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Sporting Goods Manufacturer with Explosive Growth & Patent Protection

Mount Vernon, IL (Jefferson County)

Rawlings branded machines built by Spinball
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Asking Price: $9,500,000

Cash Flow: $234,000

Gross Revenue: $1,800,000

EBITDA: $253,000

FF&E: $20,000

Inventory: $330,000

Real Estate: $200,000

Established: 2009

Sporting Goods Manufacturer with Explosive Growth & Patent Protection

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Business Description

14 Major League Teams as Customers

Spinball Sports builds next generation pitching machines for baseball, softball, football, and cricket. Existing product sales are growing at 41% due to a patented user interface that allows machines to easily simulate any pitcher. The true value of the company however, is in the new automated products that are nearly ready for release.

Spinball has $1.5M in sales over the previous 12 months and projects $2.2M in the next 12 months not including new products. 2018 net profits were $98k on $1.2M in sales or 8.2% margin. Excluding owner's salary and interest paid to owner, net profits were $224k or 18.5% margin. Markups are much higher on the new automated equipment, so these numbers should only improve going forward. Projected sales with new products are $4M for 2020, $8M for 2021, and $12M for 2022.

Much of the value of the company is speculative, so sale terms are flexible and price may be partially based on future sales, e.g. $3M down and 10% of future sales. Owner is willing to remain active in a consulting or R&D role.

Company has an excellent reputation and is recognized by Rawlings, Driveline Baseball, HitTrax, Rapsodo, and Allstar video simulators as the technology leader in the field. Sales staff has established relationships with pro and college coaches, and VP has been with company since its founding.

Spinball is a licensee of Rawlings Sporting Goods and sells machines under both brands. Licensing agreement with Rawlings began in 2014 and has been extended twice. Spinball built machines appear in the Rawlings catalog and are sold by over 3800 sporting goods stores nationwide.

Two major deals are currently in negotiations- one for $2.4M in a single sale, another for $1M annually to a single customer. In both cases, Spinball is providing an integral component of a larger system.

PRODUCT OVERVIEW:

Existing two and three wheel machines: Two wheel machines are lightweight for portability and value priced. Three wheel machines feature a patented graphical interface for controlling pitch speed and spin directly.

iPitch® smart machine: iPitch is a fully automated 3 wheel machine controlled by smart phone or tablet. Machine can simulate any pitcher and aims automatically for random sequence batting practice. Machines can be upgraded after sale with new pitcher libraries or new functionality by simply updating the controlling app. Winner of Collegiate Baseball's Best of Show award at 2017 ABCA convention. User interface and method of pitch definition is patented. Expected release: August 2019.

Armageddon® arm style machines: Spinball has patent on only arm style machines in the world that can throw breaking pitches (curves, sliders, etc.) Conceptual design is complete for an entire line of arm style machines but no prototypes have been built. High end Armageddon machines have same capabilities and phone based user interface as iPitch. Owner expects these machines will quickly become more successful than the wheeled machines.

Automatic ball feeders: Patented turret design is a perpetual attention-getter at trade shows. Working on high capacity models now, including a robotic arm.

Football machine: A fully functioning prototype was built, but the first batch of production parts came in out-of-spec, and the project was set aside to work on iPitch.

Defensive machines: Two unique designs with same capabilities as $15k Fungoman for under $2k in cost. Early in development.

Other: Owner has two other baseball related product ideas that have not been patented yet.

Attached Documents


Detailed Information

Location:
Mount Vernon, IL
Inventory:
Included in asking price
Real Estate:
Owned
Included in asking price
Building SF:
3,200
Employees:
8
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
3.5 acre lot in industrial park in Mt. Vernon, IL. 3200 sf warehouse and sales office built in 2012. 4800 sf warehouse and production facility currently being added with plans to expand another 4800 sf to add a machining and fabrication shop next year.
Competition:
$120M domestic baseball and softball market / $500M global market including all sports. Spinball is the #2 supplier to Major League teams, which is a leading indicator of future sales. There are several other pitching machine manufacturers, but none has kept up with emerging technology like Spinball. Company holds four utility patents.
Growth & Expansion:
New products: Spinball expects iPitch to double sales in the first year of release, and Armageddon to double them again. Market expansion: There are huge opportunities in going global and expanding to other sports like cricket and tennis. Marketing and advertising: Except for an annual trade show, Spinball has not advertised in two years. Active promotion would no doubt spark additional sales. Manufacturing: Profits could be increased substantially by bringing manufacturing in-house. Currently, 95% of parts are made by outside suppliers.
Support & Training:
One year of general business and engineering support. Also willing to remain active in new product R&D for a percentage of future sales.
Reason for Selling:
Owner is an inventor, not a businessman, and wants to return to a role in R&D.
Business Website:
http://www.spinballsports.com
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Business Listed By:
Tom Hart

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