4158 income tax ex pense benefit 116 116 116 reported

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4,158 Income tax ex pense / (benefit) 116 116 116 Reported EBITDA 10,201 9,151 20,186 Management adjustments Workers comp normalization MA-01 268 215 415 Bonus and profit sharing ex pense MA-02 - 347 261 Credit memo reserve MA-03 - - (285) Oracle implementation MA-04 - - 272 Shared services MA-05 (237) (388) (287) Vacation accrual MA-06 - - (172) Engineering reserve MA-07 - - 150 Loss on sale of assets MA-08 19 97 124 Group insurance accrual MA-09 - - 102 Bad debt ex pense MA-10 23 (105) (87) Warranty methodology change MA-11 (1,440) - - Total Management adjustments (1,367) 167 492 Management adjusted EBITDA 8,834 9,317 20,678 Pro forma adjustments State 2 closure PF-01 358 403 421 Pro forma EBITDA 9,192 9,720 21,098 % of revenue Reported EBITDA % 5.0% 4.4% 7.8% Management adjusted EBITDA % 4.3% 4.5% 8.0% Pro forma EBITDA % 4.5% 4.7% 8.2% Pro forma adjustments Quality of earnings Pro forma adjustments PF-01 State 2 closure: The Company has initiated plans to close the State 2 service center in Q1 2017. As a result of nominal performance in State 2 and open capacity at the State 1, State 4 and State 5 offices, the closure of the State 2 Product 4 service center will yield cost savings on fixed overhead costs performed in State 2. Cost savings are primarily expected to be attributable to savings in rent, reduction in force of two production supervisors and a customer service representative. As the service centers in other locations have the capacity to absorb the work performed by State 2, the following fixed costs presented below have been added back to pro forma EBITDA. As a result of the closure, Company expects to incur closing costs specifically related to the termination of the lease and severance for current employees. This lease termination and severance is expected to be completed prior to the close of the prospective transaction, and as such would be incurred by the Company. $ in thousands Fiscal 14 Fiscal 15 TTM 16 Cost savings Fixed Cost Reduction: Facility rent 151 189 208 Maintenance 5 5 6 Production supervisors 107 117 120 Customer service reps 75 59 60 Other 21 34 27 Total fixed cost savings 358 403 421
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© 2016 Grant Thornton LLP | Project Lightning | October 21, 2016 DRAFT 28 $ in thousands Ref. No. Fiscal 14 Fiscal 15 TTM 16 Rev enue, unadjusted 203,580 208,107 257,299 Net income 5,972 5,200 16,159 Add-backs Interest (income) / ex pense (27) (147) (247) Depreciation and amortization 4,140 3,981 4,158 Income tax ex pense / (benefit) 116 116 116 Reported EBITDA 10,201 9,151 20,186 Management adjustments Workers comp normalization MA-01 268 215 415 Bonus and profit sharing ex pense MA-02 - 347 261 Credit memo reserve MA-03 - - (285) Oracle implementation MA-04 - - 272 Shared services MA-05 (237) (388) (287) Vacation accrual MA-06 - - (172) Engineering reserve MA-07 - - 150 Loss on sale of assets MA-08 19 97 124 Group insurance accrual MA-09 - - 102 Bad debt ex pense MA-10 23 (105) (87) Warranty methodology change MA-11 (1,440) - - Total Management adjustments (1,367) 167 492 Management adjusted EBITDA 8,834 9,317 20,678 Pro forma adjustments State 2 closure PF-01 358 403 421 Pro forma EBITDA 9,192 9,720 21,098 % of revenue Reported EBITDA % 5.0% 4.4% 7.8% Management adjusted EBITDA % 4.3% 4.5% 8.0% Pro forma EBITDA % 4.5% 4.7% 8.2% Other considerations Quality of earnings Other considerations OC-01 Fair Labor Standards Act: In May-16, the regulations of the Fair Labor Standards Act were updated to raise the salary threshold of employees. As a result, the Company is expecting to incur increased costs
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  • Spring '08
  • McCaffrey
  • Revenue, Grant Thornton LLP

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