agenda - franklin furniture institute introduction 3 state of the furniture industry 8 ... robust...

1

AHFA Manufacturing Summit

March 9, 2011

FURNITURE INDUSTRY &

CAPITAL MARKET ENVIRONMENT

HOWARD ARMISTEAD


Howard Armistead: Furniture Industry & Capital Market Environment

2

March 9, 2011

Agenda

Introduction 3

State of the Furniture Industry 8

Financial Market Activity 20

Time for Strategic Review 31

Q&A 35

Reference Materials 36

2



3

March 9, 2011

Introduction



4

March 9, 2011

Howard Armistead

Co-founded Mann, Armistead & Epperson in 1991

Over 35 years in corporate finance and accounting

Former DMI board member

Noteworthy deals

3



5

March 9, 2011

Jerry says hello



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March 9, 2011

Mann, Armistead & Epperson, Ltd.

Investment banking and corporate advisory firm

Primarily advise on sale/acquisition of $10 – $500mm companies

Named partners draw on 100+ years combined experience

Started firm in belief that companies deserved dedicated, senior-level advice

Long-standing commitment to furniture industry (in times both good & bad)

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7

March 9, 2011

Top investment bank serving furniture industry

Mann, Armistead & Epperson, Ltd.Richmond, Virginia

The undersigned acted as advisor to Kohlberg Kravis Roberts & Co.

in this transaction.

has been acquired by affiliates of

KKRKOHLBERG KRAVIS ROBERTS & CO.

Aaron Rents, Inc.

Adam Wuest, Inc.

AFM Holdings, LLC

American Home

Barcalounger Corporation

Bassett Furniture Industries, Inc.

Bush Industries, Inc.

Chromcraft-Revington, Inc.

Consolidated Furniture Corporation

Continental Engineering Group, Inc.

Dixie Bedding Company

DMI Furniture, Inc.

Dreamwell, Ltd.

Durham Furniture Industries, Inc.

Florida Furniture Industries, Inc.

Gallahans Home Furnishings

Heilig-Meyers Company

Hickory-White

Hooker Furniture Corporation

IBC Group, Inc.

Kincaid Furniture Co., Inc.

Kingsdown, Inc.

Korn Industries (Sumter Cabinet Co.)

LADD Furniture, Inc.

La-Z-Boy Incorporated

Loewenstein Furniture Group

Marlo Furniture

Pulaski Furniture Corporation

Reliable Stores, Inc.

Rowe Furniture

Samuel Lawrence, Inc. (Sealy)

Sealy Mattress Company

Singer Furniture Company

Smith’s Home Furnishings, Inc.

Standard Furniture Company

The Alan White Company, Inc.

The Boling Company

The Hammock Source

The Wexford Collection

VB/Williams Furniture Company

W.S. Badcock Corporation

Wildwood Lamps and Accents, Inc.

WinsLoew Furniture, Inc.

Winston Furniture Company, Inc.

Wisconsin Furniture Industries, Inc.

Wolf Furniture Enterprises, Inc.



8

March 9, 2011

State of the Furniture Industry

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9

March 9, 2011

Recession ended June 2009, hangover subsiding

Source: Bureau of Economic AnalysisSource: Bureau of Economic Analysis

U.S. quarterly real GDP simple % growth rate

(2.0%)

(1.5%)

(1.0%)

(0.5%)

0.0%

0.5%

1.0%

1.5%

2.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

6 quarters of growth

RECESSION

18 months



10

March 9, 2011

U.S. existing home sales offering glimmers of recovery

Housing remains sluggish

Source: U.S. Census BureauSource: U.S. Census Bureau

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

2010200920082007200620052004200320022001200019991998

millions

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11

March 9, 2011

U.S. PMI manufacturing survey

Manufacturing regaining strength

Source: Institute for Supply ManagementSource: Institute for Supply Management

30

35

40

45

50

55

60

65

70

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

< 50 = manufacturing economy contracting

> 50 = manufacturing economy expanding



12

March 9, 2011

U.S. unemployment rate & recessionary periods

Unemployment of 9.0%, trickling lower


3%

4%

5%

6%

7%

8%

9%

10%

11%

20112008200520021999199619931990198719841981197819751972

9.0%

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13

March 9, 2011

Median household income

Household income down 5% over 10 years

Source: U.S. Census Bureau, 2009 constant dollarsSource: U.S. Census Bureau, 2009 constant dollars

