Insurers' journeys to build a mastery in the IoT usage
Kibel Green Intro2010
1. For over 25 years Kibel Green has advised over 1,500 clients in
• Unlocking operational potential
• Securing new sources of capital
• Turning around struggling companies
Firm Overview
Jonathan J. Wernick| Senior Consultant
Kibel Green Inc. | 2001 Wilshire Blvd, Suite 420 | Santa
Monica, CA 90403
Direct: 310.829.0255 x205| Mobile: 310.909-6121| Fax:
702-554-2625
jwernick@kginc.com | www.kginc.com
2. Firm Overview
We offer three synergistic capabilities for middle market companies
Over 1,500 clients since 1984 Primary focus on public and
$5B in transactions private middle market companies
Turnaround Operations
Lender negotiation Profitability improvement
Cash flow maximization Organization simplification
Business plan vetting Supply chain efficiency
Cost management Project management
CRO services
A one-stop solution
Broad experience
Financial Strong partnership with
management
Retail Restructuring
Senior-level professionals
Manufacturing Debt negotiations
Distribution New funding sources Resources and expertise
Service Bankruptcy plans for urgent situations
Real Estate Sale of assets
A regional presence in
Technology the Western U.S.
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3. Client Profile – Sample of Recent Engagements
We have broad industry experience and strong expertise in distressed situations
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Size $M Description Service Provided
360 Consumer Product Manufacturer Turnaround
190 Residential Real Estate Developer Turnaround, Bankruptcy
1,125 Sporting Equipment Manufacturer Operations
300 Print & On-line Media Publisher Operations
85 Home Furnishings Retailer Turnaround, Bankruptcy
135 Consumer Products Retailer Turnaround, Bankruptcy, Sale
75 Physician Network Turnaround
350 Real Estate Developer Turnaround
100 Res/Comm'l Real Estate Owner Turnaround
300 Automotive & Parts Manufacturer Turnaround, Bankruptcy, Sale
n/a County Gov't Health Svcs Provider Operations
10 Oil & Gas Producer Turnaround, Bankruptcy
110 Aftermarket Auto Parts Mfg Turnaround
70 Foreign Auto Parts Distributor Turnaround, Operations
120 Storage & Data Center Mfg Turnaround
100 Staffing Services Fin Restructuring, Capital
350 Specialty Retailer Turnaround, Operations
330 Print & On-line Media Publisher Turnaround, Sale
180 Residential Real Estate Developer Turnaround
130 Automotive & Parts Mfg Turnaround
1 - Annual Revenues except for Real Estate clients which represents the amount of Debt.
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4. Service Offerings - Turnaround
Our turnaround service offering concentrates on four key activities to address visibility, cost
and business model issues
Reducing Developing a
Projecting and Improving
Costs – Plan – Current
Managing Management
Lowering State vs.
Cash Flow Reporting
Break Even Future State
Develop a rolling 13- Renegotiate real estate Develop a detailed Create weekly
week plan and personal property current state income information package
leases statement
Tie projections to Develop company
balance sheet Evaluate facility Build a target future dashboard / key driver
consolidation state – profitable report
Create goals and business model
assign responsibility Reduce payroll Improve
expense Identify actions communication among
Identify potential necessary to lenders, equity and
sources of cash Reengineer processes
implement plan management
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5. Service Offerings - Operations
Kibel Green offers a full suite of operations capabilities across our clients’ value chains
R&D and Sourcing and Manufacturing Distribution Sales and Customer
Product Procurement and Logistics Marketing Support and
Development Service
Ideation to Vendor Manufacturing Warehouse Sales process Call center
prototyping management strategy operations improvement process
improvement improvement
Improve speed Low-cost Production Sales
to market country outsourcing 3PL vendor compensation Service parts
sourcing selection and cost reduction
Reduce Lean Pricing
management
development Spend manufacturing effectiveness
costs analytics Inventory
S&OP Marketing ROI
reduction
Human
Organization design Compensation benchmarking
Resources
Finance/
Driver Analysis Improve speed of close Improve reporting
Accounting
Information
IT strategy IT vendor selection IT risk mitigation
Technology
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6. Service Offerings – Financial Restructuring
Helping clients get difficult deals done quickly
Extensive experience assisting Companies with Plans of Reorganization.
Design Plans of
Reorganization Deep knowledge of restructuring mechanics.
Has the confidence of the lenders.
Credibility
Can vet the Company’s information and projections, thereby lending an independent “stamp of
approval.”
Turnaround, financial restructuring and operations groups under one roof.
