2009 June Board MeetingWeb Conference
June 5, 200910 to 11:30 am ET
1
June Board Meeting
• Introductions
• Review of ASC Antitrust Policy
• Conflict of Interest Acknowledgement
• Agenda
2
2009 Board of Directors
Dave Burger* - Past Chair (InduGrow)
Marcello Boldrini* - Treasurer (Ashland)
Mike Barch (Clifton Adhesive)
Christine Bryant (Bayer MaterialScience)
Phil Byers (Eastman)
Glenn Frommer (Adco Products)
Scott Johnson* (Wacker Polymers)
Mary Ann Kozel* (Sashco Sealants)
Stefan Leumann (Nolax)
Dick Maxwell (Forbo Adhesives)
Steve Meenan (3M)
Jeff Merkt (Bostik)
Shree Nabar (DAP)
Larry Owen (Franklin International)
Kay Peters (Evans Adhesive)
Gary Reed (Arizona Chemical)
Lex Reynolds (Itochu/Reynolds Co.)
Jim Smith (Kraton Polymers)
Ted Stolz* (ITW Perf Polymers)
Chris Urheim (Dow Chemical)
Larry Sloan* (ASC)
Chairman: Jim Owens* (H.B. Fuller)
* Executive Committee Member 3
Antitrust Compliance Policy
It is the policy of the Council to comply strictly with the letter and spirit of all applicable trade regulations.
Any activities which violate these regulations are contrary to Council policy.
Avoid discussions which might be construed as tending to impact prices; regulate production; allocate markets;
encourage boycotts; foster unfair trade practices; assist in monopolization; or in any way violate applicable trade
regulations and antitrust laws.
4
Conflict of Interest
5
New IRS 990 Requirements take effect now…
At each meeting, we are to include a housekeeping item on the
agenda whereby the board chair asks if there are any conflicts of
interest ASC should be aware of. The outcome is to be reflected in
the meeting minutes.
Agenda
6
• Introductions, Antitrust, Conflict of Interest
• Board Committee Appointments (Administrative)
• Board Metrics Goals (Strategic)
• Update on adhesives.org (Strategic)
• Green/Sustainability Issues: Next Steps (Strategic)
• Financials Update (Fiduciary)
• Other Business
• Adjourn
ASC Ed Foundation Board Call immediately follows
7
Consent Agenda3 Issues 1 Vote
BOARD VOTE
1. Approve the following Directors to serve 2009-12 Board Term:• Mary Ann Kozel (Sashco)• Steve Meenan (3M)• Shree Nabar (DAP)• Jim Owens (H.B. Fuller)• Lex Reynolds (Itochu/The Reynolds Co.)• Ted Stolz (ITW Performance Polymers)
2. Approve Phil Byers to replace Scott Johnson on Executive Committee (2009-11 term, non-renewing)
3. Approve Christine Bryant to replace Phil Byers on the EC Nominating Committee (2009-11 term)
Thank you
Scott!
This October will mark the end of Scott‘s twelve years of service as a member to the ASC‘s Board of Directors. Please join me in thanking Scott for his contributions and dedication to the Council.
Scott, we wish you the best and look forward to seeing you at future conventions!
8
9
Board Standing Committees
2009-10 Executive Committee
Jim Owens (H.B. Fuller) – Chair
Marcello Boldrini (Ashland) – Ashland
Dave Burger (3M Northstar) – Past Chair
Mary Ann Kozel (Sashco Sealants)
Ted Stolz (ITW Performance Polymers)
Phil Byers (Eastman Chemical) – Supplier Seat
Board Nominating Committee
• Form a standing committee of 5 members– Immediate Past Chair
– An Executive Committee Member
– 3 Directors not on the Executive Committee
• Nominating Committee Guidelines
Committee meets at the request of the President
Nominations are to be solicited from Board, staff and other members (candidates must be able to work well with both staff and Directors)
A candidate‘s contribution to the Council should be considered
The period of time since a company has been represented on the Board should be considered
Board make up should strive to be balanced (large vs. small, adhesive vs. sealant, industrial vs. consumer, etc.)
• Standing Committee Members
Dave Burger, Marcello Boldrini, Larry Owens, Kay Peters, +1(past chair) (EC) (non-EC) (non-EC) (non-EC)
10
Audit Committee• Form a standing committee of 4 members
– Treasurer serves as Chair
– 3 Directors (incl. one with CPA/strong finance background)
– ASC President & Director of F&A
• Audit Committee Duties
Oversees ASC financial procedures, recommend changes to Exec
Cmte (includes ensuring ASC has appropriate insurance levels, internal financial controls in place as recommended by Sarbanes-Oxley for small non-profits)
Reviews, acknowledges annual ASC audits
Evaluates and assesses auditor; if warranted, recommends selection
of new auditor every 5 years
• Standing Committee Members as of today…
Marcello Boldrini (chair), Mary Ann Kozel, Gary Reed, +1Kate Zando, Larry Sloan (ASC)
11
EC Nominating Committee• Form a standing committee of 5 members
– Past Chairman, Chairman and Treasurer
– A Director not on the EC
– ASC President
• Nominating Committee Guidelines
Names are solicited from the Board and staff (candidates must be able to
work well with both staff and Directors)
Nominees must be potential candidates for Chairman and express
willingness to move through the chairs of office.
EC should strive to be balanced (large vs. small, adhesive vs. sealant,
industrial vs. consumer, etc.)