40

42

44

46

48

50

52

54

200920041999199419891984197919741969

$000's

Peak in 1999

$52,388

$49,777

(5.0%)



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March 9, 2011

U.S. furniture and total retail sales indexed to 100%

Furniture sales fell earlier and deeper


100%

105%

110%

115%

120%

125%

130%

135%

140%

145%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

All U.S. Retail

Furniture

20.1% below peak

0.4% below peak

Housing Crisis

Recession

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15

March 9, 2011

Sources: Furniture Today, Mann, Armistead & Epperson, Ltd.Sources: Furniture Today, Mann, Armistead & Epperson, Ltd.

Decade in review: shifts at retail

Furniture sales by retail channel

21.8

32.7

42.9

48.3

0

10

20

30

40

50

60

2000 2009

$bn

Non-traditional storesFurniture stores

+ 50%

+ 13%

Discount Dept + 54%

Rental + 64%

Internet $3.3bn

Local stores (18%)

Top 100 + 19%



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March 9, 2011

Decade in review: dramatic rise in imports

0%

10%

20%

30%

40%

50%

60%

70%

80%

1993 1996 1998 2000 2002 2004 2006 2008 2010

Percentage imported by product category

Metal & Other heavily imported

Recent spike in wood category

Total @ 56.1%

Recent spike in upholstered

category

Mattress imports from < 1% to

almost 6%

Sources: AHFA, ISPA, U.S. Dept of Commerce, ITA, Mann, Armistead & Epperson, Ltd.Sources: AHFA, ISPA, U.S. Dept of Commerce, ITA, Mann, Armistead & Epperson, Ltd.

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17

March 9, 2011

Latest twelve months

Sources: ISPA, "Furniture Insights" a monthly publication by Smith LeonardSources: ISPA, "Furniture Insights" a monthly publication by Smith Leonard

Factory shipments recovered in 2010

(25%)

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

15%

20%

25%

Jan-09 Apr-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10

y/y changeMattress shipmentsFurniture shipments



18

March 9, 2011

Jerry had to add his two cents!

Forecasting 5.5% top-line growth in 2011

IRS delays in processing claims = later refunds

Increased savings + deleveraging = promising consumer

Cutbacks during recession enable higher profitability on incremental volume

Higher commodity costs

Currency issues Price increases to come

Higher interest rates

10



19

March 9, 2011

Confidence returns with stabilization in economy

Consumers + Investors + CEOs regaining confidence

Sources: Conference Board, Federal ReserveSources: Conference Board, Federal Reserve

0%

20%

40%

60%

80%

100%

120%

2005 2007 2008 2009 2010 2011

Relative performancetied to 100%

0

2

4

6

8

10

$bn market valuehousehold holdings of

corporate equities

ConsumerCEOInvestor (right axis)



20

March 9, 2011

Financial Market Overview

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21

March 9, 2011

Furniture sourcers’ stocks have underperformed

5-year share price performance indexed to 100%

0%

25%

50%

75%

100%

125%

150%

175%

Feb-06 Sep-06 Mar-07 Oct-07 May-08 Nov-08 Jun-09 Dec-09 Jul-10 Jan-11

Mattresses3

+51.0%

Retailers2

+12.5%

S&P 500

+2.1%

Sourcers1

(52.8%)

