Focus Stock - DTRO



DTRO – Profitable Manufacturing Business, Ongoing Revenue, Proprietary Breathing Technology, $56 Billion Polyurethane Industry, Aggressive Growth Strategy
 

Editor’s Note:

Deltron’s recent acquisitions of Blu Vu and Elasco provide cashflow to support product development, proprietary technology with a wide range of industry applications, leadership in polyurethane manufacturing, a sophisticated manufacturing facility, and near-term opportunities to significantly increase revenue and shareholder value. StockSource is excited to bring you our newest stock pick…DTRO. Do your own research…and hurry. We believe DTRO is ready to run!
Deltron, Inc. acquires profitable businesses with strong management teams, substantial revenue, established market positions and opportunities for growth. Wholly owned subsidiary Elasco, Inc. is a profitable engineered plastics and polyurethane manufacturing company with a highly automated production facility in Southern California. Elasco has been in business since 1979 producing a variety of recreational and industrial products for a diverse customer base. Wholly owned subsidiary Blu Vu Deep Oil and Gas Exploration, Inc. is a developer of innovative breathing technology including proprietary equipment and components for closed circuit rebreathers. Blu Vu’s technology goes beyond conventional SCUBA systems for commercial and recreational diving applications.
Rebreather systems are increasingly replacing traditional SCUBA equipment for use in extreme environments. Applications include deep sea commercial diving operations such as oil & gas exploration and production as well as out-of-water applications like fire, mining, search and rescue, high-rise building safety, hazardous materials, military and homeland security. Blu Vu’s R&D is led by internationally renowned deep sea diver and safety expert Dr. Jeffrey Bozanic, Ph.D., who literally wrote the book on rebreather technology. Deltron will manufacture its breathing equipment through Elasco, which is an innovator in polyurethane and plastics production serving the $56.1 billion U.S. polyurethane industry.

Looking forward

Deltron has a clearly defined acquisition strategy to create company growth for the benefit of shareholders. DTRO is aggressively seeking complementary businesses with historically profitable results, strong balance sheets, expert management and high profit margins. Deltron has also identified opportunities to create growth within and between its Elasco and Blu Vu subsidiaries.

StockSource Editor’s Note:

We are excited to bring you our latest pick and offer a little background on what we believe is an organization poised for liftoff. DTRO’s Elasco was the sole North American Manufacturer for polyurethane wheels used on Rollerblade™ skates for a contractual period including 1993 through 1997, Rollerblade’s heyday. Elasco made over 20 million wheels or about $25 million worth of product for Rollerblade.

Key Investment Highlights:
Why DTRO Should Be on Your Radar NOW

  • Deltron’s Elasco has carved out a leadership position in the production of polyurethane products for recreational sports including high performance roller skates and skateboards and industrial products including exercise equipment rollers, bowling pin setter pads and liners, and fire hydrant seals.
  • Deltron’s profitable manufacturing subsidiary provides revenue for technology development as well as a production facility to produce its proprietary rebreather equipment.
  • With its recent acquisition by Deltron, Elasco should be able to boost revenue, production and sales in new markets.
  • Blu Vu’s rebreather technology will allow commercial and military dive teams to work at deeper depths for longer times, with greater comfort and safety, and with significantly higher productivity than current technologies. It will also enhance the diving experience for recreational divers.
  • One facet of Deltron’s strategy is to dominate the untapped market for rebreathers in extreme out-of-water environments. Mining, high rise building safety, hazmat handling, firefighting, search and rescue and homeland security offer tremendous potential. These industries have a critical need for light, highly portable, self-contained, extended duration breathing equipment.
  • Recently Blu Vu was contacted to provide a rebreather solution for a large multinational corporation looking to increase efficiency while working in underground access tunnels.
  • Deltron is creating a valuable intellectual property portfolio that includes proprietary, patented and patent-pending technology for next generation breathing equipment as well as proprietary elastomers for polyurethane formulations.
  • Focus on green materials—Deltron is taking the initiative to develop polyurethane produced from eco-friendly raw materials including natural polyols derived from sustainable plants grown here in the United States. These raw materials demonstrate excellent promise for producing products with a greatly reduced carbon footprint.

