LabelWriter Business Summary 12.17.07. Quick Facts LabelWriter 400, 400 Turbo, Twin Turbo and DUO $/€ 99 - $/€ 199 » PC/Mac connected label printers and

LabelWriter BusinessSummary

12.17.07

Quick Facts

LabelWriter 400, 400 Turbo, Twin Turbo and DUO$/€ 99 - $/€ 199

» PC/Mac connected label printers and consumables.

» $99MM in 2007 net revenues, +14.6% vs. 2006. 57% Gross Margin.

» Application specific uses – addressing, filing, postage printing, visitor badges, and so on.

» Print on die cut paper labels except DUO model that combines die cut (top) with labelmaker D1 tapes (bottom).

Key Consumer Targets: SOHO and Administrative Assistants

3

I run a small business and am constantly looking for tools to help my business get ahead. I purchased the LabelWriter so we could work more efficiently and look more like the big guys. I had seen the product in an ad, then a friend told me about so I had to find out more. I researched the printer and the price online before my purchase. I use it mostly for addressing and shipping but also for postage. I use it everyday and would definitely recommend it.

I work in a large organization in an administrative support function. My main goal is making sure I am organized so that the people I support are organized. I’ve seen the LabelWriter in the catalogs and been interested but then my colleague told me about theirs and I just had to find out more. I checked it out online and asked my office supply sales rep before I ordered through the catalog. I use it all the time, mostly for filing and address labeling. It looks great and really makes me get things done so much faster. No more hassling with the sheet labels! I would definitely recommend this little printer.

SOHO

Admin

CHANNEL CONSUMER TARGETS

2007 Share Approximate Program Expense

IT Channel: Ingram Micro, Tech Data, CDW, PC Connection, Tiger, Amazon, etc...

SOHO, Admins 29% 3%

Office Superstores (Retail) SOHO 10% 23%

Commercial Catalogs Admins. SOHO 45% 23%

Direct via phone/web SOHO 10% 0%

CES: Best Buy, Fry’s, Micro Center

SOHO 2% 7%

All Other (Clubs, industrial) Various 3% 0%

Key Distribution Channels

Size of Market and DYMO Share

» In the specific Label Printer category, DYMO market share is estimated at 74%.

»Broadening the category to include sheet labels that print through standard printers reshuffles the deck as Avery and the other sheet labels together own 75% of the market.

▪ Importantly, the sheet label market is declining.

PC/Mac Label Printers (LabelWriter-like)2007 Revenue Estimates

Vendor North America EU LATAM APAC TotalDYMO $55,300,000 $39,200,000 $400,000 $4,100,000 $99,000,000Brother $12,000,000 $8,662,500 $400,000 $4,000,000 $25,062,500Seiko $7,000,000 $2,000,000 $400,000 $1,000,000 $10,400,000Total $74,300,000 $49,862,500 $1,200,000 $9,100,000 $134,462,500

2007 Market Share EstimatesVendor North America EU LATAM APAC TotalDYMO 74% 79% 33% 45% 74%Brother 16% 17% 33% 44% 19%Seiko 9% 4% 33% 11% 8%Total 100% 100% 100% 100% 100%

PC/Mac Label Printers WITH Avery Style Sheet Labels2007 Revenue Estimates

Vendor North America EU LATAM APAC TotalAvery and others $186,000,000 $138,740,000 $28,429,000 $48,776,000 $401,945,000DYMO $55,300,000 $39,200,000 $400,000 $4,100,000 $99,000,000Brother $12,000,000 $8,662,500 $400,000 $4,000,000 $25,062,500Seiko $7,000,000 $2,000,000 $400,000 $1,000,000 $10,400,000Total $260,300,000 $188,602,500 $29,629,000 $57,876,000 $536,407,500

2007 Market Share EstimatesVendor North America EU LATAM APAC TotalAvery and others 71% 74% 96% 84% 75%DYMO 21% 21% 1% 7% 18%Brother 5% 5% 1% 7% 5%Seiko 3% 1% 1% 2% 2%Total 100% 100% 100% 100% 100%

DYMO vs. BROTHER

»A “jewel” for your desk.

»Friendly, simple, approachable products.

»Best of class labeling software plus…

»….slick integration with popular software such as Word, Outlook, QuickBooks etc.

»Broad distribution.

»Lots of consumer marketing.

»A “machine” on your desk.

»Harder edge, not simple, not friendly.

»Adequate labeling software plus…

»….adequate integration with popular software such as Word, Outlook.

»Broad distribution.

»Heavy discounting since launch. Often 30%-50% less than DYMO.