A candidate‘s contribution to the Council should be considered
The Treasurer should be willing to move to the Chairman position and is, in
effect, the Chair-elect.
• Standing Committee Members as of today…
Dave Burger, Jim Owens, Marcello Boldrini, Christine Bryant, Larry Sloan(past chair) (chair) (treasurer) (non-EC) 12
The Adhesive and Sealant Council, Inc.
Strategic Map
MISSION
The Adhesive and Sealant Council provides
information, education and representation
to deliver value to its members.
VISION
The Adhesive and Sealant Council will be the
essential center of knowledge and
catalyst for industry growth
for manufacturers, suppliers and end-users.
GROW THE
INDUSTRY
GOAL: To continually provide value
to the membership
INDUSTRY
COMMUNITY
PROACTIVE
INDUSTRY
INFORMATION
STATE-OF-ART
EDUCATIONAL
PROGRAMS
GOVERNMENT
AFFAIRS
ADVOCACY
EFFECTIVE
MANAGEMENT
OF ASC
OPERATIONS
Approved by ASC Board 10/05; Updated 2/09
13
ASC Strategic Plan (2009-11)
OVERARCHING GOAL: To continually provide value to the membership
STRATEGIC INITIATIVES STRATEGIES
1. Grow the industry • Position the ASC as the portal to promote the industry and strengthen the industry’s value
proposition premise with end-user audiences
• Analyzing key influencer (i.e. designer, academia, consultant, government agency) and end-
user needs, develop broad-based educational programs and informational resources
• Research, identify, and pursue grant opportunities to subsidize research aimed at
creating/expanding markets for adhesives & sealants
2. Cultivate a strong sense of
industry community
• Create and maintain active peer group functions for specific segments of the membership
• Organize convention/expos with ample networking functions in accordance with anti-trust
guidelines
• Increase member involvement by promoting individual benefits of membership and maintaining
an active member outreach program
• Research and facilitate development of industry coalitions that address specific issues
• Develop and strengthen relations with international adhesive & sealant associations
3. Proactively provide
information to the industry
• Update and promote benchmarking survey and market report services
• Segment the membership to understand information needs, prioritize and execute per plan
4. Deliver state-of-the art
educational programs
• Revitalize and update industry short course/convention programming/other training
methodologies to improve participation and drive increased member value/revenue
• Analyzing membership’s needs for education and training, evaluate and recommend best
training methodology, prioritize and execute per plan
5. Serve as the industry’s
dedicated advocate in
governmental affairs
• Maintain an active Government Relations Committee, representing the industry based on
sound scientific principles
• Promote interaction and provide frequent information updates on global regulatory and
legislative initiatives and standards
• Proactively organize Special Action Task Forces to address specific government issues
6. Effectively manage the
operations of the Council
• Enhance Board and Executive Committee roles in strategic governance
• Strengthen Council financial controls, expense management, internal procedures
• Effectively manage costs for members and the Council while increasing revenue streams
• Invest in staff professional development; re-align resources as needed to optimize productivity 14
Board Metrics: ASC‟s “Report Card”(updated 5/31/09)
Area Metric Current Performance* Target Goal**
FinancialSurplus Margin from
Operations
13% (audited ’08)
-8% (projected ’09)0 to 10% range
FinancialCash Balance in Unrestricted
Reserves
$865k (12/31/08)
$665k (projected 12/31/09)$500k to $1MM range
MembershipNumber of Manufacturer
Members (incl Affiliates)50 (as of 5/31/09) 65 by 2010
MembershipDues as % of Total Gross
Revenues
45.0% (audited ’08)
59.6% (projected ’09)Not to exceed 50% by 2010
Program
Average of Three-Year Rolling
Average of Core Attendees
from Spring and Fall
Conventions
234* (Fall '06 – Spg ‘09)Total No. Member
Companies 106 x 2 (212)
GeneralMember Satisfaction Index
(Mean Score) 4.11 (1 to 5 scale) 4.25
* Does not include WAC (which attracted 689 core)
** Pending BOD modification
Update
Metrics revisited
Defining size of target audience
Relationship building with end-user groups
2009 marketing spend update
Marketing leads/communications activities
Google Analytics update
Web Advisory Board update
16
Metrics Revisited
17
Product/Program: Adhesives.org – Year 1
Overall Goal: Raise Awareness of Site within Design-Engineering Community
Specific Objectives: Current Status:
Average 5,000 (Monthly) Unique Visitor Traffic approximately 4,000 per month
Average 2,000 (Monthly) Return Visitor Traffic approximately 1,500 per month
Reach 10,000 Design-Engineering Leads approximately 5,700 total
Maximize SEO; Achieve #1 rankings in Google, Yahoo and MSN for search term “adhesives”; Achieve “page 3” or better rankings in Google, Yahoo and MSN for search term “sealants”
currently #4, #1, #2, respectively for adhesives; not in first 10 pages for sealants
Engage a minimum of six Primary Focus Groups (reference next slide) that result in a link exchange, online article, newslettersubmission, etc. that promotes either Adhesives.org or Adhesive CAD symbol
ASTM (Web link, Press Release, Article in May/June Issue of Standardization News)
Initial discussions with CSI, AIA, AAMA, others
Obtain 1,000 e-Newsletter Subscribers approximately 450 total
Obtain 100 Leads for ASC Members approximately 40 total
USA Market Size of End-Users Relevant to Adhesives.org (est.)
