www.MagnumHeat.com

Pioneering the Future of Heating with Renewable Fuels

Contact Information: Laurie Streich - American Energy Systems Inc. 1-800-495-3196 - sales3@MagnumHeat.com

From the HeartlandCorn is in abundant supply across America’s heartland. Homeowners choose Magnum brand stoves and furnaces because it just feels good to heat your home with a fuel source grown in the USA.

Environmentally FriendlyUnlike oil and natural gas, burning renewable fuels has had a positive effect on our environment. American Energy Systems enjoys sharing with our customers how investing in renewable fuels directly improves our environment.

Multi-Fuel CompatibilityDepending on geographic location, certain renewable fuels are more abundant than others. Magnum appliances burn over 12 different types of renewable fuels available across the US.

The Bottom LineIn many cases, the bottom line cost savings of heating with corn and other renewable fuels dramatically reduces homeowner energy costs. Read what one customer says below:

“We’ve had our stove 2 years. Next to our house, this was the best investment we have ever made. This year corn was priced slightly higher but we will still be around a total cost of $300 for the season. We would have been well over $1500 or higher with propane. Best part is – next fall, corn most-likely will be back down in price. Will propane? I don’t know, and I don’t care because I burn corn and love it. Thanks for keeping more of our money out of the oil companies’ hands. They have ENOUGH!”THINK CORN!!! – Del & Pattie Carr, Ohio

Overview

www.MagnumHeat.com

In 1973, from a small town in South Dakota, Mike Haefner began American Energy Systems (AES) with the simple goal of providing a safe source of home heating for his customers. Today, AES is viewed within the hearth products industry as the premiere corn-burning/biomass burning stove manufacturer in the world.

In 1984, American Energy Systems relocated to Hutchinson, Minnesota (45 minutes West of Minneapolis) in order to expand operations. Getting closer to a central hub of vendors, transportation partners, and a readily available workforce were driving factors in choosing the community of Hutchinson.

As the company evolved, new employees and manufacturing and distribution partners were continually added. Today, American Energy Systems manufactures out of a 34,000 square foot production facility and has plans to expand the current facility and/or open additional locations to handle intense consumer demand.

Mike Haefner Personal Profi le

Mike Haefner is continually recognized both nationally and internationally for his overall expertise, along with his business savvy and innovative technical solutions.

Mike’s credentials include:

• Contributing author to the Fireplace Institute’s Industry Installation Manual• Current member and former Board of Directors member for the North Central Hearth

Patio & Barbecue Association• Chairman of the HPBA Biomass Appliance Manufacturer’s Caucus for five consecutive years

in a row (2003-2007)

Mike and American Energy Systems have recently been featured in The New York Times, The Wall Street Journal, The Green Bay Press Gazette, The Denver Post, CBS News, NBC News, and live on CNBC’s popular On The Money program.

Thirty-four years after the inception of the business, American Energy Systems’ mission hasn’t changed. High quality, industry-leading products will continue to be produced to ensure heating homes & businesses remains an affordable, safe, economical and environmentally-friendly way of life.

Company Profi le

www.MagnumHeat.com

Inception in 1973

Company moved to current location of Hutchinson, MN in 1984

34,000 square feet manufacturing facility - considering 22,000 square feet expansion and additional locations to handle demand

MagnuM is the brand

Product mix includes: Corn-burning/Biomass-burning stoves, furnaces, fi replace inserts, and high effi ciency Zero Clearance wood-burning fi replaces

Biomass appliances are able to burn a variety of renewable fuels including corn, wheat, barley, switch grass, wood pellets, cherry pits, olive pits, and more

Product designs to fi t every décor from traditional to modern

The owner, Mike Haefner, is the inventor of the Biomass corn-burning stove, the fi rst certifi ed Biomass stove in the industry

Sell through a dealer base of more than 350 resellers

Dealer base is predominantly located in the U.S. and Canada with distribution in Europe

Premier worldwide manufacturer of Biomass-burning stoves

Retail prices of appliances range from $1895 - $3500

Company sales has increased dramatically over the last 5 years

Actively participate in community student work study programs and donate time and money to local schools, colleges, and relief efforts of Hurricane Katrina

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Fact Sheet

American Energy Systems, Inc.