SWOT: DYMO LabelWriter

7

Strengths

» Global Product line/Sub Brand

» End User Focused product/marketing

» Highly profitable consumables

» Good Innovation stream

» Software Capability

» Continuous large A&P Spend

» Product Design

» Volume leadership

» Install base as advocates

Opportunities

» Continue to build brand and category awareness

» Geographic expansion

» Leverage Sanford strength in the channel (e.g. exclusivity)

» Cross-promotions with other Sanford brands

» New vertical market solutions

» Innovation leadership

Weaknesses

» Unified DYMO brand Marketing communication

» Overall low awareness of category

» Lack of presence in Latin America & Asia(except Australia)

» B2B, direct marketing expertise

» Limited resources on product side

» CE&IT sales expertise in Sanford Sales Org

» Product development cycle

» Costs

Threats

» Price pressure from competitor attention and aggressiveness

» Convenience item

» Displacement by competition (Brother)

» Non Protected label supply

» Third party label suppliers

» Costs increases

» Further erosion of core applications (mail, envelopes, filing) due to digitization of information

SWOT: Brother

8

Strengths

» Huge company with labeling focus

» Global presence with a #1 or #2 share in most regions on core labeling products

» Well known brand

» Strong IT distribution relationships

» Proprietary business with IP coverage

» High profitability on consumables

» R&D resources enable frequent product updates, broad portfolio of products

» Deep promotional pockets

Opportunities

» Invest in building brand, consumer preference

» Gain market share in Europe, US vs. DYMO – exploiting DYMO A&P spend.

» Increasing cross promotions and other marketing/sales links with the Brother Printer Division.

» Development and launch of more end user driven solutions (applications, printers and tapes)

Weaknesses

» Product-driven marketing instead of consumer driven

» Product Design

» Price promotion “happy”

» Labeling in Multi Function business unit – no focus right now

» Commercial business relationships

» Volume movement at key channels

» Costs

» Low A&P investment

Threats

» Cost increase

» Promotional strategy eroding brand equity across other lines

» DYMO fully leveraging Sanford organization, relationships

» Emerging strength of, and consumer preference for, DYMO branded products.

» Further exclusivity programs by DYMO

Market Dynamics

Positive Developments:

» DYMO’s LabelWriter business has been growing 15% annually for several years, doubling from $50MM to $99MM in five years.

» In many measures, we’re still tapping into an under-penetrated market.

Concerns:

» In 2007, sales in all small business focused sales channels in the USA were flat to slightly down (IT, office superstore retail, CE.) Fortunately, sales through the commercial channel were up strongly. Key question is whether the weakness we see in small business channels in 2007 may deepen in 2008 and even spread to Europe.

» While we can still point to serving an under-penetrated market, due to lack of knowledge about the LabelWriter, the most popular LabelWriter application is addressing envelopes and we know that the use of first class mail volume is falling. We are diversifying the applications for LabelWriter with DYMO Stamps, DYMO File etc but key fact remains that addressing envelopes is on the decline.

» While we have been growing rapidly as we march from one new country to another in Europe, at some point we’re going to run into a stumbling block, whether economic, campaign success and so forth.

Product Portfolio - Printers

USA

» As the street prices for LabelWriter printers are the same in $s and Euros, EU consumers are really paying 40% more for their printers.

» EU average 8% program expense is lower than USA 15% average where big customers dominate.

» The standard costs for EU LabelWriter printers shown in EU chart looks way high, resulting in a 42% overall GM. The real GM is certainly higher. See next page for more accurate numbers as of 02.25.08

LabelWriter Pricing, Margins and Unit Share - USA

400 Turbo Twin Turbo DUO SE300*

Street Price $99.95 $129.95 $179.95 $199.95 $299.00Distributor Price (ASP) $80.00 $104.00 $144.00 $164.00 $225.00Margin between dist and street 20% 20% 20% 18% 25%Average Program Expense 15% 15% 15% 15% 2%Net Distributor Price $68.00 $88.40 $122.40 $139.40 $220.50Standard Cost $43.55 $44.73 $65.46 $77.71 $58.00Gross Profit $24.45 $43.67 $56.94 $61.69 $162.50 Totals

Gross Margin after program 36% 49% 47% 44% 74% 45%LE FY2007 unit sales 115,000 83,000 35,000 16,000 6,500 255,500Unit share 45% 32% 14% 6% 3%Annual net reveue $7,820,000 $7,337,200 $4,284,000 $2,230,400 $1,433,250 $23,104,850Gross Profit $s $2,811,750 $3,624,610 $1,992,900 $987,040 $1,056,250 $10,472,550

