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Started As A Mold Prevention Service, American Mold Guard, Inc.
Has Evolved As The Leader In Antimicrobial Surface Coating Assisting Hospitals And Other
Large Facilities Prevent The Spread Of Microbial Growth
Industrial Goods
Antimicrobial Services
(AMGI-NASDAQ)
American Mold Guard, Inc.
30270 Rancho Viejo Road
San Juan Capistrano, CA 92675
Phone: 949-240-5144
Paul Bowman
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published - September 14, 2007
BIO:
Paul Bowman
// CFO
Paul Bowman brings to AMGI more than 29 years of financial and management experience in
the computer and semiconductor industry. Bowman's technical expertise encompasses public
company financial leadership, investor relations, business unit controllerships, large
organization employee management and systems implementation.
Prior to coming to AMGI, Bowman served as managing director of investor relations at
Applied Materials Corp. In his 10 years with Applied Materials, Bowman also served as
managing director of worldwide manufacturing, in various controller and financial services
roles.
From 1988 to 1996, Bowman worked at Unisys Corp. He began his career at IBM Corp., where
for 10 years he served in various roles, including Personal Computer Division distribution
finance manager. Bowman holds a B.S. degree in accounting and finance from Shippensburg
State University.
Company Profile:
American Mold Guard, Inc. (NasdaqCM: AMGI),
founded in 2002, is the industry leader in the field of antimicrobial surface treatment
services. AMG Scientific, LLC is a wholly owned subsidiary of AMGI. Established in October
2006, AMG Scientific, LLC is focused on providing long-term antimicrobial infection
control services to health care facilities and large institutions in an effort to provide
an additional intervention safety net in the fight against hospital-acquired infections.
CEOCFO: Mr. Bowman, what is the vision for American Mold
Guard, and how do you get there?
Mr. Bowman: “American Mold Guard started out as a
mold prevention service company. When the Company went public in early 2006, the new
construction market was on a growth trajectory. As this market slowed, our Company saw the
opportunity to expand into new markets. What we quickly began to understand is that we are
an expert in antimicrobial surface coating. We have treated over seventy million square
feet of surfaces since our inception and we saw the need for antimicrobial surface
treatment in healthcare facilities such as hospitals, surgical centers and nursing homes
to help keep surfaces germ free for prolonged periods. The real vision for American Mold
Guard and AMG Scientific is to continue to be the leader in antimicrobial surface coatings
in multiple markets.”
CEOCFO: What sets your treatment apart from the competition?
Mr. Bowman: “There is limited competition out
there right now. We are the only company that I am aware of that really goes in with a
four-step process. First, we prepare the job-site or the framed construction
material with a high-pressure blast technique that removes about a hundredth of an inch of
the surface of the wood, removing all microbes. We then clean up the job site of any
debris left by us or other sub-contractors. We include this value added service for our
customers. Traditionally builders might pay .8 to .10 cents a square foot for this part of
our service. We next apply our antimicrobial treatment and inspect the site and finally we
issue a warranty that is good for a ten to fifteen-year period, depending on the state
statues. Our service really protects the health and the asset of the individuals who will
ultimately live in and own the property. In our Infection Control application, we also
perform a two-stage treatment process. First, we decontaminate the surface so that the
surface is free of all germs and pathogens. We then apply our EPA approved antimicrobial
coating that imparts long-term efficacy on the surface. Today, in most healthcare
facilities, a room disinfectant or cleaning occurs but what is missing is a prolonged
microbial kill that does not rely on continued human intervention. We are the Company that
provides the long-term antimicrobial surface treatment.”
CEOCFO: There has been a lot of talk about infection in
hospitals; are they ready for your services and how do you reach your potential customers?
Mr. Bowman: “The way we have approached this
market is by conducting hospital trials. We currently have two publicized studies
underway. We have already initiated the first study at Rush Medical Center in Chicago. We
are anticipating positive study results which we will start to see this fall. Our other
study is scheduled to commence on September 1st (2007) at the University of
Maryland Medical Center. We will treat ICU rooms and compare microbial levels in the
treated rooms against untreated rooms. We have also secured our own EPA label and we have
a toxicology report that attests to the safety of what we will do in a hospital
environment. To answer your question about whether hospitals are ready for this service;
we believe they are. Hospitals have a real and immediate problem around infection control.
Recent publicity, state reporting requirements, and more importantly reductions in
Medicare reimbursement provide the needed incentives to address the problem. Hospitals
have taken some very positive steps toward solving hospital-acquired infections but we
believe we offer an additional safety intervention with our antimicrobial surface
treatment.”
