Best Ideas 2016 Preview: Three of Thirty Presentations

Best Ideas 2016 Preview:
Three of Thirty Presentations
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James Roumell
President, Roumell Asset Management

ROUMELL
ASSET
MANAGEMENT
Finding Value through Out of Favor,
Overlooked and Misunderstood Securities
Manual of Ideas 1/7/16
1

RosettaStone(RST)
Description: Rosetta Stone is the global leader
in language education and owns literacy
software company Lexia Learning
Key Statistics:
Recent Price $7.00
Market Cap $150 million
2015 Revenue Estimate $210 - $220 million
Intrinsic Value Estimate $12 to $15 per share
The Assets:
Lexia Learning - $30 million in annual bookings
Language E&E - $90 million in est. revenue
Language Consumer - $90 million in est. revenue
Fit Brains - $5 million in est. revenue
Valuation:
Year-end cash estimate + 2.5x Lexia revenue +
2x Language E&E = $285 million, $13.50/share
• Ascribes no value to the consumer business or Fit
Brains (which was purchased for $12mm in Dec. ‘13
and has doubled revenue since the purchase)
• In 2012, Pearson bought enterprise language company,
Global English, which had $42 mm in revenue, for $90
mm in cash
The Capital Structure:
Cash = $40 million year-end estimate
Debt = None
Free Cash Flow = currently at breakeven
Key Considerations:
 Brand: 7 out of 10 Americans recognize Rosetta
Stone
 Lexia Literacy growing at 35% with 95% renewal
rates in fast-growing early education space
 E&E business, while struggling, should benefit
from platform update completion in the 4th
quarter
 Right-sizing consumer segment to manage for
profitability, not top-line growth (i.e., gross margin
contribution increased 50% following the change)
 Significant cost-cutting well underway
Category: Out of favor/Misunderstood Industry
Leader
Management/Board Alignment:
Interim CEO John Hass, who was introduced by 10% owner
Osmium Partners, has a significant individual stake in the
common stock and options at $7/share
Board includes 9% holder David Nierenberg (D3 Funds)
2

RosettaStone(RST)
OutofFavor/MisunderstoodSpecialSituation
Investment Rationale
• The company continues to gain momentum toward building a long-term sustainable business model leveraging a
unique brand with sizable market opportunities in the language and literacy digital marketplaces.
• Subscription and service revenue was 72% of revenue mix in the last quarter.
• Cost cutting initiatives are clearly paying off as the company’s adjusted EBITDA was a negative $1.6 million in the
third quarter vs. a negative $9.1 million in the prior year’s quarter. The company announced it’s identified an
additional $15 million in cost reductions.
• Since becoming interim CEO in April 2015, John Hass has delivered on the promised goal of managing a leaner
more focused company; 3/31/15 net cash was $46 million and the company estimates year-end cash to be in the
mid-$40 million range. The company remains debt free with access to a $25 million credit line.
• Consumer business is being rationalized with a strong focus on the passionate language learner not served by the
free app market. The efficacy of RST’s offering was underscored recently by the University of California’s decision
to certify the company’s Spanish offering as a way to allow high school students to meet their college admission
language requirement.
• E & E language continues to be a weak spot, but the new enterprise platform, Live Mocha, will be selectively
introduced in the fourth quarter for beta testing and should gain traction with the inclusion of much needed
placement and assessment tools demanded by enterprise customers. 3

RosettaStone(RST)
OutofFavor/MisunderstoodSpecialSituation
• According to an independent industry report, the Global Digital English Language Learning market is
estimated to grow at a CAGR of 12.7% from 2014 to 2019.
4

Lexia is turning out to be a home run acquisition
• Government and philanthropic money is pouring into early education digital learning and growing
the marketplace. The efficacy of Core 5 reading software is increasingly being recognized by
education decision-makers as a high-quality product that materially helps all children, particularly at-
risk ones, acquire reading skills. In fact, we’ve been unable to source negative product views from
educators and/or parents.
• Lexia’s RAPID Assessment product is addressing the adjacent diagnostic market to provide actionable
data for instructional planning. We do not expect last quarter’s 70% y/y growth to continue, but 35%
appears to be sustainable for the foreseeable future and is what the company is messaging. On the
second quarter conference call, management highlighted its expectation that in five years Lexia will
be a $100 million annual bookings business with over 90% renewal rates and strong margins. In the
third quarter, albeit one quarter later, this goal is now being seen as “four to five years” away. We
can surmise that Lexia is running ahead of management’s expectations.
• The current Credit Suisse SaaS industry index trades at roughly 4.5x revenue. If management turns
out to be correct in its presumed growth rates, 3x revenue (a SaaS multiple two-thirds of current
industry multiples), discounted back conservatively at 15% per year, represents a present value of
roughly $160 million. This number itself represents a 30% premium to the entire company’s current
enterprise value using management’s year-end cash balance of mid-$40 million. Thus, in this
analysis, E & E Language, Consumer Language and Fit Brains are free to investors at the current price.
RosettaStone(RST)
5