Source: Capital IQ as of 2/22/11. 1 Sourcers include: ETH, LZB, FBN, NTZ, FLXS, HOFT, BSET, STLY. 2 Retailers include: WSM, RCII, AAN, PIR, LNF, HVT, EH. 3 Mattress companies include: TPX, SCSS, ZZ



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March 9, 2011

Transaction history

Deal volume was surprisingly strong in 2010 after a year and a half in decline

Sources: Capital IQ, North American M&A dealsSources: Capital IQ, North American M&A deals

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10($50)

$50

$150

$250

$350

$450

$550

$650

$750Number (left)Value ($bn, right) Number + 31%

Value + 11%Number (13%)

Value (22%)Number (9%)

Value (44%)

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23

March 9, 2011

Robust M&A outlook for 2011

Drivers…

Investment quality

Liquidity

Valuation



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March 9, 2011

Investment quality improving

Scarcity of compelling acquisition candidates hurt deal flow in 2008 – 2009

Economy growing again, confidence to invest in new customers/products/etc.

Trailing twelve month results drastically better

Record corporate earnings in 3Q10

Organic prospects still limited for some who turn to acquisitions to grow

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25

March 9, 2011

Liquid capital available to finance transactions

Conservative cash hoarding

+ unprecedented downsizing

during recession +

record earnings in 3Q10

Unprecedented fundraising

before recession + scarcity of

attractive investments led to…

massive capital overhang

Corporations

$1.8 trillion

Private Equity

$500 billion



26

March 9, 2011

Excess liquidity among private equity firms

PE fund life cycles create pressure to put ~$500bn in dry powder to work

Source: Pitchbook DataSource: Pitchbook Data

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March 9, 2011

Private equity interest in furniture companies

Buyer universe (foreign, financial and strategic) evolved over last decade

MAE maintains extensive, proprietary database of furniture deals

Long-standing relationships and ongoing dialogue with PE owners

Catterton Partners (Restoration Hardware)

Clearview Capital (Hillsdale)

Compass Group (American Furniture)

Wingate Partners (Stein World)



28

March 9, 2011

Credit markets thawing nicely

Increasing availability of debt

Abundance of new issue activity in private market in 2010

Very gradual improvement in banks’ posture

Fewer regional commercial banks competing for non-asset based product

LBO debt multiples have recovered to 3.0x – 4.5x depending on EBITDA level

15



29

March 9, 2011

Valuation gap closing

Scarcity premium: intense competition for few high-quality investments

Gap between buyer and seller expectations seems to be narrowing

With stock market resurgence, return of stock as acquisition currency



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March 9, 2011

Valuation amongst furniture companiesLTM as of February 22, 2011 Growth Gross EBITDA Capex/Company Name Ticker Estimate Margin Margin Revenue

ManufacturersFurniture Brands International Inc. FBN 2.3% 24.9% 0.0% 1.9%La-Z-Boy Inc. LZB 6.5% 30.1% 4.8% 1.2%Ethan Allen Interiors Inc. ETH 6.6% 50.1% 7.5% 1.4%Natuzzi SpA NTZ 32.8% 38.1% 4.9% 1.6%Flexsteel Industries Inc. FLXS 4.0% 22.9% 6.5% 0.3%Bassett Furniture Industries Inc. BSET n/a 47.9% 1.6% 0.9%Hooker Furniture Corp. HOFT 9.2% 24.1% 6.4% 0.5%Stanley Furniture Co. Inc. STLY 0.2% (4.1%) (12.3%) 0.6%Mean 8.8% 29.3% 2.4% 1.0%Median 6.5% 27.5% 4.8% 1.0%

