Natives of Kodiak 2012 Annual Meetingnativesofkodiak.com/wp-content/uploads/2016/07/3...Jul 03, 2016 · – Small business receives help in expanding into a new industry • SBA

Natives of Kodiak 2012 Annual Meeting “Onward and Upward”

“Onward and Upward”

• Overview – Welcome and Introduction

– FY 2011 Financial Review

– Update on Subsidiary Operations

– Strategic Plan Progress Report

– Question and Answer Session


FINANCIAL REVIEW


$2,244,387

$2,814,830

-$7,004,530

-$39,947

$2,537,473 $3,039,100

-$8,000,000

-$6,000,000

-$4,000,000

-$2,000,000

$0

$2,000,000

$4,000,000

2006 2007 2008 2009 2010 2011

NOK and Shareholders Permanent Fund Trust Combined Net Income and Loss History


-$211,986.00 -$566,261.00

$354,146.00 -$129,764.00 $266,643.00 $626,050.00

-$638,319.00 -$783,306.00

$3,294.00

$1,860,738.00 $2,249,099.00

-$3,502,265.00

$1,322,412.00 $881,056.00 $594,330.00

$513,413.00 $299,088.00

-$4,128,315.00

-$512,054.00

$3,005,984.00 $2,087,330.00

-$8,000,000

-$6,000,000

-$4,000,000

-$2,000,000

$0

$2,000,000

$4,000,000

2006 2007 2008 2009 2010 2011

NOK Net Income

Shareholder Trust Net Income

KOMAN, Inc. Net Income/(Loss)

KOMAN Holdings, Inc. Net Income/(Loss)

NOK and Shareholder Permanent Fund Trust Net Income By Component


$261,593 $165,505 $210,057 $289,339

$7,400,788 $7,781,440 $8,240,354 $7,566,452 $7,963,195

$9,645,200

$978,293

$13,589,567

$4,029,078 $4,659,413

$103,894 $319,607

$1,443,735

$1,536,230

$5,561,467

$3,163,658 $2,218,830

$135,343

$2,115,107

$2,554,380

$960,597

$1,322,412 $881,056

$594,330

$1,495,291

$1,032,213

-$3,271,546

$367,496 $2,134,573

$2,913,667

-$5,000,000.00

$0.00

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

$30,000,000.00

$35,000,000.00

$40,000,000.00

2006 2007 2008 2009 2010 2011

NOK and Shareholder Permanent Fund Trust Sources of Revenue

NOK Investment Income (Includes VXM)

Trust Investment Income

KOMAN Construction

KOMAN Apparel

KDS Construction (KHI)

KOMAN - Propper, LLC Apparel (KHI)

KOMAN Services (Kodiak BOSS Contract)

Other


$1,741,643

$12,966,076

$18,002,320

$11,507,906 $10,152,895

$8,098,538

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

2006 2007 2008 2009 2010 2011

KOMAN Revenue History


$33,600 $297,908

$7,400,788 $7,781,440 $8,240,354 $7,566,452

$7,963,195

$4,029,078 $4,659,413

$103,894 $319,607

$1,443,735

$1,536,210

$5,561,467

$3,163,658 $2,233,236

$135,343

$0.00

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

$16,000,000.00

$18,000,000.00

$20,000,000.00

2006 2007 2008 2009 2010 2011

KOMAN Sources of Revenue (Including KOMAN's Interest in J.V. Revenues)

KOMAN Construction

KOMAN Apparel

KOMAN Services (BOSS)

Other (Accounting Fees and Investments)


$44,396

$1,016,225

$23,263,612

$0.00

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

2006 2007 2008 2009 2010 2011

KOMAN Holdings, Inc. Revenue history


$44,396 $37,932 $28,845

$9,645,200

$978,293

$13,589,567

$0.00

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

2006 2007 2008 2009 2010 2011

KOMAN Holdings, Inc. Sources of Revenue

KDS Construction

KOMAN - Propper LLC

Other (Rental Income and Investments)


UPDATE ON SUBSIDIARY OPERATIONS


Offices Anchorage, AK Kodiak, AK Severn, MD

Operations Alaska Dover AFB Delaware Puerto Rico Washington, D.C

PR


Past Customers:

Current Customers:



Update on KOMAN, Inc.

