ENGINEERING MEASUREMENTS COMPANY
600 DIAGONAL HIGHWAY
LONGMONT, CO 80501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 13, 1995
TO THE SHAREHOLDERS OF ENGINEERING MEASUREMENTS COMPANY:
The Annual meeting of the Shareholders of Engineering Measurements
Company, hereinafter referred to as the "Company", will be held at
the Company's headquarters, 600 Diagonal Highway, Longmont
Colorado on October 13, 1995, at 5:00 p.m., local time, pursuant
to call therefor by the Board of Directors for the following
purposes:
1. To elect Directors to serve until the next Annual Meeting of
Shareholders of the Company or until their successors have been
duly elected and qualified.
2. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
The Board of Directors has fixed the close of business on August
28, 1995 as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting.
By Order of The Board of Directors
Charles E. Miller, President
September 13, 1995
YOUR VOTE IS IMPORTANT
Please execute and return the enclosed Proxy promptly, whether or
not you intend to be present at the meeting. Should you decide to
attend the meeting, you may vote in person at that time if you so
desire. Your attention to the enclosed Proxy Statement furnished
by Management and authorized by the Board of Directors is urged.
<PAGE>
PROXY ENGINEERING MEASUREMENTS COMPANY PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF THE
SHAREHOLDERS TO BE HELD OCTOBER 13, 1995
The undersigned hereby constitutes, appoints and authorizes Charles E.
Miller, as the true and lawful attorney and Proxy of the undersigned
with full power of substitution and appointment, for and in the name,
place and stead of the undersigned to act for and vote as designated
below, all of the undersigned's shares of the $.01 par value common
stock of Engineering Measurements Company, a Colorado corporation, at
the Annual Meeting of Shareholders to be held at the Company's
headquarters, 600 Diagonal Highway, Longmont Colorado at 5:00 p.m.
local time on October 13, 1995 and at any and all adjournments
thereof, for the following purposes:
1. To elect Directors to serve until the next Annual Meeting of
Shareholders and until their successors are duly elected and
qualified:
[ ] FOR all nominees listed below (except as marked to the contrary):
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below:
Charles E. Miller Walter Kluck Thomas G. Miller William A. Ringer
(Instructions: To withhold authority to vote for any individual nominee,
draw a line through or otherwise strike out his name. If authority
to vote for the election of any nominee is not withheld, the
execution of this Proxy shall be deemed to grant such authority.)
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
<PAGE>
The undersigned hereby revokes any Proxies as to said shares heretofore
given by the undersigned, and ratifies and confirms all that said
attorneys and Proxies may lawfully do by virtue hereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1 . THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED
AT THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF
SHAREHOLDERS TO THE UNDERSIGNED.
Dated:__________, 1995
Signature
Joint Owner Signature
Please indicate change of address
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement furnished herewith.
Signature(s) should agree with the name(s) shown hereon. Executors,
administrators, trustees, guardians and attorneys should indicate
when signing. Attorneys should submit power of attorney. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ENGINEERING
MEASUREMENTS COMPANY. PLEASE SIGN AND RETURN THIS PROXY TO THE
COMPANY. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING.
<PAGE>
ENGINEERING MEASUREMENTS COMPANY
600 Diagonal Highway
Longmont, CO 80501
(303) 651-0550
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held on October 13, 1995
INTRODUCTION
The accompanying Proxy is solicited by the Board of Directors of
Engineering Measurements Company, a Colorado corporation,
hereinafter called the "Company," for use at the Annual Meeting of
Shareholders to be held on Friday, October 13, 1995 at 5:00 p.m.
local time, at the Company's headquarters, 600 Diagonal Highway,
Longmont Colorado and at any recesses or adjournments thereof.
These proxy materials are being mailed to shareholders commencing
approximately September 13, 1995.
