APPENDIX 5C. THE LOW-VOLUME MANUFACTURER

TABLE OF CONTENTS 

5C.1 INTRODUCTION ...................................................................................................5C-1 

5C.2 SEGMENT REVENUES.........................................................................................5C-1 

5C.3 SHIPMENT VOLUMES .........................................................................................5C-4 

LIST OF TABLES 

Table 5C.2.1 Reported LVM Revenue by Product Line ...................................................5C-1 

Table 5C.2.2 Reported LVM Revenue by Market Segment ($MM).................................5C-2 

Table 5C.2.3 Stated LVM Revenue by Product and Market Segment ($MM) .................5C-2 

Table 5C.2.4 Disaggregated LVM Washer Revenues ($MM) ..........................................5C-3 

Table 5C.2.5 LVM Product Importance and Segment Revenues ($MM) .........................5C-3 

Table 5C.3.1 DOE Estimate of LVM Clothes Washer Unit Shipments (2006) ................5C-5 

LIST OF FIGURE 

Figure 5C.2.2 LVM Clothes Washer Revenue ($MM) by End-User and Drum 

Orientation in 2006 ......................................................................................5C-4 

5C-i 

EE-2006-STD-0127 COMMENT 39.2
APPENDIX 5C. THE LOW-VOLUME MANUFACTURER 

5C.1 INTRODUCTION 

The purpose of this appendix is to clarify how DOE made its estimates regarding the 

shipment volumes and the importance of the commercial clothes washer business to the low 

volume manufacturer (LVM). To make its estimates, DOE relied on statements made by the 

LVM in its audited annual reports filed with the Securities and Exchange Commission (SEC) 

which were supplemented with statements to DOE. 

From 2002 to 2005, the annual reports broke out the approximate revenue that each LVM 

product line generated. In its annual reports, the LVM also stated the revenues by end-user 

market segment, residential and commercial. The LVM recorded no residential revenues from 

1999 to 2004 due to a non-compete agreement. In 2004, the non-compete agreement expired and 

residential sales recommenced. 

5C.2 SEGMENT REVENUES 

Table 5C.2.1 details DOE’s analysis of reported revenues for the LVM disaggregated by 

product type and market segment as a percentage of total revenue. 

Table 5C.2.1 Reported LVM Revenue by Product Line 

Category 

Year 

2002 2003 2004 2005 2006 

Washer Extractors 26% 25% 24% 25% 24% 

Top Load Washers 17% 17% 16% 14% 15% 

Front Load Washers 5% 4% 5% 6% 6% 

All Washers 48% 46% 45% 45% 45% 

Tumbler Dryers 21% 22% 22% 23% 23% 

Standard Dryers 11% 11% 11% 11% 11% 

All Dryers 32% 33% 33% 34% 34% 

Presses + Finishing 3% 3% 3% 2% 2% 

Service Parts 14% 14% 14% 13% 13% 

Value-Added Services 3% 2% 2% 3% 2% 

Other - Sourced Product 0% 2% 3% 3% 4% 

Other 20% 21% 22% 21% 21% 

Total 100% 100% 100% 100% 100% 

The LVM also listed commercial, residential, and service parts revenue for every year 

from 2002 to 2006, as shown in Table 5C.2.2. “Other” revenues refer to revenues from 

transactions due to an acquisition that the LVM completed in 2006. 

5C-1 

EE-2006-STD-0127 COMMENT 39.2
Table 5C.2.2 Reported LVM Revenue by Market Segment ($MM) 

Year 2002 2003 2004 2005 2006 

Residential Revenue $0.0 $0.0 $3.6 $8.5 $14.4 

Commercial Revenue 220.1 230.7 239.2 268.3 282.9 

Service Parts $35.5 $36.9 $38.2 $40.5 $45.7 

Other $0.0 $0.0 $0.0 $0.0 $23.1 

Total Annual Revenue $255.6 $267.6 $281.0 $317.3 $366.1 

DOE subsequently overlaid the tables listing revenue by product category and revenue by 

market segment in to disaggregate the revenue by market segment and product line, shown 

below in Table 5C.2.3. The LVM subsequently reviewed and corrected the DOE estimates. 

Table 5C.2.3 Stated LVM Revenue by Product and Market Segment ($MM) 

Category 

Year 

2002 2003 2004 2005 2006 

Residential Sales Revenue 

Top-Load Washers $0.0 $0.0 $1.5 $4.4 $8.7 

Front-Load Washers $0.0 $0.0 $0.8 $0.9 $0.6 

Standard Dryers $0.0 $0.0 $1.3 $3.2 $5.1 

Sub-Total $0.0 $0.0 $3.6 $8.5 $14.4 

Commercial Sales Revenue 

Top-Load Washers $43.3 $45.8 $42.9 $41.5 $42.8 

Front-Load Washers $11.8 $12.1 $14.2 $15.1 $19.2 

Standard Dryers $29.3 $31.1 $29.3 $30.3 $30.7 

Sub-Total $84.4 $89.0 $86.4 $86.9 $92.7 

Attributable Service Parts Revenue $12.1 $12.6 $12.5 $12.6 $14.5 

Total Washer + Dryer + Parts Revenue $96.5 $101.6 $102.5 $108.0 $121.6 

Total LVM Business $255.6 $267.6 $281.0 $317.3 $366.1 

Washer + Dryer + Parts Revenue % 37.8% 38.0% 36.5% 34.0% 33.2% 

Table 5C.2.3 illustrates how important the clothes washer plus dryer business is estimated 

to be for the LVM. The percentage of total revenue represented by the washer and dryer market 

has shrunk from 38% in 2002 but still represents about a third of its total revenues in 2006. 

