Slide Presentation

Zep

Inc.

Company Overview

May 2009

Inc. -

Exhibit 99.1

This presentation contains “forward-looking statements”

within the meaning of the Private Securities

Litigation Reform Act of 1995. Forward-looking statements are subject to certain risks and

uncertainties that could cause actual results, expectations, or outcomes to differ materially from our

historical experience and the historical experience of Acuity Brands, Inc. (our parent company prior

to our spin-off from Acuity Brands on October 31, 2007) as well as management’s present

expectations or projections. All statements other than statements of historical fact could be deemed

forward-looking, including, but not limited to, any projections of financial information; any statements

about historical results that may suggest trends for our business; any statements of the plans,

strategies, and objectives of management for future operations; any statements of expectation or

belief regarding future events, potential markets or market size, technology developments, or

enforceability of our intellectual property rights; and any statements of assumptions underlying any of

the items mentioned.

These statements are based on estimates and information available to us at the time of this

presentation and are not guarantees of future performance. Actual results could differ materially

from our current expectations as a result of many factors, including but not limited to: underlying

assumptions or expectations related to customer and supplier relationships and prices; competition;

ability to realize anticipated benefits from initiatives and timing of benefits; market demand; litigation

and

other

contingent

liabilities,

such

environmental

matters;

and

economic,

political,

governmental, technological, and natural disaster related factors affecting Zep's

operations, tax rate,

markets, products, services, and prices, among others. For a description of additional risks, and

uncertainties, please refer to the Company’s filings with the Securities and Exchange Commission,

including

its

Form

10–K

for

2008

year

end.

The

discussion

under

the

heading

“Risk

Factors”

part

one, item 1A of the 2008 Form 10-K is specifically incorporated by reference into this presentation.

We assume no obligation and do not intend to update these forward-looking statements.

Forward-Looking Statements

Inc. -

Company History

1896

Selig founded

1937

Zep

Founded

1962

Zep

merges w/

Nat’l Linen to

form NSI

1997

NSI acquires Enforcer

Products

2001

NSI spins off Lighting

& Chemicals to form

Acuity Brands

2007

Acuity Brands spins

off Chemicals to

form Zep

Inc.

A leading provider of innovative cleaning and maintenance solutions for

Institutional, Industrial and Commercial end users

. . . Over 100 years old

Inc. -

Company Assets

Broad Product

Offering

Powerful,

Effective Brands

Stable Cash

Flow

Strong Sales

Network and

Technical Support

2,300+ High

Performance

Industrial Strength

Formulas

Multiple Sales

Channels

Inc. -

Leading Player

in Key Markets

270,000+

Customers

Geographic

Diversity (operating

in six countries)

Zep’s

competitive

advantage

…

providing

“Superior

Solutions”

The “Superior Solutions”

Advantage

Highly trained & experienced

sales force

Technical & regulatory

knowledge

Access to dedicated technical

experts

R&D focused on innovative

solutions

Better chemical formulations

Comprehensive product

portfolio

Environmentally friendly

GreenLink

™

EnviroEdge

™

Superior

Solutions

Highly Effective Products

Sales Professionals

Technical Support

Industry and Business Overview

Cleaning

Maintenance

Chemicals

Market

($bn)

I&I

Distribution

$6.4

42%

I&I Direct

$3.2

21%

Retail

$5.5

37%

Est. $15 bn

US Market

Source:

Kline,

Mintel,

Company

analysis

Growth approximated at GDP

Minimal cyclicality

Industrial & Institutional (I & I) market:

–

4 large national players

–

More than 1,000 regional and local competitors

Favorable demand drivers:

–

Increasing regulation, health & safety concerns,

and environmental awareness

Retail

14%

Distribution

I&I Direct

84%

2008 Sales

of $575mm

Zep

Leading Market Positions

Transportation

–

One

the

top

suppliers

both

vehicle

maintenance and vehicle wash markets

Food

processing

and

service

–

One

the

top

suppliers

meat processing; no. 2 in baking; no.3 in poultry processing

Industrial

–

No.

janitorial

supplier

manufacturing

Government

–

One

the

top

suppliers

government/schools

Hospitality/healthcare

–

Small

but

growing

area

for

Zep

Contractors/homeowners

–

Largest

supplier

industrial

cleaning chemicals to The Home Depot

Zep

Market Breakdown (% of Revenues)

Strong opportunity

to expand further

into industrial

distribution and

consumer retail

channels

Inc. -

Grow share with existing and new customers

Vision

We will be a leading provider of

innovative, environmentally

sustainable cleaning and maintenance

solutions for commercial, industrial

and consumer end users.

