LESSONS LEARNED

There’s nothing like a recession to remind us of the fundamentals.

In my column this time last year, I wrote about keeping a positive attitude and doing the right thing during tough economic times. Little did any of us know what we would face in the ensuing months. To say that 2009 was simply a “tough” year would be the understatement of the decade.

In fact, this past year was arguably the worst in what Time Magazine recently called “the most dispiriting and disillusioning decade Americans have lived through in the post-World War II era.” Strong words, but many of us who have weathered the economic ups and downs of the first ten years of the twenty-first century would have to agree.

Despite the difficulties we have all endured, I am pleased to say that RL Hudson & Company is strong and our future looks bright. Everyone here worked together this past year — watching each expenditure, doing more with less — to continue bringing our customers the best value in the industry. Despite the odds, we remain free of short-term debt and posted a modest profit for the year.

There is still a lot of work to do before we can say things are “back to normal,” but it seems that the worst is over and I feel very fortunate to be among those left standing. The question is now, as it often is in the aftermath of life’s crises, “What can we learn from this?”

Here are some things I’ve learned, or re-learned this past year:

Be Flexible Be prepared to serve your customers in the ways they want to be served, not the way you want to serve them. One of our “Hudson Advantages” is that we have relationships with numerous manufacturing partners, each with specialized capabilities. This allows RL Hudson to respond quickly and effectively to the changing needs of our customers.

Avoid Debt There is an old saying, “The borrower is the servant to the lender.” The headlines in 2009 were full of stories about companies that had become too dependent on debt. When credit got tight, those companies were at the mercy of their lenders. RL Hudson is privately held and maintains only a modest amount of debt relative to our business and strives to fund operations out of cash flows. That means customers can count on RL Hudson to serve their needs instead of responding to the demands of bankers.

Deliver Value RL Hudson prides itself on delivering the best possible value, which is not always the same thing as the lowest price. Don’t get me wrong, our prices are very competitive, but there will always be a supplier who is willing to cut corners to sell at a lower price. But when a supplier shuts down your production line or ships products that fail, the true value becomes apparent.

Invest Prudently At RL Hudson, we know that money spent in areas customers don’t value is wasted. Conversely, customers generally appreciate when a supplier invests in areas that directly benefit them. We have streamlined our distribution center so that now, all shipments originate from our headquarters located in the center of the U.S. This is one reason for our near-perfect ontime delivery record. Similarly, we have invested in a state-of-the-art materials lab that allows our engineers and chemists to design the highest quality rubber and plastic compounds. We invest only in areas that benefit you!

Solutions 1Q10

LESSONS LEARNED