• KOMAN, Inc. has reached the 9-year maximum time limit allowed

BY THE SBA and exited the 8(a) Program • Previously focused on Construction, Apparel Manufacturing

and Support Services

• Current focus is on Base Operations Support Services (Kodiak Coast Guard Contract)

• Company will remain in operation at least until the end of the KSS Joint Venture


Contract Started on October 1, 2006 Joint Venture with the Bering Straits Native Corporation Subsidiary (Inuit Services) 10-Year Contract Contract Value: $13,750,000 Annually Infrastructure Management and Support Services to Kodiak Coast Guard Station 110 Full-Time Jobs Highly Visible Contract – Largest USCG Base in the World Coast Guard remains very pleased with KSS Management Staff and Operations Profitability significantly improved

Kodiak Support Services – JV


Update on KOMAN, Inc.

• Coast Guard Base Operations Support Services (BOSS) contract became significantly profitable for the first time in 2011 – Active involvement by NOK Board of Directors and Executive Team

contributed to improved safety, operations and profitability

• Annual Net Income to KOMAN, Inc. from this contract follows:

– 2011: $344,442 – 2010: $4,980 – 2009: ($51,947) – 2008: ($8,754) – 2007: ($34,258) – 2006: ($116,205)


KOMAN Diversified Services, LLC

100% Owned by Natives of Kodiak, Inc. Business Originally Formed in September 2003 Certified by the SBA as an 8(a) Company in March 2008 Current focus is on the following business lines:

Construction Management Apparel Manufacturing Pursuing other profitable business activities



• Construction Management • Direct Award Construction Basic Ordering Agreement

accepted at Dover Air Force Base, Delaware in 2010 • Three projects with a total contract value of over $15 million

• Construct C-5/C-17 Aircraft Maintenance Training Facility ($4.5 MM) • repair Taxiway “Charlie” ($9.0 MM) • Renovate Building 605 ($2.0 MM)

• Only the Building 605 Project remains in progress at this time • Air Force decided not to fund option years on this agreement



• Construction Management • Photos of three Dover AFB Projects are shown below C-5/C-17 Facility Taxiway “Charlie” Building 605




• Construction Management • Summary of Bidding and Proposal Activity During 2012

• Total Value of Awarded and Completed Projects: $17.8 Million

• Total Value of Current Project Bids (09/11/2012): $46.8 million

• Total Value of Unsuccessful Bids (09/11/2012): $377.0 million



• Exploring opportunities in other business lines • Facility security clearance for government contracts

• Fuels infrastructure projects for U.S. Military bases • Full range of opportunities with the following companies

• Tait and Associates • HDR • SCIF Constructors, LLC • Weston Solutions • JJ Kirlin



• Business Development Update – Construction • Tait and Associates:

• FAA recently awarded the Tait–KDS Team a worldwide small business multi-year Basic Ordering Agreement • has many pending and future infrastructure needs • Task orders are to range from $240,000 to $11 million

• Tait–KDS Team has created a marketing brochure for Program Managers and Implementation Managers to fully understand our team and this contract vehicle

• Our team intends to present our formal Capabilities Presentation to all appropriate FAA decision-makers



• Business Development Update – Construction • HDR / SCIF Constructors:

• Facility security clearance for government contracts

• Weston Solutions:

• Fuels infrastructure project at Whiting Field, Florida

• JJ Kirlin:

• KDS recently submitted a subcontractor proposal to replace the roof and renovate ventilation systems at the Eielson AFB Clinic near Fairbanks ($4MM TO $5MM)

• Overview of Apparel Manufacturing

– Background information

– Opportunities & Risks

– Target Markets

– Bidding and Proposal Results

– Sales & Marketing

– Operations & Finance

– Questions



BACKGROUND INFORMATION

• KDS and Propper International, Inc. created a new entity to manufacture uniforms and apparel

