2016 ANNUAL REPORT

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Thursday May 25th, 2017 – 1:30pmBest Western PlusDartmouth, NS

1) Call to Order and Record of Attendance – Chair Chris Deveaux

2) Reading of Minutes –May 26, 2016

3) Report of the Board Activities – Chris Deveaux

4) Report of President – Denis Melanson

5) Report of Finance and Auditor’s Report for the year ending March 31, 2017- Bill Abbott

6) Investment Portfolio presentation – CIBC Wood Gundy, Brady Doyle

7) Reports of Standing Committees

• Expo Committee Paul Edgett

• Membership Mike James

• Scholarship/Bursary Paul Adair

• Education Denis Melanson

8) Unfinished Business

9) New Business

• Ratification of Proposed By-Law Changes

10) Appointment of Auditors

11) Nomination of Officers & Directors for 2017/2018

12) Election of Officers & Directors 2017/2018

13) Adjournment

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• CRBSC Denis Melanson

Dear Fellow ABSDA Members:Our Annual General Meeting is the occasion to present and report on the Association’s milestones and events for the fiscal year 2016/2017.

Just like in all of our individual businesses the only constant at ABSDA in change! Our Association continues to forge ahead and innovate in order to increase the value proposition of our Membership.

This Annual Report will go into greater detail of our accomplishments of the past 12 months but here is a short glimpse of the highlights:

• ABSDA presented 4 - $2500 Scholarships and 4 - $1500 Bursaries to deserving students continuing on to Post-Secondary Education

• The Board has approved policy changes to protect the interest of our Members and now charge $150 to Non-Member Retailers to attend our Annual Building Supply Expo

• The Board has approved a policy change to increase our Membership by being more inclusive to Hardware Retailers that do not carry lumber and building materials and allow those individuals to become Members of ABSDA.

• After 35 years in Moncton our Annual Building Supply Expo was held in Halifax Nova Scotia

• ABSDA launched a New Website

• ABSDA introduced a new online electronic platform to launched in the fall of 2017

• ABSDA signed a new partnership with Johnson Insurance for Home and Auto insurance savings for our Members

• We partnered with the Canadian Retail Building Supply Council to host a National Leadership Summit at our Annual Building Supply Expo

• We hosted our second Annual Golf Tournament at Fox Creek Golf Course

• We signed a partnership agreement with Naylor Association to take over the advertising sales of ABSDA in an attempt to grow our revenues.

As you can see by this list of activities our Association has been hard at work for our Members. None of this would be possible without the engagement of volunteers on our Board of Directors. I would like to express my appreciation to our team of Directors. In 2016 we welcomed Gordon Kennedy from Rona Atlantic who filled our empty seat in the Newfoundland region. Two Board Members will be leaving us in 2017 due to having filled their maximum term of 5 years. Special thank you to Mark Dill and Mike James for their commitment to our Association.

I enjoyed serving as your Association Chair and the experience was both gratifying and rewarding.

As we move forward through 2017 I am confident the Association will continue to grow the value proposition and create new offerings for our Members.

Respectfully Submitted,

Chris DeveauxABSDA Chair

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Members of ABSDA: 2016 was a year of growth for ABSDA. Thanks to our progressive Board Members we continue to change the business model of our Association in order to build on the Value Proposition for our Members.

Perhaps the biggest challenge of ANY Association is finding ways to diversify non-membership dues revenue. Just like in your own businesses you never want to have all your eggs in one basket. Unfortunately for our Association our Annual Building Supply Expo still represents almost 60% of the gross revenues of our Association.

So what have we done to try and diversify our revenues? Well we’ve partnered with Naylor Association which now takes over 100% of our advertising sales. Thus far they’ve been able to grow our sales in our Buyer’s Guide, Newsletter and have begun online sales on our website.

Our Board has made policy changes to be more inclusive to retailers in Atlantic Canada. In the old days, if you didn’t sell lumber or building materials you could not be a Member of our Association. Well those days are gone and now we will be more welcoming of retailers that sell hardware or building supplies as long as they follow certain criteria. We estimate that this opens up opportunities for new members between 75 to 100 retail locations in Atlantic Canada.

The third thing we’ve done to increase revenue potential is the introduction of our online Marketplace.

