How Parksite is Adjusting to Fit Today’s Economic Realities

George Pattee

Chief Executive Officer

Parksite Inc.

Who We Are• Mission Statement

– Parksite Inc. is a sales, marketing and distribution organization. We offer specialized products, training, and value-added services to select market segments within the building industry.

• Keys to Success

– Strong Dealer Partners and a focus on Industry Education

– Leading Brands

– Strategic Distribution Centers in all Key Eastern US Markets

• Core Product: Education

– The success of our products is based on the education of Dealers, Builders, Architects and General Contractors.

– Communicating the solutions our products provide, creates sales for both parties.

– Providing training and technical support ensures proper installation of products and a clear understanding of building systems.

Company Background

• 1971 - Parksite Opens • 1974 - Parksite begins Corian® distribution with DuPont• 1978 - Parksite created a use for an innovative product, Tyvek®, Resulting in a change in

building practices worldwide.• 1990 - ESOP ownership structure (75%) introduced at Parksite• 1997 - ESOP ownership becomes (100%) & Subchapter S Corp• 2000 - Parksite acquires Plunkett-Webster and begins relationship with AZEK® Products• 2001 - Parksite acquires Metro-Sloan• 2003 - Parksite obtains distribution rights to Nichiha Fiber Cement Siding• 2002 - Parksite named to Inc.’s list of 500 Fastest Growing Privately Held Companies• 2004 - Expand in Florida and to Southeast Market• 2005 - Acquisition of Eastern Distributors in PA• 2006 - Parksite acquires New England sales and marketing territory for DuPont Surfaces.

Expand into Denver, CO, Market. • 2007 - Terminate relationship with Trex®.

Enter into landmark Agreement with AZEK® Building Products Enter into partnership with Fiber Composites to distribute WeatherBest® deckin

• 2008 - Weathering the Housing Storm

Parksite Profit Improvement –Two Distinct Phases

• Primary Phase I & II• What Have We Done

– July 2006 to July 2008

• Secondary Phase I & II• What Are We Doing?

– August 2008 to December 2008

Primary Phase I - What Have We Done

• Recognize start of Economic Downturn - July 2006• Rightsize based on Sales / FTE and Gross Profit / FTE

back to 2004 Levels• Change Business Model for Marginally Profitable Products• Close unprofitable operations/locations

– Appliance Business Unit, Masonite Door Shop, Selection Centers

• Reorganize Management Structure and Create Push/Pull Sales Teams

• Restructure Logistics Model

Primary Phase II - What Have We Done

• Address Order Trends; Employ ways to increase order sizes, improve margins on small orders and recover costs

• Balance Sheet Management– Reduce net working capital deployed to scale

investment and capital requirements to be in line with expectations

• Change ESOP Distribution Policy.

• Reduce Operating Expenses by $20 mm Annually

Secondary Phase I - What Are We Doing

• Open Communication, Teamwork and Mutual Commitment to Common Goals among Management & Associates– Bi-Monthly CEO Messages and detailed summaries from

the President– Newsletter, Intranet, Company-wide Conference Calls– Outside Board of Directors Involvement– Manage Change

• Outside Assistance (The Keystone Group) • Additional Resources, Another Perspective

– Facilitate thinking about our Business Differently» Associate & Facility Interview Process» Data Collection» Financial and Operating Analysis

Secondary Phase II - What Are We Doing

• Expanded Scope– Comprehensive Customer, Product, Pricing & Staffing

Profitability Analysis– Collaborative Process Advancement and Establishment of

Performance Expectations• Opportunities

– Engage Keystone and develop Management Team of 24 Associates to concentrate on prioritized list of 14 enhancements

• Goal of improvement, development of strategies and simplification of processes.

In Conclusion

• Action Plan for remainder of 2008:

– Product Profitability

– Supplier Relationship Management

– Customer Evaluation

– Establishment of Associate Roles & Responsibilities

– Engage in Organizational Roll Out!