StockSource Analysis:

Deltron’s profitable manufacturing business makes DTRO a solid bet. It provides ongoing revenue and cashflow and has significant room to expand sales and capacity with its new access to capital and exposure to the public markets. Plus it gives Blu Vu the ace manufacturing capability it needs to get its highly innovative breathing technology products to market. You won’t want to miss this opportunity!

Breaking News

Major Market Opportunity

Editor’s Note: MADE IN THE USA—Support American Manufacturing with DTRO! Elasco produces parts and assemblies in its sophisticated Garden Grove, California production facility. Deltron’s manufacturing division is a leader in polyurethane and engineered plastics for a wide range of demanding applications. DTRO manufactures products, components and assemblies made in the USA for durability, quality and high performance.
According to the Center for the Polyurethanes Industry (CPI) of the American Chemistry Council, the U.S. polyurethanes industry generates $56.1 billion, supports about 220,000 jobs and is a key element of the nation’s economy. (CPI, April 2010)
Polyurethane is everywhere. Polyurethanes can be a found in liquid coatings and paints, tough elastomers such as roller blade wheels, rigid insulation, soft flexible foam, elastic fiber, or as an integral skin. No matter how polyurethane is transformed, the underlying chemistry is the result of one man’s genius, Prof. Dr. Otto Bayer (1902-1982). Prof. Dr. Otto Bayer is recognized as the “father” of the polyurethane industry for his invention of the basic diisocyanate polyaddition process. (Center for Polyurethanes Industry, April 2010)
Polyurethanes are one of the most versatile materials today. Their many uses range from flexible foam in upholstered furniture to rigid foam as insulation in walls and roofs to thermoplastic polyurethane used in medical devices and footwear to coatings, adhesives, sealants and elastomers used on floors and automotive interiors. Polyurethane industry applications include:

  • Flexible Foam
    Flexible polyurethane foam's versatility of form and function can be seen in bedding, furniture, automotive interiors, carpet underlay and packaging. Foam can be created in almost any variety of shape and firmness. In addition, it's light, durable, supportive and comfortable.
  • Rigid Foam
    Rigid polyurethane and polyisocyanurate foams form one of the world's most popular, energy-efficient and versatile insulations. It significantly cuts fuel and construction costs while making commercial and residential properties safer, better utilized and more comfortable around the globe.
  • Thermoplastic Polyurethan
    e Thermoplastic polyurethane (TPU) offers a myriad of physical property combinations and processing applications. It's highly elastic, flexible and resistant to abrasion, impact and weather. TPU's can be colored or fabricated in a wide variety of methods, and their use increases a product's overall durability.
  • Coatings, Adhesives, Sealants and Elastomers
    Polyurethane coatings make a product look better and last longer. Polyurethane adhesives provide strong bonding advantages. Polyurethane sealants provide tighter seals. Polyurethane elastomers can be molded into almost any shape, are lighter than metal, offer superior stress recovery and can be resistant to many environmental factors.
6.5 billion pounds of polyurethane were produced in the United States, Canada and Mexico NAFTA in 2008. The United States accounted for 81% of the total polyurethane production. (IAL Consultants, “End-Use Market Survey on the Polyurethanes Industry in the United States, Canada and Mexico”, April 2010)
Rebreathers are ideal for diving at greater depths, for longer durations and with less fatigue and greater productivity. Demand for commercial diving services and equipment is rising quickly. Demand is driven by increased development of offshore oil & gas reserves at greater depths as well as the growing development of offshore wind farms.
Rigzone reports that as of April 23, 2010 there were 497 offshore rigs operating, an increase of 31 rigs over 466 one year ago. According to the Underwater Center, the oil and gas industry is currently the single largest employer of commercial divers in the subsea sector.
Offshore wind power is gaining momentum in the U.S. According to the American Wind Energy Association (AWEA), there are seven projects with significant progress in the planning, permitting, and testing process. Both the federal government and several states established significant milestones in 2009 to encourage offshore wind power development. (AWEA, Annual Wind Industry Market Report, April 10, 2010).
The Professional Association of Diving Instructors (PADI) has issued 17,532,116 entry level and continuing education diving certifications between 1967 and 2008. In 2008 PADI issued 932,486 certifications.