Right-sizing the business
• The company continues to work with Al Angrisani, noted business rationalizer, on appropriately
allocating capital to its best use. The company recently reported that it has identified an additional
$15 million in cost savings, which are expected to be “non-revenue impacting.” Targeted savings
from R&D, G&A and S&M will allow this capital to be reinvested in high growth, high return
opportunities.
• RST’s initiative to right-size its consumer business, announced early 2015, is taking hold as shown by
the segment’s margin contribution. Consumer average selling price (ASP) is stable above $200. The
days of $170 ASP seen in the fourth quarter of 2014 appear to be over. The difference between free-
app language candidates and serious language learners was highlighted by the company’s recent
announcement involving the University of California. To wit, “School districts now have the option of
leveraging Rosetta Stone Spanish I and II as a for-credit alternative, enabling students to complete
the two year language requirement for college admission using Rosetta Stone at school, home or on
their personal mobile device.” In our view, this is a clear indication of the value of RST’s product,
particularly when compared to free apps.
• Fit Brains (FB) continues to grow and is being managed for NPV without burning cash. We believe
market leader Lumosity will go public before long and provide value transparency to the FB business.
Revenues have doubled since RST made this early 2014 acquisition for $12 million and the company
believes its value is growing.
RosettaStone(RST)
6

Turnaround moving in right direction
• We believe naming John Hass as the new Chairman upon selecting a permanent CEO is an excellent
choice by the board. Investors may not be aware that Mr. Hass has a significant individual investment
in RST through his personal investment in 10% RST owner Osmium Partners, in addition to the
options he was awarded upon joining the board (strike price at roughly $7.25/share). We believe the
company is confident that it can grow its overall value in the marketplace and that any strategic
decision to sell itself (in whole or in pieces) must occur at a substantially higher price than today’s
market level. We continue to encourage the board to meet with all interested parties.
• We view RST as a well-capitalized special situation with multiple shots on goal to reward investors.
The company’s seriousness about simplifying its business, introducing the right end-market products
and managing for profitability with a laser focus on expenses bodes well for investors in light of RST’s
current price. To wit, investors are paying very little for the optionality of a successful business
turnaround. Certain sell-side analysts, while complimenting the company’s initiatives and successes,
remain on the sidelines despite noting they see little downside investing at current levels. In our
opinion, it’s precisely because we see little downside, coupled with meaningful upside, that we’re
invested in RST. Moreover, we believe the current enterprise value is substantially below current
liquidation value. Finally, of note, over 50% of RST’s shares are firmly in the hands of long-term deep-
value oriented investors.
RosettaStone(RST)
7

Risks
• E&E Language has experienced flattish to modest single digit growth despite significant favorable macro
backdrop for English learners, i.e. double-digit estimated worldwide CAGR by TechNavio Analysis and
Ambient Insight.
• New consumer model does not contribute to gross.
• Lexia suddenly hits a wall and stops growing.
• Company starts burning cash after reaching cash flow break-even.
Jim Roumell’s recent interview with interim-CEO John Hass can be viewed at
http://roumellasset.com/investor_day_2015.htm
Disclosure: The specific security identified and described does not represent all of the securities purchased, sold, or recommended for advisory clients, and the reader
should not assume that investment in the security identified and discussed was or will be profitable.
RosettaStone(RST)
8

ParatekPharmaceuticals,PRTK
Category: Misunderstood biotech (development and commercialization of antibiotics)
The Assets:
Omadacycline - Phase 3 antibiotic with three potential indications: skin, pneumonia and urinary tract
- Oral and IV formulation
- CDC: global crisis of antibiotic shortage
- Favorable Congressional and FDA environment: GAIN Act and use of Special Protocol
Assessments (SPAs)
Sarecycline - Phase 3 acne drug (JV with Actavis)
Omadacycline Valuation – Dynamic Probability Analysis
$500 mm $1 b $1.5 b
1x $29 $57 $118
1.5x $43 $86 $129
2x $57 $118 $171
Peak Revenue
M
u
l
t
i
p
l
e
1x-2x peak revenue is typical take-out metric and/or
market pricing mechanism in the sector.
Key Statistics:
Current Price: $19 per share
Market Cap: $335 mm
Net Cash: $150 mm
9

Key Points:
Omadacycline
 RAM consultant, Vince Vilker, PhD, former FDA Director of Office of Testing and Research and 30 year
industry veteran, has studied Omadacycline in-depth and assigns an 85% probability of success to PRTK’s
Phase 3 skin trial. Current price of $19 assumes a 33% and 22% probability of success at $1b and $1.5b
post-trial valuation, respectively.
 RAM will re-assess its exposure to PRTK post 2H ’16 skin trial read out.
 FDA gave Omadacycline an SPA requiring only one Phase 3 trial for skin and pneumonia; apparently
crediting the company for its partially completed previous Phase 3 trial.
 Dedicated and impressive list of shareholders including Omega (Biotech) Fund, Baupost Group and
Abingworth.
 Blue-chip management and development teams led by Michael F. Bigham and Evan Loh, M.D.
 Valuation support
 Trius – single indication antibiotic (skin) acquired in July ‘13 for $800 mm after Phase 3 top line data
reported out (pre-FDA approval). Trius founder Jeff Stein is now on PRTK’s board.
 Cempra – single indication antibiotic (pneumonia) went up 4x after issuing Phase 3 top line data in
4Q14 to $1.5b valuation. Market cap today is $1.1b after second Phase 3 trial, though successful,
showed safety issues.
 Tetraphase – Two indication antibiotic (abdominal and urinary tract) went up 4x after issuing Phase
3 top line data in 4Q14 to $1.5b. Market cap today is $360mm after second Phase 3 trial showed its
tablet did not have the efficacy of its IV trial. TTPH had never previously disclosed bioequivalence
data (whereas Omadacycline has strong bioequivalence data).
Sarecycline
• JV partner Actavis describes this drug as its number one dermatological effort and estimates US sales
between $250mm-$500mm. PRTK retains all non-US rights and a royalty on US sales. Phase 3 data
expected to be reported in 1Q16. If successful, expected valuation is $100mm - $200mm, or $6 - $12/sh.
ParatekPharmaceuticals,PRTK
10