Providing Solutions For The Industry’s Future

Haefner And AES Build On Biomass Concept And Over 30 Years Of Experience.

Editor’s note: This article is one in a

continuing series during Alternative

Energy Retailer’s 25th anniversary

year of publication that focuses on

industry professionals who began in

the business or opened shop around

the same time AER began publish-

ing. Stay tuned throughout the year

for additional coverage of veteran

hearth professionals, detailing their

experiences and perspectives on

business and industry growth with-

in the past quarter-century.

It’s an occupation and industrythat has seemed destined to be,judging by this hearth profession-

al’s early family responsibility as achild.

At age six, it became little MikeHaefner’s job to stoke the Kalamazoocoal stove at their home in SouthDakota. Back then, there wasn’t awhole lot of wood laying around inthat state, so coal and corn (what anovel idea) was the fuel of choice.

The welding shop that the Haefn-ers used on their ranch was heatedby the old-fashioned barrel stove,with a special double-decker heat ex-changer designed by the Haefnerboys.

Over the next 13 years it becameapparent that there was a whole lotof heat and smoke going up thechimney and very little going into thehome. Some of you may know whatit was like with such a stove, beingwarm on the front and frozen on thebackside.

In 1973, Mike decided to do some-thing about that problem and starteda manufacturing facility in Glenham,S.D. There he designed his first certi-

fied, factory-built masonry fireplaceand wood/coal furnace line. It wasnew to the industry to have an appli-ance that had heat exchangers andsecondary air combustion, and actu-ally put most of the heat produced in-to the home where it belonged.

This marked the birth of what isnow American Energy Systems(AES), originally named NorthcentralManufacturing. The company soonbegan to grow with the young hearthindustry in those early years, thoughsome manufacturers began to fall by

the wayside as their appliances be-came obsolete or they just did notwant to invest in the technology tokeep their appliances viable.

Hundreds of manufacturers ofwood- and coal-burning appliancesclosed up shop when governmentregulations became a part of the ma-turing industry’s life, according toHaefner, who perservered with AESby “following the buzz words of the1980s – safety testing and efficiency.”

“American Energy Systems, alongwith a select few manufacturers,took this new way of doing businessas a challenge and created new, excit-ing products that were and still are asolution to pollution,” says Haefner.“AES’ reputation continued to growas a leading manufacturer of solid fu-el appliances into the early- to mid-’80s, but that was not enough to satis-fy my growing concern for the futureof the hearth industry.”

To expand production and meetgrowing industry demands, Haefnermoved his manufacturing business toHutchinson, Minn. (I guess he soldeveryone in South Dakota a unit.) Atthe time, gas appliances were grow-ing in popularity, fuel prices were al-so growing, and wood was becominga political and environmental issueacross the nation.

Figuring it was time to take ac-tion, Haefner put on his “engineeringhat” and designed the high-efficiencyMagnum zero-clearance, woodburn-ing line; the Countryside corn-burn-ing, multi-fuel stove; and also the

Copyright © 2006 Zackin Publications Inc. All Rights Reserved.Subscription information available online at www.aer-online.com.

®

Reprinted with permission from the February 2005 issue.

Mike Haefner in 1975, pictured with hisoriginal 3536ST see-through masonryfireplace.

Magnum corn/wood pellet-burningfurnace.

“The corn and biomass fuel con-cept was so new that the hearth in-dustry pretty much laughed at it andthought I had gone crazy,” saysHaefner.

But as it turned out, he was crazyas a fox. Even though very fewhearth specialty dealers grasped theconcept of corn-burning technology,the agriculture industry did acknowl-edge it, and the Magnum/Countrysideappliances took off and grew like acorn field on a hot, humid summerday.

