This year leaves us as one of the most challenging of our first twenty two. We all know that solar pool heating is a product which has to be marketed, but since our two main competitors, as well as their dealers have drifted off into other markets, the solar pool heating industry is experiencing a market-altering contraction. Additionally, the economy has reduced the builder market to almost nothing; the above-ground DIY market has lost market share to Chinese products and the warranty burden of past business in terms of system owners that are not moving every five years is affecting every manufacturer and their dealers. Everyone except Mark Naylor I should say. A decade ago, Mark decided that he could successfully sell a 10-year limited, five year full warranty product in his marketplace, and the rest as they say, is history.

However, in 2011, Aquatherm continued to reinvest in itself; we opened ourselves up to greater accountability by becoming the first and only US solar manufacturer to become <strong>ISO 9001:2008 registered</strong> and our Solar Industries and Ecosun brands becoming two of only three polymer unglazed collectors to receive <strong>CSA certification</strong>. Another milestone we’re achieving this month since their introduction in 2000, is that shipments of our patented insert molded Sunlite and Ecolite products will hit <strong>25,000,000 sq. ft.</strong>! Both of these products have deservedly earned the name of “the most cost-effective solar thermal BTU on the planet.”

Moving ahead, Aquatherm has six new products slated to be introduced in 2012 - three are collectors.

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<strong>Ultrasun</strong>, our highly anticipated third “flagship” product, is based on our patented and very successful Sunlite and Ecolite insert-molded designs, but in a 2” by 4 ft. header version. Ultrasun will also incorporate the patented venting system now exclusively used in Ecosun, offering a total of three patents in one breakthrough product.

<strong>Sunlite ARC</strong> is a glazed, polymer collector, originally designed for the above-ground DIY pool market to compete against several imports that have already penetrated the marketplace. It features our Sunlite absorber housed between a vacuum formed base and cover. This product also has possibilities for use as a solar domestic water heating product in more temperate regions around the world.

The third collector will be our <strong>Sun-Swim FR</strong>. I don’t want to say too much about this product at the moment, but what I can tell you is that someone with the initials “FAF” is not going to be very happy with me. There will be more to come at our Master Dealer Kick-off Meetings, so be sure to attend.

A fourth new product scheduled for introduction in the first quarter of 2012 is our new, patent-pending <strong>“Snap Cover.”</strong> The design combines the strength of our stainless steel mounting hardware with the aesthetic appeal of “blacked-out” hardware and provides for the protection of sealant from weather and sun.

Being introduced next month is an<strong> all-polypropylene version of our hold-down strap</strong>. This is a lower cost alternative and designed to be used in conjunction with our standard stainless steel strap brackets in areas where wind load may not be such a concern. The part no. is 30348 and the list price per foot is $0.30. It will only be available in 1400 ft spools.

Lastly, Aquatherm is working with one of the premier manufacturer of racking systems for the PV industry to <strong>integrate the mounting of our products into their racking systems.</strong> Aquatherm has designed and will provide a proprietary component that will adapt to their line of racking systems. Currently in the final design stage, introduction is expected by the end of the first quarter, 2012. We premiered a prototype at Solar Power International in October to rave reviews. Options will be available for traditional racks and pole mounts, as well as ballast systems.

The marketplace is changing around us and we all need to accept change as not something to run from, but as an opportunity for us all, where none may have existed before.

I hope everyone has a chance to slow down and reflect, as well as enjoy this holiday season with your family and friends. The New Year with its challenges and opportunities will be here soon enough.

Dave Sizelove, President