Inc. -

Profitable Growth Strategy

Become

Acquisitive

Invest in

International

Enter Industrial

Distribution

Expand Retail

Presence

Simplify &

Improve Core

Simplify and Improve the Core

Strategies

Underway

Enable

Profitable

Growth

Demand Shaping

Goal: Reduce portfolio complexity

Eliminated over 50% of Chemical SKU’s

Increased minimum order size

Outsourced non-chemicals

Lean

Focus on cycle time and inventory

Expand and Leverage Sales Force

Eliminate underperformers

New hiring model

Establish inside operations

New Product Vitality

Innovation of environmental products

GreenLink™

EnviroEdge™

Inc. -

Simplify and Improve the Core

(continued)

–

Consolidated five branches in the last

twelve months

–

Up to six more branches to be

consolidated

–

One regional distribution center to open

near Allentown, PA during Fiscal 2009

–

Longer term plan to implement

regionalized chemical blending facilities

North American Manufacturing and Distribution Strategy (NAMADS)

Goal: Create a regionalized, co-inhabited manufacturing and distribution structure

Key

Manufacturing/Distribution

Distribution Site Only

80%

products

manufactured

Metropolitan

Atlanta

Expand Retail Presence

Strategies Underway to Accelerate Growth by Broadening Market Presence

Inc. -

Zep

Commercial and Enforcer product lines

Expand Zep

Commercial to additional

retailers serving fundamentally different

markets

True Value Hardware

Ace Hardware

Automotive Aftermarket

Increase end-market penetration through

well-known customer base

The Home Depot

Wal-Mart; Lowes;

Menards

Lowes

Menards

Zep

Professional product line

•

Full line of professional strength products designed for

a wide range of applications and end-markets

–

MRO (maintenance and repair operations)

–

Jan San (janitorial/sanitary)

–

Redistribution

–

Electrical

–

Health Sciences

Partnered with 6 world-class distributors

Early 2009 –

signed 21 local/regional

distributors; 11 pending

Enter Industrial Distribution

Strategies Underway to Improve Customer Reach via Distributor Partnerships

Inc. -

Benelux

Italy

Vision for Europe . . .

Drive core Italian business

Integrate European business

Expand geographically

International Strategy

Current

European

Locations

Inc. -

Financial Overview

Long-Term Financial Objectives

Revenue growth in excess of market growth

Distribution expansion produces 10-15% of total revenue

Target of 50 bp

annualized operating margin

improvement

11-13% annualized EPS improvement

ROIC target of 15%+

Inc. -

$524

$535

$552

$566

$575

2004

2005

2006

2007

2008

Net Sales ---

relatively flat;

increases primarily due to pricing;

partially offset by volume losses

Adjusted EBITDA

(1)

achieved little growth

…

Significantly Below Peers

Historical Financial Situation

($ millions)

Zep

underperforming

industry

…

company

transformation

required

Inc. -

Net Income

Adj

. EBITDA

(1) See appendix for reconciliation of adjusted EBITDA.

$44.2

$48.7

$48.6

$43.7

$45.7

$16.3

$14.1

$21.3

$23.1

$20.3

8.4%

9.1%

8.8%

7.7%

8.0%

2004

2005

2006

2007

2008

Performance During

Economic Downturns

Historically…

Strong cash flow generated during economic downturns

Ability to pass through raw material price increases in core, direct

business

Many of Zep’s

product categories have been relatively stable in

various economic conditions

Operating in Today’s Market…

Unprecedented volatility in energy-related raw material costs

Lower order rates from numerous end-market segments

Seasonal inventory impact from Retail and Industrial partners

Challenging pricing environment

Inc. -

Second Quarter 2009 Results

Please

see

appendix

for

reconciliation

Adjusted

Net

Income.

Net

(loss)

income

for

fiscal

years

2009

and

2008

was

$(0.9)

and

$1.9

respectively.

Net

(loss)

income

for

the

fiscal

years

2009

and

2008

was

$(2.5)

and

$8.2

respectively.