RetailersWilliams-Sonoma Inc. WSM 5.9% 44.0% 13.2% 2.0%Rent-A-Center Inc. RCII 6.2% 16.6% 14.1% 0.0%Aaron's, Inc. AAN 9.1% 54.2% 13.1% 0.0%Pier 1 Imports, Inc. PIR 5.8% 57.8% 9.5% 1.6%Leon's Furniture Ltd. LNF n/a 41.1% 14.7% 1.9%Haverty Furniture Companies Inc. HVT 3.2% 51.9% 4.6% 1.3%easyhome Ltd. EH 44.1% 56.9% 10.8% 5.8%Mean 12.4% 46.1% 11.5% 1.8%Median 6.0% 51.9% 13.1% 1.6%

Mattress CompaniesTempur Pedic International Inc. TPX 14.1% 50.2% 25.2% 1.6%Sealy Corporation ZZ 6.7% 41.8% 13.3% 1.4%Select Comfort Corporation SCSS 7.0% 62.5% 11.1% 1.2%Mean 9.2% 51.5% 16.5% 1.4%Median 7.0% 50.2% 13.3% 1.4%

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31

March 9, 2011

Time for Strategic Review



32

March 9, 2011

Negative developments

Bankruptcy and financial distress stories continue…

― Robb & Stucky

― Robinson & Robinson (LeatherTrend)

― Lack’s

― Boyles

― Roomfull Express

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March 9, 2011

Positive developments

Jennifer Convertibles recently completed reorganization

Plant expansions…

New market entrants…

― Sherwood Bedding

― Southern Motion― Washington (Lane/Action plant)― Barcalounger― Home Line― Max Home― United



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March 9, 2011

Crucial opportunity to review strategic alternatives

Build for the future…

Buy a competitor, new product line, new customers

Merge with international powerhouse

Explore new retail channels

Ad hoc board member

Cash flow issues

Valuations

18



35

March 9, 2011

Questions?



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March 9, 2011

REFERENCE MATERIALS

Investment Banking Credentials

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March 9, 2011

Who we are

Mann, Armistead & Epperson, Ltd. is a privately owned investment banking and corporate advisory firm. Based in Richmond, Virginia, our firm assists public and private companies in maximizing shareholder and corporate wealth. We bring value to our clients by assisting them to initiate, structure and execute a diverse range of innovative corporate financial and shareholder-related transactions.

Our clients deal directly with the founding partners, who bring to the table over 100 years of aggregate investment banking experience. Our track record is undeniably strong - the result of having faced hundreds of deals, spent endless hours developing industry expertise and brought management teams advice they could trust at crucial moments in their firms’ histories.

We are internally organized as a boutique investment bank, offering corporate finance execution supported by industry research capabilities. The professionals at Mann, Armistead & Epperson, Ltd. can provide:

• Merger, acquisition and sale advisory services and fairness opinions

• Corporate finance and strategic advisory services, such as performing business valuations and advising on capital formation and balance sheet restructurings

• Industry research and expertise, including demographic market analysis and exclusive data

• Litigation support and expert witness testimony services

Our clients generally range in enterprise value from $10 million to $300 million, but we have been engaged by companies with values in excess of $1 billion. Over the last 18 years, we have advised and represented a diverse set of clients, including manufacturing and service-based companies, private equity sponsors and venture capital groups. Likewise, we have represented boards of directors, shareholders and management teams. Our client base is also geographically diverse. We have completed transactions in almost all of the contiguous United States and have advised clients located in Asia, Canada, Central and South America, Europe and Mexico. As corporations and economies continue to expand and diversify globally, so has our client and transaction base.

a named Partner on every deal



38

March 9, 2011

Our proven track record

Our partners and professionals have generated long-lasting client relationships across a broad universe of strategic and financial firms. The client-focus, execution and integrity we bring to each and every transaction are the factors that distinguish us from other financial advisory firms.

Client-focus

Since our inception in 1991, we have generated long-term relationships by focusing on our clients’ needs through the utilization of senior level and experienced professionals. Our commitment to putting our clients’ objectives ahead of our own has allowed our firm to succeed in the face of changing climates and markets.

