Industry Newsline - December 2002

Industry Newsline

Innovative Control Systems Inc. of Nazareth, PA has announced the addition to its sales department of James Rafferty from Canton, OH. Rafferty has eight years experience in sales of car wash management and control systems. He will represent ICS in the Midwest region of the US. In the company's technical support department, Jim Rowland, previously a senior support technician, has been promoted to support manager. Rowland has been with ICS for just under three years, joining the company with experience
in point-of-sale management systems and network administration. The technical support department has also added three new technicians to its ranks. After a three-month training period, Jason Wizer, who is fluent in Spanish, will be based in Phoenix, AZ and will provide service to West Coast customers. Brian Ragsdale and Drew Funderburk will be stationed at the company's Nazareth offices. Ragsdale joins the team from Salem, OR with a background in programming and networking knowledge. Funderburk specialized in computer consulting and network engineering/administration.

Cleaning Systems Inc. of De Pere, WI, manufacturer of Lustra(tm) brand car wash chemicals, recently completed a successful certification audit in the process of attaining ISO 9001:2000 certification. This certification demonstrates CSI has attained a high level of quality in the design, manufacturing, and distribution aspects of its business.

"I am unaware of any other car wash chemical manufacturer that has attained this level of certification across all of their business processes," said Jim Thomes, the company's vice president of sales and marketing. "We were previously certified as an ISO 9001:1994 company, but we feel attainment of this new extensive and rigorous quality standard will pay dividends for all of CSI's distributors and customers as we move forward," he said.

CITGO Petroleum Corporation now offers a new business opportunity for automotive service providers: the CITGO Truck Lube Program. It is designed for automotive service business owners who wish to attract lucrative service contracts for Class 3-8 trucks. The program offers support, access to proven business practices, and brand equity without the costs normally associated with a traditional franchise agreement.

According to Dave Kunkel, CITGO's product manager for the installed market, "There are millions of Class 3 though 8 trucks on the road today, each needing an average of 10 oil changes and lubrications per year. More and more, we're seeing fleets outsource the care of their heavy duty and delivery trucks to local automotive service shops. Business opportunities like the CITGO Truck Lube Program make a lot sense for automotive service technicians who want to grow their business and boost their bottom line."

Mace Security International Inc. (Mace) announced that revenues for the third quarter ended September 30, 2002 were $11.8 million compared to $11.0 million in the same period of 2001. The increase in revenues during the third quarter of 2002 was principally due to the resumption of operations of the security products division, partially offset by a decrease in car wash and detailing revenues.

Operating income for the third quarter of 2002 was $290,000 compared to $392,000 in the same period of 2001. EBITDA was $846,000 or 7.1 percent of revenues in the third quarter of 2002 as compared to $1.4 million or 12.4 percent of revenues in the same period of 2001.

The net loss for the third quarter was $116,000 compared to a loss of $20,000 in the same quarter of 2001.

In a separate statement, two days before announcing its third quarter results, Mace announced plans to purchase up to two million shares of its common stock in the open market. This follows a previous block purchase of 429,000 shares the company announced on October 15, of which the company planned immediately to retire.

In a further statement, on the day following the stock-purchase announcement, Mace made public that it planned to hold a special stockholders' meeting on December 16, 2002 to obtain authorization for a one-for-two reverse stock split. The purpose of the reverse stock split is to have Mace's common stock trade above $1.00 in order to comply with Nasdaq listing requirements.

After five years of research and development and two years of on-line performance, Royal Sheen(r) of North Canton, OH has been granted US Patent No. 6,462,009 on its family of polymer-based protectants for the vehicle wash industry.

Marketed under the trade name, Polyphane(r), Royal Sheen's polymer wax/protectant offers superior protection and shine for vehicle surfaces over traditionally formulated mineral-seal-oil or vegetable-oil-based waxes currently used in car washes. Traditional oil-based waxes, because of their formulation, often offer customers only short-term protection and create the potential for smearing and spotting of their customers' vehicles.

Polyphane makes it possible to apply a durable polymer wax on cars, recreational vehicles, trucks and buses in just 5 minutes. Periodic application of Polyphane will keep vehicle paint, trim, and decals looking brand new for many years. The use of polymers dramatically improves wax durability, promotes faster drying time, and provides customers a show room shine.

Griffin, GA resident Ginny Nicholson, a 24-year-old healthcare professional, is the winner of a 1956-model Corvette convertible, a prize that was part of Valvoline's MaxLife 75K Relay for Kids, a promotion that raised nearly $85,000 for Big Brothers Big Sisters of America. The Corvette, dubbed the "MaxLife Corvette," traveled across the country to 24 cities in 75 days, raising cash for kids along the way.

The tour started on April 23 in Los Angeles, CA and finished in Daytona Beach, FL on July 6. At relay events, participants met local celebrities, picked up money-saving coupons, collected information on becoming a big brother or sister, and signed the "MaxLife logbook." For every signature received
in the logbook, Valvoline donated $10 to Big Brothers Big Sisters of America.

According to the recent Valvoline/ASE Poll of the American Mechanic, most mechanics surveyed believe their customers do not treat their vehicles with the same care that they did 20 years ago, revealing a huge need for better interior and exterior vehicle maintenance among American car owners.
Ninety-three percent of responding mechanics said that frequent oil changes would keep a vehicle running like new. In addition, 89 percent agreed that changing the oil every 3,000 miles or three months is the best thing one can do to help make an engine last longer.

Maintaining a vehicle's appearance can increase its value, yet the mechanics said that less than half (49 percent) of their customers' cars appear to have the exterior properly maintained. Ninety-five percent of the technicians believe the primary reason their customers do not keep their vehicle looking good is that they are unable to spend the time and effort to do it right.

The top recommendations given by technicians for caring for a vehicle's exterior were to wash it (93 percent) and wax it (86 percent) on a regular basis. Other tips included using protection and coating products (15 percent), and touching-up dings and chips in the paint (14 percent).

Sheila Berkman passed away November 4, 2002. Her death was a loss not only to her husband Marv, owner/operator of Foothill Car Wash in California and past president of California Contract Cities Association, her family, and the car wash industry, but to every person she met. In the microcosm of her world that was Foothill Car Wash, customers were not just faces and numbers, but friends, a family spokesman said. Sheila Berkman was a valiant fighter for finding a cure for and helping women live with breast cancer.

The automotive reconditioning industry has lost one of its newer members and one of the most dedicated. Steve Garrett of La Junta, CO was tragically killed in a traffic accident on August 31, 2002. Just this year, Steve had opened "Car Buff," a state-of-the-art automotive detailing and reconditioning center. Previous to that, he owned self-service car washes and an auto parts store in La Junta for several years. Steve was born in Whittier, CA in 1948 and is survived by two sisters and his parents.

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