National Presto Industries (ticker: NPK) Pitched in BYU Private Equity Case Competition 2012. 2nd place finish.

1. LBO of National Presto Industries
Team 18 Pitch Deck

2. Agenda
Company Overview
Industry Overview
Investment Thesis
Valuation & Deal Structure
Appendix

3. National Presto Industries Overview
NPK is a unique company with three distinct business segments
1. Defense – manufactures 20-40mm ammunition, LAP operations, cartridge cases
2. Appliance – designs, markets, and distributes small home electrical appliances
3. Absorbent – manufactures and sells private label adult incontinence products and diapers
Founded in Eau Claire, WI Publicly traded on NYSE Acquire Spectra and NCN Acquires Less than Lethal
2001 2006
1905 1969 2003 2011
Purchase RMED to form Acquires AMRON
absorbent segment
Sales Breakdown Key Financial Data
REVENUE AND GROSS MARGIN BREAKDOWN
100%
5%
•
7% 7%
90% 16% 17%
23% Stock Price: $72.89
80%
70%
• FY 2011 Sales: $431mm
60% 53%
56%
50%
60% 66% • LTM EBITDA: $83.02mm
47%
50% Absorbent
Defense
• Market Capitalization: $520.6mm
40%
30%
Appliances • Enterprise Value: $388.2mm
20%
31%
37% 33% 33% 30% 29%
• EV/EBITDA Multiple: 4.7x
10%
0%
• Free cash flow per share: $10.51
Rev Gross Rev Gross Rev Gross
2009 2010 2011

4. National Presto Industries Overview
Presto’s stock price performed exceptionally well during the financial crisis
120%
80%
40%
NPK
S&P 500
0%
4/1/2007 4/1/2008 4/1/2009 4/1/2010 4/1/2011 4/1/2012
-40%
-80%

5. Key Profit Drivers
Key Profit Drivers in Each Segment Overall Gross Margins, 2002-2011
Defense 40%
• US Government contracts
30%
• Department of Defense budget
• Military conflicts and troop deployment 20%
• Manufacturing plant utilization
10%
Home Appliances
• Per capita disposable income 0%
• Import penetration
• Existing home sales
• Commodity costs Overall EBITDA Margins, 2002-2011
30%
Absorbent Products
• Aging population
• New product development 20%
• Manufacturing plant utilization
10%
0%

6. Segment Breakdown
Gross Profit (2000-2010) Operating Profit (2000-2010)
Historical Sales (2000-2010) Historical Free Cash Flow (2000-2010)

7. Defense Segment
Corporate Structure of the Defense Segment
Products/services:
• Training ammunition
AMTEC CORPORATION • Firing devices and initiators
acq. 2001 • Fuses
Janesville, WI
SPECTRA TECHNOLOGIES AMRON LESS LETHAL SYSTEMS
acq. 2003 acq. 2006 acq. 2011
East Cambden, AR Antigo, WI Bull Shoals, AR
Products/services: Products/services:
Products/services: • Smoke and tear gas grenades
• Load, Assemble, and Pack (LAP) • Medium caliber ammunition (20-
40mm) for DOD and DOD prime • Specialty impact munitions
services for 40mm ammunition • Diversionary devices
contractors
• Cartridge casings • Stun munitions
• Launchers and gas masks
• Training for use of products

8. Management
Management has a long-term track record and deep experience
• Chairman, President, and CEO: Maryjo Cohen – 36 years at Presto
• CFO: Randy Lieble – 35 years at Presto
• VP – Sales: Donald Hoeschen – 41 years at Presto
• VP – Engineering: Lawrence Tienor – 42 years at Presto
Maryjo Cohen owns 30% of Presto. Presto’s management team is a double-edged sword. They have deep industry
experience and long track record with the company. They are responsible for the consistent growth Presto has
achieved over the last 35 years. Yet, they have traditionally operated the business with little leverage and inefficient
levels of working capital. We believe our partnership will add a fresh perspective on new opportunities.
Shares owned by management (of the float) Insider Transactions as of May 2010
5000
Maryjo Cohen 332,785 4000
Randy Lieble 1,478
3000
2000
Donald Hoeschen 372
1000
Lawrence Tienor 319
0
Shares Bought Shares Sold

9. Agenda
Company Overview
Industry Overview
Investment Thesis
Valuation & Deal Structure
Appendix

10. Industry Overview
Historical Growth Projected Growth
• Defense: 5.1% 5-yr CAGR • Defense: 3.2% 5-yr CAGR
• Small arms ammo: 14.8%
• Appliances: 1.1% 5-yr CAGR • Other ammo: 12.6%
• Appliances: 3.6% 5-yr CAGR
• Absorbent: 1.1% 5-yr CAGR • Small appliances: 0%
• Absorbent: 1.6 % 5-yr CAGR
• Disposable sanitary products as primary
source of segment growth
Historical and Projected Industry Growth (Revenue $ mm)
14,000
13,000
12,000
11,000
Small Appliances
10,000
Guns and Ammo
9,000
Paper Products
8,000
7,000
6,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

11. Competitive Landscape
Overview Appliances Segment - High
Each business segment has moderate to high
Substitutes
competitive rivalry. We believe the defense
segment is most favorable due to barriers to entry
from (1) high fixed costs and (2) long-term
Competitive Buyers
government relationships. Suppliers
Rivalry
High Medium Low
New Entrants
Defense Segment - Medium Absorbent Product Segment - High
Substitutes Substitutes
Competitive Competitive Buyers
Suppliers Buyers Suppliers
Rivalry Rivalry
New Entrants New Entrants

