Good morning, everyone. Thanks for joining us. My name is Sebastian Tadla. I am the Chief Financial Officer of FST Corp., and we are traded on Nasdaq under the symbol KBSX. Really quickly, just want to show you a disclaimer about what you're going to hear in this presentation. Just take a few seconds to take a look at that. All right. Let's begin. Who are we? At our core, FST Corp. is a golf shaft manufacturer. We started manufacturing golf shafts in 1989. However, our history goes back significantly further than that. Our CEO's grandfather started what became today, or what is now the Far East Machinery Company, 76 years ago. The Far East Machinery Company is a heavy industrial company specializing in CNC machines and piping.
They manufactured piping, everything from one-inch diameter pipes all the way up to three-meter diameter pipes, through all of these years. When they were looking at ways to expand, they thought, "What else can we do?" Well, what is a golf shaft except for just a little pipe? They quickly realized that there's a lot more technology that goes into building a golf shaft versus a standard pipe that's used to transport water. From 1989 till the mid-2000s, we continuously updated our manufacturing capacity and capabilities. Finally, in the mid-2000s, we finally believed that we could develop a premium product to the market. In 2006, we partnered with the world's most renowned shaft designer, Kim Braly, and in 2007, we launched the KBS, or Kim Braly Signature, line of golf shafts.
As many of you know, there's a lot of hard work that goes into building a brand, but everyone needs a little bit of luck. Lucky for us, for KBS, our break came in 2008. Due to Kim's relationships with professional players, he was able to convince a few players early on to adopt KBS in their golf clubs. In 2008, a player who hadn't won in many years on the PGA TOUR ended up winning three events that year. He was already in the twilight of his career, but somehow he had this resurgence. I can't say for a fact that it was KBS that caused that resurgence. However, it was the break that we needed.
What it did is it validated our technology, our design, and our product to other professional golfers, which in turn then validated it to the playing public and made KBS Golf Shafts a name that they can trust in their clubs. From then, we continued to grow. In 2019, we opened our first KBS golf fitting studio. In 2023, we were ranked one of the top 100 businesses in golf. In January of 2025, we began trading on Nasdaq under the symbol KBSX. We have a true global presence. Everywhere that golf is played, as long as there's a pro shop, a retail store, or an online store that ships, you can purchase KBS Golf Shafts. However, where are we physically located? Our North American headquarters is located in Boulder, Colorado.
Our other headquarters is located in Taiwan, in the same city, Chiayi, where we manufacture our shafts. We have additional marketing and sales offices in Carlsbad, California, which is really the mecca of golf. Additionally, we have an office in Tokyo. Our product portfolio breaks down into three distinct segments. The first one is premium shafts. These are the KBS-branded golf shafts that we started developing in the late 2000s. They offer the highest level of customization and the most sophisticated manufacturing process. They are mainly meant for serious golfers, professional and amateur alike. They make up roughly 53% of our revenue, 26% of our units sold. Next, in the middle, you'll see standard shafts.
The best way to describe standard shafts is if you were to go to a golf retailer, buy a new set of golf clubs off the wall with no customization, the club or the shaft that comes in that club, we would call a standard shaft. We manufacture these to our OEM's specifications. If TaylorMade tells us to manufacture them this specific shaft, we'll do this for them. There's limited customization involved, but these are for the general golf player. These standard shafts are roughly 45% of our golf shaft revenue, 68% of the units we manufacture. On the far right, what you will see is the economy shafts. These are the ones that we started manufacturing in the late 1980s. They are mainly going to non-branded golf clubs that are sold in big box retailers.
They represent roughly three percent of our revenue, six percent of our units sold. However, one really cool thing we get to do is all of the standard shafts that don't pass for cosmetic QC reasons, there's nothing wrong structurally with the shaft, just some pitting, things with the chroming, we are able to offload them in the economy sector to recoup our manufacturing costs. On the steel side, we are a fully vertically integrated business model. We control every step of the program, of the process, I should say, from the initial R&D and design, full in-house manufacturing, and the sale and marketing. Our R&D is still led by Kim Braly. He leads a team of 19 full-time employees. They're located in the U.S., in Europe, and in Asia.
They work with amateur and professional golfers alike to make sure that we're developing the next great shaft, and we are able to service the market. Now, our in-house manufacturing. Although we do use a third party to manufacture our graphite shafts, all of our steel shafts are made in-house at our production facility in Taiwan. This process is performed using specialized equipment, which is integrated with our proprietary automating technology, to develop the quickest manufacturing process with the highest product quality. Since everything happens in-house, we get to look at the process every step of the way. A steel shaft takes roughly 21 days, and there's 21 steps in it. If something goes wrong anywhere along the way, we can catch that and fix it, leading to lower reject rates.
