Fred C. Holmes Lumber Co.

promises to be a pivotal year-well, that was certainly true, and ditto for 2008. I wrote that 2006 was a Jekyll and Hyde year, and that there was great economic debate as to where it went from there in2007. Ditto for 2008.

At the end of 2006 and beginning of 2007 there was great anticipation that the year would turn in the second half, and, of course, that did not happen. And while I do not hear that same anticipation this year for 2008, I must say I am still hopeful that the turn upwards will start this yearever the eternal optimist. I am hearing from some of you of some really good financial performances-proving that, for some, business is still there to be had, and many are saying quietly that prices may have hit bottom. I am seeing wholesalers and retailers that, while not arming themselves with trucks of inventory, are looking at new products, particularly for the remodeling sector. My clients seem to be announcing new product introductions on a regular basis these past few months. So, the fundamentals are being put in place for the turnaround. Later in this issue, you will read about the M&A activity in our industry. It is clear that this will continue in 2008, and that is also going to throw a lot of balls up in the air and create sales losses for some companies and market opportunities for others.

The only question always for me to answer is: how do I position or reposition my company for the inevitable changes? I know as many of you wrestled last quarter with your annual budgets for 2008, you were mostly working with the challenge thrown at you of how to do more with fewer resources rather than how to get the company ready to grow again. While I have great admiration for those who are able to achieve that-it takes a lot of management skill-the reality is that for the two companies that can, another eight companies continue downwards, and this is where I see the souls of companies being torn apart.

On the other hand, this can offer a great market opportunity. I have in the past deliberately strategically positioned my companies against companies that I knew were in trouble-never being negative towards them, but knowing that their customers were probably not getting the same levels of service and maybe product quality that they were, and old Joe, the sales rep for 30 years, was now out on his ear, and therefore many would be looking for new suppliers. I find that too many companies just do not keep enough contact with prospects to be in front of them with advertising, P.R., and other marketing initiatives. Plan for the turnaround now.

We offer on extensive invenlory of fine redwood products including Fencing, Decking, Siding, ond Premium Timbers. Whether your oider is by the piece or trucklood, our gool is lo ensure the highest quolity ond service.

CLEAR ALL HEART A/R SEASONED

HRT BEE KIIN DR/ED

CLEAR AYE GREEN

BEE ROUGH & S4S

Lastly, I would like to thank all those who sent in their business cards in both our publications in support of the Susan G. Komen Cure for Breast Cancer (see pctges 63-65). My family has been greatly impacted by this insidious disease, and even more so since I originally chose this charity a couple of months back.

Wholesale lumber products

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The facts are clear. Every two minutes a woman is diagnosed with breast cancer, and today one in seven women will get it compared with one of 20 in 1960. It is an epidemic, but with early detection, the good news is that the five-year survival rate is 96Vo. Yet, some l3 million U.S. women who should be having mammograms are not. So when you read this I hope you will either go and get one or discuss with your partner if she is due for one. And just let me add that one of 100 breast cancer patients are now male, and this figure in increasing. The need for research continues and it is my great pleasure to support this charity. Our donation with the support of the business card advertisers is $3,450. I thank them sincerely for the support.