The Urgent Need for Change and The Superior Path Forward slide image

The Urgent Need for Change and The Superior Path Forward

BALLOONING DEBT LEAVES STOCKHOLDERS AT RISK We believe that keeping a balance of nearly 7x debt to EBITDA is incredibly dangerous for a business that operates in cyclical segments ▪ Even CEO Craig Bram acknowledges that operating at high leverage is dangerous - which is why he has publicly stated that stockholders should be uncomfortable with leverage of over 3x PRIVET FUND Question: "Okay. And then can you just talk about where you would take the leverage to [...] Would you take it above 3 times?" UPG STRONGER TOGETHER 01. 02. 03. 04. 05. CEO Craig Bram: "No, that's not an area we'd be comfortable with. If you look at during my tenure as CEO going back to 2011, our leverage is averaged about 1.75 times. [...] But 3 times is not a level that we would be comfortable with again recognizing that our businesses are cyclical. And while we don't see any signs at all of any softening in our end markets right now, we certainly don't want to go out and be sitting over 3 and then have things start heading south a little bit." " (1) Meaningful Change is Required at Synalloy If action is not taken immediately, Synalloy stockholders could be in grave danger 1. Source: Synalloy fourth quarter 2018 earnings call transcript 39
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