12. Agenda
Company Overview
Industry Overview
Investment Thesis
Valuation & Deal Structure
Appendix

13. Investment Thesis
Three attributes make NPK an attractive investment:
1. Sum of Parts Play
• Optimize value through 3 segments
• Spin off appliances and absorbent Current Ratio (2002-
2011)
8
5.8 5.6
2. Strong Financial Condition 6 5 4.9 5.3 5.1 5.2 5
4.3 4
• No leverage 4
• Current ratio of 5.0 2
• Strong margins 0
3. Attractive Valuation EV/EBITDA Multiple
• EV/EBITDA of 4.4x 14
12
• P/E ratio of 10.4x 10
8
6 NPK
4
Industry Average
2
0

14. Value Creation
We see three opportunities to unlock significant value in NPK:
1. Reverse Morris Trust Transaction
2. Expansion of Less-Than-Lethal Product Line
3. Enter Private Ammunition Market

15. 1) Reverse Morris Trust Transaction
Step 1: Buy National Presto Industries
Sponsor

16. 1) Reverse Morris Trust Transaction
Step 2: Form subsidiaries for the appliance and absorbent segments
Sponsor
100% 100%
Sub Appliance Sub Absorbent

17. 1) Reverse Morris Trust Transaction
Step 2: Form Subsidiaries for the Appliance to the PE sponsor
3: Distribute 100% of subsidiary stock and Absorbent Segments
Sponsor
100%
100% stock
stock
100% 100%
Sub Appliance Sub Absorbent

18. 1) Reverse Morris Trust Transaction
Step 3: Distribute 100% of subsidiary stock to the PE sponsor
Sponsor
100% 100%
100%
Sub Appliance Sub Absorbent

19. 1) Reverse Morris Trust Transaction
Step 4: Sell off subsidiaries to strategic buyer in stock-for-stock exchange
Sponsor
100% 100%
100%
Sub Appliance Sub Absorbent
merger merger
Buyer 1 Buyer 2

20. 1) Reverse Morris Trust Transaction
Step 4: Sell off subsidiaries to strategic buyer in stock-for-stock exchange
> 50% Sponsor > 50%
100%
Buyer 1 Buyer 2
Sub Sub
Appliance Absorbent
< 50% < 50%

21. 1) Reverse Morris Trust Transaction
Step 4: Sell off subsidiaries to strategic buyer in stock-for-stock exchange
Sponsor
> 50% > 50%
100%
Buyer 1 Buyer 2
Sub Sub
Appliance Absorbent
< 50% < 50%

22. 1) Reverse Morris Trust Transaction
Advantages of the spin-off Reasons for the defense segment
• Strategic focus • Largest growth potential in ammo market
• Only one segment
• Leads all segments in key ratios and metrics
• Tax-deferred sales
• Long-term capital gains: 15% • Contract with DOD through 2015
• Boost to overall IRR • Growth potential in Less than Lethal
• Returns in years 3 and 4 through block
trade • Potential to expand into private sector

23. 2) Expansion of Less-Than-Lethal
Acquired Less than Lethal Systems in November 2011
Plans for expansion:
• CapEx investment of $10mm in 2013 $2mm in 2014 to expand
manufacturing capacity
LESS LETHAL SYSTEMS
acq. 2011
Bull Shoals, AR
Clients: Products/services: Other:
• Law enforcement • Smoke and tear gas • 15,000 sq. ft
• Corrections grenades manufacturing facility
• Military • Specialty impact • $8mm of revenue in 2011
munitions
• Diversionary devices
• Stun munitions
• Launchers and gas masks
• Training for use of
products

24. 3) Enter Private Ammunition Market
The private ammunition market is fast growing and has limited transaction costs
• 2 possible ways to accomplish this:
• Acquire a small ammunition manufacturer
• Modify existing plants if demand from DoD declines
• High growth potential
• 5-yr projected CAGR of 14.8%
• Customer diversification
• Way to hedge risk of decline in government demand
• Use Less than Lethal law enforcement relationships to build customer base
• Potential targets:
• Black Hills Ammunition
• Rio Ammunition
• Fiocchi Ammunition
• Selliers & Belloitt
• Hornady

25. 3) Enter Private Ammunition Market
Case Study - Alliant Tech Systems
• “For the last few years, commercial ammunition has been Alliant's fastest-growing business, fueled in part by
Americans' increased concern over their safety and fears that stricter gun control laws could be ahead. The
segment's performance has helped Alliant offset declines in its aerospace and defense segments due to federal
budget cuts and the end of the U.S. war in Iraq.”
• “The commercial business grew from $258 million to $930 million in annual sales in the last 10 years,
accounting for an ever-larger part of Alliant's overall sales.”
• “The sporting group's 22 percent increase in sales last year was fueled in part by Wal-Mart's decision to start
selling shotguns, rifles and ammunition in more of its stores. Other major customers include Cabela's, Dick's
Sporting Goods, Bass Pro and Gander Mountain; They also sell to security companies and law enforcement
agencies.”

