Q1 2026 Company Update

As our team continues to grow, we are making a small adjustment to how we share our quarterly company updates.

Traditionally, we host an All-Hands meeting at the end of each quarter to discuss the business, share updates, and celebrate progress together. With the continued growth of our team and limited meeting space, we are trying a new format for this quarter — a company update newsletter.

And speaking of growth — we have officially reached 700 team members. This is a huge milestone for RAE and a reflection of the incredible work happening across our organization.

While the format of this update may look a little different this quarter, the purpose remains the same: keeping our team informed, aligned, and connected to where we are going as a company.

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Our Vision

To be the heart of our community’s progress, empowering our people, delighting our customers, and relentlessly innovating and improving to become a top workplace and the most sought-after brand in our industry.

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Our Vision

Excellence

Attaining the highest level of achievement possible in everything we do.

Discipline

Seeing commitments through with consistency.

Honor

Acting with integrity and accountability, no matter the consequence.

Service

Going beyond meeting basic requirements; building relationships to build trust

and community.

Evolution

Continuously adapting, improving, and growing in the pursuit of the best something can be.

Fun!

Celebrating wins to inspire great work, growth, and community.

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Company Snapshot

Damon Swank – VP of Operations

Production workload has been lighter than normal during Q1. However, sales remain strong and the shop load is beginning to pick up. We expect activity in production to increase as orders move into the schedule.

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2026 – Our Top 3 Company Goals

Everything we do as an organization supports three major company goals.

1. Deliver an Exceptional Partner Experience

At RAE we consider anyone that we do business with to be one of our partners. This includes vendors, contractors, shipping companies, recruiting companies, and end users. Every role at RAE contributes to the partner experience.

2. Drive Profitable Growth and Create Opportunities

Growth allows us to reinvest into our company, our people, and our products — creating more opportunities across the organization.

3. Become the Most Desirable Place to Work

We are committed to building a company where people are proud to work — one built on strong leadership, accountability, innovation, and respect.

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2026 Enterprise Goals

To support these company goals, our Executive Team and Director-level leaders have established 11 Enterprise Goals for 2026.

These initiatives focus on improving how we operate, strengthening our products, and positioning RAE for long-term growth.

1. Improve Lead Times (Top Priority)

One of the most important ways we improve our partner experience is by delivering equipment faster and more predictably.

Goals

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• Century lead times of 6–8 weeks, with a path to 4–6 weeks

• Coil lead times of 6 weeks on Line 1 and 5 weeks on Line 2

• Predictable ship weeks for NAP/Walmart orders

• True schedule visibility in IFS

• VSS implemented in all areas

2. Solve Parts Shortages & Build a Full Kit System

Production delays are often caused by missing parts. Our goal is to ensure materials are available before work begins so teams can build efficiently.

Goals

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• Maintain $6M+ buildable backlog in FULL KIT status

• 98% inventory accuracy

• Vendor On-Time Delivery above 95%

• Standard stocking of common components

• Eliminate year-end shutdown disruptions

• Reduce shipped-not-invoiced mismatches

3. Expand Coil Capacity

Expanding coil capacity ensures we can support both internal production and customer demand.

Goals

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• Fully utilize South Bay (Line 2)

• Expand capacity by approximately $15M by Q1

• Shift low-margin OEM coil work out of Line 1

• Prioritize internal coils for NAP, Century, and RSI

4. Improve Metrics, Reporting, and IFS Accuracy

IFS allows us to understand what is happening across the organization in real time. Accurate information improves scheduling, decision-making, and visibility across the company.

5. Build Leadership Team and Culture Systems

As we grow, leadership systems and culture become even more important.

Goals

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• Cross-functional leadership collaboration

• Culture tied to measurable results

• Retain and develop our A-players

• Consistent initiative execution

6. Integrate AI Into Daily Operations

Artificial Intelligence is rapidly changing how businesses operate.

At RAE, AI is not about replacing people — it is about helping our teams work faster, smarter, and more efficiently.

Goals

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• AI integrated across Sales, Supply Chain, Operations, Engineering, and Leadership

• Automation of routine tasks

• AI-generated summaries of key meetings

• 10–20% productivity improvements

7. Create a Century Innovation Pipeline

Innovation ensures our products remain competitive.

