2.0 ORGANIZATION SUMMARY
2.1 Names and Legal Description. The American Electroplaters and Surface Finishers Society (AESF, The Society) is a non-profit corporation within the meaning of Section 501 c (3) of the Internal Revenue Code of 1986. It was originally founded in 1909 under the name of The American Electroplaters Society (AES). Later it was changed to the current name to encompass surface finishing processes and operations other than electroplating.
2.2 Organization History and Objectives. The Society is an international individual membership. It was founded in 1909 and has 78 Branches and approximately 3,000 members. The Society is regarded and respected as the foremost finishing authority in the world.
The primary objectives of the Society as recorded in the By Laws amended in June 15, 2005 are:
To advance the science and technology of surface finishing and to disseminate knowledge thereof, and to develop a cooperative spirit of friendship and mutual assistance among its members.
In furtherance of its objectives, the Society shall conduct all such activities and do all such acts as may be reasonably related to its objectives.
2.2.1 Past Performance. Until recently the Society operated profitably based upon a paid membership which reached a high of 8,000 and a substantial income from its administration of Sur/Fin, an international surface finishing convention which included:
- Vendor equipment displays;
- Technical papers presented by experts in the field;
- Plant visitations;
- Recreational activities;
- Business sessions;
On or about the year 2004, several factors combined to create a cash crisis to the level of insolvency. They were:
- Losses from investments in the stock market and similar ventures.
= $250,000
- Unfulfilled contracts with hotels for confirmed bookings during previous conventions due to attendance at a level below expectations and the opportunity for attendees to book hotel rooms on the internet.
= $500,000
- Pledges to the Government Relations Group representing AESF, MFSA and NAMF = Approx. $150,000 per year
Eliminating the Insolvency. As a result of historically profitable operations, the Society owned, free and clear of encumbrances, the headquarters property located in Orlando, Florida. The market value, as proved by the subsequent sale by the Society, was prox. $2,000,000. Reference to Fig. 2 of the Sherwood Pro Forma chart shows that prior to the sale, the Society had a positive net worth of $674k. However, due to Current Liabilities of $780k and Current Assets of only $469k, the Society was unable to pay its liabilities, a short fall of 469k-780k = -380k. In short it was insolvent.
Insolvency was cured by selling the building and negotiating a reduction of the hotel debt from $500k to $104k. The beneficial financial results are shown in Fig. 2, Column C of the Sherwood summary of the CPA annual report dated March 31, 2005:
Current Assets |
$1,607,000 |
Current Liabilities |
$364,000 |
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Net Worth |
$1,254,000 |
THE BEGINNING OF CONSOLIDATION. During the insolvency period, members of the AESF Board of Directors entered into a consolidation effort with the National Association of Metal Finishers (NAMF), a trade association of surface finishing job shops and The Metal Finishing Suppliers Association (MFSA), a trade association of companies which sell equipment, chemicals and supplies to the surface finishing industry. The combined group of three entities was named the Surface Finishing Industry Council (SFIC).
AESF turned the administration and financial control of Sur/Fin over to SFIC with the agreement that all of the revenues, which previously went to AESF, would be divided among the members of SFIC in an predetermined apportionment which would then be given to fund the Government Relations committee (GR). The primary GR function is to lobby government regulators and legislators to reduce the number and stringency of national environmental regulations. Additional functions of GR include interfacing with government agencies to develop plating specifications, providing information concerning pending regulations to local groups and coordinating technical arguments for pending regulations.
The efforts of consolidation have continued with the ultimate objective of the parties to have all three associations operate under the umbrella of a new group entitled the National Association of Surface Finishers (NASF). This consolidation effort involves a merger of the three associations’ administration and assets.
APPROVAL OF CONSOLIDATION. At this writing, (05-19-06), the AESF Board of Directors and AESF Council of Delegates (which is made up of AESF Branch representatives), have not approved the consolidation efforts of the NASF Transition Board. The first step towards consolidation for the AESF would be approval by the Board of Directors. A vote is expected to take place on this issue prior to SUR/FIN. If the Board of Directors approves the consolidation documents, the proposal would be presented to the Council of Delegates for a vote. The vote by the Council of Delegates is expected to be taken at SUR/FIN in Milwaukee. The consolidation documents would be presented to the Council of Delegates for a vote only if the NAMF and MFSA Boards have approved the documents prior to the Council of Delegates Meeting.
- LOCATIONS AND FACILITIES. From the year (19??) to (2004??) the Society owned and occupied a building on property in Orlando, Florida. Upon sale of the building, AESF moved into a rented office space in Orlando, Florida. This office space was rented by Barrick Association Management (BAM). An agreement was signed that the three associations that BAM was managing would pay the rent if the management contract were terminated prior to the expiration of the three year lease. Once BAM was terminated on December 31, 2005 as the management company, approximately 1/3 of the rental expense became an additional expense for AESF. The new association management company (Navista) is located in Washington, DC. Therefore, the headquarters has been relocated to that area. The headquarters is shared with NAMF, MFSA and SFIC. The cost of office space is included in the association management fees under the agreement with Navista????
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