Revenue Generators

Competitive Advantages—Deltron’s profitable manufacturing division employs a high degree of automation compared to competitors. In addition, other manufacturers have significantly higher raw material costs because they typically purchase premixed packages through sources that significantly mark up the price of the base materials. Elasco has a vertically integrated production facility that enables it to purchase raw materials at a significant discount from the typical price of premixed products. Deltron expects to target companies for acquisition that have synergies that will benefit from the advantages in productivity and raw material costs that Elasco can provide in order to maximize profits.
Elasco
Since 1979 Elasco has been an innovator in polyurethane elastomer technology and a leader in the manufacture of engineered plastics and polyurethane. From its highly automated Garden Grove, California production facility, Elasco provides complete design and manufacturing services, including prototype work, mold and tooling design, manufacturing, polymer mixing and custom casting and plastic injection molding.
The company fuels its growth by developing products that can be made lighter and perform better with polyurethane and other engineering plastics. Because polyurethane is widely variable in hardness and elasticity, it is uniquely suited for many applications in which natural and other synthetic rubbers are inadequate or inappropriate.
Elasco produces up to 6,000 pounds of polyurethane a day. Various resins are used to acquire the hardness, elasticity or durability that suits each product. Elasco manufactures polyurethane products for accounts globally. Some industries include roller skate and skateboard wheels, exercise equipment, automotive suspension, bowling machine parts, potable water distribution, industrial wheels, fire hydrant seals and other varied performance products.
Elasco’s families of polyurethane elastomers bridge the gap between rubber and plastics. The versatility of its compounding provides the company with a wide range of performance characteristics outperforming other materials with:
  • Excellent abrasion resistance
  • High tensile and tear strengths
  • Flexibility over a wide range of temperatures
  • Increased elasticity over the entire hardness range
  • High impact resistance and vibration dampening
  • Excellent resistance to oils, greases, and many solvents
  • Good weatherability
  • Resistance to fungal and microbial attack
  • Ability to bond to metals, other rubbers, plastics, and polymer compounds
  • High load bearing capabilities
Blu Vu
Deltron subsidiary Blu Vu Deep Breather is a technology company developing breathing equipment for the oil and gas industries as well as for use in fire and rescue, mining, hazardous materials, and recreational diving. Rebreather technology provides many benefits over conventional open circuit breathing equipment.
Blu Vu is focused on developing patented rebreather technology solutions that will increase productivity in commercial diving applications as well as improve the diving experience for the recreational diver. Blu Vu is positioning itself to become the ocean exploration breathing technology of choice, offering sustained safe diving solutions for Recreational Divers, Military, Search and Rescue as well as deep-sea diving solutions for the Oil and Gas industry.
Benefits of Blu Vu technology include:
  • Maximum no-decompression time
  • Extended depth capability
  • Stealth ability—no bubbles
  • Minimized flying after diving restrictions
  • Ship bottom inspections
  • Size & weight of equipment package reduced
  • Helium consumption minimized

Editor’s Note:

Blu Vu’s Vice President and Director of Technology, Dr. Jeff Bozanic, PhD., is considered one of the greatest divers of our time. He won the DAN diver of the year award and is constantly lecturing and working with professional associations from cave divers to our National Park Service. Among many dive industry commendations, Dr. Bozanic received the NAUI Outstanding and Continuing Service Award; the Silver Wakulla and Abe Davis Awards for safe cave diving; and the SSI Platinum Pro 5000 Award. In 2007 he won the Rolex Diver of the Year award. In 2002, he joined the NAUI Hall of Honor. Dr. Bozanic holds doctorate degrees in education, an MBA and a master’s degree in environmental education.

Growth & Value Strategy

Deltron plans to successfully grow by acquiring companies with historically profitable results, strong balance sheets, high profit margins, and solid management teams in place. By providing access to financial markets, expanded marketing opportunities and operating expense efficiencies, DTRO expects to become the facilitator for future growth and higher profit margins. In the process, new synergies among the acquired companies may develop, allowing for greater cost effectiveness and enhancing each individual company’s strengths and shareholder wealth.