One Firm: Unique
Capabilities
Creates options for distressed companies.
Strong relationships with lenders and investors at all levels of the capital structure.
Access to Capital/
Creative
KGI has seen hundreds of transactions; seek the best result in each situation.
Structuring
Strong relationships with most of the key professionals, enabling more effective negotiations.
Negotiation and
Structuring
“Parallel Path” leads to streamlined process and optimal solution for client.
Expertise
7. Service Offerings
When to contact us
The earlier Kibel Green is brought in, the wider the range of restructuring options.
As operations and enterprise value deteriorate, the probability of a successful turnaround or
restructuring declines dramatically.
Potential Distress Signals Checklist
Breaches of key performance covenants (i.e., Late filing of financial statements/other
minimum EBITDA, maximum leverage or information
interest coverage, minimum FCCR)
Tightening of availability/taking more reserves
Failure to meet business plan
Vendors tightening terms
Significant declines in cash flow
Significant litigation
Increases in days payables
Capital infusion by owner
Piecemeal asset sales
Large write-downs
Loss of key customer or vendor
Transfer to special assets division
Layoffs
Sales of debt obligations to other parties
High turnover at officer level
Death/incapacity of owner
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8. Kibel Green’s Approach
Our standard approach translates objective, fact-based analyses into tangible client benefits
Objectivity and Experience
A 3rd party that is the Honest Broker and can achieve results with key constituents
Critical, Thorough Analyses
Detailed cash flow, financial forecasts and valuations, and analysis of stakeholder interests
Development of Strategies and Plans
Vetting and/or development of business plans that are believable to all key constituents
Practical Solutions and Action Steps
Converting the Plan into action and guiding the client through the process
Positive Results for Clients
Achieving the client’s objectives
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9. A Selection of Professionals
Our team can flex up & down – here are a few of our professionals
Steve Green
Steve Green Bruce Conklin
Bruce Conklin Jonathan J. Wernick
Jonathan J. Wernick
President
President Senior Managing Director
Senior Managing Director Senior Consultant
Senior Consultant
Expertise:
Expertise: Expertise: Expertise:
Expertise: Expertise:
Co-founder of Kibel Green
Co-founder of Kibel Green Principal of Kibel Green 18+ years of financial, business
Principal of Kibel Green 18+ years of financial, business
30+ years of capital markets
30+ years of capital markets 30+ years or experience in the development and management
development and management
30+ years or experience in the
and turnaround experience
and turnaround experience business management, Served in senior management
business management, Served in senior management
Personally managed over one
Personally managed over one operations and turnarounds
operations and turnarounds roles for public and private
roles for public and private
hundred financial and
hundred financial and Interim CEO and CRO for companies in retail,
companies in retail,
Interim CEO and CRO for
operational restructuring
operational restructuring numerous companies manufacturing, technology,
manufacturing, technology,
numerous companies
assignments, capital raising,
assignments, capital raising, construction, heath care and
construction, heath care and
Extensive experience with
Extensive experience with
sale/ acquisition transactions
sale/ acquisition transactions real estate
real estate
creditor negotiations
creditor negotiations
Frequent speaker at USC
Frequent speaker at USC Experienced in creditor
Experienced in creditor
Raised and managed several
Raised and managed several
Marshall School of Business and
Marshall School of Business and negotiations
negotiations
regional legal and business billion dollars in equity and both
billion dollars in equity and both
regional legal and business Financial analysis, budgeting,
Financial analysis, budgeting,
conferences secured and unsecured
secured and unsecured
conferences cash flow projections,
cash flow projections,
financing
financing
forecasting, valuations
forecasting, valuations
Education:
Education: Education:
Education: Education:
Education:
MBA, University of Southern
MBA, University of Southern BS, Lehigh University
BS, Lehigh University MBA, University of Southern
MBA, University of Southern
California
California California
California
CPA
CPA
BS, Northeastern University
BS, Northeastern University CPA. KPMG
CPA. KPMG
BA, Yeshiva University
BA, Yeshiva University
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10. A Selection of Professionals
Our team can flex up & down – here are a few of our professionals
Tim Vadney
Tim Vadney Matt Covington
Matt Covington Jay Maddox
Jay Maddox
Managing Director
Managing Director Managing Director
Managing Director Managing Director – Real Estate
Managing Director – Real Estate
Expertise:
Expertise:
Expertise:
Expertise: Expertise:
Expertise: Real Estate financial advisory
Real Estate financial advisory
Sales and operations planning
Sales and operations planning Over a decade of experience in and Capital Markets
Over a decade of experience in and Capital Markets
Demand planning and
Demand planning and financial restructuring and M&A
financial restructuring and M&A 15+ years commercial real
15+ years commercial real
forecasting
forecasting transactions.
transactions. estate finance and workouts
estate finance and workouts
Direct and indirect materials
Direct and indirect materials Deep understanding of financial
Deep understanding of financial Completed over $1B of
Completed over $1B of
sourcing and procurement
sourcing and procurement restructuring mechanics and
restructuring mechanics and transactions and restructurings
transactions and restructurings
Manufacturing strategy negotiation dynamics.
negotiation dynamics.
