BEACON GLOBAL

CONSULTING

BEACON GLOBAL CONSULTING

Jasper M. Stolzenbach | Jordan Wheeler | James Steinberg | Alexis

Cuny

Fisk Alloy Wire, Inc.Connecting growth and quality

BEACON GLOBAL

CONSULTING

Overview

4/14/2012 Fisk Alloy Wire, Inc.

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Problems

• Profitability

Cost of sales

Sales expense

• Managing growth

• Sustainable excellence

• Human capital

• Inventory

• Increased capacity

• Improved

profitability

• Retain and attract

talent

• Generate sales

• Acquisition

• Pricing strategy

• ESOP

• Marketing plan

Solutions Results

BEACON GLOBAL

CONSULTING

Agenda

I. Situation Analysis

II. Decision Rules

III. Implementation

Acquisition

Pricing strategy

ESOP

Marketing plan

IV.Summary

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BEACON GLOBAL

CONSULTING

Situation Analysis

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Market

• Percon 24 projected $30-40 million in 2010

Raw Materials

• Cost of sales increased 16% over last year

Competition

• Exceeds other high performance copper alloys

Company Organization

• Lack of skilled mechanics, employee training takes full year

BEACON GLOBAL

CONSULTING

CulltureMarketsFinancial

Decision Rules

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Lower cost of sales

Production matches capacity

Sustain a position of excellence

BEACON GLOBAL

CONSULTING

Alternatives

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Lower cost of sales

Production matches capacity

Sustain a position of excellence

Acquisition

Hedging

Acquisition, Pricing Strategy, Esop, Marketing

BEACON GLOBAL

CONSULTING

7

Wire and Cable Acquisition

• Equipment: Needs at least 12

tubular stranders• Time frame: 2008: Look for target 2009: Start Acquisition

• Employees: Target’s machinists can

be integrated

Acquisition Target

• $299,520

Cost

• Debt

Funding

• 2 years and 1 month

Payback

4/14/2012

BEACON GLOBAL

CONSULTING

8

Pricing Strategy

4/14/2012 Fisk Alloy Wire, Inc.

• Increase Prices of Percon

wire by 10%

• Demand driven by

regulatory changes

• Meets or exceeds industry

standards and regulatory

requirements

Description

• Increase margin to 11%

• Increase profits by $2.2m

Results

BEACON GLOBAL

CONSULTING

4/14/2012 Fisk Alloy Wire, Inc.

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ESOP

• What: Quality

management team hiring

• When: 5 years (2008-2013)

• How: Cash & stocks

• Why:

Attract workforce of

excellence

Promote quality

Description

• Existing employees

Shares: $75,000 (5%)

Cash: $1,500,000

• New employees

Shares: $63,000 (10%)

Cash: $710,000

Cost

BEACON GLOBAL

CONSULTING

Summary

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Acquisition Pricing strategy ESOP Marketing plan

Increased capacity

Improved profitability

Retain & attract talent

Generate sales

Successful

BEACON GLOBAL

CONSULTING

Questions

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Marketing

Income Statement

Timeline

RisksSource/Use

of Funds

ESOP

Pricing Strategy

Acquisition

BEACON GLOBAL

CONSULTING

EXHIBIT: Timeline Detail

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2008 2009 2010 2011 2012

A

C

Q

N

Acquire

P

R

C

G

E

S

O

P

M

K

T

G

2013

Integrate

Inflate prices

Existing employees

New employees

Revenues generation

Launch of campaign

BEACON GLOBAL

CONSULTING

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EXHIBIT: Risks

• Potential refusal from target

• Organizational culture

differences

Acquisition

• The brothers to refuse the plan

• Employees want more shares

• Initial public offering

ESOP

• Lower demand

• Entry of competitors due to

higher margins

Pricing strategy

• Inadequate market share

gains

• Uncertain returns

• Cultural differences

Marketing

BEACON GLOBAL

CONSULTING

Projected IS

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2008 2009 2010 2011 2012 2013

Revenue 28.0$ 38.2$ 64.5$ 67.1$ 69.7$ 72.5$

Cost 26.1$ 34.0$ 58.0$ 60.4$ 62.8$ 65.3$

Income from operations 1.9$ 4.2$ 6.4$ 6.7$ 7.0$ 7.3$

Other income (and expenses) (0.1)$ (0.1)$ (0.1)$ (0.1)$ (0.1)$ (0.1)$

Income before income taxes 1.8$ 4.1$ 6.3$ 6.6$ 6.8$ 7.1$

Income taxes 0.0$ 0.1$ 0.1$ 0.1$ 0.1$ 0.1$

Net income 1.7$ 4.0$ 6.2$ 6.5$ 6.7$ 7.0$

Foreign currency translation adjustment 0.0$ 0.0$ 0.0$ 0.0$ 0.0$ 0.0$

Comprehensive income 1.8$ 4.0$ 6.2$ 6.5$ 6.7$ 7.0$

BEACON GLOBAL

CONSULTING

Pricing Exhibit

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Year 2010

Feet per pound 5

Volume (million lbs.) 1,200,000

Price Increase 10%

Price per foot 5.33 5.87

Revenues 32,000,000 35,200,000

COGS 29,760,000 29,760,000

Profit 2,240,000 5,440,000

Profit Margin 7.53% 18.28%

Fisk Profit Margin 7.53% 11%

BEACON GLOBAL

CONSULTING

4/14/2012 Fisk Alloy Wire, Inc.

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EXHIBIT: ESOPSep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13

Number of employees 150 167 184 201 218 235

Common stock 26,000 26,000 26,000 26,000 26,000 26,000

Par value 1 1 1 1 1 1

Common stock value $ 1,054,401 $ 1,054,401 $ 1,054,401 $ 1,054,401 $ 1,054,401 $ 1,054,401

Share price 40.55 40.55 40.55 40.55 40.55 40.55

0

100

200

300

Workforce

$-

$2,000,000

$4,000,000

$6,000,000

Wages Expense

Stocks

Cash

BEACON GLOBAL

CONSULTING

4/14/2012 Fisk Alloy Wire, Inc.

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EXHIBIT: ESOP

Machinists added 10

Machinists wage (cash) $ 300,000

Machinists wage (share) $ 30,000

Machinists shares 740

Engineers added 5

Engineers wage (cash) $ 250,000

Engineers wage (share) $ 25,000

Engineers shares 616

Managers added 2

Managers wage (cash) $ 160,000

Managers wage (share) $ 8,000

Managers shares 197

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2008 2009 2010 2011 2012 2013

Brothers ownership

Employees ownership