Eco Building Products, Inc. CEO Letter to Shareholders

VISTA, Calif., March 20, 2015 /PRNewswire/ -- Eco Building Products, Inc. (PINK: ECOB) today released the following letter to its shareholders:

Dear Shareholders:

With the first quarter of the 2015 coming to close, amidst preparations to support a busy spring run in the Building Industry, I wanted to take some time to provide our loyal shareholders with some perspective on the Company's current position, the goals and expectations we are setting for the rest of 2015, and our strategic plan for meeting those objectives. Now with the Company gaining the national attention of Architects, Engineers, and Builders, our primary focus-based goal has transitioned from direct sales and is now set on perfecting the Company's coating operations so that we can increase production volume in support of our growing customer base, including our wholesale lumber customers as we have enabled them to distribute Eco's Advanced Framing Lumber to their customer lumberyards

Now moving into Phase 3 of the Company's business plan, let's briefly recap where we've come from, and where the Company plans to navigate moving forward. Since inception, the Company has had a vision-based plan with the first two phases, as expected, being the most difficult to realize success. In an effort to become the best in the Lumber Industry at technically supporting our customers, the Company is focusing on providing tailored and succinct direct support to our larger customers via highly-engaged technical support and customer service functions, of which has allowed for our customers a smooth transition toward using Eco's Advanced Framing Lumber. The Company's R&D Team is heavily involved in new product development and innovation, and I'm pleased to announce that we're now closer than ever before with Eco's next advanced, defensive lumber product. We are confident that once developed, tested and released to the market, the Industry will embrace the newest Eco innovation as one of the biggest developments the Industry has ever seen. Will there be lookalike products and concepts? Yes! We welcome these product developments because it is our position that all lumber needs to be protected if the engineering values are going to support ground movement, fire and high winds loads when they are called upon. Most important is the fact that Eco's Technical Team has become well versed at communicating with the Specifying Community due to the simple fact that we come from within the Building Industry and we're poised to make a difference, "Change is coming".

Phase 1 of Eco was capitalized by the creation of the Company's former truss and framing operations that were designed with the sole purpose of creating awareness and primary demand for Eco's Advanced Framing Lumber. The fact that the Company was not bound to receiving local code official approval for using the product in framing applications, we built hundreds of houses and multifamily projects with Eco Red Shield without having to convince the supply chain to take on something as new as coated lumber. We knew we were on the right track when two gentlemen, of whom we believe to be the best lumberman in all of North America, told us they thought we were the best at marketing the Lumber industry had ever seen. Our plan in Phase 1 was to get vertical with the product and then use those verticals to create demand with social media rather than trying to convince the Lumber industry that was struggling to survive the recent housing collapse.

Phase 2 of Eco's plan was the establishment of the Company's Affiliate Coater Network in key locations around the US. The Company quickly came to realize that Eco's Affiliates would not produce the same volume and intensity as demonstrated by Eco, but at the very least this network would have the capability of raising several red billboards, allowing Eco to leverage their position by telling their success story via social media and marketing to the masses. From this point in Phase 2, the company began to do business with a select few regional lumber companies which resulted in increased production requirements, and the opening of the Company's Salem, Oregon and Fair Lawn, New Jersey manufacturing and distribution facilities. Upon the establishment of these core facilities, Eco launched retail and special order pilot programs respectfully, in association with the largest retail lumber company in the world. Since first launching the initial program over two years ago, the integral processes and functional relationship with this organization has provided much needed insight and mentorship in relation to tuning up Eco's core operations and capabilities, to include technical and acceptable language and pertinent communication to consumers and the market required to support such an account with significant volumes. Today, this relationship has grown from the initial 10 stores in the Northeast, into over 130 retail locations now including the Pacific Northwest, stocking 2 SKUs of Eco's Advanced Framing Lumber in conjunction with a comprehensive special order program. The Company is aware of the other Industry competitors gunning for Eco and we're confident that our coating has perfected the "Home Center Grade Lumber" via Eco's wraparound technology; it is undebatable that this product is the most Advanced Framing Lumber on the planet.

Phase 3 of the Company's business plan is underway and the excitement level is high around Eco. With the Company having completed Phase 1 & 2 of our business plan, we are now crossing the bridge into Phase 3 because Phase 1 & 2 worked, and were successful by design. Our motto since launching this plan is that "It's a long season" and we are confident in the direction we're taking as a Company, well aware of the opposition facing us by way of some Pressure Treatment companies and organizations of the like that are resistant or slow to change. Eco Building Products, Inc. protected lumber products are not a pressure treated product; the Company does not treat any lumber in cylinders or utilize excessive water in the process because we are confident that our coating methodology is safer for application to wood fiber, by design, Eco's Advanced Framing Lumber provides whole-house protection (e.g. from sill plate to sheathing and everything in between). When it comes to delivering cost-effective and safer solutions to residential homes, it is our opinion that we're leading the world in this space. When it comes to teaching Builders and Architects about our focused efforts, it's quite simple what we're focused on accomplishing because the problems associated with wet lumber and glues holding today's lumber together are making wood-framed buildings more difficult to exit in fire because the evolution of fire is so fast, and those that come from within the Industry like us are listening. We believe the building codes are in need of change when fire protection on multifamily buildings is mainly required on exterior walls, but the interior lumber is typically kiln dried which dramatically increases the fire load of wood-framed structures. Case in point, watch this video:
http://www.huffingtonpost.com/2014/03/25/construction-worker-rescued_n_5031958.html.