ParatekPharmaceuticals(PRTK)
MisunderstoodSpecialSituation
• There is a dearth of new antibiotic drugs resulting in the CDC describing the shortage as a world-
wide crisis.
• In addition to a successful Phase 2 skin trial, Omadacycline has already successfully completed one-
third of a Phase 3 skin trial before that trial was stopped as a result of the FDA deciding to change its
end point guidelines for the industry.
• Omadacyline is the only Phase 3 skin trial going on right now providing tailwinds to signing up
patients.
• Given likely post-Phase 3 valuation ranges, the market is current ascribing a probability ratio of
between 9% and 35%.
• RAM consultant, Vince Vilker, PhD, former FDA Director of Office of Testing and Research has
studied Omadacycline in-depth and assigns an 85% probability of success to PRTK’s Phase 3
omadacycline skin trial.
• Insiders own over 15% of the common and the company’s President & Chief Medical Officer made
an open-market purchase two weeks ago.
11

History
• Paratek’s primary asset is a late-stage, broad-spectrum antibiotic drug called omadacycline. This is an
attractive market because antibiotics need to continually be developed to overcome human resistance to
older antibiotics that naturally occurs over time. The current dearth of antibiotics has been described as a
crisis by many in the industry. “If we are not careful, we will soon be in a post-antibiotic era,” Dr. Tom
Frieden, the CDC’s director, said in a media briefing. “And for some patients and for some microbes, we are
already there.”
• Paratek, founded in 1996, initiated a Phase 1 study for omadacycline in 2005, and by 2009 the drug had
advanced to a Phase 3 study with over $100 million of capital supplied by Novartis. However, in 2010 the
FDA revised the disease indication and efficacy endpoint criteria, causing Paratek to halt its Phase 3 trial.
The data from the partial Phase 3 trial (one-third completed) underscored omadacyline’s Phase 2 data. It
took the FDA nearly a year to decide on a new efficacy endpoint. During that year Novartis decided to exit
the investment given the uncertainty of new FDA guidelines and endpoints. Subsequent to Novartis’s exit
the FDA issued very reasonable guidelines for Phase 3 antibiotic study design (600 to 800 patients versus
some industry concerns at the time that estimated thousands of patients may be required to complete
Phase 3 trials). The company sought new capital in order to design and implement a Phase 3 clinical trial
that complied with the FDA’s revised criteria. Of note, the initial endpoint and the revised endpoint were
both evaluated in certain patients in omadacycline’s earlier trials, and the results showed high congruency
between the two endpoints.
• It is important to note that typically drugs enter Phase 3 trials with data on only about 100 human patients.
Omadacycline has trial data on over 700 human subject-exposures, and the drug has shown a favorable
safety, tolerability and efficacy profile. Moreover, omadacycline has both an intravenous (IV) and an oral
formulation, which expands the market beyond just a hospital setting. Moreover, the drug is an attractive
once-daily formulation.
12

Favorable Environment for Antibiotic Development
• Republicans and Democrats have actually worked together and passed legislation addressing the
supply demand mismatch related to antibiotics. The GAIN Act provides for certain approved
antibiotics (omadacyline is one) receiving an additional five years of patent production. Moreover,
given the dearth of new antibiotics and the need for new ones, the approval environment is
favorable. In other words, the FDA is likely to allow drugs onto the market that may require
strengthened safety disclosures if efficacy is established particularly given that the safety issues
associated with antibiotics are typically not viewed with dire consequences.
• Janet Woodcock, M.D. the FDA’s Director of the Center for Drug Evaluation and Research has
strongly signaled the FDA’s concern for the country’s need of a new class of antibiotics. In
September of 2014 Dr. Woodcock said, “You may have been hearing about a variety of Federal
Government actions to address the growing need for new antibiotics. For instance, in an FDA Voice
blog last year Commissioner Hamburg discussed the President’s national strategy for Combating
Antibiotic Resistant Bacteria (CARB) and our collaboration with a wide variety of organizations to
address this issue. You may have also noticed another recent blog talking about FDA’s work on the
Generating Antibiotics Incentives Now Act (GAIN Act), the Antibacterial Drug Development Task
Force, a public meeting, a Federal Register Notice, and multiple guidance documents, all aimed at
building up the nation’s arsenal of effective antimicrobial drugs.”
• Given the rarity that a drug enters Phase 3 with such a large data set of human subjects, as is the
case with omadacyline, we believe the odds that the company’s trial for skin infections will be
successful are high. In addition, the FDA issued omadacycline a Special Protocol Assessment (SPA)
for both skin and pneumonia indications that pre-defines endpoint thresholds suggesting the FDA in
fact ascribed credit to the data produced in the drug’s earlier partial Phase 3 trial.
13