Giving our Members an online community where Suppliers and Dealers can communicate, trade and educate themselves on new products will be key in the future. We cannot ignore the fact that our industry is changing and that online tools will be the future. ABSDA also hopes that this will improve the value proposition of our Associate Members and may bring back some members that have left us in the past due to a weak offering.

Lastly our latest Member offering of rebates on Auto & Home Insurance with Johnson allows for a potential new revenue stream for ABSDA through

commissions on policy renewals all while providing new Affinity Programs to our Members.

As you can see it’s been a big year for ABSDA and it would not be possible without our innovative Board of Directors. I wish to THANK every single volunteer that sit on our board and our committees. These individuals give their time and share a passion for our Association and the Building Supply Industry.

Last but certainly not in the least I wish to thank my co-workers John Logan and Connie Chevarie for their hard work in the past 12 months and for always remaining positive and dedicated in these times of change.

Respectfully Submitted,

Denis MelansonPresident

PRESIDENT’SREPORT

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2016 was the first year in which our fiscal year was from April 1 to March 31.

Our independent Auditors’ Report for the 12 month period ending March 31, 2017 has verified the Financial Statements present fairly, in all material respects the Financial Position of ABSDA. The results of our operations and cash flow for the year is in accordance with Canadian Accounting Standards for Not-for-Profit Organizations.

For the third year in a row the Association will be recording a small deficit. Most of this can attributed to strategic investments made in technology enhancements for our new website and online platform.

We continue to look for new ways to increase non-membership dues revenue.

The chart below reflects a breakdown of ABSDA revenue sources for 2016. A complete overview of the financials for the past 12 months will be presented by our Auditors AC Stevenson & Partners.

Respectfully Submitted,

Bill Abbott Chair Finance Committee

FINANCE REPORT

Association Income*Based on Grosss Income before Expenses

55% Expo

17% Membership

14% Ad Revenue

5% Investments Income

5% Misc

3% Education

1% Group Health

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TABSDA Members:Members had been asking for a change of venue for our annual trade show for many years, and the 2017 Expo was finally time to make the big move to Halifax.

While we were hoping for an increase in booth sales this did not happen in Halifax. We were able to maintain a similar number of vendors with a total of 125 exhibiting companies but the number of booth stayed relatively the same from the previous year at 258 booths.

Dealer participation from New Brunswick and PEI was down for the Halifax Expo, while the attendance from Newfoundland and Nova Scotia was up.

A new admission policy for Non-Member dealers of $150 per store affected the attendance of this segment by a little over 50%. This admission policy has been put in place to respect our paying Members as the Building Supply Expo is one of our biggest Member benefits.

Our delegates enjoyed a Sold out Welcome Reception with 500 people in attendance at Pier 21. The crowd enjoyed an Atlantic Canada Kitchen Party theme with local foods and local entertainment provided by the always popular band – Signal Hill.

The Annual Dinner also had a packed house with 720 people enjoying a fun filled evening at the World Trade Center. In keeping with our Atlantic Canada theme entertainment was provided by Matt Anderson and The Mellotones.

We are excited to announce that the 2018 Building Supply Expo will be once again in Halifax on March 21 & 22nd, 2018. However this time the Expo will be held in the new state of the art Downtown Convention Center.

We will continue to focus on bringing new and exciting changes to the Building Supply Expo.

Respectfully Submitted,

Paul EdgettExpo Committee Chair

Fellow ABSDA Members:At the March 9, 2017 Meeting of the ABSDA Board of Directors Meeting, a motion was introduced to broaden ABSDA Retail Membership to include Hardware Stores who do not carry building materials. This is reflected in the By-Law Changes which will be presented today for ratification. This change provides the Association an opportunity to grow the Membership category on the retail side.

Modest increases were implemented in 2016 to our annual Membership dues. The main reasons for the increases were to keep up with inflationary costs of ABSDA Operations and shrinking Expo revenues.

The following numbers represent our Membership Numbers, as of March 31, 2017

Retail Membership 311 Associate Membership 247

We hope that our New ABSDA Marketplace online platform will lead the way in securing new Members. In 2017, we’ll also be exploring a new HR recruitment tool that will help Members with their outreach of candidate and screening efficiency in order to find the workforce required to meet the demands of our aging labor force.

ABSDA will be actively reviewing benefits to Member Firms and will focus on new opportunities to improve the value proposition. We will also be actively recruiting to increase our Membership base.