* SE model is for vertical markets only. Not a mainstream offering but highly profitable. Not sold outside USA

Europe

Key Notes

LabelWriter Pricing, Margins and Unit Share - Europe ($1.40 exchange)

400 Turbo Twin Turbo DUO

Street Price $138.60 $180.60 $250.60 $278.60Distributor Price (ASP) $103.95 $135.45 $187.95 $208.95Margin between dist and street 25% 25% 25% 20%Average Program Expense 8% 8% 8% 8%Net Distributor Price $95.63 $124.61 $172.91 $192.23Standard Cost $59.04 $59.04 $94.07 $108.26Gross Profit $36.59 $65.57 $78.84 $83.97 Totals

Gross Margin after program 38% 53% 46% 44% 42%Likely FY2007 unit sales 116,708 32,360 6,451 13,021 168,540Unit share 69% 19% 4% 8%Annual net reveue $11,161,253 $4,032,509 $1,115,468 $2,503,079 $18,812,309Gross Profit $s $4,270,813 $2,121,975 $508,623 $1,093,425 $7,994,835

Product Portfolio – Printers (with corrected Europe costs and margins on .02.25.08)

USA

» As the street prices for LabelWriter printers are the same in $s and Euros, EU consumers are really paying 40% more for their printers.

» EU average 8% program expense is lower than USA 15% average where big customers dominate.

LabelWriter Pricing, Margins and Unit Share - USA

400 Turbo Twin Turbo DUO SE300*

Street Price $99.95 $129.95 $179.95 $199.95 $299.00Distributor Price (ASP) $80.00 $104.00 $144.00 $164.00 $225.00Margin between dist and street 20% 20% 20% 18% 25%Average Program Expense 15% 15% 15% 15% 2%Net Distributor Price $68.00 $88.40 $122.40 $139.40 $220.50Standard Cost $43.55 $44.73 $65.46 $77.71 $58.00Gross Profit $24.45 $43.67 $56.94 $61.69 $162.50 Totals

Gross Margin after program 36% 49% 47% 44% 74% 45%LE FY2007 unit sales 115,000 83,000 35,000 16,000 6,500 255,500Unit share 45% 32% 14% 6% 3%Annual net reveue $7,820,000 $7,337,200 $4,284,000 $2,230,400 $1,433,250 $23,104,850Gross Profit $s $2,811,750 $3,624,610 $1,992,900 $987,040 $1,056,250 $10,472,550

* SE model is for vertical markets only. Not a mainstream offering but highly profitable. Not sold outside USA

Europe

Key Notes

LabelWriter Pricing, Margins and Unit Share - Europe ($1.40 exchange)400 Turbo Twin Turbo DUO

Street Price $138.60 $180.60 $250.60 $278.60Distributor Price (ASP) $103.95 $135.45 $187.95 $208.95Margin between dist and street 25% 25% 25% 20%Average Program Expense 8% 8% 8% 8%Net Distributor Price $95.63 $124.61 $172.91 $192.23Standard Cost $44.59 $47.15 $67.23 $79.51Gross Profit $51.04 $77.46 $105.69 $112.73 Totals

Gross Margin after program 53% 62% 61% 59% 56%Likely FY2007 unit sales 116,708 32,360 6,451 13,021 168,540Unit share 69% 19% 4% 8%Annual net reveue $11,161,253 $4,032,509 $1,115,468 $2,503,079 $18,812,309Gross Profit $s $5,957,243 $2,506,670 $681,780 $1,467,831 $10,613,525

Product Portfolio - Consumables

Labels Key NotesLabelWriter Labels - USA

ASP$* $18.75ASP$ $13.14Margin between dist and street 30%Average Program Expense 15%Net Distributor Price $11.17Standard Cost $3.08Gross Profit $8.09 Totals

Gross Margin after program 72% 72%LE FY2007 unit sales 2,463,075 2,463,075Annual net reveue $27,510,088 $27,510,088Gross Profit $s $19,923,816 $19,923,816

* There is a wide variance on the consumer price from our customers.

» No data for Europe available at time this report was issued but the gross margin is in the same low 70% range.

