Please accept this late posting of a visit I made to OZON back in November 1997. I will enter another post of my semi-detailed notes from the shareholders meeting. I apologize for not posting this information sooner.
In early November, I visited OZON SLC headquarters for a few hours. Bill Stoddard met with myself and a MM friend of mine. I brought my friend along in hopes of getting him interested in following the company and adding his personal perspective.
Bill started by showing us a great video produced by PBS. Charleton Heston hosted the video, which was a short piece about OZON and ozone technology and how it is being applied as an active antibacterial/viral agent. The video was done very well. Bill said it would air the 16th of November in different cities at different times.
Bill then went into a short oration of the benefits of ozone over chlorine and other agents. He showed us some swatches of clothes washed with chlorine and heated water verses tap water with OZON. The results were amazing to say the least. I really think the ozone technology is incredible.
Bill then explained the history of the company and how the company became so diversified. He said the FDA delay in approving their technology forced them to pursue other markets and products to sell. Consequently, they purchased other companies to diversify but no company has really produced on a significant level. The penetration into the traditional laundry business has been very difficult because of the traditional NIH(not invented here), good ol' boy attitude. Bill said their best reception has been with the hospitals. The hospitals have a compelling need to implement their technology. I will not get into the specifics but I think that everyone should call and obtain a DD pack. The literature was quite informative. The basic benefits are: uses 70% less water, brightens whites better, uses cold water (saves energy), bright color stay bright and vivid and a 40% less degradation in textile wear, removes all odors. Very compelling. Just the hospital market alone represents 5.6 billion, of which 2.8 billion is in disposable products. The disposable market is declining while the non-disposable side is growing.
HCA as many know is in turmoil with the latest turn of events with their management. I think that this turn of events has slowed down a contract with HCA. I think the HCA deal is serious and is in the bag. This one deal would propel OZON into orbit.
OZON is also working with Mitsubishi in Japan to be a business/manufacturing partner there. From the way Bill sounded, this looked like a good opportunity. The ministry of health in Japan has hired OZON to do help with the analysis and implementation of ozone for food products in Japan.
OZON is Currently working with food processing heavyweight.
Bill said that a few very large meat-processing plants are currently testing their products. He said that the meat processing plants lent themselves very well to ozone technology. He said the plants are currently using chlorine and water. Since chlorine takes a long time to kill certain organisms - about 3125 times slower than ozone - and there are forms of E-Coli that are resistant to chlorine treatment, this industry is looking for other solutions. We mentioned the irradiation solution that Bill said would never fly. He said the reason irradiation would not fly is because of the cost of implementation and public perception. He later said that with OZON they simply changed the chlorinated water with the ozonated water there was no equipment needed in addition to the ozonator.
Roughly insiders hold 6 million shares. The company is in litigation with a firm that provided an offering. Bill felt the company drove his stock price down to almost nothing before he stopped them. Bill feels the stock is undervalued and should be a $4.00 stock. The company occupies about 13,000 square feet and has 30 full-time employees. The building and office decor is very humble.
Bill said the companies proprietary edge was built upon the following:
a) Patents - They have about 10
b) Technology Superiority - Other systems have not been able to produce a reliable and consistent method of using ozone in industrial applications.
c) Time-to-market, Bill feels OZON is positioned well and ready to take market leadership.
d) Wetting agents and methods. Apparently there are some unique ways of using ozonated water and the way it is blended with the water causes it to be more efficient with the material it is disinfecting.
e) Butterfly technology - What I call butterfly technology is technology that cannot be replicated in a linear fashion. In other words exact replication would be very difficult without reverse engineering.
Competition:
a) Bill said the primary competitors had very little success in the market place. He also said that apparently the OZON machines are replacing his competitors that are not working well.
Continued revenue stream:
Bill said that OZON planned on selling contracts, etc with the machine for service, warranties, etc.
Fragmentation of Company:
Bill sees this as a strength. With more options, OZON is harder to knock down.
Please excuse this disorganized report. I felt it was important to get something out today. Go OZON! |