26. Summary of Value Creation
At an EBITDA exit multiple of 6.5x, improvements will add $355mm of equity value
$600
$500
$400
Equity Value
$300
$200
$100
$0
Sponsor Leverage Spinoff Less-than- Private Ammo Total Equity
Equity Value Lethal Value

27. Risks of Investment
This deal has several risks, but these factors help mitigate them
1. Future Contracts with the Department of Defense
• Troop deployment
• DoD budget
Mitigating Factors
• Unrealized budget cuts
• Slow-moving military decisions
• Ammo is essential
• 5-year contract renewal in Feb. 2010
• Order backlog of $342mm
2. No Buyer for Appliance and Absorbent Product Segment
Mitigating Factors
Order Backlog ($ mm)
• Less than $500mm is ideal for these industries
• 100 years of brand recognition for appliances 350
• High growth potential in absorbent 300
250
3. Difficulty Entering Private Ammunition Market 200
150
Mitigating Factors 100
50
• Acquire small manufacturer for client relationships 0
• Law enforcement connection (Less than Lethal) 2009 2010 2011

28. Exit Strategies
NPK’s defense segment could add significant value to a financial or strategic buyer
The exit strategy is deployed early, with the spinoff of two subsidiaries. Conservative estimates give
1.5 years for the spinoff and an additional 2 years for the sale of the stock. After building up the
defense segment, we believe it will be a prime target for either a large strategic buyer or a large
financial buyer.
Any company looking to expand its operations specifically into medium caliber round manufacturing
would benefit from the synergies that may exist within distribution and operations and would benefit
highly from the key relationship NPK’s defense segment has created within the Department of
Defense and other government agencies.

29. Agenda
Company Overview
Industry Overview
Investment Thesis
Valuation & Deal Structure
Appendix

30. Valuation Summary
NPK is trading at a 52-week low, putting it in an ideal position for a buyout

31. Discounted Cash Flow
Analysis and Assumptions

32. Discounted Cash Flow
Analysis and Assumptions

33. Trading Comps
Analysis and Assumptions

34. Trading Comps
Analysis and Assumptions

35. Precedent Transactions
Analysis and Assumptions
Appliances
Date Enterprise Enterprise Value/LTM
Ann. Acquiror Target Value Sales EBITDA
01/10/12 Carrier Aircon Ltd GD Midea Holding Co Ltd $7,366.9 0.5x NA
08/22/11 Electrolux AB CTI Cia Tecno Industrial SA 514.8 1.1x 4.1x
12/13/11 Polair OAO Snaige AB 32.1 0.6x 6.9x
12/11/09 Qingdao Haier Co Ltd Haier Electronics Group Co Ltd 2,542.1 0.4x 8.7x
09/29/09 China Overseas Land & Investment Ltd
China Overseas Grand Oceans Group Ltd 1,624.1 2.3x 4.5x
07/15/09 Whirlpool Corp Hisense Kelon Electrical Holdings Co Ltd 1,342.5 0.1x 3.6x
05/27/09 Haier Group Corp Fisher & Paykel Appliances Holdings Ltd 679.0 0.3x 3.9x
Q1 0.4x 3.9x
Median 0.5x 4.3x
Q3 0.9x 6.3x
Defense
Date Enterprise Enterprise Value/LTM
Ann. Acquiror Target Value Sales EBITDA
09/21/11 United Technologies Corp Goodrich Corp $16,950.9 2.0x 9.6x
05/15/09 General Dynamics Corp Elbit Systems Ltd 2,376.1 0.6x 4.5x
08/14/08 Goodrich Corp Rolls-Royce Holdings PLC 21,491.6 1.4x 10.5x
07/15/08 General Electric Co Safran SA 13,822.0 0.9x 6.7x
Q1 0.8x 6.1x
Median 1.2x 8.1x
Q3 1.5x 9.8x

36. Precedent Transactions
Analysis and Assumptions
Incontinence
Date Enterprise Enterprise Value/LTM
Ann. Acquiror Target Value Sales EBITDA
08/25/09 CMC Holdings Ltd/Hong Kong Fancl Corp 554.3 0.8x 7.7x
06/27/08 Financiere FC 1 Clarins 2,953.9 3.8x
05/30/08 JW Holdings Co Ltd JW Shinyak Corp 168.8 4.4x 31.0x
07/12/07 Energizer Holdings Inc Playtex Products Inc 1,601.2 2.1x
Q1 1.7x 3.4x
Median 2.6x 5.8x
Q3 3.5x 13.5x
Low end High end
Implied Share Price of NPK (applying multiples to the three segments) 90.65 96.82

37. Transaction Overview
Purchase Price Allocation Sources & Uses
Current Price p/ Share $73.00 Sources Amount Multples % of total
Revolver - 0.0 0.0 0%
Offer Premium 25% Term 166.04 2.0 2.0 33%
Offer Price p/ Share $91.25 High Yield 180.00 2.2 4.2 36%
Fully Diluted Shares 6.78mm Sponsor Equity 154.84 1.9 6.0 31%
Total 500.88 6.0 100%
Equity Value (before deal) $368.51mm
Equity Offer Price $493.89mm Uses Amount
Implied Entry Multiple 6.03x Equity 493.89
Debt -
Fees 6.99
Total 500.88
Reverse Morris Trust Capital Structure
PRE-SPINOFF DEFENSE APPLIANCE ABSORBENT POST-SPINOFF
Debt Amount Amount Mult Amount Mult Amount Mult Amount
Revolver - - - - - - - -
Term 166.0 117.0 2.0 35.4 2.0 13.6 2.0 166.0
High Yield 180.0 105.6 1.8 54.0 3.0 20.4 3.0 180.0
Total Debt 346.0 222.6 3.8 89.4 5.0 34.0 5.0 346.0