Valuation
Omadacycline pivotal phase 3 skin efficacy data is expected to read out in the 2H of 2016 leaving
roughly $75 million of net cash on hand at that time from today’s $125 million net cash. The
company has a $40 million credit line ($20 million outstanding) in addition to its cash reserves.
Combining net cash at the skin read out with a reasonable valuation for sarecycline (if successful
in its Phase 3 trial being financed by Allergan) sums to roughly $15/share ($75 million plus 1.5x
non-U.S. expected peak sales of $125 million; Allergan’s published midpoint estimate for U.S.
sales is $275 million and we use typical one-third expectation for non-U.S. market revenue).
However, if omadacyline is successful, we estimate its value alone to be $1 billion (see table
below). To be clear, if the company’s skin trial fails for reasons related to efficacy, the pneumonia
trial will continue and the urinary tract infection option remains as well. If the skin trial fails
because of safety, it’s lights out for omadacycline. In the scenario that omadacycline fails to win
FDA approval, Paratek’s valuation will be materially impaired, and will rely on potential value of
the company’s acne drug, sarecycline, which is expected to read out its Phase 3 data in 2016.
Allergan owns the development and commercialization rights to sarecycline in the U.S. Paratek
owns the development and commercialization rights to sarecycline for the rest of world.
14

Recent company announcements
• Began enrolling patients in Phase 3 Registration Study of Omadacycline in Community
Acquired Bacterial Pneumonia.
• Advanced its Phase 3 Registration Study of Omadacycline in Acute Bacterial Skin and Skin
Structure Infections According to Plan.
• Company was granted FDA Fast Track Status for the oral and IV formulations of Omadacycline.
Evan Loh, M.D., President and Chief Medical Officer
Dr. Evan Loh, the company’s Chief Medical Officer, is widely recognized in the antibiotic development
community. In his 9 years at Wyeth prior to joining PRTK in 2012, he led the successful registration programs
for first-in-class glycylcycline antibiotic Tygacil, a tetracycline derivative. He is the 2006 recipient of the Heroes
of Chemistry Award from the American Chemical Society for his leadership role at Wyeth in the clinical
development of Tygacil. Dr. Loh served as a faculty member at both Harvard Medical School and the University
of Pennsylvania School of Medicine. Dr. Loh received his A.B. from Harvard College and his M.D. from Harvard
Medical School. Dr. Loh purchased PRTK stock on the open market two weeks ago bringing his outstanding
shares to roughly 80,000.
15

Risks
• Sarecycline phase 3 fails.
• Omadacycline phase 3 skin trial fails.
Jim Roumell’s recent interview with President and Chief Medical Officer Evan Loh, M.D. can be viewed at
http://roumellasset.com/investor_day_2015.htm
Disclosure: The specific security identified and described does not represent all of the securities purchased, sold, or recommended for
advisory clients, and the reader should not assume that investment in the security identified and discussed was or will be profitable.
16

Charles Hoeveler
Managing Partner, Norwood Capital Partners

2
N O R W O O D
C A P I TA L
Long-term investing in great businesses
CONFIDENTIAL - DECEMBER 2015
DISCLAIMER
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L
Confidentiality
This document is confidential. It is being provided to you on the condition that it not be forwarded, copied or otherwise  
distributed without the prior written consent of Norwood Investment Partners GP, LLC (“Norwood”).
No Offer or Solicitation
The information in this document is for informational purposes only and is not an offer to sell or the solicitation  
of any offer to buy securities. The only purpose of this document is to provide general background information on Norwood and  
Norwood Capital Partners, LP (the “Fund”). Any such offer will be made only through the Offering Circular for the Fund, which is available  
only to accredited investors.
Preparation of Document
Norwood prepared this document. The Fund’s performance results prior to 2015 were calculated based on the  
Fund’s audited financial statements, but none of the Fund’s performance results or other portfolio information has been compiled, reviewed  
or audited by an independent accountant or testing firm.
Forward Looking Statements
This document may contain forward-looking statements based on Norwood’s expectations and projections  
about the methods by which it expects to invest. Those statements are sometimes indicated by words such as “expects,” “believes,” “will”  
and similar expressions. In addition, any statements that refer to expectations, projections or characterizations of future events or  
circumstances, including any underlying assumptions, are forward-looking statements. Such statements are not guaranties of future  
performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual returns could differ 
materially and adversely from those expressed or implied in any forward-looking statements as a result of various factors.
Servicemark and Copyright Information
The “Norwood” name and mark are service marks of Norwood Investment Partners GP, LLC.

3
INVESTMENT PHILOSOPHY
Comprehensive Due Diligence
• Objective and repeatable process
• Deep primary research
• Industry and unit-economic
analysis
• Management team due diligence
• Unique insight
Investing in Great Businesses
• Scale economics drive
attractive returns over time
• Great businesses dominate
competitors and compound
value for shareholders
Concentrated Portfolio
• Maintain analytical edge
• Conviction investing based
on unique insight
• Top 5 positions typically
40 - 50% of portfolio
Time Horizon Arbitrage
• Capitalizing on forced selling
environments
• Investing when dominant
businesses see short-term
stress
• 2-4 year timeframe
N O R W O O D
C A P I TA L
Unique Insights through Primary Research.

