This document outlines the timeline and details of a proposed perishable expansion project for AGME from 1998-2004. Key events in the timeline include beginning a review process for warehouse expansion in 1998, appointing a building committee in 1999, and presenting expansion plans and cost analyses throughout 2000-2002 before authorizing M&A activity and ending expansion plans in 2002. The proposed expansion would add 41,000 square feet of space and modernize facilities. Analyses provide cost savings projections from improved efficiencies in labor, utilities, maintenance, damages and insurance that would result from the expansion.

1. ““AGME Perishable Expansion Project”AGME Perishable Expansion Project”
Executive Management TeamExecutive Management Team
December 21, 2004.December 21, 2004.

2. PERISHABLE EXPANSIONPERISHABLE EXPANSION
TIMELINETIMELINE
 January 6, 1998January 6, 1998
Management begins review process forManagement begins review process for
warehouse expansionwarehouse expansion
 July 21,1998July 21,1998
Board reviews expansion plansBoard reviews expansion plans
 November 17,1998November 17,1998
Board reviews SORA design optionsBoard reviews SORA design options

3. PERISHABLE EXPANSIONPERISHABLE EXPANSION
TIMELINETIMELINE
 March 30,1999March 30,1999
Capital expenditures for Y2K exceed budgetCapital expenditures for Y2K exceed budget
Conversion expenses climbConversion expenses climb
Board appoints building committeeBoard appoints building committee
 December 6, 1999December 6, 1999
KOM presents final expansion planKOM presents final expansion plan
 December 14, 1999December 14, 1999
Board approves motion to finalize expansionBoard approves motion to finalize expansion
plansplans

4. PERISHABLE EXPANSIONPERISHABLE EXPANSION
TIMELINETIMELINE
 January , 2000January , 2000
Company loses Irving businessCompany loses Irving business
 March 31,2000March 31,2000
Y2K Capital Budget exceeds $1.4MMY2K Capital Budget exceeds $1.4MM
Year has operating lossYear has operating loss
 April 18, 2000April 18, 2000
Board of Directors reviews whse bidsBoard of Directors reviews whse bids

5. PERISHABLE EXPANSIONPERISHABLE EXPANSION
TIMELINETIMELINE
 May 15, 2000May 15, 2000
Management postpones expansion projectManagement postpones expansion project
 December 18, 2001December 18, 2001
Board of Directors revives expansionBoard of Directors revives expansion
 May 15, 2002May 15, 2002
KOM presents re-sized recommendationKOM presents re-sized recommendation
 December 17, 2002December 17, 2002
Board of Directors authorizes M&A activityBoard of Directors authorizes M&A activity
Ends expansion plansEnds expansion plans

6. PERISHABLE EXPANSIONPERISHABLE EXPANSION
TIMELINETIMELINE
 FEBRUARY 17, 2004FEBRUARY 17, 2004
PART OF STRATEGIC PLANPART OF STRATEGIC PLAN
TO SOLVE PERISHABLESTO SOLVE PERISHABLES
SPACE PROBLEM !SPACE PROBLEM !

7. WAREHOUSEWAREHOUSE
&&
TRANSPORTATIONTRANSPORTATION
RICHRICH HOUDLETTEHOUDLETTE
DIRECTOR OFDIRECTOR OF
OPERATIONSOPERATIONS

8. Proposed ExpansionProposed Expansion
 A total of 41,000 SQ. FT. of Perishable space would be added toA total of 41,000 SQ. FT. of Perishable space would be added to
the existing perishable center.the existing perishable center.
 The frozen food would increase from 9,100 SQ. FT. to 18500 SQ.The frozen food would increase from 9,100 SQ. FT. to 18500 SQ.
FT., Meat from 6,400 SQ. FT. to 10,750 SQ. FT., Dairy/Deli fromFT., Meat from 6,400 SQ. FT. to 10,750 SQ. FT., Dairy/Deli from
4,800 SQ. FT. to 18,400 SQ. FT. and Produce from 9,500 SQ. FT.4,800 SQ. FT. to 18,400 SQ. FT. and Produce from 9,500 SQ. FT.
to 12,850 SQ. FT.to 12,850 SQ. FT.
 The Dock area would increase from 4,600 SQ. FT. to 17,900 SQ.The Dock area would increase from 4,600 SQ. FT. to 17,900 SQ.
FT.FT.
 Eight (8) new loading doors would be installed to allow for loadingEight (8) new loading doors would be installed to allow for loading
off from a temperature controlled dock.off from a temperature controlled dock.
 The existing Freon refrigeration system would be replaced with anThe existing Freon refrigeration system would be replaced with an
ammonia system.ammonia system.

