Adapt or Die – Surviving a Changing Market

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Past 30 Years • Regulated – Set Generation Prices / Inventory Levels Don’t Matter / Price No Issue

/ Got to Have the Part… NO matter what it takes• Have never had to suffer through a major downturn or catastrophic event

except for TMI (more New Build Related)• No real consequence for being inefficient• Nuclear Renaissance

The New World • De-Regulated (or acting that way) – Open Market / Inventory Levels Matter /

Price an Issue / Maybe the part really isn’t needed (demand)• Electricity Demand Low / Cheap Natural Gas / Renewables • Consequence for being inefficient – Closure• The DNP • Death of Domestic New Build – International Expansion

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Selling Less

Cutting Prices

Extending Terms

To Buy Less

Better

Terms

To Pay Less

Lower Prices

Lower Quality

Lower Service

Suppliers Exiting the Industry

Customer wants…

Suppliers are…

Result

My Background…… A lot of “Acute” and “Chronic” Change

⊲ Power Plant Mechanic Erie Plant 1979-85

⊲ Charter Boat Fishing Captain and Hunting Guide 1985-1991 Featured in Outdoor Life, Field & Stream and Sports Afield

⊲ President/CEO/Owner of AP Services 1987-2012 Started Nuclear Division in 1989

Five Time USA Supplier of the Year

⊲ GM of Nova/AP Services and VP Sales Curtiss Wright 2012-14 Nova turnaround and refocus on Domestic Fastener and RE Programs

⊲ President of ATC Nuclear 2014-2017 “Best-in-Class” 3rd Party CGD, Reverse Engineering and Supply Chain Programs

Doubled Sales in three years

⊲ Acquired ATC Nuclear on August 30th 2017 and now Paragon CEO

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70’s – 1986

Lake Erie Salmon Fishing

“In early 1985 I quit my job to become a

full time Charter Captain. In late 1985

Pennsylvania announces they were

discontinuing their Salmon stocking

program”

1986 – 1993

Lake Ontario Salmon Fishing

“The Choice – Move my

operation to somewhere

with Salmon or shut down the

Business”

Doug VanTassell 1985

Joe Cinelli 1987

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?

Acute and Chronic Market Changes

Steel Industry Collapse

Coal Plant Closures

WBN2

1980 1990

2005

2010Gas Fracking

WBN2 Ends

Focus on Power Gen

Programs aligned to support the future needs for the

industry

•Circuit Card and Power Supply Focus

•Repair Program

•Reverse Engineering in Analog – Nuclear Plants struggle with Digital

I&C

•Environmental Qualification

•Commercial Dedication

•Seismic Testing

•NRC and NUPIC Audited

CGD•Safety Related storage

• Investment Recovery

•Sourcing and Logistics

•$100M in stock

•Safety Related MRO Items

Inventory Management

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Bad NUPIC Audit

Poor Culture

Declining Sales

Profit Going to Corporate

Stellar NUPIC Audit

Doubled Sales in two years

Profit Going to the Business

2014 2017

Step 1 – Develop a REAL Strategic Plan

⊲ Trends Market Demand

Technologies

Political

Nuclear Specific

⊲ Voice of the Customer What they want and why

How are we doing

⊲ Internal Assessment Operations, Sales, Industry Position, etc.…

Start with the Management Team

⊲ Competitive Analysis SWOT

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Industry Trends

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Nuclear Trends

Voice of the Customer…. Help me please achieve the DNP

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Internal Assessment – STRAT Team (use Survey Monkey)

⊲ Operations

⊲ Systems

⊲ Teamwork

⊲ Culture

⊲ External Image

⊲ Internal Image

⊲ Pricing

⊲ Service Levels

⊲ Organizational Alignment

⊲ HR

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Step 2 – Deep Financial Dive

⊲ Use new projections created in the plan as the basis for sales,

GM and profit

⊲ Create as much visibility as possible to each business line by

contribution (Sales, GP and indirect costs)

⊲ Review fixed costs as % of sales

⊲ Trend these indictors on a 3 year history and 3 year proforma

⊲ Act on the results

Increase or decrease in operating expenses based on growth or decline

Careful review of cash flow – Expected/Best Case/Worst Case

Be like a small business, even if you are part of a larger

conglomerate

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Step 3 – Teamwork “Its all up Leadership”

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