ASC: Focus marketing efforts and educational programs in the “Target Markets” by job function; partner with Key Associations that offer best market reach to end-users identified as highest priority by Web Advisory Board
18
44%
Not
AIA
Mem
bers
Not
CS
IM
em
bers
Primary Focus
Sources: 1. SWRI, AAMA, ASRAE, CSI, US DOL; 2. AIA, Paul Lefton Company, Terry Poltrack, CSI, 2006 US Bureau of Labor & Statistics
1,500,0001
SWRI
USA Universe# of people
94%
5%
95%
= 2.0 M+
AIChE, ASCE, ASME, ASHRAE, IOPP, NSPE, SAE, SAMPE, SME,
SPE, ASTM, USGBC
Non-Members68%
32%6%
Secondary Focus
Engineers
56%
AIA
Mem
bers
Not
IS
DA
Mem
bers
Members of Engineering Associations & NGO‘s
TBD
31% affiliated
69% non-affiliated
CSI
IDSA
620k
Relationship Building
Confirmed relationships
CSI
SWR Institute
AAMA
AIA
ASTM
Others pending
19
Marketing – Spend Update
80% of approved marketing spend ($60k) already allocated
GlobalSpec and ThomasNet account for 70% of total budget
Remaining monies to be spent on targeted audiences to promote the Adhesive CAD Symbol (free plug-in), TechSelect Tool and Adhesives.org Web site
Marketing vehicles include Adhesive CAD Symbol video (adhesives.org, GlueTube), engineering portal keyword search package and corresponding ad, tile and banner ads (ThomasNet, GlobalSpec), AIA Product Marketplace
20
Marketing – Leads
GlobalSpec Leads**
Number of engineering leads generated via GlobalSpec
5,639 total leads (Registered users who took action to learn more about company, brand, products and/or services. Figure includes return visitors. ASC captures the contact information.)
57% increase from February statistics
ThomasNet Leads
Primary marketing launch in June; Ran TechSelect Tool tile ad in March (ThomasNet Industrial Newsroom)
128,625 ad impressions (The number of times a unique visitor clicked through on
adhesives/fasteners/hardware related news, saw TechSelect Tool banner ad, and had the opportunity to click through on it.) Resulted in 153 click-thrus.
Search Engine Optimization (organic non-paid keyword search=adhesives)
Google – adhesives.org is #4 (up from #5 at February mtg)
Yahoo – adhesives.org is #1 (up from #2 at February mtg)
MSN – adhesives.org is #2 (up from #4 at February mtg)21**Statistics from 08/01/08 to 05/27/09
Marketing –Communications Activities
Current activities correspond with end-user preferences to receive information as identified in a recent webinar survey (131 participants)
Adhesives.org e-Newsletter (monthly distribution=4,000)
GlobalSpec e-newsletters (Distribution: Specs&Techs=1.2 million; Fasteners=75,000)
E-mail marketing on end-user relevant topics (distribution=3,500)
Online ads & company profiles on engineering portals (reaches millions)
22
Preferred Neutral Not Preferred
Direct Mail 37.1% (36) 21.6% (21) 41.2% (40)
E-mail from ASC 81.5% (97) 13.4% (16) 5.0% (6)
Phone Contact 2.4% (2) 20.0% (17) 77.6% (66)
ASC e-Newsletters 43.6% (41) 35.1% (33) 21.3% (20)
Viral Marketing (electronic alert via LinkedIn, Facebook, Twitter, etc.)
5.8% (5) 23.3% (20) 70.9% (61)
23
3,4
54
2,8
37
66
6
5
2,8
09
2,3
32
56
7
50
3,9
51
3,2
74
87
5
85
4,3
71
3,6
64
1,0
28
15
0
3,7
58
3,0
88
1,0
07
17
7
4,1
91
3,5
26
1,0
05
20
2
5,7
61
4,7
10
1,3
77
20
9
5,0
47
4,1
79
1,2
47
27
2
4,7
90
3,9
07
1,3
03
28
3
5,4
95
4,5
60
1,3
68
44
2
0
1,000
2,000
3,000
4,000
5,000
6,000
Total number of visits Unique visitors Return visitors cumulative e-Newsletter sign-ups (includes industry and
end-users)
Adhesives.org Trending Report - By MonthThrough May 27, 2009 Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
NOTE: The e-Newsletter subscriber spike in May resulted from the call to
action inviting ASC database members to officially subscribe to the publication. It will
no longer be sent to the ASC general database.
Google Analytics
24
Google Analytics
4.0
0
4.6
4
3.2
7
3.5
9
2.5
9
3.4
8
3.4
3
4.1
8
3.1
0
3.5
6
2.5
4
3.3
7
3.3
5
3.7
7
2.4
2
3.1
8
2.3
7
3.1
6
3.1
1 3.4
3
0
1
2
3
4
5
Average minutes spent on site per visit Average page views per visit
Adhesives.org Trending Report - By MonthThrough May 27, 2009
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
25
Google Analytics
16
,01
1
10
,08
7
13
,73
3
18
,25
3
13
,36
0
14
,11
9
21
,73
1
16
,02
8
15
,11
6 18
,86
7
0
5,000
10,000
15,000
20,000
25,000
Total number of page views
Adhesives.org Trending Report - By MonthThrough May 27, 2009
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
NOTE: The page view spikes in February and May
coincide with articles/ads that we ran in GlobalSpec e-
newsletters. Additionally, after the Bonding
Requirement Questionnaire ad (March), Adhesives.org had 11 lead inquiries. To date, 15 of the 37 (41%)
leads resulted from GlobalSpec activities.
