When the COVID-19 crisis began in early March, ZOOK took aggressive steps to protect our employees, business, and customers. We just completed May 2020, the 3rd month into this global pandemic, and I would like to provide you with an update on our results and progress.
During the 3 months of March, April, and May, ZOOK performed pretty well. When you compare our results to the overall markets that we serve, ZOOK outperformed the market and probably our competitors in many areas including positioning the business for future growth. So, how did I arrive at these conclusions?
Well, it is no secret that businesses around the globe have suffered significantly from the challenges faced by this pandemic. Our competitors have announced major layoffs and several of the customers that we serve have shuttered their facilities while business is soft. In fact, global businesses have seen a decrease in their sales of between 10% and 30%, and profits decreased 15% to 50%. Businesses primarily serving the Oil and Gas markets have seen incredible decreases in their revenue and profitability of as much as 50%. ZOOK is not experiencing this level of negative impact, but we are seeing some negative trends that I want to discuss with you.
First, May new quotes and orders were the lowest of 2020. Orders that arrived at ZOOK in April and May support June shipments, and orders in May and June support July shipments. When we experience 11/2 months of lower quote and order activity, we risk impacting future revenue. Second, and perhaps more important is the profitability of the business. When we create risk from lower than expected sales, the lower profitability impacts everything at ZOOK including plans to invest in future growth.
I know what you are thinking, how can ZOOK invest in growth when there is a global pandemic?
Well, yesterday, our senior leadership team presented to the ZOOK Board of Directors our year to date results, full year guidance for 2020, and yes, key investments needed to continue to drive profitable growth and deliver customer, operational, and shareholder value. The meeting and our message was well received. The directors complimented us on our progress, but cautioned us on making sure that we continue to be urgent when engaging every new sales opportunity, serving the customer with passion and excellence, and converting the hard work that all of you provide in your quotes to new orders.
I want all of you to hear this message because if we stay committed to our mission, we will succeed! Every inquiry is an order opportunity; Seize It! Every phone call to a former, existing or new customer is an opportunity; Make It! But most importantly, Take Action, because if we take these steps to serve the customer from the time of the inquiry through to the shipping of the product, we will succeed, and we will gain a valuable customer/partner forever.
To help serve ZOOK’s needs and that of our customers, we continue with our global ERP implementation. I want to congratulate the entire ZOOK CANADA TEAM, as they continue to utilize the new ERP in their everyday business lives with no disruption to serving our customers. Well done! Next up is ZOOK USA, and we expect a go live in August 2020. Later this year, we will complete the upgrades of Navision in ZOOK EUROPE and ZOOK ASIA.
You may have noticed my comment earlier about “positioning the business for future growth”. Well, we are certainly in a defining moment for how businesses will grow in the new or next normal. It is not business as usual when trying to solicit new business. Tony Martell, Richard Clark, and our global sales directors have orchestrated a global sales training that spans a 9 week period where they will acquire skills to improve the engagement of our current and new customers in the new or next normal. Improving our planning, the sales messages, and how it is delivered, while utilizing social media, ZOOM video technology, and Microsoft Teams are actions that will ensure that ZOOK is the 1st to ENGAGE every customer opportunity, and the 1st to DELIVER that value to our customers.
You might say, how does my job help get more orders? Well, we all are serving customers, whether they are internal or external to the business. Preparing quotes quickly, answering an inquiry urgently, collecting cash from invoices, building a superior quality product, responding to a customer complaint, sourcing raw materials, paying our vendors, shipping products, and/or asking another ZOOK employee for help with a project, quote, order, or customer question are just a few of the ways that we all contribute to growth and delivering value to our customers. I commend all of you for your commitment to ZOOK and our customers, but we need more business; so let’s continue to work together to get it done.
Thankfully, with your continued support, no ZOOK employees have been impacted by COVID-19. As summer begins, there will be a tendency to relax our discipline in protecting ourselves and our families. I ask all of you to be mindful that the virus is still a huge threat. When you are in public, please use caution by social distancing and wearing masks. As for your return to the ZOOK global offices, I would not expect that our remote employees will return before the end of September. We have proved that our business can operate effectively with our office staff working remotely and our production staff isolated at our facilities. This has been a successful formula that has enabled us to protect our employees and our business. Thank you for all that you do for ZOOK, our customers, and each other.
Be safe and blessings to all your families.