May 1st First Break Talking Points

ICYMI…Here is what was discussed at First Break this morning:

1. Bonus Plan.  Just to try and clear up any confusion.  Last month we reported that we hit our Sales goal for the first quarter, but yet a couple weeks later we reported that we didn’t make the EBITDA bonus.  Why is that?  Please understand there are four very important financial indicators that play into our model for success.  If you would like any more explanation about these measures below or how they work together, please don’t hesitate to come see me or Kathy.
   1. Sales (orders that are taken along with some or all of the payment).  If we don’t have sales, nothing else happens, so we need strong sales.  Q1 was on track.  April ended up being very soft, so we are pushing for a very big May.
   2. Revenue (the $ amount of shipments that went out the door).  We had a very good shipment month in March, and thus we were profitable.  We have an even better shipment month just completed in April, so we hope to be profitable again this month.
   3. EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)  Sometimes we call this “profit” – it is a way that we use to measure on-going profitability of the company, and for us, this measure indicates how much money will be put into the bonus pool.
   4. Cash Flow.  Even if a company is profitable, sometimes there is not enough cash flow to pay for everything.  Cash Flow is key for a small business like us and something that Kathy has to monitor on a daily basis.  Free Cash Flow – actual cash we can send to our Owners (Moriah) – is what they are looking for.  That means our owners are actually getting a return on their investment – something they have never had from Dental Planet.  Kathy has put measures into place this year where we hope to start (even on a very small scale) to be able to start managing to send some cash back to Moriah.
2. Smokers.  If you are smoking outside of the production area, please move away from the doors.  There is a picnic table available in the designated smoking area.  Also please use the butt can and keep cigarette butts out of the inside trash cans.
3. Supplies.  We got an update from Tony about our major initiative to sell supplies to dentists.  This is a very big undertaking involving team members across the company.  We received our Texas Wholesale Pharmaceutical license, Anthony has been very busy getting our supply products listed on our website, and we have a planned “go-live” date on May 14th.  This effort won’t be easy, but our goal is to have a known, repeatable revenue stream from our customers who use supplies every month, as opposed to equipment that only need to replace every 5 to 10 years.
4. Our new showroom in New Jersey is now open.  The Grand Opening went very well and all of our products look great.  We look forward to more dentists being able to see our new and refurbished products in this setting.
5. Ron Hebert will be relocating back to Alaska in the next month, but hopefully once he finishes up all of his loose ends in Alaska, he will be moving to the San Antonio area where he can once again do service and install work for us.  We are advertising for a new chair tech.
6. Our new cabinet line is available and on our website.  All of our own branded products will now fall under the Dura-Pro brand.
   1. Our existing cabinets from the Koebel Brothers make the Dura-Pro Excel line, which offers more customization on size and features.
   2. Our new mid-priced line is the Dura-Pro Elite line of cabinets.  We should have some here within the next month or so for pictures and training.  These are coming from our new cabinet partner in Illinois
   3. Our economy offering will be the Dura-Pro Essential line.  These cabinets will be a very limited offering of styles, also coming from our partner in Illinois.
7. The company intranet.  Where you are reading this (employees.dentalplanet.com) continues to grow as a resource.  All employees with a DP.com mailing address will receive alerts automatically about new posts on the site.  This means those alerts will replace the e-mail message from me about new Safety Tips or Monday Memos.  If you do not have a DP.com email address, see Nick.  He can set up an “alias” that will give you the address, but it will forward to your personal email account.

Thanks for your time!  As always, please ask if you have any questions.