26
Google AnalyticsTech Select
1,3
43
47
0
1,4
72
1,0
89
1,1
70
1,5
30
2,3
19
74
2
45
8 51
6
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
TechSelect page views
Adhesives.org Trending Report - By MonthThrough May 27, 2009 Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
NOTE: ASC has collaborated with ASI magazine to post the
TechSelect icon/link to the ASI Web site home
page and the Global Adhesives and Sealants
Directory page. This should boost the traffic to the TechSelect pages
in future months.
11,109 total page views; Average/Month=1,111 (consistent with Feb stats)
Purpose of the ASC Web Advisory Board (WAB)
WAB shall provide oversight and guidance to ASC on adhesives.org content and define the website educational platform and webinar content for end users*.
Purpose:
2009 Request from ASC Board of Directors:
ASC Staff to select a diverse cross section of experts from the adhesive and sealant marketplace to help drive website content, positioning and educational programs
on adhesives.org
27* Note: End Users is defined as: Architects, Engineers, Designers, Specifiers and Consultants
Adhesives.org provides:• Resources for adhesives & sealants specifiers
• An education platform for end users • Tools for the design & engineering community
28
Green/Sustainability
Action items from Winter Meeting…
1. Develop online repository of existing global green building/rating programs.
Status: Ongoing; will create new ―Green‖ portal on ascouncil.org; currently end-user focused programs are posted on adhesives.org (with link from ascouncil.org)www.adhesives.org/HealthSafety/GreenBuildingPrograms.aspxwww.adhesives.org/HealthSafety/GreenRatingSystems.aspx
2. Research feasibility of developing comparative LCA of adhesive vs. mechanical fastener (through point of application)
Status: Update today
3. Develop marketing communications plan around how A&S enable sustainable products
Status: Limited research thus far
Action #2: LCA: Glue vs. Bolt
29
Four companies contacted:
• Athena Institute (Merrickville, Canada)
• Environ (Colorado)
• Five Winds International (Boston)
• CTC (Phila)
30
• Companies generally take the same approach for undertaking
LCA study
• A complete study of 4-5 adhesives and a metal fastener would be in the $40-$100k range
• Pilot Study entailing one construction adhesive and metal fastener est. $10-20k
• Cost could vary some dependent upon how much public information available on metal fasteners
• More robust exercise if ―cradle to grave‖ analysis (vs. ―cradle to gate‖) is performed to more fully demonstrate advantage of the adhesive over mechanical fastener
• ASC members whose product(s) are included in the analysis might need to commit significant time of a staff person to respond to questions about the material and how it was manufactured
Action #2: LCA: Glue vs. Bolt
31
Alternative Approach: Environmental Product Declaration
• New program with limited exposure in EU and Japan; no activity in North America
• An association or group of companies looks at a common product—decide on boundaries of an LCA (i.e. cradle to grave; cradle to manufacturing gate)
• Group decides on a single product. LCA is undertaken utilizing ISO Standard 21930 which documents how an LCA should be undertaken for a building construction materials
• Upon completion of the LCA, results are submitted to a third-party organization which reviews analysis and offers accreditation allowing for logo from the organization to placed on product label.
• Theoretically EPD provides the advantage that an industry-wide LCA has been undertaken. Could metal fasteners respond with their own EPD? ---Absolutely!
• Est. Cost to implement: $10-20k plus $10k (accreditation) = $20-30k total
Action #2: LCA: Glue vs. Bolt
32
Should ASC pursue?
If so, a Member Task Force is recommended to provide input and oversight
Action #2: LCA: Glue vs. Bolt
Action #3: Future Marketing Campaign
33
There is negative press out there…
In initial research for their proposal one contractor found the following quote in Austin Energy‘s Sustainability Sourcebook I:
“When applications allow, choose those installation methods that do not require the use of adhesives.”
