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Communications

A Memo to Mac-Gray Employees

1/11/2008

Our company has spent more than 80 years responding to evolving times and changing markets. When the Depression hit its depths in the thirties and American consumers couldn't afford to buy wringer washers from him, H.S. Gray helped meet their laundry needs in 1935 by inventing a new business: placing washing machines (the automatic dryer hadn’t been invented) in common areas of apartment buildings and letting the residents pay a nickel a wash. Presto: what we now call the Route business was born in an apartment building in Boston! Later, when World War II ended and the American suburban explosion began, Mac-Gray responded by installing the very first Laundromats. Over the half-century since then we have helped thousands of entrepreneurs start more of these businesses than any other company.

When the Company began to hear client complaints about rising utility costs in the 1980s we responded again. Twenty years ago what we now call “environmental concerns” began to appear. We had clients whose water bills were rising at an extraordinary rate. We appealed to Maytag to provide a high-efficiency machine that would not only reduce water consumption but would also provide a more economical energy footprint. They were unable to do so. Undeterred, we approached IPSO, a European manufacturer. In cooperation with them, we designed and then produced the most economical, energy-efficient washing machine available in North America. We branded it as the “EcoClean” washer, and deployed hundreds of them until, in the late ‘90s, Maytag finally produced the Neptune high-efficiency washer which was a more cost-effective appliance for us to use.

Today, concerns over rising energy costs and the well-being of the planet’s future are commonplace. Increasingly, customers, shareholders and employees are expecting the businesses they deal with, or invest in, or work for to be environmentally responsible. We welcome this expectation because we have been there for a very long time. We provide a solution for a basic need, doing laundry, but that solution consumes water and electricity, and the conduct of this industry’s business produces carbon dioxide emissions. So what can we do?

Treating the planet’s resources with care and respect is simply the right thing to do. Currently it may seem like a fad. We do not consider it to be trivial, or a passing thing. Natural resources are increasingly expensive and scarce. In the not too distant future a company’s sense of environmental responsibility will no longer be a point of difference, it will be a requirement. We have felt that responsibility for a long time, but we need to get even stronger in this regard. For example, consider the following 13 areas:


  • We have more high-efficiency (he) washing machines deployed in apartments and colleges than any other company in the industry. Starting with the EcoClean line of 20 years ago, approximately 30% of our washer fleet is now he, as are more than 60% of the single-load commercial washers we sell or install on route.

  • Going forward, we plan for these percentages to only increase, significantly reducing both the water that is consumed and, because the clothes come out of the washer with less residual water in them, the electricity or natural gas used by the dryers.

  • We estimate that we have more card-operated laundry equipment deployed in apartments and colleges than the rest of the industry combined. Why? We are committed to resident convenience. We are also mindful that coin- operated equipment is more harmful to the environment, because each of our collector vehicles gets heavier as each workday progresses, reducing fuel efficiency and increasing wear-and-tear on the vehicle, and coin locations can also require more frequent collector visits, as well as more frequent service visits. There is also the environmental impact of the armored car services which are necessary to haul those tons of quarters to our regional banks.

  • Going forward, we plan to further reduce the use of coin as the payment medium, and to expand the use of card or other “greener” payment methods.

  • MicroFridge®, with Safe Plug® is our flagship Energy Star® rated product. Its energy efficiency is patented! We bought the company ten years ago, because in addition to providing resident convenience it provided us with an environmentally responsible solution to the energy demands of the small- space-living-environment. In these ten years, the company has sold more than 700,000 MF units. The product line not only delivers convenience, but lowers energy consumption, to the owners of hotel rooms, assisted living facilities, military housing, and university residence halls. Our MF products, along with Maytag Energy Star washers, are on over 95% of domestic military bases. We estimate that the washers are saving the government (and its taxpayers!) over 150 million gallons of water per year.

    In the academic market, at the conclusion of a MF contract the products are environmentally recycled. Products that are deemed not suitable for reconditioning are drained of all coolant gases (all our products have been converted to R-134A gas coolant, instead of Freon) and then conveyed to a disposal agent who recycles the metal components. The metal is melted down and sold off to a metal remanufacture.

  • Going forward, we are introducing a completely redesigned MicroFridge line this summer, the first significant change to the product in a decade.

  • We promote Energy Star Laundry and Kitchen Appliances. Our Maytag Direct™ initiatives, begun three years ago, sell Energy Star Kitchen appliances to the multi-housing market, so that when kitchens are being remodeled the property owner can do so with an eye toward reducing the building’s energy footprint.

  • Going forward, we plan for that percentage to only increase, significantly reducing the energy used in common area laundry rooms, Laundromats, apartment buildings and college kitchens. And, yes, we want those remaining military bases as well.

  • We invented PrecisionWash™ one of our Intelligent Laundry™ Systems. This revolutionary product makes it possible for college students and apartment residents to use the correct he formulated detergent in high- efficiency equipment, and to use the correct amount, which is less than most consumers may believe. This has the beneficial environmental effect of eliminating both over-sudsing and excessive concentrations of detergent being left in the wastewater and the clothing. It also eliminates the need for users to purchase large plastic containers of detergent, and the eventual need to dispose of them, which usually happens with residual detergent left in them, eventually finding its way into landfills.

  • Going forward, PrecisionWash is going to be redesigned and reengineered in order to make it even more efficient, and we believe these changes will make it even easier to use, increasing its positive environmental impact.