($ millions)

Adjusted Net Income

($ millions)

Revenue

Factors Impacting Fiscal 2Q’09 Results:

Global recession

Lower orders from virtually all market verticals,

except retail

Slower than expected order rates from

industrial distribution partners; $700,000 in

stocking orders

Continued high raw material costs despite

broader commodity cost declines; expect $10-

11 million in annualized savings beginning in

Fiscal 2010

Reduced non-sales headcount by 11.3%

Initiated several temporary measures including

suspension of 401(k) match and compensation

reductions for key executives

Cost containment strategies only mitigated a

portion of gross profit shortfall

Initially,

inconsistent

results

expected

various

restructuring

initiatives are undertaken

-11.9%

13.9%

YTD

2008

2009

YTD

2008

2009

Inc. -

Balance of Fiscal 2009

and 2010 Expectations

Balance of Fiscal 2009

–

Total sales could be 10-15% below last year

–

Expected to be profitable in the third and fourth quarters, before restructuring charges

–

Expect to generate positive cash flow from operations during 2H’09

–

Due

transformation

initiatives,

uncharacteristically

high

raw

material

prices

and

the

economic slowdown, we anticipate results to be substantially below Fiscal 2008 after

adjusting for restructuring charges

Fiscal 2010

–

Raw Material Savings

•

$10 -

$11 million in annualized raw material savings fully realized beginning in 2010

–

Cost Reductions

•

million

identified

during

Fiscal

2009

implemented

Fiscal

2010

–

Cost

containment

initiatives

should

enable

Zep

profitable

each

quarter

even

without

revenue growth

–

EBIT Margins nearly double those achieved in Fiscal 2009 before restructuring charges; albeit

not at Fiscal 2008 levels

–

Every 1% of revenue growth expected to yield incremental 30 basis points in EBIT margin

improvement

2009.

Zep

Inc.

All

rights

reserved.

Strong Cash Flow Generation

Use-of-Cash Strategies

Fund normal operations

Fund quarterly dividend

Invest in Strategic Growth Initiatives

Pay down long-term debt

($ millions)

Net Cash Provided by

Operating Activities

Capital Expenditure

Free Cash Flow

Strong Free Cash Flow (FCF) -

an important characteristic of the Zep

business model

Average FCF of approximately $22M over the last four years

Noteworthy FCF generation despite investments in Strategic Growth Initiatives

Baseline

level

capital

expenditures

$10M

expected

for

fiscal

2009;

Flexibility

reduce

economic

conditions

dictate

$0.0

$10.0

$20.0

$30.0

$40.0

2005

2006

2007

2008

$12.9

$21.7

$34.6

$28.5

$5.5

$23.0

$30.9

$5.8

$25.1

$26.4

$9.2

$17.2

Inc. -

Free Cash Flow is defined as Net Cash Provided by Operating Activities less Capital Expenditures.

Debt Financing

$100 million, 5-year Revolving Credit

Facility

$7.2 million assumption of IRB debt

$20MM interest rate swaps at 3.2 % -

3.5% due June 2010

(1)

As defined in our credit agreement, which states that adjusted EBITDA is equal to

EBITDA plus certain non-cash items.

Total Debt/Credit Agreement

Adjusted EBITDA(1)

Capital Structure as of February 28, 2009

Capitalization

($ millions)

Liquidity -

a source of strategic flexibility

Untapped capacity of approximately $34 million on revolving credit facility

Additional capital to pursue profitable growth

Inc. -

3.03

Cash

$9.3

Borrowings

$63.2

Assumption of existing debt

IRB

$7.2

Total Debt

$70.4

Total Equity

$89.9

Total Capitalization

$160.3

Total Debt/Total 40%

Capitalization (net of cash)

Zep

Historical Stock Chart

Zep

Inc.

Stock

price

held

relatively

firm

during

calendar

year

2008

overall

market

decline

. . . Q1 “miss”

accelerated stock freefall

52 week range $6.63 -

$21.80 per share

2009.

Zep

Inc.

All

rights

reserved.

Appendices

Zep

Board of Directors

and Management

Management

Name

John K. Morgan

Chairman, President & CEO

30 yrs; Acuity Lighting Bus; Team grew revenues from

$600mm to $2bn

Mark R. Bachmann

EVP & Chief Financial Officer

12 yrs; Acuity Brands; President: Enforcer Products

Robert P. Collins

VP & Chief Administrative Officer

VP & CHRO: Serologicals

Corp.

David A. Korn

VP & Chief Compliance Officer

VP-Compliance: Acuity Brands; 8 yrs: American Airlines

C. Francis Whitaker, III

VP, General Counsel & Secretary

VP & General Counsel: Acuity Brands; 11 yrs: private law firms

Stanley R. Weller, Ph.D.