The Magnum/Countryside con-cept – designed to burn seven dif-ferent kinds of fuel – turned out tobe a plus for the hearth world, espe-cially the wood pellet appliance seg-ment, as consumers began catchingon to the versatility of pellet appli-ances and discovering what the in-dustry had to offer in a variety ofappliances.

“The ’90s brought a keen aware-ness to the industry that if it did notprovide solutions, then the hearth in-dustry as we knew it would fail,” re-members Haefner. “Government regu-lation was strangling the life out ofwoodburning, and the industry wasputting out one fire after another inan attempt to be proactive in provid-ing solutions.”

Gas seemed like the only solution,“but that just was not good enoughfor me,” claims Haefner, who againdecided on a proactive approach tofurther the biomass option.

“The technology in American En-ergy Systems’ biomass applianceswas hid under a bushel basket, sowe at American Energy Systemslaunched an aggressive media pushto make people aware of the benefitsof burning with renewable fuel – fuellocally grown, fuel that had a posi-tive effect on the atmosphere,” hesays.

Turning in his welding helmet,

Haefner began to present his story tovarious outlets.

“The media caught on to this andcorn-burning technology went aroundthe nation and the world through

these sources,” relates Haefner, whoconsiders a historical moment for hiscompany the time he was able topresent via numerous TV networks,NPR radio, the Washington Post andother outlets the first urban corn siloproject in Tacoma Park, Md., over-looking our nation’s capital.

The unveiling of the project,which helps ensure local fuel is onhand for the region’s stove users,was attended by various dignitaries,including Hearth, Patio & BarbecueAssociation (HPBA) chief executiveofficer Carter Keithley and HPBA di-rector Leslie Wheeler, along with themayor of Tacoma Park, several con-gressmen from Washington, D.C.,and Mike Tidwell, president of theGlobal Warming Awareness Group.

The Chesapeake Climate ActionNetwork called the new biomass tech-nology “a testament to the creativityof America,” according to Haefner,who had challenged the nation to bea part of the solution to pollution andembrace the new technologies of-

fered by the hearth industry.In the midst of breaking new ground

for this new technology, American En-ergy Systems was busy changing theway that they built their products. Anew state-of-the-art manufacturing fa-cility, along with computer-operatedfabrication equipment, took its place toassure that the reputation that AES hadearned over the years for top-qualityproducts would continue.

Today, American Energy Systemsoffers its customers high-efficiencywood, corn, wood pellet / biomassappliances that have stood the test oftime.

“And as the industry changes andgrows, we hope to help lead the bio-mass fuel appliance industry into thefuture,” says Haefner.

“The hearth industry is changing;the way that we do business is chang-ing,” he continues. “No longer can wesit idle in the same rut that traditionhas created. Hearth retailers willneed to provide installation, service,fuel and expertise for their cus-tomers, or they will fall to the way-side like so many manufacturers.

“If we do not provide a level ofservice that our customers expect,then we are like the big boxes thatsimply sell product. Hearth retailersthat want to be successful need to po-sition themselves as experts ready toprovide total solutions for their cus-tomers, not just take a check,” saysHaefner.

Being on the leading edge of one ofthose solutions, Haefner and AES be-lieve they fit into the future of thehearth industry.

“We have been called the ‘DodgeViper’ or the ‘Godfather’ of the corn-burning appliance industry. But Iwould just like to be found as out-standing in this field,” he says. “Thefuture will find American Energy Sys-tems designing solutions that will en-sure the future of the hearth industryalong with providing security, safetyand warmth for customers.”

Copyright © 2006 Zackin Publications Inc. All Rights Reserved.Subscription information available online at www.aer-online.com.

Mike Haefner guides Senator Norm Coleman through AES’ new manufactur-ing facility for its Countryside stoves line.

e

www.MagnumHeat.com

Firm fi lling world’s need for heating: American Energy reaching out from its Hutchinson base

TERRY DAVIS - Staff WriterHutchinson Leader

Things are starting to heat up at American Energy Systems, the Hutchinson-based maker of biomass stoves and furnaces. Not only are Americans looking for ways to heat their homes and businesses with something less costly than natural gas, fuel oil and propane, but people in other countries are exploring their options, too. Increasingly, American Energy Systems is playing a role in fi lling that overseas need.

