Edison, New Jersey – Site VisitSeptember 2016

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Agenda

1. Edison, NJ Introduction and Facility Overview

2. Site Capabilities, Markets, and Customers

3. Performance and Financial Information

4. Plant Tour

5. Q&A

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Edison, NJ Introduction and Facility Overview

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IntroductionLocation Facility

Product lines Solar shade window management systems.

Functions Custom product fabrication.

ProcessesFabric cutting, shade and bracket assembly, electrical component assembly, testing, and programming.

Leased / Owned Leased

Annual Lease Expense $324,000

Lease End 4 / 2025

Shifts (Current/Max) 2 / 3

Capacity Util. % 67% in 2016 / 67% in 2021

Sq. Ft. (‘000) 72# Employees 156

Key Facts

Edison, NJ

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MechoSystems East - 8 Sutton Pl. Edison, New Jersey 08817Tel: +1 (732) 339-0751

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Site History

Edison, New Jersey facility was leased and began operations in 2004.

Major product line expansions since 2004 include: Trapezoidal Shades (2006) First programmable motors (2006) SolarTrac (2007) Monumental Shades (2008) Sundialer (2009) IQ1 Std. Intelligent motors (2010) MagnaShade (2013) IQ2 Intelligent Programmable motors (2013) ShadeLoc (2014) Mecho Network Interface Controller (2015) Day Light Sensor Controller (2016) Mechonet Wireless Controller (2016)

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Shade Fabrication Area

Fabric Cutting Area

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Site Organization Chart

Winnie YuHR Manager

Tony LamDirector of Finance

Continuous Improvement & Engineering

Manager[Open]

Arlana FlynnSenior Buyer

Indirect Responsibility, Dual Reporting Direct Responsibility

Manufacturing hourly 114Warehouse hourly 12Operations / Office hourly 6TemporaryEngineering

101

IT 1HR 1OtherGrand Total

11156

Mark LangitQA Engineer

Maintenance Supervisor[Open]

Brian KeenanPlant Manager

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Heidy BocanegraShipping Supervisor

Johanny BritesHaydee CarhuaricraProduction Supervisors

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MechoSystems Edison, NJ: Fabrication Floor

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MechoSystems Edison, NJ: Office Area

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EquipmentHempocket/Splining (3)

Miller Weldmaster 112 ExtremeMoving head, hot-air spline welder.

Matic Ares-6000Spline and hempocket impulse welder.

Future Equipment ProjectsIncreased racking capacity.

Pick to Light systems.

Frontier Enterprise Resource Planning system.

Advanced riveting and automatic crimper/stripper machines to support bracket and cable assembly capacity increase.

Fabric cutting capacity increase.

Aeronaut - Fabric CutterCrush and Ultrasonic cutting capabilities.

Advanced cutting optimization – camera / optical mapping.

Fabric Cutting (4)

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Aeronaut Fabric Cutter

Matic Ares-6000 Miller Weldmaster

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Workforce

Total Number of Employees 156

Percentage Split of Permanent/Temps 93.6% / 6.4%

Turnover 4.27%

Safety (Recordable/Lost Time Rates) 2.67% / 0.00%

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Site Capabilities, Markets, and Customers

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Capabilities Fabricates highly engineered window management systems.

Specializes in hard-to-solve design and technical challenges, such as the shading of non-rectangular, sloping, high, wide, monumental, difficult-to-access, and other nonstandard windows.

Ability to fabricate motorized shades with widths ranging from two feet to forty feet.

Ability to produce 7000 bands per week or 350,000 bands per year.

Fabricates image shades with customer supplied fabric.

Capability to fabricate electrical controllers such as the Sundialer, Mechonet Wireless, Daylight Sensors, and Radiometers.

Operates a standard two shift (16 hours per day) operation with the flexibility to scale up to a twenty hour work day within an eight hour notice.

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Monumental Multi-Banded Image Shade

MagnaShade installation at the Whitney Museum, New York City, NY in 2015.

Performance and Financial Information

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Continuous Improvement

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Manufacturing Optimization Initiatives: Q4/2016 – $112.5k; 2017 – $1.16mm; 2018 – $1.31mm; 2019 – $1.31mm Transfer manual single banded solar shade fabrication from Edison to Reynosa – Status: On going. Consolidate specialized highly engineered products from Phoenix to Edison – Status: Start 11/2016.

