cps company prospectus 2010

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6/14/2010 1 Company Prospectus 6/14/2010 Darren Krantz CEO Rick Hamilton President Kevin O’Boyle CFO Alan Michael VP Business Development Mike Edwards VP Logistics and Transportation Bill Cotgreave VP Warranty Management Division Robert Madden VP North American Operations

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Consumer Product Services: Single Source Supply Chain Solutions

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Page 1: CPS Company Prospectus 2010

6/14/2010 1

Company Prospectus6/14/2010

Darren Krantz CEO Rick Hamilton PresidentKevin O’Boyle CFOAlan Michael VP Business DevelopmentMike Edwards VP Logistics and TransportationBill Cotgreave VP Warranty Management DivisionRobert Madden VP North American Operations

Page 2: CPS Company Prospectus 2010

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About Consumer Product Services

• CPS provides retailers and manufacturers with a Comprehensive GREEN

approach to managing, processing, recovering and selling returned consumer products creating profits from returns. This includes facilities supported by engineering and quality assurance labs, warranty programs, sales support and web sites to further the goal of “keeping it sold.”

• CPS consists of an interconnected family of four (4) companies all under the CPS umbrella. There are two web sites and several web stores. Additionally CPS operates a warranty company providing options for initial and extended coverage for new and remanufactured products.

• CPS operates a network of six (6) strategically located returns and remanufacturing centers in North America. CPS partners with a leading company in recycling of waste materials of all kinds, including e-waste. CPS is a premier service provider with Canadian coverage and solutions.

• CPS provides warehousing, fulfillment and transportation solutions for its customers in addition to Quality Remanufacture

Page 3: CPS Company Prospectus 2010

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Darren Krantz – Chief Executive Officer

• Mr. Krantz has a background of over 19 years in the consumer product remanufacturing industry. Mr. Krantz is the Founder of Consumer Product Services where he is responsible for strategic planning, marketing, product sales, operations and process creation.

• Mr. Krantz has proven his ability to gain contracts from some of North America’s largest Consumer Product manufacturers & retailers while building strategic relationships with the Company President’s & CEO’s.

• Over the past 19 years Mr. Krantz has developed his proprietary remanufacturing processes employing them to create and provide full scale remanufacturing programs for some of the largest consumer product manufacturers in the world.

• Mr. Krantz has successfully operated and managed multiple North American remanufacturing facilities totaling more than 1,000,000 square feet with staffs exceeding 500 people. He is acknowledged for his ability to build cohesive team structures producing the highest quality products with remarkable productivity levels.

• Mr. Krantz has developed a unique international sales network which includes Secondary Market Retailers, Salvage Centers, Discount Home Centers, Hardware Chains, Appliance Dealers and Online “E-Tailers” who have purchased millions of units of CPS remanufactured products.

• Mr. Krantz has also worked and continues working with various Engineering Universities, local, state, and federal agencies, the Department of Energy, the Department of Energy Conservation, the Environmental Protection and the New York State Energy Research and Development Agency on effective methods of remanufacturing, reprocessing and recycling of consumer products, which will conserve energy, protect the environment and create more efficient programs for manufacturers to manage & process their returned products.

Page 4: CPS Company Prospectus 2010

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Rick Hamilton - President

• With over 29 years experience in the retail industry, Mr. Hamilton joined Consumer Product Services, LLC in January 2009 as President. His responsibility includes sales of all CPS products, and working with CPS customers to provide them with access to the many services CPS offers.

• Mr. Hamilton began his career with Ingersoll-Rand where he was selected to be part of the sales team that introduced Ingersoll-Rand products to the retail markets. The team was successful in placing products in almost every type of retail outlet in the United States. This included Big Box retailers, Warehouse Clubs, Hardware Chains, Farm and Fleet, and many others. He then was Vice President of Sales for SIP USA products. At SIP responsibilities included targeting the same customer base with new and innovative products manufactured overseas.

