| December 1999 Memorandum |
Coolidge Manufacturing, Inc. |
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The information contained in this Memorandum was compiled by TCG. Neither TCG nor CMI or any of their respective directors, officers, employees or representatives make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Memorandum, and nothing contained herein is, or shall be relied upon, as a promise or a representation whether as to the past or the future. Introduction TCG International Inc., ('TCG') has entered into a Letter of Intent with Coolidge Glass Co., Inc. ('Coolidge') whereby a newly incorporated subsidiary of TCG, Coolidge Manufacturing, Inc. ('CMI') will acquire Coolidge's insulated glass and metal fabrication manufacturing business ('Coolidge Glass Distribution'). The purpose of this presentation is to provide you with the information you require to support CMI as a supplier of goods or services. The CMI/Coolidge transaction is anticipated to close in mid December 1999. TCG is a private family owned company headquartered in Burnaby, British Columbia. TCG employs approximately 2,100 people in the United States, Canada, the United Kingdom, the Netherlands and Australia. TCG is a significant participant in the automotive replacement glass ('ARG') business as a manufacturer, distributor, retailer and franchisor. TCG has glass fabrication and manufacturing experience through ownership of an insulated glass manufacturing facility in Alaska and through its 31% interest in Rioglass, S.A., a tempered and laminated replacement and OEM automotive glass manufacturer in Spain. Through its public subsidiary, Glentel Inc., TCG is an active participant in certain communication business segments in Canada. TCG has grown primarily through acquisitions, but is also experienced with start-up and expansion of business units. The Company's core competencies revolve around ARG retailing, distribution and communications. TCG invites you to visit its and the following affiliated web sites: www.tcgi.com
Corporate Profile 1. Introduction TCG is a significant participant in the ARG business as a manufacturer, distributor, retailer and franchisor. A publicly traded subsidiary, Glentel Inc., is an important participant in certain communication business segments in Canada. The Company commenced operations in 1946 when an ARG retail store was established in New Westminster, British Columbia. TCG has grown primarily through acquisitions supported by corporate growth and occasional start-ups. The Company has been willing to divest business units when circumstances justify. It is fair to characterize the Company as an entrepreneurial and multi-national corporation. For the last sixteen years, the Company has extended its operations outside of Canada with relative success. Numerous transactions have occurred over this time period which, in combination with changes in industry structure (including pricing and costing structures, networks, etc.), have resulted in TCG having a medium sized, but sound position, in the United States ARG market. 2. Description of Business TCG, directly and through subsidiaries, operates one of the largest networks of retail ARG stores in the world, specializing in repair and replacement and other automotive products, with over 2,000 corporate, franchised and agent-operated locations in North America, Europe and 27 additional countries. TCG is also engaged, directly and through subsidiaries, in the wholesale distribution of ARG and related products throughout Canada, certain areas of the United States and the Netherlands. TCG also owns Novus of Minneapolis, Minnesota' the world's leading windshield repair equipment and resin manufacturer. Novus also franchises windshield repair businesses and licenses its name. TCG has entered into a co-branding agreement with Ziebart International Corporation of Troy, Michigan to offer Ziebart products and services at Speedy retail locations, both corporate and franchised. Ziebart is a high profile brand name offering professional vehicle detailing services, rust and appearance protection services, and a wide variety of car, truck and van accessories (including running boards, window tint, guards, lights, bedliners and floor mats). TCG is also in the airbag replacement service business through its 50% interest in Airbag Services International L.L.C. of Seattle, Washington ('Airbag'). Airbag has 38 franchised and 1 corporate locations in the United States. TCG recently opened 3 corporate Airbag locations in Vancouver, Toronto and Phoenix. TCG's 64% owned subsidiary, Glentel Inc. ('Glentel'), is engaged throughout Western Canada in the sale and servicing of two-way radio, cellular, PCS, paging and satellite communication equipment and related airtime usage. In Europe, TCG manufactures automotive glass through its 31% interest in Rioglass, S.A., ("Rio") in Logrono, Spain and distributes ARG through 100% subsidiary, Breda Automotive Glass, B.V. ("Breda") in Breda, the Netherlands. 