INTERLINE BRANDS PY ea ed et ete eyTABLE OF CONTENTS: SEGMENT OVERVIEW... BRAND STRATEGY INITIATIVES .... COMPETITIVE LANDSCAPE.. AMAZON SUPPLY .. ARIZONA PARTSMASTER... BERGQUIST... CENTRAL WHOLESALERS ..... CLARK SECURITY... FASTENAL ... FERGUSON.. GRAINGER... HD SUPPLY.. HL FLAKE. LOWE’S . MENARDS..... MSC INDUSTRIAL SUPPLY .... RAY MURRAY STAPLES ADVANTAGE... UNISOURCE WATSCO.. XPEDEX..MARKET SEGMENT OVERVIEW: = SBINTERLINE 41) INSTITUTIONAL SEGMENT ($800 MILLION): © TARGET CUSTOMERS: * Building service contractors, property management companies, other cleaning services in need of janitorial supplies, healthcare facilities, educational facilities, manufacturing companies, etc © DIRECT SEGMENT COMPETITION: + HD Supply, Grainger, Staples, as well as numerous small-scale regional brands © DRIVING SOLUTIONS: + Commercial tenant retention, lower student absenteeism, less water usage, cleaner air in healthcare facilities, etc 2) MULTI-FAMILY SEGMENT ($480 MILLION): © TARGET CUSTOMERS: + Three tiers of apartment owners: 4. Large corporate (180,000+ units) 2. Mid-size managers (20-40 complexes) 3. Small owners (1 or 2 200-unit complexes) © DIRECT SEGMENT COMPETITION: + HD Supply, regional players such as Central Wholesalers and Arizona Partsmaster, and also online players like Amazon Supply © DRIVING SOLUTIONS: + Smarter purchasing and supply chain efficiency, cutting costs out of the procurement process, and soft cost savings for all of the product buying 3) RESIDENTIAL/RESALE/WHOLESALE SEGMENT ($320 MILLION): TARGET CUSTOMERS: + Plumbers, electricians, HVAC service contractors, small retailers & distributors who resell products (ie. Hardware Express sells to independent hardware store owners), and also niche brands from sell-offs © DIRECT SEGMENT COMPETITION: + Ferguson, Watsco, and very fragmented local/regional distributors © DRIVING SOLUTIONS: = Ways to reduce inventory & vendor-managed inventory programs, minimize holding costs ALL THREE SEGMENTS SELL THROUGH A MIX OF NATIONAL & FIELD SALES, CATALOGS & CIRCULARS, ONLINE, and TELESALESBRAND STRATEGY INITIATIVES: SMBINTERLINE INTERLINE BRAND’S END-GAME: © Develop brand structure and proposition that allows it to achieve scale and the highest possible perception of end-market expertise, which will lead to consumer preference that will ultimately lead to growth and the highest profit KEY THEMES: © Category qualifiers are price, availability and delivery — need to be solid, but cannot solely rely on these for strategy planning and achieving overall goals © “Transcend the SKU? - key to success, where selling is about selling solutions rather than selling parts + SKU- Stock-Keeping Unit, the need to conquer inventory processes © Growing in national accounts causes leakage in small accounts, thus hurting organic growth Must have strong sales model and e-commerce platform Ways to make a brand that is relevant to both corporate VP of Facilities AND a field maintenance man needing parts Needs to be some level of brand consolidation © Customers seek fewer vendors — open to a new name that can reduce amount of vendors © Reiterate brand DNA: solvers, exceeding expectations, accountable, invested, pride in their brand, entrepreneurial, dedicated, positive energy, passion, looking out for the customer, and a figure-it-out culture © Merchandising bias vs. customer-centricity bias © Establish meaningful tone to brand KEY PURSUITS: inform right brand architecture path, defining the true value that is both desired by customers AND seen in Interline BrandsAMAZON SUPPLY: amazonsupply PRIMARY BRAND MESSAGE: © “The Store for Business and Industry” VALUE-ADD SOLUTIONS: © "We aim to offer Earth's largest selection of essential products for businesses, labs, workshops and factories" + They offer the choice of ease over price, Amazon Supply has gained significant favoritism due to its clear, online system They are every businesses’ stress-free, one-stop-shop BRAND PERSONALITY: © Modern, simple design with layout similar to most e-commerce sites + Youthful, Friendly, and up-to-date SEGMENT(S): eo Multi-Family PRODUCT FOCUS: © Office equipment and industrial supplies