The Gathering Storm

What the heck is going on out there?

Mortgage meltdown

Gas prices up and down

Credit is drying up

Layoffs

Unemployment is increasing

Marginal companies will fail

The DOW is crashing

401K >>>> 201K

Housing values are declining and will continue to decline

Credit card debt is increasing and will be the next storm cloud

Folks are tightening their belts

Fear, uncertainty and emotion are driving the markets

Election hysteria is magnifying the problem

How will this impact business?

The weak will fail and the strong will prevail

Businesses will become more cautious and unwilling

to take risks

What should any business do?

Get your storm clothes on and batten down the hatches,

we’re in for a bumpy ride!

Be prepared for ………………………………..anything!

What have you personally experienced?

Past is prologue

What can Littlefield do about this?

Increase revenue

Increase and conserve cash

Manage, reduce expenses

Institute a fierce zero based budget discipline

When in doubt, do without!

Cancel, delay capital spending

Secure capital to grow

What am I considering doing?

Ratchet up performance, drivers

Eliminate three positions

Across the board pay cut of 12.5-15%

Cancel/delay all bonuses of any kind for 12 months

No compensation actions until 6-30-2009 --- re-evaluate

Evaluate benefits, eliminate wellness program

Reduce overhead by 20%

Delay capital projects

Create profit sharing equity pool

Do we know what we are doing?

Been there, done that, got the t-shirt

If I make the wrong decisions, you pay the price

How are we going to measure success?

What we measure, we manage

Total revenue

Total expenses

Net operating income

Expenses as a % of revenue

Operational parameters

How long is this going to take and what is

really going to happen?

This may take 12-24 months

It is probably going to get worse before it gets better

Obama --- you cannot raise taxes to cure a bad economy

McCain Republican President +Democratic Congress

= very little progress

We will communicate regularly and you can look at the numbers

We will prevail because we moved quickly

Tough times do not last,

tough people do!