Product Line ReviewPortable Fans

Chicago American Manufacturing, dba CamAir LLCEric Hunger - VP Sales and Marketing, Camair

2

Discussion Topics

I. Company Overview & Capabilities Company Profile Manufacturing Capabilities Supply Chain Capabilities Current Performance with THD

II. Market Intelligence External Market Analysis Competitive Assessment – SWOT Analysis Customer Insights

III. Product Assortment Current Assortment Review Go Forward Assortment New Product Submissions

IV. Execution & Support Execution & Vendor Support

V. Financial Considerations Program Discounts

3

I. Company Overview & Capabilities

4

Company Profile

Key Customers - Chicago American Manufacturing

Financial ( 3 Year)Company Background

Key Customers - CamAir

Revenue Trends: Up 20% year over year.

Margin Trends: Maintaining historical levels.

Operating Profit Trends: Maintaining historical levels.

Key News Affecting Financial Stability: None

Place/Date of Incorporation: Chicago, IL in 1972

Public/Private: Privately Held

No. of Employees: 230

Geographic Locations/Capabilities: From our Chicago location, we service North, Central, and South America

Key Brands: AeroSpeed, Cool Master

5

Manufacturing Capabilities

Quality

Unique ExpertiseManufacturing Footprint

Sustainability Focus

List Any Quality Certifications (ISO 9000, etc): ISO 9000 certification for our Blackhawk Steel and Dockside Steel

Current Defect Rate: Less than 0.75%

Environmental, Heath & Safety Programs: Meet current OSHA standards.

Waste Reduction: All steel, cardboard products, and waste water are recycled.

Green Packaging: Recycled cardboard for packaging.

List & Describe Manufacturing Locations: Chicago, IL.

Annual Capacity in Units: 7.5 million units

Describe Investment in Continuous Improvement: CamAir has added $1.1MM in robotic equipment used to manufacture box fans, 4 new injection molding units and expanded warehouse capacity

Describe any Unique Technical Expertise: Our engineers have over 100 years in fan design and production.

Vertical Integration: Both Dockside Steel and Blackhawk Steel are owned and operated by Chicago American Mfg.(CA M). These factories provide steel and component parts for our fan production.

Describe Any Manufacturing Patents: CamAir has patents on motors and grills designs.

Describe Any R&D Investments: Developing motor mfg. in North America and new fans for 2013.

6

CamAir’s Chicago Facility

650,000 sq. ft. of production and warehouse space

Midwest’s largest powder coating line

Robotic laser and assembly

7.5 million units of fan capacity

7

Supply Chain Capabilities

1

All manufacturing and warehousing is centrally located in Chicago.

Camair ships product to customers in Canada, the entire United States, Mexico, and South America from the Chicago facilities.

8

Current Operational Performance with THD

Avg. last 13 week Fill Rate %: 99.0%

On Time Delivery Performance: 97.0%

Lead Time – Direct to Stores: 2 weeks

Lead Time – THD Regional DCs: 2 weeks.

Chicago American Mfg. (CAM), parent company of Camair LLC, has been supplying lumber carts and display fixtures to Home Depot for over 6 years. Based on this experience, our organization knows the commitment and the service levels that are required to be a key supplier to Home Depot. The following metrics are CAM’s performance indicators Y-T-D 2014.

9

II. Market Intelligence

10

External Market Analysis

Total Market Size: $430 million

Total Market Growth: 1-2%

Home Improvement Market Size: $118 million

Home Improvement Market Growth: 1-2%

Market Share Trends/Drivers: OPP box fan, 20” air circulator, and 16” pedestal fan drive 72% of the business.

Portable Fan Market Size by Channel

Overview Portable Fan Dollar Share % by Outlet

Market Share by Brand

Home Improvement

Mass merchandise

Co-op / Independent

Specialty

Wholesale / Distributor

Internet / Catalog

Other

$118 million

$229 million

$9 million

$22 million

$21 million

$25 million

$8 million

Home Depot

Lowe's

Walmart

Menards

Sears

Target

Ace

Amazon

Other

12%

13%

33%

1%

2%

17%

2%

2%

18%

Lasko

Jarden (Sunbeam and Holmes)

CamAir (Cool Master and Aerospeed)

Imports and Other

26%

23%

10%

41%

11

Competitive Assessment - SWOT Analysis

Opportunities

Strengths Weaknesses

Threats

Home Depot’s strong brand – communicates authority on product selection and instills trust in consumer

Competitive pricing

Assortment – product offering addresses key SKUs yet has fewer SKUs in store than competition making the set easier to manage and easier to shop

Home Depot store presence

Location of product (fans) within Home Depot stores is easily accessible and generally close to a high traffic area

Retail proliferation – many retail outlets offer at least a minimum number of portable fan SKUs

Competitors are selling below cost to drive traffic

Home Depot does not include certain elements of POP such as aisle violators and index card size signage that communicates key features and benefits of the fans

Home Depot does not utilize end caps to drive fan sales – end cap on the aisle with the fan bays could make a statement with the OPP 20” box fans and draw customers down the aisle

Undifferentiated product offering from competition

Opportunities to engineer more comps into assortment by selling customer up to a higher retail price item

Air circulator (20”), which sells at higher retail, is the #2 seller in the NE, Mid-Atlantic, and SE regions, yet air circulator unit volume for THD doesn’t illustrate this trend

Establish drum fans as a destination shop for the pro customer with more robust off-shelf program at pro end of store

12

Customer Insights

The fan customer is predominantly female

The consumer does not identify with any brands in portable fans

Portable fans is not a destination category

Customers do not “shop around” online or across various retail outlets when purchasing a fan

Consumers have a preference for a white/gray for most fans; consumer preference is black for desk fans

13

III. Product Assortment

14

Current Assortment ReviewBy Price Point Structure By Finish

By Style

15

V. Execution & Support

16

Execution and Vendor Support

Camair will work with The Home Depot to manage the weather swings in this seasonal business

To capitalize on weather-related sales opportunities, Camair proposes to keep extra fan SKUs (5% of overall forecast) in storage at our facilities in Chicago that will be ready to ship to stores within 24 hours

Camair manufacturers and assembles all fans included in this proposal in the U.S.(Chicago). The only component that is sourced from overseas is the fan motor. To hedge against any potential motor sourcing issues, Camair proposes to have all motors, that are forecasted as of October 1, 2011, physically in the U.S. by mid-January 2012.

Camair commits to proactively managing the business by analyzing POS data on a weekly basis to identify issues that are negatively impacting sales (e.g., zero on hands, zero or declining sales)