38. Transaction Overview
Proceeds from Spinoff
Cash proceeds from the spinoff are reduced by 15% to account for the open-market block sales that occur in mid-
2014 and mid-2015.
Base case, upside case, and downside case returns
BASE
Segment 2012 EBITDA Multiple Enterprise Value Net Debt Equity Value Realizable Value
Appliances 24.11 4.3 103.65 89.42 14.24 12.10
Absorbent 12.31 5.8 71.38 33.99 37.39 31.78
UPSIDE
Segment 2012 EBITDA Multiple Enterprise Value Net Debt Equity Value Realizable Value
Appliances 24.11 6.3 151.86 89.42 62.45 53.08
Absorbent 12.31 7.5 92.30 33.99 58.31 49.57
DOWNSIDE
Segment 2012 EBITDA Multiple Enterprise Value Net Debt Equity Value Realizable Value
Appliances 24.11 3.9 94.01 89.42 4.59 3.90
Absorbent 12.31 3.4 41.84 33.99 7.86 6.68

39. Transaction Overview
The early spinoff of two segments will add significant value to the buyout
Assumptions of the transaction:
• The spinoff takes 2 years to complete
• The equity portions of the segments are sold off over a period of 2 years at a 15% discount
With conservative exit multiples of 6.5x and 5.5x for the two segments, NPK shareholders will
receive 50% of their investment.
PAYBACK PERIOD SENSITIVITY ANALYSIS - % of initial investment recovered from spinoff
Exit Multiple - Absorbent
28.3% 4.5x 5.5x 6.5x 7.5x 8.5x
3.5x 9.0% 15.7% 22.5% 29.2% 36.0%
Exit Multiple 4.5x 22.2% 29.0% 35.7% 42.5% 49.2%
- Appliances 5.5x 35.4% 42.2% 49.0% 55.7% 62.5%
6.5x 48.7% 55.4% 62.2% 68.9% 75.7%
7.5x 61.9% 68.7% 75.4% 82.2% 88.9%
IRR SENSITIVITY ANALYSIS - IRR after defense exit in year 5
Exit Multiple - Absorbent
27.7% 4.5x 5.5x 6.5x 7.5x 8.5x
3.5x 24.1% 25.4% 26.6% 27.9% 29.1%
Exit Multiple 4.5x 26.6% 27.8% 29.1% 30.3% 31.6%
- Appliances 5.5x 29.0% 30.3% 31.5% 32.8% 34.0%
6.5x 31.5% 32.7% 34.0% 35.2% 36.5%
7.5x 33.9% 35.2% 36.4% 37.7% 38.9%

40. Financial Summary: Base Case
PROFORMA FINANCIAL DATA 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
INCOME STATEMENT Historical Period Projection Period
Revenue 224.4 238.8 253.8 240.8 202.4 235.0 237.9 227.4 223.2 219.5 222.3
% growth
0% NA
- 6.4%
- 6.3%
- -5.1%
- -15.9%
- 16.1%
- 1.2%
- -4.4%
- -1.8%
- -1.7%
- 1.3%
-
COGS 176.1 188.5 191.9 172.7 140.4 157.5 161.8 154.6 156.3 155.9 160.0
% margins
0% 78.5%
0% 79.0%
0% 75.6%
0% 71.7%
0% 69.4%
0% 67.0%
0% 68.0%
0% 68.0%
0% 70.0%
0% 71.0%
0% 72.0%
0%
SG&A
0% 8.9
0% 3.5
0% 3.5
0% 3.0
0% 3.5
0% 3.4
0% 3.4
0% 3.2
0% 3.2
0% 3.1
0% 3.2
0%
EBITDA 39.4 46.8 58.4 65.1 58.5 74.2 72.7 69.5 63.8 60.5 59.1
% margins
0% 17.6%
0% 19.6%
0% 23.0%
0% 27.0%
0% 28.9%
0% 31.6%
0% 30.6%
0% 30.6%
0% 28.6%
0% 27.6%
0% 26.6%
0%
D&A
0% 2.7
0% 3.2
0% 3.6
0% 3.7
0% 3.5
0% 4.7
0% 5.5
0% 5.7
0% 5.6
0% 5.5
0% 5.6
0%
EBIT 36.7 43.6 54.8 61.4 55.0 69.5 67.3 63.8 58.2 55.0 53.5
% margins 16.4% 18.2% 21.6% 25.5% 27.2% 29.6% 28.3% 28.1% 26.1% 25.1% 24.1%
FREE CASH FLOW
EBITDA 39.4 46.8 58.4 65.1 58.5 74.2 72.7 69.5 63.8 60.5 59.1
Cash Interest - - - - - (13.1) (12.1) (9.4) (6.2) (3.6) (1.6)
Cash Taxes (12.8) (15.2) (19.2) (21.5) (19.3) (19.8) (19.3) (19.0) (18.2) (18.0) (18.2)
(Increase) / Decrease in NWC - (3.6) (3.8) 3.3 9.6 (3.5) (0.7) 2.4 0.9 0.9 (0.6)
Capex (4.8) (2.6) (1.3) (3.5) (1.6) (2.8) (12.4) (4.5) (2.7) (2.6) (2.7)
Free Cash Flow 21.8 25.3 34.1 43.3 47.2 35.1 28.3 38.9 37.6 37.1 36.0
% of revenue 9.7% 10.6% 13.5% 18.0% 23.3% 14.9% 11.9% 17.1% 16.9% 16.9% 16.2%
Cumulative Free Cash Flow 35.1 63.4 102.3 140.0 177.1 213.1
Revolver Balance - - - - - -
Term Loan Balance 105.3 94.8 85.3 76.8 45.5 9.5
High Yield Balance 82.2 64.4 35.0 5.9 - -
CREDIT STATISTICS
Total Debt / EBITDA 2.5x 2.2x 1.7x 1.3x 0.8x 0.2x
FCF / Mandatory Interest Payments 3.0x 2.7x 4.1x 4.4x 4.8x 7.9x
FCF / Cash Interest 2.7x 2.3x 4.1x 6.0x 10.3x 23.1x
(EBITDA - Capex) / Cash Interest 5.5x 5.0x 6.9x 9.8x 16.0x 36.2x

