State of the Nation
by E. W. Phares II
The company has now finished fiscal 2012 and it’s with great pleasure that I inform you it was an excellent year. It was a fine year in its own right, but even more so when one considers the very poor worldwide economic conditions.
The company increased sales by over $2 million versus the plan, and over $1 million over planned pretax income. All divisions are operating in the black and our share of market has improved nicely in those areas in which we are concentrating.
Penetone sales continue to improve and we are profitable for the year with excellent turnaround in pulp and paper, and oil and gas fields. Continued reduction in some of our raw materials has dramatically improved our bottom line and we’re anticipating an excellent year in 2013.
Sales in Canada continue extremely well and we’ve finished the year ahead in profit plan and last year. Dramatic increases in sales to the western tar sand field, as well as the food and barn area were accomplished. We anticipate continued growth across the board in Canada in 2013.
Petron sales for the year were well ahead in both plan and last year. Pretax operating income was also ahead of plan. We are optimistic about 2013, however, have concerns with the drop-off in business in cement, copper, and steel industries. In spite of these downward pressures, our market development activity continues quite high and we anticipate counterbalancing this drop-off with new areas of sales.
2013 looks very optimistic for our company and we look forward to working very closely with all of you to achieve new sales and profit accomplishments.
Thanks again for all of your outstanding work.
No Grounds for Concern
By Jean Richard
At the beginning of the 2012 year we had major concerns about what to expect for the upcoming year. Fortunately our concerns were unfounded.
Sales for the year (excluding DeLaval) came in at 9.55% increase above plan and 3.2% above last year. More importantly our operating profit was 13.4% above plan and 27.7% above last year.
By segment, our industrial sales (particularly Western Canada) continued to grow throughout the year finishing at $550k above plan. Supermarket sales were also surprisingly strong finishing at 7.5% over plan.The food/barn segment finished marginally above plan as the continued culling of hogs had a negative impact on our overall results. DeLaval sales held steady, but, we do expect a drop in sales in 2012 as DeLaval has recently informed us they will be transferring the powders we currently make for the US market to one of their own plants in Dallas.
On the positive side we have developed a dairy barn cleaning program in which DeLaval has shown great interest. This new program is currently being introduced across Canada and we should see a positive impact starting in the second quarter of 2013.
In addition we received confirmation of 2 important new projects in Western Canada coming on board in 2013 which puts us in a very enviable position starting the new year.
2012 also marked a milestone for West Canada as we started exporting product to Europe and the Caribbean. In addition we are currently working on new opportunities for Southeast Asia and Central America.
Last but not least I would like to thank all our employees for their efforts and contribution during the past year as there is no way we could have succeeded without their help.
I would also like to take the occasion to wish everyone and their families’ health and success in 2013. (Glad to see the Mayan`s were wrong about December 21st…)
Quality & Safety Keys to Success
By John McHale
Petron had a very successful year in 2012. We had zero lost time injuries in 2012. Everyone went home each evening unhurt and healthy and that is a wonderful accomplishment when you are running a production facility with moving equipment and high temperature machinery. Our customer satisfaction metrics were outstanding. We reached an on time shipment percentage of 98.8%. Our customer complaints were <0.4%. Our first time through batch percentage was 98.5 %. We passed our ISO 9001 audit from our registrar in 2012 as well as a very thorough 3 day quality audit from one of our major customers. Petron continues to keep quality and safety as cornerstones to our success.
The Q&T department increased their staffing by hiring Anthony Kerhin and Sarah Deshambo. The Operations department added Kiran Batchu as our new Production Manager. They also hired Glenn Berwanger and Augie Hernandez in plant operations. Administration added Candace Wilson. All the new employees mentioned above are very welcome additions to Petron. Their contributions to Petron were very timely and they helped support the hard earned growth we had at Petron in 2012.
Specifically on the growth side— I am proud to report that Petron set a record this year in sales and profitability.
Our 2012 record sales exceeded 2011 sales by 6% and our operating profit increased 4% over 2011.
Sales in our core mining products for mills and kilns remains very steady owing to a strong mining business worldwide, despite a continued slowdown in cement in the USA. The talk of China being overbuilt (albeit fairly true from a housing perspective) fails to take into consideration that China is still growing at 6-8 percent and that translates into a large mining demand and drives Petron’s success.
Our shovel and dragline lubrication business has grown substantially worldwide in the past several years and 2012 was no exception. The success we are having with our Premium 10 B and 30 B, primarily on shovels, has been one of our sales growth leaders.