GEOGRAPHY: © GlobalARIZONA PARTSMASTER: AZ PARTSMASTER YOUR COMPLETE MAINTENANCE SUPPLIER PRIMARY BRAND MESSAGE: © “Your Complete Maintenance Supplier” VALUE-ADD SOLUTIONS: © Will make your job easier Giving you only one choice, one source, and one invoice BRAND PERSONALITY: © Progressive, humorous site with simplified e-commerce method — similar to Amazon SEGMENT(S): eo Multi-Family PRODUCT FOCUS: © Full-line MRO supplier and industrial products GEOGRAPHY: © Primarily western United StatesBERGQUIST: PRIMARY BRAND MESSAGE: © “Innovation, Performance and Customer Satisfacti VALUE-ADD SOLUTIONS: © Provides the highest quality of enhancements and military-grade products on the market + Stronger durability of products BRAND PERSONALITY: o Classic and traditional, but also has a more “technical” and science-related feel to it SEGMENT(S): ©. Institutional PRODUCT FOCUS: © Thermal Interface Materials, Thermal Substrates, Fans & Blowers, and Membrane Switches GEOGRAPHY: © Based in the Upper Midwest region, but has expanded into a global supplierCENTRAL WHOLESALERS: entral WHOLESALERS, INC. PRIMARY BRAND MESSAGE: o “We Are Central to Your Business” VALUE-ADD SOLUTIONS: © Free training to customers, maxi izes profitability, and aids the organization of maintenance shops BRAND PERSONALITY: © Classic, old-fashioned, but with a sense of reliability SEGMENT(S): eo Multi-Family PRODUCT FOCUS: o Maintenance Products, In-House Production: Screens & Blinds, Custom Cabinets & Countertops, Tub, Tile & Countertop Refinishing, and Full-Service Renovations GEOGRAPHY: © South Carolina to MassachusettsCLARK SECURITY: CLARK an Anixter company PRIMARY BRAND MESSAGE: o “One team, earning customer loyalty everyday” VALUE-ADD SOLUTIONS: o Growth of people and profits as well as shared rewards - maximizes businesses + Convenient and paperless solutions BRAND PERSONALITY: o Plain and boring, yet simple and reliable SEGMENT(S): © Institutional PRODUCT FOCUS: o Communications and security products GEOGRAPHY: o NationwideFASTENAL: PRIMARY BRAND MESSAGE: © “Growth Through Customer Service” VALUE-ADD SOLUTIONS: ©. Efficiency with cost saving opportunities © Local locations allow quick-response, product flow, and no-hassle restock processing — Same-day solutions + High-volume production solutions have led to 70,000 jobs, with a spectrum of services that accompany the products BRAND PERSONALITY: © Progressive, diverse, clean, efficient and reliable SEGMENT(S): © Institutional PRODUCT FOCUS: © Wholesale distributor of industrial and construction supplies GEOGRAPHY: © GlobalFERGUSON: 43 FERGUSON’ PRIMARY BRAND MESSAGE: © “Nobody expects more from us than we do” VALUE-ADD SOLUTIONS: © Green product solutions and providing a safe and secure workplace environment + Inventory status, real-time solutions, and convenience of processing BRAND PERSONALITY: © Fresh and youthful SEGMENT(S): o ResidentialResalelWholesale PRODUCT FOCUS: o Wholesale Distributor, Plumbing, HVAC equipment, PVF, and Waterworks GEOGRAPHY: © Continental US, Puerto Rico, Mexico, and the Caribbean 40GRAINGER: GRAINGER tl rue ad PRIMARY BRAND MESSAGE: o “For the Ones Who Get it Done” VALUE-ADD SOLUTIONS: o Reduce the number of your suppliers-buying only what you need, when you need it o Standardize the products you use, reduce inventory, and improve product availability o Cutthe time it takes to manage your inventory, maximize space, and keep inventory organized — less down time o Fewer work-related injuries, improved regulatory compliance, reduce energy costs, cut waste and water consumption, and improve air quality BRAND PERSONALITY: o Home improvement store feel + Simple, industrial, and reliable SEGMENT(S): o Institutional PRODUCT FOCUS: o Supply Chain Management, Facilities Management, MRO, Light and Heavy Manufacturing, Healthcare, Inventory Management Solutions, Safety Services, Hospitality, Transportation, and Keepstock GEOGRAPHY: © Global - 157 countries 1HD SUPPLY: --DSUPPLY. PRIMARY BRAND MESSAGE: o “Always on the Job” VALUE-ADD SOLUTIONS: o Quality name-brand products at competitive prices. o Leading-edge technology, eco-friendly product offerings, job site