Productivity Initiatives

2007 Productivity Projects 2006 Cost 2007 CostUnit Cost

Saving 2007 units 2007 Savings Probability2007 Productivity Confirmed

Change Power Adapter from 65w to 42w $6.00 $5.00 $1.00 417540 $417,540.00 90% $375,786.00Change to NXP Arm 7 Micro $3.10 $2.40 $0.70 347068 $242,947.60 90% $218,652.84Change to Arm 7 PCBA $21.57 $19.85 $1.72 347068 $596,956.96 90% $537,261.26Change to Freescale A Version Micro $3.26 $2.28 $0.98 70472 $69,062.56 30% $20,718.77Change Glaze on 300 dpi Thermal Print Head $5.95 $5.68 $0.27 458991 $123,927.57 100% $123,927.572007 Total $1,450,434.69 1,276,346$

Product 2007 Units Adapter Arm 7 Micro Arm 7 PCBA A Verson MCU 300dpi Glaze Product Total

LabelWriter 400 231,708 $208,537.20 $145,976.04 $358,683.98 n/a $62,561.16 775,758$

LabelWriter 400 Turbo 115,360 $103,824.00 $72,676.80 $178,577.28 n/a $31,147.20 386,225$

LabelWriter Twin Turbo 41,451 $37,305.90 n/a n/a $12,186.59 $22,383.54 71,876$ LabelWriter Duo 29,021 $26,118.90 n/a n/a $8,532.17 $7,835.67 42,487$

Project Total $375,786.00 $218,652.84 $537,261.26 $20,718.77 $123,927.57 1,276,346$

Total Spend 2007 2007 Savings % Savings Total Spend 2007 2007 Savings % Savings

LabelWriter 400 $10,090,883.40 $775,758.38 7.69% $8,787,572.24 $775,758.38 8.83%LabelWriter 400 Turbo $5,160,052.80 $386,225.28 7.48% $4,511,175.87 $386,225.28 8.56%LabelWriter Twin Turbo $2,713,382.46 $71,876.03 2.65% $2,419,341.50 $71,876.03 2.97%LabelWriter Duo $2,255,221.91 $42,486.74 1.88% $2,036,693.78 $42,486.74 2.09%Total $20,219,540.57 $1,276,346.44 6.31% $17,754,783.39 $1,276,346.44 7.19%

400 Turbo Twin Turbo DUO Sub-Total

Total Standard Cost $43.55 $44.73 $65.46 $77.71Likely FY2007 unit sales U.S. 115,000 83,000 35,000 16,000 249,000Likely FY2007 unit sales Europe 116,708 32,360 6,451 13,021 168,540Likely FY2007 unit sales global 231,708 115,360 41,451 29,021 417,5402007 LW Material Spend $10,090,883.40 $5,160,052.80 $2,713,382.46 $2,255,221.91 $20,219,540.57

400 Turbo Twin Turbo DUO Sub-Total

Total Standard Cost (less Freight, OH, Scrap, Labor $37.93 $39.11 $58.37 $70.18Likely FY2007 unit sales U.S. 115,000 83,000 35,000 16,000 249,000Likely FY2007 unit sales Europe 116,708 32,360 6,451 13,021 168,540Likely FY2007 unit sales global 231,708 115,360 41,451 29,021 417,5402007 LW Material Spend $8,787,572.24 $4,511,175.87 $2,419,341.50 $2,036,693.78 $17,754,783.39

2007 Global LabelWriter Productivity Per Printer Model

2007 Global Productivity vs. Annual Spend

2007 Productivity Project Overview

2007 LabelWriter Material Spend

standard cost = material cog + freight, OH, labor, scrap standard cost = material cog only

2007 Productivity vs. Spend 2007 Productivity vs. Spend

2008 Global Projections

LABELWRITER

ACTUAL Oct 15th CURRENT BUDGET PROPOSED ACTUAL Oct 15th CURRENT BUDGET Curr PROP.2006 Est '07 Est '07 2008 2008 2006 Est '07 Est '07 2008 Est '07 2008

NET SALES

NA 56.8 57.9 55.3 62.8 59.8 (2.6)% 8.1%EU 27.7 39.2 39.2 51.8 47.1 41.4% 20.3%LA 0.3 0.4 0.4 0.5 0.5 48.7% 20.2%AP 1.6 4.1 4.1 4.9 4.9 154.0% 19.0%Total GBU 86.4 101.6 99.0 120.0 112.3 14.6% 13.4%

STND MARGIN

NA 32.9 34.2 32.7 37.1 35.3 58.0% 59.1% 59.1% 59.0% (0.7)% 7.8%EU 14.6 22.3 22.3 31.1 28.3 52.8% 56.8% 56.8% 60.0% 52.3% 27.0%LA 0.1 0.2 0.2 0.3 0.3 48.6% 50.0% 50.0% 52.5% 52.9% 26.3%AP 0.6 1.5 1.5 2.2 2.2 36.9% 37.5% 37.5% 44.6% 158.0% 41.5%Total GBU 48.3 58.3 56.7 70.6 66.0 55.9% 57.3% 57.3% 58.8% 17.5% 16.3%