9. Growing Labor ExpensesGrowing Labor Expenses
 For fiscal 2004 there were 1,643,186 cases received in meat,For fiscal 2004 there were 1,643,186 cases received in meat,
dairy and frozen or 59,198 pallets of merchandise.dairy and frozen or 59,198 pallets of merchandise.
 Out of that number 423,228 cases we handled 4 times fromOut of that number 423,228 cases we handled 4 times from
receipt to the delivery truck. Twice more than necessary !receipt to the delivery truck. Twice more than necessary !
 In addition 21,161 were handled 6 times due to going to outsideIn addition 21,161 were handled 6 times due to going to outside
storage. Outside storage causes the operation to receive thestorage. Outside storage causes the operation to receive the
product twice as well.product twice as well.
 Due to space constraints buy quantities have forced theDue to space constraints buy quantities have forced the
operation to receive 821,593 cases 3 times more frequentlyoperation to receive 821,593 cases 3 times more frequently
than necessary.than necessary.
 Industry average of cases per pallet for these 3 categories is 60Industry average of cases per pallet for these 3 categories is 60
cases. AGME average? 29 Cases.cases. AGME average? 29 Cases.
 AGME will spent $39,933 in fuel and labor transporting to andAGME will spent $39,933 in fuel and labor transporting to and
from South Gardiner.from South Gardiner.
 Net annual affect of additional handling, travel and employeeNet annual affect of additional handling, travel and employee

10. Electrical Utilities CostsElectrical Utilities Costs
 Electrical Utility costs for fiscal 2005 will be $245,000Electrical Utility costs for fiscal 2005 will be $245,000
Half of the load is due to refrigeration!Half of the load is due to refrigeration!
 Industry standards report a minimum of 25% savings inIndustry standards report a minimum of 25% savings in
utilities by converting to Ammonia refrigeration systems.utilities by converting to Ammonia refrigeration systems.
Net annual savings of $32,500Net annual savings of $32,500
 In addition, the elimination of 5 electric storage unitsIn addition, the elimination of 5 electric storage units
would result in an additional annual savings of $44,000 inwould result in an additional annual savings of $44,000 in
utilities and storage trailer maintenance.utilities and storage trailer maintenance.
 The elimination of the South Gardiner facility in year 3The elimination of the South Gardiner facility in year 3
would provide an additional annual savings of $42,000would provide an additional annual savings of $42,000
although this may be offset by the need for outsidealthough this may be offset by the need for outside
storage of Holiday Turkeys.storage of Holiday Turkeys.

11. Refrigeration MaintenanceRefrigeration Maintenance
 Annual refrigeration maintenance costs for the 30 yearAnnual refrigeration maintenance costs for the 30 year
old South Gardiner facility & 19 year old AGME facilityold South Gardiner facility & 19 year old AGME facility
are projected to reach $75,000 for fiscal 2005.are projected to reach $75,000 for fiscal 2005.
 Industry standards report that maintenance costs areIndustry standards report that maintenance costs are
reduced by as much as 75% by converting from areduced by as much as 75% by converting from a
mechanical Freon based system to an ammonia system.mechanical Freon based system to an ammonia system.
 Eliminating the SG Facility in year 3 and converting toEliminating the SG Facility in year 3 and converting to
ammonia at AGME would reduce the annual refrigerationammonia at AGME would reduce the annual refrigeration
maintenance cost by as much as $56,250maintenance cost by as much as $56,250

12. Damages & ShrinkDamages & Shrink
 There are a total of 2,148 pallets in reserve locations inThere are a total of 2,148 pallets in reserve locations in
Meat, Dairy and Frozen.Meat, Dairy and Frozen.
 There are a total of 1,680 possible reserve bays in Meat,There are a total of 1,680 possible reserve bays in Meat,
Dairy and Frozen.Dairy and Frozen.
 Currently 77% of the reserve locations in these threeCurrently 77% of the reserve locations in these three
coolers have more than 3 pallets in a single reserve.coolers have more than 3 pallets in a single reserve.
 What does that mean?What does that mean?
 Replenishment labor is doubled as a result of droppingReplenishment labor is doubled as a result of dropping
the stack, splitting the stack and returning the stack tothe stack, splitting the stack and returning the stack to
reserve.reserve.
 In addition the warehouse incurred $8,700 in dairy,In addition the warehouse incurred $8,700 in dairy,
$1,500 in bakery, $2,500 in meat/deli, $3,000 in frozen$1,500 in bakery, $2,500 in meat/deli, $3,000 in frozen
food and $2,500 in produce as a result of warehousefood and $2,500 in produce as a result of warehouse

