2014 DEMA Annual Report

Table of Contents What is DEMA?

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Strategic Listening & Learning Committee Update

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DEMA Show Committee Update

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Legislative Committee Update

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Market Research Committee Update

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Finance Committee Update

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Manufacturer’s Committee Update

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DEMA Membership Benefits & Overview

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What is DEMA?

The Diving Equipment and Marketing Association is a non-profit trade association. Monies earned through the industry’s participation in the annual DEMA Trade Show, along with sponsorships, and from DEMA Memberships, fund all of the activities and expenses of the Association. Unlike for-profit organizations which typically raise money at trade or consumer shows or events and funnel it AWAY from the diving industry, DEMA channels proceeds earned TOWARD diving industry-wide promotions, market and industry research, operations, legislative issues, disaster assistance, and other industry efforts, all for the benefit of DEMA Members.

Like most business/trade associations, DEMA has several functions within the recreational diving industry. DEMA is involved with promoting recreational scuba diving and snorkeling through PR activities and advertising, delivering educational programming for members and consumers, lobbying on behalf of the diving industry, and other functions. DEMA is a (501 [c] 6) California Corporation.

Description Worldwide Trade Association for the Recreational Diving and Snorkeling Industries; Includes more than 1,400 Member companies worldwide.

Mission To promote sustainable growth in recreational diving and snorkeling while protecting the environment.

Goals 1. To produce an annual trade event for the industry that services the needs of its stakeholders and produces a successful financial outcome for the Association.

2. To engage in marketing programs which promote the industry, create new customers, drive business into retail stores and resorts and promote diver retention.

3. To monitor potential legislation that could adversely affect the industry.

4. To engage in marketing research programs which will: a. Define the universe of divers b. Determine the rate of erosion amongst existing divers

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c. Determine the number of entry level certifications which take place in the United States and Caribbean each year d. Provide retail audit information that is made self-liquidating through annual subscriptions.

5. To conserve and protect natural aquatic resources.

Board Committees DEMA Committees provide an opportunity for qualified volunteers to participate in the activities of the Association and to have an impact on the effectiveness of DEMA. Committees are made up of members and may include Board members or other volunteers from the diving industry. These committees are advisory to the Board of Directors and DEMA Staff, and bring a wealth of experience to the Association.

In 2014 there are a number of standing committees helping to provide input to the Board of Directors and Staff of the Association. Having opinions and insight from the diving community is critical, and the learning curve works both ways; many volunteers learn the inner workings of a non-profit business and trade association, including the nuances and challenges of providing the best services and promotions that meet the needs of all five stakeholder groups simultaneously.

2014 Committees Finance Committee Tom Leaird, Chair Stephen Ashmore Tim Webb*

Legislative Committee Jeff Nadler, Chair Darcy Kieran Bob Harris* Al Hornsby* Dan Orr* Bill Ziefle*

Retailer Resource Committee Scott Taylor*, Chair Tom Leaird Darcy Kieran Werner Kurn Skip Commagere* Patrick Hammer* Floyd Holcom* James Murray* David Riscinti* Sid Stovall* Paul Wagenseller*

Nominations Committee Jeff Nadler, Chair Stephen Ashmore Stuart Cove Scott Daley Werner Kurn

Show Committee Jenny Collister, Chair Scott Daley Darcy Kieran Werner Kurn Neal Watson*

Strategic Workshop Planning Committee Manufacturers’ Committee Tom Leaird, Chair Stephen Ashmore, Chair Stephen Ashmore Scott Daley William Cline Harry Ward* Jenny Collister Stuart Cove Scott Daley Darcy Kieran Werner Kurn Jeff Nadler Research Committee William Cline, Chair Scott Daley Darcy Kieran Jeff Nadler Seton Kidd* Ronny Roskosch* Tim Webb* Mark Young*

*Not a current Board Member.

DEMA's Board Committees are generally determined at the first meeting of the year. DEMA Member companies with an interest in serving on future committees please contact membership@dema.org, or contact a current member of the DEMA Board of Directors using the contact information found at the following link: http://www.dema.org/staff/.

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Strategic Listening and Learning - How Can the Diving Industry and DEMA Thrive in the Years Ahead?

Tom Leaird, Chair

In April Diving Industry leaders representing DEMA’s five stakeholder groups, the DEMA Board of Directors, and the DEMA Staff met in San Diego, California for a Strategic Learning Session. The two-day session, under the guidance of a professional strategy consultant, was designed to use the knowledge of the Industry leaders present to address significant concerns and ensure that both the Association and Industry thrive in the future.

Industry leaders from the five different Industry stakeholder groups joined DEMA’s Board of Directors and Staff for the session which was led by Jeff De Cagna, Chief Strategist of Principled Innovation LLC. In addition to the members of the DEMA Board, those in attendance included: Industry Stakeholders: • Don Rockwell, Aqua Lung • Sid Stovall, Ascuba Venture, Inc. • Mike Hollis, American Underwater Products • Tim Webb, Caradonna Dive Adventures • Dan Orr, Dan Orr Consulting • Mark Young, Dive Training Magazine • Dean Garraffa, Huish Outdoors

• • • • • • •

Denise Cable, Independent Consultant Richard Mitsoda, Maduro Dive FantaSeas Mike Lever, Nautilus Explorer Drew Richardson, PADI Julie Andersen, Consultant, Scubapro Doug McNeese, Scuba Schools International Karin Sahm, Sunset House

The group was challenged to address a variety of Industry and Association issues and brainstorm the plausible future direction of the Association, as well as think through the possibilities for how DEMA can have a positive impact on the Diving Industry.

Using the concept of flipping Industry “orthodoxies,” which may be hindering the Association and Industry and preventing effective collaboration, the group identified key problems and brainstormed ways to address these challenges. “Orthodoxies” are beliefs or ways of thinking that are generally accepted as truth, regardless of how accurate they may actually be.

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Participants discussed many different beliefs and “truths,” and four main orthodoxies emerged as highly influential on the progress of the Association – and not in a good way! Orthodoxies that emerged included: • • • •

DEMA is just the Show and creates no other value for the Industry DEMA is an “old boys club” DEMA is highly influenced by larger Members/stakeholders to the detriment of other Industry participants and The DEMA Board takes no risks on behalf of the Industry and cares only about itself

These orthodoxies were discussed in detail along with the group’s recommendations for how DEMA and the Industry can move forward together to build trust and collaborate for Industry growth and success.

