A CEO Update for 2022

I look forward to sharing my annual Fall update to customers, coworkers and partners about Heeter’s progress over the previous year.

A Slowdown that Never Came

In Spring 2021, we made some strategic moves by purchasing a new Komori press and acquiring Duke Print and Mail in Cleveland, OH, our first ‘out of area’ acquisition. When the summer rolled around, the economy began to pick up steam and we saw our business first meet, then exceed, our
pre-pandemic levels. In the fall, our historic ‘busy season,’ we broke all previous sales records. But
it was somewhat painful as we battled labor and resource shortages including paper, equipment parts and other supplies that were severely delayed.

As we wrapped up 2021, we were anticipating a slowdown in the early part of 2022, but it never happened….

Thanks to the efforts of the sales and production teams, the new opportunities that were cultivated
in 2021 resulted in surging business in 2022. Demand has been going strong since. Sales for the first half of 2022 are up significantly (40%+) over last year. We’re seeing a very strong second half, in what should become our best year ever. This leap takes us to the next level of sales volume and company size.

Investment: People, Paper, Equipment

In order to accommodate the new volume, we’ve continued to invest in our people, paper,
equipment and facilities.

State-of-the Art Digital Print Center

One of the most exciting additions for 2022 is our investment in the Digital Print Center at 701 Technology Drive.

In May, we leased an additional 35,000 square feet of office and manufacturing space (for a total of 90,000 square feet in the 701 Building) and have built one of the premier digital print, mail and
fulfillment operations in the country.

We have been selected by Ricoh to be the first global beta site of its new Z75 B2 sheetfed inkjet press. Ricoh will maintain an office on-site for the next 12 months, and they’ll be hosting demonstrations for Ricoh clients from all over the world.

In addition, we’ve invested in roll fed, die cutting and gluing from MBO and inserting equipment that
will increase our capacity by 200%. All told these are $3-4 million in new investments that will allow
us to take on new opportunities with much needed capacity and new capabilities.

People

Heeter remains focused on maintaining and building its workforce with a strong culture that encourages employee retention. Our employees are among our greatest assets.

In the past year we’ve hired 40 new people, adjusted wages to be competitive in the market, and significantly increased contract labor to support surging handwork and kitting projects.

Our Directors and Managers continue to do an exceptional job in keeping jobs flowing, all while
taking on some exciting new projects.

The labor market remains challenging; Heeter is not immune to this issue. We are actively working
to create a structured workforce development program that will enable the company to find,
develop and grow employees to support our targeted growth. Printing Impressions Magazine
covered our program in a 2021 article called “Commercial Printing’s Aging Workforce: It’s Not
Someone Else’s Problem to Solve.”

Tripling Stock of On-Hand Paper

With supply chain issues, sourcing paper has become a critical part of our production process.
We now have 3 experienced team members dedicated to supply chain management. These
folks work tirelessly to make sure we have inventory on hand to produce the work for our clients.

And to be able to accommodate last minute jobs, we’ve tripled our inventory of on-hand paper stock.

Guidance from New Board of Directors

Another significant step in our company growth is the establishment of a Board of Directors to help
us maintain our growth trajectory, expand into other markets (both geographical and new product
offerings) and ensure long term stability in the organization.

Kirk Schlecker, Tim Thomas and I are on the Board along with 4 other Presidents/CEO’s from 4 sectors:
consumer packaged goods, digital marketing, health insurance and law/investment banking.
These folks are exceptional business people, the best in their industries. We’ll meet as a group 3-4
times a year to lay out a comprehensive growth strategy for the company. They’ll serve as our
advisors and help us gain access to new markets, technology and talent. Our goal is to double the
size of the company over the next 3-5 years; having wise counsel will help make this growth path less
risky and more achievable.

As you read through the rest of the newsletter, you’ll see that our team has been working diligently to
help us create one of the best companies around.

I feel so blessed to work alongside such wonderful people, and I thank all of you, our employees,
customers and partners, for your support.

Best,
Scott Heeter
CEO, Heeter