The Proxy may be revoked at any time by the shareholder before it
is exercised. All shares of stock represented by valid Proxies
received prior to the meeting pursuant to this solicitation and not
revoked before they are exercised will be voted. In each case
where the shareholder has appropriately specified how the Proxy is
to be voted, it will be voted in accordance with such
specification. Unless specific instructions are given to the
contrary, the persons named in the accompanying proxy will vote FOR
the election of the four persons nominated to serve as directors of
the Company. Abstentions received with respect to any proposal
will be counted for purposes of determining whether a quorum is
present at the Meeting, but will not be counted for purposes of
determining whether the requisite vote has been obtained for the
proposal. Broker non-votes with respect to a particular proposal
will not be counted for purposes of either determining whether a
quorum is present at the Meeting or determining whether the
requisite vote for such proposal has been obtained. The giving of
a proxy will not affect a shareholder's right to attend the meeting
and vote in person. Any shareholder giving a proxy has the right
to revoke it at any time before it is exercised by executing and
returning a proxy bearing a later date, by giving written notice of
revocation to the Company's secretary, or by attending the meeting
and voting in person.
PERSONS MAKING THE SOLICITATION
This Proxy is solicited by the Board of Directors of the Company.
In addition to the solicitation of Proxies by mail, certain of the
officers or employees of the Company, without extra remuneration,
may solicit Proxies personally or by telephone, facsimile,
telegraph or cable. The total expense of such solicitation will be
borne by the Company and will include reimbursement paid to
brokerage firms and other custodians, nominees and fiduciaries for
their expense in forwarding solicitation material regarding the
meeting to beneficial owners.
<PAGE>
REQUIRED VOTE FOR EACH PROPOSAL
The four nominees for director receiving the highest number of
votes cast by shareholders of the Company entitled to vote thereon,
assuming that a quorum of a majority (a "Quorum") of the
outstanding shares of common stock of the Company entitled to vote
at the Meeting is present in person or by proxy, will be elected to
serve on the Board of Directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The date for determination of Shareholders entitled to vote at the
meeting (the "Record Date") is the close of business on August 28,
1995. On such date there were outstanding 2,836,402 shares of
Common Stock, $.01 par value (the "Common Stock") of the Company,
each of which is entitled to one (1) vote.
On the Record Date the security ownership of each person who owned
of record or beneficially, to the knowledge of the Company, five
percent (5%) or more of any class of voting securities of the
Company, and of each current Director (and each nominee Director)
and of the Officers and Directors (and nominees) as a group was as
follows. All information is based on information furnished by each
such person. Unless otherwise stated, the indicated persons have
sole voting and investment power over the shares listed.
<TABLE>
<CAPTION>
Title of Name of Amount and Nature Percent
Class Beneficial Owner of Ownership of Class
============ ================= ====================== ========
<S> <C> <C> <C>
Common Stock Charles E. Miller 1,210,641 (1) 38.9
Common Stock William A. Ringer 76,500 (2) 2.7
Common Stock Saeid Hosseini 49,400 (3) 1.8
Common Stock David S. Miller 309,162 (4) 11.3
Common Stock Walter Kluck 21,000 (5) 0.8
Common Stock Thomas G. Miller 324,900 (6) 11.8
All Directors and Officers as a
Group (Five Persons) 1,682,441 51.6
</TABLE>
(1) Record and Beneficial; includes 834,000 shares of common stock owned
directly; an option to purchase 20,000 shares of common stock under
the 1988 Non-statutory Stock Option Plan; an option to purchase 10,875
shares of common stock under the 1991 Incentive Plan; and the right to
convert a portion of a loan balance into 345,766 shares of common
stock pursuant to loan agreements (See Note 4 to the Consolidated
Financial Statements in the Company's Annual Report). Charles E.
Miller's business address is 600 Diagonal Highway, Longmont, CO
80501.
<PAGE>
(2) Record and Beneficial; includes 16,500 shares of common stock owned
directly; an option to purchase 40,000 shares of common stock pursuant
to the 1991 Non-Employee Director Stock Plan; and an option to
purchase 20,000 shares of common stock under the 1988 Non-Statutory
Stock Option Plan. William A. Ringer's business address is 5675
Arapahoe Avenue, Boulder, CO 80303.
