KI … the one source for innovative educational solutions!

1. Smart Innovative Proven KI…the one source for innovative educational solutions! College/University Market – 2005 ISM

2. College/University Market Landscape • Tight fiscal environment • Market is starting to turn • 2004 was strongest for C/U endowment financial returns in the last 4 years • 42% of schools reported an increase in gifts vs. only 34% in 2003 • Extreme competition among institutions Bryant University, Smithfield, RI

3. 2004 College/University Market • $109.3 million in sales • 106% of Plan • 16% growth over last year • Highest year in history • Sales in 1994: $27.6 mil.

4. The C/U Market as a Part of Total KI Sales All other Markets Small Business Lg./Med. Business College/University State/Local Healthcare Fedl. Gvt. K-12 Science/Tech.

5. Top Performing Districts in 2004 - % C/U Plan (1 of 2) District Manager% of Plan 1) Hinman 247% 2) Lowe 196% 3) Binford 175% 4) Fairburn 166% 5) Kashwer 136% 6) Jones 129% 7) Strack 121% Turner 121% 9) Sliger 114% 10) Thomason 106% Canter 106% 12) Maloney 103% Rier 103% 14) Nieder. /Mahlik 101% 15) Arnold 100% Note: 63% of our Districts made Plan in 2004

6. Top 10 Performing Districts in 2004 – C/U Sales (2 of 2) • District ManagerSales Dollars • 1) Fairburn $10.3 mil. • Corbett $10.3 mil.* • 3) Strack $8.1 mil. • 4) Rier $7.6 mil. • 5) Nieder./Mahlik $6.5 mil. • 6) Thomason $6.4 mil. • 7) Arnold $6.1 mil. • 8) Hinman $6.0 mil. • 9) Lowe $5.3 mil. • Maloney $5.3 mil. • 11) Sliger $4.6 mil. • * includes Upstate NY

7. KI’s Market Position KI is #1: Over 16% Market Share

8. KI…The Most Recognized Company in Education! Annual Brand Preference Awareness Survey - -904 persons randomly surveyed (604 arch./designers, 300 facility professionals) -Margin of error +/- 3.3%

9. 2005 College/University Plans and Strategies

10. 2005 C/U Market Goals • Sales: $115.7 mil. • Growth: 5.9% • Market share: > 17% • Facetime %: • 9.5% Districts w/o a Fedl. Gvt. Goal • 9.0% Districts w/ a Fedl. Gvt. goal

11. 2005 C/U Market Bonus Incentive • .5% of Net Sales • Paid at year end • Must > 95% of 2005 C/U Sales Goal • Example: • 2005 C/U Sales Goal = $5,000,000 • C/U Market Bonus based $ X finish: • $4.0 mil. = 80% of Goal = $0 • $4.75 mi.= 95% of Goal = $23,750 • $5.0 mil. = 100% of Goal = $25,000 • $5.5 mil. = 110% of Goal = $27,500

12. 2005 C/U Market Trade Shows Show/Association Date Location ACUI (Assoc. of College Unions Intl.) 3/22 – 3/25 Reno, NV TechEd (Technology Education Conf.) 4/4 – 4/7 Pasadena, CA NAEB (Ntl. Assoc. of Educ. Buyers) 5/9 – 5/12 Salt Lake City, UT ALA (American Library Association) 6/23 – 6/29 Chicago, IL ACUHO-I (Assoc. of C/U Housing Ofcrs.) 7/17 – 7/19 Milwaukee, WI SCUP (Society of Coll./Univ. Planners) 7/22 – 7/27 Washington DC APPA (Assoc. of Higher Ed. Facility Mgrs.) 8/4 – 8/6 Orlando, FL Regional ACUHO shows: - SEAHO 2/20 – 2/23 Jacksonville, FL - UMR-ACUHO November TBD

13. 2005 College/University Ad Campaign American School & University - Every month College Planning & Management - Feb./Mar./Apr./Jun./Jul./Oct./Nov. Contract - February Education issue Buildings - July Educational issue Architectural Record - April/August C/U focused issues KI is the most aggressively advertised educational company in the country

14. Educational Environments #2 Available at: www.visualreference.com

15. 2005 AS&U/KI Educational Calendar • Mailed to over 68,000 key educational decision makers and specifiers • 100 sent to each District office

16. 2005 “Lighthouse Account” Strategy • Shore-up relationships with the top schools in the country • Maximize account penetration • Create long-term relationships • Block competitive incursions • Step #1 – Insure contracts • Step #2 – Develop penetration plans for top schools with low sales Goal: 3/31/05 completion

17. 2005 “Defensive Pricing” Strategy • We will not be undersold in C/U by: • Steelcase • Herman Miller • Haworth • HNI/Allsteel • Knoll • Falcon • Clarin Steelcase

18. College/University Trends

19. Trend #1 • Power/data connectivity • Heavy demand for solutions that provide power and/or data connections • Application types are: • University seating • Auditorium seating • Classroom tables • Computer labs • Some use for cyber cafés & lounges • Continuing growth in laptop computer use

20. Trend #2 • More natural lighting

21. Trend #3 • Upscale look and feel • Presenting a professional atmosphere that says “our expectations are high, and we know that yours are as well” • Business schools • Corporate education Northern Illinois University, IL “You need to modernize your facilities to keep up with student and parent and faculty expectations.” E. Lander Medline Executive VP, Assoc. of Higher Education Facility Officers

