LBO Model

Discussion Document

Formatting / Modeling Protocol

- We do not have the degree of standardization that many investment banks have for their Excel workbooks. Your managers may
be more particular, but in general, we adopt a whatever-works approach to formatting. That said, there are some general
guidelines that will help you construct and run your model more efficiently, and that will enable others to understand your model
quickly.

- All hard-coded data (when you enter numbers or text, as opposed to formulas) should be entered in blue.

- Hard-coded data should generally be avoided when possible, even for names and headings. Linking all cells to the fewest possible
number of inputs will save you time later.

- Always format your models / analysis for easy printing. You should be able to bring your primary output to meetings.

- Avoid Excel error messages like #DIV/0! or ### or #VALUE!

Output Page (page 1 of printout)

- The output page contains mostly data pulled from elsewhere in the model. This overview page contains the essential outputs from
the model.
- Operating information: income statement summary.
- Financing information: returns, sources and uses of funds, purchase price multiples, equity ownership table, credit ratios, cash
flow summary, key balance sheet items.

- Note the scenario choices just outside and above the print area. One of the keys to a good model is the flexibility to run a number
of different scenarios: we divide these scenarios into three primary components: operating, financing, and accounting. Use the
Audit function in Excel to trace the programming logic underlying these scenario choices (alt-T-U). We'll discuss the accounting
treatment of transactions more during the training program.

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LBO Model
Discussion Document

Sources and Uses (page 1 of printout)

- This section of the model shows how different tranches of debt and equity contribute to fund the transaction (Sources), and to
whom these funds are going in the form of payments and fees (Uses). Here's a quick list of the types of debt:
- Revolver: As discussed in the minimodel module, the revolver is an available facility that a company draws down when
necessary and pays down when possible. This is the "senior"-most level of debt, and in the case of a bankruptcy, has the first
claim on the company's assets.
- The term loan is the next most senior debt security. Typically, it will have a higher level of interest than the revolver, since it
has a junior claim to the assets of the company.
- Notes are yet another step junior to the term loan. Again, the interest rate is usually higher. Generally, the more junior a debt
security, the higher the interest rate, and the longer the maturity (and the greater the risk).

Income Statement (page 2)

- The Income Statement is the heart and soul of the financial model--it ultimately determines balance sheet account balances (and
cash flow needs), exit valuations, accessibility to the debt markets, etc. You'll spend significant time using a variety of
methodologies to estimate revenue growth and profit margins.

- Historical Data: show a few years of data if you have it. This provides helpful context for anyone looking to test the reasonability
of the projections. In addition, you should show historical financial data as the "pro forma" financials, adjusting for non-recurring
one-time events. Historical data is useful only to the extent you can use it to understand the future.

- Data source: typically we'll start with management's version of the historical financials; then, we'll make our own adjustments to
reach "pro forma" financials. In addition, we will develop our own internal view of the future, based on our market and company
analysis.

- Scenario analysis: As we discussed above, the income statement pulls its actual figures from the very bottom of the model, where
the different scenarios are laid out. Use the audit function to get a feel for how this works.
- In some cases, the scenarios you lay out will be in absolute terms (dollars of revenue, and dollars of profit); in other cases,
you'll use ratios (revenue growth, profit margin %, etc.). You'll have to modify the formulas on the income statement
accordingly.

- "Off Income-Statement Analysis"--some of the calculations for numbers on the Income Statement are more complex (interest,
amortization, and taxes), and will appear elsewhere in the model. If you're interested, use the audit function to track the
calculations.

- Beware D&A--most companies will include D&A in their COGS above the gross margin line. Others will exclude depreciation until
the SG&A portion of the income statement. Be aware of these possibilities, and adjust the model accordingly. You may (1)
subtract depreciation and amortization from EBITDA to reach EBIT, or (2) add back depreciation and amortization to EBIT to get
to EBITDA. This concept will become clearer to you when you build your first model.

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 LBO Model
Discussion Document

Balance Sheet (page 3)

- Layout: the balance sheet layout should resemble those you see in public 10-k's. One minor differences is a more detailed debt
table than you would usually find in a company's financial statements.

- Adjustments: We use adjustments to bridge the gap between where the balance sheet of the target company stands immediately
before we acquire it to how it looks the day after we purchase it. We need to adjust all goodwill, intangibles, and liabilities
accounts to zero, before calculating our new goodwill, intangibles, and liabilities balances.

- Ratios: Most of the balance sheet is calculated off of ratios--the analogy we used in the financial statement model is that the
income statement represents the amount of water flowing in any given period, and the balance sheet represents the size of the
pipe needed for that amount of water to flow through smoothly. Balance sheet accounts, then, are tied to the income statement
via ratios that compare balance sheet accounts with their corresponding operational metric (accounts receivable are tied to sales;
inventory is related to COGS, etc.) See the ratios section on page 6 for the actual calculations.

- Debt balances: the company's debt balances will decrease by the amount of principal paid down, and increase by the amount of
new debt (including revolver) raised. If you use the audit function, you'll find that the prior year's closing debt balance determines
the current year's interest expense.

- Balance Sheet Check: Assets = Liabilities plus Shareholders Equity. It sounds simple enough, but we often spend considerable
time getting the balance sheet to balance.
###
Cash Flow Statement (page 4)
- The CFS bridges the gap from one year's opening cash balance to the closing balance. As you know by now, American accounting
practice lays out the CFS via the indirect method--starting with net income, and then reconciling it to actual cash flow.

