Thomas — The Wall Street Analyst Forum (February 2006)
33 slides from Thomas's conference presentation, Feb 27, 2006
Slide 1: Presentation to The Wall Street Analyst Forum
aa THOMASGROU! Presentation to “@4)_ THE WALL STREET ANALYST FORUM February 27, 2006 Jim Taylor Chief Executive Officer David English Gary Morrison Chief Financial Officer Senior VP - Healthcare
Slide 2: Management Team
Manageme THOMASGROU! ™ Team °© CEO - Jim Taylor Pres. - Chancellor Group; VP — Overhill Farms; eZ CEO-Elcon; Partner - Coopers & Lybrand ° CFO - David English CFO — Nichols Companies; Corp. Controller-C-CAR; CFO — SW X-Ray Co. ° VP - Jim Houlditch VP — Allied Signal; SVP — Texas Instruments
Slide 3: Board of Directors
THOMASGROUP. aa Board of Directors = Background Gen. John T. Chain Edward P. Evans Dorsey R. Gardner Charles M. Harper David B. Mathis James T. Taylor Jimmy C. Houlditch 4-star Air Force (Ret’d) EVP — BNSF Chairman — MacMillan, Inc., Fansteel, Missouri Portland Cement VP-Fidelity Mgmt & Research, Pr
Slide 4: Our People
THOMASGROUP??! : Our People - and - ee J
Slide 5: Safe Harbor Statement
‘ A THOMASGROUP??! “Safe Harbor” Statement Under The Private Securities Litigation Reform Act: ‘Cettain information contained in this presentation constitutes "forward-looking statements.” Forward looking statements are those that use the words such as "believe," "expect," "anticipate," "intend,” "p
Slide 6: Established in 1978 – Dallas, Texas
© ee *Established in 1978 — Dallas, Texas f | *Total Cycle Time or “TCT” is the forerunner to Six Sigma and TQM. ° Applications in Manufacturing are easily transferable and quickly spread to other functional areas and to many industries ° Increasing global competition & shorter product life cycles c
Slide 7: Process Value Management
Process Value THOMASGROUP. ° Productivity Improvement © Technology Support Management ° Supply Chain Management Inventory Turns & Optimization ° Facility Design / Layout © Scrap Reduction * Resource Utilization © Innovation To Market * Cycle Time Reduction * Quality / First Pass Yield * Customer Sat
Slide 8: How Are We Different?
a A low are We Different?) THOMASG! “Process Value Management” works with businesses to institutionalize the processes and the metrics allows an organization to maintain customer-focused and stay on the path of continuous improvement. ‘Our Products
Slide 9: Cockpit
a o> Gockpit THOMASGROU! XYZ COMPANY, INC. 4 COMPETITIVENESS INDICES RESULTS DRIVERS ‘Our Products
Slide 10: Our People: Resultants
‘ A QurPeople: — THOMASGROU © 115 “Resultants” (added 44 in ’05, 10 in February 06) ° Avg. 25+ yrs experience — C-level....hands on BCEO & COoomPresident |CFOICIONEte. mEVPIGeneral Manager a FunctionallManager! Other
Slide 11: How Are We Different? Consultants vs Resultants
a A jaw are We Different?) "HOMASGROUP: Consultants Resultants Deliver Results Solve Problems Deliver Reports Echo Problems Train Only Lead Change Quote Benchmarks Hands-On Implementation Stay Detached Part of the Team Subject Matter Skills Single Tool Focus Broad Management Skills Integrated Toolse
Slide 12: Primary Sectors Served
a hb mary Sectors Served) THOMASGROUP ° Consumer Goods @) © Transportation pa, ° Manufacturing/Distribution SS ° HealthCare as © Food Processing ° Aerospace ° Automotive ° Department of Defense ~¥* ° Retail, Garment and Apparel oA
Slide 13: Clients Past & Present
t ’ a. A Clients Past-&' Present THOMASGROUR::: : = PHILIPS BOMBARDIER = Ser DCCC Boston bp ocientiic Experience the Extraordinary zs =" Ch coeme aie. Polaroid = ni ET] ae GRAINGER. prhostauctures ‘CORPORATION. Syvavania ADelta |Waukesha [== @ Gulfstream sans Gia cue DETROIT DIESEL [AEROSPACE CORPOR
Slide 14: Results Achieved
aa Results Achieved THOMASGROUP: TOTAL CYCLE TIME [ I 1 TIME-TO-MARKET IS) DELIVERY LEAD TIMES i I ] OPERATIONAL PRODUCTIVITY i I 1 ADMINISTRATIVE PRODUCTIVITY eae — ah DEFECTS INVENTORIES RETURN ON ASSETS Key: | = Average Range of Improvement
Slide 15: 2005 Highlights
2005 aa Highlights THOMASGROUP © Debt elimination in Q2 © Repurchase all outstanding warrants Q3 — 37% discount Dividend declared Q4 Return to NASDAQ - #4 price appreciation © Revenue increase - 44%, net income increase - 358% © Working capital & cash flow increase
Slide 16: Balance Sheets
