Looks like good news- News for 'BTOR' - (Bluetorch Inc. Issues Shareholder Update)
LOS ANGELES, Nov 19, 2004 /PRNewswire-FirstCall via COMTEX/ --
November 19, 2004
Dear Valued Shareholder:
Since my last correspondence in May 2004, Bluetorch Inc. has undergone some reorganization that should result in positive advancements for the Company and generate value for the shareholders.
As many of you now know, Bluetorch Inc. has seen a number of management changes since the identification of the 2004 problem with our National Sales Manager and the subsequent implementation of corrective procedures with regard to our Sales Department. Bluetorch Inc. management remains committed to providing superior product development, sales and marketing improvements and growing shareholder value.
Faced with a difficult sales and marketing situation, Bluetorch Inc. management and the board of directors initiated and completed a focused review of our original concepts. It is our collective investigative reasoning that the basic foundational model for Bluetorch Inc. is still correct and on target. The concept of "multiple brand/multi-level distribution," whereby Bluetorch Inc., through its subsidiaries, possesses multiple apparel brands, providing for market penetration at various levels of the distribution chain, is still a solid business foundation.
These specific strategies allow the Company the freedom from reliance on one action sport, one brand or one channel of distribution for success. This multi-pronged marketing tactic allows the Company to control the distribution of its portfolio of brands, providing the retail community a degree of exclusivity, which will clearly and substantially maximize retail gross margins.
Some people might then ask about the industry segment we are endeavoring to penetrate. Well, as recently as August 4, 2004, the Los Angeles Times wrote, "Action sports is the strongest area of growth within the sporting goods industry, according to the Sporting Goods Manufacturers' Association."
SALES FORCE RESTRUCTURING
Mr. Connors, new President of Total Sports Distribution Inc., has initiated a detailed approach to rebuilding and establishing a professional sales force. We have announced a number of newly contracted representative groups and anticipate further additions in the weeks ahead. More importantly, the contracted rep groups have exhibited an impressive record of sales achievements within the apparel industry. In many cases, Mark Connors and I have previous successful working relationships with these sales agencies. Most importantly, the agencies presently represent some of the largest and most thriving sporting goods companies nationwide, providing them with important, existing key buyer relationships in their respective territories. These existing contacts are extremely important to Bluetorch Inc. as we endeavor to penetrate various national key accounts. The very fact that these high profile agencies are willing to market our products is a valid endorsement of our various apparel lines.
The means to attracting new representative groups is three-fold:
1. Their belief in the vision of Bluetorch Inc.
2. Their positive reaction to the product lines of the respective
brands.
3. Their willingness to spend money and time in the promotion of our
products.
As a result of our new representative force, we have already met with major buyers and are rapidly expanding our appointments with amenable targeted accounts across the country.
Territories newly covered in the last couple of months include:
- New England Airwalk
- Upper Midwest Airwalk, TSABrand, Island Tribe
- California/Nevada Airwalk, TSABrand, Island Tribe
- Southwest Airwalk, TSABrand, Island Tribe
We will be making further territory announcements including the Northwest, the Lower Midwest, the Southwest, the Rocky Mountain Region and the mid Atlantic area as they arise.
MANAGEMENT ENHANCEMENTS
Mark Connors is a welcome addition to the management team. Having managed the Southeast region for Reebok and producing $180 million in sales, Mark was a regional sales Director for Avia and was the former CEO of Spenco.
Bernie Gurr, Bluetorch Inc.'s new CFO, was the finance executive for the World Cup (soccer) in Los Angeles and a former CEO of one of Australia's top rugby clubs.
Domingo Clemente, founder and President of Island Tribe Inc., is proving to be a valuable contributor to the management team and is currently expanding sales in our newly acquired majority interest in Island Tribe.
SALES IMPROVEMENTS - Third Quarter 2004 versus First Half of 2004
We are starting to see progress as a result of the improvements and reorganization of the Bluetorch Inc. sales force. The third quarter of 2004 produced combined net sales of $78,781.00 as compared to $1,917.00 in the first and second quarters combined. The net sales in the third quarter include sales from all of our portfolio apparel brands with the exception of Airwalk.