• In 1991 Mr. Hamilton started National Vendor Services, a full service manufacturers’ representative, merchandising, and service company. National Vendor Service represented almost every facet of products offered in retail home stores. This included Hardware, Tools, Outdoor Power Equipment, Plumbing, Electrical, Lighting and others. NVS was selected by Troy-Bilt to be part of the team that introduced their products to the retail market. NVS was also selected by Lowes companies to be the merchandising/service company to provide store service for the Kobalt private label brand introduced by Lowes.

• In 1999 NVS was sold to National Product Services. NPS now provides retail service to Walmart, Costco, Office Depot, Staples, Target, Lowes and other retail accounts.

• Mr. Hamilton has a degree in Electrical Engineering Technology from Southern Technical Institute.

Page 5: CPS Company Prospectus 2010

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Kevin O’Boyle – Chief Financial Officer

• Mr. O’Boyle joined Consumer Product Services, LLC in May 2008. His responsibilities include Financial Reporting, Treasury Management, Administrative Operations and Business Development. With over 30 years experience in manufacturing and retail industries, Mr. O’Boyle most recently has held executive positions as CFO and Controller for domestic and international start up and turn around corporate environments. As CFO for Look, Inc., Kevin was responsible for designing and building manufacturing, finance and performance management systems for their domestic operations. Former employers include JC Penney, Federated Department Stores, Bristol Myers Squibb, Dawson USA Group, Wolford America, Inc. and Look Inc.

• Mr. O’Boyle has both his undergraduate and MBA degrees from St. John’s University, Jamaica; NY has served on the Board of Directors for Look, Inc. and is an active member of the Financial Executive Networking Group.

Page 6: CPS Company Prospectus 2010

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Alan Michael - VP Business Development

• Alan Michael is a seasoned merchandising executive with a career spanning more than 30 years with major retailers across a broad spectrum of business categories. Extensive experience in Retail Operations, Capital Project Development and Execution and as a Buyer for both independent and public companies, have rounded out his experiences and broadened his connections across multiple facets of the current retail and manufacturing environment.

• Alan’s career has encompassed major retailers such as Circuit City Stores, The Federated Group and Montgomery Ward. Alan joined The Home Depot in 1998 where he advanced quickly into a key role on The National Appliance Team where he developed training, designed appliance showrooms, negotiated with Appliance Manufacturer’s and selected and merchandised Major Appliances. During his years with Home Depot he was instrumental in the early development and growth of this category from less than $50M to a $4B category. Alan, held roles as National Director of Capital Projects, Flooring Merchant of SE Division a $1B category as well as Kitchen, Bath and Appliance Categories in the NW Division. As Merchant for Expo Design Centers and New Concept Stores, Alan had responsibility for purchasing new products from 40 brands and distributors for Expo as well as Remanufactured GE Appliances through CPS for Small Market Concept Stores.

• Alan joined CPS in his current role in April 2009 and capitalized on his experience in financial management and his extensive connections in retail and manufacturing to connect with Whirlpool and develop the business model that led to the $20M+ Whirlpool Contract. Additionally, Alan plays a pivotal role in developing pilots and contracts from all new opportunities, Briggs and Stratton, Bissell, GE and others.

Page 7: CPS Company Prospectus 2010

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Michael G Edwards - VP Supply Chain and Logistics

• Mr. Edwards is Vice President Supply Chain and Logistics for Consumer Product Services (CPS). He has over 30 years experience in Global Supply Chain Management, Finance, Information Systems, Manufacturing and Procurement having held various senior executive positions as Vice President Distribution Sherwood Davis & Geck a multi-billion medical supplies manufacturer, Director Logistics Process Management Group, a $3B multidivisional group of Emerson Electric , St Louis MO and then served as the first Corporate Global Director of Logistics, Emerson Electric, a $17B global manufacturing corporation. Prior to his current assignment, Mr. Edwards was Director Alfred Karcher Inc. the US subsidiary of Alfred Karcher GMBH, Germany. Alfred Karcher Inc. was one of the largest customers of CPS. It was during his tenure at Karcher that CPS developed and matured many of the current solution sets on behalf of Karcher that differentiate CPS from all competitors in the reverse logistics market. Mr. Edwards joined CPS February, 2006 in his current position.

