Volume 14, Issue 1- January/February 2010

Newsworthy

BSF Shifts Focus in Hopes of Helping Film into the “Next Level”

While several window film companies chose not to exhibit at the recent SEMA show (see page 28 for show recap), exhibitors and attendees alike commented on the notable absence of San Diego-based manufacturer Solar Gard® as an exhibitor. Company officials, however, say the decision to forgo exhibiting was not due to budget cuts or the slow automotive market. Instead, it was part of the company’s shift in focusing more on window film as an energy-saving solution for the architectural market.

“We are not abandoning the auto film market,” says Christophe Fremont, president and chief executive officer of Bekaert Specialty Films LLC (BSF), manufacturer of Solar Gard products. “It takes courage to do things differently. Not being at SEMA was the courage to do things differently. We are continuing to invest in many areas and … we are a company that has been able to maintain a very solid business practice even in this economy.”

Another decision that took courage, according to Fremont, was the decision to close two service centers, one in Windsor, Conn., and one in Grand Prairie, Texas. The closures took effect November 13.

“This was not a question of streamlining, but of strategizing,” says Fremont. He explains that while the centers handled a range of services, careful review showed that most were handled over the phone. Customer service specialists ists based across the United States will now handle those calls.

“We have actually extended the number of hours in a day we will be taking customer calls,” says Fremont, explaining that calls will be handled from 5 a.m. Pacific time to 8 p.m. Pacific time–a span of 15 hours a day.

“We want to be completely transparent to our customers … and this should be smooth for our dealers. We are making sure that if a customer wants product they will be able to get it,” says Fremont, adding that about eight jobs will be affected by the closures, though future hirings are in the pipeline.

“We do not foresee any other U.S. closures,” adds Fremont.

Though the company is closing two service centers, it remains completely focused on moving the window film industry forward in a positive manner. Fremont says that while the automotive film industry seems to be moving toward a commoditization model as an increasing number of offshore manufacturers move into the U.S. market, BSF is not embracing such a model. “We have said all along that the auto market was going to be commoditized away. That is why we are looking for a superior [architectural] product … it’s where we are focused,” says Fremont. “We did not embrace commoditization; we moved away from it.”

According to Kathryn Giblin, the company’s vice president of global marketing and technical services, one reason the architec
tural market has not succumbed to commoditization is because the barriers to entry are very different compared to automotive.

“The barriers to entry [have brought] legitimacy to the industry. We now have National Fenestration Rating Council (NFRC) certification and there are so many more regulations and certifications … customers are more sophisticated and they are asking the questions.”

And the NFRC’s certification of window film is all the more reason why Solar Gard is pushing the benefits of these products as energy-saving materials.

“We want to ensure that window film is going to be a solution … the Department of Energy has recognized window film as an energy-saving product,” notes Fremont. “We need to equip our network [of dealers] with the tools they need to grow the architectural market.”

In this regard, Fremont says his company is continuing to focus on innovation.

“We are going to be bringing products [to market] that no one has seen before. A few of us [in the film industry] have spectrally selective films that can be put on certain types of low-E glass, but we want to be even more innovative in the future … We are going to continue to be innovative and it sets us aside from becoming a commodity,” he added during an exclusive interview with Window Film magazine.

“Window film is an excellent retrofit product,” says Giblin. “When you start looking at the carbon footprint of placing window film compared to replacing the glass entirely, window film [has a much smaller carbon footprint] and is more favorable.”

She continues, “There is so much business out there that there is enough for everyone. Window film is here and it is here to stay. Yes, we will see increased competition, but good competition just makes us stronger.”

Both Fremont and Giblin also agree the window film industry must move to the next level. One step in getting there will be to position window film as a solution to those who are not familiar with it. Educating and making installers aware will also be essential.

“We want installers to be trained on energy savings. It’s a skill we are trying to bring to the network. We believe the majority of our volume is in architectural glass. We do a lot of auto, but our growth is in architectural glass. We have the opportunity for greater volume,” says Fremont.

Giblin adds, “I think the key is that as an industry we have to continually push to get window film recognized and NFRC certification is a start, but we need to keep pushing and lobbying and educating … our job is to fight on behalf of everyone involved and some manufacturers are involved and some are not. We need to let the dealers know what the industry is doing for them on a daily basis.”

“We want to try and overcome the negativity that’s been around window film,” adds Fremont. “The industry needs to be strong and unified.”

As part of its efforts to continue growing and educating dealers and installers, the company plans to launch its own accreditation program next year.

“Dealers understand what’s needed and they want the legitimacy to go out into the marketplace,” says Giblin. “They are ready to meet the standards in return for education and training. Through our Solar Gard academy we want to be a university of choice.”

Financial News
XPEL Announces Third-Quarter 2009 Results
XPEL Technologies Corp. announced results for the three and nine months ended September 30, 2009, as compared to the three and nine months ended September 30, 2008.