- Operating cash flow: the first step is to addback all non-working capital and working capital expenses to reach cash flow from
operations (CFO).

- Investing cash flow: we then subtract capex to determine cash available for debt paydown. We sometimes forecast Capex as a %
of sales.

- Financing cash flow: we pay down debt, issue new debt, pay down the revolver, and draw down from the revolver in this section
of the CFS.
- Debt amortization: we start by paying down all predetermined amounts. If necessary we will tap the revolver for additional
funds. Be careful, though, that your projections don't include a drawdown of the revolver that is larger than the ceiling.
- Sweeping cash: after paying down debt, all "excess" cash is typically used to pay down the revolver (if the balance is greater
than zero). Then, it can be used either to prepay long-term debt, or it can be deposited in the company's cash account.

- Reconciling to cash: After the above three types of cash flow (operating, investing, and financing), the residual change becomes
the change in cash from opening to closing.

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LBO Model
Discussion Document

Returns (page 5)
- We start by calculating Total Enterprise Value, as a multiple of either EBITA or EBITDA, subtract other interests in the company to
reach our residual equity valuation. From there, it's a simple CAGR calculation to reach our IRR.

- Common A's vs. Common L's: for most LBO transactions that we execute, we will divide the common equity into two pieces--the
A's and L's. We do this because it creates a tax-advantaged structure for some LP's (and us).
- The Common L's hold 90% of the value of the common equity, but only 10% of the upside. We model this by giving the
Common L's a fixed return.
- The Common A's hold 10% of the value of the common equity, but 90% of the upside. We model this by giving all of the
residual upside (after the fixed return on the L's) to the A's. From an investor's standpoint, we will put the A's in our tax-
advantaged accounts, leaving the L's for our more traditional holdings.

- At times it is more appropriate to view exit on a P/E basis, in which case we would build a separate returns calculation.

Ownership Tables (page 5)

- For now, we won't go into extreme detail on the tables. Suffice it to say that these tables are used to determine how much equity
we have by the end of the investment period. It is flexible enough to accommodate existing shareholders who have options,
options attached to other securities, management options, etc.

Ratios (page 6)
- This is where the calculations are done for the balance sheet items mentioned above. We use ratios to determine the balances for
working capital. Depending on the balance sheet item, the ratio differs. Here are some examples:
- Inventory is tracked vs. COGS (Inventory Turns)
- Accounts Receivable are tracked vs. Sales (Accounts Receivable Days)

- Profitability ratios: They also appear on this page. One of the most important metrics is Return on Net Assets, which determines
how efficiently a company uses its tangible assets. Generally speaking, RONA's should approach the cost of capital, barring any
special competitive advantages or disadvantages. High RONA industries attract competition; low RONA industries deter it.

Amortization Schedules (page 6)

- Historically, companies would amortize their goodwill accounts over a given period of time Given recent accounting changes, this
is no longer the practice. Goodwill will remain generally constant on a company's balance sheet.

- Financing Fees: companies are permitted to amortize their financing fees (those fees paid to investment banks and Sponsor) and
to amortize them over a certain period of time. The model accommodates this feature.

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LBO Model
Discussion Document

Income Tax Calculation (page 6)

- Like the ownership tables, we will leave the detailed understanding of this section until later. The purpose of this section of the
model is to reconcile book taxes with actual taxes. We use deferred tax balances to bridge that gap.

Debt Tables (page 7-8)

- With the exception of the revolver, debt paydown schedules are simple. We will negotiate a debt amortization schedule with the
banks, and we calculate interest off the balance accordingly.

- Revolver: this debt account provides cash when CFO is insufficient to pay for capex and principal paydown. On the other hand,
excess cash generated
Eligibility: by the
in some cases, wecompany
negotiateis an
usually used towith
agreement paythe
down the for
banks revolver balance
a revolver before
whose sizegoing to the balance
is determined by thesheet.
size ofHere
arecertain
some additional thoughts
asset accounts on the
(typically use of areceivable
accounts revolver: and inventory). From the bank's perspective, these assets serve as
- collateral against default. This is the case in the attached model.
- Borrowing ceiling: the bank will also set a ceiling for revolver borrowings based on negotiations.