35
…‖Right Size items‖ based on principles adopted by the
Outdoor Industry Association‟s Eco-Working
Group
Action #3: Future Marketing Campaign
36
Next Steps…
1. Form Member Task Force to:a. Define scope of project – how many
different examples do we want to tell of how adhesives/sealants enable green products
b. Assist in pulling together facts
2. Prepare project budget for board approval
Green: Other Issues
37
• Harmonize with other organizations
ASTM D14: ASC to lead effort to explore need for new Sustainability Sub-Committee
Work closely with FEICA‟s new Sustainability Task Force to align efforts with EU
• As requested via the Formulators Webinar Survey, Green Webinar series coming in July…
Membership Update
38
Membership Report(Updated 5/31/09 – all figures actual)
No. of Estimated Budget -12.50% No. of Actual
Companies Dues Dues Difference Companies Dues
Membership Dues
Manufacturers 46 560,577$ 621,000$ (60,423)$ 54 625,594$
Suppliers 44 305,411 380,000 (74,589)$ 64 383,442
Affiliates 16 39,608 34,000 5,608$ 14 36,217
Total 106 905,596$ 1,035,000$ (129,404)$ 132 1,045,253$
2009 2008
39
2009 Dues
Last Year's Dues 1,045,253
Minus Resignations (151,988)
Minus Mergers (25,786)
Dues after Resigns/Merger 867,479
plus New Members 21,557
Dues after New Members 889,037
plus Part-Yr to Full-Yr 5,351
plus Bracket Creep 11,208
Total 905,596$
Budget 2009 1,035,000$
Over(Under) Budget (129,404)$
Financials Update
40
99 00 01 02 03 04 05 06 07 08 09*
* 2009 Reserve Balance assumes withdrawal of $200k
99 00 01 02 03 04 05 06 07 08 09*
A Retrospective Look: 1999-09
-$150,000
-$100,000
-$50,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Net Surplus from Operations
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
Reserves Value
41
Cash Flow: 2004-09
Cash Flow: Projected Actual Actual Actual Actual Actual
Cash Generated from Operations 2009 2008 2007 2006 2005 2004
Start January 1 $323,565 $640,082 $441,007 $573,365 $356,501 $453,261
Cash In $1,819,602 $2,386,780 $2,241,980 $1,681,604 $1,917,074 $1,909,539
Cash Out -$2,002,810 -$2,203,297 -$1,842,905 -$1,561,393 -$1,500,210 -$1,806,298
Balance December 31 $140,357 $823,565 $840,082 $693,576 $773,365 $556,501
Increase (Decrease) in Oper. Cash -$183,208 $183,483 $399,075 $120,211 $416,864 $103,241
Transfers from Reserves $200,000
Transfers to Reserves* $0 -$500,000 -$200,000 -$252,569 -$200,000 -$200,000
Balance Operating Cash $340,357 $323,565 $640,082 $441,007 $573,365 $356,501
*2008: ASC deposited $50,000 Restricted Equity and $300,000 Unrestricted and $150,000
Cash Management
ASC has deposited $1,352,569 into its Reserves over the past five years
42
Statement of Activities(2009 year end estimate as of 5/21/09)
2009 2009 2008 2007 2006 2005 2004
Estimate Budget Actual Actual Actual Actual Actual
Membership Services: $746.1 $788.8 $885.9 $958.4 $863.9 $875.2 $887.2
Dues, Interest, Member Recruitment &
Retention, Surveys, Govt Relations,
Peer & Board Mtgs, Industry Promotion
Conventions, Meetings: $251.5 $356.0 $632.5 $453.4 $372.3 $357.3 $326.8
Conventions, Leadership Conference,
Short Courses, Webinars
Affinity Programs: $20.2 $31.1 $22.8 $33.7 $34.4 $16.8 $31.9
Market/Industry Reports, Affinity
Services, Publications, Online Services
Core Expenses: ($1,140.2) ($1,235.7) ($1,248.2) ($1,124.0) ($1,043.0) ($1,027.6) ($1,130.9)
Occupancy, Comp/Benefits, Web, IT
Depreciation, Taxes, Insurance, Non-
recurring Expense (Moving Exp in '08)
Net Operating Surplus -$122.4 -$59.7 $293.0 $321.4 $227.7 $221.7 $115.0
Non-Operational/Special Projects: CAD
symbol, CHEMARK Design Firm
Research, VT NDE, Formaldehyde Free
Wood Adhesives Work Group $26.0 $0.0 -$86.0 -$144.1
adhesives.org amortization -$33.4 $0.0 -$26.3 -$42.2
Net Surplus after Special Projects -$129.8 -$59.7 $180.7 $135.2
Interest and Gains/Loss on Reserves $10.0 $10.0 -$109.0 $67.7
Unrestricted Audit Totals: -$119.8 -$49.7 $71.7 $202.9
Temporarily Restricted Projects
Service Life Prediction (SLP) Consortium $0.0 $0.0 $14.5 $0.0
Audit Totals w Temporarily Restricted -$119.8 -$49.7 $86.1 $202.9
Funded from Unrestricted
Reserves
43
2009 Statement of Activities Assumptionsas of May 21, 2009
(Comparisons to budget in red)
• Dues: Actual plus 3 renewing members and 3 new members ($914.4k vs $1,035 MM budget)
• Fall Convention: 90% of Budgeted Net ($126k vs $140k)
• Short Courses: PSA 23.5% of Budgeted Nets ($4.6k vs
$19.6k), Waterborne: 40% of Budget ($10k vs $25k),
Additives: 50% of Budget ($7.6k vs $15.2k)
• Webinars: 40% of Budget ($12.6k vs $32.6k)
• Market Reports: 70% of Budget ($15.4k vs $22.1k)
• Proceedings: 50% of Budget ($4.7k vs $9k)
44
2009 Statement of Activities Assumptions (cont‟d)as of May 21, 2009
Expense Reductions:
• Membership Services: -$83.4k (-$42.3k adhesives.org maintenance; -$20.1k no statistical surveys; -$9.5k member visits and FEICA; -$5.2k committee mtgs; -$6.3k general marketing and Adhesion Society Young Investigator award)
• Overhead: -$95.5k (-$65.2k compensation, pension and bonus; -$5k continuing education; -$12.6k outsourcing; -$12.7k supplies, maintenance, general administration expenses)