Manufacturing strategy 10 years financial and
10 years financial and
Returns management Has advised companies,
Has advised companies, operations management
Returns management operations management
creditors and financial sponsors
creditors and financial sponsors experience with small
Customer and channel
Customer and channel experience with small
in both in-and-out-of-court
in both in-and-out-of-court technology companies
segmentation
segmentation technology companies
restructuring transactions
restructuring transactions
Sales force effectiveness
Sales force effectiveness across a variety of industries.
across a variety of industries.
IT strategy and effectiveness
IT strategy and effectiveness
Education:
Education: Education:
Education: Education:
Education:
MA, American University
MA, American University JD/MBA, University of Chicago
JD/MBA, University of Chicago MBA, UCLA Anderson School
MBA, UCLA Anderson School
MA, Ritsumeikan University
MA, Ritsumeikan University BA, University of California at
BA, University of California at BA, Claremont McKenna College
BA, Claremont McKenna College
Berkeley
Berkeley
BA, Emory University
BA, Emory University
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11. Contact Information – Los Angeles Office
2001 Wilshire Boulevard Suite 420 Santa Monica, CA 90403
866.875.0255 Tel 310.453.6324 Fax www.kginc.com
Steven J. Green, Co-Founder & President
310.829.0255 x220
sgreen@kginc.com
Jonathan J. Wernick, Senior Consultant
310.829.0255 x205 Office
jwernick@kginc.com
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13. Introductions
An investment with Kibel Green creates immediate and lasting value
Benefits of an Introductory Meeting with Kibel Green
Client will receive valuable insights and ideas
We provide an initial assessment of the business model and identify options and strategies
The initial consultation is at no charge
Fee Structure
Affordable – fees are based upon hourly rates
Engagements are at-will
Transactions – based primarily on contingency fees
Kibel Green wrote
the book on crisis
San Francisco and turnaround
We primarily serve clients in management and
the 11 Western States but do Los Angeles
Orange County
understands how to
perform engagements across navigate the
the U.S. and internationally in economic downturn.
support of key relationships.
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14. Kibel Green’s Team
We have substantial professional resources available that can be quickly mobilized to tackle
either short-term or large and complex projects
We are a boutique firm offering
Partners Directors custom, highly specialized
services throughout the Western U.S.
Manage engagements and lender We staff based on the size and
negotiations complexity of the engagement.
We have 7 people at the Managing
Director level or higher and have a
staff of about 30 people.
Managing Consultants
We actively recruit and maintain a
highly-qualified reserve of 50+ senior
Prepare detailed business plans, financial
executives to provide additional
forecasts and presentation outputs
functional or industry-specific
expertise as needed.