Page 5 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

ASSUMPTIONS USES OF CASH SOURCES OF CASH

LIBOR (5 Yr Swap Curve) 2.78% Cum. Mult. Of LIBOR /

10-yr Treasury 4.21% Refinance Debt $0.0 Ceiling $ 07 EBITDA % Total Rate Treas. +
Purchase Price of Equity 201.7 Revolver $0.0 $0.0 0.0x 0.0% 5.78% 3.00%
Last FY End 12/31/2007 Total Enterprise Value 201.7 Term Loan A 81.3 2.2 39.1% 5.78% 3.00%
Stub Months 3 Fee % Amort. Term Loan B 0.0 2.2 0.0% 7.28% 4.50%
Bank Debt Fees 2.0 2.50% 5 years Term Loan C 0.0 2.2 0.0% -- --
Deal Structure Stock Purchase High Yield Fees 2.5 5.00% 10 years Term Loan D 0.0 2.2 0.0% -- --
Other Financing Fees 0.0 5 years Senior Notes 0.0 2.2 0.0% -- --
Total Financing Fees 4.5 Sr Sub Notes PIK? 50.0 3.5 24.1% 12.78% 10.00%
RETURNS % Cap. Amort. Seller Note No 0.0 3.5 0.0% -- --
Sponsor Fees 0.0 75.0% 5 years Discount Notes 0.0 3.5 0.0% -- --
Exit Multiple Other Fees 1.6 75.0% 5 years Preferred No 0.0 3.5 0.0% -- --
EBITDA EBITA Total Transaction Fees 1.6 Common-L 68.9 5.3 33.2% 10.00% --
Scenario 1 4.8x 5.5x Common-A 7.7 5.5 3.7% -- --
Scenario 2 5.2x 6.0x Working Capital 0.0 Excess Cash 0.0 0.0%
Scenario 3 5.6x 6.5x Check:
Total Uses of Cash $207.8 Total Sources of Cash $207.8 100.0% 0.00
2012 Exit IRR Payback
Scenario 1 22.2% 2.7x PURCHASE PRICE MULTIPLES EQUITY OWNERSHIP SUMMARY (Fully Diluted)
Scenario 2 24.2% 3.0
Scenario 3 26.1% 3.2 Purchase Price $201.7 Holder Security Cost Basis $ Invested Common-L Common-A
Preferred Warrants Nominal $0.0 0.0% 0.0%
2013 Exit IRR Payback 2007 2008 2009 Management Options 3.0x 1.1 0.0% 5.0%
Scenario 1 20.9% 3.1x EBITA Multiple 5.9x 7.5x 6.8x Management Options 2.0x 0.8 0.0% 5.0%
Scenario 2 22.5% 3.4 EBITDA Multiple 5.4 6.5 5.9 Management Options 1.0x 0.4 0.0% 5.0%
Scenario 3 23.9% 3.6 EBITDA-CapEx Multiple 5.4 7.5 6.8 Existing Holders Shares 1.0x 0.0 0.0% 0.0%
Sponsor Shares 1.0x 76.6 100.0% 85.0%
Total $78.8 100.0% 100.0%

CREDIT RATIOS CASH FLOW SUMMARY

EBITDA - EBITDA - Bank Cash Pay Total

Fiscal EBITDA / Main. CapEx/ EBITDA / Main. CapEx/ Debt / Debt / Debt / Fiscal Change Total CFO - Cum. CFO - Principal Revolver Revolver
Year Cash Interest Total Interest EBITDA EBITDA EBITDA Year in W.C. CapEx CapEx CapEx Payments Draw/(Pay) Availability
2007 PF 3.4x 3.4x 3.1x 3.1x 2.2x 3.5x 3.5x
2008 Stub 0.9 0.9 0.9 0.9 0.0 1.6 1.6 2008 Stub $109.5 $0.0 $108.9 $108.9 ($81.3) $0.0 $0.0
2009 5.4 4.7 4.7 4.1 0.0 1.5 1.5 2009 (0.2) (4.6) 5.1 114.0 0.0 0.0 0.0
2010 5.8 4.9 5.1 4.3 0.0 1.3 1.3 2010 (0.3) (5.6) 5.2 119.2 0.0 0.0 0.0
2011 6.4 5.6 5.6 4.9 0.0 1.2 1.2 2011 (0.3) (5.3) 8.2 127.4 0.0 0.0 0.0
2012 7.0 6.1 6.1 5.4 0.0 1.1 1.1 2012 (0.3) (5.4) 10.5 137.9 0.0 0.0 0.0

INCOME STATEMENT SUMMARY BALANCE SHEET SUMMARY

Fiscal Gross Operating As % of EBITDA - Fiscal Debt Excess

Year Revenues Growth Profit Margin Expenses Revenues EBITDA Margin EBITA Margin CapEx Margin Year Outstanding Cash
2006 148.7 -- 57.3 38.5% 23.6 15.9% 33.7 22.7% 30.6 20.6% 29.4 19.8%
2007 159.1 7.0% 62.4 39.2% 24.9 15.7% 37.5 23.6% 34.0 21.4% 37.5 23.6% At Close $131.3 $0.0
2008 171.8 8.0% 67.0 39.0% 36.1 21.0% 30.9 18.0% 26.9 15.7% 26.9 15.6% 2008 50.0 27.6
2009 185.6 8.0% 72.4 39.0% 38.0 20.5% 34.3 18.5% 29.8 16.1% 29.8 16.0% 2009 50.0 32.7
2010 200.4 8.0% 78.2 39.0% 41.1 20.5% 37.1 18.5% 32.0 16.0% 31.5 15.7% 2010 50.0 37.9
2011 216.5 8.0% 84.4 39.0% 43.3 20.0% 41.1 19.0% 35.6 16.4% 35.8 16.5% 2011 50.0 46.1
2012 233.8 8.0% 91.2 39.0% 46.8 20.0% 44.4 19.0% 38.3 16.4% 39.0 16.7% 2012 50.0 56.6
'07 - '12 CAGR 8.0% 7.9% 13.4% 3.4% 2.4% 0.8%

Page 6 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

INCOME STATEMENT
FYE December 9 Mo. End 3 Mo. End Projected FYE December
2005 2006 2007 9/30/2008 ### 2008 2009 2010 2011 2012

Revenues $117.8 $148.7 $159.1 $128.9 $43.0 $171.8 $185.6 $200.4 $216.5 $233.8
Growth -- 26.2% 7.0% -- -- 8.0% 8.0% 8.0% 8.0% 8.0%

