Agenda - Council - 08/08/2006 - Laserfiche WebLink

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ZERO ZONE, INC. 110 N. OAKRIDGE DR. NORTH PRAIRIE, WI 53153 -9792 262-392-6400 800 - 247 -4496 FAX: 262- 392 -6450 —348— www.zero= zone.com July 26, 2006 SEAN SULLIVAN 15153 NORTHERN BLVD NW RAIVISEY MN 55303 Dear Sean, Enclosed is a copy of the appraisal obtained by Supervalu last month, as per your request. To answer your question about the transition from TLC to Supervalu and back to management today is both complicated a and 2004 we had grown the business i Ramsey to about $17mm nd the acquisition took place in February 2005. By the end of 2005 we had dropped to $14.5mm for the year, but the second half of the year was_ 35% less than the previous year. This loss of business was directly attributable to our other customers believing that they were competitors of our new parent company and would therefore not purchase from us. As we moved into 2006 sales got progressively worse and just now are starting to turn around again. In the first six months of 2006 we were 41% below the first six months of 2005 but in February our parent company finally made the move to divest our company. As I said, things are now starting to come back and although we will not achieve 2005 sales results the trend is there moving forward. (Zero Zone, In Today the company ( is owned by fourteen of our managers as well as the Lubar family. We maintain that we can probably do three times our current capacity in our existing facility. After that we would either have to move to another location or expand our existing facility. Within two to three years we should know what we are going to do. Our old customers are corning back and although they do not come back as fast as they left, we still see very positive opportunities. I hope this explains our past and current position for your Council. Sincerely, ZERO ZONE, INC. J �c Van Deryloeg hairman of Board JDVP /plb