22. Trend #4 • Techno-savvy image • Projecting an image that cutting-edge education takes place here • Some schools are even giving incoming students i-Pods, Blackberrys, Tablet PCs, or cell phones • Duke University i-Pods • Winona State University Tablet PC • Uni.v of North Dakota Tablet PC • Mayville State University Tablet PC • Univ. of Maryland Blackberry • State Univ. of New York Cell phones C.S. Mott Community College, MI • The Princeton Review just launched a cell-phone accessed SAT prep tool • 25 schools in New Hampshire now encourage their students to access their • assignments via their cell phone • -A new company, HomeWorkNow.com, provides homework assignments and other school information to students via web-enabled cell phones or PDAs

23. Trend #5 • Flexible General Purpose spaces • Mobile tables • Nesting chairs Orangeburg Calhoun Technical College, SC

24. Trend #6 • Warmer color tones • Yellow cast (optimism) • Green cast (harmony) • Brown cast (Starbucks, security) • Wood grains (nature) • Pairing with other colors families (blues, etc.) Source: - Color Marketing Group - Interface Fabrics - Trend Curve

25. Trend #7 • Move from “Factory” Education model to an “Active Learning” model Source: - In Sync, Dr. Lennie Scott-Webber Chair, Ryerson University School of Interior Design - Designing Places for Learning, CEFPI - SCUP ’04 Conference

26. Factory Education Model • Information based • Vertical communication • Information is passed from the head of an instructor into the head of a student • Instructor is the worker with the student as a product • “Put them in a room, do something to them, ring a bell, put them in another room, do something to them, and so forth.” Albert Shanker

27. Active Learning Model • Knowledge vs. information based • Active learning • Student is the worker with the instructor as a coach • Students learn to learn, and to apply their knowledge • Insight, synthesis, judgment, results, and team work are the desired outcomes and attributes

28. How Active Learning Occurs Knowledge Delivered Knowledge Created Student: Knowledge Applied Knowledge Assimilated

29. Where Active Learning Occurs Labs Informal Areas Cyber Cafes Lecture Halls Class Rooms Student: Knowledge Applied Team Rooms Seminar Rooms

30. Clustering Learning Spaces • Learning spaces are being grouped together in close proximity • Education & learning can take place in the space most suitable to the need or opportunity • The most efficient space is used for the best learning application

31. Trend #8 • Advancing instructional technology • Control audio, video, light, sound, internet links, temperature, and more • Minimize pervasive look and feel of past presentation bunkers • Provide flexibility for different presenters • User friendly and consistent from venue to venue • Two extremely advanced applications are: • Wharton School of Business, University of Pennsylvania • -Technology Square, Georgia Tech.

32. Trend #9 • High-end food service facilities • Coffee houses • Cyber cafés • Keeping the money on campus • Meeting higher expectations • Huge profit centers for most schools

33. Trend #10 • Expansion into shopping malls • 18% of enclosed regional malls are abandoned or in serious decline (Price Waterhouse Copper market study) • Experienced colleges say it makes economic and educational sense • Extremely cost effective space • Everything under one roof • Infrastructure is already there • A location and atmosphere familiar to students • Conveniently located in population centers Examples: - Cayuga Community College, Auburn, NY - Simon Fraser University, Vancouver, B.C. - Florida Community College, Jacksonville, FL - University of Texas, Brownsville, TX - City University of New York, NY, NY - University of Connecticut, Stamford, CT - Kennesaw State University, Atlanta, GA

34. College/University - Things to Know

35. C/U Applications Supplied byKI KI is the only manufacturer who can supply all C/U applications!

36. Key Decision Makers by Campus Area

37. C/U Buying Behavior – What are they looking for? • 1) Product quality • 2) Product performance capabilities • 3) Reputation (Rep., Dlr., Mfr.) • 4) Brand recognition • 5) Warranty • 6) Price • 7) Life cycle cost Based on a study by AS&U magazine

38. KI is a Proud Member of the Following Associations • NAEB– Ntl. Assoc. of Educational Buyers • ACUHO-I– Assoc. of Coll./Univ. Housing Ofcrs. • ACUI – Assoc. of College Unions Intl. • SCUP – Society of Coll./Univ. Planners • AUID – Assoc. of University Interior Designers • APPA – Assoc. of Higher Educ. Facility Officers • ALA – American Library Association

39. National C/U Buying Agreements • HRG - Horizon Resource Group • Headquartered in Nashville, TN • FCCC - Foundation of California Community Colleges • Headquartered in Sacramento, CA • Main focus is California community colleges G P O

40. Locate Contacts in C/U Residence Hall Programs (1 of 2) Web site: www.acuho-i.org Section: Members only User Name: SA1024 Password: 26699 Search for schools, by size and type, and get current contact information.

41. Online Membership Directory Main Page Search Educational Institutions Search Individual Members Search Sustaining Affiliates Institutional Members Browse Listings Alphabetically Browse Listings by Country and State Individual Members Browse Listings Alphabetically Browse Listings by Country and State Sustaining Affiliates Browse Listings Alphabetically Browse Listings by Country and State Locate Contacts in C/U Residence Hall Programs (2 of2) You have logged in successfully. You can use the links at the top of the page to search for educational institutions, individual members, or sustaining affiliate members. You can also browse directory listings using one of the links below.

42. Locate A&D Firms Who Specialize in Education • www.schooldesigns.com

43. Sustain™ Furniture – A Recognized Eco-Solution Architectural Record Magazine( Dec. ’04 issue), in it’s 2004 Products Report, chose Sustain™ as one of the “outstanding products of the year” due to it’s environmental consciousness, and great look and value.

44. Positive Results From Facetime • Avg. 2004 C/U facetime: 8.4% • Districts > 100% of Plan: 8.7% • Districts < 99% of Plan: 7.7% • Districts > 120% of Plan: 9.5% There is a direct correlation between facetime and success!

45. So…Its Time to Fly!

46. Thank You WORKING FOR YOU