Expo Holdings, Inc. (Pink Sheets: EXPH - News), provides a recap
of the day’s events, and information disclosed.
The Company and its representatives conducted shareholder tours
from 3pm until 4pm. Shareholders were able to meet most of our
staff, excluding James Kendrick and our on-site installers.
Shareholders were able to tour most of the plant, including
production areas and work-cells in use. The finish department was
closed during the tour for safety and comfort reasons.
Approximately 4pm, Glenn Harrs, Co-President called the meeting
to order. Glenn thanked those in attendance and began the
management introductions, including the following:
J.D. Brown, Co-President
Mr. Elledge, Controller
Mrs. Reynolds HR manager and front office manager
Mr. Flora Plant manager
Mr. Mahan, Lead Engineer
Mrs. Wood, Lead Designer
Mr. Woods, Finish Master
Mr. Sigmon Director Purchasing, Director custom residential
production
Mrs. Sidden, Sales manager grocery, custom displays
Mr. Hartley Sales manager residential
Mr. Hartzog, VP commercial sales
Mr. Kendrick (not present), product manager etc. brand, product
manager economy pet program
James Kendrick provided an update regarding the etc. brand and
the company’s new economy pet program. It is summarized by the
following statement by Mr. Kendrick “I apologize for not being able
to attend the shareholder meeting as I desired to meet each of you.
Customers are very demanding and in behalf of the etc. brand and
D&D Displays, I could not reschedule my meeting with our
customer today. The Company anticipates retail availability of etc.
brand products within 15 business days. Initial retailers will
feature vanities in a variety of premium designer paints and glazed
finishes. Shareholders are invited to visit easytoinstall.com and
look for the new “where to buy” feature that will allow customers
and shareholders alike to locate retailers that sell etc. brand
product. This feature should be enabled in the same time frame.
Additionally, the company is introducing to retail a new economy
pet program. Originally this was a product line sold to utilize the
company’s un-utilized scrap. Due to an increase in demand for these
products the company is in the process of launching this product on
a larger scale. It will be sold and marketed through a master
distributor / two-step distribution process. The company currently
has commitments for three retail locations, and expects this to
expand to over 20 by year end.”
Kentec Management Solutions has been identified as the master
distributor for the etc. brand and the company’s new economy pet
program for the states of GA, FLA, and ALA.
The company has identified its candidate for its currently
vacant CEO position, and the candidate is currently employed by the
company. The company anticipates filling this position on or before
January 1, 2011. The company expects continued debt reduction up to
this date, and the new CEO will take the leadership role with a
stronger balance sheet under better transparency. Two debts, one
with BB&T and one with TCF have been paid in full and the
company now owns the equipment. The company’s focus will now turn
to debt reduction with other traditional banking sources as well as
direct debt reduction to five (5) individual debt providers. These
debts total approximately $247,000. It is the company’s goal to
satisfy these private debt providers by April 2011. It is
imperative that the company have a stronger balance sheet by
January 1, 2011 to be prepared for expected opportunities.
The company conducted a brief financial overview of 2009
performance. The company had sales of approximately $1,600,000 (one
million six hundred thousand), and operated at a significant loss.
Sales were considerably lower than the company expected due to
order delays, cancelations, and a sharp drop in sales for the
months of July and August (2009). 2008, 2009, and YTD 2010 have
been difficult for the company in terms of unpredictable sales,
cash flow and profitability, mostly related to the economic
downturn that many domestic manufacturers are experiencing. The
company states that without its valued shareholders and the capital
injected by them, it would not have survived. Financial conditions
are improving with relatively large shipments to Lowe’s companies
commencing this week. Shareholders are cautioned that extreme
economic volatility with spikes up and down in demand is expected
throughout 2010 &2011. These spikes are illustrated by the
following sales facts. June 2010 sales declined by an approximate
70% compared to June 2009 Sales. Sales for the month of July (2010)
were up 85% over July (2009), and sales for the month of August
(2010) were up 580% over August (2009). The company could not, and
did not accurately forecast this. As a result of this volatility
the company has been diversifying from displays and commercial
cabinetry to retail cabinetry (etc.), residential cabinetry, high
end residential cabinetry, and a new economy pet program. It is
also important to point out that a major shift in customer types is
occurring from single project based customers to customers that
need to replenish stock on a regular basis.