VP & Chief Technology Officer

18+ yrs; Increasing roles in research & development during tenure

Title

Name

Board of Directors

Title

Veronica Biggins

Director: HNCL Search; Avnet Corp. & AirTran

Holdings Inc.

Earnest W. Deavenport, Jr.

Retired Chairman & CEO: Eastman Chemical Co.; Former Director

Acuity Brands; Director: King

Pharmaceuticals, Inc. &Regions Financial Inc.

O.B. Grayson Hall, Jr.

Vice Chairman & Director: Regions Financial Corporation

Sidney J. Nurkin

Retired Partner: Alston & Bird, LLP. Director: Dayton Superior Corp.

Joseph Squicciarino

CFO: King Pharmaceuticals, Inc. Formerly, CFO-N. America: Revlon, Inc.; CFO-Int’l: Revlon International, Inc.

Group & Controller, Pharmaceuticals-Europe, Middle East, Africa: Johnson & Johnson

Timothy T. Tevens

President, CEO & Director: Columbus McKinnon Corp. Director: ISMA

Inc. -

Adjusted EBITDA Reconciliation

Annual . . .

Quarterly . . .

Inc. -

($ millions)

2004

2005

2006

2007

2008

Net Income

$20.3

$23.1

$21.3

$14.1

$16.3

Interest Expense, net

1.7

2.6

4.4

5.0

2.8

Provisions for Income Taxes

14.9

12.0

14.5

10.8

9.7

Depreciation and Amortization

8.2

9.1

8.4

7.1

6.9

EBITDA (unaudited)

45.2

46.8

48.6

36.9

35.7

Non-recurring environmental charges

6.8

Special charge

4.5

10.0

Gain on sale of National Chemical business

(1.0)

(0.5)

Gain on sale of facilities

(2.1)

Adjusted EBITDA (unaudited)

$44.2

$48.7

$48.6

$43.7

$45.7

Years Ended August 31,

Net (Loss) Income

($1.5)

($0.9)

$6.3

$1.9

$0.2

$8.0

Net Interest Expense

0.6

0.4

1.1

0.8

0.5

Depreciation / Amortization

1.7

1.6

1.7

1.8

Income Taxes

(0.9)

(0.6)

3.5

1.0

0.3

4.8

EBITDA

($0.2)

$0.6

$12.5

$5.4

$2.8

$15.1

Adjustments

Seaboard Remediation Reserve

Restructuring

1.9

1.1

0.8

7.8

Inventory Write-Off

1.2

Waste Haul

0.3

Total Adjustments

1.9

1.1

0.8

9.3

Adjusted EBITDA (unaudited)

$1.7

$12.5

$6.2

$12.1

$15.1

FY09

FY08

Adjusted Net Income and

EPS Reconciliation

($ millions)

Three Months Ended

Six Months Ended

Year Ended

February 28

August 31

2009

2008

2009

2008

2007

Reported (GAAP) Net (Loss) Income

($942)

$1,907

($2,487)

$8,187

$16,322

$14,083

Restructuring Charges, net of tax

695

476

1,888

476

5,389

Discontinued Inventory Charge, net of tax

955

Environmental Charges, net of Tax

5,290

Adjusted Net Income

($247)

$2,383

($599)

$8,663

$22,666

$19,373

Reported (GAAP) Diluted Earnings Per Share

($0.04)

$0.09

($0.12)

$0.39

$0.77

$0.68

Restructuring Charges, net of tax

0.03

0.02

0.09

0.02

0.25

0.00

Discontinued Inventory Charge, net of tax

0.00

0.05

0.00

Environmental Charges, net of Tax

0.00

0.25

Adjusted Diluted Earnings Per Share

($0.01)

$0.11

($0.03)

$0.41

$1.07

$0.93

Adjusted EBIT Reconciliation

($ millions)

Reported

FY2008

Restructuring

Charges

Adjusted

FY2008

(unaudited)

Net Sales

$ 574.7

Adjusted Cost of Goods Sold

251.5

(1.2)

250.3

Gross Profit

323.2

324.4

Adjusted Selling, Distribution and Administrative

294.2

(8.8)

285.4

Miscellaneous expense, net

0.2

Adjusted EBIT

$ 28.8

$10.0

$ 38.8

Gross Profit %

56.2%

56.5%

SD&A %

51.2%

49.7%

EBIT %

5.0%

6.8%

Return on Invested

Capital Reconciliation

(1)

Voluntary Environmental Remediation Reserve

(2)

Operating profit after tax divided by beginning of year total non-cash assets less non-interest bearing liabilities

Inc. -

Restructuring &

($ millions)