Two weeks ago, American Energy Systems hosted a delegation of 17 Austrians, including that western European country’s minister of agriculture and fi nance. They were exploring options for home heating. While Austria imports most of its corn, it wants American Energy Systems founder Michael Haefner to research its more plentiful wood pellets and pumpkin seeds as potential fuels in the company’s modifi ed Magnum brand corn stoves.

“We’ve been approached by a number of countries about the biomass and corn-burning products we have,” Haefner said last week. “Most are ahead of the United States in the use of biomass.” While Americans have been complaining about escalating prices for gasoline, natural gas, propane and fuel oil in recent years, the prices paid here would be considered bargains in many other countries.

“Natural gas is very diffi cult to get in Austria because of the terrain, and fuel oil is extremely high throughout Europe,” Haefner said. “So the cost of heating is very high. They are looking to buy (alterna-tives).” The company is even working with Kenya to test the burning qualities of a charcoal-like coal made from coffee husks.

Going International

American Energy Systems, which Haefner founded in his native South Dakota in 1973 and moved to Hutchinson in 1984, is already a global company manufacturing through partners in Ireland, Asia and soon France. Its overseas operations usually involve setting up manufacturing within an overseas part-ner’s existing factory. “We ship some production components over for assembly there, but eventually we look to manufacture in the countries,” Haefner said. “We are helping to create a lot of new business and jobs worldwide in manufacturing and fuel delivery.”

(continued)

www.MagnumHeat.com

(continued)

Finding labor overseas is not a problem. But in Hutchinson and throughout Minnesota, fi nding quali-fi ed, metal-working employees is becoming an increasing concern. He employs about 72 people in the company’s 35,000- square-foot plant built a few years ago at the intersection of Michigan Street and Second Avenue Southeast. Haefner recently added a second shift. Sales have grown about 500 percent during the past fi ve years.

“Labor is our biggest challenge,” he said. For that reason, the company now manufactures its line of stoves through a network of six manufacturing partners employing 150 people elsewhere in the state. But that hasn’t stopped Haefner from planning a 22,000-squarefoot expansion of the production line, along with a 4,500-square foot expansion to the offi ce area. Ground should be broken in the spring. Production is expected to increase to 75,000 units next year, double current levels.

Corn Still Economical Here

Haefner, chairman of the biomass appliance research committee of the Hearth, Patio and Barbecue As-sociation, said corn is still an economical choice for heating even though it has gone up in cost because of demand by ethanol plants. Nor does he believe corn stove users need to fear that corn prices will increase so much further that it is no longer economical.

Even if it did, the stoves can burn other fuels. Canadian biomass stoves are fueled almost entirely by grains, such as wheat, barley, oats and rye because of low prices. Biomass fuels vary by region in the U.S., too, he said. Corn is readily available in the Midwest, but wood pellets are popular in the Northeast.

An average home would use about $600 worth of corn each heating season, burning about two-thirds of a bushel per day. That is compared to the average natural gas or fuel oil cost of about $2,000, Haefner said. While economics is a major factor in favor of using biomass appliances that use domestic fuels, Haefner believes the best reason to consider using them is to protect our other fuel resources for other uses.

Workers at American Energy Systems put the fi nishing touches on a biomass-fueled hearth appliance at the company’s plant in the Hutchinson industrial park. The factory is scheduled for a major expansion in 2007.

Contact: Marketing Director, marketing@magnumheat.com

For Immediate Release: High energy prices make heating with corn and other agri-fuels an appealing

option for homeowners and legislators Biomass stove/furnace manufacturer will sell record units in 2006-07 heating season

Hutchinson, MN – November 13, 2006

Mike Haefner, president and founder of American Energy Systems in Hutchinson, MN

has been told he’s crazy before. That was prior to being featured within the pages of The

Washington Post and The Wall Street Journal, live prime-time CNBC interviews, and

personal visits from government officials such as Senator Norm Coleman of Minnesota.

