NASDAQ:SPGC
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Corporate Rebranding
On September 4, 2024, Sacks Parente (NASDAQ:SPGC) announced a significant change in its corporate brand identity. The company will restructure its putter and shaft divisions under the new name NEWTON GOLF, with the subtitle, “A Sacks Parente Company.” The stock symbol will remain the same at SPGC.
The original Sacks Parente Golf putter division will now be called Newton Gravity while Newton Motion Shafts will keep its segment name. This change reflects the company’s commitment to aligning its brands more closely with its core values and the basic principles of physics, which have been the foundation of its innovative golf products.
Greg Campbell, Sacks Parente’s Executive Chairman stated, “By embracing a more modern identity, we’re aligning ourselves with the innovative spirit that has always driven us forward, while proudly retaining the Sacks Parente commitment to excellence that is our legacy. We’re confident that this evolution will not only resonate with golfers but also position us for ambitious growth and continued success. This rebranding marks an exciting new chapter for us by making our brand structure more streamlined and less confusing for our customers and stakeholders.”
All NEWTON GOLF products are proudly made in the U.S. The Newton Gravity putters are manufactured in Camarillo, California, and the Newton Motion Shafts are individually hand-crafted in the company’s factory in St. Joseph, Missouri.
All NEWTON GOLF products can be found at www.newtongolfco.com.
New CFO
On September 9, 2024, the company announced it had hired Doug Samuelson as its new Chief Financial Officer. Mr. Samuelson began his 30-year career with Arthur Anderson LLP, providing audit and business advisory services to many small-to-middle market companies. He later joined numerous public and privately held companies and served in various financial reporting and audit roles, including as CFO for Response Genetics, Medacta USA, Smack Sportswear, Solis Tek, AdvaVet, Wellness Center USA, Genelux, and, most recently, Kairos Pharma, a position he held since 2019. Mr. Samuelson brings significant SEC reporting experience, Sarbanes Oxley compliance experience, and over 10 years in public accounting. He received his B.S. in Accounting from the University of Utah and his M.S. in Computer Science from California State University, Northridge.
Mr. Samuelson stated, “I am eager to join an emerging golf equipment provider and the team at NEWTON GOLF. The Company’s Newton Motion line of replacement golf shafts and innovative putters are contributing to strong revenue growth, and I’m excited to provide strategic financial leadership as the Company looks to continue its aggressive growth. I believe my CFO experience with publicly traded companies will be valuable in supporting the Company’s vision.”
New Gravity Putter Product Line
On September 25, 2024, the company announced the launch of three new putter models and two redesigned classics in its newly formed Gravity Premium Series line of putters. The putter line has been redesigned and rebranded as Gravity under the NEWTON GOLF umbrella. The lineup features dynamic red and black colors and a premium ceramic coating finish previously reserved for professional level putters. These models embody NEWTON GOLF’s core design principles, including the brand’s signature patented Ultra Low Balance Point (ULBP) and Center of Gravity (CG) technology.
The new lineup includes three new models:
1. Classic – The Classic, Gravity’s new traditional anser-style putter in the Premium Series, is optimized for modern stroke types with a shallower arc. It features a newly designed hosel for enhanced performance and feel. The Classic is made with 1018 carbon steel material for the best ball feel with Tour Only quality ceramic coating finish.
2. DEUCE – The new DEUCE is a double-wide anser putter that is easy to aim with a blade-like look. Available in 1018 carbon steel body, the DEUCE is designed to fit all stroke types with two hosel locations.
3. DUKE – The new DUKE putter takes its inspiration from PGA TOUR Champions player Ken Duke. Made with a 1018 carbon steel body with tungsten weighting, the DUKE is a modern interpretation of a classic-style putter that has a shorter blade length with a half mallet back.
Additionally, the DRAC and the PRISM from the previous Sacks Parente brand have been redesigned and have the new Gravity logo and colorways.
4. DRAC – The redesigned DRAC is the modernization of a fang-style putter. It is Gravity’s highest MOI putter that is made of 6061 aluminum and 100 grams of tungsten. It has been redesigned with the Gravity logo and colorways.
5. PRISM – Gravity’s redesigned PRISM mallet putter naturally improves the putting stroke and tightens the dispersion of putts. Engineered to deliver the right MOI and unmatched stability, the PRISM optimizes the stroke and provides the best roll in golf. It is made of 6061 aluminum and 50 grams of tungsten. The mallet head has been reshaped to improve stability and move CG more forward.
The company is also introducing a new putter shaft, Newton Tempo, which is an improved design to provide better feel and balance with the newly designed heads.
Valuation and Estimates
Our primary valuation tool utilizes a Discounted Cash Flow process. Based on growth and profitability projections and the potential for possible dilution from a shelf registration, our DCF-based valuation target is approximately $12.00 per share. Our target price may be conservative as it utilizes a high discount rate of 15.0% due to the unpredictability of earnings, higher prevailing interest rates, and the timeline of reaching net profitability on an annual basis.
Our 2024 full year revenue estimate is $2.98 million and our 2024 EPS estimate is a loss of ($2.96). For 2025, our revenue estimate is $5.2 million and our EPS estimate is ($1.78). We expect the company to reach net profitability in 2026.
The company’s closest competitor Acushnet (NYSE:GOLF), trades at a price/sales ratio of approximately 1.66x. Applying that multiple to SPGC’s 2027 revenue estimate of $10.7 million and discounted back creates a value of approximately $10.00, which is substantially greater than the current stock price. In 2021, TaylorMade was acquired for $1.7 billion which equates to a price/sales ratio at the time of 1.7x.
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