delivery, emergency response, localized, strategic market locations, will-call and direct ship options * Diversified logistics with delivery or staging for pick up, and extensive industry knowledge BRAND PERSONALITY: o Modern and metropolitan-friendly SEGMENT(S): o Institutional & Multi-Family PRODUCT FOCUS: o Maintenance, Repair and Operations (MRO), Infrastructure and Power, and Specialty Construction + An Industrial Distribution Company GEOGRAPHY: o 46 states, Puerto Rico, and 9 Canadian provinces 42HL FLAKE: hfe O.L. FLAKE SECURITY HARDWARE PRIMARY BRAND MESSAGE: © “HL Flake for all you supply needs!” VALUE-ADD SOLUTIONS: © “Strong, stocked inventories allow for H.L. Flake to always meet its customers’ needs” BRAND PERSONALITY: © Outdated, difficult, text-heavy company/website with poor visual appearance SEGMENT(S): o ResidentialResalelWholesale PRODUCT FOCUS: © Security Hardware GEOGRAPHY: © Nationwide — primarily central US 13LOWE’S: “IMPROVING PRIMARY BRAND MESSAGE: © “Never Stop Improving” VALUE-ADD SOLUTIONS: © The Lowe's Business Credit Account, Lowe’s Business Rewards Card from American Express and Accounts Receivable programs give you the flexibility, convenience and financial power to get the job done + twill save you time, money, make your business run smoother, and get you out of the store and back on the job faster BRAND PERSONALITY: c Home improvement store, friendly, modern, simple, and reliable SEGMENT(S): eo Multi-Family PRODUCT FOCUS: © Building & Remodeling, Property Management, Maintenance & Repair, and Construction & Trade GEOGRAPHY: © 1,750 stores in the United States, Canada and Mexico 14MENARDS: PRIMARY BRAND MESSAGE: o “Dedicated to Service & Quality” VALUE-ADD SOLUTIONS: © Commercial tenant retention with a cleaner work environment due to better cleaning products, waste management systems, safer handling of materials, and higher quality paper products + Supply-Chain efficiency BRAND PERSONALITY: © Traditional, friendly, homey, and rural SEGMENT(S): © Institutional & Residential/ResalelWholesale PRODUCT FOCUS: © Cleaning Products, Material Handling, Planters, Vinyl Strip Doors & Air Curtains, Food Service Products, Paper Products, Safety, and Waste Managem ent GEOGRAPHY: © 14-state, Midwest region 415MSC INDUSTRIAL SUPPLY: ® Industrial Supply Co. PRIMARY BRAND MESSAGE: o “Our mission is to be the best Industrial Distributor in the world, as measured by our associates, customers, owners and suppliers” VALUE-ADD SOLUTIONS: o A “need it now" attitude, with guaranteed next-day shipping for the most effective level of supply-chain efficiency BRAND PERSONALITY: o Industrial and traditional, with an outdated, cluttered website SEGMENT(S): o Institutional & Wholesale PRODUCT FOCUS: o Propane Equipment, Bobtail, Transport, Plant & Industrial Equipment, Compressed Gas Equipment, Hearth Products, Grills & Outdoor Living Products, and Heating & Air Conditioning GEOGRAPHY: o Northeast and Midwest US regions 16RAY MURRAY: RAY MURRAY INC. GAS EQUIPMENT DISTRIBUTORS PRIMARY BRAND MESSAGE: © “RMI: Your #1 gas equipment and hearth products supplier!” VALUE-ADD SOLUTIONS: © “Because we offer so many SKU’s, our products are organized and managed in Product Groups. A product manager is the overall product group expert and responsible for determining what products we market and sell, coordinating our relationship with manufacturers, and training our customer service and warehouse employee teams. This facilitates the best communication of information and, ultimately, provides a much demanded value added resource to Customers.” BRAND PERSONALITY: © Outdated, old, classic, and disorganized SEGMENT(S): o ResidentialResalelWholesale PRODUCT FOCUS: © Cleaning Products, Material Handling, Planters, Vinyl Strip Doors & Air Curtains, Food Service Products, Paper Products, Safety, and Waste Managem ent GEOGRAPHY: © 14-state, Midwest region 47STAPLES ADVANTAGE: Advantage PRIMARY BRAND MESSAGE: © “Your Business. Your Advantage" & "We make buying office products easy” VALUE-ADD SOLUTIONS: © “Customized Programs ensure EXACTLY what you need, ONE source for everything your office will need, Sustainable