The company overviewed its 2010 sales / financial plan. Funds
were raised this year in anticipation of continued introduction of
the etc. brand to commercial customers, and the planned
introduction of etc. to over 100 retail locations by year end 2010.
The company anticipates continued demand for our Cima brand
products and expects to deliver over 24 major projects by year end
related to this brand. Additionally, a Cima showroom will be
completed by January 1, 2011. D&D Displays continues to deliver
products on a large scale and is in the process of shipping to over
1500 Lowe’s Companies, Inc. stores as the shareholder meeting was
conducted. Shareholders were able to view pending shipments as they
were prepared for transport. The company will not be providing any
further form of financial guidance for 2010 or 2011 as the company
feels the economy is too volatile to predict. The company also
allowed a quick peek at the new dddisplays.com, which includes a
fully functional shopping cart and a wide variety of standard store
fixtures available for purchase via the internet. The new
dddisplays.com should be launched on or before January 1, 2011.
The company anticipates no change in its authorized shares, and
no reverse stock split is a consideration.
The company announced that Glenn Harrs, and J.D. Brown will be
stepping down from their current positions on or about January 1,
2011. The company also disclosed year to date income for these
individuals at $5,544 for J.D. Brown and $10,201 for Glenn Harrs.
This is total compensation. There is no accruing income for these
two individuals. These same two individuals own restricted stock in
the company and the company has never removed a restrictive legend
from any of their certificates, nor has any share owned by either
of these individuals ever been sold.
The company also demonstrated the etc. brand product. A twelve
year old young man volunteered to assist the company in completing
a “remodel” of a standard vanity. After removing the sink top, the
“remodel” was completed in less than 3 minutes. This young man had
no prior experience with etc. He completed this process without the
use of tools.
The company conducted a question and answer period. The
following key points were discussed:
Q: Will you file form 3’s.
A: Yes.
Q: Will you begin updating shareholders regularly both positive
and negative via the company’s website. Particularly will you
update on a weekly basis?
A: Yes
Q: Did you issue shares at .001?
A: Yes, among other price points as well.
Q: Will you offer forecasts?
A: No, other than short term 30-90 day estimations.
Q: Will you give more detailed information regarding value of an
order?
A: No, the Company considers this information sensitive and
confidential; however, it will make a best effort to recap the
amounts at a later date if the information is no longer
sensitive.
Q: Will you comment on stock message boards.
A: No Comment.
Q: Will management look into certain programing errors located
on its website?
A: The Company committed to check into the issue.
Q: Will management make available the restricted and float
information?
A: The Company will review and consider the request.
Q: When will you file with Pinksheets.com?
A: Soon, as we now have the OTC iQ SecurID RSA key.
Q: What is your current sales guidance?
A: We will not provide sale guidance, however display shipments
valued in excess of $200,000 should ship in the next two weeks.
Q: Do you have a backorder status?
A: The company has approximately a 6 week backlog of orders for
cabinetry products and a 4 week backlog on display related
products.
Q: Do you have NDA’s?
A: Yes, 3 with the most notably being with Lowe’s Companies,
Inc.
Other questions were asked, but these highlighted the Q&A.
The questions asked were modified to accommodate this written
document. We believe the intent of the questions was covered.
All shareholders in attendance were invited to a dinner with
company representatives. This dinner was “Dutch” as each person was
responsible for his or her own meal. One shareholder paid for
dinner for all in attendance.
Management stated that it remains optimistic regarding the
company, its future prospects, and its customer base. Management
expects to begin updating its financials with pinksheets.com as the
OTC iQ SecurID RSA Key has now been received.
This meeting summary includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 27E of the Securities Act of 1934. Statements contained in
this summary that are not historical facts may be deemed to be
forward-looking statements. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual
performance and results may differ materially from that projected
or suggested herein due to certain risks and uncertainties
including, without limitation, ability to obtain financing and
regulatory and shareholder approvals for anticipated actions. Any
information given verbally by representatives of the company at
this meeting is subject to this statement. Shareholders are
forewarned that investment in our company is very risky and that
they may lose some or all of their investment should they choose to
make one.
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