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Business Review

  1. 1. Advanced Concrete Tools, Inc. Business Review The Centerpoint Condo Project in Tempe, Ariz.
  2. 2. Advanced Concrete Tools, Inc. Advanced Concrete Tools Is Engaged in Design, Manufacture and Marketing of Product Solutions for the Concrete Placement and Finishing Industry •Vibratory Wet Screeds •Concrete Vibrators •Curb Roller and Roller Screed •Concrete Hand Tools •Concrete Chemical Solutions Indiana University’s New End Zone Seating Facility
  3. 3. Advanced Concrete Tools, Inc. Market Position • 500 Plus Dealers in Our Network • Over 10,000 Contacts in Our Data Base • A Strong Brand Presence • $100 Bil Global Equipment Market Interstate-35W crossing over the Mississippi River in Minneapolis • Developing Critical Global Relationships
  4. 4. Advanced Concrete Tools, Inc. Investment Objective Our Objective is to Significantly Increase the Value of ACT as a Strategic Investment • Rapidly Expanding Our Capability to Participate in the World Wide Investment in Infrastructure Development • Developing Partnerships With Major International Firms –Utilize Our Channel to the US Equipment Market –Provide ACT Products Access to Global Markets • Increasing Our Manufacturing Value Add in the US • Development of Proprietary Technology • Rapidly Expanding Our US Market Channels • Creation of Manufacturing and Distribution in Brazil • Managing the Business to Attract Private Capital Investment to Execute Growth Strategies –Develop ACT as US Manufacturing Partner –Complementary Acquisitions
  5. 5. Advanced Concrete Tools, Inc. Strengths • Brand Awareness Through Over 3000 Contacts in the US • Product Reputation for Performance and Reliability • Patented Bar That Significantly Outperforms Other Bars • Ability to Partner With Major International Firms • Management Team Experience in Successful Businesses All Night Pour at Denver Museum of Science
  6. 6. Advanced Concrete Tools, Inc. Primary Success Factors • Become an Increasingly Significant and Important to Our Distribution Channel Partners • Manufacturers Representatives • 550 US Dealers • Focusing on Products That Enable the Concrete Contractor • Rapidly Adding High Value Products to Provide Our Distribution Partners an Opportunity to Sell Everyday • Increasing Awareness of Concrete and Construction Contractors to Our Products and Our Brand • Implementing Effective Merchandising and Promotions to Sell Through Our Channels • Industry Leading Warranty and Outstanding Product Service
  7. 7. Advanced Concrete Tools, Inc. • Founded in 1996 in Hendersonville Tenn. By Roy Frazier • Acquired Design and Patents From Weber Concrete Tools of Fort Smith, Ark. • Developed Distribution in 50 States • Founder Died From Sudden Heart Attack • Wife Kim Ran Company After Roy’s Death • Paid Down Debt • Maintained Steady Sales • Conservative Financials • Run As Life Style Business
  8. 8. Advanced Concrete Tools, Inc. Market Summary • $5.6 Trillion Global Construction Industry • $100 Billion Construction Equipment Industry • $60 + Billion Ready-mix Concrete Production $30 Billion US • The North American Equipment- rental Industry $38.3 Billion in the United States and $3.0 Billion in Canada. Twin Condominium Towers Site in Miami
  9. 9. Advanced Concrete Tools, Inc. United States Customer Base There Are 32,583 Concrete Contractors in the United States • 5,444 in the Southeast • 2,105 in Florida. • 3,276 in California • 2,113 in Texas There Are 9,444 Ready Mixed Concrete Manufacturers in the United States.
  10. 10. Advanced Concrete Tools, Inc. $30 Billion US Ready Mix Industry
  11. 11. Advanced Concrete Tools, Inc. ARA 2008 State Of The Equipment-Rental Industry Report • The North American Equipment-rental Industry Is the Largest in the World, Generating $38.3 Billion in the United States and $3.0 Billion in Canada. • Construction & Industrial Equipment Generated 69% of the Revenue With $24.5 Billion. • General Tool Accounted for $8.4 Billion in Rental Revenue in 2008, Which Remains Consistent With 2007 Rental Revenue of $8.5 Billion. • 2008 Revenue Was Only Down (2.7%) From 2007. Declines Are Not Expected to Last in 2011 & Beyond.
  12. 12. Advanced Concrete Tools, Inc. Global Stimulus The Potential Boost to the Global Construction Industry From Fiscal Stimulus Packages Over the Next Two Years Could Be Enormous. • US$ 355 Billion Is Greater Than the GDP of Many Medium-sized Countries, Florida Hospital Memorial Division • It Is Greater Than the Size of the Project in Daytona Beach German Market - the Fourth Biggest Market in the World • Additional Spending to Shore-up Economic Growth in 20 Major Economies Is Set to Exceed US$ 1.9 Trillion, of Which US$ 795 Billion Has Been Ear-marked for Construction • Most of This Will Be Spent in 2009 and 2010 Downtown Mall Light Rail Extension Project. Portland, Ore.