  • Another of our Intelligent Laundry™ Systems is VentSnake™. This product gives our branch operations the capability to efficiently clean the dryer vent systems of our clients. This process has strong environmental implications. It prevents clothes lint from blowing into the atmosphere and it also makes dryers run more efficiently and effectively, reducing the amount of drying time required and saving energy (electricity or gas,) as well as reducing the likelihood of fires starting in the venting system.

  • Going forward, we expect to see more vent cleaning. We have recently re- balanced our deployment of outfitted trucks and portable units. Where needed, we will add to our VentSnake truck fleet to increase our capacity to efficiently perform this service.

  • We invented TechLinx™ and CollectorLinx™, two more Intelligent Laundry™ Systems. These routing systems replaced the voice-based field work-force management system with a pair of data-driven mobile applications that also embrace geo-location. The result was the ability to provide our technicians with better, earlier information to help them optimize their day and to design optimal daily routing patterns for our service and collector vehicles, reducing fuel consumption and the miles traveled each day by an average of 15% per vehicle.

  • Going forward, we will continue to improve our optimization and scheduling tools, and how we apply them to our service operations, to further reduce mileage and improve service response times.

    A more paperless, real-time information environment is coming. Our investment in advanced information technology goes back more than a decade. We have made significant strides automating processes for review, approval, transmission of documents and for supervision and management. Another wave of change is coming. The next generation of service and customer management software will further reduce paper documents and manual processes at the branch level and at headquarters. We will have less to print, file, mail or circulate. And yet, we will know more, and know it sooner, than today.

  • We decided to reduce the environmental impact of our service and collection vehicles in another way. In the past two years we have purchased 175 vehicles with smaller 4.6 liter engines, and a different rear-end gear ratio. This has resulted in at least a 7% improvement in mileage, or a savings of approximately 37,000 gallons of gasoline.

  • Going forward, we will continue to swap our fleet out for more fuel-efficient vehicles. When reliable hybrid technology or economic alternative fuel options become available for our light van class of vehicles, Mac-Gray will begin to make that transition as well. Meanwhile we are closely tracking new offerings and talking with other service companies and vehicle manufacturers about test vehicles.

  • We decided to encourage employees to telecommute by requiring sales rep’s to work out of home offices. This has not only reduced the amount of office space we need in our branches but it also reduces vehicle emissions. Similarly, our investments in our email network, in almost 200 BlackBerrys for checklist, in our VPN, and now WebEx for Internet- based meetings have all been put in place as cost-cutting, energy-saving and carbon-reducing initiatives.

  • Going forward, we intend to further use teleconference technologies to eliminate the need for people to drive or fly to meetings that can be held on-line.

  • When we moved our corporate headquarters two years ago, we designed our new space with environmental responsibility top-most among our concerns. All offices and most of the common areas have motion sensor activated lighting. The flooring materials are made of bamboo and other green materials. We purchased new flat-panel computer monitors to save energy, and we have a computers-off policy when the work day ends. (A PC left on all day will cost a company approximately $75 / yr. If switched off at night and weekends, this drops to $20 / yr.) We recycle white paper and plastic.

  • Going forward, we will be switching to all recycled paper, for both headquarters and our branches. I also ask that anyone who has the AutoSignature feature of their email enabled please consider adding the following below their contact information, in dark green of course: Do you really need to print this email? Think Environmentally!

  • Recycling! Mac-Gray has been a long-time advocate of recycling. Each one of our twenty-four branches recycles appropriate metals and machines.

  • Going forward, we will be even more aggressive in our recycling of corrugated packaging, shipping pallets, and plastics.

  • Used laundry machines are stripped of reusable parts, and our service technicians are measured on their ability to successfully diagnose and use reusable parts. We rebuild and then reuse computer boards, thus keeping very harmful materials out of landfills. Our Certification shop in Woburn, MA rebuilds and certifies thousands of laundry appliances a year, which are then returned to the service of our clients.

  • Going forward, we will be even more committed to our effectiveness in using “experienced” machines, recognizing that reequipping them for further years of service is not only cost-effective but is a significant contributor to environmental responsibility.

  • We hate the U.S. Mail! We strongly encourage our employees to receive their paychecks in the form of direct deposit to their bank accounts. We also strongly encourage all of our clients to get their rent commission checks from us by electronic transfer. Why use paper checks, envelopes, stamps, and the gasoline required by the U.S. postal service, when you can just use electrons?

  • Going forward, we will attempt to move more transactions to electronic payment. We shall also continue to direct an increasing percentage of our marketing efforts toward email and other more environmentally friendly methods.

We are proud of everything we’ve attempted to do in this regard, and yet we are determined to do more. This Company has always tried to be timely and cutting-edge, believing that a quality company should be active, not reactive. Environmental responsibility has been part of our respect for employees and customers for a long time, and it also has to be a powerful part of our future.

Society is not only expecting successful companies to go further in this direction, but it is also a positive recruitment tool. Prospective employees don’t want to work for wasteful companies, or for polluters. Providing cutting edge products for our clients, working to enhance the convenience of our clients’ residents, and offering the greatest transparency possible are wonderful business goals. Becoming even more “green” than we already are is another dimension because it engages all of us in taking care of the planet so as to bequeath a healthy future for our children and grandchildren. We need to continually ask ourselves “What do we really do? What do we offer, and how can we provide the same products and services with less natural resource usage and less environmental impact?”

The ideas that are presented here, under the Going Forward Going forward sections, are just a beginning. However, the best ideas are going to come from everyone in this company. I would love to hear suggestions from anyone as to how we can continue to get better as a company, while we continue to reduce our environmental impact.

 
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