3. Management Structure TCG is presently a management / holding company exerting significant control over its divisions and subsidiaries through its head office. The Skidmore family owns the Company and is represented through TCG's board and senior management. Arthur Skidmore, one of the Company's founders, remains involved from a board perspective. The Company's day to day affairs are managed by Allan Skidmore (automotive unit) and Thomas Skidmore (communication unit). Tom and Allan are Arthur Skidmore's sons. Allan and Tom, together with senior operating management, are responsible for managing day to day operations. 4. Summary Status - United States 8 ARG distribution warehouses operating
as Autostock Distribution; Coolidge Glass Manufacturing 1. Introduction Coolidge has been in business since 1963. From one warehouse in Milwaukee distributing ARG, Coolidge has grown to be a force in the Midwest as a leading fabricator and/or wholesale distributor of auto replacement glass, flat glass, insulated glass, metal parts and allied products. Coolidge added flat -glass to its ARG distribution operations in the early 1970s and began fabricating insulating glass products in 1978. In 1994, Coolidge was designated an official distributor for Tubelite's architectural metal products. Coolidge operates 15 distribution centres in Wisconsin, Illinois, Michigan, Minnesota, Michigan, and North Dakota. Two of the existing 15 distribution centres (Fargo, North Dakota and Minneapolis, Minnesota) were acquired in 1997 when Coolidge purchased, by merger, Total Glass Distributing, Inc. During the 3 years prior to 1997, Coolidge opened 6 new distribution centres. A distribution centre in Cincinnati, Ohio, which opened in 1997, was closed recently due to non-performance. Coolidge leases a 100,000 square foot facility in Waukesha, Wisconsin where it fabricates insulated, spandrel, tempered glass and architectural metals. Corporate head office is based in this location. In 1997, Coolidge completed the expansion of its production facility in Waukesha increasing it by 30% to its present 100,000 square feet. Over $3 million was invested in new machinery and equipment including the largest tempering furnace of its kind in Wisconsin and a new edge fabricator, high-tech washer, polisher and hole drilling machine. The expansion of its production facility and distribution operations in recent years have stretched Coolidge's financial capabilities. Recent industry changes within the ARG distribution business including the introduction of generic (lower cost) ARG and lower margins exhausted Coolidge's financial resources, As a result, after investigating its options and discussions with TCG, Coolidge decided to divest its operations. TCG has agreed to purchase Coolidge's business through two subsidiaries; CMI is purchasing the manufacturing operations and Coolidge Distribution, Inc. ('CDI') is purchasing the distribution business. 2. Manufacturing operations Coolidge's manufacturing facilities are
located in the 100,000 square foot facility in Waukesha, Wisconsin. The
production facility occupies 88,000 square feet of the total facility. The
facility is recognized in the industry as modern and efficient. The products are currently distributed directly and through Coolidge's 15 warehouses. The products are shipped to the warehouses and construction sites both by a corporate fleet in Wisconsin and via a contracted third-party carrier. Coolidge currently employs 15 employees in metal fabrication and 80 in insulated glass fabrication. The company currently runs one ten-hour shift for fabricating insulated glass, spandrel and tempered glass, and two ten-hour shifts for glass cutting. 3. CMI Strategic Focus TCG believes the major strengths of Coolidge's manufacturing business are the significant and loyal customer base and the strong name recognition. Other strengths include a good complement of experienced and loyal staff. TCG will focus upon improving customer service, delivery and quality of product. Our secondary focus will be to improve employee morale. The reaction of the sale of the manufacturing division by the employees has been positive. The employees look forward to working in a stable environment after the uncertainties of the past few months. We believe that sales can be improved by concentrating our efforts on the Milwaukee and Chicago markets and by reducing dependence on the distribution network. Operating management agree with this assessment. 4. Financial Information CMI will be financed through a subordinated loan by a TCG subsidiary, a bank financing offered by Wells Fargo Business Credit, Inc. and various assumed liabilities.
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