FOR IMMEDIATE RELEASE:
October 31, 2005

Contact
Ian Larkin, Managing Director (312) 681-7400
Greg Long, Vice President (312) 681-7400
Brian Maney, Director, Corporate Communications (301) 951-6122

STEIN WORLD GETS ACCENTS RIGHT

By Linda Corman

Stein World LLC, a leading designer, importer and distributor of residential accent furniture and portable lighting, was started 18 years ago on Harve Stein's observation of an untapped market for quality, imported, accent furniture sold at prices below those of nationally branded manufacturers. Early on, the company focused on wicker and rattan furniture from the Philippines and wooden chairs from Italy. After Harve Stein's son, Andy, purchased the company in 1999, he focused exclusively on importing from China. Since then, the company has grown to source from several vendors in China while maintaining a local Chinese office. Stein World also operates distribution warehouse facilities at its headquarters in Memphis, Tennessee. A line of portable lighting fixtures was added in 2005.

In an October 13, 2005 sponsored debt refinancing led by Goense Bounds & Partners, a private equity firm which bought Stein World in June 2004, American Capital Strategies Inc. (NASDAQ: ACAS) provided $32 million in the form of a senior term B loan and senior and junior subordinated debt. Dymas Capital Management, GE Corporate Financial Services and Antares Capital Corporation provided a senior term A loan and a revolving credit facility. Goense Bounds, New York Life Insurance Company, Stein World management and private investors are currently invested in the equity.

Stein World, with its line of credenzas, chests, tables, cabinets and other residential accent furniture, serves 78 of the top 100 retail furniture chains. The company has attained its leading position through outsourcing, continually updating its products and maintaining hundreds of SKUs - many of which are low-cost redesigns of popularly branded furniture. The average retail price of its products range between $200 and $700. By comparison, its competitors' average retail prices range from $1,500 to $2,000. Stein World also provides one-week delivery by ordering in advance of sales such that retail buyers at High Point, the industry's largest furniture trade show, for example, receive product within a week of placing their orders at the show.

"This is in stark contrast to the rest of the industry that typically introduces prototypes at the show to gauge market interest in advance of building inventory to order-an approach that takes several months before customers receive product," said Andy Stein, Stein World's President.

Each of Stein World's products stands on its own rather than being a part of larger furniture sets. End consumers can therefore make an impact on improving the appearance of rooms without making major investments. Stein World's lower price points mean that its furniture appeals to a broader array of end consumers. In addition to accent furniture, the company sells portable lighting, including wall sconces, floor lamps, and chandeliers. Pictured here is an antique vanity with a copper sink and granite top.

Stein World has joined American Capital's portfolio of more than 140 middle market companies in a wide range of industries. Since 1997, American Capital has invested approximately $7 billion in over 190 companies. For more information about American Capital's portfolio click here.

According to analysts, sales of furniture and bedding exceeded $75 billion in 2004 and the home accents market (which includes accent furniture) accounted for about $65 billion of that total. Although the overall furniture industry is somewhat cyclical, accent furniture is less susceptible to fluctuations due to its lower price point and low reliability on consumer credit. While the accent furniture market has had historical annual growth of 8%, Stein World's growth has been substantially more robust with average annual sales growing 70% over the last three years. Retailers play a critical role in the demand for accent furniture and they are inclined to enthusiastically support the category because it is more profitable than other furniture products and product turnover is higher. Growth is also propelled by a trend in end consumers' taste away from furniture sets towards a blend of individual pieces.

The company's broad range of products-its 750 SKUs make it an industry leader-provide a significant competitive advantage. In addition, Stein World's extensive retail customer base creates substantial barriers to entry for potential competitors. Pictured here is a unique wooden credenza.

Stein World anticipates strong future growth fostered by further penetration of existing retail accounts, expansion of the customer base and rollout of the complementary lighting products. The company foresees expanding its customer base into specialty retail stores, such as fabric, home office, and hardware stores and possibly hotels. Lighting sales have already gotten off to a strong start and are expected to continue as lighting is a natural complement to accent furniture. With its strategic growth plans and an extensive product line, Stein World is on track to solidify its lead in providing just the right accent in residential furniture.