PowerPoint Presentation

Growth:Wishing for it, Getting it, Surviving it. Stuart TeshimaVice President and Corporate Controller

Growth
Everyone hopes for it.It defines accomplishment in business.It must be handled with care and attention or it has the potential to collapse a company.Epsilon (Internal Organic Growth):An increase of 45% in 2006.An increase of 39% in 2007.

History and Highlights

Diversified Engineering, Technical & Professional Services Corp.

Six Business AreasMarine and Industrial Services: Ship Repair, Alterations & Fleet SupportFleet Engineering Services: Engineering & Technical ServicesNuclear Operations & Environmental Management ServicesInformation Technology & Communications/C4ISR total program supportManufacturer of Flat Panel Displays and customized electronics Security Technology

Contract Vehicles

Department Of EnergyDepartment of Defense Department of Homeland SecurityGeneral Services Administration

Awards
2007 DOD selects Lockheed Martin Maritime Systems and Sensors and Epsilon Systems Products Sector for the prestigious Nunn-Perry Mentor-Protg award 2007 San Diego Business Journal names Epsilon as one of San Diegos Best Places to Work 2006 Epilepsy Foundation of San Diego County recognizes Epsilon as Employer of the Year2006 San Diego Magazine recognizes Epsilon as one of San Diegos Best Workplaces2006 & 2004 - The San Diego Business Journal recognizes Epsilon as one of the finalists for The Best Companies to Work for in San Diego 2005 - Epsilon received Minority Owned Technology Company of the Year Award by Inland Empire and the Minority Business Development Center, a federally-funded program of the Minority Business Development Agency of the U.S. Department of Commerce2003 Inc. Magazine ranks Epsilon as #1 in the Defense Sector in their America's 500 Fastest-Growing Private Companies List
2003
2006San Diegos Best WorkplacesAwarded by San Diego Magazine

Employee Growth
Number of Employees
Number of Employees

San Diego, CA
China Lake, CA
Albuquerque, NM
Denver, CO
Keller, TX
Newport, RI
Portsmouth, VA
An International Company
Oak Ridge, TN
Bremerton, WAEverett, WA
Idaho Falls, ID
Las Vegas, NV
Pearl Harbor, HI
Overseas locations include:GuamYokosuka, JapanSasebo, Japan
National City, CA
Corporate Headquarters/ ProductsNuclear Operations & Environmental Mgmt. ServicesMarine & Industrial ServicesInformation Technology & Communications ServicesFleet Engineering Services
18 Offices in 17 Locations
11-9-06

Challenges
Types of growthMore of the sameVertical IntegrationPeople & ProcessesDiversified GrowthRisks inherent with new businessPotential lack of skill sets needed to succeedService company versus ManufacturerForeign businessGovernment versus Commercial

Process
Initial Assessment.What do you have, what do you need?Interpreting what is ahead.Wolf at the door and define your gaps.Think big, strategic and set your goals.Continuously monitor and reassess.Focus on objectives.Evaluate how you did?Repeat, repeat, repeat.

Initial Assessment
Take an Inventory of PersonnelWhat experience do they posses? Examples include Public Reporting, SOX skills, Strategic Thinkers or plodders.Look at your company from a strategic vantage point.What are your largest risks?Take an inventory of CultureChange resistant or Change seekingOld School Mentality Weve always done it that way.

What do you have?
Small Company Mindset.Tactical and stuck in Quadrant 1.Bottleneck in decision making.Slow to react.Big Company Expectations.Deliver results.Everything boils down to numbers.Tone at the top, ethics based system of controls.ProcessRecognize the environment change.Auditing is moving toward a risk oriented process model.Ending balances are a result of process.

What do you have (contd)
CultureIs there an element that is non-financial in nature that creates success?Identify the intangibles that make your company desirable.Is there a current underfoot that is a priority?Preserving profit versus culture/core values.Examples EpsilonBen & Jerrys

What do you need?
What do you have to do today that you didnt yesterday?More people to supervise.More levels of management.What will you have to do tomorrow that you didnt today?Regulatory.Multiple sources of audit activity.What makes sense to implement, what makes sense to defer?Risk;Importance;Cost.

Wolf at the door!
Risk evaluation.What issues could potentially cause the most disruption in your organization?What fits into the companies strategic plan over the next 3-5 years?Develop objectives after reviewing the companies strategic objectives.Identify gaps.Address immediate steps to correct in the short term.Use your limited resources wisely to develop a strategic plan.

Dare to think big
Your goals should address big initiatives not just compliance or general job duties.Use middle management to be responsible for the tactics.When developing goals, think big and always endeavor to overshoot goals.You can always alter them if the situation changes.

Continuous Monitoring
Fallacy of success.Process is continuous and evolving.Never rest on goals achieved.Your company is perpetually changing and so should your thinking.Quad 1 versus Quad 2Imperative to force yourself to work on the company not in the company.

How did you do?
Use SMART Goals.SMART (Specific, Measurable, Attainable, Realistic & Time Bounded)Avoid soft, non-quantifiable goals.Have the discipline to review goals at least quarterly.Alter them if conditions warrant.Develop follow on or new goals at this time.

Repeat, repeat, repeat.
Not a static, one time activity.Retrospective;Over time, your organization will become stronger, more efficient and able to handle the rigors of a dynamic environment.By reviewing/revising each quarter;You ensure the course changes necessary to keep your focus strategic.Keep your planning efficient.

Conclusion
Growth is a blessing and a curse.Assessing your organization and people is a necessary step.Development of an evolving strategic plan is vital.Review risks to your company.Continue to review your organization and plan.

Questions?