,000.
• We realized the auto sponge was the fastest way to get into the
market place.
• We are not a 1-product company. We have right now (even though we
haven’t introduced them all) we have in excess of 25 different SKUs.
• We’ve taken advantage of the tremendous opportunities in sports
marketing and advertising. We’ve been able to build our brand.
• We want to be a household name and not just with our products. There
will be SpongeTech mops, brooms, carpet cleaners, floor cleaning
products.
• We want to brand and develop the name SpongeTech and enhance it with
our own proprietary products.
• Our revenue has taken off and we owe that to our aggressive
marketing campaign, which we can do because of our large gross margins
and our proprietary technology.
• We’re not a baby-stage company anymore. Our 3rd full year as a
publicly traded company we told Wall St. we would do $40 million.
• [Slide]: U.S. Retail Sales: 28%, Worldwide Sales: 72%. Goals:
Increase U.S. market share, Continue to grow international business.
• We have very, very large earnings because we are proprietary,
because we are unique, because it is a technology that cannot be
duplicated.
• Look at this as a bottle. This replaces bottles.
• We started selling the auto products first overseas to South
America, Dubai to help roll out the product.
• Any place you see us associated with a sports team, rest assured our
products are in stores in that marketplace.
• We are now in CVS, Walgreen’s, Sav-ons. We’re talking with some
major, major retailers.
• By the end of the summer we’ll be in over 100,000 doors.
• The product, most importantly, is exceptional.
• The auto sponge claims to be able to be used 8 times. But frankly
you can get 10 or 12 washes out of it.
• The auto sponge can hold 32 oz. of fluid.
• If the sales get exponentially larger, the profit margins will
follow along.
• We are positioned correctly to buy right. We have a nice clean
balance sheet.
• [Slide]: U.S. Retailers: WalMart, CVS, Costco, Walgreens, SuperValu,
Ace Hardware, HSN, Kroger, Basha’s
• Just signed our first order with Costco that we will be rolling out
now.
• We’ve done extremely well with Ace Hardware. They continue to
reorder and reorder.
• We have not had to pay for shelving. We’ve been able to put in free-
standing displays.
• In about 2 weeks we’re rolling out another national product. We’ve
signed a deal with Nickolodeon (Viacom). They were very, very tough on
us and we’ve met their standards. This product is entirely made in
America.
• SpongeBob product gets between 250-300 squeezes. Filled with
children’s soap that will not irritate their eyes.
• Viacom believes in our first full year of distribution we’ll do $20
million on SpongeBob.
• We’ve had conversations at licensing show with some major players in
“characters” and I hope we will have some things to say soon on that.
• We have a license with MGM Entertainment for Pink Panther. We have
about a year to develop that and we will.
• We have our own children’s products called Puddle Pals. You’ll see
these in .99 stores, Big Lots, This is another very profitable item
for us.
• At Westminster Dog show, we introduced Uncle Norman’s Pet Sponge”.
Product is shampoo, conditioner, detangler. Product is now in PetSmart
and Pet Co.
• Will continue to develop more brands under the name “Uncle Norman’s
Pet Products”
COO: Moskowitz:
• Last year we raise shares to 1.2 billion
• We started buying back shares
• We’re trading right now at about 9x earnings
• 69 million market cap
• About a month ago we were only about a 10 million market cap
• Last year we did $5.2 million.
• This year we’ll do over $40 million.
• We should keep up that same growth pace over the next 3 to 5 years
as the products start coming out.
• We have about 25 products now. We should have about 100 by the end
of 2011
• Better products are still yet to come.
• We wanted to test the products on cars and dogs before we started
using it on human beings and in the house.
• Now we can add to products like glass cleaners, carpet cleaners,
cleaning dishes, cleaning tables, mopping the floors. Those are where
the big dollars are in the products and that is where our biggest
gross profit margins are going to be.
• Even after advertising, we’re still left with about 20% gross
margins
• 95% of everything is made domestically. Remainder is made in China.
• We have 3 warehouses on the east coast handling production.
• We have patents with Dicon and other companies
• Polymer comes from Dow Chemical. Foam comes from Corning. Chemicals
come from Rochester Chemicals.
• Shipments to plants are unmarked. Mixing is done based on a formula
provided by SpongeTech.
• Company has over a few million in cash. No debt at all.
• Shareholder equity is in excess of $20 million and growing every
day.
CEO: Metter:
• Kitchen sponges typically absorb bacteria, get moldy and smelly.
SpongeTech sponges will never smell, will never, ever absorb the dirt.
It will always stay clean.
• Product can be made as small as 1/16 of an inch, which will give us
opportunities in the medical industry and in in nursing homes.
• We spend about half a million dollars a year in research. We’re
working on suntan lotions and sunblocks.
• The grand slam is in the kitchen. The focus groups proved that
people who work in the kitchen (instutitionally or at home) like the
product because you cannot get dirt in the sponge.
• If we were able to put a major chemical (like a disinfectant) in
there and market it under someone else’s name – that is where the
grand slam is.
• We have signed non disclosures and we are working with one company
that is the biggest in the world.
• We have an appointment in a couple of weeks to meet with another
NYSE company.
• There are probably 12 to 15 patents that surround the product. Some
patents are pending. Some are issued.
• 35 worldwide trademarks. Patents filed in Europe and China – total
about 26 countries.
• Don’t lose sight that this is a worldwide product.
• If you look at Proctor & Gamble, right now we’re a pimple on their
rear end. Some day we won’t be. These big companies – they do not
develop new products and technology. They just ultimately buy new
product and companies.
• [Jack/Marketing?]: In 23 major league ball parks
• [Jack/Marketing?]: Spending over $300k a week in television and
direct response advertising.
• Steven and I believe this is a life changer. OxiClean had 3
products. They were sold for $325 million.
• The big companies want technology. They want uniqueness.
• We are really focused on building this over the next 3-5 years to a
$500 billion company. We believe we can do it. We believe there is
SpongeTech Europe in our future. We believe we have the capability,
capacity and the smarts to make it happen.
• The building of the brand SpongeTech is much greater than the
product distribution, it’s the licensing of the name.
• [Question]: Is the Costco rollout regional or nationwide? [Answer]:
Costco rollout are going into their “A” stores. Costco will not allow
SpongeTech to release the number of stores where products will be
distributed.
• In America you have “push through marketing” you have to drive it
home, they won’t come to you. That’s how you get into the WalMarts and
the K-Marts.
• [Question]: Don’t you have to be @ $4 minimum stock price to apply
to NASDAQ? [Answer]: Yes. We have a meeting Thursday with NASDAQ. As
you know , NASDAQ has lost 700 companies this year, alone. We have 3
of the 4 qualifications. We have the asset base, we have the
shareholder base, we have the profitability base.
• [Question]: Would you entertain a 1:100 reverse split to get listed?
[Answer]: Well, we’ll deal with it when…Right now we’re going to go
there on the basis of what the stock is going to grow to. The time has
come for us to move off the Bulletin Board.
• [Question]: Do you manufacture or outsource these products?
[Answer]: We have exclusive manufacturers. We have very close
relationships. Some of the factories, we are the production. We have 4
factories in this country that we outsource to. We have the capacity
with these factories to do 100+ million sponges a year and that’s only
on one shift. Some of the factories are thinking about going 24/7. We
have the capacity.
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