4
N O R W O O D
C A P I TA L
Annual Returns 2011 2012 2013 2014 2015
Norwood Partners - net1 (1.1)% 40.8% 26.9% 13.7% 6.9%
S&P 5002 (5.3)% 16.0% 32.4% 13.7% 3.0%
Russell 20002 (11.9)% 16.4% 38.8% 4.9% 0.6%
DJCS Long/Short Equity Index (9.4)% 8.2% 17.7% 5.5% 3.6%
(30.0)%
10.0%
50.0%
90.0%
130.0%
May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15
PERFORMANCE SNAPSHOT SINCE INCEPTION
N O R W O O D
C A P I TA L
Norwood +112.2%
S&P 500 +70.3%
Russell 2000 +50.3%
DJCS L/S Index +26.2%
1Norwood Partners returns unaudited for 2015 and presented net of all fees and expenses. 2015 returns through November
2S&P 500 / Russell 2000 returns adjusted for 2011 to coincide with Norwood launch on June 1, 2011. Includes dividends reinvested

5
Graphic Packaging (NYSE: GPK)
N O R W O O D
C A P I TA L

6
N O R W O O D
C A P I TA L
OVERVIEW
Company
Graphic Packaging (“GPK”) is a vertically-integrated, low-cost producer of paperboard in North America and the largest producer of CUK /
CRB with ~50% share of each. GPK is the largest operator of converting plants with ~40% share of domestic folding cartons.  
Financial Stats: $4.1b LTM revenue, $742m LTM EBITDA, $4.2b market cap
Market
Paperboard is a mature, stable industry with roughly GDP growth through cycles. The industry is consolidated - GPK and WestRock are the
largest players. GPK’s business is 80% in North America,15% in Europe and 5% other
Products
CUK/CRB are best described as folding cartons (think six-packs of beer, cereal boxes or frozen food packages). Given GPK’s market share,
nearly one out of every two paperboard packages for food and beverage contains GPK board
Customers
85% of GPK’s customers are in food/beverage (i.e. cyclically resistant). In fact, organic volumes were about flat in 2009 vs. 2008. Additionally, in
many instances, GPK co-locates its converting plants at customer sites resulting in sticky, long-term relationships. Budweiser, Kraft,
MillerCoors are customers.
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

7
GPK IS A HIGH-QUALITY BUSINESS
Industry Leader
• Largest producer of CUK/CRB
with ~50% share of each
• Largest operator of converting
plants with ~40% share
• Consolidating North America and
replicating strategy in Europe
Management
• Executive team are GPK and
industry veterans
• Engineering team are six-
sigma experts driving
industry leading operational
performance
Hard to Replace Assets
• GPK owns 2 virgin paper
mills in the Southeast near
low-cost softwood pine
• North American paperboard
companies cost-advantaged
vs. international competitors Important to Customers
• GPK often co-locates
converting plants at
customer sites creating
sticky relationships
• Pricing power based on
industry consolidation
• Customers share marketing
data to further collaboration
N O R W O O D
C A P I TA L

8
N O R W O O D
C A P I TA L
QUALITATIVE INVESTMENT THESIS
Leading Market Share in Consolidated Industries Changes Pricing Dynamic
• GPK boasts 52% market share in CUK and 47% in CRB
• Smaller competitors cannot compete for large customer business
• CUK is ~52%/43% GPK/WestRock. In CRB, the top 4 companies have roughly 97% of the industry
• Industry contracts 13 years ago featured built-in price declines:
• 2010: 20% price increase
• 2013: roughly 10% price increases in the absence of meaningful raw material inflation
• 2015: 5% price increase CRB while raw materials generally deflating
• Price increases drop straight to EBITDA for circa 15-20% of box contracts
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L
CUK Market Share
Kapstone
5.2%
GPK
52.1%
WestRock
42.7%
CRB Market Share
White Pigeon
3.0%Caraustar
6.0%
Paperworks
16.0%
GPK
47.0%
WestRock
28.0%

9
N O R W O O D
C A P I TA L
Vertical Integration
• Cost advantage versus overseas competitors (access to Southeast softwood pine and Midwest customer base)
• Cyclicality muted by producing less in its mills than it converts in its plants
Defensive Volumes due to End Markets and Innovation
• 85% of volume to food & beverage (volumes flat in 2009)
• GPK has taken share through innovation and grown in a negative industry volume environment, allowing the company to optimize and fully
utilize its fixed asset base
Outstanding Management Team / Corporate Governance
• Industry veterans with extensive operating, marketing experience
• Excellent capital allocation, focused on IRR
• Late 2012 acquisitions in Europe at synergy-adjusted multiples of roughly 4x EBITDA.
• >20% return from biomass boiler project in Macon, GA
• Share repurchase in late 2012, delaying the achievement of the leverage target (3.0x)
• Delivery of targeted operational improvements of $60-80m per year since 2008
• Ongoing Lean and Six Sigma initiatives in both mills and plants driving cost saves
• Requires high-return growth CapEx investment in some cases
• Applying best practices across the footprint with kaizen engineering team
• Effective corporate governance
• As the company de-leveraged, incentive metrics changed from cash flow generation and leverage ratios to EBITDA growth and ROIC
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

