XTECH Sales Grow +/- 400% YoY Amidst Record Adoption

XTECH

XTECH Protective Equipment has increased sales by nearly +400% YoY as coaches, equipment staff and players, at the pro, collegiate and high school levels, have embraced their lightweight, durable (see: flexible, water resistant) protective padding. More than 70% of NFL players (including Odell Beckham, Khalil Mack and Von Miller) will wear XTECH padding during the 2018 NFL season, as will student-athletes on 400+ NCAA football teams (including: USC, ND and Ohio St.) and 500+ high school football teams; no player or team is paid to wear (or endorse) XTECH products. Known for shoulder pads, XTECH has introduced a line of thigh and knee inserts for the ’18 season to help college teams comply with a new NCAA rule requiring players to wear padding and pants that cover the knee.

Howie Long-Short: XTECH is the fastest growing company in the protective pads space and maintains an exclusive multi-year contract with XRD Impact Protection (for the use of its foam in NFL, collegiate and youth football pads), so the company could dominate the landscape for some time.

XTECH, which is privately held, is in the process of evaluating a new investor round.

XRD Impact Protection is owned by Rogers Corporation (ROG), a technology company focused on creating innovative solutions for power electronics, advanced foams for cushioning and protective sealing, and high frequency printed circuit materials.

ROG reported Q2 ’18 earnings in late July. While sales rose +6.6% (to $214.7 million), net income declined 17.1% YoY (to $17.3 million) as gross margins dropped by 430 basis points; CEO Bruce Hoechner blamed “additional costs for capacity and activities to reduce cost structure” for margins that failed to meet expectations. Hoechner insists ROG remains well positioned to reach 2020 performance targets though, with “significant growth opportunities in 5G wireless, advanced driver assistance systems, and electric and hybrid electric vehicles” all on the short-term horizon.

Fun Fact: Super Bowl Winning Coach Brian Billick is an investor in XTECH.

Fan Marino: Players love XTECH padding because it enables them to hit hard (or get hit hard) without feeling anything. Check out this short video of Founder Bob Broderick slamming his bare hand with a helmet and you’ll understand why Andrew Luck, Matt Ryan, Jameis Winston, Baker Mayfield, Josh Allen, Sam Darnold, and Josh Rosen all chose to switch to XTECH padding for the ’18 season.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Helmet Manufacturer Remains Unsold as Investors Fear “Possible Crippling Damages”

Riddell

The ongoing threat of potential lawsuits by NFL players related to brain trauma has prevented Riddell owners from selling the manufacturer of America’s most popular football helmet. Riddell is profitable (on $200 million in revenue), but prospective buyers remain fearful of “possible crippling damages” from future suits. It must be noted there is also a CTE-related class action suit currently pending against the company. That lawsuit was filed on behalf of 4,500 former NFL players.

Howie Long-Short: Fenway Partners acquired control of Riddell in 2004 near the height of the NFL’s popularity and recently sold many their investor’s shares, so it would seem as if Riddell was a losing investment for the firm; but, a deal with Hollyport Capital has given the P.E. firm a 2nd chance to turn a profit on the company. Should Hollyport Capital sell Riddell above its current intrinsic value, its agreed to pay Fenway a percentage of the profits. Of course, there’s no guarantee Hollyport is going to be able to sell the company anytime soon; there’s no financing to be had, traditional lenders are avoiding the helmet manufacturing industry like the plague.

Looking for a publicly traded football equipment manufacturer? XTECH Protective Equipment is utilizing military grade XRD foam to create state of the art shoulder pads. The 6-year-old company manufactures and distributes pads marketed as the lightest weight, most protective product on the market. Super Bowl Winning Coach Brian Billick is an investor in the company, which now boasts of players on 29 NFL teams (and 250 college teams) wearing its product including; Khalil Mack, Von Miller and Le’Veon Bell.

XTech has an exclusive contract with XRD Impact Protection for use of its foam in NFL, college and youth football pads. XRD is owned by Rogers Corporation (ROG), a technology company focused on creating innovative solutions for power electronics, advanced foams for cushioning and protective sealing, and high frequency printed circuit materials. It should be noted that ROG shares have declined -37.5% ($114.72), since reaching a 52-week high in mid-January.

Fan Marino: Following an annual laboratory study to assess helmet performance, the NFL recently announced a list of 10 helmets (from SG, Rawlings, Schutt and Riddell) that will be eliminated from the game. New players and those who didn’t wear the helmets in ’17, will be prohibited from wearing those 10 models this season; a full phase out is expected following the 2018 season. It’s been estimated that +/- 200 players wore the now banned models last season. The study determined that of 34 helmets tested, VICIS ZERO1 “best reduces head impact severity.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

MILITARY GRADE FOAM BEING USED IN FOOTBALL PADS ON NFL, COLLEGE AND YOUTH LEVELS

XTECH Protective Equipment has revolutionized football equipment; utilizing military grade XRD foam to create state of the art shoulder pads. The 6 year old company manufactures and distributes pads marketed as the lightest weight, most protective product on the market. Super Bowl Winning Coach Brian Billick is an investor in the company, which now boasts of players on 28 NFL teams wearing its product including; Khalil Mack, Eli Manning and Odell Beckham Jr.

Howie Long-Short: XTech has an exclusive contract with XRD Impact Protection for using its foam in NFL, college and youth football pads. XRD is owned by Rogers Corporation (ROG), a technology company focused on creating innovative solutions for power electronics, advanced foams for cushioning and protective sealing, and high frequency printed circuit materials. The company reported net sales of $201.4 million for Q2 ’17 (up 27.9% YOY) and gross margins of 40% (a record), up 180 basis points.

Fan Marino: Players like the pads because they can hit hard without feeling anything. Don’t take their word for it? Watch Founder Bob Broderick slam his bare hand with a helmet.

Revolutionary shoulder pads catching on in NFL