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Financial Management Report
Tom's Machinery Co. Inc.
Multi-Year Scenario #1
(Dollars and Shares in Thousands, Except Per Share Amounts)

	Estimate			Forecast
	12 Months 06/30/09			12 Months 06/30/10		12 Months 06/30/11		12 Months 06/30/12		12 Months 06/30/13		12 Months 06/30/14
1.    Working Capital Management:
Net Working Capital:
Current Assets	$186			$210		$239		$269		$304		$347
Current Liabilities	(120)			(131)		(137)		(138)		(138)		(134)
Net Working Capital	$66			$79		$102		$131		$166		$213
Current Ratio:
Current Assets, divided by Current Liabilities	1.55			1.61		1.74		1.94		2.20		2.60
Quick Ratio:
Cash plus Accounts Receivable divided by Current Liabilities	0.75			0.76		0.82		0.90		1.01		1.18
Net Working Capital Turnover:
Net Sales, divided by Net Working Capital	7.58			7.28		6.48		5.80		5.27		4.72
2.    Asset Management:
Number of Days Sales in Accounts Receivable
Accounts Receivable, divided by Net Sales/365	47.5			47.8		47.8		47.8		47.8		47.8
Number of Days Cost of Goods Sold in Inventory
Inventory, divided by Cost of Goods Sold / 365	97.2			97.8		97.8		97.8		97.8		97.8
Capital Expenditures (Net):
Ending Property, Plant and Equipment, minus Beginning Property, Plant and Equipment	NA			$18		$20		$23		$27		$31
Depreciation (Net):
Ending Accumulated Depreciation, minus Beginning Accumulated Depreciation	NA			$9		$10		$12		$14		$16
Net Property, Plant and Equipment:
Property, Plant and Equipment, minus Accumulated Depreciation	$55			$64		$73		$84		$97		$112
Fixed Asset Turnover:
Net Sales, divided by Net Property, Plant and Equipment	9.09			9.01		9.01		9.01		9.00		9.01
Total Asset Turnover:
Net Sales, divided Total Assets	1.92			1.94		1.95		1.98		2.00		2.01
3.    Liabilities Management:
Number of Days Cost of Goods Sold in Accounts Payable:
Accounts Payable, divided by Cost of Goods Sold / 365	42.1			41.8		41.8		41.8		41.8		41.8
Number of Days Operating Expenses in Accrued Expenses:
Accrued Expenses, divided by Operating Expenses / 365	101.4			101.3		101.3		101.3		101.3		101.3
Current Maturities:
Current Maturities of Long Term Debt	$11			$13		$15		$17		$20		$23
Long Term Liabilities, as % of Total Assets:
Total Long Term Liabilities, divided by Total Assets	22.2%			21.9%		22.2%		22.7%		22.9%		23.0%
Total Liabilities, as % of Total Assets:
Total Liabilities, divided by Total Assets	68.2%			66.0%		62.8%		58.8%		54.6%		49.8%
Debt-to-Worth Ratio:
Total Liabilities, divided by Owners' Equity	2.14			1.94		1.69		1.43		1.20		0.99
4.    Profitability Management:
Gross Margin on Sales:
Net Sales, minus Cost of Goods Sold	$162			$190		$218		$255		$295		$342
Gross Margin %:
Gross Margin on Sales, divided by Net Sales	32.4%			33.0%		33.0%		33.5%		33.7%		34.0%
Operating Earnings:
Gross Margin on sales, minus Operating Expenses	$18			$35		$46		$57		$68		$86
Operating Earnings %:
Operating Earnings, divided by Net Sales	3.6%			6.1%		7.0%		7.5%		7.8%		8.6%
Earnings Before Interest, Taxes, Depreciation and Amortization of Intangible Assets (Referred to as "EBITDA")
Net Earnings, plus Interest Expense, plus Income Tax Expense, plus Depreciation, plus Amortization of Intangible Assets ("EBITDA")	$12			$45		$58		$73		$88		$110
EBITDA as % of Net Sales:
EBITDA, divided by Net Sales	2.4%			7.8%		8.8%		9.6%		10.1%		11.0%
Earnings Before Income Taxes:
Net Earnings, plus Income Taxes	$12			$30		$41		$54		$67		$88
Net Earnings Per Share:
Net Earnings, divided by Common Shares Outstanding	$0.07			$0.30		$0.41		$0.54		$0.67		$0.88
Earnings Before Income Taxes as % of Net Sales:
Earnings Before Income Taxes, divided by Net Sales	2.4%			5.2%		6.2%		7.1%		7.7%		8.8%
Net Earnings as % of Net Sales:
Net Earnings, divided by Net Sales	1.4%			5.2%		6.2%		7.1%		7.7%		8.8%
5.    Debt Management:
Senior Interest Expense:
Interest on Line of Credit, plus Interest on Term Loan	$0			$6		$7		$7		$7		$6
Non-Senior Interest Expense:
Interest on Subordinated Debt	$0			$0		$0		$0		$0		$0
Total Interest Expense:
Senior Interest Expense, plus Non-Senior Interest Expense	$0			$6		$7		$7		$7		$6
EBITDA Coverage of Senior Interest Expense:
EBITDA, divided by Senior Interest Expense	0.00			7.50		8.29		10.43		12.57		18.33
EBITDA Coverage of Total Interest Expense:
EBITDA, divided by Total Interest Expense	0.00			7.50		8.29		10.43		12.57		18.33
Required Debt Service:
Total Interest Expense, plus Current Maturities	$11			$19		$22		$24		$27		$29
EBITDA Coverage of Required Debt Service:
EBITDA, divided by Required Debt Service	1.09			2.37		2.64		3.04		3.26		3.79
EBITDA minus Capex, divided By Required Debt Service:
EBITDA minus Capital Expenditures, divided by Required Debt Service	1.09			1.43		1.75		2.08		2.27		2.74
Free Cash Flow:
Net Earnings, plus Depreciation minus Capital Expenditures, minus Dividends	$7			$9		$15		$21		$27		$39
Cash Available for Debt Service:
Free Cash Flow, plus Total Interest Expense	$7			$15		$22		$28		$34		$45
Debt Service Coverage:
Cash Available for Debt Service, divided by Required Debt Service	0.64			0.80		1.02		1.17		1.27		1.53
6.    Estimated Bank Credit Availability:
Borrowing Base Assets:
Accounts Receivable	$65			$75		$87		$100		$114		$132
Inventory	90			103		119		135		155		178
Property, Plant and Equipment (Net)	55			64		73		84		97		112
Estimated Borrowing Base %:
Accounts Receivable	80.0%			80.0%		80.0%		80.0%		80.0%		80.0%
Inventory	35.0%			35.0%		35.0%		35.0%		35.0%		35.0%
Property, Plant and Equipment	50.0%			50.0%		50.0%		50.0%		50.0%		50.0%
Estimated Amount Available to Borrow:
Accounts Receivable	$52			$60		$70		$80		$91		$106
Inventory	32			36		42		47		54		62
Property, Plant and Equipment	28			32		37		42		49		56
	$112			$128		$149		$169		$194		$224
Loans Outstanding:
Line of Credit	$29			$30		$22		$7		$(12)		$(37)
Current Maturities	11			13		15		17		20		23
Term Loan	38			44		51		59		68		78
	$78			$87		$89		$84		$76		$63
Estimated Net Bank Borrowing Availability:
Estimated Amount Available to Borrow, minus Loans Outstanding	$34			$41		$60		$85		$118		$161
Senior Debt Outstanding as Multiple of EBITDA	6.5			1.9		1.5		1.2		0.9		0.6