• Meetings: Lower F&B attributed to reduced attendance, lower speaker fees; re-negotiated lower minimum guarantees on hotel room blocks for both conventions
45
2009 Statement of Activities Summaryas of May 21, 2009
Membership Services• Membership Dues Projected Down -$129k vs. Budget• Projected Membership Services Cost Savings +$86k• Net Profit Comparison (vs. budget) -5% reduction
Conventions/Meetings• Projected Revenue Down -$173k vs. Budget• Projected Cost Savings +$68k• Net Profit Comparison vs. Budget -29% reduction
Affinity• Net Profit Comparison vs. Budget -35% reduction
Core Expenses•Projected Cost Savings +8% vs. Budget
Bottom Line:Operating Revenue: Projected Reduction of -$312k (-17%) Operating Expenses: Projected Cost Savings of +$250k (+13%)
46
Dues 59.7%
Conventions,Leadership
32.4%
Short Courses, Webinars
5.6%
Gross Revenue Estimate for 2009$1,533,100
Market Rpts, Other2.3%
THE ADHESIVE AND SEALANT COUNCIL, INC
as of May 21, 2009 47
Reserve Fund: Pre „09 Withdrawal (updated 5/31/09)
Notes: ASC Restricted Reserve cannot fall below 25% of annual ASC Operating Budget without Board approval. Investment objectives: Equities in Restricted ROR = S&P 500; Fixed in both Restricted & Unrestricted = CPI + 2% (revised per EC in March ‘09)
* Compare vs. 5/31/08 Balances: Total: $2,045,721 (Unrestricted: $1,143,639, Restricted: $902,082)
$864,938“Unrestricted
segment”
Total = $1,868,823*
$1,003,885“Restricted segment” ―Restricted‖ segment is
to be used in an emergency financial
situation to keep operations going
(―rainy day‖ funds)(46% CDs, 39%
Equities, 8% Bonds, 7% Cash)
1-yr Rtn ~ -12.25%
―Unrestricted‖ segment isto be used for advancingthe goals of the Councilor a strategic initiative(78% laddered CDs;
22% cash)1-yr Rtn ~ 2.78%
Target minimum of 50% of
$1.6MM annual ASC operating
budget
48
Reserve Fund: Post „09 Withdrawal Assumes Withdrawal from Unrestricted (updated 5/31/09)
Notes: ASC Restricted Reserve cannot fall below 25% of annual ASC Operating Budget without Board approval. Investment objectives: Equities in Restricted ROR = S&P 500; Fixed in both Restricted & Unrestricted = CPI + 2% (revised per EC in March ‘09)
* Compare vs. 5/31/08 Balances: Total: $2,045,721 (Unrestricted: $1,143,639, Restricted: $902,082)
$664,938“Unrestricted
segment”
Total = $1,668,823*
$1,003,885“Restricted segment” ―Restricted‖ segment is
to be used in an emergency financial
situation to keep operations going
(―rainy day‖ funds)(46% CDs, 39%
Equities, 8% Bonds, 7% Cash)
1-yr Rtn ~ -12.25%
―Unrestricted‖ segment isto be used for advancingthe goals of the Councilor a strategic initiative(94% laddered CDs;
6% cash)1-yr Rtn ~ 2.78%
Target minimum of 50% of
$1.6MM annual ASC operating
budget
49
50
Non-Dues Revenue Strategies(2009 and beyond)
In addition to maintaining an active membership recruitment program, ASC will:
• Explore and enter into business partnerships with third parties to expand ASC Market Report and Past Proceedings sales
• Contract with third parties to realize royalties on sales of related publications of interest to the A&S industry
• Research opportunities to host end-user webinars that may generate a profit to offset adhesives.org maintenance costs; leverage AIA/CES program and others if feasible to enhance marketability
• Scan environment for other non-dues revenue programs that add member value (e.g. MultiView, Industry Shipping Data Report)
• Actively promote banner ad opportunities for e-newsletters
This concludes the 2009 Financial Projections.
Questions?
Next up: In May, EC recommended ASC prepare preliminary 2010 and 2011 Projections…
51
STATEMENT OF ACTIVITIES ($ net x 1000)
2009 2010 2011
Projected (optimistic) (optimistic)
Operations:
Member Services: Dues, member communications,
statistical surveys, govt. relations, adhesives.org
maintenance, etc. $746.1 $738.5 $847.8
Conventions, Meetings: Spring & Fall, Leadership
Conference, short courses, webinars $251.5 $293.2 $370.7
Affinity Programs: Market Rept, Publications, APPI $20.2 $16.0 $48.0
Core Expenses: Occupancy, comp/benefits,
outsourcing, depreciation, taxes, insurance ($1,140.2) ($1,165.5) ($1,229.9)
Net Surplus/(Loss) from Operations ($122.4) ($117.9) $36.6
Estimated Cash from Reserves - Operations $200.0 $85.0 $0.0
Non-Operational and Special Projects:
VA Tech NDE Reimbursement $26.0 $0.0 $0.0
Amortization of adhesives.org ($33.4) ($33.4) ($33.4)
Upgrade iMIS Database $0.0 ($15.0) $0.0
Redesign of ascouncil.org website $0.0 $0.0 ($60.0)
Interest and Gains/(Loss) on Reserves $10.0 $25.0 $35.0Net Surplus/(Loss) Non-Operational and
Special Projects $2.6 ($23.4) ($58.4)
Estimated Cash from Reserves - Special Projects $0.0 $15.0 $60.0
Total Net Surplus/(Loss) ($119.8) ($141.3) ($21.8)
Total Estimated Cash from Reserves $200.0 $100.0 $60.0
Reserve Balance after Interest and Gains $1,687.3 $1,612.3 $1,587.352
2010-11 Optimistic ScenarioStatement of Activities Assumptions