14. Workmen’s CompensationWorkmen’s Compensation
Kathy NasonKathy Nason
Sr. DIRECTOR HRSr. DIRECTOR HR

15. “Workers Comp Data”
2003
 45 First reports filed for Workers
Compensation.
27 of these reports originated in the
Perishable Area
 Total of 1142 restricted days 77% of these
days originated in the Perishable Area
 Average cost shoulder strain $ 10,000
Med only
 Average cost shoulder surgery $
30,000 Med only
Average cost of a back strain $ 10,000 Med
only
 Average cost of a back surgery $
25,000 Med only
 Average cost of a back fusion $
50,000 Med only

16. (OSHA Reports 2003)
3
6
9
27
0
5
10
15
20
25
30
Office Transportation Dry Grocery Perishable
Area
#FirstRports
Reports
(Total Resricted Days 2003)
0
103 163
876
0
100
200
300
400
500
600
700
800
900
1000
Office Dry Grocery Transportation Perishable
Total Days

17. (Productivity Loss in Dollars 2003)
$331
$8,062
$16,456
$142,026
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
Office Transportation Dry Grocery Perishable
Dollars

18. WAREHOUSE EXPANSION WILLWAREHOUSE EXPANSION WILL
ENHANCE SAFETY EFFORTSENHANCE SAFETY EFFORTS
PROACTIVE APPROACHPROACTIVE APPROACH
““Safety Culture”Safety Culture”
Reduce Ergonomic Risk FactorsReduce Ergonomic Risk Factors
 Less Handling of productLess Handling of product
 Proper Slotting to eliminate ergonomic risk factorsProper Slotting to eliminate ergonomic risk factors
““Safety Culture”Safety Culture”
 Offer Safe work environmentOffer Safe work environment

Employee MessageEmployee Message
““Management Commitment to Safety”Management Commitment to Safety”

19. INSURANCEINSURANCE
KENT JOHNSONKENT JOHNSON
VP ALLIED INSURANCEVP ALLIED INSURANCE

20. IMPACT ON INSURANCEIMPACT ON INSURANCE
Building PremiumBuilding Premium
Building and contents estimated at $5,000,000Building and contents estimated at $5,000,000
Premium increase $ 3,526Premium increase $ 3,526
Savings IncurredSavings Incurred
Deletion of 4 Storage trailers ( $ 936)Deletion of 4 Storage trailers ( $ 936)
Premium in workers compensation ($ 9,067)Premium in workers compensation ($ 9,067)
Net Effect: Saving of ($6,477)Net Effect: Saving of ($6,477)

21. PROCUREMENTPROCUREMENT
&&
MARKETINGMARKETING
DAVE MARCUSDAVE MARCUS
V.P.V.P.
PROCUREMENT/MARKETINGPROCUREMENT/MARKETING

22. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 ELIMINATE BOZZUTOS FUNDELIMINATE BOZZUTOS FUND
 A LOSS OF $102,000A LOSS OF $102,000

23. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 FROZEN CASH DISCOUNTFROZEN CASH DISCOUNT
 90% WILL REALIZE 2%90% WILL REALIZE 2%
 10% WILL REALIZE 1%10% WILL REALIZE 1%
 GAIN OF $43,700GAIN OF $43,700

24. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 $55,250 FIRST YEAR SLOTTING GAIN$55,250 FIRST YEAR SLOTTING GAIN
 FROZEN FOODFROZEN FOOD $24,000$24,000
 DAIRYDAIRY $12,250$12,250
 BAKERYBAKERY $4,000$4,000
 MEAT/DELIMEAT/DELI $15,000$15,000
 ONGOING IN FROZENONGOING IN FROZEN $14,400$14,400

25. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 $64,000 PER YEAR IN FROZEN FOOD$64,000 PER YEAR IN FROZEN FOOD
AD INCOMEAD INCOME
 RUN 8 FROZEN FOOD ITEMS PERRUN 8 FROZEN FOOD ITEMS PER
WEEKWEEK
 $200 FLAT FEE PER ITEM$200 FLAT FEE PER ITEM
 40 NATIONAL BRAND ITEMS PER YEAR40 NATIONAL BRAND ITEMS PER YEAR

26. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 BOZZUTO’S FEE 1.6% ON PURCHASESBOZZUTO’S FEE 1.6% ON PURCHASES
 SAVINGS OF $36,800 PER YEARSAVINGS OF $36,800 PER YEAR

27. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 $20,800 PER YEAR IN DEAL INCOME$20,800 PER YEAR IN DEAL INCOME
 ABILITY TO PURCHASE EXTRAABILITY TO PURCHASE EXTRA
PRODUCTPRODUCT
 MAKE SPECIAL BUYS & TRUCKLOADMAKE SPECIAL BUYS & TRUCKLOAD
PURCHASESPURCHASES

28. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 $112,770 ADDITIONAL PROFIT ON$112,770 ADDITIONAL PROFIT ON
SALES OF ADDITIONAL VARIETYSALES OF ADDITIONAL VARIETY
 USED NUMBER OF NEW ITEMS PERUSED NUMBER OF NEW ITEMS PER
DEPARTMENTDEPARTMENT
 AVERAGE WEEKLY MOVEMENT OF 7AVERAGE WEEKLY MOVEMENT OF 7
CASESCASES
 AVERAGE DEPARTMENT CASE COSTAVERAGE DEPARTMENT CASE COST
 USED CURRENT DEPARTMENT

29. PROCUREMENT & MARKETINGPROCUREMENT & MARKETING
 FROZENFROZEN $21,245$21,245
 DAIRYDAIRY $24,309$24,309
 BAKERYBAKERY $15,998$15,998
 MEAT/DELIMEAT/DELI $40,810$40,810
 PRODUCEPRODUCE $10,408$10,408

30. PROCUREMENT &PROCUREMENT &
MARKETINGMARKETING
 WILL REALIZE LOSS OF 2% IN MARGINWILL REALIZE LOSS OF 2% IN MARGIN
 LACK OF ABILITY TO BUY INLACK OF ABILITY TO BUY IN
TRUCKLOAD AT THE BEGINNINGTRUCKLOAD AT THE BEGINNING
 ENSURE KEEPING PRODUCT COSTSENSURE KEEPING PRODUCT COSTS
THE SAME TO OUR CUSTOMERSTHE SAME TO OUR CUSTOMERS
 THE DIFFERENCE IN THIS LOSS ANDTHE DIFFERENCE IN THIS LOSS AND
THE ELIMINATION OF BOZZUTO’S FEETHE ELIMINATION OF BOZZUTO’S FEE
IS A LOSS OF .40% MARGINIS A LOSS OF .40% MARGIN

31. FINANCIALSFINANCIALS
RON CLOUTIERRON CLOUTIER
CHIEF FINANCIALCHIEF FINANCIAL
OFFICEROFFICER

32. OTHER EXPENSESOTHER EXPENSES
 DEPRECIATIONDEPRECIATION
 EXPANSION COSTS OF $4.7 MIILIONEXPANSION COSTS OF $4.7 MIILION
 PRE-COSTS OF $100,000PRE-COSTS OF $100,000
 INTERIM INTEREST OF $76,000INTERIM INTEREST OF $76,000
 DEPRECIATE OVER 39 YEARS FOR BOOKDEPRECIATE OVER 39 YEARS FOR BOOK
 YEARLY NON-CASH EXPENSE OF $125KYEARLY NON-CASH EXPENSE OF $125K

33. OTHER EXPENSESOTHER EXPENSES
 INTERESTINTEREST
 6 MONTH CONSTRUCTION LOAN USING6 MONTH CONSTRUCTION LOAN USING
A 30 DAY LIBOR RATEA 30 DAY LIBOR RATE
 CONVERT TO A MORTGAGE LOAN INCONVERT TO A MORTGAGE LOAN IN
OCTOBEROCTOBER
 MORTGAGE LEVEL PAYMENT OF 15MORTGAGE LEVEL PAYMENT OF 15
YEARS WITH A 15 YEAR AMORTIZATIONYEARS WITH A 15 YEAR AMORTIZATION
AT 6.62% FIXED RATEAT 6.62% FIXED RATE
 TOTAL MORTGAGE LOAN OF $4,815,000TOTAL MORTGAGE LOAN OF $4,815,000

34. OTHER EXPENSESOTHER EXPENSES
 REAL ESTATE TAXESREAL ESTATE TAXES
 ASSUMPTION TO HAVE A 5 YEAR TIFASSUMPTION TO HAVE A 5 YEAR TIF
CREDITCREDIT
 THIS WOULD REDUCE OUR TAXES BYTHIS WOULD REDUCE OUR TAXES BY
50% FOR YEARS 1 THROUGH 550% FOR YEARS 1 THROUGH 5

