We were incorporated in the State of Nevada as Oceanview Acquisition Corp on
January 31, 2011. On May 18, 2012, we amended our Articles of Incorporation
to change our name to Sterling Consolidated Corp. We are a holding company,
and all of our operations are conducted through our four subsidiaries: Sterling
Seal & Supply, Inc., ADDR Properties, LLC, Q5 Ventures, LLC, and Integrity
Cargo Freight Corporation.
Sterling Seal & Supply, Inc.
Our largest subsidiary is Sterling Seal, a New Jersey corporation which was
incorporated in 1997. Its predecessor was Sterling Plastic & Rubber Products,
Inc., which was incorporated in New Jersey and was founded in 1970. Sterling
Seal engages primarily in the distribution and sale of O-rings, rubber seals,
oil seals, custom molded rubber parts, custom Teflon parts, Teflon rods, O-ring
cord, bonded seals, O-ring kits, and stuffing box sealant.
Sterling Seal is a distributor of O-rings. O-rings are one of the simplest,
yet most engineered, precise, and useful seal designs. They are one of the most
common and important elements of machine design. O-rings and the other products
that Sterling Seal sells are used in a wide variety of industries, including
automotive, pump, transmissions, oil and energy, machinery, and packaging. These
products are utilized primarily as seals to prevent leakage of liquids or air.
Most of the products carried by Sterling Seal are made of rubber, but some are
coated and the rubber compound can change upon customer request.
Sterling Seal sells directly to smaller distributors and original equipment
manufacturers in need of seals. It offers a catalogue of standard sizes, and
will take orders for special sizes not available in the standard catalogue.
In order to satisfy the needs of our customers and stay competitive, Sterling
Seal always maintains a wide variety of products in substantial quantities at
its main warehouse in Neptune, New Jersey, as well as its other facilities in
the United States. The products that we hold in inventory at our warehouse are
standard products that are most often ordered. If a customer orders a product
that is not in our inventory, we order the product from one of our suppliers
in China.
We have approximately 3,300 customers that place orders with us for the delivery
of O-ring or similar products. Our largest customer is a southeastern U.S. manufacturer/distributor
of automotive/industrial products. Other automotive customers are Precision
International, Fruedenberg and Sonnax Transmissions. We stock a variety of rubber
seals to service pool filter and pump manufacturers. We also distribute our
products to many resellers of replacement parts and pool stores. Bay State Pool
and Horizon Pool and Spa are two of our larger accounts in the pool industry.
A large portion of our customer base services the plumbing and industrial industries.
These accounts include, Fastenal, Kaman Industrial and Eastern Industrial. They
are localized to service a wide range of products, but they purchase O-Rings
and rubber seals from Sterling.
Sterling Seal receives requests for quotations electronically and by fax daily
from its various customers. The sales force then reviews each request, and responds
with a “quoted” price for delivery and price. If such a quote is
accepted, the customer responds with a purchase order for a specific price and
delivery.
After a purchase order is accepted and we do not have the ordered product in
our inventory, we then contact one of our suppliers. All of our suppliers are
located in China. In determining which suppliers to use, we look for suppliers
that deliver quality products in a timely manner. We do not have any long term
contracts with any of our suppliers. The following is the list of our 10 largest
principal suppliers:
- Progum Elastomer Technology Co., Ltd.
- Ivy Seals Group Corp.
- Ge Mao Rubber Ind. Co.
- Escort Seals
- Rubber Best Industry Corp.
- Wyatt Seal, Inc.
- Best Ring Industrial
- Supaseal Ltd.
- Goodway Rubber Ind Co Ltd
- AnySeals, Inc.
O-ring and rubber seals are generally considered commodities, meaning that such
goods are fungible and there is little if any distinction between the various
producers and suppliers of the products. None of the products sold by Sterling
Seal are under patent and there are no intellectual property or licensing issues.
Sterling Seal sets itself apart from other similarly situated companies though
the variety and quality of its inventory, the price point at which it sells
its various products, and its ability to deliver products to customers on time.
The time it takes us to deliver the ordered product to a customer will mainly
depend on whether we have it in inventory or need to order it from a supplier
in China. If we have it in inventory, we can package, ship and distribute the
product within two (2) business days.
When orders arrive at Sterling Seal, we ship the products to our customer and
invoice on a 45-day basis.
Integrity Cargo Freight Corporation
Our subsidiary, Integrity, is a freight forwarding business. They are primarily
responsible for transporting products we order from our suppliers back to our
warehouse in Neptune, NJ. After Sterling Seal confirms from its supplier that
a product is ready to be picked up, Integrity Cargo is responsible for picking
up the products and getting them to the dock and delivered to the Sterling Seal
warehouse.
Integrity shares a facility with Sterling Seal and manages the importation of
Sterling Seal’s products and its exports to various countries. Currently
eighty percent (80%) of Sterling Seal’s imports come from Asia, and ten
percent (10%) of the Company’s sales are exported to various countries.
However, all payables are billed and collected in USD, so Sterling Seal does
not bear any foreign exchange risk on open payables.
We incorporated Integrity in order to vertically integrate our operations and
not have to rely on third parties to deliver our products from the supplier.
This has resulted in quicker delivery and more predictable delivery times.
This provides the Company with a competitive advantage over other importers
of O-rings and seals as we can utilize our own freight company and consolidate
our operations. As a result, the Company is able to provide lower prices to
its customers. This also provides us with a much greater level of control over
our shipping, which expedites lead times and deliveries to our customers.
Entering the freight forwarding market has provided the Company with a competitive
advantage as compared with other importing distributors of rubber O-Rings. By
having the ability to utilize our own freight company, we are able to consolidate
shipments from various sources and ship as frequently as needed, which has resulted
in improved efficiencies and delivery times.
Integrity also performs freight forwarding services for third party customers.
Integrity currently has about twenty (20) customers for whom performs freight
forwarding services. However, roughly fifty percent (50%) of its revenues derive
from freight forwarding for Sterling Seal.
Integrity shares a facility and certain overhead costs such as information technology
with Sterling Seal, so both entities have lower operational costs due to economies
of scale.
ADDR Properties, LLC.
ADDR is one of our two subsidiaries that owns real property. ADDR owns a 28,000
square foot facility in Neptune, NJ. Roughly ninety percent (90%) of this property
is used by Sterling Seal as its principal executive office and primary warehouse.
The Company does not pay rent to ADDR for the use of this facility. The remaining
3,000 square feet of this facility is rented out to the Children’s Center
of Monmouth County.
Q5 Ventures, LLC
Q5 owns a 5,000 square foot facility in Apopka, Florida, which is used by Sterling
Seal for its Florida operations. This facility was specifically built for Sterling
Seal’s operations. Sterling Seal does not pay rent to Q5.
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