• Dues: $10k in member resignations in 2010, none in ‘11; 50% of members that resigned in ‘09 will rejoin in ‘10 – balance rejoin in ‘11; Henkel rejoins mid-2010; top 10 members drop 1 dues bracket in ‘10 and climb back up in ‘11
• 2011 Winter Leadership Conference/Board Meetings: Host at $5k loss; co-located winter board mtg (like in ‗09); June mtgs via web/call both yrs
• CEO Peer Groups Meetings: Host stand-alone Large CEO & CTO in ‘10; no CEO and co-located CTO at Adhesion Society Conference in ‘11
• International Travel: ASC president attends FEICA & ARAC in ‘10; FEICA in ‘11
• Adhesives.org: Maintenance/marketing funded at ‘09 levels
• Conventions: ‘10: $125k net for spring (25% above ‘09); $135k for fall; ‘11: near ―normal‖ profit of $150k per event
• Short Courses: ‘10: $20k net (comparable to ‘09); ‘11: $62k (bump-up in net due to popularity of courses held in ‘11 vs. ‘10)
• Webinars: $15k net for A&S audience (comparable to ‘09 forecast); $4k for end-users (new programs not currently offered)
• Market Reports: New edition issued Fall ‗10 with return to near ―normal‖ sales
• Staff Compensation/Benefits:
• Freeze salaries for ‘10, 3.5% inc for ‘11; Individual bonuses at 50% for ‘10 and 100% for ‘11
• 401k EOY match 2.5% for ‘10; 5% (standard) for ‘11
• Health insurance premiums increase 15% per year
• IT: Invest in 3 new Desktops and 1 File Server in ‘10 53
STATEMENT OF ACTIVITIES ($ net x 1000)
2009 2010 2011
Projected (pessimistic) (pessimistic)
Operations:
Member Services: Dues, member communications,
statistical surveys, govt. relations, adhesives.org
maintenance, etc. $746.1 $664.4 $711.8
Conventions, Meetings: Spring & Fall, Leadership
Conference, short courses, webinars $251.5 $227.7 $229.7
Affinity Programs: Market Rept, Publications, APPI $20.2 $6.0 $26.2
Core Expenses: Occupancy, comp/benefits,
outsourcing, depreciation, taxes, insurance ($1,140.2) ($1,165.5) ($1,229.9)
Net Surplus/(Loss) from Operations ($122.4) ($267.4) ($262.2)
Estimated Cash from Reserves - Operations $200.0 $235.0 $250.0
Non-Operational and Special Projects:
VA Tech NDE Reimbursement $26.0 $0.0 $0.0
Amortization of adhesives.org ($33.4) ($33.4) ($33.4)
Upgrade iMIS Database $0.0 ($15.0) $0.0
Redesign of ascouncil.org website $0.0 $0.0 ($60.0)
Interest and Gains/(Loss) on Reserves $10.0 $10.0 $15.0Net Surplus/(Loss) Non-Operational and
Special Projects $2.6 ($38.4) ($78.4)
Estimated Cash from Reserves - Special Projects $0.0 $15.0 $60.0
Total Net Surplus/(Loss) ($119.8) ($305.8) ($340.6)
Total Estimated Cash from Reserves $200.0 $250.0 $310.0
Reserve Balance after Interest and Gains $1,687.3 $1,447.3 $1,152.354
2010-11 Pessimistic ScenarioStatement of Activities Assumptions
• Dues: $10k in member resignations in 2010 and ‘11; 25% of members that resigned in ‘09 will rejoin in ‘10 – another 25% in ‘11; Henkel rejoins mid-2011; top 20 members drop 1 dues bracket in ‘10 and only 25% climb back up in ‘11
• 2011 Winter Leadership Conference/Board Meetings: Host at $10k loss; co-located winter board mtg (like in ‗09); June mtgs via web/call both yrs
• CEO Peer Groups Meetings: Host stand-alone Large CEO & CTO in ‘10; no CEO and co-located CTO at Adhesion Society Conference in ‘11
• International Travel: ASC president attends FEICA & ARAC in ‘10; FEICA in ‘11
• Adhesives.org: Maintenance/marketing funded at ‘09 levels
• Conventions: Profit for spring conventions do not recover from ‘09 ($104k/event); fall conventions net only $110k each yr
• Short Courses: ‘10: $10k net across all; ‘11: $22k net
• Webinars: $5k net for A&S audience; $0 for end-users
• Market Reports: New edition issued Fall ‗10 with depressed sales remaining at current levels
• Staff Compensation/Benefits and IT: Same assumptions as for optimistic scenarios
55
Expense Reductions
56
Estimated Savings ($000)
2010 2011 Total
Personnel related
1. Eliminate staff EOY 401k match (2.% in '10, 5% in '11) $16.0 $34.0 $50.0
2. Eliminate part-time admin (1/2 yr in '10, full yr in '11) $10.0 $22.0 $32.0
3. Eliminate year-end staff bonuses (at 50% level in '10, 100% in '11) $8.0 $15.0 $23.0
Subtotal - Personnel $34.0 $71.0 $105.0
Program related
1. adhesives.org
a. No paid marketing $50.0 $50.0 $100.0
b. No e-newsletter $25.0 $25.0 $50.0
2. No statistical surveys (Ind Sales, FOC both yrs; C&B in '10 only) $20.0 $12.0 $32.0
3. No CEO/CTO peer groups (standalone Large CEO and CTO in '10 only) $11.0 $3.0 $14.0
4. No 2011 WLC - $10.0 $10.0
5. Fundamentals S.C. is breakeven $5.0 - $5.0
Subtotal - Program $111.0 $100.0 $211.0
Other
1. No intl travel for pres (FEICA, ARAC in '10; FEICA only in '11) $10.0 $5.0 $15.0
2. Produce e-Catalyst in-house $8.0 $8.0 $16.0
3. Eliminate (or charge members to access) Knovel E-Library $8.0 $8.0 $16.0
4. Eliminate all member visit travel $5.0 $5.0 $10.0
5. Eliminate Ann. Outstanding Young Technologist Award $2.5 $2.5 $5.0
6. Miscellaneous IT savings $10.0 $10.0 $20.0
Subtotal - Other $43.5 $38.5 $82.0
Grand Totals $188.5 $209.5 $398.0
This concludes the 2010-11 Financial Projections.