41. Revenue Projections: Base Case
Assumes deployed soldiers use 4x as much ammunition as non-deployed
PROFORMA REVENUE 2012 2013 2014 2015 2016 2017
Ammunition
40mm Backlog 170.0 113.0
40mm 4/1/12 option 40.5 40.5
Add'l options - 12.9 112.8 146.1 139.0 137.8
Total Ammunition Revenue 170.0 166.4 153.3 146.1 139.0 137.8
% change -2.1% -7.9% -4.7% -4.9% -0.9%
Other Revenue 50.0 50.0 50.0 50.0 50.0 50.0
Less-than-Lethal 15.0 16.5 18.2 20.0 22.0 24.2
Private Sales - 5.0 6.0 7.2 8.6 10.4
Total Revenue 235.0 237.9 227.4 223.2 219.5 222.3
REVENUE DRIVERS 2012 2013 2014 2015 2016 2017
Total Army Troops 558,571 552,241 545,982 539,794 533,676 527,628
Army Troops Deployed - Middle East 54,000 50,000 30,000 20,000 10,000 10,000
Army Troops Deployed - Other 46,000 46,000 46,000 46,000 46,000 46,000
Army Troops Not Deployed 458,571 456,241 469,982 473,794 477,676 471,628
Adjusted Amount of Troops 858,571 840,241 773,982 737,794 701,676 695,628
% Change -2.1% -7.9% -4.7% -4.9% -0.9%

42. IRR Analysis: Base Case
IRR ANALYSIS 2012 2013 2014 2015 2016
Initial Equity Investment (154.84)
CF from Divestment 21.94 21.94
Exit Year EBITDA 60.53
Exit Multiple 6.5x
Enterprise Value 393.44
Less: Net Debt 45.52
Equity Value 347.92
Equity Proceeds (154.84) 0 21.94 21.94 347.92
IRR 27.7%
Cash Return 1.0x 0.0x 0.1x 0.3x 2.5x
IRR SENSITIVITY ANALYSIS
Entry Premium
27.7% 15% 20% 25% 30% 35%
5.5x 36.0% 28.3% 22.4% 17.5% 13.5%
Exit 6.0x 39.0% 31.2% 25.1% 20.2% 16.1%
Multiple 6.5x 41.8% 33.9% 27.7% 22.7% 18.5%
7.0x 44.4% 36.4% 30.1% 25.0% 20.8%
7.5x 46.9% 38.8% 32.4% 27.3% 23.0%