Too many investment banks exploit the reputation of their senior-level bankers in order to win business only to pass the majority of the work on to less experienced, junior members of their firm. You have highly specialized needs that deserve the attention of a seasoned professional. One or more of our named Partners will always be an integral part of the service we provide you.

Execution

Our deal teams are highly focused, thorough and responsive. We view each client and transaction as unique and tailor our solutions accordingly. Mann, Armistead & Epperson, Ltd. believes in a team-oriented process that includes company management, legal council, and accountants.

Our clients have the utmost confidence that senior-level professionals are leveraging the entirety of our firm’s resources to add value to their business. Over the last 18 years, our partners have represented hundreds of clients equating to billions of dollars in value. We’ve been honing our process and perfecting our execution for decades, resulting in one of the most professional, effective and tailored approaches in the business.

Integrity

At Mann, Armistead & Epperson, Ltd. we focus on developing long-term relationships based on trust, candor and shared success. Our deep and long-standing client base reflects this strategy that is dedicated to integrity. We pride ourselves on bringing the highest level of integrity to our daily activities and research offerings, which are independent from investment banking activities within the firm. We want to be your partners for corporate growth.

Our proven track record of results and integrity-based client relationships are what set us apart.


The undersigned acted as advisor to Kohlberg Kravis Roberts & Co.

in this transaction.

has been acquired by affiliates of

KKRKOHLBERG KRAVIS ROBERTS & CO.


Mann, Armistead & Epperson, Ltd. acted as financial advisor to

RVL Packaging, Inc. in this transaction.

RVL Packaging, Inc.has been acquired by

Avery Dennison Corporation

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March 9, 2011

Services we offer our clients

As an investment banking and corporate advisory firm, we offer our clients a wide range of services. We are internally organized as a boutique investment bank, providing corporate finance execution supported by highly regarded industry research capabilities.

Merger & Acquisition Services

Our firm specializes in merger and acquisition mandates and often serves clients in an advisory role prior to a transaction. Our merger and acquisition services include the representation of directors, shareholders, and managers considering or confronted with potential mergers, acquisitions, divestitures, buyouts and similar types of transactions.

Corporate Finance Advisory Services

Our corporate finance advisory services typically include advising on capital formation, re-engineering balance sheets, conducting valuations, restructuring bank facilities, providing strategic advice and/or participating at the board of directors level with select clients.

Consulting & Research Services

The consulting and research side of our firm conducts industry analysis which focuses on consumer products companies. We publish variousmanufacturing, retail, distribution, strategy and demographic reports. In addition, we regularly consult company management teams and their investors and provide litigation and expert witness testimony services to a diverse set of clients.

Driven by Founding Partner Jerry Epperson’s respected insight and long-term commitment to the furniture and mattress industries, our firm provides industry specific knowledge to clients involved with mergers, acquisitions, private placements, public offerings, debt refinancing and strategic planning. Our professionals enjoy close relationships across a broad spectrum of companies that uniquely enable us to add value in identifying buyers, citing industry trends and forecasting growth prospects.


has been acquired by a subsidiary of

The undersigned acted as advisor to Industrial Marine Service, Inc.

d/b/a IMS Environmental Services in this transaction.


The undersigned served asfinancial advisor to BarcaloungerCorporation in this transaction.

has been acquired by

HANCOCK PARK ASSOCIATES



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March 9, 2011

Merger & Acquisition Services

Our firm specializes in merger and acquisition mandates and often serves clients in an advisory role prior to a transaction.

Sale Mandate

In a sale mandate, we assist in establishing client goals; valuing the business entity; preparing a sales memorandum that describes the business; identifying, researching and selecting qualified buyers; structuring and negotiating the transaction; anticipating obstacles and resolving issues so that transactions proceed smoothly; reviewing documents and working with attorneys and accountants through the final closing of the transaction.