A&P

NA 5.3 6.5 6.2 6.0 5.7 9.4% 11.2% 11.2% 9.6% 16.8% (7.7)%EU 6.3 5.7 5.7 9.1 8.0 22.8% 14.4% 14.4% 17.5% (10.6)% 41.3%LA 0.0 - - 0.1 0.1 0.5% 0.0% 0.0% 10.6% (100.0)%AP 1.1 0.4 0.4 0.5 0.5 69.7% 9.7% 9.7% 9.8% (64.7)% 20.4%Total GBU 12.8 12.5 12.3 15.6 14.3 14.8% 12.3% 12.4% 13.0% (4.0)% 16.2%

CONT INCOME

NA 25.6 25.9 24.6 26.5 25.0 45.0% 44.7% 44.4% 42.2% (3.9)% 1.6%EU 6.4 15.0 15.0 19.3 17.6 23.1% 38.4% 38.4% 37.4% 135.1% 17.2%LA 0.1 0.2 0.2 0.2 0.2 48.0% 50.0% 50.0% 42.0% 54.8% 0.9%AP (0.5) 1.1 1.1 1.7 1.7 -32.7% 27.8% 27.8% 34.8% 48.9%Total GBU 31.6 42.3 41.0 47.8 44.5 36.5% 41.6% 41.4% 39.8% 29.8% 8.6%

% of Net Sales % Growth

Become the business consumer’s preferred choice in label printing from a computer

Global Business Strategy & Actions

15

Strategy

Drive sales through targeted awareness building activities

Develop products with market leading specifications, industrial design and usability.

Continue broadening the base of applications through partnerships and internal development (internet postage, digital filing, shipping, visitor management...)

Regional/Geographic expansion/growth.

Key Actions

16

North America Outlook 2008

»Increase ad campaign effectiveness.

»Continued focus on commercial channel support.

»Strengthen postage message at Office Superstores by adding Twin Turbo.

»Promote the ability to print labels and postage more aggressively.

Keys to Success2008 Revenue Walk

»Small business slowdown worsens.

»Corporate sector sales slow.

»Weak retail store execution isn’t reversed.

Risks

2008 USA Walk2007 net sales $50.83% core business growth $1.5Label price increase $1.2Non recurring returns $1.5Total USA 2008 $55.0

2008 CANADA Walk2007 net sales $4.72008 forecast $4.8

2007 vs 2008 NA TOTAL2007 net sales $55.32008 net sales $59.8% Change 8.1%

2008 USA MarCom View

» Goal:▪ Drive awareness through full year of activities on TV, online and

in store mediums

▪ Focus on Small Office (<5) sector to support in store and IT/CE business

▪ Halo effect to administrative assistant market

17

18

EUROPE Outlook 2008

Keys to Success

» Q1 campaign success in Spain, Benelux, Italy and Germany.

2008 Revenue Walk

Risks

» Campaigns under perform.

» Brother’s steep discounts gain traction.

» Economic slowdown crimps spending.

NWL Achieved +40% in 20072006 net sales $27.72007 net sales $39.2$ Growth $11.5% Growth 42%

+20% Goal for 20082007 net sales $39.22008 proposed sales $47.1$ Growth $7.9% Growth 20%

2008 ($m @1,34)

Region Net Sales2008 Campaign

SpendingWestern Europe $11.6 $0.813Central Europe $10.5 $2.033Southern Europe $13.0 $2.338UK and Ireland $8.1 $2.033Nordic $2.5 $0.203Eastern Europe $0.9 $0.051Emerging Markets $0.5 $0.051Total $47.1 $7.522

2008 EU Media Activity

TV

TVTV

TV

TV

TV

TV

TV

$ '000s at 1,34 rate JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC $ SpendTotal $ spend

TECHNOLOGY $12,969Label writer

Germany $2,033

UK $2,000

Benelux $813

Spain $813

Italy $1,525

Prof. LabellingGermany $2,033

France $305

Benelux $305

UK $400

LetratagSpain $712

France $712

IndustrialUK $95

Germany $102$0Discpainter

Benelux $413

CardscanGermany $407

UK $300

3 Year Product Road Map

Hardware:

Q2: LabelWriter 4XL

• Handles 4” wide labels.

• Shipping applications and vertical markets.

Q2: Print Server

• Enables sharing of printer among several users.