43. Financial Summary: Upside Case
PROFORMA FINANCIAL DATA 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
INCOME STATEMENT Historical Period Projection Period
Revenue 224.4 238.8 253.8 240.8 202.4 235.0 244.7 246.6 249.5 250.8 250.5
% growth
0% NA
- 6.4%
- 6.3%
- -5.1%
- -15.9%
- 16.1%
- 4.1%
- 0.8%
- 1.2%
- 0.5%
- -0.1%
-
COGS 176.1 188.5 191.9 172.7 140.4 157.5 166.4 175.1 177.2 178.0 177.9
% margins
0% 78.5%
0% 79.0%
0% 75.6%
0% 71.7%
0% 69.4%
0% 67.0%
0% 68.0%
0% 71.0%
0% 71.0%
0% 71.0%
0% 71.0%
0%
SG&A
0% 8.9
0% 3.5
0% 3.5
0% 3.0
0% 3.5
0% 3.4
0% 3.5
0% 3.5
0% 3.6
0% 3.6
0% 3.6
0%
EBITDA 39.4 46.8 58.4 65.1 58.5 74.2 74.8 68.0 68.8 69.1 69.1
% margins
0% 17.6%
0% 19.6%
0% 23.0%
0% 27.0%
0% 28.9%
0% 31.6%
0% 30.6%
0% 27.6%
0% 27.6%
0% 27.6%
0% 27.6%
0%
D&A
0% 2.7
0% 3.2
0% 3.6
0% 3.7
0% 3.5
0% 4.7
0% 5.6
0% 6.2
0% 6.2
0% 6.3
0% 6.3
0%
EBIT 36.7 43.6 54.8 61.4 55.0 69.5 69.2 61.8 62.6 62.9 62.8
% margins 16.4% 18.2% 21.6% 25.5% 27.2% 29.6% 28.3% 25.1% 25.1% 25.1% 25.1%
FREE CASH FLOW
EBITDA 39.4 46.8 58.4 65.1 58.5 74.2 74.8 68.0 68.8 69.1 69.1
Cash Interest - - - - - (13.6) (12.3) (9.4) (6.0) (3.2) (1.1)
Cash Taxes (12.8) (15.2) (19.2) (21.5) (19.3) (19.6) (19.9) (18.4) (19.8) (20.9) (21.6)
(Increase) / Decrease in NWC - (3.6) (3.8) 3.3 9.6 (8.2) 2.5 4.5 (0.6) (0.3) 0.0
Capex (4.8) (2.6) (1.3) (3.5) (1.6) (2.8) (11.7) (4.4) (3.0) (3.0) (3.0)
Free Cash Flow 21.8 25.3 34.1 43.3 47.2 30.1 33.3 40.3 39.4 41.8 43.4
% of revenue 9.7% 10.6% 13.5% 18.0% 23.3% 12.8% 13.6% 16.4% 15.8% 16.7% 17.3%
Cumulative Free Cash Flow 30.1 63.4 103.7 143.1 184.9 228.3
Revolver Balance - - - - - -
Term Loan Balance 105.3 94.8 85.3 76.8 37.8 -
High Yield Balance 87.2 64.4 33.6 2.7 - -
CREDIT STATISTICS
Total Debt / EBITDA 2.6x 2.1x 1.7x 1.2x 0.5x –
FCF / Mandatory Interest Payments 2.6x 3.2x 4.3x 4.6x 5.4x 11.5x
FCF / Cash Interest 2.2x 2.7x 4.3x 6.6x 12.9x 40.7x
(EBITDA - Capex) / Cash Interest 5.3x 5.1x 6.8x 11.0x 20.4x 61.8x

44. Revenue Projections: Upside Case
Assumes deployed soldiers use 4x as much ammunition as non-deployed
PROFORMA REVENUE 2012 2013 2014 2015 2016 2017
Ammunition
40mm Backlog 170.0 113.0
40mm 4/1/12 option 40.5 40.5
Add'l options - 12.9 121.8 158.1 150.9 140.8
Total Ammunition Revenue 170.0 166.4 162.3 158.1 150.9 140.8
% change -2.1% -2.5% -2.6% -4.5% -6.7%
Other Revenue 50.0 51.0 52.0 53.1 54.1 55.2
Less-than-Lethal 15.0 17.3 19.8 22.8 26.2 30.2
Private Sales - 10.0 12.5 15.6 19.5 24.4
Total Revenue 235.0 244.7 246.6 249.5 250.8 250.5
REVENUE DRIVERS 2012 2013 2014 2015 2016 2017
Total Army Troops 558,571 552,241 545,982 539,794 533,676 527,628
Army Troops Deployed - Middle East 54,000 50,000 45,000 40,000 30,000 15,000
Army Troops Deployed - Other 46,000 46,000 46,000 46,000 46,000 46,000
Army Troops Not Deployed 458,571 456,241 454,982 453,794 457,676 466,628
Adjusted Amount of Troops 858,571 840,241 818,982 797,794 761,676 710,628
% Change -2.1% -2.5% -2.6% -4.5% -6.7%

45. IRR Analysis: Upside Case
IRR ANALYSIS 2012 2013 2014 2015 2016
Initial Equity Investment (154.84)
CF from Divestment 51.32 51.32
Exit Year EBITDA 69.14
Exit Multiple 6.5x
Enterprise Value 449.43
Less: Net Debt 37.76
Equity Value 411.68
Equity Proceeds (154.84) 0 51.32 51.32 411.68
IRR 39.3%
Cash Return 1.0x 0.0x 0.3x 0.7x 3.3x
IRR SENSITIVITY ANALYSIS
Entry Premium
39.3% 15% 20% 25% 30% 35%
5.5x 50.4% 41.3% 34.3% 28.7% 24.0%
Exit 6.0x 53.2% 44.0% 36.9% 31.2% 26.4%
Multiple 6.5x 55.8% 46.5% 39.3% 33.5% 28.7%
7.0x 58.2% 48.8% 41.6% 35.7% 30.9%
7.5x 60.5% 51.0% 43.7% 37.8% 32.9%