“XPEL has now achieved its third consecutive quarter of positive net income from operations. Our goal for 2009 has been to significantly strengthen our balance sheet with a particular focus on reducing our liabilities,” says XPEL’s chief executive officer Ryan Pape. “With stability in our operations, our focus is on growing the business by expanding our product offering, attracting new installers and taking market share as the automotive industry recovers.”

The company reported that revenues decreased from $1,164,779 to $994,250 or 15 percent between quarters and from $3,488,175 to $2,922,026, or 16 percent between the nine-month periods. The decreases were primarily due to the downturn in the global economy and sluggish auto sales.

XPEL incurred a net income loss of $638,904 for the quarter ended September 30, 2009 with earnings of $67,628 from continuing operations as compared to net income of $255,262 for the quarter ended September 30, 2008 with earnings of $153,339 from continuing operations. In addition, the company incurred a one-time loss on the sale of XPEL Canada of $756,118 during the third quarter.

The company also reported a net loss of US$553,345 for the nine months ended September 30, 2009 with earnings of $154,952 from continuing
operations. This is compared to a net loss of $3,336,101 for the nine
months ended September 30, 2008 with losses of $983,192 from continuing operations.

Cost of sales are reported to have decreased from $455,748 to $398,279, and remained consistent as a percentage of revenues of 40 percent between quarters. For the nine-month periods cost of sales are also reported to have decreased from $1,563,524 to $1,186,357, and decreased as a percentage of revenues to 41 percent.

Company News
Window Contractor Plans to Draw on Past Customers’ Mistakes
As consumer interest in energy savings continues to grow, film dealers across the world have begun to explore additional product offerings to pad their sales sheets. But window film dealers aren’t the only ones with a wandering eye these days. Universal Window Solutions, a Bradenton, Fla.-based contractor that traditionally offers windows, doors and hurricane shutters, recently made its way into the film business. And the company expects to capitalize on its past customers’ mistakes by offering window film to those who opted out on certain glazing technologies in their past window selections.

Universal won’t be starting from the ground up, as the company recently purchased an established dealership from Hurricane Glass Shield in Sarasota, Fla. Hurricane Glass Shield, previously a 3M dealer, now serves as a 3M distributor.

“We have been in the new construction and window replacement business since 1981 with thousands of windows, doors and hurricane shutter installations,” says Bob Smith, Universal’s chief executive officer. “This acquisition might be the most important strategic move we have seen yet.”

Universal will continue to serve the door, window and shutter market, but company officials say they expect to grab additional market share by offering homeowners the opportunity to improve, rather than replace, existing windows, many of which may have been purchased through the company at a previous date. Company officials say Universal’s past client list could serve as an immense selling ground, as they plan to revisit past clients who did not invest in door and window products offering solar control or impact resistance technology. They also believe that the company’s builder list will prove beneficial as they strive to meet new energy codes.

Shawn Cabral, general manager for Hurricane Glass Shield, says his company had an important choice to make in selecting its
new owner.

“We worked diligently to put this deal together with Universal,” he explains.

In this case, the selection process carried a bit more importance than just continuing Hurricane Glass Shield’s legacy, as the company will continue to support its previous owner’s success as a distributor.

“As our success as a 3M distributor is directly tied to the success of our dealers, we had to be convinced Universal was the perfect long-term fit,” Cabral says. “We knew Universal had the financial and operational strength to grow the business.”

“This is a perfect fit at a perfect time,” says Rocky Smith, president of Universal Window Solutions. The company projects revenues to exceed $6 million in the first three years and plans to add 12 new positions in the coming months.

Geoshield Holds First Annual Dealer Meeting
Geoshield of Baton Rouge, La., held its first annual dealer meeting last fall in New Orleans. More than 25 of the company’s customers traveled from around the United States to attend the two-day event, which was held at the W Hotel.

During the meeting Geoshield took the opportunity to update its dealers on the National Fenestration Rating Council’s (NFRC)
Component Modeling Approach (CMA) and its CMAST software.

“[The software] allows an Accredited Calculation Entity (ACE) to print custom NFRC labels for any specific window,” explains Burns Mulhearn, president of Geoshield. “It is also compatible with EnergyPlus Software, which can be used to determine return on investment.”

Several guest speakers also presented during the meeting.

Mike Feldman, owner of Advanced Film Solutions in Tampa, Fla., gave a presentation titled “Differentiation and Self Reliance.” He stressed that if companies don’t satisfy their customers someone else will be happy to take over that duty.

In addition, Brent Williams of Energy Control Consultants, presented on the importance of social networking to increase website search engine optimization. This includes blogs, Twitter, Linkedin, Facebook, Myspace as well as others.

“Our dealer’s really liked [the presentation] and have already begun implementing recommendations,” says Mulhearn.

A private awards dinner was also held at ACME oyster house. Sunbelt Window Films of Houston was recognized as the distributor of the year; Absolute Perfection in Sykesville, Md., was recognized as dealer of the year; and Confianza Window Tinting in Miami was recognized with the Visionary Award.




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