Q3: LabelWriter 450 Series

» Improved print speed and resolution.

Software:

» DYMO Stamps update for rate change.

» DLS update for MS Office.

» DLS update for LW450

» DLS v8 – a major rewrite/upgrade

20

2008 2009

1H: DLS8 Localizations• EU first since, then Japan.

2H: LabelWriter 500• All new cartridge based

product line.

• Next step in ease of use.

2010

Color Label Printer

• R&D not currently funded.

New Software Applications:• DYMO Visitor

• DYMO Shipping

(B)Project Everest: LW4XL Overview

What?DYMO LabelWriter 4” printer

Why?Opportunity exists to introduce stand-alone label printer as well as an integrated shipping solution for small business

Features / Performance Specs: 4” print capacity USB Windows and Mac Compatible 15 4” Shipping Labels/minute*

Application / Benefits: Perfect for use in the shipping area Perfect for use in security, inventory and othervertical markets No ink or toner needed Process shipments quickly and efficiently

Competition:BrotherZebra/EltronLaser/inkjet printers

Source of Supply:Honor Tone

IP Status:In process

*Final spec. to be completed.

NEW PRODUCT WITH CONSUMABLES:

2008 2009 2010 2011

Target Unit Cost 80.00$ 80.00$ 80.00$ 80.00$

Avg Net Sale Price 187.00$ 187.00$ 187.00$ 187.00$

GM 57% 57% 57% 57%

Capital 225,000$

Dev. Time (mo) 19

Project Close (G6) May-08

Sales Start May-08

Units 4,000 8,000 12,000 12,000

NA Sales 4,000 8,000 12,000 12,000

Europe Sales

Asia Pacific Sales

Latin America Sales

Total Global Sales 748,000$ 1,496,000$ 2,244,000$ 2,244,000$

GM 428,000$ 856,000$ 1,284,000$ 1,284,000$

Inc. Units 4,000 8,000 12,000 12,000

Inc. Sales 748,000$ 1,496,000$ 2,244,000$ 2,244,000$

Inc. GM 428,000$ 856,000$ 1,284,000$ 1,284,000$

Consumables Sales 50,000$ 102,852$ 209,251$ 418,503$

Consumables GM $ 34,026$ 68,052$ 138,451$ 276,903$

Total Inc GM 462,026$ 924,052$ 1,422,451$ 1,560,903$

3 year total Inc GM 3,907,406 Inc Sales 6,714,606

(AF)LW500 - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line

Why?To continue to innovative the LabelWriter product line, adding increased value and end user benefit

Features / Performance Specs: Drop and Load Cassette System New Industrial Design Entry level labeling (40lpm) Manual Cutter SystemApplication / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.

Competition:Brother QL series

Source of Supply:TBD

IP Status:GNI-XX-XX-XX; Patent No. XXXXXXXX

500 2009 2010 2011 2012

Target Unit Cost $ 53.74 $ 51.05 $ 48.50 $ 46.80

Avg Net Sale Price $ 80.00 $ 80.00 $ 80.00 $ 80.00

GM 33% 36% 39% 41%

Capital $ 60,000

Dev. Time (mo) 16

Project Close (G6) May '09

Sales Start June '09

Units (K) 195 281 312 345

NA Sales 106 152 168 184

Europe Sales 80 115 127 139

Asia Pacific Sales 7 11 14 17

Latin America Sales 2 3 4 5

Total Global Sales $ 15,600 $ 22,515 $ 24,935 $ 27,640

GM $ 5,121 $ 8,147 $ 9,818 $ 11,470

Inc. Units (K) 0 0 0 0

Inc. Sales $ - $ - $ - $ -

Inc. GM $ - $ - $ - $ -

Consumables/Aftermarket Sales Revenue

Consumables Sales $ 9,750 $ 14,072 $ 15,585 $ 17,275

Consumables GM $ $ 6,435 $ 9,287 $ 10,286 $ 11,401

Total Inc GM $ 6,435 $ 9,287 $ 10,286 $ 11,401

3 year total Inc GM 30,975 Inc Sales 46,931

(AF)LW500 Turbo - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line


Features / Performance Specs: Drop and Load Cassette System New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models

Application / Benefits: General office labeling Auto loading makes exponential difference on interaction with consumables replacement Faster. Easier makes printing labels a simpler chore, eliminating the hassles of labeling.




