RACINE, Wis., April 25, 2005 (PRIMEZONE) -- Pacific Sands, Inc. (OTCBB:PFSD) will release a multi-article series on the state of the company:
Article One:
The board of directors of Pacific Sands, Inc. is pleased to offer this first part of a multi-article series on the state of the company. The series will culminate with the release of the company's Q-3 financials on May 13, accompanied by an overview press release and a conference call.
In June of 2004 a new management team and Board of Directors took over operations of Pacific Sands. At that time, new management set aggressive goals and timetables aimed at steering the company on a carefully planned course to achieve profitability within an 18-month period. Many of these goals were detailed in the "Management Discussion" section of the company's 10K-SB for the fiscal year ending June 30, 2004. To date, the company has achieved or surpassed the majority of those goals.
Pacific Sands, a maker of environment and health-friendly consumable products, is engaged in one of the few remaining markets where an all-American manufacturer can compete profitably. An important key to achieving sustainable profits in this market is to maximize manufacturing capability and efficiency while strictly regulating costs.
One of management's initial objectives was to increase manufacturing capacity to a level sufficient to meet anticipated production demand at least three years in the future. This needed to be accomplished without excess burden on precious financial resources during the transition phase. To achieve this goal, the company designed and implemented a modular mixing, filling, labeling and packaging operation.
Management estimates that the company's current product manufacturing capacity is between $6 million and $14 million per annum. In anticipation of a spike in demand due to an upcoming infomercial ad campaign, the company recently added a fully automated bottle labeler to the line.
Costs to further expand capacity are nominal compared to the ability to immediately fill the need for increased demand. The company will continue to add capacity on an as-needed basis, carefully considering the costs and benefits of all alternatives including outsourcing and partnerships for specialty and overseas products.
Formerly, Pacific Sands' products were batched on an as-needed basis, a few hundred units at a time. This method was problematic not only from a resource efficiency standpoint, but for consistent quality control as well. We now have the raw capacity and appropriately scaled technology to formulate the EcoOne Spa Product at nearly 10,000 units per batch at an optimum product quality level. Additionally, we now batch multiple products concurrently.
Finally, the company has begun purchasing bottles, labels, caps, actuators and other raw material in quantity. For example, the company used to buy labels a few thousand at a time. We now order batches in excess of 100,000 units. The cost savings have been dramatic. Management recently decided to pass our material cost savings on to our distributors, dealers and customers while retaining efficiency savings. These price breaks are at least partially responsible for a recent surge in orders and sales.
Management believes that the combination of increased manufacturing efficiency and capacity, cost containment and the ability to deliver bulk orders with zero lead time are essential contributing factors to what will be a profitable future for Pacific Sands.
The next update will cover Corporate Structure, Operations and Financing.
The PFSD Board of Directors Michael Wynhoff Michael Michie Mark Rauscher
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