Acquisition Mandate

In an acquisition mandate, we develop acquisition criteria with the client, survey the marketplace, identify and initiate contact with suitable and approved candidates, negotiate transaction terms and conditions, and oversee the transaction through closing, as required by the client. For tender offers, we help our clients develop acquisition strategies; we also assist clients in defending against either unfriendly or unsolicited takeover attempts or activity.

Fairness Opinions

During many types of financial transactions, corporations, directors, special committees and management, and others with fiduciary responsibility often seek a fairness opinion from a qualified corporate advisor. Our firm provides these opinions and valuations which serve as important and prudent input for the formation of critical decisions faced by the directors, special committees, managers and shareholders.

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March 9, 2011

Corporate Finance Advisory Services

Our corporate finance advisory services typically include advising on capital formation, re-engineering balance sheets, restructuring bank facilities, conducting valuations, providing strategic advice and/or participating at the board of directors level with select clients.

Business Advisory Services

These services may include advice on strengthening the balance sheet, including refinancing of current debt and/or the solicitation of new financing sources; consultation on the disposition or acquisition of a division or separate corporate entity; determining the best time to prepare for and file an initial or secondary public offering; assisting a financial or corporate entity with long-range strategic planning as it relates to acquisitions and divestitures; and assisting senior management with overall long-term planning.

Valuations

We offer extensive experience in providing valuations of both public and private entities. Such valuations have been used for estate planning, minority interest transactions, pre-merger/acquisition planning, ESOPs, FASB 141/142 (Goodwill) analysis and a wide range of other corporate and personal uses.



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March 9, 2011

Research & Consulting Services

The consulting and research side of our firm conducts industry analysis which focuses on consumer products companies. We publish various manufacturing, retail, distribution, strategy and demographic reports. In addition, we regularly consult company management teams and their investors and provide litigation and expert witness testimony services to a diverse set of clients.

Driven by Founding Partner Jerry Epperson’s respected insight and long-term commitment to the furniture and mattress industries, our firm provides industry specific knowledge to clients involved with mergers, acquisitions, private placements, public offerings, debt refinancing and strategic planning. Our professionals enjoy close relationships across a broad spectrum of companies that uniquely enable us to add value in identifying buyers, citing industry trends and forecasting growth prospects.

Research Publications

Mann, Armistead & Epperson, Ltd. publishes the Furnishings Digest, a monthly research piece dating back to 1974 that is distributed by paid subscription to furniture manufacturers, retailers, suppliers and other industry participants. Our research is also provided to various furniture associations, trade press organizations, and other interested parties such as the International Trade Administration and the Federal Reserve Bank’s Board of Governors. A free monthly e-newsletter gives insight into industry trends and is received by hundreds worldwide.

Table II-AChannels of Distribution for Residential Furniture 2007

National Furniture Chains, 9.4%

Manufacturers' Dedicated, 7.8%

Decorator/Designer, 8.7%

Office Supply Stores, 4.3%

Non-Store Retailing:, 3.0%

Wholesale Clubs, 3.1%

Department S tores, 3.7%

Not Elsewhere Classified, 2.2%

Factory Direct, 1.7%Speciality Stores:, 6.8%

Local/Regional Stores, 20.5%

Rental/Rental Purchase, 3.2%

Discount Department S tores, 6.5%

Top 113 Furn Stores, 18.9%

Pre-Furnished Manufactured Housing, 0.2%

Source: Mann, Armistead & Epperson, Ltd.

