2002 In Review

State of Laminate Industry

Healthy and Robust

• Category growth despite down economy
• Double-digit percentage increases in both square feet and dollars over 2001
• Just a slight decrease in pricing
• Increased competition at low end balanced by strong performance of mid-up products
• Estimated share of overall flooring business approaching 5%

Category Shifts

• Low-End Commodity
  
  
  • Strong performance and increased competition
  • Price driven, "bread and butter" products continue to drive volume
• Mid-Up
  
  
  • Higher margins offer strong profit and growth potential
  • Consumers increasingly want features and benefits
  • Realistic textures and better decors
  • High quality workmanship
  • Correct matching
  • Latest technological advances
• Glueless products performing well
  
  
  • Sales have dramatically increased
  • Glueless now accounts for 62% of market
  • Ease of installation a strong selling point
• Pre-glue coming on strong
  
  
  • Early acceptance by retailers, installers and consumers
  • Demand currently greater than supply
• Glued products still perceived as the best quality

Looking Ahead - What to Expect

• Increased competition at the low end
• Continued growth in mid-up products
• More design and technological innovation
• Predicted category growth areas:
  
  
  • Residential replacement
  • Commercial -NALFA currently developing commercial standards

What is NALFA?

• Organization of U.S. and Canadian manufacturers and importers of laminate flooring products
• Formed in 1997
• Mission: To encourage the establishment and maintenance of high standards in laminate flooring in North America and to recognize those that meet these standards

Membership

• Current members account for 79% of laminate flooring sold at retail today.

Regular Members

Associate Members

Membership Requirements

• Regular Member: Manufacturer, marketer or importer of laminate flooring for sale in North America
  Does not include retailers, buying groups, retail cooperatives, retail marketing groups or wholesale distributors.
• Associate Member: Corporation, partnership, proprietorship or other entity regularly engaged in the business of selling goods or services to those that are eligible to be regular members

Member Benefits

• Active voice in constructively building the industry
• Participation in laminate floor standards setting
• Valuable opportunities to network with other laminate floor producers and marketers

Current Standards

• Residential Standards
  
  
  • Originally published in Oct. 2001
  • Specifications and Test Methods
  • NALFA Seal
    
    
    • Visual symbol to assure consumers that products have passed the required tests to conform to NALFA standards
    • For marketing use on product packaging, collateral materials, etc.
    • Consumers know to look for the NALFA seal and have grown to expect certain performance qualities from laminate flooring that carry this symbol

Standards in Development

• Commercial Standards