My heartiest thanks and appreciation go out to all of the Petron personnel, customers, distributors, OEM’s and vendors who helped Petron achieve records in sales and operating income in 2012.
Hurricane Tests Penetone Team
By Phil Figdore
Hurricane Sandy came and went, unleashing most of its fury here in the metropolitan New York City, including Bergen County in New Jersey where Penetone is located. Outside of the Rockaways (western end of Long Island) and Staten Island which guard the entrance to the harbor, Bergen County may have been one of the hardest hit as a major levee designed to protect the low lying communities of Little Ferry, Moonachie, and Carlstadt where we are located failed Monday evening (the 29th) at the height of the storm, with the result that the water rose 4-5 feet in a matter of 30 minutes. Although we were in the path of this flood, our site faired extremely well compared to many of our corporate neighbors. We did get "flooded" with a few inches of water with the major casualty being the office carpet and several battery back-ups. We did not suffer any loss of product. Two factors contributed to this:
- Location, location, location. Well in our case, elevation, elevation, elevation. Our plant sits about 6-12" higher than many of our neighbors. This was enough to prevent major flooding of the plant and office.
- A decision to move all cardboard inventory on top of drums and moving as many computers from floors to desks giving both an extra 3' of protection.
After the surge subsided early Tuesday morning (the 30th), the production side of the plant had 3-4 inches of water in it due to it being saucer shaped to contain spills. A make shift garden hose siphon allowed it to be emptied Tuesday night. Not knowing what they would find on Wednesday, our people showed up and everyone pitched in to the task of clean up - mopping up the residual puddles of water in the warehouse, assessing the office area with its wet carpet, moving water soaked cardboard boxes. With system wide loss of power and telecommunications, a priority was given to somehow getting these restored.
Although our phone provider got hit by the storm, Charlie was able to get through to them and have them forward all calls to our Los Angeles office by Wednesday afternoon. Sylvia and Maria offered their assistance by working longer hours to provide full coverage. Not knowing when electricity would be restored, and unable to source a generator close by (everything was sold out within 200 miles, trust me, we checked), we reached out to James Tormey and Jean Richard in Montreal who were able to locate one in a matter of an hour, purchase it, and have it personally delivered by James who drove very early Thursday morning and was here by 7 am. And James even brought the five gallons (Imperial thank you) of gasoline to make sure we could operate it as there was a severe gas shortage in our area. This allowed Joyce to get rudimentary computer services up and connectivity to the internet and hence Syspro going on Thursday. While all this was occurring, Kim somehow was able to find a carpet installer who visited us that afternoon! They came Friday morning to begin ripping out the carpet, and just as they showed up at 6:45 am, the lights came on. A brief inspection showed that we had FULL power to all plant equipment. Our plant personnel were making product on Saturday and were even able to make an emergency batch of product for use at the Bayway refinery in Linden, NJ which was inundated with 10-12' of water. Thank you Eversley, Luis, and Blas!
The slowest utility to come back on line was our T1 computer line used for phone and high speed internet service as all the switching stations in the area were flooded and it took some time dry these out. The storm tested our preparedness but ultimately we "weathered" the storm and are ready for the next!
The President’s Award was bestowed to Phillip Figdore to recognize accomplishments he has made to Penetone over his career and in 2012 in particular. Phil began managing production and inventory control in late 2011 accomplishing significant inventory reduction, efficient production planning and lower purhcasing prices. Phil has accepted and successfully completed all projects assigned to him including ISO certification and maintenance, and compliance with all regulatory requirements for products and the plant. We congratulate Phil on his accomplishments.
Employee of the Year
Mike Nelson has been awarded Sales Manager of the Year for his outstanding Pulp and Paper results. Sales in 2012 more than doubled to $3.2M.
Wayne Dory has been chosen as this year’s Salesman of the Year for maintaining and growing sales in the petroleum shutdown market. Wayne has expanded sales in to Ceda International with 500K of new business while maintaining and building our existing shutdown customer base. In addition he assisted in the development and growth of new technologies for the Ultrasonic Industrial cleaning market, resulting in over 100K in new business. Wayne is also an outstanding team player overall.
Joyce Seccia was selected Administrative Employee of the Year recognizing her accomplishments in enhancing the computer systems company wide and continued excellent financial reporting.
- Phillip Figdore, VP R& D, Penetone 25 years
- Matthew McClellan, Sales Engineer, Petron 5 years
- Jean Richard, General Manager, West Penetone 15 years