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BP International is
positioned to be a major player in the emerging fabric structure business
Consumer Products
Manufacturer of Tennis and Athletic Field Equipment, Netting for construction
and Privacy Screening, and Fabric Structures
(BPIL-OTC: BB)
BP International Inc.
510 W. Arizona Ave.
Deland, FL 32720
Phone: 386-943-6222
Larry Ball
Chairman and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
May 5, 2005
BIO:
Larry Ball, CEO and President, attended Florida State University and majored in Marketing.
He was a tennis professional until 1984, when he entered the tennis sales industry
with the new company, Tennis Sales, Inc. based in Sanford, Florida. In 1987, Larry
founded Ball Products, Inc. He continues to serve as the company's visionary leader
and entrepreneurial force."
Company Profile:
BP International, Inc. (BPIL) is a leading manufacturer of fabric architecture shade
structures and cabanas, tennis court equipment, athletic field and gymnasium equipment,
custom netting, and outdoor fabrics for use in privacy and construction fencing. The
company recently introduced ShadeZone® shade structures, an expanding line of standard
and custom, permanent and portable, fabric architecture to reduce heat and block UV rays
on playgrounds, golfing facilities, zoos, baseball and football complexes, theme parks,
parking lots, car dealerships, outdoor concessions, pool sides, etc.
Capitalizing on long-term relationships with
prominent contractors and equipment rep consultants, the company recently initiated a
distributor program that will ultimately comprise a network of well-trained independent
sales representatives throughout the United States, Canada, Mexico, South America and the Caribbean.
Customers include Arena Football, Montreal Expos,
Boston Red Sox, Houston Astros, New England Patriots, and many colleges, universities and
sports complexes throughout the United States.
CEOCFOinterviews: Mr.
Ball, what was your vision when you started the company, and how has that vision played
out?
Mr. Ball: “When I started the company in 1987, we had a
vision of being the leading manufacturer of tennis court equipment in the country. That is
where we sprouted our wings -- in the tennis business. As we became successful in the
tennis industry, we began to realize that the tennis market was limited. We wanted to be
bigger than that. We wanted to diversify. We analyzed our tennis products to determine
what we could use in other industries. As a result, we tweaked our tennis windscreens a
bit and developed a few products for the construction industry. Because of the
overwhelming response, we established a fence division where we diversified into calling
on fence contractors. At construction sites all over the country you now see temporary
fences with this type of screen. That is becoming very common.
As we began going into the athletic market with our fence screening, we realized that
there were many other demands and needs that we could fill, such as netting and field
equipment composed of outdoor fabrics and metal fabrication – everything we already
did in our plant. Gradually we developed a full line of athletic equipment. We diversified
into three main divisions with very similar product lines. About seven years ago, I
started looking at the fabric structure industry. When we realized the incredible
potential involved in this industry, which was ready to take-off, we jumped in feet-first
and developed a significant fabric structure division. A fabric structure is what you see
at some airports and malls where the entrance might be covered with a big steel framework,
and high-tension fabric instead of a typical awning.
Our focus has been covering playgrounds and bleachers at ball fields and parks to keep the
UV exposure off the children. The medical industry is now saying that overexposure of UV
rays at an early age increases the chances of skin cancer. This concept, of keeping
children out of the sun, is becoming a big issue and fabric shade structures are one of
the best and most cost-effective ways to solve the UV/heat problem. So, to recap, our
vision was to get a solid footing in the tennis industry, and then diversify while keeping
our core manufacturing capabilities fairly similar.”
CEOCFOinterviews: What
is the market for your products?
Mr. Ball: “The market for athletic facilities equipment
is enormous. We have tried to get some sense of the true size of the market. We have done
some studies and surveys. It is a multi-billion dollar market. When you take all the high
schools, colleges, park and recreation departments, YMCA’s, professional facilities
-- whether it is baseball with all their different training facilities, football, and
soccer facilities -- there are so many throughout the country. All of those facilities
have a number of needs for our product lines. The athletic industry is one of the most
competitive markets, with probably about 12-15 significant players very well established.