• In his current role, Mr. Edwards actively participates in business development, account management, facility management, manages the firms transportation contract negotiations, carrier selection, pricing, transportation execution and supply chain consulting activities. He also directly consults on customs compliance and brokerage issues on behalf of the firm’s clients. This includes classification, valuation, drawback and duties.

• Mr. Edwards has held various industry positions, served as Roundtable Officer for the Council of Supply Chain Management Professionals, and frequently presents at industry conferences and lectures at various Universities about SCM and reverse logistics.

Page 8: CPS Company Prospectus 2010

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Bill A. Cotgreave - VP Warranty Division

• Bill brings 15+ years of operational and sales management experience in the insurance industry to the Go Warranty division of Consumer Product Services. He is responsible for developing and implementing the warranty programs with our insurance carriers, business development, overseeing the call center and the day-to-day operations of Go Warranty.

• During his time in the insurance industry he has developed a great understanding for implementing and overseeing productive and successful sales teams. Bill has succeeded in increasing sales revenue by over thirty percent at one of the largest insurance firms located in downstate NY with the increased revenue coming from organic growth, acquisitions, and strategic alliances.

• Bill is well versed with the compliance requirements and the laws governing the individual state insurance departments. He has also established strong relationships with many of the top insurance carriers and executives throughout North America.

Page 9: CPS Company Prospectus 2010

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Robert Madden - VP North American Operations

• Robert Madden comes to CPS with 20 plus years of experience with logistics and transportation background. His management roles with Roadway Express, Preston Trucking Co., and Yellow Transportation has lead to increased profit margins throughout his career. Through Rob’s leadership, these facilities were able to successfully improve on time service, increased key metrics, while reducing costs. CVS had an all store rollout nationwide and they were not sure which carrier to go with. Rob’s expertise lead CVS to a unique idea to receive these displays in a two week period of time. Yellow delivered at on time rate of 99%. Because of this outside of the box thinking, Rob was awarded the first ever Innovation Award in 2006 from the president of Yellow Transportation.

• Rob has worked directly with major merchants, home centers, and drug store chains. Communicating to his team the importance of quality and delivering on time, resulted in increased business levels from these major retailers. The facility was awarded the coveted Crystal Quality Award for 2007, having the highest on time rate and the fewest claims.

• His leadership skills and core values will integrate well into the CPS system.

Page 10: CPS Company Prospectus 2010

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Strategically Located Return Center’sOptions on Reporting Requirements

• CPS receives returned products directly at our facilities• CPS validates physical quantities vs. RA documents• CPS audits, analyzes, captures and reports back to the client

comprehensive information regarding:– Product Defect Data– Mechanical Failures/Design Failures/Packaging Failures– Cosmetic Failures– Retailer Mismanagement of Product/RA Process– Damage occurring throughout supply chain– Consumer error or abuse

• All data is recorded including Model#, Serial#, Customer, Store Location, Carrier and RA#

Page 11: CPS Company Prospectus 2010

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Product Categories Served

• Coffee Makers and Espresso Machines• Counter Top Appliances• Microwave Cooking• Air Conditioning / Home Comfort• Water Dispenser / Filtration Product/ Portable Ice Makers• Outdoor Power Equipment• Power Tools (Gas and Electric)• Compressors• Major Appliances• Floor Care Products / Vacuums• Consumer Electronics / Cable Receivers• Wireless / Cellular

Page 12: CPS Company Prospectus 2010

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CPS Value Proposition

• Educated and Committed Team– Extensive Retail Experience

– Manufacturing, Merchandising & Representation, Supply Chain

• Complete Focus on Reverse Supply Chain Solutions – Environmental Sustainability– Licensed and Certified Recyclers

• Single Relationship – Leveraged• Flexible, Scalable Solutions• Cost Effective, Higher Recovery Dollars • Information Driven – Visibility and Transparency