Proven Management

Henry Larrucea
Deltron CEO/President, Blu Vu CEO/President, Elasco CEO
Mr. Larrucea brings to Deltron over three decades of continuous leadership, management and executive experience in high volume manufacturing environments for consumer recreational markets. He is responsible for overall management oversight and strategic long term planning. Mr. Larrucea’s corporate responsibilities include business development, marketing, and acquisition prospect development and management.
Mr. Larrucea was one of the original founders of Elasco in 1979 and its sole shareholder from 2001 thru 2008. He has expertise in all aspects of product development. Mr. Larrucea is directly involved in new product design and development including concept validation, engineering review and tooling design. He has extensive experience in production process implementation and maintenance.
Mr. Larrucea has two patents in his name for roller skate and skateboard related inventions. His experience in polyurethane chemistry over 30 years with the company has enabled Elasco to produce many unique polymers for use in a diverse range of industries.
Mr. Larrucea earned a degree in Mathematics with a minor in Engineering from El Camino College in Redondo Beach, CA.
Jeffrey Bozanic, Ph.D. 
Blu Vu Vice President of Research and Development
Before being named to head the Blu Vu science and engineering team, Dr. Bozanic, Ph.D., spent over 20 years as a management consultant specializing in marketing and business development services both within and outside the dive industry. His responsibilities have included training services, general management and consulting work, financial modeling and forecasting, and project management.
Dr. Bozanic’s past clients have included Micropore (solid sate rebreather absorbent media), Steam Machines (PRISM Topaz rebreather), B&E Engineering (Nautilus rebreather), Aquarius Research International (engineering and management support for new technologies in natural resource utilization for Mexico and other developing countries), Carbon Company Inc. (waste coal electrical power generation), the American Red Cross, PacifiCare Health Services, Boeing, Gulton Industries, AgeSolutions.com, VisionArt Interactive, Inc. and others. Dr. Bozanic has also performed services as an accident investigator and expert witness, consulting on cases related to scuba fatalities and non-fatal dive related incidents involving both open circuit and rebreather technologies.
Dr. Bozanic has published extensively on diving education topics, with heavy emphasis on cave and rebreather diving. Specializing in rebreather use, he is best known for his seminal textbook on the topic, Mastering Rebreathers (Best Publishing Co.). Dr. Bozanic has edited and reviewed many diving textbooks including co-authoring the Antarctic Scientific Diving Manual. He frequently speaks at diving seminars and dive shows.
Dr. Bozanic is an extremely active technical diver and instructor. His scientific diving began in 1978 while working on his thesis for his degree in geology. He spent a year dredging for gold in the Trinity Alps in California, later analyzing the settling velocity of natural alluvial gold particles.
In addition to his research activities, he has overseen scientific diving programs in Antarctica as part of the U.S. Antarctic Program, the University of Southern California as Diving Safety Officer, and on multiple diving control boards of various universities and academic diving programs. He currently serves as an advisor to the diving program of the U.S. National Park Service.
Dr. Bozanic’s contributions to diving safety and education have been recognized with many awards, including the Platinum Pro 5000, Henry Nicholson, Silver Wakulla, International Safe Cave Diving award, NAUI Hall of Honor, and the 2007 DAN / Rolex Diver of the Year. Dr. Bozanic holds both an MBA in International Marketing as well as a Ph.D. in Education. In addition, he spent another three years in Ph.D. level studies in marine geochemistry.
These companies are primarily successful family owned businesses that are looking for a way to increase market presence and provide financial security for the owners while at the same time leading further growth and technological advancement. USOG offers all of that by taking the company to the public marketplace, providing valuable business management experience to identify operating efficiencies, linking companies together to exploit synergies, and providing technical expertise and technology to their already successful businesses.

Investment Conclusion – DTRO.OB

DTRO offers the kind of timing and opportunity small cap insiders search for. StockSource is bringing it to you first!
Deltron has developed the capacity to grow in many directions. Rebreathers are replacing scuba systems for diving because they offer many advantages in terms of depth, duration, productivity and recovery. There is a growing market for rebreathers for commercial diving, military operations and recreational diving—it’s the next big thing. For out-of-water applications the rebreather market is wide open—no one company is dominating in the race to provide safe, portable, long-duration breathing equipment for the mining, building safety, hazmat, fire, homeland security, and search and rescue industries.
At StockSource we believe Deltron, with its leading edge technology and industry leadership from Blu Vu and its manufacturing capability from Elasco, has the ability to dominate multiple market segments. DTRO is a unique, multi-faceted ground floor opportunity. Don’t miss it!
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