(3) Record and Beneficial; includes an option to purchase 49,400 shares of
common stock under the 1991 Incentive Plan. Saeid Hosseini's business
address is 600 Diagonal Highway, Longmont, CO 80501.
(4) Record and Beneficial; includes 309,162 shares of common stock owned
directly. David S. Miller's business address is 420 E. Armour, N.
Kansas City, MO 64166.
(5) Record and Beneficial; includes 1,000 shares of common stock owned
directly; and an option to purchase 20,000 shares of common stock
under the 1991 Non-Employee Director Stock Plan. Walter Kluck's
business address is P.O. Box 421, Clifton, NJ 07015.
(6) Record and Beneficial; includes 304,900 shares of common stock owned
directly; and an option to purchase 20,000 shares of common stock
under the 1991 Non-Employee Director Stock Plan. Thomas G. Miller's
business address is 11725 W. 112th St., Overland Park, KS 66210.
ELECTION OF DIRECTORS
The Bylaws, as amended, provide for a Board of four(4) Directors.
Management recommends the election of the nominees listed below as
Directors, to hold office until the next Annual Meeting of
Shareholders or until their successors are elected and qualify.
Except where otherwise instructed, proxies will be voted for
election of all the nominees. If, at the time of the 1995 Annual
Meeting of Shareholders, any of such nominees should be unable to
or decline to serve, the discretionary authority provided in the
Proxy will be exercised to vote for a substitute. Management has
no reason to believe that any substitute nominee or nominees will
be required.
<PAGE>
The following Table indicates the name of each of the Company's
Directors and nominees for Directors, their ages and business
experience during the past five (5) years.
<TABLE>
<CAPTION>
Year First Position and
Elected As Principal Occupation
Name of Director Age Director (for the past 5 years)
================= === ===== ====================================
<S> <C> <C> <C>
Charles E. Miller 57 1967 Chief Executive Officer, President,
Director, Chairman of the Board and
Secretary, previously President from
1967 to 1987; member of the
Compensation Committee; and Director
of Marcum Natural Gas Services, Inc.
William A. Ringer 61 1978 Director; Member of Compensation
Committee; President of
Granville-Phillips Company, Boulder,
Colorado, which is not an affiliate
of the Company. Employed by
Granville-Phillips in an executive
capacity for more than five years
prior to the date of this proxy
statement.
Thomas G. Miller 48 1995 Director; Member of Audit, and
Incentive Committees; CEO and
physician of College Park Family Care
Center of Overland Park, Kansas,
which is not an affiliate of the
company. Employed by College Park
Family Care Center in an executive
capacity for more than five years
prior to the date of this proxy
statement.
Walter Kluck 66 1995 Director; Member of Audit,
Compensation and Incentive
Committees; CEO of Industrial
Representatives, Inc. of Clifton, New
Jersey, which is not an affiliate of
the Company. Employed by Industrial
Representatives, Inc. in an executive
capacity for more than five years
prior to the date of this proxy
statement.
</TABLE>
The Board of Directors of the Company, which held two meetings
during the last fiscal year, has the primary responsibility for
directing management in the business affairs of the Company. All
Directors attended all meetings. The Board of Directors has
standing Audit, Compensation, and Incentive Plan Committees.
The Audit Committee reviews the financial statements of the Company
and exercises general oversight with respect to the activities of
the Company's independent auditors and Controller and related
matters. Mr. Thomas Miller and Mr. Kluck constitute the members of
the Audit Committee. The Audit Committee met once in fiscal year
1995.
The Compensation Committee reviews and makes recommendations to the
Board with respect to employee and officer compensation. Messrs.
Charles Miller, Ringer, and Kluck serve on the Compensation
Committee.
<PAGE>
The Compensation Committee did not meet formally during
the last fiscal year.
