Pellet Fuels Institute Membership Meeting

1
Pellet Fuels Institute Membership Meeting

• Wednesday, March 8, 2006
• Don Johnson
• HPBA Director of Market Research
• Don Kaiser
• PFI Executive Director

2
Agenda

• Set the Stage Detail Current Status of the
  Pellet Industry
• Hearth Pellet Appliance Shipment Statistics
• Pellet Fuel Shipment Trends
• Select Manufacturer Rep Survey Results
• Questions

3
Top of the Line Hearth Industry Statistics
4
U.S. Hearth Appliance Shipments in 2005

• Cordwood 561,596
• Gas 2,141,165
• Electric (N.A.) 380,000
• Pellet 118,490
• TOTAL 3,201,251

Includes Gas Log Estimated Data (925,000)
Note Gas Log and Electric Data Estimated and
Vetted
5
Hearth Appliance Shipments by Type of Fuel -- 2005
Includes Gas Log Data
6
Between 2004 and 2005 . . .

• Cordwood Appliance Shipments Increased 13
• From 498,630 to 561,596
• Gas Appliance Shipments Increased 2
• From 2,103,685 to 2,141,165
• Electric Appliance Shipments Increased 27
• From 300,000 to 380,000
• Pellet Appliance Shipments Increased 76
• From 67,467 to 118,490

Overall, Industry Increased 8 Between 2004 and
2005
7
Since 1998 . . .
Overall, Industry Increased 36 Between 1998 and
2005

• Cordwood Appliance Shipments Decreased 14
• From 652,500 to 561,596
• Gas Appliance Shipments Increased 33
• From 1,611,750 to 2,141,165
• Electric Appliance Shipments Increased 660
• From 50,000 to 380,000
• Pellet Appliance Shipments Increased 249
• From 34,000 to 118,490

8
Hearth Appliance Shipments1998--2005
9
Total U.S. HearthAppliance Shipments1999--2005
10
Freestanding Stove Appliance Shipments by Type of
Fuel -- 2004
Pellet Stoves Account for 34 of Net Stove Sales
11
Freestanding Stove Appliance Shipments by Type of
Fuel -- 2005
Pellet Stoves Account for 51 of Net Stove Sales
12
Those are The Official HPBA Numbers

• But HPBA has Been Producing Pellet Stove Shipment
  Estimates Since 1992

13
Pellet Appliance Shipments1992--2005
76
5 out of the Last 6 Years Have Seen Increases
43
-36
39
14
Pellet Appliance Shipments1992--2005
Early Estimates Somewhat Overstated?
545
15
Pellet Fuel Shipment Trends
16
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Shipments Estimated to Increase 17 in 2006 88
since 2000
Shipments Up 14 61 Since 2000
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Thats a 32 Increase!
21
HPBA Manufacturers Rep Survey

• Conducted Quarterly Since June 2000 (23 Quarters)
• FAXED to Approximately 100-110 HPBA Manufacturing
  Reps
• Response Rates Range from 28 to 50
• Leading Indicator for Industry

22
Sales of Pellet Appliances Compared to a Year Ago
100 Believe Pellet Appliance Sales are Up
Compared to a Year Ago
January 2006
Of those respondents who rep pellet appliances
23
of Reps Who Feel Pellet Appliance Sales are Up
Compared to a Year AgoQuarterly--June 2000
through January 2006
24
Pellet Appliance IndustryMy Personal Perspectives

• The Best Possible Time for the Pellet Industry
• Produces Affordable Heat
• Produces Type of Heat Consumers Want
• Overcome Initial Poor Perceptions/Bad Rep
• Appeals to Green Movement
• Benefits from High Gas Prices Cyclical Product
• Most Volatile Product in the Hearth Industry
• Manufacturers are More Committed to the Product
  Than Ever Before

25
Questions?