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FONTANA CAOpened 2004

Chicago ILOpened 2006

DALLAS TXOpening Q2 2010

ATLANTA GAOPENING Q2 2010

LONG ISLAND NYOpened 2002

TORONTO ONOpening Q3 2010

Consumer Product Services Offers Six (6) Strategic

North American Coverage Solutions

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US Facilities with Over320,000 sq.ft. of Flexible Production and

Warehousing

ATLANTA, GA Opens 6/2010 Fontana, CA

Chicago, IL Dallas, TX Opens 6/2010

Deer Park, NYCorporate HQ

Operations in LISince 2002

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6150 Dixie Road Toronto 20,000 sq.ft. of Flexible Production

• Receiving wk of 6/28• Production Launch 7/19• Retail Options for Mfg.• Pick and Ship Options

Page 16: CPS Company Prospectus 2010

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Current Business – Contracts and PO

Page 17: CPS Company Prospectus 2010

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2010 Post Capital Infusion – Rolling 36 mos.Conservative Growth Plan

Page 18: CPS Company Prospectus 2010

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Pilot Phase & NDA Business Opportunity 2010

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Pipeline Opportunities 2010 & 2011

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Other Business Opportunities 2011 & 2012

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Summary of Business Opportunities 2010 - 2012

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CPS Engineering and Quality Assurance

• CPS Provides Unique Opportunity to Set Programs that Address a Supplier’s Needs and Maintain Profitability

• Selection of Services and Reporting– Silver Basic Dashboards– Gold Quality Engineering – Platinum Quality System Integration

• Root Cause Analysis (Available) • Pareto Analysis (Available)• Corrective Action Analysis (Available)• Pre Market and Post Production Testing

Page 23: CPS Company Prospectus 2010

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Potential Commercial Arrangements

The CPS Solution Allows Flexibility of Commercial Arrangements from Outright Sale to Managed Service Options and May be Modified by Client Contract

• Outright Sale– CPS procures 100% of returned product at preset pricing, refurbishes and re-sells through

CPS secondary market channels– Full CPS process of data management and reporting

• Revenue Share– CPS procures 100% of returned product at preset pricing, refurbishes and re-sells through

secondary market channels and shares percentage of revenue.• Fee for Service Model

– CPS refurbishes at preset fees per model– Secondary market sales are based on CPS commission structure

• Gain Share– CPS may or may not acquire title to inventory– CPS will incur and leverage all costs to bring units through second channel sales– Each Partner is reimbursed for cost contribution prior to gain share split– Sales commission and warehousing costs are part of CPS gain share.

Page 24: CPS Company Prospectus 2010

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Business Model OpportunitiesFlexible Options and Programs

Model/Cost Element Return Freight

Retailer Handling Fees

2nd Channel Sales

Reman Costs

Warehousing Materials Warranty Returns

Gain Share

Purchase Model

Fee for Service

Revenue Share

Manufacturer and CPS Determine Best Model for ProgramAnd Will Set Parameters in Contract

Shared Shared Shared Shared

Client

Client Client Client Client Client Client

Client

Client

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Engineering and Quality Assurance

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Product Awaiting Shipment

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Product Awaiting Shipment

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Example: CPS Facility- Production Line

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CPS Solutions – Why CPS? “The Single Source Solution”

• CPS Provides ALL Critical to Recovery Options for Their Clients• CPS’s Unique “Single Source Solution” Business Model with

Flexible Solutions for Manufacturer’s Encompassing Supply Chain, Transportation, Quality Remanufacture, Laboratory Analysis, Transparent Reporting and Optimized Recovery is Unmatched in the Industry

• Specializing in Mechanical, Motor, Compressor and Electrical Products with future TV and Electronics Focus

• North American Solution With Multi Regional Locations to Optimize Recovery on Transportation Expense Across US and in Canada

• Flexible Business Models to Enhance Recovery on Products Across Varying Price Points and Categories. Manufacturer’s May Contract Individual Categories or Products

• Warranty Division Offer’s Solutions for Initial Warranty or to Offset Manufacturer’s Liability on Remanufactured Goods. Extended Warranty Options to Add Financial Recovery.