### APPENDIX 13A. THE LOW-VOLUME MANUFACTURER

TABLE OF CONTENTS

13A.1 INTRODUCTION ...................................................................................................... 13A-1 13A.2 SEGMENT REVENUES............................................................................................ 13A-1 13A.3 SHIPMENT VOLUMES ............................................................................................ 13A-4

LIST OF TABLES
Table 13A.2.1 Reported LVM Revenue by Product Line ...................................................... 13A-1 Table 13A.2.3 LVM Revenues by Market Segment............................................................... 13A-2 Table 13A.2.4 Stated LVM Revenue by Product and Market Segment ($MM) .................... 13A-2 Table 13A.2.5 Disaggregated LVM Wa sher Revenues ($MM)............................................. 13A-3 Table 13A.2.6 DOE Estimate of LVM Washer Revenue Percentages ($MM)...................... 13A-3 Table 13A.3.1 DOE Estimate of LVM Clothes Washer Unit Shipments (2006)................... 13A-5

LIST OF FIGURES
Figure 13A.2.1 LVM Clothes Washer Revenue ($MM) by End-User and Drum Orientation in 2006. ........................................................................................ 13A-4

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### APPENDIX 13A: THE LOW-VOLUME MANUFACTURER

13A.1 INTRODUCTION The purpose of this appendix is to clarify how the Department of Energy (DOE) made its estimates regarding the shipment volumes and th e 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 th e U.S. Securities and Exchange Commission (SEC) which were supplemented with statements to DOE.
From 2002 to 2005, the annual reports broke ou t the approximate revenue that each LVM product line generated. In its annual reports, the LVM also stated th e revenues by end-user market segment; i.e. , residential and commercial. The LVM recorded no residential revenues from 1999 to 2004 due to a non-compete agreem ent. In 2004, the non-compete agreement expired and residential sales recommenced.

13A.2 SEGMENT REVENUES
Table 13A.2.1 details DOE’s analysis of re ported revenues for the LVM disaggregated by product type and market segment as a percentage of total revenue.
Table 13A.2.1 Reported LVM Revenue by Product Line Year Category 2002 2003 2004 2005 2006 Washer Extractors Top Load Washers Front Load Washers 26% 17% 5% 25% 17% 4% 24% 16% 5% 25% 14% 6% 24% 15% 6% All Washers
Tumbler Dryers Standard Dryers 48%

21% 11% 46%

22% 11% 45%

22% 11% 45%

23% 11% 45%

23% 11% All Dryers
Presses + Finishing Service Parts Value-Added Services Other-Sourced Product 32%

3% 14% 3% 0% 33%

3% 14% 2% 2% 33%

3% 14% 2% 3% 34%

2% 13% 3% 3% 34%

2% 13% 2% 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 2002 to 2006, as shown in Table 13A.2.2. “Other” re venues refer to revenues from transactions due to an acquisition that the LVM completed in 2006.

13A-1

### Table 13A.2.2 LVM Revenues by Market Segment ($MM) Year 2002 2003 2004 2005 2006 Residential Revenue Commercial Revenue Service Parts Other $0.0 $220.1 $35.5 $0.0 $0.0 $230.7 $36.9 $0.0 $3.6 $232.9 $38.2 $0.0 $8.5 $268.3 $40.5 $0.0 $14.4 $282.9 $45.7 $23.1 Annual Revenue $255.6 $267.6 $281.0 $317.3 $366.1

DOE subsequently overlaid the tables listi ng revenues by product category and revenue by market segment in order to disaggregate th e revenues by market segment and product line, shown below in Table 13A.2.3. The LVM subs equently reviewed a nd corrected the DOE estimates.
Table 13A.2.3 Stated LVM Revenues by Product and Market Segment ($MM) Year Category 2002 2003 2004 2005 2006 Residential Sales Revenue Top-Load Washers Front-Load Washers Standard Dryers $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $1.5 $0.8 $1.3 $4.4 $0.9 $3.2 $8.7 $0.6 $5.1 Sub-Total

Commercial Sales Revenue Top-Load Washers Front-Load Washers Standard Dryers $0.0

$43.3 $11.8 $29.3 $0.0

$45.8 $12.1 $31.1 $3.6

$42.9 $14.2 $29.3 $8.5

$41.5 $15.1 $30.3 $14.4

$42.8 $19.2 $30.7 Sub-Total
Attributable Service Parts Revenue $84.4 $12.1 $89.0 $12.6 $86.4 $12.5 $86.9 $12.6 $92.7 $14.5
Total Washer + Dryer Revenues $96.5 $101.6 $102.5 $108.0 $121.6