Because our manufacturing is in Taiwan, we have significantly reduced manufacturing and labor cost compared to our competition, who is located in the U.S. and in Japan. The final thing I do really want to point out here is we use a proprietary low-carbon blend of steel, which took seven years of R&D to develop with China Steel, who is Taiwan's largest steel shaft supplier. The reason I bring this up is this blend of steel only works in our process. Think of it as cooking. You have a recipe and you have your ingredients. Those ingredients only work with this recipe. If you change the recipe in any way, the shaft will become too brittle. That all being said, there's a really high barrier to entry here for additional people to come on board.
Our sales and marketing team currently has over 30 employees that are located worldwide, and we sell to three major customer segments. Our first one is going to be our OEM partners. These are every single golf brand that people think of when they think of golf. They represent almost 60% of our overall revenue. Next, we sell to custom fitters, such as Club Champion, New York Golf Center, Cool Clubs, and golf retailers worldwide, such as The GolfWorks and the PGA TOUR Superstore. As I mentioned earlier, we opened our first KBS Golf Experience fitting studio in 2019. In 2021, we opened our second studio in Japan, and in 2024, we opened our third studio in Taipei. These fitting studios have three major benefits for us. The first is we do believe that having people play the correct golf club is going to make them a better golfer.
It's going to help you get the ball off the ground, have it fly exactly how it's supposed to. In turn, you're going to have more fun on the golf course, and you're going to come back and you're probably going to keep playing golf. We're bringing the custom fitting experience to the final consumer or user of our product. That is the first benefit. The second benefit is through the custom fitting, we're collecting data. We're collecting launch angles, swing speeds, and demographic data. Then we can tie it to the average person who is 30 years old, swings at this rate. What do we need to develop to make sure that we're staying ahead of the curve and providing the best products for that specific demographic? All that data is collected and fed into our R&D environment.
The third and final major benefit is where we located these stores. They're located where there's tons of, whether it's OEM business headquarters or assembler headquarters. What this allows us to do is bring the customer service teams, bring the sales teams from our customers in and teach them about the benefits of KBS, and in turn, they can better sell our product to their customers. Some additional services that I want to point out is we offer an online fitting tool. It's called Find Your Fit. It's free for everyone. Like I said, custom fitting is truly something we believe in. However, we do know that it's time-consuming and sometimes it's not financially feasible for someone. We have developed a free tool where you can log on, answer 10-ish questions about your golf game, and then the tool will spit out a recommendation.
Is this as good as getting a full custom fitting? Clearly, it's not, but it'll get you 60%, 65%, 70% of the way towards being custom fit. The next KBS service we offer is the tour truck that you see here. This is our tour truck, which we sponsor. It goes to all continental PGA TOUR events to support professional players. Professional players playing KBS shafts is the single best form of marketing for our company. When a professional player is playing on Sunday, you can see that red label on their club. It helps us sell more clubs, whether that's to OEMs or the general public. Finally, we do have two restaurant brewery bars, located in Taiwan. They're just off-course bars, lets us connect with the community. There's no plans to bring these to the U.S. Excuse me.
Since 2021, KBS has over 127 professional tour wins. The reason I bring that up is because, as I said earlier, this is the best marketing for the company. Today, almost 30% of all professional golfers worldwide play a KBS golf shaft, whether that is steel or graphite. We want to continue to build that up to get those players that are in the top 150 in the world because those are really the most marketable players. What are some of the competitive advantages? There is a minimal risk of future competition in steel shaft manufacturing. There's very high barriers to entry to get in here. Today, we estimate it would cost roughly $40 million to open a factory where you can manufacture 100,000 steel shafts per month.
Today, we're manufacturing about 1 million steel shafts per month, that $45 million investment's not going to allow you to compete. The next competitive advantage for us, because we manufacture in Taiwan and about 70% of all golf clubs are assembled in Southeast Asia, what we can do is offer our customers, those OEMs, lower shipping rates and shorter lead times to get product from our Taiwanese factory to that assembly point in Southeast Asia. Our Taiwanese manufacturing also has lower labor and manufacturing costs, allowing us to compete on pricing with our competition, who is located in Mississippi and in Japan. We have direct engagement with professional and amateur golfers through our KBS Golf Experience, which allows accelerated product development, and it's led by Kim Braly, which none of our competition can say. Kim is truly one of one.
What is steel shaft manufacturing and steel shafts in general? We're going to talk steel shafts specifically here with this slide. The three of us, FST, True Temper Sports, and Nippon Shaft, makes up 96% of all steel shafts that are manufactured in the world. As golf continues to grow, we do believe that steel will still be the dominant material in all golf clubs. Today, 60% of all golf shafts in the market are steel, and we believe it's going to continue being that because steel has better stability and more consistent performance compared to graphite, even as graphite continues to improve year-over-year. As golf grows, steel will maintain its dominance, and we will have that base of revenue. This is general golf shaft market.