Apparently he’s not crazy anymore.

Today, as homeowners everywhere search for alternatives to decrease their heating bills,

heating with renewable fuels such as corn, wood pellets, wheat, barley, and oats is

growing in popularity across the country. “Numerous factors can be attributed to the

continual rise in overall demand” says Haefner. “People are fed up with needing to be

dependant on foreign sources of oil. Others are attracted to the environmental benefits

heating with corn has. Most read about how much money they can save on their heat bill

and pick up the phone minutes later.”

It’s not uncommon for homeowners to cut their heat bills in half by heating with

renewable resources and lowering their consumption of fossil fuels such as natural gas

and fuel oil. One of the true benefits of the stoves and furnaces produced at American

Energy Systems is their ability to burn a variety of solid agri-fuels. Haefner continues,

“In the heartland, corn is readily available. In the northeast, wood pellets are the

common choice. Many homeowners in different areas of Canada heat with grains such as

- MORE -

wheat, barley, oats, and durum. It all depends on your location and what renewable fuels

are readily available in your area. The great thing about our Magnum appliances is the

ability our customer’s have to switch fuel sources should a fuel type ever become scarce

in their area – such as wood pellets have become in some states.”

Unlike wood-burning stoves and fireplaces, the amount of ash produced by heating with

corn and other agri-fuels is remarkably small. Typically, the daily amount of ash, or

“clinker” as it is called when burning corn, will fit within the palm of your hand. “The

stoves do require some daily maintenance, but our customers have found that the days of

hauling out bucket loads of ash are over when they decide to heat with agri-fuels” says

Haefner.

Many attribute American Energy Systems as the first producer of a corn-burning stove in

the early 1980s. More than thirty years after its inception in 1973, the company remains

the premiere manufacturer of biomass-burning appliances today.

For more information on American Energy Systems, please the Marketing Director directly

at marketing@magnumheat.com. Find additional press information online at

http://www.magnumheat.com/pressroom.cfm.

Contact: Marketing Director, marketing@magnumheat.com For Immediate Release:

MagnuM introduces the new step top Winchester series stove and insert The Winchester is a new corn/bio-mass stove that can burn 100% corn, switch-grass pellets,

wood pellets, wheat, and a variety of pelletized fuel - it burns renewable energy!

Hutchinson, Minnesota—February 6, 2007 American Energy Systems Inc. the manufacturer of MagnuM corn, wood pellet and agri-fuel appliances-is proud to announce the new Winchester corn/bio-mass stove. This is a new step top stove with a European design that compliments the other stoves and inserts in the MagnuM line. It is offered as a free standing stove with a pedestal and optional legs for added height and appeal. The Winchester is also offered as an insert that can turn drafty, inefficient wood burning fireplaces into efficient corn/bio-mass burning appliance that can heat your home. The stove and the insert are offered in AC and DC SKUs and can operate on electricity from solar energy, wind power, batteries or a generator. Burning renewable energy such as corn, wood pellets, grass pellets, wheat, cherry pits and other grains/pellet fuel in the Winchester can save home owners hundreds of dollars on their annual heating bill—in many cases more than a thousand dollars! The Winchester stove goes up to 45,000 BTUs, has a 68 pound hopper, and a burn time of up to 56 hours. It has multiple heat settings for your comfort and can be used with a thermostat for maximum comfort and fuel savings. The Winchester step top stove and insert have an arched door with a large viewing area of the fire offered in a gold, nickel, gun metal black, or black door. Other options include Queen Ann legs, grills in different finishes, etched glass (deer, pheasant and eagle), and an automatic ignition system. The Winchester has an improved heat exchanger with a wrap around air shell for more heat. For more information on American Energy Systems, the Winchester, burning with corn, bio-mass fuel for home heating, or to find a dealer near you visit our website at www.magnumheat.com.