Science & Technology
Science and Technology
Science and Technology
Wed, January 19, 2011
Tue, January 18, 2011
2010 Summary Letter to Digital Angel Stockholders from CEO Joseph J. Grillo
SO. ST. PAUL, Minn.--([ BUSINESS WIRE ])--The following is a letter to the stockholders of Digital Angel Corporation (OTCBB: DIGA) from CEO Joseph J. Grillo:
Dear Fellow Stockholders,
While 2010 brought its share of challenges, many of our accomplishments over the last twelve months have provided Digital Angel with a promising foundation to start the New Year.
When 2010 began, improving our balance sheet and cost structure was a top goal. Since then, among other things, we: paid down debt; raised money in the capital markets; refinanced long-term debt and streamlined our corporate structure, which resulted in a savings of approximately $2 million per year.
These financial improvements, along with the divestiture of another non-core business, allowed us to shift additional focus and resources to our core and future business, Destron Fearing.
In 2010, a targeted marketing effort highlighting Destron Fearinga™s quality, innovation, customer service and pricing helped to reestablish the Destron Fearing brand. These actions were well-timed as the livestock market continued to improve and new government regulations in Canada and Europe went into effect. The end results was enhanced sales in the livestock segment, in addition to new customer wins in North America.
We also secured product qualifications in South America -- a market that we targeted for expansion. Additional focus and resources in the region enabled Destron Fearing to win new business in competitive situations. In 2010 we became the official supplier for government sponsored cattle identification programs in Columbia and Peru.
Moreover, sales of electronic ID products were up 25% year-over-year as the transition from visual to electronic tags gave us an advantage over many of our competitors. As we look to 2011, we believe this will provide momentum in all aspects of our business.
Our new product pipeline designed to meet the needs of new and existing customers also delivered results. A line of Destron Fearing HDX tags were approved by the USDA in August and opened doors to new domestic markets. Duflex® FT was introduced in Europe in the beginning of 2010 to meet the demand of European customers complying with new EU regulations. Destron Fearing is a technological market leader, and our investment in technology is a key competitive advantage.
On the emergency identification side, our new SARBE Advanced Aircrew Personal Locator Beacon (AAPLB) also achieved several milestones during the year, including full COSPAS-SARSAT approval. Production progress is moving forward, and orders placed in the second half of 2010 by the Spanish and Turkish Armed Forceswill be completed and shipped in the first half of 2011. Shipping for our PELS contract with the UK Ministry of Defense is expected in the second half of the year. The AAPLB is clearly poised to become the next generation Search and Rescue Beacon of choice for the worlda™s defense customers.
Looking at business in its entirety; in 2010, we received several inquiries from third parties about Digital Angela™s future plans. To help us explore all our options, the Board of Directors engaged the investment bank AgriCapital Corporation following a rigorous selection process.
AgriCapital is in the process of completing an independent valuation of the Company, evaluating third-party interest and advising the Board on all strategic alternatives, including maintaining our independence as a public company. Significant progress has been made since AgriCapital began their work in late October, and I expect to disclose additional information on this matter in the coming weeks.
Our momentum continued into early 2011. On the companion pet side, we recently signed a contract extension to provide syringe and RFID microchip systems and readers to Intervet Incorporated/Schering-Plough Animal Health through December 31, 2011.
Additionally, we are in receipt of a term sheet from our current mortgage lender which will extend the terms of our lease for twelve months, with an option for an additional six months. We expect this extension to be officially finalized in the next 30 days.
We remain focused on growing Digital Angel in the coming year and we are cautiously optimistic about the outlook. With both new and existing goals for 2011, our priority list includes:
- Continued growth of the Destron Fearing animal identification business
- Fulfillment of the UK MoD PELS contract as well as AAPLB sales growth
- Further balance sheet improvements and additional divestitures of non-core assets
The entire Digital Angel management team is committed to achieving these goals and securing our future.
I would like to thank all of our customers, shareholders, and dedicated employees for their support in 2010, and I look forward to sharing with you our continued progress in 2011.
Sincerely,
Joseph J. Grillo
President & Chief Executive Officer
About Digital Angel
Digital Angel (OTCBB: DIGA) is an advanced technology company in the field of animal identification and emergency identification solutions. Digital Angel's products are utilized around the world in such applications as pet identification, using its patented, FDA-approved implantable microchip; livestock identification and herd management using visual and radio frequency identification (RFID) ear tags; and global positioning systems (GPS) search and rescue beacons for army, navy and air force applications worldwide. For further information please visit [ www.digitalangel.com ] and [ www.destronfearing.com ].
This press release contains certain aforward-lookinga statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements included in this press release include, without limitation, those concerning expectations regarding the future of our business in current economic conditions, our ability to comply with listing requirements, and expected benefits of the restructuring program.These forward-looking statements are based on the Company's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Additional information about these and other factors that could affect the Company's businesses is set forth in the Company's Form 10-K under the caption "Risk Factors" filed with the Securities and Exchange Commission ("SEC") on April 1, 2010, and subsequent filings with the SEC.The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
