River Capital

River Capital, founded in 1983, is an Atlanta-based private investment firm, which provides capital for management buyouts, recapitalizations, and the growth capital needs of well-established, profitable middle market companies. Typically, we invest in transactions with purchase prices of $10 million to $50 million. River Capital is one of the oldest and most experienced firms of its type in the Southeast and has acquired companies in a broad range of industries with combined revenues in excess of $600 million.

River Capital was initially formed as the private investment vehicle for its principals, who had successfully owned and operated businesses similar to those in which River Capital now invests. In 1985, the first River Capital partnership was created to enable other individual investors to participate in the continuing investment activity of the firm.

Our network of individual investors was broadened further through the formation of additional partnerships in 1988, 1990 and 1997. Our most recent investment partnership, formed in 1997, includes both individual and institutional investors.

The principals of River Capital have developed a valuable network of contacts and personal relationships in the business and acquisition community. They are active participants, most often in leadership positions, in a number of prestigious business and civic organizations, such as the World Presidents’ Organization, Chief Executive Organization, International Business Fellows and similar organizations.

Our individual limited partners are predominately CEOs of public and private businesses located throughout the Southeast and greatly expand our functional and industry expertise. They also provide invaluable assistance in sourcing investment opportunities, due diligence support and portfolio assistance. We have chosen them as carefully as they have chosen us.

Our institutional limited partners include some of the nation's largest financial institutions such as Mass Mutual Life Insurance Company, The Prudential Insurance Company of America, Wachovia Corporation, and others. Beyond their investment, they assure our access to competitive and efficient capital markets.

After an investment is made by River Capital, the company retains its operating autonomy. While leaving the day-to-day affairs of portfolio companies to the management teams, River Capital provides strategic oversight and participates as an active member of the board of directors.

The principals of River Capital include individuals with direct operating and ownership experience and thus, bring a unique perspective to our portfolio companies. Beyond board participation, we work with our portfolio companies from a strategic perspective, advising and supporting them on a broad range of issues. We also support our portfolio companies with additional capital to fund expansion and add-on acquisitions. Further, the principals of River Capital personally invest in every transaction, thus aligning our objectives with those of our management partners.

Our contribution to the success of our investments extends beyond our capital and financing expertise. An entrepreneur faces unique challenges; we have traveled this path and feel we can offer advice and support along the way.

OUR INVESTMENT CRITERIA

Our investments are opportunistic and do not focus on any specific industry. However, we generally adhere to these guidelines:

Management. We invest in people with a proven track record within their industry and a total commitment to their business. In each of our investments, management has held a substantial equity interest.

Business Attributes. We invest in profitable middle market companies with at least $10 million in sales, generally characterized by stable earnings and secure market positions.

Transaction Size. We prefer transactions that are fairly priced to both parties with transaction values of $10 million to $50 million.

Investment Size. We invest between $3 million and $7 million in each transaction and have the capability to bridge equity requirements above $7 million. In addition, through co-investment by our institutional limited partners, we can invest in excess of $10 million in each transaction.

Industry Focus. We prefer to invest in companies involved in light manufacturing, distribution and selected service industries. We do not invest in companies involved in real estate, oil and gas or financial services.

Buy and Build. We favor companies with opportunities for superior performance through internal growth, product or geographic expansion, the completion of complementary add-on acquisitions or industry consolidation.

Geographic Focus. Although our focus is in the Southeast, we regularly evaluate investment opportunities throughout the country.

Structure. In most cases, the size of our investment requires that we hold a majority interest in our portfolio companies. However, management receives significant ownership and maintains daily operating control. Alternatively, when we can effect corporate strategy and the method and timing for the disposition of our interests, we will consider alternate structures.

OUR ADVANTAGE

Experience. As one of the oldest firms of its type in the Southeast, River Capital has an experienced management team and a demonstrated track record. Additionally, our experience as successful business owners brings a unique perspective to our portfolio companies. Through numerous business cycles, we have a proven track record of helping our management partners create value.

Investment Focus. We are one of the few firms consistently focused on the middle market, or companies with purchase prices between $10 million and $50 million. Our experience, as business owners and professional equity investors, is best suited to this market. We believe this market offers opportunities for attractive investment returns and is undeserved by most professional equity investors, who regularly pursue larger transactions.