Respectfully Submitted,

Mike JamesMembership Committee Chair

RetailMembers

Associate Members

Main / Head Office 184Branch 127

Main / Head Office 205Branch 42

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The ABSDA Scholarship Program was first introduced in 1987. In 2016 we presented 4 - $2500 Scholarships and 4 - $1500 Bursaries for an investment of $16,000.

This project has developed into a very positive Member Benefit for our Association and includes both Retailer and Supplier categories. This program will only continue to be successful if Members promote it to their staff and that we continue to receive qualified and deserving applicants.

ABSDA received fifty-nine (59) applications in 2016. The summary below recognizes 8 recipients and their sponsoring firms.

We continue to engage a third party adjudicator who reviews all applications and recommends successful recipients to insure the Association is not in any conflict of interest. Congratulations to all 8 recipients who are listed below!

Scholarship Recipients

Mark Belbin ••••••••••••••• Notre Dame Agencies Ltd.Patrick Bowen ••••••••••••• Central Home Improvement WarehouseAlexa MacDougall •••••••••• Callbecks Home Hardware Building CentreAndrew Graham ••••••••••• Emco Retail Services

Bursary Recipients

Gavin Clothier • • • • • ••••••• Burgeo TIMBER MARTAlyssa Frenette •••••••••••••• Kent Building SuppliesJenna Gallant ••••• • • • • • • • North Rustico Home Hardware Building CentreAmanda Hill •••••••••••••• Kent Building Supplies

Respectfully Submitted,

Paul AdairABSDA Director

EDUCATION REPORT ABSDA continues to provide Industry specific training to our members. Some of the more popular programs are:

• Fundamental Estimating - Decks & Garages • Residential Estimating• Yard Forman/ Operations Manager• Boom Truck Safety Training• Fork Lift Safety

In total ABSDA delivered 14 classroom programs to 139 Member Staff.

Our Distance Learning Program continues to grow in popularity. With the latest launch of our new website the 70 videos are now available open source on our website. The main categories of the online training program are focused in the following areas:

• Customer Selling• Contractor Selling• Building a Team• Bottom Line• Selling Skills• Estimating

Having these videos open source on our website will make it easier to access and less complicated for employees. We are receiving partnership interest from Buying Groups in order to grow the distribution and communication to our dealer network. We firmly believe that training is the key to having a productive and engaged workforce.

This Association will continue to explore the development and delivery of additional Educational Training for our Members.

Respectfully Submitted,

John LoganManager, Membership & Communications

The following are some recent course testimonials we have received:

“I thought the course was very

easy to understand, follow and

use. As someone who struggled at

times to do estimates, the course

offered me tips and techniques

to do estimates efficiently

faster and more accurately”.

“Great course, every service

counter employee should take it”.

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In 2016 the CRBSC was incorporated in accordance with the Canadian Not-For-Profit Act. The head office will be based in Ottawa and will have 5 regional officers.

In partnership with the ABSDA, the CRBSC held its very first National Leadership Summit in Halifax NS on March 22, 2017. A total of 33 Leaders from across the country participated in this half day strategic planning session. The makeup of the group was quite unique as it included representation from the Buying Groups, National Suppliers, Dealer Owners and Association Leaders from across the country.

The direction provided by industry pointed the CRBSC to focus in 4 main categories to help move our Industry on the right path.The main priorities identified for CRBSC are as follow:

Unified Voice The absence of an effective unified national voice representing the industry players in the right forums leaves the Membership at the mercy of external forces.

Industry Image Many participants identified the existing image as a potential barrier to overcoming the other priorities. It’s important that we all share the same definition of “Brand” image and work towards consistent messaging.

Workforce Attraction & Retention The rapid pace of change is impacting our workforce in multiple

fashions. While educational requirements may be increasing, our industry is nonetheless more and more challenged with attracting and retaining the necessary talent particularly the younger generation

Duplication While there are unique regional distinctions that warrant maintaining regionally focused organizations, there was a consensus amongst the participants that many services are duplicated and that it could be wise and more efficient to explore minimizing some of those duplications.

The next steps for CRBSC is to implement an action plan with measurable outcomes to in order to accomplish these objectives.

Denis Melanson from ABSDA will be the Chairman of CRBSC for the next two years and he looks forward to the challenge.

The future is bright for the Building Supply Industry.

Respectfully Submitted,

Denis MelansonABSDA President

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