Cost of Goods Sold (w/o Depreciation) 71.5 91.4 96.7 78.6 26.2 104.8 113.2 122.3 132.0 142.6
Gross Profit 46.3 57.3 62.4 50.3 16.8 67.0 72.4 78.2 84.4 91.2
Margin 39.3% 38.5% 39.2% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0%

Selling & Marketing Expenses 9.2 13.3 13.5 11.6 3.9 15.5 16.7 18.0 19.5 21.0
General and Administrative Expenses 10.5 10.3 11.4 15.5 5.2 20.6 21.3 23.0 23.8 25.7
Research and Development Expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Operating Expenses 19.7 23.6 24.9 27.1 9.0 36.1 38.0 41.1 43.3 46.8
as % of Sales 16.7% 15.9% 15.7% 21.0% 21.0% 21.0% 20.5% 20.5% 20.0% 20.0%

Non-Operating Expense / (Income) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBITDA 26.6 33.7 37.5 23.2 7.7 30.9 34.3 37.1 41.1 44.4
Margin 22.6% 22.7% 23.6% 18.0% 18.0% 18.0% 18.5% 18.5% 19.0% 19.0%

Depreciation Expense 2.6 3.1 3.5 3.0 1.0 4.0 4.5 5.0 5.5 6.1

EBITA 24.0 30.6 34.0 20.2 6.7 26.9 29.8 32.0 35.6 38.3
Margin 20.4% 20.6% 21.4% 15.7% 15.7% 15.7% 16.1% 16.0% 16.4% 16.4%

Goodwill Amortization 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBIT 24.0 30.6 34.0 20.2 6.7 26.9 29.8 32.0 35.6 38.3
Margin 20.4% 20.6% 21.4% 15.7% 15.7% 15.7% 16.1% 16.0% 16.4% 16.4%

Interest Expense (Income)

Financing Fee Amortization 0.7 0.9 0.9 0.9 0.9
Revolver 0.0 0.0 0.0 0.0 0.0
Term Loan A 3.5 0.0 0.0 0.0 0.0
Term Loan B 0.0 0.0 0.0 0.0 0.0
Term Loan C 0.0 0.0 0.0 0.0 0.0
Term Loan D 0.0 0.0 0.0 0.0 0.0
Senior Notes 0.0 0.0 0.0 0.0 0.0
Sr Sub Notes 4.8 6.4 6.4 6.4 6.4
Seller Note 0.0 0.0 0.0 0.0 0.0
Discount Notes 0.0 0.0 0.0 0.0 0.0
Total Interest Expense (Income) 9.0 7.3 7.3 7.3 7.3

Interest Income 0.0 0.0 1.2 1.4 1.6 1.9

Asset Step-up Write-off 0.0 10.0 10.0 10.0 10.0 10.0

Management Fee 0.0 1.0 1.0 1.0 1.0 1.0
Earnings Before Taxes (2.3) 12.7 15.1 18.9 22.0

Taxes (0.9) 5.1 6.1 7.6 8.8

Net Income before Dividends (1.4) 7.6 9.1 11.3 13.2

Preferred Dividend 0.0 0.0 0.0 0.0 0.0

Net Income ($1.4) $7.6 $9.1 $11.3 $13.2

Page 7 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

BALANCE SHEET
FYE December Estimated Opening Adjustments Closing Projected FYE December
2005 2006 2007 09/30/08 09/30/08 Dr. Cr. 09/30/08 2008 2009 2010 2011 2012
Assets
Cash $11.5 $3.4 $3.3 $0.0 $0.0 $0.0 $0.0 $27.6 $32.7 $37.9 $46.1 $56.6
Account Receivables, Net 28.9 29.4 41.4 134.2 134.2 0.0 134.2 40.6 43.8 47.3 51.1 55.2
Inventories 13.4 15.6 17.4 4.9 4.9 0.0 4.9 17.5 18.9 20.4 22.0 23.8
Asset Step-up -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Current Assets 3.9 4.5 4.2 13.6 13.6 0.0 13.6 5.2 5.6 6.0 6.5 7.0
Total Current Assets 57.7 52.8 66.3 152.7 152.7 0.0 0.0 152.7 90.8 101.0 111.7 125.7 142.6

Property & Equipment, Gross 30.0 33.7 34.4 31.4 31.4 0.0 31.4 31.4 36.0 41.5 46.8 52.2
Accumulated Depreciation (11.1) (14.1) (14.6) 0.0 0.0 0.0 0.0 (1.0) (5.5) (10.5) (16.1) (22.1)
Property & Equipment, Net 18.9 19.6 19.8 31.4 31.4 0.0 0.0 31.4 30.4 30.5 31.0 30.8 30.1

Goodwill and Other Intangibles, Net 88.6 79.0 83.2 83.2 83.2 285.2 83.2 285.2 285.2 285.2 285.2 285.2 285.2
Capitalized Financing Fees 1.2 0.9 0.8 0.0 0.0 5.7 5.7 5.1 4.2 3.3 2.4 1.5
Other Assets 1.3 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Assets $167.7 $153.3 $171.1 $267.3 $267.3 $291.0 $83.2 $475.1 $411.5 $420.9 $431.2 $444.1 $459.4
207.800

