FST Corp. Ordinary Shares LD Micro 20th Annual Main Event Conference

Thank you. Good morning, everyone. We are FST Corp. We trade on NASDAQ under the symbol KBSX. Again, my name's Sebastian Tadla. I am the Chief Financial Officer of FST. Quickly before we begin, just need to show you our disclaimers about what you're going to hear in this presentation. So take a quick few seconds to read that through. We can begin. Let's just jump into it. Who are we? FST, at its core, is a golf shaft manufacturer. We started manufacturing golf shafts in the late 1980s. However, our history goes back quite a bit further than that. About 80 years ago, our CEO's grandfather opened what today is a heavy industrial company located in Taiwan. They specialize in CNC machining. The thing that we were spun out of is piping. They would make, they still do make, all sorts of pipes.

Anything down from a few centimeters in diameter all the way up to 3 meters. In the 1980s, with all that knowledge of pipe making, they were trying to decide what else they could do, how else they could branch out and gain additional revenue, and they initially thought, "What is a golf shaft if not a little pipe?" So from the late 1980s to the mid-2000s, we spent that time improving our manufacturing capacity and capabilities because we quickly found out that there's a lot of technology that goes into golf shafts, significantly more than standard piping. So in 2006, we finally believed that our factory was ready to deliver a premium product to the market. So we partnered with Kim Braly, who is a renowned shaft designer, and in 2007, we launched the KBS brand of golf shafts.

As many of you know, there's a lot of hard work that goes into building a brand. However, you do need to get lucky at the same time. Luck plays a major factor. Lucky for KBS, our lucky break happened in 2008 when a golfer who was in the twilight of his career decided to switch to KBS shafts. He was a player on the PGA Tour, and that year he won three events after not winning for five years.

What that did is it validated the technology and the design of the product to all the other golfers on the PGA Tour, and we quickly started seeing more professional golfers switching in, which caused all the major OEMs to take notice and notice that we have developed a product that is good enough for a professional golfer, and therefore, it is good enough for them to use in their golf clubs. That was 2008. As the time went on, in 2023, we were ranked one of the top 100 businesses in golf. In 2024, over 100 professional players were playing KBS shafts. At the beginning of 2025, we won in a city called Chiayi. Our Asian headquarters are located in Taipei, also about an hour away from Chiayi. We have an office in Tokyo.

Moving over to the U.S., our North American headquarters are in Boulder, Colorado, and we do have a sales office here in Carlsbad, California. As of this year, just a few months ago, we also opened a small satellite office in the U.K. to better serve the European market. Our products break down into three distinct product lines. The first one, excuse me, is what we call our premium products. These offer full customization. They are our proprietary designs. How you can tell that it is a premium product is if it has a KBS label. Anything with a KBS label, any golf shaft, that is considered premium. The target users are professional and serious players. We do recommend that most people get custom fitted into these clubs because which shaft you play will dictate how the club feels and performs.

Premium line of products represent roughly 53% of our revenue and 26% of the units we sell. Next, we will move to our standard units, or our standard line of products. These products offer less customization, and we get the designs from our OEM partners. What this means is TaylorMade has a golf club that they are releasing. They want a proprietary design. They will give us that design, work with us, we will build it for them, and then sell it. These are not branded as KBS. They represent about 45% of our shaft revenue and 68% of the units we manufacture. Finally, on the right, we have what we would call economy shafts. These are the shafts that we started manufacturing in the late 1980s. They offer little to no customization. They are unbranded, mainly being sold in big box retailers such as Walmart.

They represent about 3% of our overall shaft revenue, 6% of the units we manufacture. The one interesting thing that we get to do is any of the standard shafts that do not pass for cosmetic QC reasons, meaning that there is something wrong with the chroming, but nothing wrong with the shaft itself, we get to offload those in the economy sector. Our R&D is led by Kim Braly still. Today, he leads a team of 19 R&D employees that are located around the U.S. and Asia. They work with professional and amateur golfers alike to develop the next great shaft. Our steel shaft manufacturing is done in our in-house production facility, which is located in Chiayi, Taiwan. We do have our own proprietary steel blend. This steel blend took us about seven years of R&D working with China Steel, who is Taiwan's largest steel manufacturer, to develop.

I do want to say our competition has their own steel blend, so this is not unique to us. However, our blend only works in our process. We could not use their blends in our process because the shafts would turn out too brittle. We try to optimize the production process and monitor every step of the way as the shaft moves from the steel coil to the final product. It takes about three weeks to manufacture one steel shaft. Because all of this is done in-house at our production facility, we can catch any sort of issues that happen along the way and correct them and hopefully, get a lower reject rate. All of this really leads to a shorter delivery period for our customers because the shafts are 100% done in-house.

Final thing I want to say, we do have reduced costs compared to our competition, in our manufacturing and labor cost. Our competition makes their shafts in Japan and here in Mississippi while we manufacture in Taiwan. Our sales and marketing team is currently about 30 employees that's located all around the world, and we sell to two distinct customer segments. The first segment is our OEMs customers. These represent roughly 70% of our overall revenue, and these are all the brands that everyone knows, TaylorMade, Cobra, Titleist, Takomo. The other 30% of our customers are what we call aftermarket and retail. So these are fitting studios, mom-and-pop shops, Club Champion, PGA Superstore, and others located worldwide. We have three fitting studios currently. Our first one was opened in 2019 here in Carlsbad, California.

We followed that up with our second studio in Tokyo, Japan, in 2021, and our flagship was opened in Taipei in 2024. These studios have three main benefits to them. The first is bringing custom fitting to the people. We believe that every player should play a golf club that is really good for them today. Meaning that as your game progresses, chances are you need to play a different club that's meant for you. So we want to get that fitting to the customer's hands to see them play as well as they can today. Second major benefit for us is that we get to take all the data from those custom fittings. We get to see swing speeds, and then we get to use that in our R&D process.

The third major benefit is we get to bring in our OEM partners, bring in their sales, bring in their customer service teams, and we can teach them about what is new with KBS at these Experience Studios. Some of the other things we offer outside of just buying new clubs is a retro build service. We know custom fitting is tough for people, whether from a time or a financial commitment. So we have retrofitting, where you can log in to our website, answer a few questions. It'll spit out a number of shafts that we believe would be good for you today, and then you can send your clubs in, and we will rebuild them with a new product for a fraction of the cost. Some of the other services KBS offers. We have this on-site PGA Tour truck.

This truck goes to all North American PGA Tour events, and it is there to support the professional player. We do have that online fitting tool, which I talked about. We have the KBS Open. Last year was the inaugural KBS Open, and then this upcoming January is going to be the second one. It is a golf tournament. It is a pro-am tournament located in Taiwan. It has Taiwan's largest purse. It is open to anyone through two regional qualifiers. We are really excited for what this tournament allows us to do to reach the greater golf community, and hopefully, this will spread and continue to grow. As I mentioned earlier, it is really important for us to have professionals playing KBS shafts because this is the single greatest marketing tool we have.

When a professional player, whether on the PGA, LPGA, Korn Ferry, or DP World Tour, is seen winning a tournament playing a KBS shaft, that signals to the general consumers that KBS has a product that is worthy of a professional player, and that that product is good enough for amateurs and professionals alike. Some of the competitive advantages that we have. There is a minimal risk of future competition in steel shaft manufacturing. We estimate that it would cost around $40 million to open a steel shaft plant where you can make about 100,000 units a month. Today, we can manufacture about 1.2 million units per month, so that wouldn't allow you to compete on the world stage. We do have lower shipping costs.