I was at the sharehoders meeting.
We started off with a tour of the plant. First stop was the area where pallets of displays for Lowes were being sorted. 20,000 displays being sorted and stacked on 1,800 pallets. Will all be shipped within 2 weeks because Lowes wants them hanging in their stores for the beginning of next month. Displays ranged from floor samples to ceramic tile displays. I took some pics and will try to get them loaded some time tomorrow.
Next stop was the spray finish area where they had samples of CIMA and ETC on display. Their lead finisher was there, a top guy they got from Builder's Choice. Several others from Builder's are also on the team. There were commercial displays here also, some of which were to be shipped to JoAnn Fabrics.
We also were given a demonstration of how simple the ETC line was to install. JD had my 12 yr old son pull the front off the bathroom vanity display and slide on another. Very simple design, easy enough for anyone to be a handyman.
We were then shown the cutting area. Their router machine was very impressive and working as we went thru. The plant manager stated they are getting 89-92% usage out of every 4x8 sheet of product, up from the 70% range. They were also using an automated self feeding saw to cut more of the Lowes display orders. Both machines, well in excess of half a million $$, are totally paid off.
JD and the others present gave a report on their functions, their time in the business, and their backgrounds. I was impressed with the people they have working in all facets. All seemed like honest, hard working individuals. They are all excited about the future.
Shipments amounting to over $200k will be shipped in the next 9 days. I'm guessing that will be the Lowes order as that fits the time frame from the beginning of the tour. They said orders of around $700k in the next 5 weeks shipping, and that does include the $200k.
CIMA appears to be very strong at this point. The guys they brought in from Builder's Choice also brought a solid client list that has been providing solid orders. They currently have 6 men out installing orders. This is high end cabinetry so I am looking forward to the numbers on this product line. Currently running an 8 week backlog of order per plant manager's statement. They have 4 weeks of backlog for the display business, which they said was a little soft, but as the economy bounced back, they believe this division will also.
They have seen many of the competitors close down, about 50% less competition in the residential area for CIMA and about 20% less for the displays/commercial. A new website for D&D, which we got a small preview of at the meeting will be launched soon. It was a very impressive site.
We asked JD to provide more updates, possibly weekly on the websites. PRs were not necessary, shareholders agreed that a month in between updates was not beneficial to management or shareholders.
New CEO in place Jan 1. New CEO wanted a positive balance sheet by Jan 1 and JD and all stated they were committed in achieving this goal. He stated the new CEO has alot of experience and has dealt with Home Depot and Lowes, along with other big box stores. JD was honest and admitted that he has made mistakes and that he had short comings as a CEO and in running a public company. He and the others are excited about turning over the reigns to this new CEO. I respect JD's honesty and assessment of himself, it takes a big man to step aside and let someone else run with your plan. He also thanked the shareholders and their support thru last year, what was in his words, a very tough time. He stated if it hadn't been for shareholders, many in the room tonight, that the company would not have made it. He also stated NO R/S or AS increase seen in the future. He said they plan on using conventional loans to fund the company and stressed that is why they are liquidating debt and cleaning up the balance sheet.
ETC is to be launched in the next 15 days, goal is 100 retail locations by the end of year. Be sure to buy ETC when you see them in retail outlets.
I am sure I missed a few details but it was a 5.5 hour drive home and I am tired. I liked what I saw tonight and believe this is a solid hold, and one that should appreciate nicely from this range. Good night and good luck to all shareholders!