We have longstanding relationships with our institutional partners, which include some of the nation’s largest financial institutions. These institutions have the capability to meet every facet of our financing needs and allow us to complete a transaction quickly

Significant Resources. Our partners, both individual and institutional, bring significant resources to the firm. Our individual partners, predominately CEOs of public and private businesses, greatly expand our functional and industry experience. Often, these relationships create business opportunities for our portfolio companies.

Partners for Growth. We favor companies, with opportunities for substantial internal growth, product or geographical expansion, complementary add-on acquisitions or industry consolidation. Historically, using our financial resources and acquisition expertise, we have been aggressive in funding growth opportunities and in originating, funding and completing add-on acquisitions for our portfolio companies.

Flexibility. We tailor our approach to meet the needs of both selling shareholders and operating managers. We are also responsive to family business issues and owners who desire personal liquidity, yet wish to continue to participate in the growth of the business. In addition, we are sensitive to the needs of a company’s employees, customers, suppliers and its local community

REPRESENTATIVE INVESTMENTS

Since its founding, River Capital has made investments in a diverse group of companies, including community newspapers, a craft manufacturer, full-line vending and food service, general aviation, outdoor casual furniture, a manufacturer of healthcare products, specialty food and beverages, a supplier to the manufactured housing industry, wholesale hardware distribution, and others.

In every investment we have made, management has had an opportunity to significantly enhance their personal net worth. Following is a summary of some of our representative investments:

General Hardware Company, Inc., headquartered in Atlanta, Georgia, was the largest independent hardware distributor in the United States, serving the Southeastern United States and the Caribbean. As a member of the Sentry Group, the Company distributed hardware, housewares, electrical appliances, sporting goods, and lawn and garden chemicals and equipment from four distribution centers in Georgia, Florida and North Carolina. River Capital and management acquired General Hardware in 1985. River Capital’s interests were successfully sold to the management group in 1988.

Winston Furniture Company, Inc., headquartered in Haleyville, AL, designs and manufactures casual furniture for both outdoor and indoor use. The company’s products are constructed of aluminum, wrought iron and tubular steel and are offered in numerous style collections. The company’s products are in the upper-medium price range and are sold through patio stores, furniture stores and department stores. River Capital and management acquired Winston in 1986. The company was taken public in 1987 and subsequently sold, through a public tender, to a private investment firm in 1988.

Hometown Communications, Inc., headquartered in Duluth, MN, was formed to acquire and manage small- to medium-sized newspapers, generally with a circulation of between 5,000 and 20,000 households. The company initially acquired three newspaper properties in Kansas and Utah, and subsequently, six additional properties in Kansas, Michigan and Nebraska. River Capital, along with another investment firm and management, acquired Hometown in 1989. The company was sold to an industry acquiror in 1997.

Décor Gravure Corporation, Inc., headquartered in Birmingham, AL, designs, manufactures and distributes decorative vinyl, gypsum and plywood paneling for use in the manufactured housing and recreational vehicle industries. The company’s facilities are strategically located in eight of the top ten states for manufactured home production. Décor is the only vertically integrated company in the industry. River Capital and management acquired Décor in 1989. The company was sold to a private investment firm in 1995.

Piedmont Aviation Services, Inc., headquartered in Winston-Salem, NC, operates five full service general aviation facilities supporting corporate, business charter and individual aviation markets. Operations also include maintenance and overhaul, aircraft sales, charter services and flight training. Piedmont is a FAA-approved repair station and provides overhaul services for piston and turbine engines, auxiliary power units, landing gear and propellers. The company is also the exclusive Beech aircraft distributor in the Carolinas, Virginia and West Virginia. River Capital and management acquired Piedmont in 1992. The company was sold to an industry acquiror in 1998.

American Threshold Industries, Inc., headquartered in Asheville, NC, develops and manufactures disposable nonwoven protection products sold into the healthcare and controlled manufacturing markets. The company distributes its products to hospitals, long-term care facilities, dental offices, outpatient care centers, veterinary clinics, clean rooms, laboratories, and industrial sites. River Capital and management acquired American in 1998. The company was sold to an industry acquiror in 2001.