The Incentive Plan Committee administers the employee incentive
plans and programs. Messrs. Walter Kluck and Thomas Miller serve
on the Incentive Plan Committee. The Incentive Plan Committee did
not meet formally during the last fiscal year.
All Directors hold office until the next annual meeting of the
shareholders of the Company or until their successors have been
elected and qualified. Officers serve at the discretion of the
Board of Directors and are elected annually.
Charles E. Miller and Thomas G. Miller are brothers.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and
greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with the copies of all Section
16(a) forms they file. Based solely on review of the copies of
such forms furnished to the Company, or written representations
that no Forms 5 were required, the Company believes that during the
last fiscal year, all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten-percent beneficial
owners were complied with.
<PAGE>
EXECUTIVE OFFICERS
The Table below indicates the name of each of the Company's
executive officers, their ages and positions, and their business
experience during the past five (5) years.
<TABLE>
<CAPTION>
Position Position, Date First Elected to
Name of Officer Age and Principal Occupation (for the
past 5 years)
================= === =======================================
<S> <C> <C>
Charles E. Miller 57 Chief Executive Officer, President
Chairman of the Board and Secretary;
previously President from 1967 to 1987.
Saeid Hosseini 32 Vice President Sales and Marketing.
Previously Product Line Manager, and
Manager of Applications Engineering.
Employed by the Company for more than
five years prior to the date of this
proxy statement.
</TABLE>
SIGNIFICANT EMPLOYEES
The Table below indicates the name of each of the Company's
significant employees, their ages and positions, and their business
experience during the past five (5) years.
<TABLE>
<CAPTION>
Position, and Principal
Name of Employee Age Occupation (for the past 5 years)
================ === ===========================================
<S> <C> <C>
John B. Thompson 38 Controller since August 1992.
Employed in an accounting management
capacity from 1991 to 1992 at Rocky
Mountain Bank Note Company, Lakewood,
Colorado, which is not an affiliate of the
Company, and employed by Micro Motion,
Inc., Boulder, Colorado, which is not an
affiliate of the Company, in an accounting
management capacity for more than five
years prior to the date of this proxy
statement.
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation awarded to,
earned by, or paid to the Company's Chief Executive Officer and
it's other two executive officers for services in all capacities to
the Company during the fiscal years ended April 30, 1993, 1994 and
1995:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- Securities All
Name and Annual stricted Underlying LTIP Other
Principal Compen- Stock Options/ Pay- Compen-
Position Year Salary Bonus sation Awards SAR's outs sation
($) ($) ($) ($) (#) ($) ($)
========== ==== ====== ====== ======= ======= =========== ==== =======
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles E. 1993 56,346 1,738 0 0 365,766 0 0
Miller, 1994 58,906 22,911 0 0 0 0 201
C.E.O. and 1995 86,874 0 0 0 10,875 0 1,098
Chairman of
the Board
Douglas J. 1993 98,986 1,738 0 0 105,000 0 0
Collier, 1994 102,331 22,911 0 0 6,460 0 865
President 1995 107,783 0 0 0 8,240 0 201,307
(1)
Saeid 1993 64,500 1,128 0 0 33,000 0 0
Hosseini, 1994 66,530 14,871 0 0 8,230 0 288
Vice 1995 80,000 0 0 0 8,170 0 474
President
(1) Mr. Collier ceased being a director and officer of
the Company in March, 1995. Mr. Collier received $200,000
in payment for the repurchase of his stock options.
(2) Other Compensation for all officers reflects the matching
portion of the Company's 401K plan.
</TABLE>
<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
Individual Grants
<CAPTION>
(a) (b) (c) (d) (e)
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees Base Expiration
Name Granted (#) in Fiscal Yr. Price ($/Sh) Date
============= ============ ============= ============ ===========
<S> <C> <C> <C> <C>
Charles E. 10,875 24% $3.38 4/14/00 (1)
Miller
Douglas J. 8,240 18% $3.38 4/14/00 (2)
Collier
Saeid 8,170 18% $3.38 4/14/00 (1)
Hosseini
</TABLE>
(1) Exercisable in full beginning October 14, 1994, through the
expiration date of the options.