Goals

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• Improve startup reliability, installation time, efficiency, and cost

• Create the Century Refrigeration Advisory Board

• Align innovation with standardization and profitability

8. Evolve Century & RSI Products

This initiative focuses on simplifying product architecture and improving manufacturing efficiency.

Goals

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• Standardize Century product architecture

• Reduce manufacturing complexity

• Improve BOM accuracy

• Achieve 10% cost reduction on sales parts

9 & 10. NAP Innovation Pipelines

RAE is developing repeatable strategies for determining what solutions we bring to market.

These pipelines ensure new solutions:

• Solve real market needs

• Can be engineered and manufactured successfully

• Align with company capabilities

• Deliver strong profitability

11. Execution Discipline & Operating Standardization

Great companies succeed because they execute consistently.

Goals

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• Procedures and standards followed across the organization

• IFS used as the system of record

• Reduced rework, scrap, and schedule disruption

• ISO-ready operating discipline

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Sales Update

Jeremy Colvard – VP of Sales

We are off to a strong start in 2026 and remain committed to being a customer-focused and customer-driven organization.

Our booking goal is $15 million per month, and we met that goal in both January and February.

Key highlights:

• Strong demand for AI-related coil solutions

• Century Refrigeration production lines expanding at RAE South

• Agriculture market currently flat due to commodity pricing

• NAP division performing well

• Aftermarket Parts demand expected to increase into summer

Our Marketing Team will join Century, NAP, and RSI sales teams at the IIAR Conference in San Antonio (March 15–18).

Following the conference, the team will promote Century Refrigeration Contractor Training in Boise, Idaho (April 22–23).

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Safety Update

Kinsey Donner - Safety Manager

Over the past two weeks, we experienced three recordable injuries involving hand and wrist lacerations.

Each incident involved hand tools slipping and contacting nearby sheet metal.

We are currently evaluating:

• Tool selection and condition

• Proper tool use and positioning

• PPE including gloves and cut-resistant sleeves

Safety Metrics (Year-to-Date)

• Stop Work Authority Engaged — 2

• Near Misses — 18

• Property Damage — 5

• Information Only Injuries — 14

• First Aid Injuries — 27

• Recordable Injuries — 3

• Lost Time Injuries — 0

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Facilities Update

Bryan Turner

New NAP Stockroom — Nearly Complete

The new 10,500 sq ft stockroom includes 49 racks and is now being stocked and organized.

This area also includes a new hydro test area and fan/motor testing.

NAP Breakroom & Facilities — Now Open

The new 2,750 sq ft space includes:

• Seating for 52 people

• Outdoor seating

• Kitchen area

• Wellness room for new mothers

• New restrooms

• Training desks

New East Warehouse — Under Construction

A 7,725 sq ft warehouse is being built to house stock currently stored in RAE South and the three-sided building.

The former Ship Loose area is also being converted into a new Shipping Office.

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ISO Audit Update

Macy Kindle – Director of Quality

WE DID IT — ISO 9001:2015 CERTIFICATION HERE WE COME

From March 3–6, our facility underwent an official certification audit conducted by DNV, one of the world’s leading certification bodies.

We are proud to announce that RAE Corporation successfully passed the audit and will be recommended for certification.

Highlights from the audit:

• Quality Policy awareness across the facility

• Strong employee involvement through the DIY Program

• 570 DIY submissions in 2025 with $46,900 paid out

• $153,222 donated to the local community in 2025

• All corrective actions from internal audits closed

• External audits from NSF, UL, AHRI, and ETL — zero issues

Minor improvements were identified with responses due by April 6, but no major nonconformities were found.

This certification reflects the culture and commitment to quality across every department.

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Upcoming Events

RAE Corporation Easter Egg Drop

March 28 – 10 AM | The District

If you attend, be sure to check in at the RAE table.

RAE Family Foundation Easter Egg Raffle

Begins March 30

RAE Family Foundation Scholarships

Application Deadline: April 15

SmartDollar Tax Filing

April is Tax Month. Employees can file taxes for free using the SmartDollar Program.