Table III-F2007

CHAN NELS OF DISTRIBUTION BY RELATIVE PRICING LEVELFOR RESIDENTIAL FURNITURE

0

10

20

30

40

50

60

70

80

90

100

Deco ra tor/Designer

Fu rn itu re St ores

ExportManufact urers' Dedi cate d

Departmen t St ores

Inte rn et

Who lesal e C lub s

Non-St ore Ret ail ing

Ren t-to -Ren t

Facto ry Di rect

Ren t-to -Own

Home Imp rovemen t

Office Supersto res

D iscoun t Depa rtme nt Sto re s

Mob ile Homes

Premium

Relat ive Ret ailPrice Point

Pro motional

Consulting

Whereas many research analysts must initiate calls with companies, top management teams regularly seek us out to discuss industry issues and statistics that are not available elsewhere. Our distinctive approach to research has enabled us to provide an unparalleled quality of tailored strategic and financial consulting services to management teams and investors searching for a competitive advantage. We offer rare data points and a unique business perspective, shaped by over 125 years of aggregate experience.

We have known many of today’s top executives on a personal level long before they gained their current positions at their respective companies. In many cases, we worked with the companies for years before they went public, and have known multiple generations of owners/managers of family-controlled firms. Committed to thinking about strategy and long range planning alongside numerous public and private companies, the partners at Mann, Armistead & Epperson, Ltd. have earned a strong reputation based on confidentiality, trust and professionalism.

Litigation Support & Expert Witness Testimony

We regularly provide advice and/or assistance in preparing and providing testimony for use by our clients and their attorneys as they prepare for and defend against actual or threatened corporate and personal litigation.

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March 9, 2011

Industries served

Although our partners and professionals are industry generalists, Mann, Armistead & Epperson, Ltd. has historically conducted half of its business assisting corporations in the consumer products sector. As a result of our research and associated corporate finance execution, we have developed a world-wide reputation in this sector. The other half of our business involves assisting a wide variety of manufacturing and service related industries located throughout the United States. Some of the most common industries we serve are listed below.

Apparel Industrial Machinery & Supply

Building Products Metal Fabrication

Business Services Packaging

Chemicals Plastics

Consumer Products Printing

Contract and Office Furnishings Recreational Vehicles

Engineering Services Restaurants

Environmental Services Retail

Financial Services & Insurance Shipbuilding/Ship Repair

Food Manufacturing & Distribution Technology

Health Care Textiles

Home Furnishings Wire Manufacturing



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March 9, 2011

Our Professionals

James M. Mann

Jimm is one of our founders and a Managing Director of Mann, Armistead & Epperson, Ltd. Jimm brings over thirty years of investment banking/accounting experience to our client base and has advised clients on numerous exclusive sale assignments, buyside transactions, public company defenses and a wide variety of strategic advisory situations. Although capable in many aspects of corporate finance, Jimm’s focus is assisting clients through the merger and acquisition process and the related financial, legal and tax issues. Prior to forming our firm, Jimm spent thirteen years at Wheat, First Securities Inc. as a Senior Vice President where he was in charge of the Merger and Acquisition Group. He also spent time at the Department of Justice as a Special Agent for the Federal Bureau of Investigation and as a Certified Public Accountant with Ernst & Young.

Jimm earned a Bachelor of Science degree in Accounting from Virginia Commonwealth University.

Contact Jimm at: [email protected]

W. Howard Armistead

Howard is one of our founders and a Managing Director of Mann, Armistead & Epperson, Ltd. Howard has over thirty years of experience in assisting corporations and shareholders in a wide variety of transactions which focus on the transfer and transition of corporate ownership. Howard has significant experience in dealing with small and mid-cap public companies and related transactions such as “going private” tender offers, advising special committees, providing valuations and fairness opinions and structuring corporate sell-side mandate processes. Howard also spends significant time advising companies regarding transition of ownership of family businesses. Prior to forming our firm, Howard was a Senior Vice President at Wheat, First Securities Inc. and Craigie Incorporated. Howard started his career as a CPA with Ernst & Young rising to partner level and Director of Health Care Services in the Mid-Atlantic Region. Within his fifteen year tenure at Ernst & Young, Howard spent three years as a Medical Group Administrator at Duke University Medical Center.

Howard earned a Bachelor of Science degree in Accounting at Virginia Tech.

Contact Howard at: [email protected]

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March 9, 2011

Our Professionals (cont.)

