SpongeTech Delivery Systems, Inc. (OTCBB: SPNG) CEO Michael Metter released the following letter to shareholders:
Dear Shareholders:
We have had an exciting year this year and have made a lot of progress moving our company from a development stage company into a production stage company. We started off 2007 with no sales backlog to speak of, and minimal sales outside of some legacy accounts that we had been servicing for a while. Since that time we have built up a sales backlog of more than $10.7 M and our online e-commerce sales have done very well. Below are a few more of our company's accomplishments for 2007.
Since the beginning of the year we have accomplished the following:
- Ramped up product manufacturing to build sufficient inventory to
service growing sales channels. We currently have around a million
units of our SpongeTech Car Wash & Wax Products in stock to service
order fulfillment.
- We launched a new company web site with e-commerce and online ordering
facilities. We have seen significant month over month growth in our web
site traffic and online sales and these sales are high margin sales.
- The company has accumulated more than $10.7 M in sales backlog which is scheduled to be shipped between Q4, 2007 and the end of Q3, 2008.
- During 2007 we have signed several new international product
distributors in Mexico, South America and Asia which have significant large orders in place for 2008 delivery.
- SpongeTech has participated in numerous Trade Shows in 2007 with
enthusiastic response for our products, and we are diligently working
to turn these show contacts into purchasing customers.
- During 2007 I have personally been a guest on investor talk shows, have
conducted phone interviews with a number of online IR outlets, and was
recently a guest on MoneyTV.net which has worldwide TV distribution.
- SpongeTech has ramped up marketing activities including conducting
numerous online sales promos this year which have resulted in many
incremental sales and a significant increase in web site traffic month
over month.
- We recently launched a new Children's Bath Product at a Las Vegas International Children's Product Show to enthusiastic response and the
company will start shipping that product in the very near future.
- SpongeTech also recently announced a new manufacturing partnership with
Rogers Foam Corporation who has manufacturing capabilities
strategically located throughout the world. Rogers will be bringing new
production online in Q1 2008.
- SpongeTech is working on finalizing our new infomercial and marketing
campaign with Incredible Discoveries. This new infomercial is scheduled
to debut very soon and is expected to generate projected orders in the
neighborhood of $19 M over the next 18 months.
- SpongeTech recently announced new free-standing retail point of sale
(POS) display units for their SpongeTech Car Care Delivery System
Products for the upcoming holiday season and should help the company
increase its holiday sales given that the company won't need to fight for space on retail store shelves during the holiday season.
Company Expectations for remainder of 2007 and 2008:
- SpongeTech will continue to grow its online sales and marketing efforts
and will continue to upgrade its web site and online product sales and
fulfillment capabilities to facilitate more high-margin online sales.
- We expect to start shipping our new Children's Bath product soon which
will begin to open up new sales and distribution channels for the
company and should positively impact our sales numbers for 2008.
- We will aggressively continue to pursue new domestic and international
sales partners to open up new markets for our Car Care and Children's
Bath products around the world.
- We will continue to develop new products to attack new vertical market
segments suited for our product technology and thus open new markets
and sales channels for SpongeTech products.
- We will continue to raise the visibility of our company and stock
within the investor community through frequent communications to investors through press releases, executive interviews, online talk
shows, and participation in investor conferences.
- We plan to attend more market related trade shows in 2008 to attract
new customers and increase visibility of SpongeTech and our products to
global retailers.
- SpongeTech will continue to enhance its manufacturing capabilities and
find ways to reduce product costs through production volume,
manufacturing efficiencies.
Summary:
SpongeTech already has orders on the books which should drastically increase our gross revenues in 2008 over 2007 sales numbers, and should help us to turn the corner on company profitability. We will continue to be conservative in the growth of our overhead costs while still trying to find new and innovative ways to increase our marketing presence and grow our sales channels and volumes. We believe that we have just barely scratched the surface in opening new sales and distribution channels on a global basis, and as we bring on new distribution partners we believe our sales will continue to grow in significant ways.
SpongeTech has made a lot of progress in 2007, and we expect great things for our company in 2008, and beyond. We are committed to continuing to keep SpongeTech investors up to date on what is going on with the company and we will put out relevant press releases on an ongoing and timely basis.
We want to thank SpongeTech investors for sticking with us this year and we will do our best to help reward SpongeTech investor's patronage and loyalty with our efforts moving into 2008, and beyond.
Best Regards,
Michael Metter, CEO
For more information please contact Investor Relations at
1-877- SPONGE T or visit the company website at: www.spongetech.com.
