FST (NASDAQ:KBSX), a golf shaft manufacturer operating under the KBS brand, said it increased first-half revenue by 23% and gross profit by 33% year over year as it benefited from manufacturing scale and lower per-shaft production costs.
Speaking at a company presentation, Chief Financial Officer Sebastian Tadla said EBITDA improved to positive $2.4 million in the first half from a loss of $1.5 million in the prior-year period. Net income improved to $830,000 from a loss of $5.8 million, which the company said reflected, in part, lower operating expenses. Tadla noted that prior full-year results included costs associated with going public.
Steel Shaft Manufacturing and Product Mix
FST traces its golf-shaft operations to the late 1980s, when its Taiwan-based industrial parent expanded from pipe production into golf shafts. The company launched the KBS brand in 2007 through a partnership with shaft designer Kim Braly, who continues to lead FST’s research and development organization.
The company manufactures steel shafts at its facility in Chiayi, Taiwan, using a proprietary steel blend developed with Taiwan-based China Steel, according to Tadla. He said the manufacturing process takes about three weeks per steel shaft and is completed in-house, allowing the company to monitor quality and delivery timelines.
FST divides its shaft business into three categories:
- Premium KBS shafts: Fully customizable, proprietary products aimed at professional and serious players. This category represents about 53% of revenue and 26% of unit sales.
- Standard shafts: Products developed with original equipment manufacturer partners, including brands such as TaylorMade, Cobra, Titleist and Takomo. The segment represents about 45% of shaft revenue and 68% of units produced.
- Economy shafts: Unbranded, lower-customization products, including shafts sold through big-box retailers. The category represents about 3% of shaft revenue and 6% of unit production.
Tadla said OEM customers account for approximately 70% of total company revenue, while aftermarket and retail customers—including fitting studios, independent stores, Club Champion and PGA Superstore—make up the remaining 30%.
Capacity Utilization and Margins
FST previously expanded manufacturing capacity to approximately 1.2 million shafts per month. Tadla said current output is about 700,000 to 750,000 shafts monthly, or roughly 65% utilization, though production can vary with golf seasonality.
The company’s gross margin is currently just under 50%, Tadla said. He pointed to 2022, before the capacity expansion, when factory utilization exceeded 80% and gross margins were in the 60% to 65% range. Reaching 80% utilization at the current capacity would require production of roughly 850,000 shafts per month.
“Each additional unit is harder to get than the previous one,” Tadla said, noting that OEM product cycles and new customer programs can affect volume. He cited TaylorMade’s Qi iron program as an example of a high-volume launch that naturally declines in its second year before a new product cycle begins.
Graphite Expansion and International Growth
While steel remains the company’s core manufacturing capability, FST is pursuing growth in graphite shafts. Tadla said graphite accounts for about 40% of golf clubs and described the company’s approach as a “dual track strategy” of developing its own graphite products while evaluating potential acquisitions.
FST currently uses third-party manufacturing for graphite products. Tadla said a potential acquisition target would ideally have both a globally recognized brand and its own manufacturing capabilities. Such an acquisition, he said, could potentially increase FST’s revenue from roughly $50 million to about $80 million while creating opportunities for improved margins through internal production.
The company also is expanding geographically. FST has headquarters in Taipei and Boulder, Colorado, sales operations in Carlsbad, California, and Tokyo, and recently opened a satellite office in the United Kingdom. Tadla said the company aims to expand further into continental Europe and other parts of Asia.
Fitting, Tour Presence and New Products
FST operates three KBS Golf Experience Studios in Carlsbad, Tokyo and Taipei. The studios provide custom fitting services, collect golfer data for research and development, and serve as training locations for OEM partners’ sales and customer-service teams.
The company also maintains an on-site PGA Tour truck supporting professional players at North American PGA Tour events. Tadla said professional adoption remains an important marketing tool, as tour usage and tournament wins can validate product performance with consumers.
During the question-and-answer session, Tadla discussed the recently introduced V-X and V-X Lite shaft lines, which will be offered in steel and graphite. He said the products are designed to provide a “beefier feel at a lighter weight” for players with stronger swing speeds who prefer lighter shafts, including potential users on the LPGA Tour.
Tadla estimated the total market served by the three largest steel-shaft producers at approximately $120 million to $150 million and said FST holds an estimated 30% to 40% share of that market.
About FST (NASDAQ:KBSX)
FST Corp. designs, manufactures, markets, and distributes steel golf shafts to golf club original equipment manufacturers and distributors worldwide. The company offers steel shafts under the KBS brand name. FST Corp.is based in Chiayi, Taiwan.
