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