Thus, this product category remains very important to the LVM. The balance of revenue comes 

primarily from high-capacity commercial laundry equipment. Standard dryer sales are usually 

bundled with clothes washer sales, hence their inclusion in the above analysis. 

Besides providing revenue, the clothes washer and standard dryer sales give the LVM 

scale to help purchase parts, raw materials, and to help amortize equipment and tooling 

investments. If standard dryers and their estimated parts revenues were to be removed from 

Table 5C.2.3, the importance of the washer business remains evident in Table 5C.2.4. 

5C-2

EE-2006-STD-0127 COMMENT 39.2
Table 5C.2.4 Disaggregated LVM Washer Revenues ($MM) 

Category 

Year 

2002 2003 2004 2005 2006 

Residential Sales 

Top-Load Washers $0.0 $0.0 $1.5 $4.4 $8.7 

Front-Load Washers $0.0 $0.0 $0.8 $0.9 $0.6 

Sub-Total $0.0 $0.0 $2.3 $5.3 $9.3 

Commercial Sales 

Top-Load Washers $43.3 $45.8 $42.9 $41.5 $42.8 

Front-Load Washers $11.8 $12.1 $14.2 $15.1 $19.2 

Sub-Total $55.1 $57.9 $57.1 $56.6 $62.0 

Attributable Service Parts $7.9 $8.2 $8.3 $8.2 $9.7 

Total Washer + Parts Revenue $63.0 $66.1 $67.7 $70.1 $81.0 

Total LVM Revenues $255.6 $267.6 $281.0 $317.3 $366.1 

Washer + Parts Revenue % 24.6% 24.7% 24.1% 22.1% 22.1% 

While the revenue of the clothes washer business has been declining as a percentage of 

overall sales from 25 percent in 2002 to an estimated 22 percent in 2006, the clothes washer 

business remains a substantial business unit for the LVM. Table 5C.2.5 lists the relative 

importance of washer platforms and market segments to the LVM. 

Table 5C.2.5 LVM Product Importance and Segment Revenues ($MM) 

Year 

2002 2003 2004 2005 2006 

Revenue Percentage by Top Loader 78.6% 79.1% 74.7% 74.2% 72.2% 

Washer Type Front Loader 21.4% 20.9% 25.3% 25.8% 27.8% 

Revenue Percentage by End- Residential 0.0% 0.0% 3.9% 8.6% 13.0% 

Market Commercial 100.0% 100.0% 96.1% 91.4% 87.0% 

Although the revenues of front-loading clothes washers have increased, top-loading 

commercial clothes washers continue to represent the majority of sales. Figure 5C.2.2 details the 

product and market segment data estimates for the LVM in 2006. 

5C-3

EE-2006-STD-0127 COMMENT 39.2
Commercial Parts Residential TopSales, $8.4, 10% 

Sa

Loader, $8.7, 11% Residential FrontLoader, $0.6, 1% 

Residential Parts 

les, $1.26, 2% 

Commercial FrontLoader, $19.2, 

24%

Commercial TopLoader, $42.8, 

52% 

Figure 5C.2.2 LVM Clothes Washer Revenue ($MM) by End-User 

and Drum Orientation in 2006 

The potential impact of an energy efficiency standard that eliminates vertical-axis 

commercial clothes washers could thus be quite significant. Just the commercial vertical-axis 

business represents over 52 percent of total clothes washer plus parts sales and about 12 percent 

of total LVM revenues. Accounting for the bundled parts and dryer sales increases the 

importance of the commercial clothes washer sales further. 

5C.3 SHIPMENT VOLUMES 

While annual reports from subsequent years show significant growth in the residential 

market segment, commercial sales are still significantly higher. Based on the pricing survey 

(Table 3.11.2 and Figure 3.11.1 of this TSD) and the published clothes washer markups (Table 

8.2.42 of this TSD), DOE made the following shipment estimates for this manufacturer as of 

2006. 

5C-4

EE-2006-STD-0127 COMMENT 39.2
Table 5C.3.1 DOE Estimate of LVM Clothes Washer Unit Shipments (2006) 

Market 

Segment Drum Axis 

2006 

Revenues 

($MM) 

End User 

Clothes 

Washer 

Cost *

Total 

Clothes 

Washer 

Markup** 

Mfgr. 

Markup 

Shipment 

Volume by 

Sales 

Channel 

Residential 

Commercial Top-Loader 

Front-Loader 

Top-Loader 

Front-Loader 

$42.8 / 

$19.2 / 

$8.7 / 

$0.6 / 

$824.00 x 

$1,355.00 x 

$697.00 x 

$1,332.00 x 

$1.93 / $1.23 = 

$1.93 / $1.23 = 

$1.93 / $1.23 = 

$1.93 / $1.23 = 

81,502 

22,234 

19,586 

707 

Total Mfg Volume (units) 124,028 

* See Chapter 3 of the TSD 

** See Chapter 8 of the TSD 

 Shipments Assumptions 

• End-user prices depend on the presence of a coin box. Further, 

– Commercial units require a coin box; and 

– Residential units do not require a coin box. 

5C-5 

EE-2006-STD-0127 COMMENT 39.2