  13. 13. Advanced Concrete Tools, Inc. Global Stimulus • China's Extra Investment US$ 450 Earmarked for Infrastructure. Its Investment of US$ 225 Billion Per Year for Two Years Is Equivalent to an Extra +40% Boost to Its US$ 540 Billion Per Year Construction Output. • United States Us$ 130 Billion Out of of Us$ 800 Billion Invested in Transport and Energy Infrastructure. • Germany Eur 18 Billion (Us$ 23.4 Billion) California Science Center Expansion • France Will Invest EUR 10.5 Billion (US$ 14 In Los Angeles Billion) • Spain's EUR 11 Billion (US$ 14.5 Billion) Construction • Chile $ 700 Million to Public Works This Year • Mexico US$ 54 Billion Access Shaft of the East Side Combined Sewerage Overflow Tunnel Project in Portland, Ore
  14. 14. Advanced Concrete Tools, Inc. Residential construction spending is 59.3% below the peak of early 2006 Non-residential construction spending is 8.5% below the peak of last September
  15. 15. Advanced Concrete Tools, Inc. Nonresidential spending is now slightly negative on a year-over-year basis, and will turn strongly negative going forward. Residential construction spending is still declining, although the YOY change will probably be less negative going forward.
  16. 16. Advanced Concrete Tools, Inc. Business Development A 450-ton Deck Section on the New The Long Tan Hydropower Plant in Tacoma Narrows Bridge Tian, China Structural Engineering Teaching & Benicia-martinez Bridge in Northern Research Laboratory for Villanova California University's College of Engineering
  17. 17. Advanced Concrete Tools, Inc. Products
  18. 18. Advanced Concrete Tools, Inc. Business Development Developed an OEM Agreement With Stone Construction Equipment to Provide Screeds Under Their Brand World Wide • 100% Employee-owned • Design, Manufacture and Marketing of Light and Medium Construction Equipment. • Over 375 Products All Designed and Manufactured for Worldwide Distribution – Concrete and Mortar Mixers – Power Trowels – Concrete and Masonry Saws – Hand Held, Walk Behind and Ride on Dirt and Asphalt Compactors and Material Handling Equipment • Founded in 1967 and Is Located in Honeoye, New Screed Bull™ York, in a 175,000 Square-foot Facility
  19. 19. Advanced Concrete Tools, Inc. Business Development Developed an Exclusive Arrangement to Distribute Spyder Electronic High Frequency Vibrator ENAR Vibrators and Screeds in the United States and Now selling the ENAR Products Into the US Market Dingo High Frequency Electric Vibrator
  20. 20. Advanced Concrete Tools, Inc. Business Development Agreement With Nox-Crete Chemical to Expand Our Line of Concrete Chemical Solutions Concrete Bomb - Original Concrete Blast Off Concrete Bomb - New Green Chemically reacts with concrete and mortar Chemically reacts with the alkalies in concrete buildup. This effervescent reaction quickly to instantly prevent fresh concrete from bubbles away buildup. Byproducts are easily bonding and to gradually soften existing rinsed away with water concrete buildup. Apply before each use. Bio-Klean Concrete Gardcoat Chemically reacts instantly when applied to Concentrated, Biodegradable, form a waxy, protective coating that is both Citrus Based Concrete Cleaner chemically and physically welded to the And Degreaser. surface. a powerful, water dilutable cleaner that deeply penetrates concrete surfaces to safely and effectively remove most surface contaminants.
  21. 21. Advanced Concrete Tools, Inc. Business Development Agreement With Goldblatt Hand Tools to Distribute Their Line of Concrete Hand Tools in the United States • Founded 1885 120 Year History • Stanley Works Purchased the Goldblatt in 1992 • In March, 2006, Finishpro Tools Purchased the Brands From Stanley Works • Goldblatt Tool Company LLC Became Its Own Business in 2006 and Returned to Kansas City
  22. 22. Advanced Concrete Tools, Inc. Business Development Reached Agreement With Curb Roller Manufacturing to Distribute Their Line of Hydraulically Driven Products in the United States Reached Agreement with Allen Face Companies To distribute their patented Laser Screed Rail
  23. 23. Advanced Concrete Tools, Inc. Business Development Developed New Distribution in Florida, Southeast US and Far West
  24. 24. Advanced Concrete Tools, Inc. Business Development Upgraded to a State of the Art Scalable CRM System
  25. 25. Advanced Concrete Tools, Inc. Business Development Have Begun Test Marketing Screeds and Vibrators in Southern Brazil • Response Has Been Very Positive • Increasing Manufacturing Input Is Required to Overcome Import Barriers • The Brazil Opportunity Is Second Only to China • The basic infrastructure in place to begin marketing in 2009