CEOCFO: Did you recently have some EPA approval?
Mr. Bowman: “We did. We have been working on this
for about a year, and the Company has recently been granted our own EPA label. Our new
label is significant in that the EPA has determined that our antimicrobial is an agent
that can kill microbes and bacterial organisms that will inhibit bacterial growth over a
prolonged period. Our new label also allows us to treat an expanded number of
surfaces.”
CEOCFO: Are you moving beyond your current geographic
footprint?
Mr. Bowman: “We are. The Company was founded in
California back in 2002 and we have a strong Mold prevention presence in California. We
branched out into Florida and started to provide restoration services in the Gulf States
post hurricane Katrina. Last summer we opened up our Mid-west region in Texas. We recently
announced a sales presence in Seattle, Chicago and Atlanta and we are in the process of
adding local sales in Boston and the Washington/Baltimore area. We really are a national
company as we have the capability to sell anywhere in the US and can mobilize our
operational crews to service projects across the United States. Our mold prevention
service is focused on both multi and single-family developers; by multi-family, I mean the
big apartment complexes, condominiums or multi-house complexes. We can be very productive
in multi-family projects. We go into a multi-family job site and can cover a lot of square
footage, which translates into a higher level of labor productivity”
CEOCFO: What is the financial picture of the company?
Mr. Bowman: “As a company we raised just under
$17 million of net cash back in May of 2006. We used investor funds to pay off all of the
Company’s debt. That left us with around $9 million. We have invested the money in
productivity and capital improvements. Since then we have demonstrated gross margin growth
from roughly the low 20% up to almost 50%, with last quarter’s gross margin at a
record 49.8%. We recently raised additional capital of approximately $4 million and we are
using these funds to invest in our mold prevention sales expansion and infection control
initiative. As a Company, we are not yet profitable but over the last six quarter we have
continually increased, our gross margins and we have reduced our SG&A spending. Of
note is that last quarter we reduced our cash burn by $500 thousand as compared to the
previous quarter. We have a real focus in the Company on cash management and driving sales
growth. We are currently in a tough new construction market but we are very encouraged
with our focus on the stronger multi-family segment and the enormous opportunity that we
believe the infection control business could provide”
CEOCFO: What do you see are the challenges going forward and
how are you ready?
Mr. Bowman: We believe we offer a very valuable,
novel, and needed service in both Mold Prevention and Infection Control. Our biggest
challenge is to market and sell our treatment on a broader scale. We would like to be able
to reach the consumer directly but we are limited from a funding perspective to be able to
mass market to homeowners and patients. Therefore, we are focused on the top builders in
the US, selling them on the value proposition of reduced liability while providing their
customers with a clean / “green” structure. Another significant challenge is how
quickly we can move our Infection Control hospital trials to a first sale. We believe the
market is ready and in need of this service. We are starting to see real interest in what
we do from large medical institutions and we are quite excited about the opportunity ahead
of us. From an Investor standpoint, I believe that successful hospital trials and or our
first Infection Control sale will represent a very significant milestone for the
Company.”
CEOCFO: Why should investors be interested now, and what
might an investor miss when they first look at the company that really should stand out to
them?
Mr. Bowman: “I believe one of the misconceptions
at this time is that our future is tied directly to the construction industry. What
investors should consider is the vast market opportunity that the company has around
antimicrobial surface coatings. We believe the market for our service is much broader than
just the construction industry. While we are very proud of our roots in the mold
prevention business, we recognize that the infection control market is a very large
market. Whether that is in hospitals, nursing homes, surgical centers or health clubs, we
believe there are very many applications for antimicrobial surface applications. It opens
up a huge market for the Company. When I look at the current risk / reward in our stock
price I believe that the upside potential, given the opportunity that we have in Infection
Control and Multi-family Mold Prevention far outweighs the downside risk. My advice to
Investors is if you are not invested in the Company do not miss out on what we believe
holds great promise.”
CEOCFO: What should people remember about American Mold
Guard?
Mr. Bowman: “This Company has a new, novel,
leading-edge concept in the delivery of antimicrobial surface coatings. We are pioneering
the industry, having treated over seventy-million square feet of surface and we have
entered the Infection Control market by collaborating with two leading hospitals. The
market opportunity in front of us is very big and we believe we offer a very valuable
product and service that has not yet been fully appreciated. At American Mold Guard and
AMG Scientific, we are committed to preserving the health and assets of individuals and
businesses and through this commitment; we are very focused on building shareholder
value.”
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