Other Special

Adjusted

Environmental

Adjusted

FY2008

Charges

FY2008

FY2007

Charges

FY2007

(unaudited)

Return on Invested Capital

Adjusted Operating Profit

$29.1

$10.0

$39.1

$29.6

$6.8

$36.4

Tax Rate

37.2%

43.3%

39.6%

Adjusted Operating Profit after Taxes

18.3

6.3

24.6

16.7

5.3

22.0

Invested Capital (beginning of year

balances)

Non-Cash Total Assets

240.3

240.2

Non-Interest Bearing Total Liabilities

99.6

(4.1)

(1)

88.2

92.3

Total Invested Capital

140.7

152.1

147.9

ROIC

(2)

12.9%

16.2%

11.3%

14.8%

Non-GAAP Disclosure

•

This presentation includes the following supplemental non-GAAP financial measures: EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, adjusted operating

profit (before and after taxes), adjusted net income, return on invested capital (“ROIC”) and adjusted return on invested capital (“adjusted ROIC”). We also

include ratios derived from non-GAAP measures. GAAP means generally accepted accounting principles in the United States. This presentation contains

reconciliations of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

•

EBIT

equal

net

income

plus

(a)

interest

expense,

net;

and

(b)

provision

for

income

taxes.

Adjusted

EBIT

equal

EBIT

plus

restructuring charges.

•

EBITDA

equal

net

income

plus

(a)

interest

expense,

net;

(b)

provision

for

income

taxes;

and

(c)

depreciation

and

amortization.

For

this

presentation,

adjusted

EBITDA

calculated

adding

EBITDA

(a)

certain

charges

for

fine

incurred

connection

with

the

wastewater

investigation

our

primary

manufacturing facility in Atlanta, Georgia related to conduct that took place prior to 2003, as well as a charge taken in the third quarter of fiscal 2007 reflecting

our best estimate of costs associated with environmental remediation efforts related to soil and groundwater contamination present at that manufacturing

facility,

and

(b)

charges

incurred

connection

with

our

restructuring

initiatives,

and

excluding

from

EBITDA

(a)

gains

resulting

from

the

sale

the

National

Chemical

business

water

treatment

business),

and

(b)

gains

from

property-related

sales

that

were

unusual

nature

given

the

infrequency

with

which

dispose of such facilities.

•

Adjusted operating profit is calculated by adding to operating profit the restructuring charges and environmental remediation charge described above.

Adjusted net income is calculated by adding to net income the restructuring charges and environmental remediation charge described above.

•

ROIC is equal to after-tax operating profit divided by total non-cash assets less non-interest bearing liabilities. Adjusted ROIC is equal to after-tax adjusted

operating profit (as described above) divided by total non-cash assets less non-interest bearing liabilities.

•

We believe EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, adjusted operating profit, and adjusted net income and the ratios derived from these measures

are useful to an investor in evaluating our performance for the following reasons:

–

During

the

first

quarter

fiscal

year

2009,

Zep’s

management

initiated

actions

necessary

reduce

non-sales

headcount

5%.

Accordingly,

recorded a net pretax charge of $1.9 million during the three months ended November 30, 2008. This charge was entirely composed of severance

related costs. In the second quarter of fiscal year 2009, the Company recorded a charge of $1.1 million as it exited two facilities, and, in accordance

with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, adjusted sub-lease rental income assumptions associated with a

leased

facility

exited

during

the

third

quarter

fiscal

year

2008.

During

the

second

quarter

fiscal

year

2008,

Zep’s

management

recorded

net

pretax

severance-related

costs

$0.8

million.

believe

useful

exclude

restructuring

charges

from

reported

operating results as they are unrelated

to our core operating performance.

–

During the third quarter of 2008, the progress made on the Company’s strategic initiatives resulted in restructuring charges totaling $9.3 million. The

restructuring breakdown is as follows: The company recognized a $4.5 million charge for employee severance related to the new organizational

structure we announced in June that will serve to decentralize specific functions of the business to establish decision making and accountability closer

to the customer. Additionally, during the third quarter, we incurred a $3.3 million charge related to the consolidation of our corporate headquarters,

which

includes

certain

assumptions

made

regarding

future

revenue

from

sublease

rentals.

Lastly,

recorded

$1.5

million

charge

the

write-down and disposal of discontinued inventory as a result of our product line rationalization. This charge addresses the integration of our Selig

product line into Zep and the first wave of reductions from the bottom half of our products in our North American I&I product line. We believe it is useful

to exclude such charges from reported operating results as they are unrelated to our core operating performance.