With Phase 3 now underway in our core facilities, the following key elements are integral to the success of the Company moving forward:

1. The Company is installing additional production equipment that will enable increased output of Eco's Advanced Framing Lumber in support of our wholesale customer that services hundreds of lumberyard customers, and Eco's big box customer with an increasing count of active stores in the programs in both the Northeast and Pacific Northwest.
2. Once this production expansion is complete (tentatively) by the end of April 2015, the Company's output of finished goods will double. By mid-Summer, additional advanced production equipment will come on line at Eco's core facilities, effectively streamlining the Company's operations in support of coating services only.
3. Further, Eco has made the decision to sell the Truss Company along with moving out of the coating facility in Colton, California, in order to position core coating operations closer to the production of lumber and wholesale lumber positions in both the Pacific Northwest and the Company's existing production operation in Fair Lawn, New Jersey, with plans to have twice the production output by the end of April 2015, as the Company is focused on growing its finished goods output.

Eco's marketing and Media efforts have remained a key component for creating demand and raising awareness for the product. Having navigated a wide variety of marketing positions and vantage points, the Company has keyed in on what strategies truly support the direction being pursued. This past Friday (3.13.2015) Channel 12 News NY/NJ metro covered a story in relation to Eco in which Architect Robert W. Adler spoke about his business, and how he now builds with defensive lumber. This morning (3.20.2015), a Company affiliate by the name of Frank Dicopoulos appeared on CBS KDKA 2 Pittsburgh Today Live, Philadelphia's number one morning talk show. Frank hosted a portion of the show about Eco Building Products, and it can be viewed by visiting: http://pittsburgh.cbslocal.com/pittsburgh-today-live/. Look for more media appearances as the Company continues to teach consumers and the Building Industry how to build better buildings by embracing a technology that only makes the lumber we grow in North America better. We understand better than most that such a dramatic change is difficult to undertake just like it was after the Northridge Earthquake when new hardware to support ground movement became the norm, and we are equally aware that consumers are now engaged and listening, especially when shows such as 60 Minutes air, where only a few weeks ago they released a story about formaldehyde emissions polluting the indoor air quality of homes as a byproduct of specific building materials. Further, another 60 Minutes story aired detailing the fact that published engineering reports on houses destroyed after Super Storm Sandy could have been altered to conclude that buildings which are truly unsafe, have been deemed safe for occupancy. Our Company has made a comparison to these stories in connection with the widespread use of wet lumber that ends up behind the walls of all American homes. New building codes are now being implemented across the US that requires 19% or lower moisture content readings prior to drying a building in. It does not take a rocket scientist to understand that lumber stored outside all winter and exposed to the elements will be in excess of 19% moisture content, and to dry it out would take more time than any builder has allocated during construction. The big question is "Why was that code adopted given the current conditions of today's wet framing lumber in widespread use?"

In closing, the Company is focused primarily on producing a higher volume of finished goods while growing our wholesale relationships. Throughout the course of 2015, the Company will continue to stay focused on targeting Architects and Specifying Community, along with maturing the plan with our Wholesale Lumber relationship, starting in the Pacific Northwest with our Big Box relationship. The Pacific Northwest territory is showing promising signs that remind us of the growth experienced in the Northeast because both regions deal with so much wet weather, a key element that demands the use of Eco's Advanced Framing Lumber. Our Technical teams have reached out to over 150 Architects with our Specifier's Guide aimed at teaching Architects why wood fiber needs to be protected from wet storage and termites, as well as fire evolution, and why wood today ignites faster than the lumber previously deployed. During all this forward movement and planning, the Company has hired a team of financial professionals to help the Company take a harder look at our business, and to provide insight into our decision-making processes focused on ramping Phase 3 of the business plan into full swing by this summer. This financial restructuring process, already deep into action, has taken about 3 months, as we've broken down our entire financial business plan and business model, highlighting what business channels are truly profitable, and which channels are depleting our margins that no longer support the Company's goals. The financial business model is now our map for direction, and today as a company we have completed the necessary cuts and revisions to operations, significantly reducing our overhead as we are now at the point with two core facilities producing more of Eco's Advanced Framing Lumber than ever before. Lastly, the Company is now interviewing candidates to expand its Board, and has a commitment to support the necessary capital required to support the Company's go forward plan.

Also, please note: The Company's ticker symbol has temporarily changed to "ECOBD" due to recent corporate action to reverse split the stock 1 for 20.  This symbol will be in effect for 19 more business days.

About Eco Building Products, Inc.
Eco Building Products, Inc. is a manufacturer of treated wood products that are protected against fire, mold/mycotoxins, fungus, rot-decay, wood ingesting insects and termites by our proprietary eco-friendly chemistry utilizing ECOB WoodSurfaceFilmTM and FRC™ technology (Fire Retardant Coating) leading the world on Defensive Innovations through the implementation of defensive building practices. Eco Building Products' Global Defensive Vision is to foster environmental stewardship, respect reforestation programs, and consider the carbon footprint and recycling efforts as we forge forward in the protection of homeowners and builders. We believe that in conjunction with these endeavors, Eco Building Products will have a positive impact on U.S. export business as supported by factory-built housing managed by American Veterans, demonstrating once again to America's youth that working in the Building Trades is an honorable vocation.

Safe Harbor Statement: This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. Forward looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this release. ECOB takes no obligation to update or correct forward-looking statements, and also takes no obligation to update or correct information prepared by third parties.

Company Contact 
Eco Building Products, Inc.
Phone: 1 888 Red Shld (888.733.7453)
Email: [email protected] 
Web Site: www.ecob.net

SOURCE Eco Building Products, Inc.

Related Links

http://www.ecob.net