More important than identifying these orthodoxies is the understanding that DEMA needs to make structural and other changes that help build value for DEMA Members and Industry participants. By identifying these orthodoxies, it becomes possible to overcome them when they are not true and positively impact problems that do exist.

During the session DEMA employed a graphic recorder to capture the key ideas in a visual format.

These graphics were aimed to help with participants’ comprehension and retention and make the information that was shared easily accessible to the Industry.

What Recommendations Were Made?

DEMA’s Strategy Consultant made the following “On the Rise” strategic recommendations, to be implemented over the course of the next 24-36 months:

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Pursue holistic solutions to strategic challenges facing the diving industry - DEMA should be the convener and coordinator of more inclusive and generative conversations designed to tackle the complex challenges facing the industry that cannot be solved by any one organization or stakeholder group working on its own.

Build retailer capacity by increasing market intelligence - The success of the local dive store depends on its ability to nurture and maintain loyal relationships with diving enthusiasts who will purchase products and services over time. DEMA can help facilitate more meaningful relationships that drive business by providing deeper and more dynamic support using the AnySite marketing information system as the core of a comprehensive approach to build retailers to thrive in the years ahead.

Operate as the diving industry’s data gathering and interpretation resource - DEMA is already conducting important research and data collection to better understand the emerging business dynamics facing the diving industry today and in the years ahead. DEMA can expand and deepen this effort by working more closely with retailers, manufacturers and other industry contributors to identify which currently unavailable data should be collected for the shared benefit of all stakeholders, and by making sense of those data to facilitate better strategic decision-making.

Orchestrate an open and on-going dialogue of diving industry orthodoxy - DEMA can create a compelling context for collaboration by engaging industry stakeholders in an on-going dialogue around the orthodox beliefs that may prevent both the Association and the industry from thriving in the years ahead. By pursuing this dialogue openly, DEMA will demonstrate its commitment to building trust with other industry stakeholders, as well as to developing a richer empathic understanding of the short-term problems, intermediate-term needs and long-term outcomes that shape the way those stakeholders think about their place in the industry.

Integrate AnySite market intelligence with retailer learning and development − DEMA’s investment in the AnySite marketing information system will be able to realize its game-changing potential for the diving industry only if it is fully leveraged by retailers and other industry stakeholders. To increase AnySite’s impact, DEMA will integrate the market intelligence it provides into new learning and development offerings for retailers to be delivered on both a digital and in-person basis. By fully grounding learning and development in actionable business insight, retailers will able to justify their investment of time, attention, energy and financial resources in applying what they learn to improve performance.

Develop an industry-wide dashboard of performance analytics - DEMA has developed valuable infographics visualizing the attributes and characteristics of diving industry customers. DEMA can build on this work and move to another level of impact by working with the industry’s various stakeholders to identify the valuable yet unavailable aggregated performance analytics that can provide a helpful snapshot of industry performance on a quarterly and annual basis. DEMA can use the AnySite marketing information system as a foundational resource for this initiative and, over time, work toward the development of an industry-wide dashboard of performance analytics.

Action Steps to Date DEMA already put into place several steps to enact the recommendations made by the Strategy Consultant, with more to come in 2015:

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Formation of a Retailer Resource and Support Committee - This Committee’s main goal will be to focus on retailer resources and support including education, access to pertinent and actionable data, and, ultimately, business growth.

Creation of an online forum on DEMA’s website - This forum allows Industry stakeholders to provide feedback and engage with DEMA and other Industry stakeholders in a dialogue about DEMA and Industry-related issues.

Implementation of a policy to appoint non-Board Member chairs for appropriate committees - In an effort to engage all stakeholders and foster idea generation, the Board has adapted a preferential policy that non-Board members will take the role of Committee Chairs. This policy will stimulate additional conversation and bring new ideas as well as foster engagement of DEMA Board and Members wishing to serve in a capacity other than a full three-year commitment of a Board term.

Conduct a review of DEMA’s Board Election process and policies - Such a review includes the methods by which Board Members are nominated. Currently, the Board has hired an outside consultant to help with any changes to the election process.

Commitment to review and re-align DEMA’s Mission Statement with the organization’s strengths, capacity to create collaboration, and needs of the industry - This will help Members take advantage of areas of expertise such as legislative advocacy, business and industry research, face-to-face meetings and events, business education and member services that provide value and help facilitate business for all stakeholders.

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DEMA Show Committee Update Jenny Collister, Chair

The DEMA Show committee continued to work with the DEMA staff to enhance and update the Show in order to maximize benefits and opportunities to exhibitors and attendees.

Future DEMA Show Locations Since Show venue changes usually require an advance window of three to five years, the Show Committee is always reviewing new venues in which to hold DEMA Show. In 2013 DEMA investigated and reviewed proposals from locations such as New Orleans, LA and Nashville, TN. Criteria for selection of a show venue include many details but in general, the selection criteria include: • • • • •

• •

•

Attendee popularity.

A city or metropolitan area with cultural or entertainment attractions and special event venues. appealing to the diving professional. There should be a variety of restaurants and other entertainment within a 10 minute walking distance of the host hotel/convention center.

A major airline destination for North American and international travelers. The city should have a substantial number of direct flights coming into the city, and be a hub for at least one major airline.

Current published industry labor rates for the city must be within 10% of the median current rates for past DEMA cities.

There must be an available convention facility that meets DEMA’s exhibit and meeting space needs. The convention center must be in a location convenient to major hotels, the international airport and city points of interest. The minimum conventions center size is 350,000 – 400,000 gross square feet.

A minimum of 30 meeting rooms in the convention center, capable of holding at least 50 – 100 people each while using classroom style seating.

Desirable hotels convenient to the convention and exhibit facility for 10,000 – 12,000 attendees.

Hotel facilities should accommodate a minimum of 1,500 – 1,800 rooms peak night pick up, with 8,500 total room nights required within DEMA’s block. This number of hotel rooms must be within a 5-mile radius/15 minutes travel time (whichever is less) of the convention center.