500 Turbo 2009 2010 2011 2012

Target Unit Cost $ 55.94 $ 53.14 $ 50.49 $ 48.72


GM 46% 49% 51% 53%

Capital $ 60,000

Dev. Time (mo) 16



Units (K) 150 215 236 260

NA Sales 80 115 127 139





GM $ 7,209 $ 10,918 $ 12,638 $ 14,360


Inc. Sales $ - $ - $ - $ -

Inc. GM $ - $ - $ - $ -



Consumables GM $ $ 4,950 $ 7,085 $ 7,793 $ 8,572

Total Inc GM $ 4,950 $ 7,085 $ 7,793 $ 8,572


(AF)LW 500 Twin - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line


Features / Performance Specs: Drop and Load Cassette System Twin System Offers double the productivity New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models





Twin 2009 2010 2011 2012

Target Unit Cost $ 83.38 $ 79.21 $ 75.25 $ 72.62


GM 42% 45% 48% 50%

Capital $ 80,000

Dev. Time (mo) 16



Units (K) 61 87 96 106

NA Sales 35 50 55 61





GM $ 3,698 $ 5,657 $ 6,603 $ 7,542


Inc. Sales $ - $ - $ - $ -

Inc. GM $ - $ - $ - $ -



Consumables GM $ $ 2,013 $ 2,881 $ 3,169 $ 3,486

Total Inc GM $ 2,013 $ 2,881 $ 3,169 $ 3,486


(AF)LW 500 Duo - OverviewWhat?New Platform and updated design to Global LabelWriter Product Line


Features / Performance Specs: Drop and Load Cassette System New Industrial Design Faster and Quieter (60lpm) Auto Cutter on high end models





Duo 2009 2010 2011 2012

Target Unit Cost $ 91.50 $ 86.93 $ 82.58 $ 78.45


GM 44% 47% 50% 52%

Capital $ 150,000

Dev. Time (mo) 20

Project Close (G6) Oct. '09

Sales Start Nov. '09

Units (K) 32 45 49 54

NA Sales 15 22 24 26





GM $ 2,320 $ 3,478 $ 4,025 $ 4,635


Inc. Sales $ - $ - $ - $ -

Inc. GM $ - $ - $ - $ -



Consumables GM $ $ 1,056 $ 1,489 $ 1,631 $ 1,788

Total Inc GM $ 1,056 $ 1,489 $ 1,631 $ 1,788


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Broadening the Application Base for LabelWriter

27

• With core applications such as addressing and filing on the decline, we have sought new office applications for LabelWriter that could be branded DYMO.

• We have targeted four specific apps:• Printing postage (launched)• Digital filing (launched)• Temporary visitor badges• Printing shipping labels

DYMO Stamps (launched April 2006)

» Exciting new application for LabelWriter as everybody needs stamps.

» First internet postage system where users don’t pay a monthly fee.

» NWL makes its profit from sale of label printer and sales of postage labels.

» 20 months after launch, 16,000 users print a total of approx 1 million stamps monthly. That means about 10% of Stamps compatible printers are actually printing postage.

» Postage label sales in 2007 have brought the Tech GBU $1.3 million in revenue at 90% margin.

» You can print postage from a standard LabelWriter Turbo. Even better is a Twin Turbo that holds address labels and stamps at the same time. 50% of users have selected the Twin Turbo.

» DYMO Mailing Solution Kit includes 5 pound USB scale. Currently selling at Sam’s Club at 80 units/monthly. Plan to broaden distribution in 2008.

DYMO Stamps Next Steps

4” Wide Printer for Shipping Labels

»On its own, will be used in vertical markets where people need wider labels.

»Combined with a multi-carrier shipping service, could be sold through SOHO distribution channels.

DYMO Stamps Sheet Labels

»Print postage stamps on any laser or inkjet printer.

»Could be sold in the Avery label aisle in office superstores.

»Consumer research taking place now.

DYMO Stamps Printer

»Mini stamp printer.

»Unlike LabelWriter, this printer would only print stamps, not stamps plus standard labels.

»Priced in the $59-$69 range.

»Consumer research taking place now.

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For paperwork that needs to be filed digitally….

new DYMO File Softwaremakes it easy to...

To organize his paperwork, we give him two choices.

DYMO File (launching Q4 2007)

DYMO Visitor (future)

» DYMO LabelWriter is a popular choice to print visitor badges in the lobbies of many office buildings.

» Over the years, DYMO has partnered with several small software companies that specialize in visitor management software. Companies such as STOPware (a Brady company), Infrasafe and others resell our LabelWriter printers with their software.

» DYMO even developed its own visitor management software called GuestGuard that was quietly launched in Belgium in 2005 and has a couple dozen customers.

