PDF - Somero Enterprises

and are optimistic that new distributorsin China and India will be equallysuccessful. Our biggest industry tradeshow, World of Concrete, was held in Chinafor the first time in 2006. Our productswere well received and our key distributionpartner has committed sales, serviceand engineering resources to expandthe Chinese market for our products.Our product development processcontinues to produce innovativeequipment for the concrete industry.The newest of these, the HoseHog, wasintroduced in August. The HoseHog wasnominated in the Most InnovativeProduct contest sponsored by ConcreteConstruction & Masonry ProductsMagazine in connection with World ofConcrete in January 2007 and won theaward in the “Experts’ Choice” category.Previously the CopperHead and thePowerRake have both won awards in thiscontest in 2003 and 2006 respectively.Our goal of maintaining high marginsis key to our product developmentprocess. To this end, we continue toassess the value proposition of ourproducts and carefully control ourcosts. Manufacturing operations in ourHoughton Michigan facility continuedtheir focus on cost reductions in 2006.The competitive landscape did notchange significantly in 2006. Our fieldresearch and experience show thatalternative low-technology or manualmethods of placing and screedingconcrete continue to be our maincompetition. The small hand-heldvibratory screeds, primarily sold bysmall and mid-sized manufacturers oftools and equipment, are still beingutilised by concrete contractors.The initial public offering in November2006 was successfully completed withlimited disruption to daily operations,as reflected in our very strong resultsfor the year to 31 December 2006.Employees met the new corporatestructure with enthusiasm and our focusas a Group is firmly on the continueddelivery of shareholder value.Current TradingTrading in the first three months of thisyear has been entirely in line withmanagement’s expectations and thenon-residential construction marketremains strong. We were encouragedby the record attendance at the annualindustry trade show in January whichoften acts as a barometer for our salesoutlook for the year. Internationalattendance was particularly high andwe secured a number of sales leads innew territories. In the first quarter wealso reorganised our US and Europeansales organisation to place increasedemphasis on developing further salesin China, the Middle East and India.OutlookThe outlook for 2007 appears strongin all markets. The non-residentialconstruction market is expected tocontinue to be strong throughout thisyear and next. Somero is focused oncontinuing its growth in all areas.We will look to expand our presencein emerging markets, introduceinnovative new products into new andexisting markets, and add small linesales and demonstration personnel inall regions. The Company’s attractivefundamentals, market position andproducts, together with an experiencedmanagement team, provide us with asolid platform on which to continue togrow the business both organicallyand, where appropriate, throughselective acquisitions.Jack CooneyChief Executive Officer7Somero Enterprises, Inc.Annual Report and Accounts 2006