Purchasing, Support for Diversity, Local Partnerships, Lower Costs, Greater Convenience, Minimized Risk, and Responsible Purchases” BRAND PERSONALITY: © Clean, simple, helpful, and friendly SEGMENT(S): © Institutional PRODUCT FOCUS: © Office Products, Facility Solutions, Breakrooms, Technology Solutions, Managed Print Services, Furniture, Promotional Products, and Print Solutions GEOGRAPHY: © North America 18UNISOURCE: &. unisource* PRIMARY BRAND MESSAGE: © “Experience Efficiency Reimagined” VALUE-ADD SOLUTIONS: WAREHOUSING: 85 locations across North America and 15 million square feet of warehouse space available to you. FULFILLMENT: With our advanced technology means your orders get processed at lightning speed improving your time to market. PICK-PAGI With a proven track record of providing both low-volume and large-scale pick-pack fulfillment, we can help you better manage your Supply Chain leveraging Unisource's advance technology capabilities. KITTING AND ASSEMBLY: An expert team of dedicated product assembly experts who know how to get any product to market faster and ‘more accurately than anyone else in the industry. PACKAGE DESIGN: We offer a complete packaging system audit that leads to automation, improved packaging design and the Jowest total operating cost solutions. ‘SOURCING: ‘No matter if you demand local, regional, national or international sourcing, we have the know-how to search and find the right supplier to meet your specific needs. CONTRACT PACKAGING We provide the labor, equipment, location and knowledge to create the very best package for your company's goods. BRAND PERSONALIT © Modern, organized, and energetic SEGMENT(S): © Institutional PRODUCT FOCUS: © Packaging Design, Paper, Janitorial Supplies, Graphic Imaging, Sustainability, Third Party Logistics, Packaging and Containers, Digital Printing, Commercial Printing, Sanitary Supplies, Facilities Supplies, Janitorial Equipment, Supply Chain, and Operations GEOGRAPHY: © Global 19WATSCO: watsco Comfort for Every Season PRIMARY BRAND MESSAGE: © “Giving Comfort for Every Season” VALUE-ADD SOLUTIONS: More Products at the Point-of-sale More Convenience from New Locations Internet e-commerce for Virtual Locations Open 24x7 More Know-How to Build Our Customers’ Success BRAND PERSONALITY: © Modern, organized, progressive, clean, and “green” SEGMENT(S): © Institutional & Residential/Resale/Wholesale PRODUCT FOCUS: Air conditioners, furnaces and related parts (50%) Air movement products, including ductwork and insulation (25%) Controls, including thermostats and air treatment systems (15%) Refrigeration products (10%) GEOGRAPHY: © 570 locations in 38 U.S. states, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to Latin America and the CaribbeanXPEDEX: PRIMARY BRAND MESSAGE: © “We Are Distribution Excellence” VALUE-ADD SOLUTIONS: EDUCATION: Educational facilities must create conditions that promote health and wellness, and do it while managing costs. FACILITY MANAGEMENT: Property managers, facility managers and building service contractors must provide a healthy, clean and ‘sustainable environment their tenants, visitors, employees and customers. HEALTHCARE Healthcare facility managers and environmental services managers have to provide healthy, clean and ‘sustainable environments for their patients, visitors and employees. MANUFACTURING: End-to-end solutions — from packaging line operations and equipment to package design, distribution and delivery. PRINTING & PUBLISHING: For printing and publishing professionals, xpedx integrates products and services for digital, offset and wide format production, as well as color and workflow optimization, bindery and finishing. RETAIL: Whether you need to support brand guidelines with specific packaging supplies or you need not-for-retail products to keep business running smoothly. BRAND PERSONALIT o Reliable, Professional, Progressive, Corporate-feel, Clean, and “Green” SEGMENT(S): © Institutional & Residential/Resale/Wholesale PRODUCT FOCUS: © National Distributor of Packaging, Facility Solutions, and Printing Supplies & Equipment GEOGRAPHY: © US and Mexico — 85 distribution centers 24