46. Financial Summary: Downside Case
PROFORMA FINANCIAL DATA 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
INCOME STATEMENT Historical Period Projection Period
Revenue 224.4 238.8 253.8 240.8 202.4 228.0 212.4 196.4 195.2 194.0 192.8
% growth
0% NA
- 6.4%
- 6.3%
- -5.1%
- -15.9%
- 12.7%
- -6.8%
- -7.6%
- -0.6%
- -0.6%
- -0.6%
-
COGS 176.1 188.5 191.9 172.7 140.4 152.8 144.5 141.4 144.5 145.5 144.6
% margins
0% 78.5%
0% 79.0%
0% 75.6%
0% 71.7%
0% 69.4%
0% 67.0%
0% 68.0%
0% 72.0%
0% 74.0%
0% 75.0%
0% 75.0%
0%
SG&A
0% 8.9
0% 3.5
0% 3.5
0% 3.0
0% 3.5
0% 3.3
0% 3.0
0% 2.8
0% 2.8
0% 2.8
0% 2.7
0%
EBITDA 39.4 46.8 58.4 65.1 58.5 72.0 65.0 52.2 48.0 45.7 45.5
% margins
0% 17.6%
0% 19.6%
0% 23.0%
0% 27.0%
0% 28.9%
0% 31.6%
0% 30.6%
0% 26.6%
0% 24.6%
0% 23.6%
0% 23.6%
0%
D&A
0% 2.7
0% 3.2
0% 3.6
0% 3.7
0% 3.5
0% 4.6
0% 4.9
0% 4.9
0% 4.9
0% 4.9
0% 4.8
0%
EBIT 36.7 43.6 54.8 61.4 55.0 67.4 60.1 47.3 43.1 40.9 40.6
% margins 16.4% 18.2% 21.6% 25.5% 27.2% 29.6% 28.3% 24.1% 22.1% 21.1% 21.1%
FREE CASH FLOW
EBITDA 39.4 46.8 58.4 65.1 58.5 72.0 65.0 52.2 48.0 45.7 45.5
Cash Interest - - - - - (13.5) (12.6) (10.5) (8.4) (6.5) (4.4)
Cash Taxes (12.8) (15.2) (19.2) (21.5) (19.3) (18.9) (16.6) (12.9) (12.1) (12.0) (12.7)
(Increase) / Decrease in NWC - (3.6) (3.8) 3.3 9.6 (6.4) 3.9 4.0 0.3 0.3 0.3
Capex (4.8) (2.6) (1.3) (3.5) (1.6) (2.7) (11.9) (4.3) (2.3) (2.3) (2.3)
Free Cash Flow 21.8 25.3 34.1 43.3 47.2 30.5 27.8 28.5 25.4 25.2 26.3
% of revenue 9.7% 10.6% 13.5% 18.0% 23.3% 13.4% 13.1% 14.5% 13.0% 13.0% 13.7%
Cumulative Free Cash Flow 30.5 58.2 86.7 112.1 137.3 163.7
Revolver Balance - - - - - -
Term Loan Balance 105.3 94.8 85.3 76.8 69.1 59.0
High Yield Balance 86.9 69.6 50.6 33.7 16.2 -
CREDIT STATISTICS
Total Debt / EBITDA 2.7x 2.5x 2.6x 2.3x 1.9x 1.3x
FCF / Mandatory Interest Payments 2.6x 2.6x 3.0x 3.0x 3.3x 3.8x
FCF / Cash Interest 2.3x 2.2x 2.7x 3.0x 3.9x 5.9x
(EBITDA - Capex) / Cash Interest 5.1x 4.2x 4.6x 5.4x 6.7x 9.7x

47. Revenue Projections: Downside Case
Assumes deployed soldiers use 4x as much ammunition as non-deployed
PROFORMA REVENUE 2012 2013 2014 2015 2016 2017
Ammunition
40mm Backlog 170.0 113.0
40mm 4/1/12 option 40.5 40.5
Add'l options - 1.0 98.0 137.2 136.0 134.8
Total Ammunition Revenue 170.0 154.5 138.5 137.2 136.0 134.8
% change -9.1% -10.4% -0.9% -0.9% -0.9%
Other Revenue 50.0 50.0 50.0 50.0 50.0 50.0
Less-than-Lethal 8.0 8.0 8.0 8.0 8.0 8.0
Private Sales - - - - - -
Total Revenue 228.0 212.4 196.4 195.2 194.0 192.8
REVENUE DRIVERS 2012 2013 2014 2015 2016 2017
Total Army Troops 558,571 552,241 545,982 539,794 533,676 527,628
Army Troops Deployed - Middle East 54,000 30,000 5,000 5,000 5,000 5,000
Army Troops Deployed - Other 46,000 46,000 46,000 46,000 46,000 46,000
Army Troops Not Deployed 458,571 476,241 494,982 488,794 482,676 476,628
Adjusted Amount of Troops 858,571 780,241 698,982 692,794 686,676 680,628
% Change -9.1% -10.4% -0.9% -0.9% -0.9%

48. IRR Analysis: Downside Case
IRR ANALYSIS 2012 2013 2014 2015 2016
Initial Equity Investment (154.84)
CF from Divestment 5.29 5.29
Exit Year EBITDA 45.74
Exit Multiple 6.5x
Enterprise Value 297.29
Less: Net Debt 85.32
Equity Value 211.97
Equity Proceeds (154.84) 0 5.29 5.29 211.97
IRR 9.7%
Cash Return 1.0x 0.0x 0.0x 0.1x 1.4x
IRR SENSITIVITY ANALYSIS
Entry Premium
9.7% 15% 20% 25% 30% 35%
5.5x 14.4% 8.2% 3.5% -0.4% -3.7%
Exit 6.0x 18.0% 11.6% 6.7% 2.7% -0.7%
Multiple 6.5x 21.2% 14.8% 9.7% 5.6% 2.1%
7.0x 24.3% 17.6% 12.4% 8.2% 4.7%
7.5x 27.1% 20.3% 15.0% 10.7% 7.1%

