I heard a report this morning (5/27/09) that stated many economists believe the recession will be over by the end of this year. They claim the basic underlying economic problems have been stemmed and although unemployment will continue to rise until the end of the year and into next year, they claim the worst is over and we will begin to regain our economic strength in 2010. I wish I could believe those economists but considering an abundance of facts surrounding the real estate market both commercial and residential, I do not happen to agree with them. The housing start numbers for April 2009 were the worst in recorded history. There remains a huge problem out there with jumbo and super jumbo loans coming due and this will be the next wave of foreclosures to hit the marketplace. The continual increase of low cost properties entering the supply side will further convince the Home builders to sit on their cash and wait out the problem. Why would home builders build a product that must compete with a foreclosure product which may be up to 50% cheaper to buy in a local marketplace? The builders know that eventually (I predict middle-end of 2010) the foreclosures will finally begin to subside and then once the supply is reduced they will again start applying for permits and begin building new homes.

          The economists are misreading the housing sales numbers because they assume that more housing sales equals a reduction in supply, but when foreclosures continue on a faster pace than unit sales, this model does not apply. Furthermore using numbers that show a smaller decrease than expected for both Home Depot and Lowe’s to determine that new home building is picking up is also flawed. In our experience since many foreclosures need work, this is driving the increase in companies like Home depot and Lowe’s who service the small contractor or homeowner markets. This activity and the fact that more and more people are becoming do it yourselers is the cause for the smaller decreases, not the improved housing market.

     On the commercial side; supply has swelled and that is bad news for commercial contractors and landlords. It is become increasingly difficult to match rental rates with financing models thus causing owners of properties to reduce rental rates. That translates to more properties on the market at lower prices thus creating a problem for all but the owner-user segment. It is more likely that many commercial properties will also end up in foreclosure thus causing a severe slowdown in that market.

      I can only hope that I am wrong, but I do not think so. I believe it is the economists that are wrong.

Greg Wiener

As we enter the final stretch of our 21st year in business , I wish to discuss where we are heading and how we view the immediate and long term future of our industry. For those of you who do not know our history, I will give you the abbreviated version.

I started this company in my garage on July 20th, 1987. I started out as a local distributor of a wide variety of miscellanous supplies to the cabinet and furniture trades in the Northern California Bay Area market. This market had a radius of approximately 90 miles. After a few years it became obvious to me that there indeed was a need for someone to specialize in fasteners for wood and I decided it would be us. We then embarked on a long campaign to have the Cabinet industry recognize us as the leader in innovative Wood fastening technology. In 2004, we grew to become the single largest privately held company in our field. In the past 5 years we have sold over 7 billion screws nationwide. We are still the largest privately held company in our niche.

         Our customers include distributors, resellers , catalog companies and manufacturer’s. The only market we have yet to penetrate is the internet retail world. We will venture into this market soon by launching an internet retail website in the next few months. We wish to offer the Quickscrews product line to users who have never had the opportunity to purchase. There are those buyers out there who are only going to search the internet and want to buy the best and are willing to pay for it. Those are the customers who we will be reaching out to.

     For the distributors, wholesalers and manufacturers we will continue to offer the highest quality products and services as well as the most competitive pricing available. We will strive to improve all aspects of our business and improve efficiencies to continue to drive down costs.

       Although the economy has shrunk and become flat we are well aware of the increasing demands of our customers and their customers as we all strive to survive in this negative economic climate. We are beginning to see signs of downward pressure on pricing and expect price decreases to be in play as early as the third quarter of 2009. We will monitor the situation closely and advise you as we go along.

Thank you for your continued loyalty,

Greg Wiener

Owner

Quickscrews International Inc.