Hotel room rates available for the DEMA hotel block which fit attendee cost criteria.

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After careful research and consideration it was determined that realistic options which fit the minimum criteria were limited to only about 25 destination cities, and fewer fit all the criteria. To secure the most desired convention and hotel contracts in optimal locations DEMA negotiated space for DEMA Show through 2019 as follows: Year DEMA Show 2015

Dates November 4-7, 2015

DEMA Show

November 16-19,

2016

2016

DEMA Show 2017

November 1-4, 2017

DEMA Show

November 14-17,

2018

2013

DEMA Show 2019

Oct 30-Nov 2, 2019

Venue

Hall(s)

Orange County Convention

South

Center

Halls

Las Vegas Convention Center

Orlando, FL

South

Las Vegas,

Halls

NV

Orange County Convention

South

Center

Halls

Las Vegas Convention Center

City, State

Orlando, FL

North

Las Vegas,

Halls

NV

Orange County Convention

South

Center

Halls

Orlando, FL

Updated Registration Policies In an effort to improve the registration process and badge allocation at DEMA Show 2014 the following policies were implemented as determined in 2013. •

Recognition of DEMA Membership level in determining the number of Exhibitor Badges allotted per 10x10 Exhibit space To make sure that legitimate and qualified Attendees are served during the limited Show schedule the number of badges allotted for each exhibit space will be based on the following sliding scale based upon DEMA Member Level beginning with DEMA Show 2014: o Level 1 Member: 4 complimentary exhibitor badges per 10x10 o Level 2 Member: 5 complimentary exhibitor badges per 10x10 o Level 3 Member: 6 complimentary exhibitor badges per 10x10

•

Exhibitor and Attendee Badge Reprints DEMA Members have continued to request that DEMA work to prevent unqualified consumers (non-trade) from obtaining badges which allow them onto the trade show floor. During DEMA Show 2014 those requesting a badge reprint will incur a $25 badge reprint fee in an effort to improve the badge distribution process. This will encourage professionals to keep track of their distributed badge and discourage distribution of badges to those other than the person

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indicated on the badge or never being distributed to all registered staff members, thus leaving some registered individuals needing a reprint of a badge they were never given.

•

Manufacturers’ Representatives Also beginning with the 2014 Show Manufacturers’ Reps will be required to register using the same system as other business Attendees for DEMA Show. Manufacturers’ Reps can elect to receive a badge from one of their affiliated Exhibitors or register and pay as do all professional Attendees.

DEMA Show committee members and DEMA staff also continue to evaluate DEMA Show features and Show planning to maintain and increase the value of exhibiting and attending DEMA Show. In 2014 benefits and features include: •

New in 2014: Art Innovation Center The Art Innovation Center provides a unique opportunity for attendees to experience an art gallery right on the Show floor. DEMA recognizes that art is a great way to connect the marine environment to a larger consumer audience. Ocean photography, art, film and sculpture can generate consumer interest in diving, travel and dive equipment in ways words alone can’t. This installation of the world’s greatest ocean art will inspire attendees to think more visually in their marketing, their customer relationships, and their continued interest in and support for the dive industry.

•

New in 2014: First-Time Exhibitor Center DEMA is pleased to announce the new First-Time Exhibitor Center located on the Show floor.

Don’t miss this must-see area featuring new exhibitors, products and services to help your business succeed.

•

New in 2014: Freediving Resource Center As one of the fastest growing trends in the dive industry, the Freediving Resource Center features vendors with the latest innovations in the field of freediving. Stop by for the newest products and services from these specialized organizations.

•

Bigger and Better in 2014: The Image Resource Center & Technical Diving Resource Center Both the IRC and the TDRC return to DEMA Show bigger and better! These sold-out areas are a must for attendees looking for photo/video and technical diving-related information, products and services. Both areas will provide complimentary educational sessions on the hour on relevant topics in these fields. For complete session details see pages 58-63 of the Show Directory or view them on your handheld device using the DEMA Show mobile app.

•

Bigger and Better in 2014: The DEMA Show Mobile App for iPhone, Android and Smart Phone Devices The DEMA Show Mobile App returns in 2014, providing easy-to-use interactive capabilities to enhance the DEMA Show experience including: o o

An all-in-one dashboard to keep attendees organized with up-to-the-minute Exhibitor, Seminar and Event information A personal scheduler for setting up appointments, seminars and meetings

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o o o o o •

Show floor maps and a “Locate Me” feature to help attendees navigate the Show floor and Seminar locations Timely alerts and helpful reminders to keep users updated in real-time Attendee & friends features to help all users make connections with the thousands of attendees at DEMA Show Social networking links, a video gallery and a shared photo gallery to make sharing Show experiences easy and fun A listing of local places including dining, entertainment and shopping options

Bigger and Better in 2014: The Timeline of Diving Display To celebrate the dive industry’s history and its future the Timeline of Diving will return to the Show floor in Booth #1645 to feature historical facts, footage and displays that celebrate our milestones on the 4’s.

DEMA Show Among Top 250 Shows!

DEMA Show was once again recognized as being one of the top 250 tradeshows in the US in 2013 by Trade Show News Network. The Show Committee thanks all who participate in DEMA Show, making it possible to help keep costs down for everyone!

Youth Programming at DEMA Show DEMA recognizes the importance of encouraging involvement of young people in recreational diving. To help in this effort DEMA will once again host local youth for the Deep Ambitions Aquatic Career Fair on Friday during DEMA Show. This type of programming can be coordinated by DEMA Members and details can be found by contacting DEMA at DEMA Booth #1558.

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Legislative Committee Update Jeff Nadler, Chair

Each year DEMA establishes a Legislative Committee which includes DEMA Board members, DEMA Member volunteers and DEMA staff. The Committee works directly with the DEMA Office to review issues and bills, gather input from members of the diving industry, and provide input to government officials and organizations via the DEMA staff.

The Legislative Committee works for the betterment of the recreational diving industry, striving to strike a balance between maintaining access to dive sites and protecting the underwater environment for all so that we all have a place to dive that is clean and healthy. Duties of the Committee include monitoring legislation and government administrative activities which may adversely impact diving businesses or dive site access, and encouraging activities which protect the underwater environment.