Tronair, Inc., headquartered in Toledo, OH, designs, engineers and manufactures a diverse line of ground support equipment for the business, commuter and commercial aviation markets. The company sells its products to distributors, service centers, corporations and aircraft manufacturers, such as Bombardier, Gulfstream, Cessna, and Dassault and is a recognized leader in the ground support industry. Tronair is currently looking to expand their product offering through selective acquisitions of other manufacturers of ground support equipment. River Capital and management acquired Tronair in 2000.

MasterWorks Décor, Inc., headquartered in Union, SC, designs, imports and assembles botanical décor. The company offers one of the broadest lines of fine quality silk trees, plants and floral arrangements sold through department stores, home décor, home improvement, office supply, gift and furniture markets. In addition, the company introduced the licensed “Laura Ashley” line in the fall of 2004. River Capital and management acquired MasterWorks Décor in 2003.

New CPE, Inc., headquartered in Union, SC, manufactures acrylic felt and other textile products for the consumer and industrial nonwoven markets. The company manufactures a broad line of industrial nonwovens for application to the geotextile, filtration, home furnishings and other markets. The company’s products are sold nationally through major craft and home sewing retailers, mass merchandisers, and manufacturers and distributors of nonwoven products. River Capital and management acquired New CPE in 2003.

Lara's Crafts, Inc., headquartered in Union, SC, is one of the nation's largest suppliers of quality wood parts and accessories for the craft and hobby industry. The company's products can be found in craft and hobby retail stores throughout the U.S. and around the world.

THE PROCESS

River Capital welcomes inquiries directly from company management as well as through business intermediaries. We are accustomed to paying finders fees and protecting intermediaries.

To assist us in our initial review, we prefer certain information, including a description of the company and industry, historical and projected financial statements, resumes of key management and a summary of ongoing business strategy. We respect the confidentiality of all information provided to us and will respond to all inquiries in a timely manner.

RIVER CAPITAL, INC.
4200 Northside Parkway
Building 14, Suite 250
Atlanta, Georgia 30327

Jerry Wethington is President of River Capital and Managing Principal of River Capital Partners.

Before joining River Capital in 1984, Mr. Wethington was Executive Vice President and Chief Operating Officer for Mitchell Steel, a large steel processing operation then a division of Fuqua Industries, Inc. Mr. Wethington and other members of management purchased the company in a leveraged buyout from Fuqua Industries and later sold it to Cargill, Inc. Prior to Mitchell Steel, Mr. Wethington was a senior manager with Fuqua Industries and Teledyne, Inc. in both operations and financial management.

Mr. Wethington currently serves as Chairman of Consumer Product Enterprises, Inc. and Tronair, Inc., each a River Capital portfolio company. In addition, he has served as a director of both public and privately held companies in diverse industries including food service, furniture manufacturing, general aviation, hardware distribution, manufactured housing, media, medical products and steel processing.

Mr. Wethington is a member of several business and civic organizations, including the Young Presidents' Organization, Chief Executive Organization, Association for Corporate Growth, and serves as a director of the Atlanta Venture Forum.

Mr. Wethington received a bachelor's degree in economics from the University of Kentucky, a master's degree in economics from Western Kentucky University and a master's in business administration from the University of Louisville. Born and raised in Louisville, Kentucky, Mr. Wethington lives with his wife and two sons in Atlanta.

F.W. (Bill) Hulse, IV is a Principal of River Capital. Mr. Hulse was one of the original founders of River Capital in 1983 and has been a special limited partner in several of the River Capital partnerships. Before River Capital, Mr. Hulse was President and Chairman of Hangar One, Inc., a general aviation sales and service company that he owned and sold to Beech Aircraft in 1983. During his ownership, the company grew from five to fifteen locations with more than 800 employees, and its annual revenues increased from $20 million to over $100 million. Mr. Hulse was also the owner of Aviation Supply Company, a $20 million aviation parts distributor, which he sold to Piedmont Airlines in 1983.

Mr. Hulse was formerly Chairman of American Beechcraft Company and a Director of Fuqua Enterprises, Inc. (NYSE) and numerous privately held companies. In addition, Mr. Hulse has formerly served as Chairman of General Hardware Company and Décor Gravure Corporation, Inc., both of which were River Capital portfolio companies.