(2) Terminated due to the fact that Mr. Collier is no longer an
employee or director of the Company.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SAR's Options/SAR's
Shares at FY-End (#) at FY-End ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise(#) Realized ($) Unexercisable Unexercisable
========== ============== ============ ============= =============
<S> <C> <C> <C> <C>
Charles E. 0 0 20,000/0 $13,750/$0
Miller 280,674/0 $431,536/$0
65,092/0 $57,118/$0
10,875/0 $0/$0
Douglas J. 0 0 0 0
Collier
Saeid 0 0 3,000/0 $2,813/$0
Hosseini 30,000/0 $43,125/$0
8,230/0 $2,037/$0
8,170/0 $0/$0
</TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
None.
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company received an annual
Director's fee of $3,000. This fee is paid whether or not the
Director attends meetings of the Board and its Committees.
Under the 1988 Non-Statutory Stock Option Plan, options to purchase
40,000 shares were granted to directors, 20,000 shares each to
William A. Ringer, and Charles E. Miller, in fiscal year 1993
exercisable at $1.75 per share from July 1, 1993 to June 30, 1997.
Under the 1991 Non-Employee Director Stock Plan, in fiscal year
1993, options to purchase 20,000 shares were granted to William A.
Ringer at $1.58 per share from December 20, 1992 through December 20, 1995.
Under the 1991 Non-Employee Director Stock Plan, in fiscal year 1995,
options to purchase 60,000 shares were granted, 20,000 each to
William A. Ringer, Walter Kluck, and Thomas G. Miller, exercisable
at $3.40 per share from October 14, 1995 through October 14, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The terms and conditions pertaining to the Industrial Development
Revenue Bond purchased by Charles E. Miller from Colorado National
Bank of Denver in August 1992, remain the same. The only difference
is that Charles E. Miller now has all rights, title and interest of
the debt instrument instead of Colorado National Bank of Denver. For
terms and conditions please see Note 4 to the Consolidated Financial
Statements included in the accompanying Annual Report.
The related party transactions between the Company and Marcum Natural
Gas Services, Inc. are set forth in Item 1 of the Form 10-KSB
included in the accompanying Annual Report. Other related party
transactions include the sales from the Company to DVCO of
approximately $68,000 in the fiscal year ended April 30, 1995 and
$292,000 in the fiscal year ended April 30, 1994. The Company also
recognized $50,000 of royalty income from DVCO during fiscal year
ended April 30, 1995 and $50,000 for fiscal year ended April 30,
1994.
INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton served as the Company's independent certified public
accountants for the year ended April 30, 1995 and is expected to
serve in such capacity for the current fiscal year.
It is expected that a representative of Grant Thornton will be present
at the Annual Meeting of the Shareholders. Such representative will
have the opportunity to make a statement, if he desires to do so, and
is expected to be available to respond to appropriate questions.
<PAGE>
PROPOSALS BY SHAREHOLDERS
Any shareholder who wishes to submit a proposal to be considered at the
Annual Meeting of the Company's shareholders, to be held after the
April 30, 1996 fiscal year, must submit the proposal to the Company
by May 16, 1996 for the proposal to be included in the Proxy
Statement for that meeting. Any such proposals should be sent to the
Company's principal executive offices at 600 Diagonal Highway,
Longmont, Colorado 80501.
OTHER MATTERS
Management is not aware that any matters not referred to in the Proxy
Statement will be presented for action at the meeting. If any other
matters properly come before the meeting, the persons named in the
enclosed Proxy will vote such Proxy in accordance with their best
judgment.
AVAILABILITY OF ANNUAL REPORT
The Company will provide any Shareholder with a copy of its Annual
Report on Form 10-KSB for its fiscal year ended April 30, 1995,
without charge upon receipt of a written request for such report.
Such requests should be addressed to the Company's secretary at 600
Diagonal Highway, Longmont, Colorado 80501. The Annual Report is not
a part of this proxy statement.