10
N O R W O O D
C A P I TA L
Primary Research Insights 2012-2015
• ‘800 pound gorilla in the industry, most competitors are afraid of them’ - Operator at a competitor 2013
• ‘The best operators in the industry, and it’s not even close. Kaizen engineers drive huge value for the company’ - Industry insider 2014
• ‘Great business…nobody can compete with them’ -Vendor May 2015
• ‘Great assets…and will add to them over time’ - Industry consultant September 2015
• ‘Smartest capital allocators around…the recent deleveraging is a massive opportunity’ - Industry insider September 2015
• ‘Nowhere near the point where growth slows’ - Industry insider September 2015
• ‘The very best at recruiting engineers’ - Industry consultant 2014
• ‘I expect industry volumes to inflect upward in 2016 given tight correlation to real disposable income’ - Industry insider September 2015
Impact
• The comments above from industry experts substantiate the Norwood thesis that GPK is outstanding operationally, highly effective in
capital allocation and operates in a stable industry
• Drives confidence in our quantitative model in 2017-2018…which drives the investment profile over the next 2 years
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

11
N O R W O O D
C A P I TA L
QUANTITATIVE INVESTMENT THESIS
Not Optically Cheap
• 17.9x/15.8x FY15E/FY16E GAAP Consensus EPS
• 2.6x Net Debt to LTM EBITDA
• FCF generation would result in ~0.9x de-leverage in FY16 if 100% used to pay down debt
GAAP Earnings vs Economic Reality Skew Valuation
• EPS includes a full 38% GAAP tax rate versus the reality of a 13-20% cash tax rate
• EPS reduced by non-cash and non-economic amortization of written-up assets from previous M&A
• EPS forecasts not yet adjusted for lower pension expense 2016 and beyond
• EPS forecasts do not account for high incremental margins from 150k tons of excess pulp capacity
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

12
N O R W O O D
C A P I TA L
GPK Can Use Balance Sheet for Accretive M&A
• Management has a track record of successful M&A
• Assets purchased at 6-7x pre-synergies end up 4-5x post-synergies
• Synergies substantiate GPK’s ability to operate better than peers
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

13
N O R W O O D
C A P I TA L
GPK Can Use Balance Sheet for Accretive M&A
• Robust acquisition pipeline
• We conservatively estimate an acquisition of International Paper’s Consumer Assets would increase GPK’s equity value by ~$3.40 per share
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

14
N O R W O O D
C A P I TA L
RISKS
Short Term
• Volumes can fluctuate quarter to quarter, causing small earnings volatility and the risk of ‘missing a quarter’
• If input costs inflate, GPK generally recoups cost inflation through 9-month contractual pass-throughs, creating an earnings lag
• If USD further strengthens, GPK is impacted both translationally and transactionally (ships 150k tons to Europe).
Medium Term:
• Metsa Paper announced the conversion of a newsprint machine to folding boxboard (‘FBB’) - a substitute product for SBS targeting food
service end markets
• Based on extensive industry conversations, we don’t think this is a major risk to GPK’s core business
• FBB is a low-quality product with a yellowish hue - imperfect for consumer marketing
• GPK core box customer is located in the Midwest, difficult for Metsa Paper to access from Scandinavia
• GPK currently buys SBS from competitors
Longer Term:
• GPK has no ability to recoup labor cost inflation. Labor costs increasing at a meaningfully faster pace than historically could create a drag
on margins
• If CSD and cereal declines accelerate, will be hard for GPK to grow volumes long-term
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

15
N O R W O O D
C A P I TA L
SUMMARY
Risk vs. Reward is Very Attractive
• GPK should generate ~$814mm of FCF in 2016/2017
• At the December 31, 2015 share price of $12.83, the forecast IRR through FY 2017 is 22.4%
• Year end 2017 target price of ~$19 or ~22% IRR using 8.2x ‘18E EBITDA and 14.0x Cash PE assuming 100% of FCF used for share
repurchase (vs. M&A or debt paydown)
• Downside estimate is ~$10.40 or -10% IRR assuming 10x LTM 17E Cash PE (flat volumes, margin compression, FCF used to de-lever)
N O R W O O D
C A P I TA L
N O R W O O D
C A P I TA L

16
Questions?
Charles Hoeveler
Norwood Capital Partners, LP
100 Larkspur Landing Circle, Suite 212
Larkspur, CA 94939
415-419-5954
N O R W O O D
C A P I TA L

17
Questions?
Charles Hoeveler
Norwood Capital Partners, LP
100 Larkspur Landing Circle, Suite 212
Larkspur, CA 94939
415-419-5954
N O R W O O D
C A P I TA L

January 12-13, 2016
Online, global, live
www.valueconferences.com
Keith Weissman
Director of Research, Sibilla Capital

Presented by Keith
Weissman
January 2016
Edgewell Personal Care
(NYSE: EPC)