» There may be an opportunity for DYMO to offer a packaged bundle (label printer, software, service) that makes it easy for small businesses to replace the front desk logbook. We would need to be very careful to not enter the visitor management market as that requires a single minded focus with a long sale cycle. Our solution would be a simple, log book replacement.

» Key decision is whether we would develop and maintain the software/service ourselves or partner with STOPware, Infrasafe or another specialist as we did with Endicia to launch DYMO Stamps. And whether our distribution channels would embrace the product.

DYMO Shipping Solution (future - speculative)

» Concept is to offer small business a printer, software, internet service based system for managing their Package Shipping.

» Can’t be USPS only as Pitney Bowes has tried that and failed.

» Needs to be multi-carrier.

» Endicia is looking into the opportunities here.

» Endicia would be product management arm, while DYMO would bring the solution to market.

» Key challenge is that small businesses already have many options for shipping – unsure yet whether we can bring added value.

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Internal Challenges

Japan Update

» Japan is a large labeling market, with 3 strong competitors - King Jim (dominating the office market), Brother (office/home) and Casio (home focus). Due to the strong IP position held by competitors in Japan, and the fact that Esselte never had a presence in Japan, the only business DYMO has in Japan is a tiny embossing business.

» Newell Japan has expressed an interest in selling LabelWriter printers in Japan because they will not run afoul of competitor’s IP and because Brother is already selling their QL series in the market. Importantly, the GBU has received no market data on Japan

» Selling LabelWriter in Japan requires a Japanese version of the DYMO Label Software, which is tied to a major rewrite called DLS v8. DLS 8 is being written in Unicode to facilitate translations beyond Latin languages.

▪ As recently as September, DYMO indicated to Ian Coleman that DLS8 in Japanese would be available in Q4 2008. This was a mistake as DLS8 development has not yet begun and we currently expect just the English version to be complete by year end 2008.

▪ In November, DYMO informed APAC that a Japanese version of DLS will be ready in the second half of 2009, and will follow DLS 8’s release in North America and Europe where we have a big business to protect.

» Just as important is that NWL APAC performs a careful market analysis to see whether there is a market need for the LabelWriter in the local market in its current form, or a modified form, along with a marketing/sales plan detailing exactly how the product would be positioned, distributed and marketed. Without that, it is impossible to judge the ROI of such a development project.

Business Reporting (Global)

» Sales reporting is incomplete.

» We have lost visibility into customer POS in USA.

» No resource to turn to in the USA for ad-hoc sales/market analysis.

35

Channel Management (USA):

» While the NWL office sales organization is terrific in office and mass channels, due to the specialization of the channel, and its importance to the Tech GBU, we believe the Tech GBU should manage the IT and CE sales channels directly.

▪ There is precedence for this as this is the way DYMO managed its business under Esselte.

36

Innovation/Product Management

» The LabelWriter business should have dedicated resources in the following functional areas – Channel Support, Business Development, Marcom, and Innovation/Product Management.

» The one glaring hole in the organization is innovation/product management.

▪ Over the next several years, the new printers, updates to core software and the pursuit of new applications all require the focus of an Innovation and Product Management team.

▪ The cartridge based LabelWriter 500 is a complete change to all parts of the product – printers, software and consumables.

▪ Development of a color printer would also be a major project.

» A second area of concern is in Europe where Tom DeFruytier handles the whole business by himself. He doesn’t have time to support the country clusters with anything beyond the normal business, meaning no time to pursue vertical markets and other special opportunities.

» A third area of concern is business development as we will need to add to the team in order to develop and launch new applications such as DYMO Visitor. Please see the next slide for a detail of the current business org chart with yellow highlighting our needs.

37

LabelWriter Business Organization

38

Andrew NewmarkSVP – PC Products,

Business Development

Tom DeFruytierMarketing Mgr EU/

APAC

Bob Anders(Advertising Consultant)

Tim RobbMarketing Mgr NA

Sue BawolLabel Product Mgr

Melisha CurryCustom Label

Manager

Dena StahlheberAssociate

Marketing Manager

Erik HedlingChannel Advocate

Miguel OrtizMarketing Manager –

Business Development

Regine CrossmanAssociate Brand

Manager – Mailing/Shipping and BD

Important NeedProduct Innovation

Team

Future HireBusiness Dev Manager - EU

Future HireAssociate Brand

Mgr – Visitor Management

Documents

LabelWriter Business Summary 12.17.07. Quick Facts LabelWriter 400, 400 Turbo, Twin Turbo and DUO $/€ 99 - $/€ 199 » PC/Mac connected label printers and