Jones Blair Notes

Which party controls Congress?

Where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company in the southwestern United States.

US PAINT INDUSTRY

3 segments

• architectural coating – “shelf goods”

o 43% of industry

• OEM coating

o 35% of industry

• Special purpose coatings

o 22% of industry

Paint Industry sales 2004

• $16 billion

OUTLOOK ON ARCHITETUAL PAINT COATINGS AND SUNDRIES

Industry sales 2004

• $12 billion +

Architectural coating considered to be a mature market with sales growth 1%-2% per year

US paint manufacturers pressured to reduce emission

CONSOLIDATION AND COMPETITION IN THE ARCHITECTURAL COATINGS SEGMENT

600 current companies

• 40% fewer than 1980

Declining 2-3% per year

Major producers of paint for the architectural coatings segment include Sherwin- Williams, Benjamin Moore, the Glidden unit of Imperial Chemicals, PPG Industries, Valspar Corporation, Grow Group, and Pratt & Lambert.

• Accounts for 60% of sales in the architectural coating segment

50% under private, controlled, or store brands

• ex. Walmart home depot

Specialty paint store = 36%

ARCHITECTUAL COATINGS PURCHASE BEHAVIOR

50% of dollar sales from DIY painters

Professional = 25%

Government export and contractor sales = 25%

60% of annual architectural coating sales are for interior paint

38% exterior paint

Lacquers make up the rest

Paint purchase per purchase occasion = $74

Sundry purchase per purchase occasion = $12

JONES BLAIR COMPANY SERVICE AREA

Jones Blair markets its paint and sundry items in 50 countries

The 11 county Dallas-Fort Worth metropolitan area is the major business and financial center in the company’s southwestern service area.

Jones Blair sold $80 million in 2004 (exhibit 2)

• 60% from DFW

DIY = 70% of Non contractor related volume in DFW

• 90% of non contractor relation volume...