Balance Sheets’ tHomASGROUP: mn 2005 2004___2003 Cash 0.1 1.9 Accounts Receivable 5.2 3.5 Other Current 0.4 0.7 PP&E, Other 0.6 0.8 1.3 $13.0 EF 6.5 $ 7.4 AIP & Accrueds $ 3.6 $ 22$ 23 Income Tax Payable 0.2 0.1 0.1 Dividends Payable 0.5 - - Current Debt - 0.4 1.2 Long Term Liabilities 0.3 1.4 3.1 C
Slide 17: Income Statement
ry | Revenue Cost of Sales Gross Profit 52% 50% S,G&A 13.5 12.4 11.6 31% 41% 38% Sublease loss 0.6 - 0.2 144 12.4 11.8 Operating Income 8.3 2.6 3.1 Interest, other (0.0) (0.3) (0.6) Income from continuing operations 8.3 2.4 25 19% 8% 8% Income taxes (benefit) 0.3 - (0.3) 8.0 24 28 Disc Ops, cumulati
Slide 18: Cash Flow
a Gash Flow THOMASGROUP: 2005 2004 Net Income... Depreciation & Amort. i . . Sublease loss 05 - 02 Swiss closure 07 - - Other 04 03 0.2 Change in assets/iabilties. Receivables G6) (1.4) 27 AVP and liabilities 1.2 0.2) = 2) Income taxes payable 04 0) 04) Other 04 (0.0) 0.3 Net Cash Provided by Operat
Slide 19: History: Net Income and Revenue
a A History THOMASGROUP. $70.0 (am Net Income —-— Revenue $60.0
Slide 20: Pretax Net Income %
Pretax THOMASGROUP'?! Net Income % 20.0% 15.0% 10.0% 5.0% 0.0% 5.0% 10.0% 15.0% +20.0% +25.0% -30.0%
Slide 21: Diluted EPS
aa Diluted EPS THOMASGROU! $2.00 $1.08 wm $0.38 pe - $0.63 , $0.4 ain $007 S014 0) 95 "96 ‘97 "99 00 03 04 05 ($1.00) ($2.00) ($3.00) ($4.00) ($3.87)
Slide 22: EPS adjusted for stock doubling
EPS: adjusted for, THOMA: a 702)stock doubling BOO goss * $0.6 $0. a* $0.3 $0.16" iS soor 4 $0.1 0.2) 95 9687, ‘99 00 0.5) ($0.40) 60.7) 61.0) 612) $15) 617) 03 "04 05 (90. ny a ($1.69) * Adjusted for stock issuance of 5.4m shares
Slide 23: Our Competition
Gur Gompetition THOMASGROUP??: a ¢ NAICS 541611 ¢ SIC code 8742
Slide 24: TGIS vs. NAICS 541611
A GIS\vs. NAIGS 541611 THOMASGROUP 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Retum on Assets Return on Equity Pre-tax profit aTcis Glndustry
Slide 25: Why Us? Why Now?
Why Us? a A Why Now? SHOMASGROU! P/E Ratio approx 12:1 20:1 if fully taxed, Industry avg 39.60 . $0.20 Annual Dividend ¢ No intangibles, low dilution
Slide 26: Revenue Model
a A Revenue Made! THOMASGROU @SWharton KNOWLEDGE LEADERSHIP Davie of Poors White Papers, Books, ExecSeminars, Roundtables IMPLEMENTATION TRAINING PVM, TCT, Demand Flow, Six Sigma, Lean R Kaizen, Theory of Constraints, ete.
Slide 27: Reducing Employers' Healthcare Cost
ad Reducing Employers’ Gq Healthcare Cost + o “Aligning Process hl and Technology” [ateok >
Slide 28: Case Study: Centura Health System
Gase'study; . THOMASGROUP: Gentura Health System Client Description’ Situation © 225 bed full service hospital © Poor relations with physicians venGENC WY © Culture resistant to change © Declining market share © 30% charity care and growing Program Challenges Program Results © Significantly reduce p
Slide 29: Case Study: Naval Aviation
Gase Study: Naval|Aviation THOMASGROUP?:: © “More Aviators Out, Faster” + Time - To - Train Decreased: 37 % From 48 mon. to 30 mon. +» Production Rate Increased: 23 % From 968/year to 1297/year = Total Production Increased: 2,000 New Cat 1 Aviators to Fleet Students In ‘WIP’ Decreased: 14 % From 352
Slide 30: Navy Testimonial
a A Navy Testimonial THOMASGROU! ¢ A Total Enterprise approach is required for best results °© Change requires commitment / willingness to drive * Throwing money at broken processes is pretty close to a crime ° Establishing the right metrics (output / customer) is essential ° Not everything can be f
Slide 31: Case Study: Gulfstream
Gase Study THOMASGROUP: Gulfstream * On-time delivery and quality problems affecting growth / market share Challenges Results + Output stalled at 25 aircraft per * Output from 25 to 78 aircraft / year year + Lead as (CT) from 3 years to 15 i i months # Rong (ead timetferalkeramn(s + Cost reduction o
Slide 32: What is different about Thomas Group?
a A THOMASGROU! What is different about Thomas Group? * Our Products ¢ Our People ¢ Our Results
Slide 33: Searchable text section of graphics
Searchable text section of graphics shown above [GRAPHIC] [LOGO] Presentation to [GRAPHIC] THE WALL STREET ANALYST FORUM February 27, 2006 Jim Taylor Chief Executive Officer David English Gary Morrison Chief Financial Officer Senior VP - Healthcare Ma nagement Team • CEO - Jim Taylor [GRAPHIC] Pres.
Thomas Group — The Wall Street Analyst Forum (February 2006) on 6ix