Sr. Consultants Consultants
Conduct ground level due diligence,
analysis and research
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15. A Selection of Professionals
Our team can flex up & down – here are a few of our professionals
Guy Schneggenburger
Guy Schneggenburger Matthew Getty
Matthew Getty Jonathan J Wernick
Jonathan J Wernick
Director
Director Managing Consultant
Managing Consultant Senior Consultant
Senior Consultant
Expertise:
Expertise: Expertise:
Expertise: Expertise:
Expertise:
25+ years of industry and
25+ years of industry and 17 years of financial, marketing
17 years of financial, marketing 18+ years of financial, business
18+ years of financial, business
consulting experience
consulting experience and operations management
and operations management development and management
development and management
Warehouse operations
Warehouse operations Managed a business unit of a
Managed a business unit of a Financial analysis, budgeting,
Financial analysis, budgeting,
Distribution network planning public company and ran a
public company and ran a cash flow projections,
cash flow projections,
Distribution network planning
division of a $1B private
division of a $1B private forecasting, valuations
forecasting, valuations
Transportation management
Transportation management company
company Structured and sourced $1B+
Structured and sourced $1B+
Demand planning and
Demand planning and Business planning, new product
Business planning, new product of corporate debt
of corporate debt
forecasting
forecasting development and introduction
development and introduction Due diligence
Due diligence
Production capacity planning
Production capacity planning Sales operations and demand
Sales operations and demand Business process reengineering
Business process reengineering
Lean manufacturing
Lean manufacturing planning
planning
Turnaround and restructuring
Turnaround and restructuring
Inventory management
Inventory management Turnaround expertise
Turnaround expertise
Project management
Project management
Education:
Education:
Education:
Education: Education:
Education: MBA, University of Southern
MBA, University of Southern
MA, Cal State Fullerton
MA, Cal State Fullerton MBA, UCLA California
California
MBA, UCLA
BS, UC Irvine CPA, Deloitte & Touche CPA, KPMG
CPA, KPMG
BS, UC Irvine CPA, Deloitte & Touche
BS, University of San Francisco BS, Yeshiva University
BS, Yeshiva University
BS, University of San Francisco
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16. Retail Case Study – Turnaround
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$350M regional retailer with ten Prepared an objective independent
locations with 90% of sales on bank report that provided clarity
credit to immigrant community and assurance on the Company’s
with no previous credit history turnaround efforts
$150M term debt Built a cash flow modeling tool to
Downturn in economy resulted in navigate tighter loan availability
higher defaults and slower Created a dashboard of key
payments performance drivers (KPI’s) to
Financial and purchasing practices assess and improve financial and
did not keep pace with rapid operational results
expansion over the last 3 years Identified operational opportunities
Running out of ABL loan availability to improve cash flow, profitability
In forbearance with lender group
and utilization of working capital in
and credibility deteriorating excess of $10 million
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17. Distribution Case Study – Operations
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$1B sporting goods manufacturer $4.0M EBITDA improvement in 3
was staffed for day-to-day months
operations and needed immediate Lead the Asian-market supply chain
expertise for strategic project selection and implementation
implementation activities
Executives observed that cost Completed supply chain partner
reductions should be available from selection and implementation in
improvements to distribution three countries
operations and improved Established knowledge base for
outsourcing relationships activities in five additional countries
Market pressure to show results on
Cross-functional project
a quarterly basis increased urgency management between executive
of capturing identified opportunities leadership, internal departments,
Underperforming Asian (China, and external vendors
Korea, Japan) distribution partners
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18. Distribution Case Study – Turnaround, Operations, Financial Restructuring
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$70M regional automotive and Stabilized the bank relationship
marine parts distributor Approved a $2.0M over-advance
experiencing a cash shortage Downsized the footprint to liquidate
$18M asset-based loan inventory and increase near-term
Lenders were not cooperating by cash flow by $3.1M
providing an overadvance Used increased funds to improve
Strained supplier relationships were stocking levels
constraining inventory levels Created time to run a sale process
Fill rates declined from 90% to Effectuated a sale transaction
72% resulting in a noticeable within 4-months that paid the
impact to sales secured lender 100%
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19. Distribution Case Study – Operations
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$2B telecommunications products $18M EBITDA improvement in 6
distributor had a new management months
team leading a leveraged buyout - 100% improvement in distribution
needed to reduce costs quickly center productivity from process
Network of over 70 regional engineering
distribution centers with varying Reduced average order processing
policies and performance results time to two hours
Flagship distribution center Facilitated installation of WMS
averaged two days to process an across the distribution network
order Led and provided project
Operations management team had management for four facility
difficulty translating financial goals consolidation and relocations
set by the Board into action Created departmental KPI program
to translate financial goals into
work standards
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20. Manufacturing Case Study – Turnaround, Operations
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$225M medical products $2M EBITDA increase in 4 months by
manufacturer had a 5-year history removing the barriers of an
of losses or breakeven organization built on functional silos
performance
$4.5M EBITDA gain with design and
Private equity investor and senior
debt holders wanted an exit implementation of new transportation
program
Senior management recently
completed a restructuring project, Reduced the number of SKUs from