Wallace W. "Jerry" Epperson, Jr., CFA

Jerry is one of the founders of our firm and a Managing Director of Mann, Armistead & Epperson, Ltd. Jerry is the head of our research efforts and has in excess of thirty years of experience in the publication of hard/soft dollar research which focuses on demographics, consumer products, furnishings (residential and contract) and related issues. More specifically, Jerry’s research in the furnishings industry is recognized on a world-wide basis for its in-depth coverage of suppliers, manufacturers and retailers. Jerry has also been acknowledged by several industry, research and Wall Street associations for his coverage. On several occasions, Jerry has been requested by the U.S. State Department to travel to the Pacific Rim and Europe to assist those countries in understanding the furnishings industry. Prior to founding our firm, Jerry spent fifteen years at Wheat, First Securities, Inc. and five years at Scott & Stringfellow, Inc.

Jerry earned a Bachelor of Science degree in Commerce from the University of Virginia and an MBA from the College of William & Mary. He is also a Chartered Financial Analyst.

Contact Jerry at: [email protected]

Jin S. Ko

Jin joined our firm in 2006 and is a financial analyst in our research department. More specifically, Jin is responsible for industry research publications produced by Mann, Armistead & Epperson, Ltd. Jin joined our firm after working at Wachovia Corporation in Richmond, VA.

Jin earned a Bachelor of Science degree in Financial Planning from Virginia Commonwealth University.

Contact Jin at: [email protected]



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March 9, 2011

Our Professionals (cont.)

Patrick F. Bisceglia

Patrick is a Senior Associate in our investment banking group. He assists the named partners with execution of merger and acquisition transactions. His primary responsibilities include business development, interacting with our clients for due diligence review, valuation modeling, offering memorandum preparation and conducting company and industry analysis. Prior to joining our firm in 2009, Patrick covered diversified media and small-cap companies while working in the U.S. Equity Division at T. Rowe Price Associates.

Patrick earned a Bachelor of Business Administration degree in Finance cum laude with an Accounting concentration and a minor in Economics from the Mason School of Business at the College of William and Mary.

Contact Patrick at: [email protected]

Contact

Mann, Armistead & Epperson, Ltd. 119 Shockoe Slip

Richmond, Virginia 23219

T. 804.644.1200

F. 804.644.1226

[email protected] named Partner on every deal

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March 9, 2011

Legal Disclaimer

These materials have been prepared by Mann, Armistead & Epperson, Ltd. (“MAE”) with the direct assistance of and for the benefit of the MAE client or potential client (the “Company”) and are being directly addressed and delivered to certain interested business entities (the “Addressee”) in connection with an actual or potential mandate, engagement or transaction and may not be used or relied upon for any purpose other than as specifically contemplated by a separate written agreement with MAE and/or the Company. These materials are based on information provided directly by or on behalf of the Company and/or other potential transaction participants, and from other public and private sources. MAE assumes no responsibility for independent investigation or verification of such information and has relied on all such information as being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by and/or reviewed with the managements of the Company and/or other potential transaction participants or obtained from public or private sources, MAE has assumed that such estimates and forecasts have been reasonably prepared. No representation or warranty, actual, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific business entities familiar with the business and affairs of the Company and are being furnished and should be considered only in connection with other due diligence information, oral or written, being provided not only by MAE in connection herewith but from other due diligence activities and sources deemed reasonable by the Addressee. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation by MAE with respect to, any potential transaction or other matter. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by MAE to provide or arrange any financing for any potential transaction or to purchase any security in connection therewith. MAE assumes no actual, express or implied obligation to update or otherwise revise these materials. These materials have not been prepared with a view toward public disclosure under state or federal securities laws or otherwise, are intended solely for the benefit and use by the Company and the Addressee, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, in any manner without the prior written consent of MAE.

MAE does not provide tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by MAE to be used for tax planning.

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