Legislative advocacy can require a substantial amount of time, but can be well worth the effort.

Advocacy provided through the DEMA Legislative Committee provides DEMA Members with a direct voice in the legislative process. When DEMA has the opportunity to act or publicly comment on potential legislation which may have a far-reaching impact on the diving industry, DEMA Members have the added bonus of receiving notifications regarding those changes to federal, state, local, or international laws. One of the goals of this effort is to provide such notification in time for Members to also participate in actions affecting these issues.

The Legislative Committee is composed of DEMA’s Legislative Advocate, Bob Harris, Al Hornsby (PADI), Tom Ingram DEMA Executive Director, Darcy Kieran (Total Diving), Jeff Nadler, Chair (PADI), Dan Orr (Dan Orr Consulting), Carlos Santana (Hawaiian Islands Recreational Scuba Council), and William Ziefle (Divers Alert Network).

DEMA Legislative Initiatives USCG National Offshore Safety Advisory Committee Because of concerns that the US Coast Guard may be moving to implement regulation of some components of the recreational diving industry, DEMA has stayed in close contact with representatives

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of the USCG in an attempt to have as much input as possible into the processes being discussed. A presence by DEMA representatives at meetings which involve topics of interest to recreational diving is and will continue to be important. The meeting in Texas was one which Commander Rob Smith of the USCG, DEMA’s contact in that branch of service, indicated may be of interest.

Two topics were of interest on the meeting agenda: Final report from Marine Casualty Reporting and Form CG-2692 revision Subcommittee; Progress report from Commercial Diving Safety on the OCS Subcommittee.

Final report from Marine Casualty Reporting and Form CG-2692 revision Subcommittee This subcommittee reviewed the current marine casualty reporting form (CG-2692) and made recommendations for changes to the form. A copy of the draft changes are attached, but please note that this was obtained from the subcommittee co-chair and the draft was NOT distributed to the general public or the NOSAC Committee during the meeting.

In reviewing the draft form, there are several notations which may concern the Legislative Committee: 1. The new form is divided into sections which are different than those of the current CG-2692 form being used (also attached).

2. It appears there is an attempt to simplify the terminology used in the draft form.

3. The Subcommittee indicated that the instructions should also be altered to make it easier for the mariner to complete the form. The Subcommittee’s notes are attached as part of the form, but no additional draft instructions were obtained.

4. The USCG representatives indicated that the form is only one part of the reporting process. In fact, Masters were required to notify the USCG IMMEDIATELY when a casualty occurred, and that this immediacy requirement was to be met by calling the USCG as soon as the Master had knowledge of the accident and casualty.

5. USCG Commander Rob Smith indicated to the Subcommittee members and public in the meeting that a “Coast Guard Guidance” document was in the process of being prepared to assist in the completion of form CG-2692. Due to the government shutdown during the fall of 2013 that Guidance document had not yet been completed at the time of the meeting, but nonetheless the Subcommittee was tasked with moving the revision of the form forward.

During the public comment period which was part of the meeting on November 14, DEMA Executive Director Tom Ingram issued the following statement: “As recreational diving charter vessels are commercial passenger vessels and are impacted by this process and form, we appreciate the opportunity to comment. We understand that the form and process are evolving and the release of a USCG Guidance Document was delayed due to recent government shutdown. We encourage the release of the Guidance document prior to finalizing the next iteration of the Marine Casualty Reporting Form. We also encourage the integration of well-defined terminology in the Guidance document and in the form to assist in the completion process.”

One other area became concerning following the meeting which was not immediately apparent until the draft revised CG-2692 could be obtained; the title of the reporting form has changed from “Report of Marine Accident, Injury or Death” to “Report of Marine Casualty, Commercial Diving Casualty, or OCSrelated Casualty.” It may be of concern that “Diving” is called out as part of the form title, and may be part of the movement to regulate all forms of diving under the USCG’s control.

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In March Executive Director Tom Ingram volunteered to join the USCG Sub-Committee for the National Offshore Safety Advisory Committee to consider broadening the regulatory requirements for reporting marine casualties that occur on the U.S. Outer Continental Shelf (OCS). The limited reporting requirements currently applicable to foreign-flag OCS units in those waters would be replaced with the broader requirements currently applicable to U.S.-flag OCS units and to marine casualties occurring elsewhere in U.S. waters. The proposed changes would improve the Coast Guard’s ability to collect and analyze casualty data for incidents on the OCS, in the interest of maintaining and improving safety on the OCS. This proposed rule would support the Coast Guard’s maritime safety and stewardship missions.

Ingram participated in the USCG Sub-Committee meetings in New Orleans and by conference calls for the NOSAC Sub-Committee. One of the outcomes of attending the USCG committee meetings is that a separate Commercial Diving Sub-Committee has recommended that NO SCUBA be allowed for commercial diving use. Such a recommendation could have an economic impact on small commercial diving companies and their ability to do light underwater work such as inspections, light salvage, and hull cleaning.

Ultimately the USCG proposed a rule change that would implement one marine casualty reporting system for US and foreign vessels. This Sub-committee (SC) supports this rule change to align reporting requirements on the Outer Continental Shelf (OCS).

The USCG made estimates of the affected population and the burden on that population. The SC was asked to respond to the following questions related to estimating the affected population as they relate to a possible change in the marine casualty reporting process: 1. How accurate is the USCG’s estimate of the affected population? a. The SC believes that the USCG has underestimated the vessel count and thus the affected population.

2. How accurate is the USCG’s estimate of burden upon the affected population? a. The SC believes that the USCG underestimated the burden upon the affected population.

3. How valid is the USCG’s method of determining the affected population? a. The SC disputes the estimate of the affected population thus the method is in dispute also.

4. How can the USCG reduce the burden of casualty data collection? a. The SC is in agreement the burden of casualty data collection can be reduced by raising the threshold level from the current $25,000 to $100,000 of material damages prior to requiring a report.

