Jamak CEO Kirk Eustace Discusses 2010 Success and Outlook for the Future

09/07/2010

Likely shows my age, but there is an oldie but goody classical American song called “I can see clearly now”. Part of the song says the following:

I can see clearly now, the rain is gone

I can see all obstacles in my way

Gone are the dark clouds that had me down

It’s gonna be a bright, bright, bright beautiful day

Those words do a pretty good job of describing my outlook for 2010 and the next few years. The dark clouds of the economy that hung over us the last two years are starting to break up and we can see some rays of sunshine. We are a long ways from bright, beautiful days but along with the hurdles to our recovery that I can now identify (and attack); I do see the signs of a rainbow. Contrast that “view” to a year ago when things were so difficult that you could barely see into next month … or even next week some of the time! We can now look out further on the horizon and recognize more specifically what areas weathered the storms well, what has to be rebuilt, and what challenges we must focus upon in order to experience some nice sunshine moments.

Jamak’s industrial manufacturing Business Units are the leaders among the groups that “weathered the storm well”. They did an outstanding job of bunkering down to survive the tough times while making aggressive adjustments to their business models such that they are performing nicely now with some recovery of sales, despite the fact that sales are nowhere near historical records! Their current success is the product of attacking all areas of the business cycle. They reduced direct product costs through efficiency gains and adjustments to processes and suppliers. They reduced overhead in ways that not only helped them survive, but left them strong enough to still be effective even with growing sales volume. Finally, they faced challenging times with their customers in a professional manner backed by simple good business sense and logic. These groups are performing extremely well and I anticipate that they will continue to do so as we move forward.

Jamak’s Healthcare Technologies Business Unit (HTBU) came into the “storms” in weak shape – a relatively small unit still in the start-up phase of building revenues and optimizing processes. However, they quietly built themselves a nice business despite, and among, the economic storms. HTBU used the time to focus with great intensity on their internal performance and found a way to become profitable on even existing sales volume and customer base. Then they began to add new business and handled that growth in a cost effective manner. Looking ahead, they have some very exciting growth potential, already specifically identified, and my bet is they can and will handle that growth with the same professionalism and effectiveness.

Jamak’s Distribution Unit (DTBU), by design, operates a business model on thin margins in order to give our customer base a “one stop shopping” supplier. Depressed sales volumes created some real challenges to that business model. Nonetheless, relationships with our customers were enhanced as DTBU creatively found ways to help the customers deal with reduced inventories, smaller orders and increased Asian pricing. In fact, many of our customers moved more of their existing products to DTBU upon discovering that the DTBU economic model was better for them than investing in the manufacturing or direct sourcing of those products. As a result, Jamak and our customers are enjoying mutual success with effective offshore sourcing and a very efficient supply chain.

Jamak’s Business Unit for Consumer Products had a particularly difficult time. As we know, consumer spending dropped significantly, and with that, major retailers scrambled to cope with those economics. Some of their retail customers desperately cut suppliers in an effort to reduce management overheads and inventory, trying to align their costs with significantly lower store traffic. Potential new customers bunkered down and were afraid to make any significant changes, especially new additions, to their offerings. While continuing to work the large retail customers, Jamak is now identifying and constructing new paths to the market via channels that we have not previously sold thru. www.TheWiperStore.com is one of these channels and is already implemented. This is an exciting internet store that we have high hopes for. It is seeing steady week over week growth and we have multiple strategies in various stages of implementation that should drive significant traffic to this store. Selling a line of Jamak products thru school fund-raising is another new channel that has recently launched. This sales channel seems to be attracted to Jamak‘s unique products and capabilities in a market that has grown tired of food, candles and wrapping paper. Jamak is also in the early stages of launching high quality silicone products as earth friendly alternatives to products made from non-silicone materials. Watch for some great new products in both the Wine Industry and the Dairy Industry!