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DEAR FELLOW SHAREHOLDERS:I am pleased to report that your Company achieved its fourth consecutive year of profitability in fiscal 2008, our 83rd year, as we continued to successfully implement our strategic plan. Net earnings for the year grew by 38% to $1,335,562 or $.36 per share. Consolidated gross margin remained strong at 40%, while consolidated revenues from continuing operations grew to $19.7 million. We paid our 115th consecutive quarterly cash dividend and ended the year with a stronger balance sheet including a significant increase in working capital, enabling the Board of Directors to increase the dividend recently by 11%, and leaving the Company well positioned to take advantage of strategic opportunities when they arise. When I was chosen as your Company’s fifth Chief Executive Officer in fiscal 2000, we faced a new decade and many believed a new type of economy, with many different challenges and opportunities. We had to make a choice about the direction of our focus, and because we had built, owned and managed numerous buildings during our long history, we decided to remain very close to that heritage. We knew first hand that there were considerable forces at work putting increasing pressure on buildings’ operating results, so we chose to reinvent our business to be a provider of products and services that could enable our customers to gain control of and reduce the operating costs of their facilities. Accordingly, we began to assemble a new business platform during the next several years through a series of acquisitions. As a result, today Servidyne is well positioned for the times. The need for energy efficiency is at a premium as utility costs are reaching unprecedented heights, while other facility operating expenses are soaring as well. The rapid increase in the price of oil and other commodities is impacting companies worldwide, necessitating in-depth examinations of available strategic alternatives in executive suites and corporate boardrooms across all business segments. There are numerous ways companies can confront these unprecedented challenges, but many of the options are supply-side solutions, including the use of alternate sources of energy like solar and wind power and bio-fuels, which are long-term strategies that in most cases will not be economically viable for years to come. In contrast, there are currently available and affordable demand-side solutions through which businesses can immediately obtain meaningful and sustainable energy cost savings by optimizing the efficiency and operating performance of their existing facilities. Servidyne’s customers are big beneficiaries of this approach, as we implement solutions that reduce their energy consumption and improve their bottom-line results. During the past year, Servidyne was recognized by the White House after we completed an energy conservation project for the U.S. Department of the Interior’s Bureau of Land Management (BLM). As a result of your Company’s efforts, American taxpayers are now receiving ongoing annual energy costs savings, and BLM’s facilities are now conserving energy and protecting the environment. Servidyne has helped more commercial office buildings earn the U.S. Environmental Protection Agency’s ENERGY STAR® label than any other service provider in the country. In just the last twelve months alone, nearly fifty commercial office buildings employed the recommendations and expert guidance of Servidyne engineers to become recognized among the nation’s most energy efficient buildings. I believe the potential for our business is great as we continue to grow both organically and through acquisitions. We are continuously seeking opportunities to add more expertise and proprietary products and services to our core capabilities in order to further enhance Servidyne’s value proposition to our customers. To that end, we acquired Atlanta-based Atlantic Lighting and Supply Company, a distributor of cutting-edge energy efficient lighting products, early in the first quarter of fiscal 2009. Our customers and in fact our planet are confronting unprecedented challenges related to energy and climate change. These are complicated and vexing problems but are not insurmountable hurdles. As we enter our 84th year, I am very proud that Servidyne is in a position to be an important part of the solution. Sincerely, |