5. Is there any additional information the USCG should consider? a. The SC made 6 observations it believes USCG should address: i. Alignment of USCG and BSEE reporting requirements - operators of certain OCS units are currently required to report the same incident to both the USCG and BSEE. ii. Creation of a single site for submittal of all USCG Marine Casualty Reports – the USCG currently requires submitting reports to the nearest USCG Sector, Marine Safety Unit (MSU), Activity nearest the location of the casualty, or, if at sea, nearest the arrival report as currently required. For vessels working on the OCS the nearest USCG Sector, MSU or Activity is not necessarily well understood.

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iii. Acknowledgment of receipt of Marine Casualty Reports - Currently those submitting do not receive confirmation that their reports have been received and that their obligation to report marine casualties has been met. iv. Streamlined Reporting - for oil spills the current requirement is for operators to report to incident to both the USCG’s National Response Center (NRC) and the USCG’s Captain of the Port (COTP) for the zone in which the incident occurred. A single report to the NRC should serve the purpose of notifying the USCG and reduce the burden on industry from dual reporting. Further, BSEE reporting requirements for spills should be aligned with the USCG. v. Clarification on what requires immediate notification (serious marine incident) vs. what is required to be reported within 5 days – current requirements are not well understood and often vary by USCG Sector, MSU, or Activity. Further, the SC believes the USCG, BSEE, and EPA should adopt similar notification requirements. vi. Changes to draft CG-2692 Marine Casualty Reporting form: 1. Block 19 of the form requests the “Date/Time (local) of Occurrence”.

Since many ships operate on their own local time, or European/Maritime dating format, the SC believes it would be simpler to change the block to read “Date/Time/Time Zone” that incident occurred.

2. Block 20 of the form requests the location of the incident. The SC notes that this Block has blanks for “Name of Body of Water or Waterway”, “Latitude:”, “Longitude:” or “River Mile Marker:” The SC believes the USCG should add the option of identifying location by “OCS block.”

Submitting this report ended the Sub-Committee’s activities. Perhaps the greatest benefit of this effort and participation has been maintaining the relationship and communication effort with the USCG. Dive In Day, Florida Florida Dive-In Day 2014 took place March 3 and 4 in Tallahassee, FL, the first day for new and returning legislators at the Capitol Building.

DEMA arranged for space in the capitol building in which DEMA Member Businesses displayed their products and services. As new and returning legislators passed through the building they had the opportunity to see that Florida has a thriving diving business community. The effort made for a good PR opportunity and, as in the past, generated substantial press coverage for recreational diving and the DEMA Member businesses that participate.

In addition to space in the building, DEMA also hosted a group of children from Florida’s PACE Center for Girls whose goals include educating others on the importance of sharks. DEMA assisted with the cost of transporting 15 kids to the capital and provided t-shirts to help draw media attention to the effort.

Dive operators also had the opportunity to set up appointments with their local legislators, stay an extra day and meet these members of the Florida legislature face-to-face, and help DEMA advocate for divingrelated issues that impact these operators and the diving industry in Florida.

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The event was open to any DEMA member diving professional who is passionate about diving issues and wants to make a difference, as well as meet and network with fellow advocates from around the state.

Goliath Grouper The Gulf of Mexico Fishery Management Council, the South Atlantic Management Council and the Florida Fish and Wildlife Conservation Commission met on January 7-9 in Key Largo, Florida to consider reopening the Goliath grouper fishery.

DEMA has twice opposed the lifting of the moratorium on harvesting Goliath Grouper due to several factors: • These fish are slow moving, unafraid of divers • They are slow to mature • It appears that they are unsafe to eat due to high levels of mercury • There is insufficient data to determine if they have reached a point where harvesting would not damage the population DEMA issued a Member Alert and submitted written comments to the Gulf of Mexico Fishery Management Council, the South Atlantic Management Council and the Florida Fish and Wildlife Conservation Commission requesting that the moratorium remain in place.

In addition to maintaining our position in favor of the moratorium on goliath grouper harvest, DEMA conducted a poll of divers from around the world (taking into account the opinions of divers outside and inside of Florida). With a sample of more than 15,000 the results indicated that with a confidence level of 95% the true percentage of the diver population wishing to maintain the moratorium is between 67.2% and 78.8%.

Ultimately the moratorium on harvest was maintained. It is likely to face future challenges and DEMA is maintaining a watch on meetings being planned in 2015.

National Ocean Policy Statement DEMA has long been on public record as supporting a balanced approach to environmental issues, an approach which permits diver access to aquatic sites along with economic growth. Our balanced approach considers the need for appropriate environmental policies and proposals, backed by sound, peer-reviewed science, having a positive impact on the aquatic environment on which our professional members and their diving customers rely. DEMA has testified before both houses of the US Congress on such important issues as support of the re-authorization of the National Marine Sanctuaries Act, the need for monitoring economic considerations related to Ocean Acidification, and has served on the White House’s National Ocean Council Recreational Advisory Group.

In late 2013 DEMA received concerns from members of the diving industry regarding the current stance on Coastal and Marine Spatial Planning and the National Ocean Policy. Although DEMA is aware of these concerns, we remain in opposition at this time.

In December 2013 DEMA issued a statement outlining our rationale for withholding support for CMSP as outlined in the NOP: http://c.ymcdn.com/sites/dema.siteym.com/resource/resmgr/Documents/Reasons_DEMA_Does_Not_Suppor.pdf

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HB 1049-Florida-Dive Flag Law During 2014 a modification of the dive flag laws was proposed in Florida. DEMA generally supported this change in the law as long as current dive flag laws were not impacted. The proposed ruling, which eventually passed, made it possible for additional products to be used to mark the location of a diver in the water. Initially there were some changes to the current law included in the draft legislation and DEMA acted on these changes to correct them in the final implementation.