Mr. Hulse serves on the Board of Managers of the University of Virginia Alumni Association, the Board of the World President’s Organization, and the Board of Trustees of Embry-Riddle Aeronautical University. He is a member of several business and civic organizations including the Atlanta Rotary Club, the International Business Fellows, and served as International President of the Young President’s Organization.

Mr. Hulse received a bachelor’s degree in Economics from the University of Virginia and a master’s degree from Harvard Business School. Frank was born and raised in Birmingham, Alabama.

Before joining River Capital, Mr. Brown's private equity experience included senior positions with GenCap America in Nashville, TN and the Slovak American Enterprise Fund in Bratislava, Slovakia. At GenCap America, Mr. Brown was responsible for identifying, underwriting, structuring, closing and managing investments as well as expanding business development efforts. At the Slovak American Enterprise Fund, Mr. Brown was accountable for overseeing the investment portfolio while revising operating and due diligence procedures and implementing a new investment strategy. Prior to private equity, Mr. Brown was a Principal for Pace Resources, Ltd., a financial advisory firm, and a Senior Vice President for the Leveraged Funding Group of Heller Financial, Inc.Mr. Brown currently serves as a director of New CPE, Inc., a River Capital portfolio company. Additionally, he has served as a director of both domestic and international privately held companies in diverse industries including branded consumer recreational products, telecommunications, metal fabrication and household products.Mr. Brown has been involved with several business organizations during his career including the Association for Corporate Growth and the Atlanta Venture Forum. In addition, Mr. Brown previously served as chairman of the Slovak Venture Capital Association and as a director of the European Venture Capital Association.

Mr. Brown received a bachelor's degree with honors in marketing management from Memphis State University. Born and raised in Memphis, Tennessee, Mr. Brown has a son and a daughter and lives in Atlanta.

GARY R. MELICK
Vice President

Gary R. Melick is a Vice-President of River Capital. Before joining River Capital, Mr. Melick was a Senior Executive with Hartsfield Capital, a boutique investment bank and securities firm focusing on middle market mergers, acquisitions, and recapitalizations, completing transactions in manufacturing, industrial coatings, distribution, moving and storage, apparel and the advertising specialty industries. Prior to Hartsfield Capital, Mr. Melick was the Vice President of Finance and CFO for a $200 million division of AFC Enterprises, a branded restaurant and consumer products company. As the Division CFO, Mr. Melick was instrumental in the acquisition of the Cinnabon brand and franchise system. Prior to AFC Enterprises, Mr. Melick held senior management positions with PepsiCo, Northwest Airlines, and Pillsbury in both operations and financial management.Mr. Melick has held advisory roles for several companies in the moving and storage, distribution, apparel, and advertising specialty industries. He is active in several business and youth organizations including the Wharton Club of Atlanta and the Northwest Georgia Baseball Association where he has coached numerous select travel baseball teams.

Mr. Melick received his bachelor’s degree from Iowa State University and a master’s degree from the Wharton School at the University of Pennsylvania. Mr. Melick was born and raised in the Midwest and now lives with his wife and three sons in Atlanta.

JAMES H. MOORE, JR
Senior Associate

Jay Moore is a Senior Associate with River Capital. Before joining River Capital, Mr. Moore was a Senior Associate within the valuation department of Ernst & Young LLP’s Transaction Advisory Services division in Atlanta. At Ernst & Young, Mr. Moore was responsible for valuing business enterprises, securities, intellectual property and intangible assets for strategic decision-making purposes involving mergers, acquisitions, joint ventures, divestures and financial reporting. Prior to Ernst & Young, Mr. Moore was a Senior Analyst with IBM Corporation. At IBM, Mr. Moore served in several finance and operations roles while covering billion dollar sales channels, industry sectors and product offerings. Prior to IBM, Mr. Moore was an investment officer with SunTrust Securities, Inc.

Mr. Moore currently serves on the administrative board for Peachtree Road United Methodist Church and has been active in several civic and youth organizations such as The United Way and The Big Brother Program.

Mr. Moore received his bachelor’s degree in economics from the University of Georgia and his master’s degree from the Terry College of Business at the University of Georgia. Mr. Moore also holds the Chartered Financial Analyst designation. Born and raised in Gainesville, Georgia, Mr. Moore now lives with his wife in Atlanta.