• Thee new COMpany is a JOinT VenTUre (“KOMan prOpper, llC”)

• SBA approved a Mentor-Protégé (M-P) Agreement in July 2010

• Propper will provide specific assistance to KDS in getting established in apparel manufacturing

• Valid for one year and can be continued for

two or three years with SBA approval


• Highlight of Mentor-Protégé Program

– Large + Small Business = Small Business team

– Opportunity for A Small Business to learn and become self-sufficient

• Business Intent of Mentor-Protégé Program – Large business gets to bid on contracts set-aside for SB/8(a)

– Small business receives help in expanding into a new industry

• SBA Joint Venture Requirements – Small business must own more than 50% of the new company

• For K-P LLC, KDS owns 51% and Propper owns 49%

– Eligible for 8(a) awards as long as KDS is in 8(a) Program

– Two-year lifespan; maximum of 3 JVs


Opportunities & Risks

• Opportunities

– The Federal government is reserving more uniform and

apparel manufacturing contracts for Small Businesses

– Propper International has very strong credibility with federal Government customers which extends to K-P, LLC

– Propper has robust Administration, Logistics, Sales/Marketing, B&P, and Operations to help JV


Opportunities & Risks • Risks

– Reductions in current military personnel strength or operations

would mean reduced demand for uniforms and other apparel items • Competition increases for remaining contracts, and

• COnTraCT “wins” become more difficult and profit margins drop

– Possible additional restraints against 8(a) Direct and Competitive Awards

– deep Federal budget cuts or possible sequestration


Target Markets

• Commercial Market

– Not viable due to competition from China, Dominican Republic, etc.

• U.S. Military (Department of Defense) – Military uniforms and textile-based equipment

– Military body armor (team with armor manufacturer)

– Critical Safety Items and Hi-Visibility Contracts

• U.S. Department of Homeland Security – Uniforms

– Concealable Body Armor


Bidding and Proposal Results

• Pursued 17 Government contracts since January 2011

• Total Contract Value Approximately $400 Million – 5 solicitations cancelled or delayed

– 1 solicitation rejected by K-P, LLC due to low margins

– 3 solicitations in which K-P, LLC was not selected

– 2 Direct Awards rescinded in favor of Ability One

– 4 solicitations still under review by Government

– 1 Direct Award ($18.5 Million) to K-P, LLC

– 1 Competitive award ($2.9 Million) to K-P, LLC


Sales & Marketing

• Personal contact, trade shows, web-based marketing

• Direct Award, Competitive Solicitations

• Cost Control Efforts – Leverage Propper inTernaTiOnal’s resOUrCes, TO inClUde bUsiness

development and proposal capabilities

– Limited business travel outside Alaska

– Maintain minimum required staffing level



Operations and Finance

• K-P, LLC worked on subcontracts from Propper from

January 2011 through March 2012 to maintain Las Marias workforce • Propper exchanged their direct costs for operating the Las

Marias manufacturing plant for subcontract costs to K-P, LLC

• These activities generated $9 million in revenue for the joint VenTUre dUring 2011, bUT On a “breaK-eVen” basis

• K-P, LLC has since been awarded its own contracts


Operations and Finance

• U.S. Navy Working Uniform (APECS) Trouser Contract – 3-year, $18.5M contract (estimate completion in 2.5 years)

– Employing 120-135 people

– Projected revenue to KDS of $375,000 - $400,000

• U.S. Army Protective Undergarment (PUG)

– 150-day, $2.9M contract

– Employing 65-75 people

– Projected revenue to KDS of $25,000 - $30,000


NATIVES OF KODIAK, INC. STRATEGIC PLAN

PROGRESS REPORT


MaJOr aCTiOn iTeMs frOM lasT year’s strategic planning retreat

• improve the flow of information to our shareholders • NOK Annual Meeting Strategic plan progress report

• Better Inform our shareholders of recent and upcoming activities

• Encourage more interaction with the Board of Directors • First annual NOK shareholders picnic in Kodiak