Liabilities & Shareholders Equity

Accounts Payable $6.2 $7.2 $8.4 $9.1 $9.1 $9.1 $8.7 $9.4 $10.2 $11.0 $11.9
Other Current Liabilities 47.3 39.8 47.4 31.2 31.2 31.2 51.5 55.7 60.1 64.9 70.1
Total Current Liabilities 53.5 46.9 55.8 40.3 40.3 0.0 0.0 40.3 60.3 65.1 70.3 75.9 82.0

Revolver -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Term Loan A -- -- -- -- 81.3 81.3 0.0 0.0 0.0 0.0 0.0
Term Loan B -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Term Loan C 76.1 62.8 61.3 61.3 61.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Term Loan D -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Senior Notes -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sr Sub Notes -- -- -- -- 50.0 50.0 50.0 50.0 50.0 50.0 50.0
Seller Note -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Discount Notes -- -- -- -- 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Long-Term Debt 76.1 62.8 61.3 0.0 0.0 61.3 131.3 131.3 50.0 50.0 50.0 50.0 50.0

Deferred Income Taxes 2.8 2.8 3.5 0.0 0.0 0.0 (0.9) (4.0) (8.0) (12.0) (16.0)
Reserve 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Pension Obligations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Non-Current Liabilities 3.4 3.3 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Liabilities 135.8 115.9 123.1 40.3 61.3 131.3 171.6 109.4 111.1 112.3 113.9 116.0

Preferred 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Seller Common 31.9 37.4 48.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Common-L -- -- -- -- 68.9 68.9 68.9 68.9 68.9 68.9 68.9
Common-A -- -- -- -- 7.7 7.7 7.7 7.7 7.7 7.7 7.7
Total Paid-In Capital 31.9 37.4 48.0 0.0 0.0 76.6 76.6 76.6 76.6 76.6 76.6 76.6

Retained Earnings 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (1.4) 6.3 15.4 26.7 39.9
Shareholders Equity 31.9 37.4 48.0 0.0 0.0 76.6 76.6 75.2 82.8 91.9 103.2 116.4

Total Liabilities and Shareholders Equity $167.7 $153.3 $171.1 $40.3 $61.3 $207.8 $248.1 $184.6 $193.9 $204.2 $217.2 $232.5

Balance Check: 0.00 0.00 0.00 226.93 352.30 291.00 226.93 226.93 226.93 226.93 226.93 226.93
DEBITS DO NOT EQUAL CREDITS

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Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

STATEMENT OF CASH FLOWS

FYE December 9 Mo. End 3 Mo. End Projected FYE December
2005 2006 2007 9/30/2008 ### 2008 2009 2010 2011 2012

Net Income ($1.4) $7.6 $9.1 $11.3 $13.2

Non-Cash Interest Expense 0.7 0.9 0.9 0.9 0.9
Non-Cash Dividends 0.0 0.0 0.0 0.0 0.0
Change in Deferred Taxes (0.9) (3.1) (4.0) (4.0) (4.0)
Depreciation 1.0 4.5 5.0 5.5 6.1
Goodwill Amortization 0.0 0.0 0.0 0.0 0.0

Change in Working Capital

Account Receivables, Net 93.6 (3.2) (3.5) (3.8) (4.1)
Inventories (12.6) (1.4) (1.5) (1.6) (1.8)
Other Current Assets 8.5 (0.4) (0.4) (0.5) (0.5)
Accounts Payable (0.4) 0.7 0.8 0.8 0.9
Other Current Liabilities 20.3 4.1 4.5 4.8 5.2
Total Change in Working Capital 109.5 (0.2) (0.3) (0.3) (0.3)

Total Cash From Operations 108.9 9.7 10.8 13.5 15.9

Maintenance Capital Expenditures (1.5) (2.2) (1.8) (2.4) (2.2) (2.6) (2.6) (2.7)
Discretionary Capital Expenditures (1.4) (2.1) 1.8 (1.7) (2.4) (3.0) (2.7) (2.7)
Total Capital Expenditures (2.9) (4.3) 0.0 (4.1) (4.6) (5.6) (5.3) (5.4)

Cash Flow Before Financing Activities 108.9 5.1 5.2 8.2 10.5

Term Loan A Amortization 0.0 0.0 0.0 0.0 0.0

Term Loan B Amortization 0.0 0.0 0.0 0.0 0.0
Term Loan C Amortization 0.0 0.0 0.0 0.0 0.0
Term Loan D Amortization 0.0 0.0 0.0 0.0 0.0

Cash Flow For Optional Debt Amortization 108.9 5.1 5.2 8.2 10.5
plus: Beginning Cash Balance 0.0 3.3 0.0 0.0 0.0 0.0
Cash Available For Optional Debt Amortization 108.9 5.1 5.2 8.2 10.5

Revolver Drawdown / (Paydown) 0.0 0.0 0.0 0.0 0.0

108.9 #VALUE! 5.1 5.2 8.2 10.5
Optional Term Loan A Paydown (81.3) 0.0 0.0 0.0 0.0
27.6 #VALUE! 5.1 5.2 8.2 10.5
Optional Term Loan B Paydown 0.0 0.0 0.0 0.0 0.0
27.6 #VALUE! 5.1 5.2 8.2 10.5
Optional Term Loan C Paydown 0.0 0.0 0.0 0.0 0.0
27.6 #VALUE! 5.1 5.2 8.2 10.5
Optional Term Loan D Paydown 0.0 0.0 0.0 0.0 0.0
Total Optional Debt Amortization (81.3) 0.0 0.0 0.0 0.0