Advanced Manufacturing Initiatives: Q4/2016 – $59.1k; 2017 – $247.6k; 2018 – $256.3k; 2019 – $256.3k Enterprise Resource Planning system – Frontier and SAMS – Status: On going, projected completion date of 3/2017. Machine integration with SAMS – TigerStop systems – Status: Projected completion date of 3/2017 Implementation of Pick to Light systems for bracket and tube assembly areas – Projected completion date of 3/2017. Laser guided, moving head hot-air spliner machine – Miller Extreme 112 – Status: Completed 9/2016. Dual function, impulse welding hempocket/spliner machine – Matic Ares-6000 – Status: Completed 9/2016.

Springs Business System - Lean Implementation through Employee Engagement Q4/2016 – $25k; 2017 - $100k; 2018 – $100k; 2019 – $100k KPI charts maintained and reviewed on a weekly basis – Status: On going. 6S initiatives in 2016 designed to improve fabrication process flow and pedestrian safety – Status: On going. Work instructions available for major processes – Status: On going, projected completion date 1/2017. Gemba walks conducted each morning by management team – Status: On going.

Quality at the Source - Process Controls: Q4/2016 – $25k; 2017 – $100k; 2018 – $100k; 2019 – $100k Incoming inspection of raw materials such as fabric, aluminum extrusion, and injection molding – Status: On going. In process defect and dimensional inspection after panel cutting – Status: On going. WIP inspection of shades and brackets – Status: On going. Implemented weekly meetings with Shade Shop associates to review quality issues and corrective actions. Revised fabric sample books for the fabric cutting associates – Status: On going. Provided associates training to refine skills for reading work orders – Status: On going.

Results: Installed wider hempocket machine (Matic Ares-6000) to reduce cycle time and improve productivity. Installed 30’ long, moving head hot-air welding machine (Miller Extreme 112) to reduce cycle time and improve productivity by limiting the need for

Kabar technology. Advanced riveting and automatic crimper/stripper machines to support bracket and cable assembly capacity increase. Continuous Improvement projects for 2018 to 2021 will offset target wage inflation rate of 3% per year or $97,350.

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Key Performance Indicators

YTD month incident rate (TCIR) 2.67%

YTD recordable rate 2.67%

Corporate safety audit 28.96%

Percent complete on company training 92%

Safety

Plant Productivity 39.4 MPB

% OT 10.9%

Turnover 4.27%

Var. expense per unit (ATO) $ 84.17

Quality

Internal Quality Audits 95.62%

RMFG 2.49%

RSHIP 0.44%

PMFG 0.69%

FPY 99.08%

DPPM for components

Costs

OPD 97.01%

Carrier Performance

FedEx 98.63%LTL 72.96%

Delivery

All aspects of manufacturing tracked to goals

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2016 YTD (Aug)

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Key Performance Indicators (cont’d) - A

Safety – Recordable Rate

Delivery - OPD

Initial Quality

Productivity – Minutes Per Band

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2014 2015 2016 YTD Aug02468

1012141618 17.12

2 2.67

1.64 1.52 1.27

Edison SWF

2015 2016 YTD Aug0

0.5

1

1.5

2

2.5

3

2.682.49

2.07 1.94

Edison SWF

2015 2016 YTD Aug75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

89.10%

97.01%

84.07%

91.26%

Series1 Series2 2014 2015 2016 YTD Aug35

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3738

3940

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4243

4445

44.5

38.839.4

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Financials

Sales

Units

CAPEX

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($’000)

($’000)

2011A 2012A 2013A 2014A 2015A 2016 YTD Aug$0

$20,000

$40,000

$60,000

$80,000

$43,686 $50,051 $51,708 $54,345 $58,013$41,585

2011A 2012A 2013A 2014A 2015A 2016 YTD Aug0

50,000100,000150,000200,000250,000300,000350,000

196,720

252,872286,350 289,118

318,403

233,839

2011A 2012A 2013A 2014A 2015A 2016 YTD Aug$0

$200

$400

$600

$100 $128 $176

$505

$92$227

Plant Tour

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Introduction to the Site Plant Tour

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Important Safety Information

Safety glasses should be worn at all times in designated areas.

Hearing protection required in designated areas.

Only walk in designated area unless accompanied.

Obey all warning signs and follow the host’s instructions.

Do not touch moving or rotating parts of the machines.

Smoking is prohibited except in designated areas.

No food or drink allowed on floor.

Camcorders, photo cameras, recording devices, and cellular phones may not be used without prior permission.

In case of emergency, please follow your host’s instructions and vacate the area using the evacuation routes.

Do not pick up or touch products.

Ensure to sign out prior to leaving premises.

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Thank You!

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