CalCedar has long been an international company, serving customers on five continents, we recognize the world is changing. To remain competitive, we must offer a balanced mix of products, with technologies using the most appropriate raw materials and people from around the world. As a result, CalCedar has restructured operations to support its newly formed Global Manufacturing and distribution system.

We also recognize that our future success can no longer be assured simply through the continuation of traditional practices in managing customer and supplier relationships. We realize our customers and suppliers around the world are facing similar challenges, and thus have committed ourselves to form innovative new supply alliances throughout the world. We now view our traditional core business not simply as the Incense-cedar pencil slat business, but rather as the delivery of pencil casings through our Pencil Products Business Unit. This group will develop and introduce a wide variety of new products, services and customer support capabilities, linking with our traditional pencil slat customers to meet their complete pencil casing requirements.

These changes apply to more than our traditional pencil casings business. As CalCedar grows other businesses, we will look to explore similar strategies to expand these businesses on a global basis.

In response to the increasing rate of change in the markets we serve, we are developing a new kind of organization. It is faster, more efficient and more customer-focused than before. Our employees will face the continuing challenge of adapting to new business structures and methods, developing new individual skills, and taking on new and different work responsibilities as our company evolves. How we all look at our career opportunities both inside and outside the company will change as old positions are redefined or eliminated and new ones are created.