2009 June Board Meeting Web Conference June 5, 2009 10 to 11:30 am - - PowerPoint PPT Presentation

2009 June Board Meeting Web Conference

June 5, 2009 10 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 Agenda 3 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

• f new auditor every 5 years
• Standing Committee Members as of today…

Marcello Boldrini (chair), Mary Ann Kozel, Gary Reed, +1 Kate 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
• perations 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**

Financial Surplus Margin from Operations 13% (audited ’08)

• 8% (projected ’09)

0 to 10% range Financial Cash Balance in Unrestricted Reserves $865k (12/31/08) $665k (projected 12/31/09) $500k to $1MM range Membership Number of Manufacturer Members (incl Affiliates) 50 (as of 5/31/09) 65 by 2010 Membership Dues 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) General Member 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, newsletter submission, 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 Members Not CSI Members

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-Members

68% 32%

6% Secondary Focus

Engineers 56%

AIA Members Not ISDA Members 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 3,454 2,837 666 5 2,809 2,332 567 50 3,951 3,274 875 85 4,371 3,664 1,028 150 3,758 3,088 1,007 177 4,191 3,526 1,005 202 5,761 4,710 1,377 209 5,047 4,179 1,247 272 4,790 3,907 1,303 283 5,495 4,560 1,368 442

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 Month

Through 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

• fficially subscribe to

the publication. It will no longer be sent to the ASC general database.

Google Analytics

24

Google Analytics

4.00 4.64 3.27 3.59 2.59 3.48 3.43 4.18 3.10 3.56 2.54 3.37 3.35 3.77 2.42 3.18 2.37 3.16 3.11 3.43

1 2 3 4 5 Average minutes spent on site per visit Average page views per visit

Adhesives.org Trending Report - By Month

Through 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

16,011 10,087 13,733 18,253 13,360 14,119 21,731 16,028 15,116 18,867

5,000 10,000 15,000 20,000 25,000 Total number of page views

Adhesives.org Trending Report - By Month

Through 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 Analytics Tech Select

1,343 470 1,472 1,089 1,170 1,530 2,319 742 458 516

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 Month

Through 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

• n 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

• n adhesives.org (with link from ascouncil.org)

www.adhesives.org/HealthSafety/GreenBuildingPrograms.aspx www.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
• n 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
• rganization 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.”

34

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)

N

• . of

Estimated Budget

• 12.50%

N

• . 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

• ver 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 Assumptions

as 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 Summary

as 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, Other 2.3%

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

• perations going

(―rainy day‖ funds) (46% CDs, 39% Equities, 8% Bonds, 7% Cash) 1-yr Rtn ~ -12.25% ―Unrestricted‖ segment is to be used for advancing the goals of the Council

• r a strategic initiative

(78% laddered CDs; 22% cash) 1-yr Rtn ~ 2.78% Target minimum

• f 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

• perations going

(―rainy day‖ funds) (46% CDs, 39% Equities, 8% Bonds, 7% Cash) 1-yr Rtn ~ -12.25% ―Unrestricted‖ segment is to be used for advancing the goals of the Council

• r a strategic initiative

(94% laddered CDs; 6% cash) 1-yr Rtn ~ 2.78% Target minimum

• f 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
• f 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

• thers 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,

• utsourcing, 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 $35.0 Net 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 $1,587.3

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2010-11 Optimistic Scenario Statement 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,

• utsourcing, 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 $15.0 Net 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 $1,152.3

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2010-11 Pessimistic Scenario Statement 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
• nly $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

• n 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 Activities

Total 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 Reserves 2. 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 Meeting Agenda

• 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 payable

73

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

• ther). 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!

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