PRT's - Comments and Questions from Employees

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Comments and Questions from Employees

"Why do we have the money to establish new operations in Nevada or Oregon, and yet we have to make budget cuts?"

One goal of this response is for everyone at PRT to understand the difference between capital investment and operating costs. The establishment of operations close to our customers is a significant part of our strategy, and part of how we ensure that we provide the "comprehensive service" mentioned in my original letter to employees. As Walter Gretsky taught his son Wayne very early in his hockey learning, "Skate to where the puck will be." Thanks to Tom Harvie’s initiative and hard work, we have attracted significant business from the USA in recent years. This is also part of our goal to diversify geographically, to level out the effects of often punitive government regulation in any given area, such as occurred in BC through most of the 1990’s. But more importantly, capital investments are expenditures made for the future, to generate income and add to our sustainability for all stakeholders - employees, customers and shareholders alike.

I’m sure you all know someone who switched from oil or electric heat to a natural gas furnace or maybe even a wood pellet system. It cost them far more than their anticipated yearly savings from the conversion. If you did this yourself, you probably calculated how much you would save per year, and whether it was worthwhile to invest in the new furnace. The cost of the furnace is a capital investment, and the new lower cost of heating your home, is the annual expense. The savings justify the investment.

Or maybe you moved from one town to another where there were better job opportunities. In this case, you invested some of your savings to pay for the move, and thereby increased your income potential. Have you ever taken some training to qualify yourself for a higher income? Did this improve your earning potential and maybe your credit rating? You may have helped your children make a similar investment by helping them attend technical school or university. Many parents start very young with investments in sports camps and fine arts opportunities. These are all investments to sustain and improve future outcomes.

Imagine what PRT would look like today if we had not mustered the courage to convert from bareroot to container seedling production. This conversion required capital investment of some $14 million dollars when all was said and done. It also required a solid relationship with our lenders – the bank and our employee shareholders. Today, less than 1% of seedlings in our original market areas are ordered for bareroot growing. If we hadn’t made that substantial investment, we’d certainly look silly today, not to mention that most, and maybe all, of the jobs at PRT would be gone. Instead, we wrote cheques to over 1,800 people last year.

So when we refer to sustainability, and to our future through prudent investment, I’m sure it’s obvious why we strive to maintain good relations with our bank and investors, by delivering sustainable good results. We have also sustained employment for as many people as possible. Capital investments are made for one reason - to sustain and improve our business.

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