Now that 2009 is in the rear-view-mirror, I thought I would share a few 2009 Hycomp achievements with our valued Distributors, Dealers, and other industry friends.

First off, we are very proud to announce that in the midst of a hard-hitting recession and a very difficult climate for capital equipment expenditures, our revenues grew for a fifth straight year. We give a lot of credit to our valued Distributors, Dealers, end users and employees for their great efforts.

During the course of the year, we had our share of difficulties as some of our key customers saw their businesses struggle. This gave us the opportunity to re-calibrate our Distributor/Dealer Network and to further diversify our business across more industries and applications. We developed completely new Distributor Literature Kits and Distributor Training Programs, which are already proving to be very valuable tools in capturing the situations that require our unique and individualized solutions.

Internally we focused on production efficiency and quality. Through stricter control on our manufacturing floor, we reduced our internal cost of goods, allowing us to keep our prices level during the wildly fluctuating raw materials markets of the past few years. I am also very proud that we improved our delivery performance by 4%, reducing lead-times to your customers.

As our quality department continues to grow, our overall warranty levels continue drop. Our total warranty claims were a record low 0.17% of total sales, meaning for every thousand dollars sold, we had less than two dollars in warranty costs. I can think of no better testimony to the craftsmanship of our employees than this.

We enter 2010 poised to have another record year. Organizationally, we are now better structured to support our Distributors and Dealers. We are already well ahead of pace to have a record month in January and we consider our outlook for this year to be very positive, despite the tough economic conditions that still prevail.

Thank you again for your diligent efforts and continued support of Hycomp. We look forward to working with you in 2010, and I personally wish you success in the coming year.

Robert James
President and CEO
Hycomp, Inc.