Non-GAAP Disclosure

(continued)

–

We recently paid a fine of $3.8 million in connection with intentional misconduct on the part of certain non-executive employees resulting in our failure

to comply with our wastewater discharge permit prior to 2003 at our primary manufacturing facility in Atlanta, Georgia. In connection with the

investigation,

the

EPA

and

Zep

each

analyzed

samples

taken

from

certain

sumps

this

manufacturing

facility,

and

the

results

led

undertake

further

soil

and

groundwater

studies.

Based

the

results

date

these

studies,

plan

conduct

voluntary

remediation

the

site

and

May

2007 accrued a pre-tax liability of $5.0 million representing our best estimate of costs associated with remediation and other related groundwater

issues over approximately five years at this site. The remediation will address issues that have developed in the past, during the almost fifty-year

period we have been operating at the site. We believe that the expenses associated with this fine and remediation are non-recurring in nature and that

such expenses are not reflective of our core operating performance. Accordingly, we believe it useful to exclude these expenses from our reported

operating results.

–

During fiscal 2005, we undertook a restructuring initiative designed to streamline operations, improve customer service, and reduce transaction costs.

connection

with

these

restructuring

activities,

incurred

special

charge

$4.5

million

during

the

second

quarter

fiscal

2005

reflect

the

costs associated with the elimination of 70 salaried positions worldwide. We believe it is useful to exclude this charge from our reported operating

results

because

unrelated

our

core

operating

performance.

–

During fiscal 2004, we sold the National Chemical business, which marketed water treatment chemicals and services. While this sale was completed

in fiscal 2004, we deferred the recognition of a portion of the total $1.5 million gain until the following fiscal year. This deferral was necessary because

of concerns surrounding the collectability of consideration promised in exchange for National Chemical. We have adjusted our reported operating

results to exclude the impact of the gains related to the sale of this business as the proceeds received from the sale are not relevant to our ongoing

core operating performance.

–

routinely

dispose

certain

classes

fixed

assets

the

normal

course

business,

such

equipment

and

vehicles

used

the

production

and

delivery of our products. Less frequent are sales of facilities operated by the company. However, in fiscal 2005, we recognized gains on such sales of

$2.1 million. These sales were executed in fiscal 2005 pursuant to a specific review of our leased and owned facilities. While the evaluation of our

resources is an on-going process, the company does not currently have plans involving similar facility sales and, therefore, believes it is useful to

adjust

reported

operating

results

present

financial

measures

that

exclude

gains

these

sales.

–

We believe these measures are an important indicator of our operating strength and the performance of our business because they provide a link

between profitability and operating cash flow.

–

We believe these measures adjust for items which are generally not indicative of our core operating performance.

–

We also believe that analysts and investors use EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, adjusted operating profit, and adjusted net income

as supplemental measures to evaluate the overall operating performance of companies in our industry.

•

believe

ROIC

useful

measure

providing

investors

with

information

regarding

our

performance.

ROIC

widely

accepted

measure

earnings

efficiency in relation to total capital. We believe that the expenses associated with the environmental fine and remediation are non-recurring in nature and that

such expenses are not reflective of our core operating performance. Accordingly, we believe it useful to exclude these expenses from adjusted ROIC.

•

Our management uses EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, adjusted operating profit, and adjusted net income:

–

as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis as they remove the

impact of items not directly resulting from our core operations;

–

to evaluate the effectiveness of our operational strategies; and

–

evaluate

our

capacity

fund

capital

expenditures

and

expand

our

business.

Inc. -

Non-GAAP Disclosure

(continued)

•

Our

management

uses

ROIC

and

adjusted

ROIC

measure

how

effectively

allocate

our

capital

our

core

operations

and

measure

progress

against our longer-term value creation goals.

•

EBIT,

adjusted

EBIT,

EBITDA,

adjusted

EBITDA,

adjusted

operating

profit,

adjusted

net

income,

ROIC

and

adjusted

ROIC

and

the

ratios

derived

from

these

measures

calculated

are

not

necessarily

comparable

similarly

titled

measures

used

other

companies.

addition,

these

measures:

(a)

not

represent

net

income

cash

flows

from

operating

activities

defined

GAAP;

(b)

are

not

necessarily

indicative

cash

available

fund

our

cash

flow

needs; and (c)

should not be considered as alternatives to operating profit, net income, cash provided by operating activities, or our other financial information

as determined under GAAP.

Inc. -