SnowBoards for Grown-Ups.

EVEN THOUGH THEY WORK AND PLAY AT THE BEACH, THE TWO ENTERPRISING FOUNDERS OF ARBOR SNOWBOARDS ARE LOOKING TO CASH IN ON THE GROWING POPULARITY OF SPORTS THAT REQUIRE LOTS OF ICE AND SNOW

IT'S early on a summer morning, which means Bob Carlson can be found surfing -- a passion he indulges in daily, before heading off to his Santa Monica office.

It's an idyllic lifestyle, spending weekday mornings charging across the warm L.A. surf and sand. But Carlson has his mind on mountains, freezing temperatures and snow.

Carlson and his partner Chris Jensen are co-founders of Arbor Snowboards Inc., whose main revenue source is snowboards made for the fastest-growing segment of snowboard enthusiasts: adults. The pair is preparing now for the winter season and are currently pounding the pavement for at least $400,000 in venture capital, so they can step up marketing efforts and increase Arbor's snowboard production from last year's 5,500 boards to 15,000 a year.

They are looking for a minimum investment of $25,000, which would get the investor a little less than 1 percent of the company.

"To grow faster, we need to bring in a financial partner," Carlson said. "We sell out every year, and we would love to produce more."

When the company started in 1997, money came from friends and family, as well as from a previous woodworking business owned by Carlson and Jensen. If all goes well with this round of financing, a third round of $2 million is planned within the next two years to finance a line of accessories.

Targeting adults

Arbor represents a distinct niche in the growing sport of snowboarding, albeit a very small one.

According to a poll by trade association SnowSports Industries of America, there were 1.58 million snowboards sold globally in 1998. In that same year, U.S. snowboard sales were up 22.9 percent over 1997.

Arbor sold 2,500 snowboards, generating $650,000 in revenues, during its first year of production in 1997. Last year, the company generated $1.4 million in sales, and this year sales are projected to reach $2 million.

In the process, the company has gone from a two-man operation to nine employees, and along the way has branched into skateboards and wakeboards. This year the partners expect to sell 1,500 skateboards. A prototype surfboard is being tested, but so far has not made it into the line.

Arbor's snowboards, the meat of the business, retail for between $399 and $459 -- just high enough to create a mystique, but not so high as to price Arbor out of the market. By comparison, the average snowboard on the market is priced at around $311.

Arbor designs all its snowboards in-house, but manufactures only the top wooden sheet. The rest of the boards are assembled by Los Angeles-based sporting-goods maker K2 Inc. After paying K2, Arbor tacks on about $100 for its portion when setting the wholesale price for the boards.

By outsourcing most of the manufacturing to K2, Arbor makes a little less money, but it also avoids costly manufacturing overhead that can lead to serious losses in a bad snow season.

The boards are designed to appeal to an older audience than the normal teen-aged snowboard set. The wood top is the result of a seven-layer process that Carlson and Jensen perfected while running their previous woodworking business.

Mark Richards, co-owner of Val Surf board sports shops in the San Fernando Valley and Valencia, says fewer Arbor snowboards are returned by customers than any other line the stores carry.

"They are very unique," he said. "They came on the market when there was nothing out there like it -- from both a cosmetic and structural standpoint."

Arbor claims to be the only snowboard company in the niche market of high-end hoards for adults. Most snowboard manufacturers target the 11- to 17-year-old market with boards loaded with graphics or cartoons. While these boards can be hot for a season, they might be out of style the next, and manufacturers often have to make costly design changes.

Surfers and snowboarders

By contrast, Arbor's "woodie" look is understated but never goes out of style, Arbor officials say, and each board has a unique look because of differing wood grains. While the boards appeal mostly to adults, Arbor has made inroads with the younger market.

According to Richards, Arbor's Heritage line has been a favorite of teenage girls who buy at Val Surf. The line features a wood grain top surrounded by a Hawaiian flower motif.

Many of Arbor's customers are older surfers who turn to snowboarding in the winter. These people recognize marketing touches like the name of Arbor's top-end snowboard -- which is called the Mickey Munoz line. Munoz made his name in Southern California in the 1950s with his famous surfer pose, "The Quasimodo." Munoz is now an avid snowboarder.

Spotlight

Arbor Snowboards Inc.

Year Founded: 1995

Core Business: Snowboard design, manufacturing, wholesaling

Revenue in 1997: $650,000

Revenue in 1999: $1.4 million

Revenue in 2000: $2 million (projected)

Employees in 1995: 2

Employees in 2000: 9

Goal: To be the top supplier for adult-oriented board sports equipment

Driving Force: Demand for more-sophisticated snowboards by customers who are somewhat older than the typical teen-aged snowboarder