Total Cash From Financing (81.3) 0.0 0.0 0.0 0.0

Total Change in Cash $27.6 $5.1 $5.2 $8.2 $10.5

Page 9 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

RETURNS
December 2011 Exit December 2012 Exit December 2013 Exit
Scenario 1 Scenario 2 Scenario 3 Scenario 1 Scenario 2 Scenario 3 Scenario 1 Scenario 2 Scenario 3

EBITDA $41.1 $41.1 $41.1 $44.4 $44.4 $44.4 $48.0 $48.0 $48.0
Multiple 4.8x 5.2x 5.6x 4.7x 5.2x 5.6x 4.8x 5.2x 5.7x

EBITA $35.6 $35.6 $35.6 $38.3 $38.3 $38.3 $41.9 $41.9 $41.9
Multiple 5.5x 6.0x 6.5x 5.5x 6.0x 6.5x 5.5x 6.0x 6.5x

Enterprise Value $195.8 $213.6 $231.4 $210.9 $230.1 $249.2 $230.4 $251.4 $272.3
less: Debt (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0) (50.0)
less: Preferred 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
plus: Cash from Warrants / Options Exercise 0.4 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1
plus: Excess Cash 46.1 46.1 46.1 56.6 56.6 56.6 69.3 69.3 69.3
Total Equity Value $192.3 $210.9 $228.7 $218.7 $237.8 $257.0 $250.9 $271.8 $292.8

Preferred Return on Common-L (10.00%) $98.5 $98.5 $98.5 $108.3 $108.3 $108.3 $119.2 $119.2 $119.2
Equity Return on Common-L 9.4 11.2 13.0 11.0 12.9 14.9 13.2 15.3 17.4
Total Value of Common-L $107.9 $109.7 $111.5 $119.4 $121.3 $123.2 $132.3 $134.4 $136.5
Sponsor % Ownership at Exit 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total Value of Common-A $84.4 $101.1 $117.2 $99.3 $116.5 $133.8 $118.5 $137.4 $156.2
Sponsor % Ownership at Exit 95.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0%

Total Value of Sponsor Equity $188.1 $200.8 $216.9 $208.7 $226.2 $243.6 $239.0 $258.1 $277.2
Initial Investment 76.6 76.6 76.6 76.6 76.6 76.6 76.6 76.6 76.6
Time Horizon (Years) 4.00 4.00 4.00 5.00 5.00 5.00 6.00 6.00 6.00

IRR 25.2% 27.3% 29.7% 22.2% 24.2% 26.1% 20.9% 22.5% 23.9%
Multiple of Investment 2.5x 2.6x 2.8x 2.7x 3.0x 3.2x 3.1x 3.4x 3.6x

OWNERSHIP

Common-L
Cost At Close Warrants $ Cost of Post-War. Options $ Cost of O-ship % Cash from Total $
Security Basis $ Invested O-ship % O-ship % Warrants O-ship % O-ship % Options at Exit Exercise Invested
`
Preferred Warrants Nominal $0.0 0.0% 0.0% $0.0 0.0% 0.0% $0.0 0.0% $0.0 $0.0
Management Options 3.0x 0.0 0.0% 0.0% 0.0 0.0% 0.0% 0.0 0.0% 0.0 0.0
Management Options 2.0x 0.0 0.0% 0.0% 0.0 0.0% 0.0% 0.0 0.0% 0.0 0.0
Management Options 1.0x 0.0 0.0% 0.0% 0.0 0.0% 0.0% 0.0 0.0% 0.0 0.0
Existing Holder Shares 1.0x 0.0 0.0% 0.0% 0.0 0.0% 0.0% 0.0 0.0% 0.0 0.0
Sponsor Shares 1.0x 68.9 100.0% 0.0% 0.0 100.0% 0.0% 0.0 100.0% 0.0 68.9
Total $68.9 100.0% 0.0% $0.0 100.0% 0.0% $0.0 100.0% $0.0 $68.9

Common-A
Cost At Close Warrants Cost of Post-War. Options Cost of O-ship % Cash from Total $
Security Basis $ Invested O-ship % O-ship % Warrants O-ship % O-ship % Options at Exit Exercise Invested

Preferred Warrants Nominal $0.0 0.0% 0.0% $0.0 0.0% 0.0% $0.0 0.0% $0.0 $0.0
Management Options 3.0x 0.0 0.0% 0.0% 0.0 0.0% 5.0% 1.1 5.0% 1.1 1.1
Management Options 2.0x 0.0 0.0% 0.0% 0.0 0.0% 5.0% 0.8 5.0% 0.8 0.8
Management Options 1.0x 0.0 0.0% 0.0% 0.0 0.0% 5.0% 0.4 5.0% 0.4 0.4
Existing Holder Shares 1.0x 0.0 0.0% 0.0% 0.0 0.0% 0.0% 0.0 0.0% 0.0 0.0
Sponsor Shares 1.0x 7.7 100.0% 0.0% 0.0 100.0% 0.0% 0.0 85.0% 0.0 7.7
Total $7.7 100.0% 0.0% $0.0 100.0% 15.0% $2.3 100.0% $2.3 $10.0