But, when you are looking at a multi-billion dollar market, that is not very many
companies compared to other industries. We believe there is plenty of room for us to carve
out a very lucrative niche for our company.
But we have four product lines: tennis equipment,
athletic field equipment, fence screens, and fabric architecture shade structures and
pavilions. You can see how parks and recreation departments, sports facilities, high
schools and colleges and universities, and professional athletic clubs would be primary
markets for us. But, because of our fabric architecture division, our markets are greatly
expanded. We are building shade structures at automobile dealerships to prevent hail
damage, at office complexes and multi-family dwellings for covered parking, at restaurants
for covered outdoor dining, at pool facilities, and at golf facilities. Once we get
into fabric structures, really, the market is endless — it is anywhere someone needs
shade, UV protection, or hail protection.”
CEOCFOinterviews: Why
are people choosing BPI?
Mr. Ball: “BPI has been successful creating product
lines that are consistently of the highest of quality. I have been fortunate to be able to
surround myself with very good people. The company philosophy has always been
customer-focused. I think that has really paid off. We have been very successful creating
relationships, and I think that is where we truly excel. When we get a customer, they
generally continue to buy from us. When we were considering going public, we were
analyzing the company, dissecting it, trying to find the positive things about the company
and the also the negative things, trying to weigh how the public was going to view us. One
of the things we found through research is that, since our founding in 1987, our customer
retention rate has been over 90%. I don’t know if there are any industry standards
out there, but that’s got to be extremely high.”
CEOCFOinterviews: How do
you reach your potential customer?
Mr. Ball: “It all depends on the product division. One
of the things that we fight as a growing company is where to put our resources -- what is
the most cost effective way to reach new customers. Tennis was, in a way, much easier.
It’s a fairly small niche market. Within a very short time we knew all the tennis
court builders and tennis supply companies. The fence market is even a little bit easier
than that. Our goal has been to educate fence contractors so that, when they sell a chain
link fence, they will know that there is an opportunity to sell privacy screens, as well.
This will increase job profitability while at the same time giving the customer a more
decorative, private type of fence. There are publications that go directly to the fence
market, and they focus our advertising efforts. We also attend trade shows that target
both the fence and the tennis industries. We do a lot of direct mail. Our customer service
staff always has a list on their desk of people for follow up, or new customers in new
areas we want to contact personally.
The athletic market is a little more difficult because it is just so huge. In that market
we have not put forth the resources we’d like, because we are trying to divert the
resources that we have into the appropriate places, where we’ll get the most bang for
our buck. And yet, with very little overt marketing, the athletic market is one in which
we have been pretty successful. We have done an enormous amount of work with arena
football. We work with a number of professional baseball and football stadiums and
facilities. We do a lot of work with the major colleges. We are developing the sort of
word-of-mouth recognition that, for example, a public high school in Florida recently won
the state baseball championship and got a lot of booster money. They created probably one
of the nicest high school baseball facilities in Florida, and just about all of our
products are there.
One of the things on the planning table for the next twelve to eighteen months is to get
much more aggressive in that arena. We do that through publications, advertisements,
catalog mailers, and phone calls as well as foot soldiers on the road. That holds true for
the shade structure market as well; we are working on putting more foot soldiers and sales
people out there. One of the nice things with the athletic and shade structure market is
that we have developed a significant number of tennis court builders and fence contractors
that buy from us on a consistent basis. We have gone to these customers and shown them the
potential within the athletic and the shade structure markets, offering them the
capability of representing our products within their geographic areas. These are
well-established businesses, and they already have relationships with many of the clients
that will be buying these other products. Furthermore, they have the capability to install
the products. So we are trying to help some of the fence contractors and tennis court
contractors develop new divisions within their existing companies, and become distributors
for us. So far, this approach has worked out very well.”
CEOCFOinterviews: Are
many of your products customized?
Mr. Ball: “Many of our products are customized only to
the degree that the sizes may change. For instance, with a shade structure product, we may
cover a 20x30 playground today and tomorrow we may get an order for a 22x34 just because
of the size of the area that they want to cover. We are just changing the size of the
rafters but the basic product stays the same. There are quite a few products that we make
and put on the shelf. And yet, there are a large number of products that are made to
order. We are proud that we can offer customized products with a very fast turnaround
time, while keeping the price relevant for our customers.”
