TORONTO, March 4 /CNW/ -
Results of Operations as at December 31, 2007
Revenue for the quarter ended December 31, 2007 decreased by $309,613 or
47% to $356,130 compared to revenue of $665,743 in the quarter ended December
31, 2006. This result was due to the Company's measures to keep inventories of
the older version of Golf Launchpad products low in the channel in
anticipation of the release of Golf Launchpad Tour (see below). Further, as
Electric-Spin's release of Golf Launchpad Tour was anticipated, retailers
chose to keep lower inventories, in some cases resulting in out-of-stock
situations. Correspondingly, management allocated the majority of its
marketing funds for the introduction of Golf Launchpad Tour.
The Gross Margin for the current period is 30% as compared to 27% for the
comparative period after adjusting for an allowance of $187,807 for inventory
write-down taken by management for those inventory items relating to those
soon to be discontinued Golf Launchpad products. In addition, higher
manufacturing costs were incurred by the Company as customization and
refurbishment of products in the quarter ended December 31, 2007 took place at
the Company's warehouse in Canada, instead of its factory in Pakistan, where
costs are significantly lower. These higher costs are expected to continue
into the quarter ending March 31, 2008. Management on the other hand expects
the margins to improve to the 40% range and beyond with the sales of Golf
Launchpad Tour that has lower manufacturing costs compared to Golf Launchpad
Classic. These margins could improve further with the higher sales volumes
anticipated in the second half of calendar 2008.
Operating expenses increased to $331,306 from $191,982, primarily due to
the Company ramping up its operations to take advantage of significant
opportunities it sees in 2008 with the release of the next generation of Golf
The Net Loss for the quarter ended December 31, 2007 increased to
$412,750 from a loss of $14,697 in the corresponding prior quarter, primarily
due to the reasons noted above.
See the MD&A filed on SEDAR.COM for further details.
Release of Golf Launchpad Tour
In January, 2008, the Company introduced the Golf Launchpad Tour, its
next generation of home golf simulators at the Consumer Electronics Show in
Las Vegas and at the PGA Merchandising Show in Orlando. The Tour product line
was very well received by the media, retailers and distributors from North
America and from around the world. Golf Launchpad Tour is based on a brand new
hardware platform that provides multi-platform "out of the box, plug-and-play"
compatibility with PC, Mac, PlayStation 3 and XTV gaming platforms. The new
platform provides significantly enhanced processing power and features that
will increase its longevity while increasing manufacturing throughput and
reduce cost. In addition, the Company is in discussions with other first party
platform vendors to provide compatibility with their consoles. The new
platform also enables customers to purchase and download system enhancements
e.g. adding compatibility with new game software titles or adding learning
Golf Launchpad Tour also features a RealPhysics(TM) software interface
that operates over USB concurrently with legacy interfaces. This new interface
will enable software developers to create game and learning software that can
directly access the physics of the shot to greatly enhance the level of
realism of their software and more tightly integrate their software with Golf
Launchpad Tour. Several developers are working with the RealPhysics(TM)
interface for upcoming releases.
Golf Launchpad Tour also features an all-new design, making the unit more
compact, portable and aesthetically superior to its predecessors. The compact
form-factor and use of composites over steel will enable the Company to reduce
the retail price while increasing its margins.
The Company expects to start shipping Golf Launchpad Tour in March, 2008.
The Company is happy to announce the hiring of Garry Cole as its VP of
Sales. Garry comes to Electric-Spin with over two decades of sales and
marketing experience with industry leaders such as Namco-Bandai, Sharp,
Toshiba, and Activision. As Executive VP of Sales at Namco Bandai, Garry saw
the company's revenues grow from $50M to over $250M, driven by his sales
organization of 12 people.
Clas Ohlson (CLASB.ST), a premier Scandinavian retailer with over 75
stores in Sweden, Norway, Finland and the UK has decided to carry Golf
Launchpad Tour in all their stores with an opening order of 500 units. Clas
Ohlson has an annual turnover of SEK4 billion, employs 2,600 employees and has
retail and mail order/Internet operations.
Several other retailers and distributors have added the new Golf
Launchpad Tour to their product lines and as of February 29th the Company has
over 2,000 units already booked for immediate delivery with an additional
forecast of over 3,500 units over and above the booked orders.
On March 3, 2008, the Company issued 1,045,962 common shares and warrants
to purchase an additional 209,063 common shares to certain service providers
of the Company in consideration for the extinguishment of debt in the
aggregate amount of $219,652 owed by the Company to such service providers.
Each warrant will entitle the holder to purchase one common share of the
Company at an exercise price of $0.21. The warrants will have a term of two
years. On February 27, 2008, the TSXV approved this transaction. The shares
are subject to a hold period of four months plus one day. The Press Release by
the Company dated January 30, 2008 stated incorrectly that the number of
warrants were 203,063 and that they had a term of three years.
Electric-Spin Corporation, the subsidiary of Electric-Spin Ltd.
(TSX - V: ESC) is the worldwide leader in home golf simulators marketed under
its Golf Launchpad brand and carried by premier retailers in over 16 markets
worldwide. Electric-Spin designs, develops and manufactures its golf
simulators, accessories and software at its headquarters in Woodbridge,
Ontario, and at its Asian subsidiary.
For further information:
For further information: For inquiries, please contact Alnoor Ebrahim at
Electric-Spin at 1-866-571-7746 ext. 403; For more information, please visit