TURNAROUND SUCCESS FACTORS

MANAGEMENT INVESTORS

CUSTOMERS LENDERS

SUPPLIERS

TIME_______________

CASH

Why does this company deserve to live?

If so, which parts and how structured

If not – how to get value from assets

Obstacles to building a recovery plan

◦ Management – self interest, denial◦ Access to data◦ Data accuracy◦ Sorting out fact from fiction

Lack of timely and accurate financial information

Lack of effective measurements of performance

Lack of effective plans A management team that believes they are

doing a good job

◦ Source: P.Leming May 2011 TMA event

How a leading industrial company was nearly destroyed ---

- Then saved, and rebuilt into a stronger organization

$2.5 billion sales - 3 strong businesses Broad product portfolio with leading brands Diversified markets: commercial construction,

industrial MRO, utility, retail Multiple channels to market: distribution,

direct, retail Proven, global IT systems and integrated

manufacturing network Reputation for excellent customer service and

innovative new products

*Not inclusive of all T&B brands

Color-Keyed®

T&B® Fittings

Ocal®

Ty-Rap®

Steel City®

Blackburn® Elastimold®

E-Z-Code®

Ty-Duct®

Sta-Kon®

Kindorf®

Red Dot®

10

Electrical*

Leading Brands Help Create Demand

Acquisitions w/o integration Weak financial function & controls Multiple initiatives w/o execution plan No accountability/responsibility Drive for quarter-end profit target◦ Power Buys◦ Build inventory to cover costs

Amazon of the B-to-B Electrical Industry

-400

-200

0

200

400

600

2000 2001 2002 2003

Operating IncomeOperating Working CapitalOperating Cash Flow

•No Cash•No Credit•No Strategy•No Business Disciplines

Shareholder lawsuit initiated June 2000 Eventually settled in next two years

SEC investigation of revenue recognition results in a permanent injunction Eventually lifted several years later

New Corporate CFO recruited – April Sell $800M electronics business to Tyco –June◦ Prevents breakage of loan covenants

Board Chair steps into CEO position - August Value investor attracted – GAMCO Major customer relationships stabilized Experienced industry executives hired as the

turnaround team

Cut sales regions from, 19 to 9 Pricing authority centralized Close and consolidate 10 plants (The Big

Event) Close 5 regional warehouses Build to order – not for inventory Settle $300M past due deductions & invoices

-400

-200

0

200

400

600

2000 2001 2002 2003

Revenue Cycle Disciplines• Outsourced Collections• Controlled Field Sales Pricing Authority• Standardized Terms and Conditions• Addressed and Managed Return Policy• Systems to Process High Volume Deductions

• Resolved Order Price Difference• Installed Metrics and Reporting

Supply Chain Disciplines• Build Inventory for Customers, not Plants• Closed Multiple Warehouses• Fixed MRP and Open Ended PO’s• Eliminated Obsolete Products• Established Service and Quality Metrics

Revenue Cycle Pricing leadership in volatile

materials market Metrics to drive order quality Schedule for every customer Deduction resolution within 30

days Lean culture including warehouse

and office Apply cash in 1 day – or less

050

100150200250300

2004 2005 2006

Operating IncomeOperating Working CapitalOperating Cash Flow

Overall, maniacal focus on cycle time reduction and customer service

Supply Chain

Convert MRP to “Pull” System

Implement lean culture at suppliers

A strong Balance Sheet has fueled improved income statement performance

Less time correcting errors: More time on improving

Cross functional execution To the customer: lower cost of doing

business Customer partnerships with foundation in

service, quality, and integrity

T&B reestablished itself as a leader in the electrical market

Accolades for service, quality, and product innovation

Price leader that manages pricing decisions with integrity