49. Agenda
Company Overview
Industry Overview
Investment Thesis
Valuation & Deal Structure
Appendix

50. Assumptions
Assumptions 2012 2013 2014 2015 2016 2017
Sales (% growth) 16.1% 4.1% 0.8% 1.2% 0.5% -0.1%
Base Case 1 16.1% 1.2% -4.4% -1.8% -1.7% 1.3%
Upside Case 2 16.1% 4.1% 0.8% 1.2% 0.5% -0.1%
Worst Case 3 12.7% -6.8% -7.6% -0.6% -0.6% -0.6%
Gross Margin (% sales) 67.0% 68.0% 71.0% 71.0% 71.0% 71.0%
Base Case 1 67.0% 68.0% 68.0% 70.0% 71.0% 72.0%
Upside Case 2 67.0% 68.0% 71.0% 71.0% 71.0% 71.0%
Worst Case 3 67.0% 68.0% 72.0% 74.0% 75.0% 75.0%
SG&A (% sales) 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
Base Case 1 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
Upside Case 2 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
Worst Case 3 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
D&A (% sales) 2.0% 2.3% 2.5% 2.5% 2.5% 2.5%
Base Case 1 2.0% 2.3% 2.5% 2.5% 2.5% 2.5%
Upside Case 2 2.0% 2.3% 2.5% 2.5% 2.5% 2.5%
Worst Case 3 2.0% 2.3% 2.5% 2.5% 2.5% 2.5%
Capex (% sales) 1.2% 4.8% 1.8% 1.2% 1.2% 1.2%
Base Case 1 1.2% 5.2% 2.0% 1.2% 1.2% 1.2%
Upside Case 2 1.2% 4.8% 1.8% 1.2% 1.2% 1.2%
Worst Case 3 1.2% 5.6% 2.2% 1.2% 1.2% 1.2%
NWC (% sales) 25.0% 23.0% 21.0% 21.0% 21.0% 21.0%
Base Case 1 23.0% 23.0% 23.0% 23.0% 23.0% 23.0%
Upside Case 2 25.0% 23.0% 21.0% 21.0% 21.0% 21.0%
Worst Case 3 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%

51. Debt Schedule
FREE CASH FLOW - DEFENSE 2011 2012 2013 2014 2015 2016 2017
EBITDA 58.5 74.2 74.8 68.0 68.8 69.1 69.1
Cash Interest - (13.6) (12.3) (9.4) (6.0) (3.2) (1.1)
Cash Taxes (19.3) (19.6) (19.9) (18.4) (19.8) (20.9) (21.6)
(Increase) / Decrease in NWC 9.6 (8.2) 2.5 4.5 (0.6) (0.3) 0.0
Capex (1.6) (2.8) (11.7) (4.4) (3.0) (3.0) (3.0)
Cash Available for Debt Repayment 47.2 30.1 33.3 40.3 39.4 41.8 43.4
Less: Mandatory Payments -11.7 -10.5 -9.5 -8.5 -7.7 -3.8
Less: Principal Repayment -18.4 -22.8 -30.8 -30.9 -34.1 -34.0
Free Cash Flow after Pmts 0.0 0.0 0.0 0.0 0.0 5.7
DEBT SCHEDULE - DEFENSE Rate 2012 2013 2014 2015 2016 2017
LIBOR CURVE 0.60% 0.73% 0.94% 1.17% 1.43% 1.66%
Revolver L + 250 bps
Beginning Balance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Paydown Yes - - - - - -
Ending Balance - - - - - -
Interest Expense - - - - - -
Commitment Fee 50 bps -0.39 -0.45 -0.56 -0.69 -0.85 -1.13

52. Debt Schedule
Term Loan L + 400 bps
Beginning Balance $117.0 $105.3 $94.8 $85.3 $76.8 $37.8
Mandatory Amortization 10% ($11.70) ($10.5) ($9.5) ($8.5) ($7.7) ($3.8)
Additional Paydown Yes - - - - (31.4) (34.0)
Ending Balance 105.3 94.8 85.3 76.8 37.8 -
Interest Expense (4.8) (4.7) (4.4) (4.2) (3.1) (1.1)
High Yield 10.0%
Beginning Balance $105.6 $87.2 $64.4 $33.6 $2.7 $0.0
Paydown Yes (18.4) (22.8) (30.8) (30.9) (2.7) -
Ending Balance 87.2 64.4 33.6 2.7 - -
Interest Expense (8.7) (7.6) (4.9) (1.8) (0.1) -
Total Net Debt (EB) $192.6 $159.2 $118.9 $79.5 $37.8 $0.0
Total Net Interest Expense (13.6) (12.3) (9.4) (6.0) (3.2) (1.1)
Total Free Cash Flow 30.1 33.3 40.3 39.4 41.8 43.4
Debt Service (13.6) (12.3) (9.4) (6.0) (3.2) (1.1)
CREDIT STATISTICS 2012 2013 2014 2015 2016 2017
Total Debt / EBITDA 2.6x 2.1x 1.7x 1.2x 0.5x –
FCF / Mandatory Interest Payments 2.6x 3.2x 4.3x 4.6x 5.4x 11.5x
FCF / Cash Interest 2.2x 2.7x 4.3x 6.6x 12.9x 40.7x
(EBITDA - Capex) / Cash Interest 5.3x 5.1x 6.8x 11.0x 20.4x 61.8x