VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 14, 2017) - TekModo Industries Inc. (TSX VENTURE:TEK) ("TekModo" or the "Company") is providing an update on its current operations and business plan going forward.
- Jake Vogel becomes Executive Chairman.
- Marc LaCounte assumes the role of President.
- Bill Fenech joins Jeff Schwartz as an Elkhart based Strategic Advisor.
- Equipment failure causes seven weeks of production down time. Production is now resuming.
- The GRP gel coat manufacturing line is expected to be completed in March 2017.
- Multiple Activated Carbon orders received.
- Need for immediate financing.
TekModo manufactures, assembles and distributes a wide range of advanced composite material to the RV, trailer, panel van, box truck, shuttle bus and marine industries from its 50,000 square foot facility in Elkhart, Indiana. RV customers are demanding superior quality and manufacturers are confronting increasing warranty claims. TekModo products fulfill both consumer and manufacturer goals by replacing legacy wood construction with vastly superior advanced composite materials.
At year end, the Company experienced an unexpected manufacturing equipment failure which resulted in approximately seven weeks of production down time and substantially reduced sales and cash flow for the months of January and February 2017. The equipment is being repaired and upgraded and the manufacturing schedule is being resumed.
In addition to several existing manufacturing and assembly lines, the construction of the new GRP gel coat manufacturing line is expected to be completed in March and will initially allow the Company to produce commercial samples of SpectraLite™ exterior skin replacement, for initial select customers. TekModo intends to commercially launch its SpectraLite™ product in July 2017. SpectraLite™ is a highly engineered exterior wall panel to be produced in a continuous process, resulting in a high-gloss seamless panel with improved optics, reduced weight and extreme durability. After completion and subject to testing, this product, when integrated with the Company's proprietary substrate (secondary layer) material, Fortis, will be designed to provide the most advanced seamless sidewall skin system in the marketplace due to its appearance, quality and durability. Based on preliminary discussions with TekModo customers, demand for the patentable, disruptive SpectraLite™ is anticipated to be very strong.
TekModo announced the delivery of its first shipment of distributed, pelletized activated carbon on December 8, 2016. Since then, the demand for this product has increased, and resulted in multiple orders.
Business Plan Going Forward and Financing
The business plan of the Company going forward will be to continue to grow the customer base and demand for the current manufactured, assembled, and distributed products while in parallel, focusing on the development of the GRP gel coat manufacturing line and the commercialization of the SpectraLite™ product. This will involve the completion of construction of the GRP manufacturing line, commissioning of the GRP line, and development and evaluation by potential customers of the SpectraLite™ product. The commercialization will be dependant on the quality of the product, the rate at which the product can be produced, and pricing enabling TekModo to achieve acceptable margins. Commercialization cannot be assured.
As a result of the January shutdown and the associated interruption to cash flow, the Company requires an immediate equity financing to maintain its current business operations and complete the GRP commercialization. Discussions are being held with various parties and progress will be reported in a future news release. The amount and pricing is yet to be determined.
Transition to Elkhart, Indiana and Associated Leadership Changes.
TekModo has made the decision to consolidate all of the Company activities in Elkhart, Indiana including administration, accounting and corporate finance. As part of this initiative, Jake Vogel has been appointed Executive Chairman and John Proust has stepped down as Chairman and will remain on the board as Executive Director. Marc LaCounte, a founding Director and former Business Development Officer, has been appointed President. Mr. LaCounte has a thorough understanding of the TekModo business operations, suppliers, customers and employees. The board has great confidence in Marc to lead the Company and execute the business plan.
Marc LaCounte commented, "I am pleased to assume the leadership role of President of TekModo and strengthen our business efforts moving forward. I am proud to be leading our team and working with the caliber of people that are associated with our business. If we are able to successfully finance our operations, this opportunity will allow me to focus my energy and realize my true passion on building this business, executing our vision, and continuing to bring truly disruptive technologies into the marketplace. The opportunity is present; the time is now."
Mary Wetzel has resigned as President and director, for personal reasons, but the Company looks forward to working with her in the role of consultant, as TekModo potentially diversifies into the automotive manufacturing industry at some point in the future. Robert Cross, Gordon Keep and Morris Klid have resigned as directors, and Jack Khorchidian as a Director and COO as the Company transitions into the USA. The Company thanks the outgoing directors and officers for their support and commitment to the formation of TekModo and wishes them success in their future endeavors.
Bill Fenech has resigned as a Director and will be taking on a new role as an Elkhart based Strategic Advisor joining with existing Strategic Advisor Jeff Schwartz. Mr. Fenech and Mr. Schwartz will focus on new product development applications, customer relationships and overall business operations.
The reconstituted Board of TekModo now consists of Jake Vogel, Executive Chairman, John Proust, Executive Director, Marc LaCounte, and Murray Flanigan. The Officers of the Company are Marc LaCounte, President, Vince Boon, CFO and Eileen Au, Corporate Secretary. The Elkhart based Strategic Advisors are Bill Fenech and Jeff Schwartz.