While we are encouraged by sales growth, we believe that our true sales potential will not be recognized until the third and fourth quarters of 2005 as the enhanced sales and marketing strategy is fully implemented. We expect significant sales growth for the year 2005 and, more importantly, a solid foundation for increasing revenues in future years. The recent shipment of Airwalk apparel in the fourth quarter of 2004 supports our confidence in Bluetorch Inc.'s ability to rapidly expand revenues as stated.
CAPITAL REQUIREMENTS
Bluetorch Inc. has been designated a Business Development Corporation, which allows us access to capital by issuing shares to a variety of funding organizations within the investment community. The Company is currently being financed by a Southern California investment banking group and we anticipate sufficient working capital will be provided by them or other entities until the company has reached a break-even point through the generation of revenues.
FUTURE PROSPECTS:
International:
Bluetorch Inc. is currently negotiating potential international distributorship opportunities for our brands, with the exception of Airwalk, where licensing rights are limited to the United States and Mexico. The fruits of these conversations will be made public as agreements are signed.
Marketing:
The TSA Brand and Island Tribe labels brands are targeted to the core shops (skate & surf). Our recent announcement regarding Planet X television is an example of how our plans to market our brands to the core consumers are beginning to bear fruit. We are in the process of establishing a TSABrand skate team and an Island Tribe surf team as a part of our marketing support strategy.
Beyond our existing portfolio, we will continue to look at selective opportunities to license and/or acquire additional properties that could provide synergistic opportunities and greater revenue/shareholder value. However, it is critically important that we execute effectively in terms of our current portfolio of brands. With that in mind, we will only add new lines if we are confident that new acquisitions or licenses will enhance our current marketing strategy.
Sales:
We have had numerous meaningful meetings with key national accounts, particularly, in presenting our Airwalk apparel line. The results support our belief that we have an innovative and winning apparel line. There are scheduled follow up appointments and an aggressive list of new meeting dates in the coming weeks and months. It is our intention to communicate the results of the orders placed as they become available. The anticipated orders for the year 2005 will make Airwalk our revenue flag ship apparel line.
It is an understatement to say that the retailers are surprisingly impressed with our new Airwalk lifestyle product line. The initial reaction to the fall 2005 Airwalk snowboarding line has been tremendous! Optimistically, we expect to be in a position to announce orders in the first quarter of 2005. Our marketing strategy will be centered on creating sales volume within the Airwalk label while slowly building the other labels in the core and specialty-shop distribution channels.
To that end, our 2005 revenue forecast for all three subsidiaries combined is estimated to be in the range of $4 million to $6 million. We currently estimate that Total Sports Distribution Inc. (Airwalk apparel) should represent approximately 85% of 2005 estimated revenues. The majority of 2005 Airwalk apparel revenues will be in the second half due to the snowboarding outerwear.
I want to personally thank you for your patience and continued support as we work towards creating positive shareholder value for Bluetorch Inc. I am confident that as the first quarter of 2005 ends, shareholders of Bluetorch Inc. will have received numerous communications validating the strategic approach the company is currently pursuing.
Sincerely,
Bruce MacGregor
President & CEO
Bluetorch Inc.
For further information, please contact investors, Marge Rohr of Bluetorch Inc.,
+1-909-861-3244, investors@bluetorchinc.net; or Geoffrey Eiten of OTC
Financial
Network, +1-781-444-6100, ext. 613, geiten@otcfn.com, for Bluetorch Inc.
SOURCE Bluetorch Inc.
CONTACT: investors, Marge Rohr of Bluetorch Inc.,
+1-909-861-3244,
investors@bluetorchinc.net; or Geoffrey Eiten of OTC Financial Network,
+1-781-444-6100, ext. 613, geiten@otcfn.com, for Bluetorch Inc.
(BTOR)
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