Somero Enterprises, Inc. is pleased to provide an update on trading ahead of its Annual General Meeting to be held on Tuesday 12 June 2018.
Trading Update
Somero is pleased with the broad contributions to the Company's growth at this early stage of the year and the positive market conditions we continue to see across our portfolio of territories. North America and Europe remain healthy markets with robust activity levels and we remain encouraged by the performance in China in the period as we continue to work on gaining traction in this significant market. We are similarly encouraged by solid activity levels in the Middle East, Latin America and our Rest of World territories and we see opportunities for growth in each of these markets.
On a product basis we have seen balanced contributions from each product category as sales of Boomed screeds, Ride-on screeds and Parts and accessories have all been key contributors to growth to start the year.
The Company continues to focus heavily on future growth initiatives and product development efforts, and has progressed in developing a solution for concrete leveling in the structural high-rise market segment. Through job-site testing of our prototype machines we have gained valuable insight into the this market segment and identified opportunities to improve the design of the equipment that will increase the value of the offering. We are encouraged by the Company's progress in the long-term effort to penetrate a new market segment.
In summary, the Company feels comfortable with the positive trading environment across our footprint, and the growth opportunities visible in North America, Europe, China, Middle East, Latin America and our Rest of World territories. This constructive environment combined with solid margin performance and healthy operating cash flow generation means the Company's trading to date is ahead of the comparable prior year period and in-line with market expectations for the full year ending 31 December 2018.
Succession Planning
The Board has implemented a clear succession planning process to provide for the measured transition of responsibilities from President and Chief Executive Officer, Jack Cooney, to the current, experienced senior leadership team. The transition of responsibilities is designed to take place gradually over the next three years to ensure an orderly transition of his day-to-day responsibilities.
Mr. Cooney has been nominated for re-election to the Board of Directors, subject to shareholder approval at the Annual General Meeting on 12 June 2018, for a three-year term coinciding with the transition of his responsibilities as President and Chief Executive Officer. It is expected Mr. Cooney, after transition of his current executive responsibilities, will be considered by the Nominating Committee for re-election to the Board as a non-executive director.
The Board also has a succession planning process designed to provide for a highly independent, well-qualified Board, with the diversity, experience and background to be effective and to provide strong oversight. A key element to the Board succession planning process is the Board retirement policy adopted in November 2017. The Board retirement policy states directors shall not be re-nominated for election after reaching 75 years of age, provided that the Board may approve exceptions to the policy based on a recommendation from the Nominating Committee, and that if a director reaches the age of 75 during his or her term, the director will offer to resign in writing. The Board retirement policy further states the remaining members of the Board may choose to accept, defer or reject the offer to resign. Based on Mr. Cooney's current age of 71, this retirement policy is not applicable for the duration of his proposed new three-year term, as described above. The Board unanimously agreed to implement this policy in 2017 as an important mechanism to ensure orderly transition of responsibilities for directors that reach retirement age and to ensure the Board remains well-qualified and effective in its oversight role for the benefit of Somero and its shareholders.