SIBILLA CAPITAL MANAGEMENT LLC
Disclaimer
2
The ideas expressed in this presentation are solely the opinions of the author and do not necessarily
represent the opinions of firms affiliated with the author, including the employing firm of the author. The
views expressed are current as of the original publication date and are subject to change without notice.
Reproduction of any content from this presentation is strictly prohibited. The content in this presentation is
subject to various factors and risks. All information is presented in good faith. The content in this presentation
might have errors, might not be accurate, or might not have been changed with recent data. and is
provided as general information only and should not be taken as investment advice. All presentation
content shall not be construed as a recommendation to buy or sell any security or financial product, or to
participate in any particular trading or investment strategy. The author may or may not have a position in
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presentation is ultimately your responsibility. Consult your investment adviser before making any investment
decisions. Under no circumstances is the author held liable for anybody(s), or any individual(s) or any
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Executive Summary
3
Business
Description
Edgewell Personal Care Company, formerly known as Energizer Holdings, Inc., is one of the world's largest
manufacturers and marketers of personal care products in the wet shave, skin care, feminine care and
infant care categories with over 25 brands.
Quick Facts Ward M. Klein, Chairman of the Board
David P. Hatfield, President &CEO
Sandra J. Sheldon, CFO
Common: 60.0 million shares outstanding
Recent Price: $75.55*
Market Cap: $4,530 million*
Average daily volume (3 mo): 0.6 million
Key Themes Improved financial results through productivity gains:
• Optimized sales channel focused on personal care products
• Rationalized manufacturing footprint
• Improved spending on advertising and promotion
Brand leader and resiliency in all product categories:
• Most key products are #1 or #2 in respective categories
• Products offered are products of need not want
M&A activity likely to unlock shareholder value:
• Company in position to add brands/products to better leverage its platform
• Excellent acquisition target for a larger consumer products company
* Priced as of December 18, 2015

Product Offering
4
Wet Shave (60% of revenue)
Feminine Care (16% of revenue)
Sun and Skin Care (17% of revenue)
Infant and Pet Care (7% of revenue)

Business Model and Industry Characteristics
5
Products are sold primarily through a direct sales force
• Distributors and wholesalers used as well in certain international markets where the go-
to-market strategy post-separation has changed
• Wal-Mart accounts for 24% of sales but no other retailer accounts for more than 10%
• No supply agreements or minimum purchase agreements with top customers
Highly competitive industry
• Brand reputation, product quality, innovation, and price are the major factors among
which companies compete for shelf space
• Proctor & Gamble is the company that competes most directly across the company’s
product categories
• Upstarts in shaving industry such as Dollar Shaving Club and Harry’s are carving out their
niche
Company maintains some exposure to certain raw material prices
• Steel
• Plastic and rubber resins
• Lubricants
• Chemicals
Orders are shipped within a month of order date
• This serves to minimize inventory risk and reduce capital outlay

Investment Themes
6
Platform is highly scalable as adjacent product categories can be added
seamlessly
Proven brand leader in all key categories holding #1 or #2 position in most
brands
Product categories are resilient given low level of discretion associated
with purchase of personal care products
Separation from legacy Energizer business creates opportunity to improve
efficiency in sales channel and overhead cost
Attractive acquisition candidate itself which limits downside exposure

Scalable Platform
7
Part of the justification for the separation from Energizer was to free up
resources to focus on acquisitions
• Company not paying a dividend to conserve resources for acquisitions
Company built through acquisitions starting with the original shaving
business
• Playtex, Hawaiian Tropic, and Banana Boat (2008)
• Skintimates and Edge (2010)
• Carefree, Stayfree, and o.b. (2014)
Significant synergies to be achieved in acquisition of other personal care
products
• New products acquired can be sold through the company’s existing sales channel
• Most if not all SG&A can be eliminated post-closing
Lack of organic growth increases need for acquisitions
A larger platform would allow company to gain more leverage over
retailers

Brand Leader and Resilient Product Lines
8
Well-known brand leader in chosen product categories
• #2 brand in wet shave to Gillette
• Four leading brands in feminine care which compete with P&G and Kimberly-Clark
brands (Tampax, Kotex, Always)
• Leader in sun care with Banana Boat and Hawaiian Tropic
Product categories do not show much variability
• Typical year shows growth rates ranging from -2% to 2% excluding foreign currency
movements
Company sells products of need not want
• Despite wider acceptance of facial hair more recently, shaving is still necessary
• Previous facial hair fads faded as will the current one
Brand leadership and product resiliency provide some downside
protection
• Company faces less threat from an economic decline or competitive actions

Productivity Improvements
9
More resources focused on the right sales channel for personal care
products
• Changing to distributor network in smaller markets removes fixed costs in these areas
Optimizing the manufacturing footprint
• Closing redundant plants in Canada and Brazil
• Moving production to low cost manufacturing centers in Mexico and China
Increase R&D on key products
• More resources committed to developing products which are front of mind with
consumers
• Innovation is an important part of the competitive advantage that the company enjoys
in most product categories
More focused advertising and promotion spend
• Push (batteries) vs. pull (personal care) strategy for marketing

Attractive Acquisition Target
10
Company’s platform is an excellent fit with larger consumer product
companies such as:
• Unilever ($123 billion)
• Kimberly-Clark ($46 billion)
• Colgate-Palmolive ($60 billion)
• Clorox ($17 billion)
• Church & Dwight ($11 billion)
• Too much overlap in wet shave for Proctor & Gamble
Organic growth opportunities in the personal care product category are
limited increasing the likelihood of M&A activity in the sector
Past acquisitions in this sector have taken place at 14.0-16.0x EBITDA
Mere chance of acquisition is likely to limit downside in stock price and
provide a premium valuation in the event an acquisition is consummated