The final changes to the Dive Flag options in Florida were signed into law in mid-June, going into effect on July 1, 2014. The new law allows both dive flags and specifically designed “buoys” to be legally used by divers to mark their in-water location. DEMA issued a Legislative Alert to all members and through social media on June 13. http://www.dema.org/news/177694/New-Law-in-Florida---Dive-FlagsAND-Dive-Buoys.htm DEMA also updated a poster and shared this with the industry through social media and links to DEMAIL as well as a video Public Service Announcement: http://www.youtube.com/watch?v=x4IEk0ePG6A&feature=youtu.be&utm_source=Urg ent+Legislative +Alert%3A+New+Law+in+Florida+-+Dive+Flags+AND+Dive+Buoys&utm_campaign=2014- 06-13-Leg +Alert&utm_medium=email The legislation can be found here: http://c.ymcdn.com/sites/dema.siteym.com/resource/resmgr/Documents/HB_1049_by_Rep._Raschein_2.2.pdf Vocational-Technical Schools in Florida – Diving Instructor Trainers In Florida there have long been licensing requirements for Diving Instructor Training Facilities through Florida’s Commission for Independent Education (vocational-technical schools). In recent years Florida declined to enforce this rule. Some facilities continue to follow the rules, at great cost of time and money, while others seem to be avoiding the cost. The result may be that an anti-competitive environment could be created for those facilities following the rules.

Several DEMA member facilities wrote to the Commissioner for Independent Education and expressed their concerns over the lack of enforcement. Advocate Bob Harris continues to monitor the situation. A letter from a DEMA member store regarding this issue can be seen here: http://c.ymcdn.com/sites/ dema.site-ym.com/resource/resmgr/Documents/Letter_from_Florida_Dive_Bus.pdf Shark Fin Ban The proposed Florida Shark Fin ban bill (SB 540) backed by DEMA, which banned possessing, selling, trading, buying, shipping, or bartering a shark fin in Florida or its waters was changed due to pressure from the fishing industry. The bill was re-written by the Senate Environmental Preservation and Conservation Committee to instead bump up the penalties for fishers caught cutting the fins off sharks at sea.

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The bill makes the act of harvesting fins a second-degree misdemeanor punishable by up to a $500 fine and 60 days in prison for a first offense.

The amended bill can be seen here: http://c.ymcdn.com/sites/dema.siteym.com/resource/resmgr/Documents/Amendment_by_Senator_Abruzzo.pdf Guidelines for Diving on Sunken Military Craft and Terrestrial Military Craft under the Jurisdiction of the Department of the Navy In March DEMA became aware of a notice of proposed rulemaking regarding diving on sunken military craft. DEMA was approached about this issue by divers in the Northeast who were concerned about their ability to continue diving on and salvaging artifacts from sunken vessels in that region.

After some additional investigation DEMA issued a legislative alert regarding this issue. The Alert can be found here: http://www.dema.org/news/171943/DEMA-Legislative-Alert-Recent-Federal-RegisterNotice-May-Impact-Your-Business.htm DEMA also requested clarification of terms used in the rulemaking proposal. In early May DEMA received the clarification, which can be seen here: http://c.ymcdn.com/sites/dema.siteym.com/resource/resmgr/Documents/DEMA_2014.pdf Dredging in Bimini In May DEMA was contacted by operators in the Bahamas regarding the construction of the North Bimini Ferry Terminal and its potential for harming dive sites near the construction site. DEMA responded to the request by gathering diving-related economic impact data on the construction project and asking the Bahamas government to investigate further. The statement from DEMA can be seen here: http://www.dema.org/news/173281/DEMA-Comments-onPotential-Environmental-Issue-Which-May-Impact-Diving.htm

The first day of dredging

Several media outlets picked up the story and featured DEMA prominently in their discussions of the project: The Nassau Guardian http://www.thenassauguardian.com/bahamas-business/40-bahamas-business/47360-pmaccused-ofacting-beyond-his-powers-in-bimini-dredging-project The Bahamas Weekly http://www.thebahamasweekly.com/publish/local/DEMA_Dredging_could_devastate_Bimini_s_thriving _dive_industry34988.shtml Unfortunately the dredge project did move forward. See blog postings: http://forums.floridasportsman.com/showthread.php?155373-Its-a-sad-day-in-Bimini#ixzz31st9K5HN DEMA continues to monitor the effects on both the environment and the diving business in this region.

DEMA is also watching other destination locations which cater to the cruise ship trade.

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Florida Lobster Mini-Season Florida’s lobster mini-season was July 29th and 30th. DEMA issued information to the industry containing access to a poster and a video Public Service Announcement (PSA) to remind divers to have their equipment serviced and to update their diving skills in time for the two-day season.

Rule Change in Florida Regarding Lionfish On June 18 the Florida Fish and Wildlife Commission (FWC) enacted new rules which took effect on August 1 regarding the taking of Lionfish in that state.

The new rules allow rebreather use and with some restrictions, spearing lionfish in areas otherwise prohibiting spear fishing. The new rules can be found here: http://myfwc.com/fishing/saltwater/recreational/lionfish/.

DEMA worked diligently with FWC to help ease the licensing requirements and equipment use for taking lionfish so that divers could assist in keeping the populations of this invasive species in check. Lionfish threaten Florida’s saltwater fish and wildlife, and FWC encourages snorkel and scuba divers, anglers and commercial harvesters to remove lionfish in Florida waters to limit the negative impacts to native marine life and ecosystems caused by this prolific species.

Lionfish Management Changes Among the new FWWC rules are several management changes, all of which went into effect Aug. 1: • • • • •

No daily bag limit in Gulf State or Atlantic State waters; No minimum size limit in Gulf State or Atlantic State waters; Prohibiting the importation of live lionfish; Allowing the harvest of lionfish when diving with a rebreather, a device that recycles air and allows divers to remain in the water for longer periods of time; and Increasing opportunities that will allow participants in approved tournaments and other organized events to spear lionfish or other invasive species in areas where spearfishing is not allowed. This will be done through a permitting system.

Licensing A recreational fishing license is NOT required for recreational fishers targeting lionfish while using a pole spear, a Hawaiian Sling, a handheld net or any spearing device that is specifically designed and marketed exclusively for lionfish. The sale of commercially harvested lionfish requires a saltwater products license.

A permit is required to harvest lionfish in the no-take zones of the Florida Keys National Marine Sanctuary. Permits are issued by the Sanctuary following training given by the Sanctuary and the Reef Environmental Education Foundation.

More information can be found here: http://www.dema.org/news/news.asp?id=180002&hhSearchTerms=%22li onfish%22 DEMA, DAN and REEF jointly issued information & safety card/poster about lionfish: http://www.dema.org/news/news.asp?id=190825&terms=%22lionfish%22

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Market Research Committee Update William Cline, Chair

DEMA’s role includes providing Members with pertinent industry data that helps their businesses.

