Annual Report 2007 - Shareholders Letter
Dear Shareholders:
Of all the exciting and challenging years we have experienced throughout the last 14 years of growth and development, our 2006 - 2007 fiscal year has been by far, the most exhilarating one. Many creative and strategic developments were realized setting the course of permanent expansion and growth.
Our path is filled with proud and rewarding achievements, which have safely guided AG to the position that we currently hold. Our diversification strategy to enhance shareholder value and ensure the growth of the company has been the guiding force in the development of key strategic initiatives and accomplishments. Among them: the expansions to Northern Florida and the International markets; the increase in our Real Estate portfolio; the purchase of the Pompano Beach facility; and the consolidation of our Distribution Centers.
Through planning and research, and with a strong grip on our vision of expansion, the consideration to pursue the acquisition of our current Pompano Beach location began in early 2006.
After an intense process of financial and strategic considerations, and with the unwavering support of our Board of Directors, it was deemed that the acquisition of the property was not only necessary but also vital to the future of our company. In addition to the operational advantages of consolidating three distribution centers: the Ocala Central Florida, the Miami East dry warehouse, and the Miami West perishable warehouse, our Pompano Beach property affords diverse income producing opportunities for the future.
Our Pompano facility is strategically and logistically positioned within a short distance to the main travel and transport resources in South Florida: by ground, Interstate 95 and the Florida Turnpike; by air, Ft. Lauderdale International Airport; and by sea, Port Everglades.
Our vision of growth and consolidation culminated in July 2006 when our move from Miami to Pompano became a reality.
The Move.
Due to purchase negotiations having re-directed our closing date more than once, the actual transfer from our main facility in Miami to our new home in Pompano had to be executed with exacting precision and in record time. With services and operations being performed around the clock, interrupting shipping to our customers was a luxury we could not give ourselves. Within a few short weeks, transactions were finalized and our Staff, Warehouse Operations and Distribution teams found themselves with only one month to prepare for the move and one weekend to execute the main transfer of merchandise. In four weeks, our team of professionals was able to prepare the communications and physical infrastructure, rack and slot the new 810 thousand square feet of warehouse space in order to make it suitable for business.
On a Friday afternoon in July 2006, our 340,000 square feet of warehouse space in Miami filled with their new home in Pompano Beach. By noon that Sunday, shipping to our customers was resumed with no major consequence to operations or service to our members. We take great pride in the discipline and commitment demonstrated by our Staff and employees in making this massive move possible in such a short period of time. Seeing our people work as one in this endeavor tells us that our vision is clear and present not only in our minds, but throughout the blood flow of our organization.
Technology
Another major accomplishment during this year was the implementation of our brand new, state-of-the-art Warehouse Management System.
An award winning software, it is the only Microsoft Windows based solution currently available that can support our type of operation. Feature rich and flexible, our system’s open architecture allows us to interface with a number of other transportation management systems and supply chain applications. Automating our operation to meet the demands of our new facility as well as the needs of our ever growing customer base has been successfully accomplished. We can now monitor and track all of the activities in our warehouse.
With this, we have positioned ourselves as technology leaders in our industry. From receiving to cross-docking to task interleaving, we have the necessary tools to ensure that labor productivity and service to our customers remain our priority.
Emerging Business
Diversifying and tapping into new and promising ventures has been AG’s trademark for years. Our brand new off-shore warehouse and distribution center in Freeport Grand Bahama represents one of our proudest moments. A hub for export, International Distributors of Grand Bahama Limited will provide product sourcing from around the world to our current customers, as well as providing an opportunity filled venue for new business. All conveniently located only 60 miles off the US coast. With phase one of our projected 1.5 million Sq Ft of warehouse space and showroom completed, our Grand Bahama facility is quickly transforming and re-defining our export expectations.
Summarizing
Within the last year, we purchased our new Pompano Beach facility, moved into it, consolidated all of our distribution centers, sold the former Miami warehouse and are in the process of leasing the Ocala and West Miami facilities. We have become a new company. We will continue to write new and exciting chapters with the reassurance that the future of the Independent Entrepreneur is ever developing. We can confidently move forward demonstrating to the new and upcoming generations of independent entrepreneurs that opportunity is created by our belief in our vision of what is to come. A vision fueled by the Independent’s Spirit. The dream which is now a reality that Associated Grocers stands for the Independent’s Spirit. A spirit which will live on for years to come.
James H Rines
Chairman of the Board |
Calvin J Miller
President & CEO |
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