Independent data suggests that today the golf shaft market is roughly $500 million, and it's slated to grow at 5.1% compounded annually over the next 10 years. Where is a lot of this growth coming from? The U.S. is a very mature market for golf. It represents 45% of the overall revenue for golf worldwide. However, we still see really good growth here, but that growth is coming from ladies picking up the game, from minorities being able to play. For a long time, this was just a white guy sport, right? Now more people are getting into golf, and it's a really good thing here in the U.S. Worldwide, where is golf growing? Our main driver that we're seeing is Southeast Asia because there is a growing middle class.
When that middle class picks up leisurely sports, low-impact sports, golf is really at the forefront of that. We're seeing worldwide the game growing. In the U.S., the game growing as well. Let's look at full year financials. These are the last three years. From 2023 - 2024 - 2025, we had over 30% growth year-over-year for each of the past three years when it comes to revenue. Our gross profits also went up in that same timeframe. Our operating expenses did go up as we're spending more money on marketing, on having a better sales team to grow that revenue. Our EBITDA keeps growing. On the right side, you'll see that we had some net losses. We went public through a SPAC transaction at the beginning of 2025. Overall, all those fees all in all cost us about $6 million.
A lot of that comes out right here. As 2025 ended, we got over, paid off all of our SPAC fees. We started 2026 with a clean slate. What does Q1 2026 versus Q1 2025 look like? We were able to grow revenues 36% from $10.7 million to $14.6 million. Our gross profit went up by 52% year-over-year as we achieved economies of scale in our manufacturing. We were able to raise our gross profit to above 50% through getting a larger market share, manufacturing more shafts. Our operating expenses actually went down as we were able to streamline some of our processes. EBITDA went up to $2.2 million for the quarter, and our net income, you can see we were -$2.8 million in Q1 of last year to a positive $1.9 million this year.
What are some of the growth strategies that we're seeing for the next one, three, five, 10 years? We want to continue increasing our market share with OEM partners. This is really only available because three years ago we did a manufacturing capacity increase. We invested quite a bit of money and raised our manufacturing capacity up to 1.2 million shafts per month. This allows us to be aggressive with those OEM partners, go after business, and become the number one golf shaft in the world. The second thing, as I mentioned, 60% of all golf clubs are steel. That means 40% are graphite. Graphite has been a new thing for us. We've been in the market for just a few years on the graphite side. Today, it's roughly 20% of our revenue. We would like to grow that more, we're doing dual tracks right now.
The first is that organic growth. Ensure that we're investing in R&D and marketing, picking up players, and then taking over the public sentiment. However, we're also looking at potentially acquiring a graphite shaft manufacturer, which would allow us to bring manufacturing in-house and accelerate our revenue growth from a $50 million company to $70 million, $80 million, $90 million in the next year. We're looking at expanding the KBS Golf Experience into new markets as they mature. We're being very judicious here. We've opened three fitting studios in the past seven years. We're not expanding too quickly here. Finally, expand sales into Asia and those other untapped markets. That is as those markets mature, as golf becomes more and more a bigger sport there, we want to make sure that we are on the forefront.
Our management team, all of us have been together for over 17 years now. Cumulatively, we have over 100 years of experience in golf shaft manufacturing, sales, marketing, finance, and accounting. Quickly, just some investment highlights. FST, we have a protected status in steel shaft manufacturing. We're one of three dominant players, and there's extremely high barriers to entry. We have global expansion into Asia and other untapped markets, which will continue to drive revenue growth. We have a cost advantage over our competition because we manufacture in Taiwan versus Japan and the U.S. We're a vertically integrated business model on the steel side and hopefully overall in the next 12 - 18 months. We have proven R&D capabilities with player collaboration through our KBS Golf Experience fitting studios and the professional tour players we work with.
We have had a 50% EBITDA increase in fiscal year 2025, 31% revenue growth in 2025, and we're forecasting improved top and bottom-line results in 2026. With that, I just want to say thank you very much for coming and listening to the presentation. If you guys have any questions, please feel free to reach out to us at investorrelations@fstshafts.com or our external IR at ir@skylineccg.com. Thank you. Any questions? Sure. Right now, our graphite shafts, overall, our margins on them are roughly around 30%. We do believe if we bring it in-house, one, we would control the manufacturing process, and we can raise that margin to 55%-60%, accelerating growth.
What we believe the deal would look like is it would be roughly around a $40 million deal, financed through debt, which we already have lined up. A portion of that, about 25% of that, would be financed through equity. Any other questions? All right. Thank you, guys. Really appreciate the time.