From the CEO: To list or not to list?

After our announcement last week that we would be delisting from NASDAQ, I have fielded a lot of questions from DWR folks, investors, manufacturers and just plain curious people. Generally I believe that for every one who asks a question there are 10 or 20 people who have the same question but won’t raise their hands. Kind of like high school but with older people – you get the idea, and I am sure many of you have experienced the same human phenomenon. So, for all who have asked (and for all who want to ask but are too shy), I thought it might be good to provide a very simple and hopefully concise review of our reasoning and intentions relating to this step. So here it goes: 

As we all know, the world is going through a financial reconciliation of sorts. Everybody spent too much, got separated from their money, reason and common sense, and now we are all trying to reconcile. Some call it de-leveraging. Whatever you care to name the state of the economy over the last few months no one would call it rosy. Today most business have drastically cut expenses to bring them in line with reduced revenues and to insure the survival of the entity, the shareholders’ value and their people’s futures. At DWR we are certainly not immune. We have seen revenues fall by 30% for the last year and we are repositioning our expenditures and our reason to exist to fit into the emerging world order. We have cut expenses by over 30%, reduced assortments, revisited outdated ideas, accelerated our efforts to move manufacturing to America, and we are looking forward to growth in the near future.
During this process we have attempted to run the business with integrity and for cash flow. Simply put, that means insuring our out go does not exceed our income. Many times this has caused us to make difficult and personally agonizing decisions, but the good of the whole must always be the driver. So we have slowed payments to vendors, closed two unprofitable stores, and managed to stay what the banks call “liquid.” Meaning we can pay our bills and operate – but little else. 
Thanks to the efforts of our people, we have kept sales at a level that allows us to keep moving, smiling through the adversity and pushing ever forward. 
However, that is actually a lousy way to run a railroad (or a furniture company for that matter). We believe the economy is getting better and we are seeing signs of life ahead, but they will be slow in coming and we are okay with that. The laissez-faire attitudes of the past cannot go on. We must all live more responsibly and realize that what is really import in life is family and friends. For that alone, this recent wake up call is a good thing. 
But back to business – sorry for the detour there. As we continue to look for savings that do not impact our people (staff reductions) or our clients (quality compromises) we are leaving no stone unturned. So, when we looked under the NASDAQ stone we saw expense with no real value to us. Please do not misunderstand: NASDAQ has real value to its member companies and we believe they are a quality organization that does an excellent job of informing and providing access in an environment of integrity. Certainly a real need today. But we have less than 100 shareholders of record and almost no float. (“Float” refers to shares that trade, and most of our shareholders are not sellers.) Combine that with too little available stock to make a position and you realize that for us, staying listed on NASDAQ is an expense we can forgo with no negative impact on the organization’s ability to provide our clients with quality, our employees with security and our shareholders with value. 
When the delisting is complete we may look for added investment, we will certainly be looking to improve our liquidity, and we intend to continue to stay registered. Some time in the future – we believe the near future – we will likely re-list on an exchange, have greater float and more shareholders. But until that day, we are saving the money and continuing to move forward. 
So that is what the delisting is about. Basically – we are just keeping the ball moving forward. 
Posted by Ray Brunner, CEO, Design Within Reach