Page 10 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

RATIOS
FYE December 3 Mo. End Projected FYE December
2005 2006 2007 ### 2008 2009 2010 2011 2012
Working Capital Ratios
Days Receivable 88.3 days 71.1 days 93.7 days 93.7 days 85.0 days 85.0 days 85.0 days 85.0 days 85.0 days
Inventory Turns 5.3x 5.9x 5.6x 5.6x 6.0x 6.0x 6.0x 6.0x 6.0x
Other Current Assets / Net Sales 3.3% 3.0% 2.6% 2.6% 3.0% 3.0% 3.0% 3.0% 3.0%
Days Payable 31.4 days 28.2 days 31.2 days 31.2 days 30.0 days 30.0 days 30.0 days 30.0 days 30.0 days
Other Accrued Liabilities / Net Sales 40.1% 26.8% 29.8% 29.8% 30.0% 30.0% 30.0% 30.0% 30.0%

Profitability Ratios
Return on Equity (ROE) (2.4%) 9.6% 10.4% 11.6% 12.0%
Return on Investment (ROI) 0.04151037 12.5% 15.8% 16.1% 16.9% 17.1%
Return on Net Assets (RONA) 2.3% 6.9% 8.4% 8.9% 9.8% 10.3%

AMORTIZATION SCHEDULES

Goodwill Amortization Amount Amort.

Book Purposes 15 years $0.0 $0.0 $0.0 $0.0 $0.0
Tax Purposes $285.2 15 years 14.3 19.0 19.0 19.0 19.0
Book vs. Tax Amortization Delta ($14.3) ($19.0) ($19.0) ($19.0) ($19.0)

Financing Fee Amortization Total % Cap. $ Cap. Amort.

Bank Debt Fees $2.0 100.0% $2.0 5 years $0.3 $0.4 $0.4 $0.4 $0.4
High Yield Fees 2.5 100.0% 2.5 10 years 0.2 0.3 0.3 0.3 0.3
Other Financing Fees 0.0 100.0% 0.0 5 years 0.0 0.0 0.0 0.0 0.0
Sponsor Fees 0.0 75.0% 0.0 5 years 0.0 0.0 0.0 0.0 0.0
Other Fees 1.6 75.0% 1.2 5 years 0.2 0.2 0.2 0.2 0.2
Total $6.1 $5.7 $0.7 $0.9 $0.9 $0.9 $0.9

INCOME TAX CALCULATION

Book Accounting
Earnings Before Taxes ($2.3) $12.7 $15.1 $18.9 $22.0
plus: Non Deductible Goodwill Amortization 0.0 0.0 0.0 0.0 0.0
plus: Other Add-backs for Book Taxes 0.0 0.0 0.0 0.0 0.0 0.0
Book Taxable Income -$2.3 $12.7 $15.1 $18.9 $22.0
Tax Rate:
Total Book Taxes 40.0% -$0.9 $5.1 $6.1 $7.6 $8.8

Tax Accounting
Book Taxable Income AHYDO? ($2.3) $12.7 $15.1 $18.9 $22.0
Seller Notes Interest Add-back Yes 0.0 0.0 0.0 0.0 0.0
Discount Notes Interest Add-back Yes 0.0 0.0 0.0 0.0 0.0
Asset Step-up Write-off 0.0 10.0 10.0 10.0 10.0
Book vs. Tax Goodwill Amortization Delta 0.0 0.0 0.0 0.0 0.0 0.0
Reserve Beg. NOL 0.0 0.0 0.0 0.0 0.0 0.0
Net Operating Losses (NOLs) $0.0 0.0 (2.3) 0.0 0.0 0.0
Cash Taxable Income ($2.3) $20.5 $25.1 $28.9 $32.0
Tax Rate:
Total Cash Taxes 40.0% $0.0 $8.2 $10.1 $11.6 $12.8

Change in Deferred Tax Liability / (Asset) ($0.9) ($3.1) ($4.0) ($4.0) ($4.0)

Page 11 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

DEBT TABLES
Projected FYE December
Stub 2008 2009 2010 2011 2012
Revolver
Advance % Eligible % Net % At Close
Accounts Receivables 85.0% 90.0% 76.5% $102.7 $31.0 $33.5 $36.2 $39.1 $42.2
Inventory 65.0% 90.0% 58.5% 2.8 10.2 11.0 11.9 12.9 13.9
Total Borrowing Base $105.5 $41.3 $44.6 $48.1 $52.0 $56.1
Maximum
Total Available Borrowings $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Unused Balance 0.0 0.0 0.0 0.0 0.0

Beginning Balance $0.0 $0.0 $0.0 $0.0 $0.0

Drawdowns / (Paydown) 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense on Draws 5.78% $0.0 $0.0 $0.0 $0.0 $0.0

Average W/C Borrowings $0.0 0.0 0.0 0.0 0.0 0.0
Commitment Fee 0.50% of Unused Balance 0.0 0.0 0.0 0.0 0.0
Total Revolver Interest Expense $0.0 $0.0 $0.0 $0.0 $0.0

Term Loan A
Beginning Balance Check: $81.3 $0.0 $0.0 $0.0 $0.0
Amortization % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Mandatory Amortization 0.0 0.0 0.0 0.0 0.0
Optional Paydown (81.3) 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 5.78% $3.5 $0.0 $0.0 $0.0 $0.0

Term Loan B
Beginning Balance Check: $0.0 $0.0 $0.0 $0.0 $0.0
Amortization % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Mandatory Amortization 0.0 0.0 0.0 0.0 0.0
Optional Paydown 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 7.28% $0.0 $0.0 $0.0 $0.0 $0.0

Term Loan C
Beginning Balance Check: $0.0 $0.0 $0.0 $0.0 $0.0
Amortization % 100.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Mandatory Amortization 0.0 0.0 0.0 0.0 0.0
Optional Paydown 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Term Loan D
Beginning Balance Check: $0.0 $0.0 $0.0 $0.0 $0.0
Amortization % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Mandatory Amortization 0.0 0.0 0.0 0.0 0.0
Optional Paydown 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Page 12 of 14
Project Molecule Model Does Not Balance!
($ in millions, except where noted) Base Financing Structure

DEBT TABLES, Con't.