but did not achieve breakthrough 350 to 75 resulting in simplified
results manufacturing processes and
More than 85 cost reduction increased purchasing leverage
projects were in motion without Increased product availability and
coordination decreased finished goods inventory
Company had difficulty expressing through a significant reduction in
its value proposition for the market changeover times
place
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21. Manufacturing Case Study – Turnaround, Operations
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$125M high-performance appliance $12M EBITDA improvement in 6
manufacturer was undervalued months
versus investor expectations in a Increased capacity 30% in existing
sales process facilities
A history of late delivery to its Reduced lead time from 153 to 6
distribution channels days for product delivery to the
WIP inventory required a separate customer
material handling staff to track and Established Office of Continuous
move it Improvement to sustain changes
Company was contemplating the Reduced WIP investment by 80% by
purchase of additional machine incorporating parts tooling into
tools to solve parts shortage assembly lines
problems Led sales process that resulted in
achievement of the investors’
financial goals
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22. Manufacturing Case Study – Turnaround, Operations
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$150M manufacturer and supplier Stabilized the bank relationship
of furniture Negotiated over-advance and long-
A cash shortage and operating term forbearance agreement
losses Downsized headcount and
$14M asset-based loan increased production flexibility by
Borrower moved into special assets changing to a cell manufacturing
Facing decreased demand for
methodology
domestically made furniture and Created time to continue to
pricing competition from overseas operate
Currently operating under extended
forbearance agreement with same
lender
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23. Consumer Goods Case Study – Financial Restructuring
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$100M designer and direct- Created an offering memorandum
marketer of educational products Ran a successful sale process
$90M syndicated debt targeting 16 strategic buyers and
Rapid dissipation of customer base 18 financial buyers worldwide
due to construction industry Achieved a consensual agreement
implosion and heightened scrutiny avoiding bankruptcy
of immigration issues Structured and negotiated key
Y-O-Y Revenues down 19% and elements of the transaction
forecasted to drop another 10% Provided critical input to stabilizing
Dramatic reversal in EBITDA within and improving cash flow
a short timeframe
Syndicated loan with a difficult and
fragmented lender group
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24. Real Estate Case Study – Turnaround, Financial Restructuring
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
$60M Los Angeles urban in-fill Stabilized the lender situation and
homebuilder restored management’s credibility
$28M of construction loans and Developed the Company’s financial
unsecured debt in default, all restructuring plan
personally guaranteed by principals Created robust financial models for
Home values substantially lower lender presentations
than secured debt, resulting in Negotiated a repayment of debt
potentially massive personal obligations at a 44% discount with
recourse exposure full release of personal guarantees
In forbearance with lender group, and dismissal of legal proceedings
with one lawsuit filed and Facilitated new $10.8M capital
credibility deteriorating infusion
Company retained equity in
projects
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25. Real Estate Case Study – Turnaround, Financial Restructuring
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
Major California homebuilder Stabilized the lender conflict
$70M of senior secured and $62M situation
subordinated parent company debt Prepared detailed project budgets
in addition to $100M of project and cash flow analysis and roll up
construction loans with 12 different financial projections for corporate
banks and co-lenders in California guarantor entities, stratified by
and Texas lender
Project debt guaranteed by Created bankruptcy analysis at
corporate entities, creating heavy corporate and project levels to
liquidity pressures due to loan re- support lender negotiations
margining demands from banks Advised in lender negotiations and
In conflict with lender group, with helped avoid a run-on-the-bank
existing and pending loan covenant that would have crippled the
defaults company
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26. Real Estate Case Study – Turnaround, Financial Restructuring
An investment with Kibel Green creates immediate and lasting value
Business Challenges Results Delivered
Family controlled commercial Prepared detailed business plan
developer/owner based in Southern and financial forecasts including
California liquidation analysis to support
Multiple commercial and land lender negotiations
development projects that Educated client on available
encountered difficulty in the recent defenses in response to aggressive
economic downturn tactics by lead bank
$40M of bank debt subject to re- Assisted in successful effort to
margining demands and/or obtain long term extensions of
maturing with no viable repayment bank debt thereby providing for
source, posing a significant threat long term financial stability
to liquidity and long term viability
of the portfolio
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27. Service Offerings – Financial Restructuring
Maximizing client value in various types of Financial Restructurings
Restructuring Balance Sheets Renegotiating Debt Covenants/Terms
$645M meat processor and sandwich maker $140M mobile phone distributor
$250M contract manufacturer of field rations for $200M chain of regional casinos
the military
$96M global provider of telecommunications
$366M natural gas plants in the Northeast services
$150M chain of furniture stores $350M chain of electronics and furniture stores
Raising Capital Selling Distressed Assets/Companies
$350M manufacturer and distributor of medical $100M Group of wineries in Northern California
consumables for the elderly
$114M Jeweler targeting low-middle income
$126M manufacturer and distributor of dairy Hispanic market
products
$200M retailer of denim and casual clothing for
$75M chain of Mexican restaurants teens
$100M integrated media publishing company $125M manufacturer of consumer and
(trade magazines, journals, conferences) commercial cooking equipment
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