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LETTER FROM THE CHAIRMAN & PRESIDENT We are pleased to report that Fiscal 2006 was a year of continued growth, leadership, innovation and financial success for Perfect Fry. Highlights from the past year include:
During the past year, the Company achieved net earnings of $280,283 (3 cents per share) down from both the net earnings of $341,775 (4 cents per share) in 2005 and $353,946 (4 cents per share) in 2004. Overall revenue over cost of goods sold has declined primarily as a result of fluctuations in the exchange rate between the Canadian and US currency. While the number of units sold increased, the exchange rate has really affected this past four years resulting in higher unit sales but lower per unit earnings. Our costs are rising significantly due to price increases of stainless steel (result mostly from nickel surcharges) and the cost of labor in the vibrant Calgary employment market. We are extremely pleased with the introduction and product launch of our new PFA RapidFry™ automated fryer. This fully-enclosed deep frying system is capable of producing up to 100 pounds of fries in a single hour while it amazingly requires only 17 linear inches of counter-space. The PFA Rapid Fryer boasts up to 7200 watts of power, the most of any countertop ventless deep fryer, while its fully-automated front-loading, front-dispensing design makes it the most compact deep fryer of its kind. The PFA RapidFry™ offers an easy-to-operate interface which provides operators with flexibility and reliability that are unsurpassed in foodservice equipment. With four different modes of operation, the PFA RapidFry™ is the perfect frying solution for any operation, regardless of staffing levels and capacity. Manual, Preset, Preset-Locked and the innovative RapidFry™ programming Modes allow the operator to adapt the PFA RapidFry™ to suit their individual needs. The PFA RapidFry’s™ advanced electronic capabilities further allow the operator to adapt the unit to their particular needs. Cook Time Sensitivity (CTS™) ensures a consistent, fully-cooked product by automatically adjusting cooking times to account for different sizes of product loads. Food Type Sensitivity (FTS™) gives the operator the ability to control the movement of the basket to ensure that all food products are dispensed at the conclusion of the frying cycle. Finally, the Dual-Load Cook Cycle allows the user to simultaneously cook two different food products with different cook times in order to reduce preparation time. Perfect Fry continues to be committed to its relationships in the marketplace. A new competitor entered the US market in 2004 resulting in a short term reduction in sales which stabilized and reversed as our commitment to customer service, product development and innovative marketing tools had proved effective among our loyal client base. One of the benefits that only Perfect Fry offers in this highly competitive field is our state-of-the-art fire suppression system which is now listed by Underwriters Laboratories (UL). It is the development of these systems that allows the company the flexibility to introduce new and innovative products to the marketplace. Perfect Fry maintained its commitment to developing both current and new markets in Canada , the USA and around the world. We are specifically targeting the chain account business with our efforts concentrated on demonstrations, testing and trials. Our extensive customer research and tracking systems prove that most fryers are purchased after the prospective buyer has had a hands-on opportunity to use the fryer on-site. In most cases, the Perfect Fryer sells itself after first-hand use. The buyer sees that it is an easy-to-use, compact and income-generating unit. We continue to promote and refine our financial programs to facilitate these opportunities. ggressive marketing programs, innovative product development and strong business relationships don’t just happen haphazardly or in a vacuum. We credit our solid performance in Fiscal 2006 to the continuing effectiveness of the Company’s marketing, sales, design and administrative infrastructure. Our success starts with our employees. We look to the future. We build on our strengths. We encourage innovation. We vigorously pursue operational efficiencies. We continually balance frugality with opportunity. We study future trends and opportunities while maintaining a close watch on today’s bottom line. We dream, we analyze, we budget, we plan, we empower our employees, serve our customers and seek new markets. We acknowledge and are grateful for the support and guidance from our Board of Directors who share their considerable talent and business expertise. On behalf of the Board, Jack Senior Gary G. Calderwood |
