1. Graco Supply & Integrated Services 1.1.4 Continuous Improvement Management Process June 4, 2012 Tim Holland, CEO/President Aman Sangha, Business Systems MGR/CI

2. Graco Supply & Integrated Services What we do? Distribution, Packaging and Vendor Managed Inventory Services of Industrial/Specialty Supplies such as Adhesives, Sealants, Paint and Composite Manufacturing Materials for the Aerospace and Composite Structure Industries.

3. Graco Supply & Integrated Services Who we are? Serviced Aerospace Industry Since 1959 Owner Change 2011 Revenue 2011 ~ $43.7 MUSD AS9100/AS9120 Certified, NADCAP Accredited Headcount 79 FTE Locations – Fort Worth, TX (HQ) – Wichita, KS – Tulsa, OK – Ball Ground, GA – High Point, NC

4. Graco Supply & Integrated Services Adopted “Gazelles” One-Page Strategic Plan. Gazelles was founded by Verne Harnish in 1996 (Author of: Mastering the Rockefeller Habits)

5. Graco Supply & Integrated Services Process: This process is owned and lead by the VP of Operations/Director of Quality and includes selected team members throughout the Company. The Continuous improvement process is perpetual. Projects are identified through numerous sources and may be suggested from “top down” or “bottom up”. We are a Distribution/Value-added Services Company. Projects address all key processes in the company, so Kaizen activities may take on different forms to address the specific needs of departments.

6. Graco Supply & Integrated Services 1.1.4 Continuous Improvement Management Process Project Identification Project Scope and Desired Outcome Kaizen Event Deployment CONTINUOUS IMPROVEMENT PROCESS Define Project Scope/Dates Customer Interviews/Surveys Employee Interviews/Surveys Supplier Interviews/Surveys Identify Participants Identify “Pre-Event” efforts Location Data necessary for success Tools/supplies Define Project Need Financial Analysis Operations Analysis Customer Feedback/Analysis Competitive Analysis Supplier Feedback Standards – AS9100, SEA Kick-off Scope/Desired Outcome Review Available Data Problem Solving Objectives – Action Plans “Just Do It” Teams/Process Owners Capture New Processes Implementation Teams Report Outs As required: Employee Meetings Supplier Meetings Customer Meetings Department & Individual Goals Reward Recognition Communication Follow up Determine Success (Desired Outcome Reached) If DO not achieved determine next Kaizen event and scope to address shortcomings. Purpose: to define and deploy a Continuous Improvement Process to drive performance improvement. 1.1.4 Continuous Improvement Management Process – How does your organization select improvement priorities and review progress on improvement initiatives? How are process owners, master trainers, and strategic champions included in this process? How are improvement projects and teams selected and given direction? How is a standard problem-solving model deployed throughout the organization? How are recognition and sharing of key learning accomplished? How are process improvement ideas solicited, reviewed, approved, and implemented? How is a high level of workforce participation ensured? How are improvement suggestions recognized? How are suggestions made visible in work areas?

7. Graco Supply & Integrated Services Performance Metrics APRIL 02, 2012 EMPLOYEE MEETING SalesFinancial Internal EffectivenessCustomerSupplierTraining SalesGP Adjusted Expenses Adjusted EBITDAInventory TurnsSales / EmployeePEICash CycleWaste On-Time Shipping PPM to customer On-Time Receipts PPM from Vendors Annual Training Hours 2011 Sales / BudgetGP / BudgetBudget / SG&A Adj Actual / Budget COGS *12 / InventorySales / FTE Sales / (Payroll + Benefits) OOD + Spoilage / Sales Actual vs promised date Defectives / UM's shipped Actual vs requested Defectives / UM's ReceiviedHours/FTE*12 March108.7%97.8%101.4%127.0%11.1 $ 637,5058.440.30.54%83.0%1361965.0%196821.1 April93.6%103.0%102.3%77.3%9.7 $ 530,4998.052.00.79%82.0%519470.0%199030.7 May96.8%101.4%105.2%70.8%10.0 $ 538,7597.541.60.57%84.0%234972.0%27470.3 June99.5%102.1%99.9%108.6%10.1 $ 573,3517.738.70.53%81.0%573865.0%23721.0 July109.3%98.5%98.6%167.0%9.4 $ 554,2777.939.30.81%77.0%558063.0%54990.9 August113.8%91.7%106.9%93.2%9.1 $ 619,6737.930.70.50%79.0%644966.0%483854.7 September116.8%92.2%103.9%127.2%10.9 $ 629,2697.941.50.89%86.0%543960.0%27700.5 October117.7%86.5%117.1%30.9%10.5 $ 641,7957.647.60.59%91.0%1882453.0%92141.0 November98.4%91.1%99.7%-2.5%8.0 $ 532,3306.352.20.58%93.0%242063.0%20470.6 December124.3%89.9%101.4%2512.2%8.1 $ 548,2737.249.71.04%82.0%844065.0%539871.0 January111.7%88.1%106.5%65.8%10.7 $ 624,3087.749.80.94%86.0%533068.0%83210.7 February100.8%94.8%108.5%35.4%11.0 $ 633,8517.641.11.41%90.0%1363370.0%133980.4 Cumulative107.4%94.8%104.4%80.9%9.9 $ 589,7527.643.70.77%84.5%769965.0%163601.1

8. Graco Supply & Integrated Services Q4 FY 2011 Q3 FY 2011

9. Graco Supply & Integrated Services KAIZEN EXAMPLE SALES ORDER ENTRY

10. Graco Supply & Integrated Services Thank You! Tim Holland: tholland@gracosupply.com Aman Sangha: asangha@gracosupply.comtholland@gracosupply.comasangha@gracosupply.com