• First annual NOK shareholders picnic in Seattle

• Shareholder gathering during AFN meeting in anchorage

• More interesting and helpful shareholder newsletters

• More informative and user friendly Internet home page



• Commitment to market our capabilities as aggressively as

possible to improve overall growth and profitability • We have continued to strengthen our strategic relationships

with our key business partners, including: Lakeshore TolTest Corporation, HDR, Tait and Associates, Propper International, Smith Manus Bonding Company, and others

• Our comprehensive Tait-KDS Capabilities Presentation to the Federal Aviation Administration in Seattle several months ago represented a specific example of this commitment

• As previously shown, out Team was awarded a multi-year ordering agreement for current and future design and construction contracts



• Search for Kodiak area natural resource opportunities • Protect our lands and resources for future generations

• nOK reCenTly deVelOped and sUbMiTTed a COMprehensiVe “fOresT sTewardship plan” fOr OUr lands On afOgnaK island

• In return, NOK received a $24,000 grant from the state of Alaska

• Continue to seek opportunities to responsibly diversify into new and more profitable business lines • Actively look for opportunities to develop shareholder hire

opportunities and grow the local Kodiak economy by investing in profitable local businesses with long-term growth potential



• Key eleMenTs Of “dUe diligenCe” CheCKlisT fOr any pOTenTial business acquisition by Natives of Kodiak, Inc. • Financial Information

• Annual and quarterly financial information for past three years • Financial Projections for the next three years • Other financial information (tax returns, accounting policies, etc.)

• Products or Services • Description of each product or service line

• Customer Information

• “TOp 15” CUsTOMers fOr The lasT TwO fisCal years • Strategic relationships (and any significant changes in them) • Revenue by customer



• Key eleMenTs Of “dUe diligenCe” CheCKlisT fOr any pOTenTial

business acquisition by Natives of Kodiak, Inc. (continued) • Competition

• Market position and related strengths • Basis of competition (price, service, technology, distribution, etc.)

• Marketing, Sales and Distribution Channels

• Strategy and Implementation • Marketing Opportunities and Risks • Principal Methods for Generating New Business

• Research and Development (if applicable)

• New Product Pipeline



• Key eleMenTs Of “dUe diligenCe” CheCKlisT fOr any potential business acquisition by Natives of Kodiak, Inc. (continued) • Management and Personnel

• Organization Chart • Historical and projected headcount by function and location • Summary biographies of senior management

• Employment history, service with company, years in current position, etc.

• Compensation arrangements • Key employment agreements • Employee Benefit Plans • Discussion of incentive stock plans (if any) • Significant employee relations problems, past or present • Personnel Turnover Data for the last two years



• Key elements Of “dUe diligenCe” CheCKlisT fOr any pOTenTial business acquisition by Natives of Kodiak, Inc. (continued)

• Legal and Related Matters

• Pending lawsuits against the Company • Pending lawsuits initiated by the Company • Environmental issues and related liabilities • Employee safety issues and related liabilities • New regulations and their consequences to the Company • List of material patents, copyrights, licenses, and trademarks • Summary of insurance coverage and any material exposures • Summary of material contacts on any other legal matters • History of Federal, State or local regulatory agency problems


Major aCTiOn iTeMs frOM lasT year’s strategic planning retreat

– Further strengthen our networking and interaction with Alaska Native organizations locally and statewide to: • prOTeCT OUr sharehOlders’ finanCial and OTher inTeresTs • iMprOVe OUr sharehOlders’ qUaliTy Of life

– NOK Board of Directors and our senior executives have

been much more active in the following Alaska Native organizations over the past year • Kodiak Roundtable • Alaska Native Village CEO Association (ANVCA) • National Congress of American Indians (NCAI) • Native American Contractors Association (NACA) • Other Alaska Native Organizations


Conclusion

The Board of Directors, David Anderson, our management, employees, and I would like to sincerely thank each of you for your continued support, Confidence and encouragement during these extremely challenging economic circumstances.


Questions?

Documents

Natives of Kodiak 2012 Annual Meetingnativesofkodiak.com/wp-content/uploads/2016/07/3...Jul 03, 2016 · – Small business receives help in expanding into a new industry • SBA