CEOCFOinterviews: Do you
do anything outside of the United States?
Mr. Ball: “We do a little bit of international business.
We have done some work in the Middle East and some other places, especially with fabric
structures and some other equipment. We do quite a bit of work in the Caribbean. We plan
to get more aggressive in the international market. We also have a manufacturing facility
outside of the United States. There is fabric in just about all the products that I have
mentioned. We actually built a plant in Mexico about three years ago, and that plant makes
a certain amount of products for us. So we are pushing to become more international.”
CEOCFOinterviews: What
is the financial situation of the company?
Mr. Ball: “About three years ago, when we decided that
we wanted to take this company to the next level, we took on some large, cash-hungry
projects. We took on the task of building the plant in Mexico. At the same time, we went
after a shade structure project that was the largest in the history of the business that
any of us in the industry knew about. The county school board in Collier County chose to
cover, or shade, every playground at every elementary school in the county. That gave us
an insight on where this market was going -- there are so many counties and school
districts that are starting to raise funds to do the same thing because of a lawsuit over
a child that had been over-exposed to the sun. We went after that project and won it; we
knew it was a bit big for us, but we knew it would put us on the map.
We successfully completed that project but it was a large project for us to handle and we
did a lot of R&D. The job cost us more than we expected. That, with Mexico and the
cost of going public, made the last three years tough on us financially. Looking at the
big picture, with the accounting firm we use as a consultant, they feel that we had to go
through those painful years to get this company in a position to go to the next level. We
were able to finance those rough years through private investment prior to going public.
We just recently closed on a $5 million credit line with a company called LROS FUNDS. We
feel that we have the correct financing in place to take us where we want to go. We still
want to grow at an acceptable pace. One of the challenges we have had over the years is
trying not to grow too fast and outrun our cash flow. We have a very good controller now,
which I had not had in the past. We have developed cash flow projection statements to make
sure that as we grow our sales projections, our cash flow works with those sales
projections. This has been a huge help for us.”
CEOCFOinterviews: In
closing, why should potential investors be interested?
Mr. Ball: “We have been around since 1978. We are not
some recent start-up company, and we are not going anywhere. We have survived and
weathered some difficult years. We actually manufacture products that are on the cutting
edge of consumer demand. They are not products that are going to be a hit-or-miss, they
are products that people use on a daily basis to protect health and property, and for the
comfort consumers now demand at outdoor facilities. We have established the fact that we
can be competitive with all the products that we manufacture. We know how to go to market
with these products. That’s what makes our company enticing.
But, the biggest reason to invest in us, I think, is
the fabric structure industry itself. It is one of those industries that comes
around so very seldom, where you have the enormous potential of an industry just entering
its infancy, with all its growth still in front of it, and you are sitting right there
with the product, already in production, tried and tested, that will fill the needs within
that industry.
We have positioned ourselves to be a major player in the fabric structure industry.
We’ve successfully survived very intense restructuring, we’ve taken our knocks,
we’ve paid our dues and we know exactly what we are doing. The primary reason we went
public was so that we could run with this industry as it enters the enormous growth that
we see coming. Consider this, and it will just blow your mind: you are looking at
playgrounds, bleachers and ball fields at schools, colleges, and parks all over the
country. Many states are requiring that facilities provide shade on their playgrounds.
This is an emerging market that just takes your breath away.
Then there is the automobile industry. Insurance companies are starting to withdraw their
hail protection insurance, so car dealers, car manufacturers, and large parking facilities
are seeking ways to protect their cars, and fabric structures are the most cost-effective,
and attractive, means at their disposal. With all the product lines we have, with the
enormous emerging potential of the fabric structure market, I feel that we will be a $7
million dollar company in the next three or four years. We feel confident that we will,
ultimately, grow into a $20-$30 million dollar company. We are a diamond in the rough.
Whoever has the foresight to recognize us as such can get on board and grow wealthy right
along with us.”
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