Providing market and Industry research is critical for all trade associations. As a Marketing Association, DEMA has taken this role as a central part of its goals.

The DEMA Research Committee consists of several individuals both from the DEMA Board of Directors and from the DEMA membership. The 2014 DEMA Research Committee included William Cline (Cline Group), Chair, Scott Daley (Body Glove), Darcy Kieran (Total Diving), Jeff Nadler (PADI), Seton Kidd (Sports Chalet), Ronny Roskosch (Active Scuba Divers TM), Tim Webb (Caradonna), Mark Young (Dive Training Magazine and Dive Center Business), and Tom Ingram, DEMA Executive Director.

At the heart of “marketing” is the understanding of the customer, how we communicate with them and what message will generate the greatest response in a cost-effective manner.

Most everyone in the diving industry has some idea of their own customers; retailers see who purchases the equipment and training they sell; manufacturers have an understanding of who purchases their products through warranty registrations and information from their retail dealers, training organizations can easily check their own certification information for demographic details, places where their customers live and more.

The question for the Industry and for DEMA is how to pull all this information together to enable additional sales, more traffic, greater retention and more fun. Having marketing data from all sources in the diving industry, including data from actual divers is critical, but only if it translates into action.

DEMA participates in several ongoing research projects each year, but also has additional customized data available for DEMA Members to use. All members of the diving community can benefit from this type of data.

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Certification Census Thanks to the three participating certification organizations data has been made readily available regarding the number of new divers certified each year since 2003. The Census includes data on Open Water-level diver certifications only, as defined by the Recreational Scuba Training Council (RSTC). This statistic is a measure of growth for the Industry at large, and is indicative of the health of the sport.

The cooperative effort between all of the currently reporting certification agencies includes reporting their certification information to an independent, third party auditing firm. Although not all training organizations currently participate with this program, all are invited to participate each year.

Open Water certification numbers are reported from the third party administrator (TPA) to DEMA in an aggregated total only after the TPA does a thorough review of the data, removes any duplicated customer records that appear across or from within agencies, and receives a letter of verification of the numbers from the reporting training organization.

The process is designed to make the Certification Census totally anonymous with regard to training organization affiliation of the new diver and to produce an accurate accounting of the total divers from within the US. Neither the DEMA Office nor members of the DEMA Board receive access to individual training organization totals, only the aggregate total. Up-to-date certification census data is available at www.dema.org and important state-by-state data is available to DEMA Members.

Manufacturing Sales Index (MSI) For more than 20 years DEMA has gathered and reported data on sales at the manufacturing level. The data is reported by those manufacturers that voluntarily participate in the program and is gathered by a third party administrator on a monthly and quarterly basis.

The individual manufacturer’s information is kept confidential and only the aggregate is reported back to participating companies. Data from the Index used by manufacturers to compare their own sales with those in the Industry, to help understand market share information, and to help determine trends.

Localized Dive Center Research For a variety of marketing programs in virtually every industry the place to begin is in understanding the current customer, their buying habits and their values. DEMA has conducted studies of these parameters at a national level in the US, but diving consumers are diverse and each geographic region is different in terms of diving season, equipment and training needs and the people that participate.

Through a sponsorship funded partially by the Manufacturer’s Committee, DEMA Members have access to AnySite, a marketing information system providing data on the geographic location of the individual dive store and the potential customer households found in the immediate vicinity.

Location, location, location: Even with online sales growing in importance to the diving industry and others, a critical component of the success of any specialty retail business is where the store is located.

The physical dive store is still the center of attention for components of dive instruction and equipment purchases where proper fit is critical. In fact data indicate that more than 23% of all divers have NEVER made a purchase from an online dive retailer.

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The geographic location of a brick-and-mortar dive center plays an important role in the image the dive center portrays, the type of customers attracted, and ultimately the success of the business. It is helpful (necessary) to know some basic details about store location, even in an existing store, as the economic conditions in a given geographic area can change from year to year.

Once there is an understanding of WHO the customer is and how to communicate with them, those customers must be LOCATED and there must be frequent-enough interaction with them to generate interest and actions with the store.

WHO is the Customer?

Understanding the customer from several perspectives is helpful. AnySite does provide an abundance of information about the customer, using multiple variables to identify the potential customer’s “life stage.” Including: • • • • • • •

Income Education Group Quarters Dwelling Type Geographic Mobility Place of Work and Commuting Mode of Travel

• • • • • • •

Employment Industrial Classification Occupation Age Race, Hispanic Origin, and Ethnicity Immigration Home Language Household Structure & Family Status

WHERE is the Customer?

In addition to the “WHO” the AnySite program also allows the retailer to use a postal code locator to determine WHERE these potential customers are located in relation to the store.

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It is worth noting that companies such as Master Card, Sprint, Verizon, Rexall Drugs and many others use this same marketing information system for their marketing and store location efforts.

Additional free video and print advertising images from some of the premier photographers in the Diving Industry, such as David Doubilet, are available to DEMA Members, and to help reduce advertising costs, there are free-to-Members “How To” guides such as, Regional Cable Television Advertising Buying Guide and Direct Mail Guide.

Industry Research Project – Customer Analysis In 2014 DEMA released the results of a research project using the AnySite Marketing Information System with the goal of acquiring more customers. The population from which the data was collected in 2013 included more than 472,000 customer records from five different activities; • • • • •

Divers certified at the Open Water level between 2010 and 2012 Divers certified ABOVE the Open Water level between 2010 and 2012 Divers purchasing hard goods (regulator, BC or computer) Divers traveling to a land-based dive resort Divers diving from a liveaboard boat

The customers from each of these activities were analyzed separately, and the data was also aggregated to understand the customer participating in all of these activities.

Initial results were published in late 2013 and final reports, including details about the households from which these customers originated were released to DEMA members in mid-2014. Detailed results can be obtained by DEMA members at no cost by clicking on www.dema.org and logging into their member portal.

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The data gathered in 2013 on the US diving consumer includes an analysis of the consumers’ life stages, customer buying behaviors and more.

The marketing information system uses the current diving consumer’s geographic location, and uses the long-verified approach that customers with similar incomes, activities and backgrounds gravitate toward one another, shop in the same stores, buy many of the same products and have other similar life stage behaviors; the concept that “birds of a feather flock together.”