Total LVM Revenues Washer + Dryer + Parts Revenue % $255.6 37.8% $267.6 38.0% $281.0 36.5% $317.3 34.0% $366.1 33.2%


### Table 13A.2.3 illustrates how important the cl othes washer plus dryer business is estimated to be for the LVM. The percentage of total revenues 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 revenues comes primarily from high-capacity co mmercial laundry equipment. Standard dryer sales are usually bundled with clothe s washer sales; hence, their incl usion in the above analysis.
Besides providing revenue, the clothes washer and standard dryer sales give the LVM the scale to help in purchasing parts and raw materi als, and to help amortize equipment and tooling

13A-2

### investments. If standard drye rs and their estimated parts reve nues were to be removed from Table 13A.2.1, the importance of the washer business remains evident in Table 13A.2.4.

Table 13A.2.4 Disaggregated LVM Washer Revenues ($MM) Year Category 2002 2003 2004 2005 2006 Residential Sales Top-Load Washers Front-Load Washers $0.0 $0.0 $0.0 $0.0 $1.5 $0.8 $4.4 $0.9 $8.7 $0.6 Sub-Total

Commercial Sales Top-Load Washers Front-Load Washers $0.0

$43.3 $11.8 $0.0

$45.8 $12.1 $2.3

$42.9 $14.2 $5.3

$41.5 $15.1 $9.3

$42.8 $19.2 Sub-Total
Attributable Service Parts Revenue $55.1 $7.9 $57.9 $8.2 $57.1 $8.3 $56.6 $8.2 $62.0 $9.7
Total Washer + Dryer Revenues $63.0 $66.1 $67.7 $70.1 $81.0

Total LVM Revenues Washer + Dryer + Parts Revenue % $255.6 24.6% $267.6 24.7% $281.0 24.1% $317.3 22.1% $366.1 22.1%



### While the revenues of the clothes washer busines s have been declining as a percentage of overall sales from over 25 percent in 2002 to le ss than 22 percent in 2006, the clothes washer business remains a substantial business unit for the LVM. Ta ble 13A.2.5 lists the relative importance of washer platforms and market segments to the LVM. Table 13A.2.5 DOE Estimate of LVM Washer Revenue Percentages ($MM) Year 2002 2003 2004 2005 2006 Revenue Percentage by Product Line Top Loader 77.3% 81.0% 76.2% 70.0% 65.2% Front Loader 22.7% 19.0% 23.8% 30.0% 34.8%
Revenue Percentage by Market Segment Residential 0.0% 0.0% 4.1% 10.2% 13.2% Commercial 100.0% 100.0% 95.9% 89.8% 86.8%

Although the revenues of front-loading clothe s washers have increased, top-loading commercial clothes washers continue to represent the majority of sales. Figure 13A.2.1 details the product and market segment data for the LVM in 2006.

13A-3Residential Parts Sales, $1.3, 2%Residential TopLoader, $8.7, 11% Commercial FrontLoader , $19.2, 24% Residential Front- Loader, $0.6, 1%
Commercial Parts Sales, $8.4, 10%

Commercial TopLoader, $42.8, 52%



### Figure 13A.2.1 LVM Clothes Washer Reve nue ($MM) by End-User and Drum Orientation in 2006.
The potential impact of an energy efficiency standard that eliminates top-loading commercial clothes washers could thus be qui te significant. The commercial top-loading business alone represents over 52 percent of tota l 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.

13A.3 SHIPMENT VOLUMES
While annual reports from subsequent years show significant growth in the residential market segment, commercial sales are still sign ificantly higher. Based on the pricing survey (Table 3.11.2) and the published clothes washer markups (Table 8.2.42 in Chapter 8 of this TSD), DOE made the following shipments estim ates for this manufacturer as of 2006.

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### Table 13A.3.1 DOE Estimate of LVM Cl othes Washer Unit Shipments (2006)

Market Segment Drum Axis Estimated 2005 Revenues

($MM) EndUser Clothes Washer

Cost* Total Clothes Washer Markup** Mfgr. Markup* * Shipment Volume by Sales Channel

Commercial TopLoading

FrontLoading $42.8

$19.2 /

/ $824
$1,355 X

X 1.93

1.93 /

/ 1.23

1.23 =

= 81,502

22,234

Residential TopLoading

FrontLoading $8.7

$0.6 /

/ $697
$1,332 X

X 1.93

1.93 /

/ 1.23

1.23 =

= 19,586

707 Total Mfg Volume (units) = 124,028

* See Chapter 3 of the ANOPR TSD ** See Chapter 8 of the ANOPR TSD 

### Shipments Assumptions

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

– Commercial units require a coin box; and

– Residential units do no t require a coin box.

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