Questions?
We have Adequate Reserves in place to continue funding Council activities without exercising cuts
on previous slide and maintaining Reserves balance above 50% minimum
57
Background Financial Trend Data
58
The following slides are updates from material presented at the Winter Meeting in Scottsdale.
Major Sources of Revenue
59
Statement of Financial Position
Assets, Liabilities, Members‘ Equity
60
Statements of ActivitiesTotal Revenue, Total Expense, Net Surplus/Loss
61
Statements of Activities
Membership – Revenue, Expense, Net Surplus
62
Statements of Activities
Meetings– Revenue, Expense, Net Surplus
63
Statements of Activities
Affinity Programs– Revenue, Expense, Net Surplus
64
Statements of Activities
Overhead Expense
65
ASC OPERATING CASH BALANCE (x1,000)
Notes:1. Cash balances after deposits to Reserves2. Cash Balance Target = 20% of Operating Expense Budget (~$380k)
As of Dec. 31 each year (2009 as of May 21)
66
Education Foundation Reserves As of Dec. 31 (2009 as of May 21)
67
Fall Board Meeting
Sun., October 11 (3 to 5:30 pm)
@ Fall Convention (Lexington, KY)
December Meeting (Web-Audio)
Fri., December 11 (10 to 11 am ET)
2010 Winter Board Meeting
Wed. evening, Jan. 27 – Fri. noon, Jan. 29
Old Town Alexandria, VA
2009-10 Board Meetings
www.ascouncil.org/members/boardresources/upcomingmeetings.cfm
68
69
June Board Meeting
Web Conference
June 5, 2009
70
June MeetingAgenda
• Introductions
• Future of Education Foundation/Va. Tech. Endowed Professor Fund
• Other Business
• Adjourn
71
2009 Board of Directors
Dave Burger* - Past Chair (InduGrow)
Marcello Boldrini* - Treasurer (Ashland)
Mike Barch (Clifton Adhesive)
Christine Bryant (Bayer MaterialScience)
Phil Byers (Eastman)
Glenn Frommer (Adco Products)
Scott Johnson* (Wacker Polymers)
Mary Ann Kozel* (Sashco Sealants)
Stefan Leumann (Nolax)
Dick Maxwell (Forbo Adhesives)
Steve Meenan (3M)
Jeff Merkt (Bostik)
Shree Nabar (DAP)
Larry Owen (Franklin International)
Kay Peters (Evans Adhesive)
Gary Reed (Arizona Chemical)
Lex Reynolds (Itochu/Reynolds Co.)
Jim Smith (Kraton Polymers)
Ted Stolz* (ITW Perf Polymers)
Chris Urheim (Dow Chemical)
Larry Sloan* (ASC)
Chairman: Jim Owens* (H.B. Fuller)
* Executive Committee Member 72
Status of the Organization
IRS requirements mandate a change in the status of the ASC
Education Foundation (ASCEF) to a Private Foundation because it
has failed the annual fundraising test for more than a decade. As a
private foundation the EF will now incur an annual excise tax on
net investments and possibly an excise tax on undistributed
income. ASC‘s auditor recommends the ASCEF Board pass
resolutions on two issues:
(1) Remove the VT Endowed Professorship Fund from the
EF‟s books (i.e., bequeath or repatriate monies)
(2) Develop an Operating Plan to spend down the
remaining EF funds to $0 over 1 or more years to
minimize taxes payable73
Action Items from Winter Meeting…
• ASC will discuss with Dr. Dillard what role VT can play, if any, in developing end-user oriented materials aimed at educating college engineering students. The consultancy agreement concept will be broached.
• Based on the outcome, an EF Board Task Force will review options and make recommendations to be presented at June meeting
74
EF Board Task Force
Mike Barch
Marcello Boldrini
Christine Bryant
Phil Byers
Stefan Leumann
Dick Maxwell
Jeff Merkt
Larry Owen
Gary Reed
Ted Stolz
75
Task Force Recommendations
BOARD VOTE
• Permanently bequeath the entire Endowed Professor Fund to Virginia Tech in the spirit of goodwill and a continued strong working relationship between VT and ASC.
• Allocate the remaining $30+k left in the Education Foundation Account to development of new end-user educational materials (for adhesives.org and other). ASC intends to use the new Web Advisory Board to evaluate new content ideas and anticipates spending down funds by end of 2010.
• Education Foundation can remain alive as a legal entity possibly potentially even after the monies are spent down so that it can serve as a viable Applicant for future US Federal Grants. If ASC should discover that there is no need to keep the EF open for this purpose, then it will recommend the entity be closed down once all monies are spent.
76
Have a profitable and
healthy summer!
77
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