  26. 26. Advanced Concrete Tools, Inc. Economic & industrial performance Gross Domestic Product Source: IBGE – Brazilian Institute of Geography and Statistics  Latest update: Upgraded to investment-grade in 2008 Source: Brazilian Ministry of Petrobras Itaipu dam Finance, Moody's oil rig Embraer jet and Fitch. • Economically, Brazil has performed very strongly, reflected in it’s improving risk rating • Brazil has a highly developed industrial base, enjoying world leadership in many sectors: • Hydro-electric power; Itaipu dam is the world's largest hydroelectric plant • Mineral production; local oil giant Petrobras is a pioneer in the field of deep water oil research. • Aircraft manufacturing; local company Embraer is the world leader in the design & development of smaller scale jet aircraft • Agriculture production, particularly Biofuels, where Brazil is the largest producer • Advanced space program, with significant launch capabilities and satellite manufacturing 4
  27. 27. Advanced Concrete Tools, Inc. Infrastructure Development Sao Paulo, a modern international city of over 10m people, with 1st world infrastructure services Sao Paulo metro, which has received awards in the recent past as one of the cleanest systems in the world by ISO9001. Sao Paulo airport: Brazil has the Curitiba: internationally recognised as a Porto Alegre: home to 2nd largest number of airports in model city for urban & infrastructure modern infrastructure, incl the world (~3,000) development. metro system 4
  28. 28. Advanced Concrete Tools, Inc. Next Products • Introduction of Platinum Beauty With Equilateral Triangle Bar • Add ENAR Back Pack Vibrator • Add ENAR Vibratory Float • Add Laser Rail • Evaluate Opportunities to Add a Line of Compaction and Power Trowels to Our Product Line • Enar • Kentsel Machinery Company Turkey • Dynapac France • Rhino-tuff USA • Ingersoll-Rand Small Equipment Line
  29. 29. Advanced Concrete Tools, Inc. US Equipment Distribution • Equipment Supply • White Cap Supply • Ram Tool • Rental • United • Sunbelt • RSC • CAT Rental • Major Construction Firms • Construction Supply • Internet – Construction Complete
  30. 30. Advanced Concrete Tools, Inc. Sales Strategy • Implement Floor Plan and Sales Incentive Program with Major Accounts • Utilize CRM to implement systematic initial contact and sales follow up • 5-STAR Dealers • Solution Programs – Major Dealers • Hot Zones - L.A, N.Y, and Chicago, Houston, DFW • End-Users / Mega-Buyers • Relationship Development • Easy to buy – Easy to Sell • Superb Product Availability and Customer Service • Expanded relationship with Stone and ENAR
  31. 31. Advanced Concrete Tools, Inc. Major Customer Targets • Ram Tool – Southeast US – 15 locations • Stowers CAT – East Tennessee • Puckett CAT - Mississippi • Thompson CAT – Alabama, Georgia, North Florida • Gerdau - Enco group – Southeast – 8 Locations • SCS – Southeast – 4 Locations • American Construction – California • McCann - Chicago • Lincoln Construction - Ohio • Mustang CAT - Houston
  32. 32. Advanced Concrete Tools, Inc. Marketing Strategies • Implement improved Web Site and Strategies to Increase Hits and Opt Ins • Build Contacts From the Blue Book of Concrete Contractors in Focus Areas • Enhance Email, Direct Mail and Fax Capability to Professionally Reach Decision Makers • Develop Effective Trade Advertising • Evolve Viral Marketing and Networking Strategies to gain access to early adopters in the industry
  33. 33. Advanced Concrete Tools, Inc. Competition Multi Line Manufacturers • Atlas-Copco - Sweden $8.9 Bil Sales • Wacker Corp - Germany $1.2 Bil Sales • Doosan - South Korea - $15 Bil Sales • Multiquip Inc. - Carson, California $100 Mil + • Stone Construction Equipment - Honeoye,NY $50 Mil + • Allen Engineering- Paragould, Arkansas • MBW - Slinger, Wisconsin $30 - $50 Mil
  34. 34. Advanced Concrete Tools, Inc. Consolidation • Dynapac Acquired by Atlas-Copco of Sweden • Wacker Corp acquired Neuson Equipment • Doosan aquired Construction Equipment line from Ingersoll Rand • Multiquip aggressive acquirer of brands
  35. 35. Advanced Concrete Tools, Inc. Small Equipment Segment Open to Focused Business • Focus on Large Equipment Sales Leaves Small Equipment Market Underserved • Relatively Low Brand Awareness and Loyalty • Dealers Evolve Toward Multi-line Suppliers but Will Sell Products Their Customers Are Seeking • Multi-line Suppliers Such as Multi-Quip are effectively roll ups lacking credibility with the end users • Contractors Tend to Return to What Works but Are Very Receptive to Try New Products • Dynapac and Ingersoll Rand exit small equipment segment • MBW and other firms struggling financially
  36. 36. Advanced Concrete Tools, Inc. Capital Structure • Immediate Financing Requirements • $350,000 Replace Existing Bank Financing • $50,000 ENAR Letter of Credit • $50,000 Bank Line of Credit for Working Capital • $200,000 First Round Equity Investment for Marketing, Product Development and Brazil • Second Round Financing • $50,000 Additional ENAR Line of Credit • TBD Bank Financing and Private Equity for Acquisition and US - Brazilian Manufacturing