Longmont, Colorado
September 13, 1995
<PAGE>
Dear Shareholder:
It is my pleasure to share with you several of the more
significant events which have occurred over the past 12-
months; events likely to reshape the course and pace of
corporate development well into the next century. This was a
year of considerable progress measured in terms of
organization, personnel, manufacturing capability, and growth
in EMCO's stature as an international manufacturer of
Quality Flowmeter Products. We emerge from our experience a
stronger, more vibrant company, uniquely positioned for a
period of sustainable real growth.
"...the misfortunes of mankind, or the institutions of his
making, yield vital seeds of change essential to real
progress", so notes a keen observer of human behavior.
EMCO's experience over the last year would seem to validate
this maxim. During the first half of '94, the company was
experiencing Quality Control problems which compromised
product reliability. While the technical problems have long
since been solved, the residual effect was an unfortunate
loss in sales momentum and a hit to earnings.
This attention-getting experience, while unpleasant, set into
motion a number of positive management and structural changes
at EMCO to make certain that Product Quality and Customer
Satisfaction receive the very highest priority and attention
as articulated in our adopted Statement of Corporate
Philosophy-see inside cover.
Since January 30, when top management changes were announced,
steady progress has been made to translate into daily
practice the ideals and principles embedded in the
"Statement". I encourage you to read and reflect on the
Statement since it represents my personal, deeply held
beliefs, goals and priorities for the company. You can
consider the Statement a virtual blueprint for corporate
development and a useful template for measuring future
management decisions and performance.
Several of the more recent developments--mile stone events,
by my recognizing--indicate the magnitude of progress that
has been made in several important areas:
ISO 9001 certification
In August of this year, EMCO was notified that it has been
certified under ISO 9001. This prestigious, internationally
recognized standard has become a de-facto
standard used by many of our customers as an indicator of
manufacturing excellence. ISO certification is a major
achievement that can not only improve our capability and
performance as a manufacturer, but also significantly improve
our image and respect globally.
<PAGE>
Product certification from Russian Government
In May, three representatives of Gosstandt (Russian
Certification Agency), spent two weeks at EMCO conducting a
thorough-going audit of our manufacturing operations,
calibration facilities and products. This exhaustive, in-
depth audit concluded with our receiving official
notification in July enabling EMCO to sell into the Russian
market four of our main products. We believe these
particular products will be well received in the rapidly
developing Russian Energy market. Significant orders for
equipment have already been booked and the quotation activity
is strong.
The strategic importance of Russian certification cannot be
overestimated. To support our Russian initiative, EMCO has
hired a full time native Russian engineer to recruit Russian
Sales Distributors, and promote and manage Sales.
Financially, the year was disappointing--essential a break-
even year; the most significant contributing factors: poor
product quality and lower than expected sales. Personnel
additions and upgrades to our engineering and production
departments further eroded profits. On the positive side,
the company has a strong balance sheet, positive cash flow from operations,
excellent credit with all its supplier and no bank debt.
Looking forward, I believe EMCO is in the best position
ever to make significant gains in sales and earning in the
coming year. ISO certification is a significant achievement
in the life of any company and its impact on EMCO will be
significant and far-reaching.
EMCO is now a legitimate player on a global scale. Foreign
sales continue to expand particularly in the emerging markets
of the former eastern bloc countries; and we have recently
received orders from Lithuania, Malaysia, Taiwan, Singapore,
Pakistan and India.
Sales by Danfoss of EMCO's Vortex flowmeter grew by
approximately 60% during the year indicating strong product
acceptance in Europe. While monetary exchange rates have been
problematic--sale of Danfoss products in the US
market--we believe our value engineering program will allow
us to maintain existing profit margin under increasing price
pressure and competition.
Finally, the company continues to maintain a healthy product
development program. We expect to add several significant new
products in the coming year, which will open up impressive
new market opportunities and expand our sales base.
Thank you for your continued support.