Mr. Vogel is the Chief Executive Officer of Boat Holdings, LLC, the manufacturer and owner of several industry-leading recreational boat brands including Bennington, Godfrey, Hurricane and Rinker. Together these brands represent roughly 30% of the market share in the large and growing pontoon boat segment, and 45% in the deck boat segment. In his seven-year leadership role with the company, Mr. Vogel has achieved more than 11-fold growth in Boat Holdings' business through both acquisitions and organic growth. Prior to his position at Boat Holdings, Mr. Vogel spent two years in investment banking, focused primarily on mergers and acquisitions, and almost seven years as a business services consultant with Accenture, where his clients included leading international companies and government agencies such as CN Rail, NASA, Johnson Controls, Corning and PepsiCo. Mr. Vogel is a triple major honors graduate with a Business degree from the Indiana University Kelley School of Business, and holds an MBA from the University of Chicago Booth School of Business.
Mr. Vogel stated that "I am very positive about the direction of the business and moving its leadership more to Elkhart where the core of its operations and customers reside. The Elkhart team has the necessary knowledge, experience and passion to best manage the business and make decisions. As Executive Chairman and the largest shareholder, I believe in the Company's ability to bring value to its customers and the team's ability to execute this plan."
Mr. LaCounte is a co-founder of TekModo LLC. He has extensive experience in developing and marketing new technologies. Mr. LaCounte was the Senior Business Unit Manager of Specialty Markets for Webasto Thermosystems, a wholly-owned division of Webasto, one of the world's largest automotive industry suppliers. At Webasto, he was responsible for the strategy, product development, and commercial conversion of new technologies, where he managed all aspects of the military, industrial/commercial, marine, cargo, and RV market groups. He is credited with introducing a revolutionary cargo heating system to the market from concept through to global distribution. Mr. LaCounte was the Senior Business Unit Manager for Hoff and Associates Company, which supplies advanced computer-aided engineering and design services. Mr. LaCounte was also a managing director of Group Impact, an advanced polymer material science and complex rehologic thermoplastic material development company. Mr. LaCounte holds a Business Degree from Indiana University Kelley School of Business.
Mr. Fenech brings decades of RV industry experience to TekModo. Mr. Fenech started his career in 1989 as the District Manager of Coachmen RV, and went on to become a co-founder of Keystone RV Company in 1996. He held several key management positions with Keystone before ultimately selling the company to Thor Industries in 2001. He continued on at Keystone, and then assumed the role of President of Damon Motor Coach in 2004. In 2010 he took over the presidency of Four Winds International. Both motorhome companies are divisions of Thor Industries. Damon Motor Coach and Four Winds International were merged in 2010 to form Thor Motor Coach, North America's top motorhome manufacturer. After retiring in 2011 from his role as President of Thor Motor Coach, in 2012 Mr. Fenech co-founded Grand Design RV Company, a privately owned RV manufacturer focused on quality workmanship, top-level customer service and innovative products. In October 2016, Winnebago announced that it had agreed to purchase Grand Design for USD $500 million.
As expressed by Mr. Fenech, "I recently invested in TekModo through an investment group that I am part of. The reasons for the investment were the products that they were producing at the time and the products that were in the pipeline for production and/or distribution. I remain excited about these products and feel they could be the next generation of mainstream products for the industries they are targeting."
Mr. Schwartz has over 25 years of paint and chemical experience. He owns and manages numerous entities that manufacture, distribute and apply coatings that primarily revolve around wood components, RV / bus, large truck, and specialty architectural applications. His focus throughout the entities is designing customer specific products that require unique chemical footprints to solve product issues or constraints.
Mr. Schwartz commented "TekModo Industries has an excellent offering of building block technologies that will shape more modern manufacturing methods and vastly improve quality, price and performance for many industries. I am pleased to bring my experience and resources to the equation to value add to the existing portfolio of TekModo products and help create customer driven solutions that are second to none in the building products space."
The Company feels that the newly reconstituted Board, and Elkhart, Indiana based management and Strategic Advisors will create the best opportunity for the business to provide value to its customers and to achieve the future growth and development objectives of TekModo.
On Behalf of the Board of TekModo Industries Inc.
Jacob Vogel, Executive Chairman
About TekModo Industries Inc.
TekModo is an established manufacturer and distributor of advanced composite panels, with existing revenue and a proven history of rapid growth. TekModo's composite panels are currently being used in the walls, roofs, floors and doors of RVs, buses and trailers. The Company has also advanced a number of products with applications in the construction, transportation, industrial filtration and defense industries. With a suite of intellectual property, research and development expertise, leading-edge manufacturing processes and a fully operational manufacturing facility, TekModo is poised to expand its commercial product base to exploit opportunities across a diverse range of industries. More information is available at www.tekmodo.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Notes Regarding Forward-looking Statements
This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively "forward-looking statements"). Certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "will", "potential", "advancing" "expected" and variations of such words and phrases or statements that certain actions, events or results "will" occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, including the completion of the GRP line and subsequent testing of the Company's ability to obtain an equity financing on acceptable terms, cash flow being sufficient to carry on business, and the Company's ability to capitalize on additional business opportunities. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.