In managing our business we have key areas where we concentrate our efforts and each gets considerable attention. Planet Keilhauer is our environmental initiative. We feel that it is important that we work as quickly as possible to create a company that is environmentally benign (CLOSED LOOP).

The basic elements of our plan are to use others' waste (recycled materials) or sustainable sources of raw materials to create our products, to ensure that our products are fully recyclable, to use as few resources as possible in the manufacturing process and to ensure that we minimize or eliminate waste and emissions. We would like our footprint on the world to be very light.

We currently conduct annual waste audits of our manufacturing facilities with the view to reducing the waste and emission in our processes and have started the process of life cycle analysis for all of our products.

Once made, our products should last for a long time, and when their useful life is over, they should be fully recyclable. As an example of this, we have a 10-year warranty on our Tom series of chairs and will take them back for recycling once our customers have finished with them.

We have also started the process of life cycle analysis for all of our existing products and are incorporating it into the design and development of any new products in the future.

Many of these practices are already incorporated into our existing products. A cross section of our products reveals the following:

• Metal components are 100% recyclable and are made from up to 100% recycled material
• Almost all the plastic used in products is 100% recyclable
• All foam is CFC-free and is applied using water-based adhesives where appropriate
• Our hardwood frames are made of kiln dried maple sourced from sustainable forests wherever possible
• We also use engineered wood which utilizes waste wood and wood from fast-growing species
• Sawdust from wood manufacturing is recycled as animal bedding at farms
• Wood pieces and off cuts are collected and used in energy generation
• In the manufacture of our leather most of the waste products are reused
• Leather scraps resulting from cutting upholstery covers are recycled
• Cardboard waste from packaging materials is recycled

Our total recycling at this point is 85% of our solid waste generated. Our ultimate goal is to have nothing go to landfill.

Although we are well within acceptable limits of compliance to any legislation, we regularly undertake an emission audit to understand how we can reduce our already small emission in this area. We have already converted much of our production facility to water-based adhesives, and are investigating the feasibility of converting our wood staining operation to water-based stains in the near future.

Approximately 75% of our freight is shipped blanket wrapped allowing us to fit more into a trailer and avoid the use of cardboard in the packing process.

All of our facilities were old factories that were completely gutted and converted to modern day buildings. The factories, in their construction, were fitted with state-of-the-art lighting with electronic ballasts, motion detectors for our lighting, low-flush toilets, and low glare double-thick curtain walls.

At our main facility, all of the electricity that we use to power our factories and offices comes from 100% green power sources provided through Bullfrog Power, a green electricity retailer. In one year, the emissions offset by the green power purchased by Keilhauer, is the equivalent of removing 95 cars from the roads.