Permatex: Ninety Years Young - and Rarin' to Grow
2 November 1999
Permatex: Ninety Years Young - and Rarin' to Grow
LAS VEGAS--Nov. 2, 1999--Permatex, Inc. is off and running at a quick pace since its acquisition from Loctite in August."We enjoyed record monthly sales in August, September and October, and are on track to meet or beat our internal projections for 1999," Permatex President Pat Formica told participants today at the annual APAA/SEMA show.
Mr. Formica spoke at the Company's first formal press conference since being acquired by a group of private equity investors, headed by The Jordan Company LLC, Automotive Performance Group (OTCBB: RACG), a publicly traded company, and Permatex management. He noted that despite being a newly formed corporation, Permatex sold its first product 90 years ago, and is far from a typical start-up company. "We have a well established 60-person direct sales force, dedicated to serving the entire North American automotive aftermarket from Canada to Mexico. We currently have annual revenues in excess of $100 million and enjoy solid operating margins."
Permatex, a business unit of PBT Brands, Inc., a corporation formed to acquire the Loctite North American automotive aftermarket business, has established strong brand recognition for its broad range of products, which enjoy either number one or number two ranking in market share. Included among its brand franchise products are Permatex, the Right Stuff, and Fast Orange.
"But we are not about to stand still," Mr. Formica noted. "We know that the addressable market for our products is much larger than had been previously imagined. In other words, while our traditional products have a large market share in the markets we serve, we have now identified significant growth opportunities within those markets. Consequently, we are quickly developing new products and product-extensions to capitalize on those opportunities," Mr. Formica added.
The Permatex executive noted that the Company's growth strategy has five core components. "One of the components for our growth is new products. We are already introducing new Permatex products to the aftermarket and we are designing new packaging and labeling to help reinforce-or re-establish-the Permatex brand name in gasket replacement products, easy-to-use repair kits, new advanced gasket dressing products and new innovative delivery systems."
End-user training clinics is a second growth component. "These clinics focus on educating professional mechanics and technicians on the cost and performance benefits of Permatex chemical gaskets and thread lockers," Mr. Formica said. "These seminars are currently being conducted by our direct sales force. In addition, we've contracted with a national organization to help schedule and provide on-site training for more than 100,000 technicians next year. Our objective is to build brand awareness and preference and to drive traffic to our wholesale and retail customers."
Aggressive advertising and promotion and expansion of Permatex' products into new channels and markets and into special customer segments represent two more elements for growth. "The Permatex brand is one of the best known trademarks in the automotive aftermarket. We will devote major resources in 2000 and beyond to re-invigorating the Permatex brand and associated products," Mr. Formica added. "There are excellent international opportunities for Permatex as well, and we are aggressively pursuing them."
Acquisitions represent the final component in Permatex' growth strategy. "The automotive aftermarket continues to consolidate. We have made no secret of our intention to use our strong infrastructure to grow through acquisitions. We have financial partners who are committed to the automotive aftermarket," Mr. Formica noted. "Our new owners are ready to help us search for appropriate combinations that would allow Permatex to improve its profitability and create greater value."
Editor's Note: The full text of Mr. Formica's comments is available upon request.