Valuation
11
Stock offers 24% upside in expected case for 2017 with compelling upside
in our bull case scenario
Current stock price is within reasonable proximity to our bear case
scenario which makes for a compelling risk-reward trade-off
Upside in potential acquisition of the business
• Past acquisitions in consumer products sector suggests that the company could be sold
for possibly as high as 14.0x EBITDA
• Our analysis does not assume that the company is acquired rather it assumes that the
company undertakes a small amount of acquisitions itself
• Mere chance for acquisition of the company provides downside protection

Valuation
12
* Priced as of December 18, 2015
Consensus Extreme Bear Bear Expected Bull Extreme Bull
FY2017 Case Case Case Case Case
% growth on sales
Organic 0.9% -5.0% -3.0% 1.0% 3.0% 5.0%
Currency 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Acquisition 20 0 50 200 300 500
Revenue 2,344 2,187 2,283 2,525 2,672 2,918
% growth 1.8% -5.0% -0.8% 9.7% 16.0% 26.7%
Gross margin 1,167 1,061 1,119 1,258 1,336 1,473
% margin 49.8% 48.5% 49.0% 49.8% 50.0% 50.5%
Sales, general and administrative 343 339 343 354 361 379
% of revenue 14.7% 15.5% 15.0% 14.0% 13.5% 13.0%
Advertising and sales promotion expense 385 372 379 404 419 455
% of revenue 16.4% 17.0% 16.6% 16.0% 15.7% 15.6%
Research and development 61 59 60 61 62 63
% of revenue 2.6% 2.7% 2.6% 2.4% 2.3% 2.2%
EBIT 378 291 337 439 494 576
% margin 16.1% 13.3% 14.8% 17.4% 18.5% 19.7%
D&A 93 93 93 93 93 93
EBITDA 472 384 430 532 587 669
% margin 20.1% 17.6% 18.8% 21.1% 22.0% 22.9%
Interest/other 62 62 62 62 62 62
Pre-tax income 316 229 275 377 432 514
Tax rate 32% 32% 32% 32% 32% 32%
Net income 216 156 187 256 294 349
EPS $3.70 $2.53 $3.04 $4.17 $4.77 $5.68
Revenue 2,344 2,187 2,283 2,525 2,672 2,918
% change -6.7% -2.6% 7.7% 14.0% 24.5%
EPS $3.70 $2.53 $3.04 $4.17 $4.77 $5.68
% change -31.5% -17.6% 12.8% 29.2% 53.8%
EBITDA Multiple 11.2x 10.0x 11.0x 12.0x 13.0x 14.0x
Implied P/E Multiple 20.4x 20.2x 21.7x 22.5x 24.0x 25.3x
Implied P/S Multiple 1.9x 1.4x 1.7x 2.2x 2.6x 2.9x
Equity value 4,501 3,040 3,933 5,585 6,827 8,565
Share Price $76 $51 $66 $94 $115 $144
% change -32.5% -12.6% 24.1% 51.7% 90.3%

Investment Risk
13
Company unable to identify or close acquisitions
• Significant amount of growth over last few years has been due to a string of acquisitions
Consumers trade down to cheaper products or competitors promote
aggressively
• Private labels in all categories and upstarts in shaving provide cheaper alternatives
• P&G suing Dollar Shave Club for patent infringement
• Aggressive promotional environment is factored in already as this has been ongoing in
the recent past
Improved technology in shaving systems leads to less frequent blade
purchase
• Existing level of technology has been around for some time so not a new risk factor
• Higher production cost of new blade technology leaves product more sensitive to price
competition
• Acquisition of other products would decrease reliance on wet shave systems

Investment Risk (cont’d)
14
Debt level elevated post-separation from Energizer
• Management focused on paying down debt which is evident in the last two quarters
• Company is well clear of financial covenant thresholds
Customer concentration risk
• Wal-Mart represents the largest risk though other large retailers and supermarkets also
present some risk
• Consolidation in supermarket industry is the biggest threat
U.S. dollar continues to strengthen
• About 50% of sales outside of the U.S.
• Our financial outlook for the company assumes that the U.S. dollar stays around current
levels relative to key currencies

SIBILLA CAPITAL MANAGEMENT LLC 15
Appendix: Biography
Keith A. Weissman, CFA, CPA
Keith Weissman is a Senior Analyst and Director of Research at Sibilla Capital. He has more than 15 years
of experience in equity research and principle investment. His approach to fundamental analysis has
been developed over his career having looked at investment opportunities across a variety of sectors
from both the perspective of a market-oriented and private equity investor.
Prior to joining Sibilla, Mr. Weissman served as a research analyst at CLSA Asia-Pacific Markets covering companies in the
aerospace sector. During his time at CLSA, he developed a comprehensive framework for analyzing investment
opportunities which serves as the basis for fundamental research performed at Sibilla. Before transitioning to CLSA, he
closed over $1 billion in principle investments. In doing so, Mr. Weissman developed deep due diligence and valuation skills
that formed the foundation of his approach to investment research.
Mr. Weissman holds a Master’s in Business Administration from Columbia Business School and a Bachelor of Science degree
in Economics from the Wharton School of the University of Pennsylvania. In addition, he is a CFA charter holder, a CPA
license holder and is an adjunct professor in the Gabelli School of Business at Fordham University, the Zicklin School of
Business at Baruch College, and the Lubin School of Business at Pace University. He has lectured on topics such as
corporate valuation, investment analysis, portfolio management, banking and central bank policy, the securities industry,
and risk management.
Contact: kweissman@sibilla.com

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