35. ASSUMPTIONSASSUMPTIONS
 USED 2% INFLATION FACTORUSED 2% INFLATION FACTOR
FOR:FOR:
 ADDT’L GROSS ON SALES-VARIETYADDT’L GROSS ON SALES-VARIETY
 DIRECT LABORDIRECT LABOR
 REDUCTION IN REFRIDGERATIONREDUCTION IN REFRIDGERATION
COSTSCOSTS
 ELECTRICAL UTILITIES SAVINGSELECTRICAL UTILITIES SAVINGS
 OUTSIDE STORAGE COSTS-SO.OUTSIDE STORAGE COSTS-SO.
GARDINERGARDINER
 OUTSIDE STORAGE COSTS-TURKEYSOUTSIDE STORAGE COSTS-TURKEYS
 TRAILER STORAGE LABOR COSTTRAILER STORAGE LABOR COST

36. ASSUMPTIONSASSUMPTIONS
 USED 39 YEARS TO DEPRECIATEUSED 39 YEARS TO DEPRECIATE
 TIF CREDIT FOR 5 YRS AT 50%TIF CREDIT FOR 5 YRS AT 50%
SAVINGS FOR REAL ESTATE TAXESSAVINGS FOR REAL ESTATE TAXES
 FOR THIS PROPOSAL A 10 YEARFOR THIS PROPOSAL A 10 YEAR
CASH FLOW ANALYSIS WAS USED.CASH FLOW ANALYSIS WAS USED.
 ONLY 1 MILLION IN SALES GROWTHONLY 1 MILLION IN SALES GROWTH
WAS FACTORED (VARIETY) FORWAS FACTORED (VARIETY) FOR
THIS ANALYSIS.THIS ANALYSIS.

37. CASHFLOWCASHFLOW
 POSITIVE CASHFLOW ALL 10POSITIVE CASHFLOW ALL 10
YEARSYEARS
 CASHFLOW DEVELOPED BY:CASHFLOW DEVELOPED BY:
 TAKING TOTAL INCOMETAKING TOTAL INCOME
 PLUS DEPRECIATIONPLUS DEPRECIATION
 PLUS INTERESTPLUS INTEREST
 LESS LOAN PAYMENTLESS LOAN PAYMENT

38. RETAIL SALES ANDRETAIL SALES AND
DEVELOPMENTDEVELOPMENT
RAY JACQUESRAY JACQUES
V.P. SALESV.P. SALES

39. PERCEPTIONPERCEPTION
 TEAM MOVING IN A POSITIVETEAM MOVING IN A POSITIVE
DIRECTIONDIRECTION
 LACK OF VARIETY IN PERISHABLESLACK OF VARIETY IN PERISHABLES
 SERVICE LARGER STORES NEEDSSERVICE LARGER STORES NEEDS
 NEED LARGER ACCOUNTS FORNEED LARGER ACCOUNTS FOR
ROTATION AND TURNSROTATION AND TURNS
 GROWTH IN PERISHABLESGROWTH IN PERISHABLES
 FROZEN FOOD FASTEST GROWINGFROZEN FOOD FASTEST GROWING
CATEGORY

40. DIRECTIONDIRECTION
 BECOME BEST INDEPENDENTBECOME BEST INDEPENDENT
DISTRIBUTORDISTRIBUTOR
 SET AN EXAMPLE FOR CURRENTSET AN EXAMPLE FOR CURRENT
CUSTOMER BASECUSTOMER BASE
 INSPIRE DEVELOPMENT ANDINSPIRE DEVELOPMENT AND
EXPANSIONEXPANSION
 TOOLS TO GROW MEMBERSHIPTOOLS TO GROW MEMBERSHIP

41. DIRECTIONDIRECTION
 WE MUST UPGRADE AND EXPANDWE MUST UPGRADE AND EXPAND
OUR PERISHABLE FACILITYOUR PERISHABLE FACILITY
““THIS IS OUR GREATESTTHIS IS OUR GREATEST
TOOL, OUR GREATESTTOOL, OUR GREATEST
ASSET”ASSET”

42. IMAGEIMAGE
 CREATE A NEW PERCEPTION OFCREATE A NEW PERCEPTION OF
AGMEAGME
 INSTILL EXCITEMENT AND PRIDEINSTILL EXCITEMENT AND PRIDE
 INSPIRE GROWTH ANDINSPIRE GROWTH AND
DEVELOPMENTDEVELOPMENT
 PART OF A WINNING TEAMPART OF A WINNING TEAM
 NEW PERCEIVED IMAGENEW PERCEIVED IMAGE

43. AGME A WINNING TEAMAGME A WINNING TEAM
THETHE BESTBEST
INDEPENDENTINDEPENDENT
DISTRIBUTORDISTRIBUTOR
ININ
NEW ENGLANDNEW ENGLAND

44. PROJECT SCHEDULEPROJECT SCHEDULE

45. AGME Board of Directors
Q & A Session ?