Homasote : Annual Report 2021

2021 Annual Report Our 112th Year

Homasote Company

About Us

Homasote Company is America's leading green building products manufacturer. Most of our base products are manufactured from Homasote® board which is made from 98% recycled paper fiber. The remaining 2% is comprised of environmentally-friendly materials that give our products their strength, water resistance and mold/mildew resistance. They contain no added urea formaldehyde, phenolics or resins to outgas.

We categorize our served markets into two sales divisions. The larger is our millboard division that supplies a variety of products including sound insulation in walls and floors (440 SOUNDBARRIER®), roof decking (HOMASOTE EASY-PLY®, FIRESTALL®), floor decking (HOMASOTE 4-WAY® floor decking), concrete expansion joint and forming board (HOMEX®), and finished interior panels (NovaCork, DesignWall, PINnacle™ panels).

Our industrial division is the smaller of the two sales divisions and serves the glass, metal and paper industries with a variety of shapes and coated strips for product separation and breakage reduction, along with custom designed packaging that protects customers' products during interplant transport (PAK-LINE®,STAPLE-SAFE®). Homasote products are used in everything from finished caskets to blocking for refrigerator doors during shipping.

Whether you need sound control for a home theatre installation or a joint filler for your driveway that contains no harmful bituminous material, you can count on Homasote to deliver time tested performance while keeping an eye on the planet. Homasote, Sensible. Sound. Solutions.

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HOMASOTE COMPANY

To Shareholders and Employees

April 29, 2022

In 2021 we were still feeling the effects of the Covid 19 epidemic but fortunately, it did not interfere with our ability to operate. What did have a direct effect on our operations was a fire that broke out on June 25, 2021 in our main auto sander. Upon inspection of the area, our Specialties finishing department, it was discovered that 2/3 of the roof (over 200,000 sq. ft.) was deteriorating and needed to be replaced. The area was deemed unsafe to work in by the township and the department, which housed the machines to produce our value-added products, was shutdown for almost 3 ½ months due to long lead times for new roof decking and insulation. Orders did not stop coming and our backlog increased 2-fold with no set date for completion of the roof.

By early October a good portion of the roof had been completed and clean up began in the area. By November, we were back running all operations and set the wheels in place to start shipping orders which had been placed in early May when lead times were 6 to 8 weeks, but now were in excess of 12 weeks.

As of this writing, having worked weekends, our lead times are down to 8 weeks and holding steady with orders starting to increase due to the coming spring and summer building seasons. At no time during this year have industrial orders slowed down.

Accomplishments & Projects Completed through

2021 were:

• Coating & repair of roofs - ongoing
• Replacement of pulping unloading area roof
• Pulper conveyor exit repaired
• Cogen - emissions testing of all engines complete and paperwork submitted for continued permit
• Replacement of roof in pulping unloading area
• Replacement of roof in specialties

Major Projects started in 2022:

• Replacement of sidehill screen platform and expansion of same
• Switch to an IT managed solution
• Replacement of interior roof area of Lincoln Hwy
• General roof repair
• Continue investigation of a new dry dust collection system with briquetting
• Carter Day controls upgrade
• Cogen Engine #3 top end cylinders / rebuild
• New or used floor sweeper

Year In Review

Millboard sales results were as follows: our flagship 440 SoundBarrier decreased by 7%, Homex expansion joint and forming boards increased 4%, and Nova prefinished interior panels decreased by 37%. Industrial (Pak-Line Division) sales increased by 14%.

Net sales for 2021 were $19,048,002 versus 2020 sales of $18,390,327, an increase of $657,675. Net loss for the year was ($406,330), resulting in diluted earnings per common share of ($1.12). The 2020 net income was $1,196,464. Working capital was $(1.4) million, a decrease of $1.0 million from the previous year.

On October 4, 2021, Norman Sharlin retired from the Board of Directors of Homasote Company after 23 years of service. He will be missed. We thank Mr. Sharlin for his many years of knowledge and guidance and wish him well in his retirement.

We wish to acknowledge and express our appreciation for the many years of loyal effort and cooperation given to Homasote Company by our 2021 retirees, Mr. Larry Furth and Mr. Joseph Leming.

We wish to thank our loyal shareholders, employees, directors, officers, customers and suppliers for their continued support and we value each of you.

Homasote Management Team

Warren L. Flicker	Ronald D. Fasano	Peter Tindall
Chairman of the Board,	Chief Financial Officer	Vice President,
Chief Executive Officer	& Treasurer	Operations

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