1. (From the recent 10-q) On September 25, 2008, the Company with its Answer and Counterclaims to Kidde filed a third-party Complaint against United Technologies Corporation in the United States District Court for the District of Maryland in Case No. 08cv2202 for the predatory litigation campaign by the defendant and its subsidiary, Kidde. On December 17, the Company filed a motion to amend its Answer and Counterclaims which has been opposed by both Kidde and United Technologies Corporation. That motion is pending and case remains in a preliminary, pre-discovery stage. In both the original and the Amended Counterclaim, the Company is seeking injunctive and antitrust damages. The Company intends to vigorously prosecute its claims.
2. In July, 2008, the Company announced a stock buyback program and authorized the purchase of up to 100,000 shares of common stock. Shares may be purchased from time to time under this program in the open market, through block trades and/or in negotiated transactions. Unless extended by the Company’s Board of Directors, the program will terminate when 100,000 shares of common stock have been repurchased by the Company pursuant to the program (unless increased or decreased by the Board of Directors).
3. On November 4, 2008, we entered into an operating lease for new headquarters space located in Baltimore County, Maryland. The lease is for 12,000 square feet of office and warehouse space for a term of 10 years through February 28, 2019. The current rental, with common area maintenance, is approximately $8,250 per month during the current fiscal year, with increasing rentals at 3% per year through the term of the lease. (Seems like pretty good terms here, especially when velocity of money picks up and hyperinflation begins)
4. Inventories are valued at the lower of market or cost. Universal is still selling products which they profit from, therefore as inventories are lowered, cash reserves in the US division will climb.
5. Universal is distributing two new higher price point smoke alarms to Home Depot. Those distributions began in December and will allow UUU to increase purchases from HK. This is partially offset by the fact that Universal overordered from HK last quarter in anticipation of HD inventory strategy remaining the same. According to Grossblatt, inventory holdings for certain products at home depot have been lowered, so HD will temporarily be cutting back on purchases as it reduces its stock. This seems irrelevent at it appears, intuitively, that this will lead to more frequent purchases by HD, but of less volume per purchase-order. Apparently they used to stock about 150 items per store in reserve, and now it's between 50-100. EH? Does it matter?