Projected FYE December
Stub 2008 2009 2010 2011 2012

Senior Notes
Beginning Balance $0.0 $0.0 $0.0 $0.0 $0.0
Additions / (Repayments) 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Sr Sub Notes
Beginning Balance $50.0 $50.0 $50.0 $50.0 $50.0
Additions / (Repayments) 0.0 0.0 0.0 0.0 0.0
Ending Balance $50.0 $50.0 $50.0 $50.0 $50.0

Interest Expense 12.78% $4.8 $6.4 $6.4 $6.4 $6.4

Seller Note
Beginning Balance PIK? $0.0 $0.0 $0.0 $0.0 $0.0
Additions No 0.0 0.0 0.0 0.0 0.0
Repayments 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Discount Notes
Beginning Balance $0.0 $0.0 $0.0 $0.0 $0.0
Accretion 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Interest Expense 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Preferred
Beginning Balance PIK? $0.0 $0.0 $0.0 $0.0 $0.0
Additions No 0.0 0.0 0.0 0.0 0.0
Repayments 0.0 0.0 0.0 0.0 0.0
Ending Balance $0.0 $0.0 $0.0 $0.0 $0.0

Dividend 0.00% $0.0 $0.0 $0.0 $0.0 $0.0

Page 13 of 14
 Project Molecule: Valuation Sensitivity
Current Scenario: $14.10

Historic Valuation Comparison

Enterprise Value Financials
2005 2006 2007 Current Offer 2005 2006 2007 LTM 03/08 LTM 03/08
Share Price #ADDIN? #ADDIN? #ADDIN? #ADDIN? $14.10 Total Revenue $24.6 $26.3 $27.4 $28.0 $28.0
Shares Outstanding #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN? Operating Income 4.0 5.3 5.3 5.3 5.3
Public Market Value #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN? Adj. EBIT* 4.0 5.5 6.0 5.7 6.0
Adj. EBITDA* 4.9 6.2 6.6 6.5 6.5
Options: Wtd Av Exercise Price $7.70 $8.52 $8.73 $8.73 $8.73 Net Income 2.9 3.9 3.8 3.9 3.9
Options Outstanding 0.9 0.9 0.9 0.9 0.9
Options Market Value #ADDIN? #ADDIN? #ADDIN? #ADDIN? 4.6 Valuation
Total Market Value (MV) #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN? 2005 2006 2007 Current Offer
Total Debt - - - - - TEV / Revenue #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Cash and Equivalents $8.9 $12.3 $12.2 $12.4 $12.4 TEV / Op. Inc. #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Minority Interest - - - - - TEV/Adj. EBIT #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Net Debt (8.9) (12.3) (12.2) (12.4) (12.4) TEV / Adj. EBITDA #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Enterprise Value (TEV) #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN? MV / Net Inc. #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
TEV Premium #ADDIN? P / E (Basic) #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
* Adjusted for $250K of public company costs that will not be needed as a private entity Moderate IRR 16.1% 14.4% 13.2% 12.2% 11.5%

Offer Price Sensitivity

Uses of Cash Sources of Cash Price Sensitivity
Purchase of Common #ADDIN? Cash from Balance Sheet $12.4 Offer Price: $11.00 $12.00 $13.00 $14.10 $15.00
Purhase of Options, Net 4.6 Debt 22.9
Fees 3.0 Equity 48.7 Net Equity Value #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Total Uses #ADDIN? Total Sources $84.0 TEV #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
TEV / Adj EBITDA* #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Purchase Price TEV / Adj EBIT* #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Price per share $14.10 Premium to trading #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Common #ADDIN? Premium to TEV today #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Options 0.9 Premium to all-time hi (22.0%) (14.9%) (7.8%) -% 6.4%
Total Diluted Shares #ADDIN? Premium to TEV all-time hi #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Gross Equity Price #ADDIN? Max Leverage 3.50x 3.50x 3.50x 3.50x 3.50x
Wtd. Avg. Price of Options $8.73 Debt Required $22.9 $22.9 $22.9 $22.9 $22.9
Proceeds from Options 7.5 Equity Required #ADDIN? #ADDIN? #ADDIN? #ADDIN? #ADDIN?
Net Equity Value #ADDIN?
Plus Net Debt (12.4) Base Return 1.72x 1.64x 1.57x 1.52x 1.49x
Total Enterprise Value #ADDIN? Base IRR 13.5% 12.0% 10.9% 9.9% 9.3%
Add: Fees 3.0
Total Purchase Price #ADDIN? Moderate Scenario 1.90x 1.80x 1.73x 1.67x 1.63x
* Adjusted for $250K of public company costs that will not be needed as a private entity Moderate IRR 16.1% 14.4% 13.2% 12.2% 11.5%

SFW Capital Confidential 11/20/2017 Page 14