At present, the Company's product line focuses on vehicular cleaning uses. However, SPNG is applying its patented technology to the development of sponges for additional applications, including sponges with anti-bacterial, bath and kitchen soaps for household uses, as well as a children's bath foam sponge.
During FY 2008, SPNG reported robust growth with revenues approaching $5.5 million. The sales gain is attributable to an expanded marketing campaign, including sales from the Web site. Going forward, the Company continues to experience strong demand in the United States and abroad, and is entering FY 2009 with order backlog in a $27 million range.
A
business model capitalizing on innovative product offering
SPNG manufactures and distributes specially configured sponges containing
an outer contact layer and an inner matrix, which is loaded with formulated
soaps or soap and wax. When the sponge is applied to a surface with minimal
pressure, the soap is applied to the surface. When the sponge is not in
use, the hydrophilic matrix contains the soap and prevents leeching.
Product
characteristics drive rapid adoption
SPNG's technology offers significant cost savings to consumers since the
wash and wax are built into the sponge; the consumer doesn't need to purchase
these products separately. In addition, the Company's sponges are biodegradable,
gentle enough for all surfaces, yet tough enough to remove stubborn dirt.
SPNG's automotive/vehicle sponge was named one of the seven best new products
at the Automotive Aftermarket Product Expo in Las Vegas this year.
Robust
revenue growth evidences strong product demand
During FY 2008, SPNG reported robust sales growth
with revenue approaching $5.5 million, up from $0.06 million in FY 2007.
An expanded marketing campaign, development of sales from the Web site
and extended distribution channels fueled FY 2008 sales growth. The Company
continues to report strong interest from U.S. and international buyers
and enters FY 2009 with confirmed order backlog in a $27 million range.
The Company's primary product line has been designed for automotive/vehicle applications, including boats, airplanes, ATVs, jet skis and motorcycles. SPNG also markets Uncle Norman's™ Pet Sponge, designed for use with dogs, cats and other pets. Additional applications are in development. These include anti-bacterial, kitchen and bath cleaners and a unique foaming bath sponge for children.
During FY 2008, SPNG significantly expanded its sales and marketing, began airing a TV commercial for its auto wash & wax system, and produced a new commercial for the Pet Sponge Care Kit. The commercials are expected to run through February 2010 in all 50 U.S. states. SPNG's commercials will air on LOGO, Inspiration, Hallmark Movie Channel, Discovery Science, NBATV, ESPN University, CBS College Sports, Sports New England, Sports Mid-Atlantic, Sports South, Fox Sports Pittsburgh, Fox Sports Southwest, and other cable and satellite TV channels.
The Company has also signed advertising agreements with several magazines and retailer catalogs, including Eastwood Co Automotive, JC Whitney, Mid-America Motorworks, Publisher's Clearinghouse, Quadratec Essentials for Jeep, Speedgear, Doubleday Military Book Club, Handyman Club of America, Carol Wright, Heartland America, Overstock.com, Reiman Country Store, Seventh Avenue, Fingerhut and Cabela's Catalog. This campaign complements SPNG's ongoing radio and TV advertising on WFAN-AM Radio, SportsNet New York, BusinessTalkRadio and LifestyleTalkRadio.
Other promotional agreements
include sponsorship by the New York Yankees and New York Mets and promotions
on QVC's "Keep It Clean" broadcast and on The Price is Right
Game Show Prime Time Specials.
Large purchase orders
from major U.S. and Latin America retailers
The Company is in discussions with several major retailers who are evaluating
and test marketing its products. SPNG is also negotiating with a major
supplier of brand name household cleaning products.
The Company has secured several orders, which together exceed $11 million, from well-known chain stores. SPNG received initial orders totaling $4.95 million from Winn Dixie, Ollie's, and Price Chopper, as well as Wal-Mart Mexico and Wal-Mart South America. The second order from Wal-Mart South America totaled $2.25 million and is scheduled for December 2008 delivery. A third order totaled $4.16 million and will ship to South America in January 2009.