Psychographics Part of the analysis includes understanding “Psychographics,” the concept of buying behaviors, values and other areas of consumer behavior, allowing companies to identify, in detail, their best customers, learn how to win more customers like them and keep them coming back.

Analyzing a set of current customer records creates precise profiles of these customers and literally maps out the specific neighborhoods where more customers like them can be located. Each neighborhood is identified for this analysis, enabling members of the Industry to target these groups, linking them directly to a physical location. The use of this process helps transform raw consumer and demographic data into actionable data in a quick and accurate way.

2014 Survey In 2014 DEMA also conducted a web-based “diver behavior” survey of more than 24,000 divers. The process was unique in that those companies that participated in Phase I of the research also assisted by asking their customers to click on the behavioral survey and complete it. In addition to those companies which participated in Phase I, other organizations with access to certified divers, such as the dive consumer show organizers, also assisted in getting the survey links out and allowing an analysis to take place. Each company or organization participating also received the results from their own list of divers.

All surveys were conducted using a third party administrator to preserve the confidentiality of the customers and participating companies.

Aggregated survey results will be reported separately and also used in DEMA’s strategic planning efforts.

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Finance Committee Update Tom Leaird, Chair (Board Treasurer)

The Finance Committee provides oversight to all budgetary activities of the Association, approves the budget for the fiscal year, and reviews all Association financial transactions.

DEMA’s financial standards are developed using Generally Accepted Accounting Principles. In addition to following these high standards, DEMA also retains the services of an outside professional accounting firm to conduct annual audits of all financial activities of the Association, as well as periodic evaluations of financial data. The Association’s audited financials are posted on www.dema.org for member review.

Giving Back to the Industry One of the most important objectives of the Association is the opportunity to place money back into the diving industry for business purposes. Since January 2003, DEMA has carefully placed money into successful promotions and other business-related efforts that were then evaluated for their return on the investment, using standard financial evaluation techniques.

DEMA considers funding many different projects and allocates funds to these projects taking the following into careful consideration: Projects Managed Directly by DEMA (Board or Staff) – This is the most common type of project, usually involving extensive committee and Board discussion, plans and evaluation prior to implementation.

Projects of this nature may be proposed internally or by an outside entity, but are managed by DEMA Staff with Board supervision. As such: 1.

2.

3.

4.

5.

6.

Projects are under direct control of DEMA Board Project costs can be more easily evaluated and controlled Project success can be more easily and accurately measured Compliance with anti-trust regulations can be more easily monitored Compliance with Association objectives and corporate standards can be more easily monitored Safety risks can be mitigated more easily

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Projects managed directly by DEMA require evaluation by DEMA staff, recommendations to the Board and Board approval.

Projects Not Directly Managed by DEMA – When projects not managed directly by DEMA staff are considered for DEMA funding, the following should be considered: 1. Projects are NOT under direct control of DEMA Board or staff. For this reason additional information is required before approval of funding.

2. DEMA sets limits on funding to prevent cost overruns and expects periodic reports from the project management team.

3. Clear objectives and evaluation measures must be provided by the team managing the project prior to funding.

4. Written information must be provided to DEMA regarding the individuals involved, their qualifications to conduct the project, the responsibilities of each, and the terms, limits and conditions of the project.

5. Project proposals are reviewed by DEMA counsel prior to approval.

6. DEMA must be indemnified against losses, injuries, violations of anti-trust regulations and laws, and other issues appropriate to the project in question.

7. Projects must DIRECTLY benefit the diving industry overall.

8. Consideration should be given to DEMA member companies when appropriate.

9. Adequate liability insurance naming DEMA, staff and directors is required and should be incorporated into any funding agreement as appropriate.

10. Approved project funds can only be dispersed after a written agreement is executed.

Projects not directly managed by DEMA require evaluation by DEMA staff and in some cases may require evaluation by outside sources. Such evaluation by outside sources may involve additional cost to the team proposing the project prior to recommendations being given to the Board and prior to the necessary Board approval.

Pursuant to the Bylaws of the Diving Equipment and Marketing Association (DEMA), you are hereby notified that you have the right to receive the DEMA Annual Financial Report.

This Annual Report and the available Balance Sheet, Income Statement, and Statement of Changes in Financial Position constitute the DEMA Annual Financial Report. As Treasurer I hereby certify that those accompanying documents were prepared from the books and records of DEMA. Audited Financial Statements are available to DEMA members via www.dema.org. DEMA’s annual report is posted each year on its website.

The names and addresses of current members of DEMA are located at the DEMA Office at 3750 Convoy Street Suite 310, San Diego, CA 92111.

In 2014, DEMA engaged in no transactions which involved more than $50,000, or aggregating more than $50,000, with the same person, and in which any director or officer of DEMA or any holder of more than 10% of the voting power of DEMA had a direct or indirect financial interest.

In 2014, DEMA paid no loans, guaranties, indemnifications, or advances to any officer or director of DEMA.

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Manufacturer’s Committee Update Stephen Ashmore, Chair

The Manufacturer’s Committee represents all member manufacturers. Representatives on the Manufacturer’s Committee come from the DEMA Board and can also include non-Board members.

The Manufacturer’s Committee monitors and allocates monies from the Manufacturer’s Fund, which was established in 1994 when DEMA was re-organized to include all stakeholders in the Diving Industry.

The Fund is composed of 5% of the gross receipts from DEMA Show each year and is used at the discretion of the manufacturers to promote recreational diving. The allocation of the funds follows a Board-approved process, and the Manufacturer’s Committee has been supportive of many different initiatives over the years.

The Manufacturer’s Fund allocated $122,000 in promotions for the industry during 2014. Programs supported include: • • • • • •

Be A Diver Pool Tour Manufacturing Sales Index (MSI) Be a Diver Program/Promotion of DiveCaching Diving Industry Strategic Planning AnySite-MicroBuild Sponsorship Funding/Retail Retention DEMA Member Promotions

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The Diving Equipment & Marketing Association (DEMA) 3750 Convoy Street Suite 310 San Diego, CA 92111 858-616-6408 www.dema.org