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STAR Park Forum September 2013

STAR Park Forum September 2013. Who We Are.

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STAR Park Forum September 2013

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  1. STAR Park Forum September 2013

  2. Who We Are • Through its global network, Thermon provides highly engineered thermal solutions, known as heat tracing, for process industries, including energy, chemical processing and power generation. Thermon's products provide an external heat source to pipes, vessels and instruments for the purpose of freeze protection, temperature maintenance, environmental monitoring and surface snow and ice melting. Thermon is headquartered in San Marcos, Texas. For more information, please visit www.thermon.com. Market Share (3) End-Markets (1) Geography (1) • Results for nine months ended 3/31/2013 • ‘Other’ category includes all sales to Agents and Representatives, as well as sales to end-markets such as Mining, Food & Beverage, Wastewater Treatment, Textiles, LNG, Pharmaceuticals and Pulp & Paper • From an analysis prepared by Alvarez & Marsal, February 2013 • Formerly Tyco Thermal Controls 2

  3. What is Heat Tracing? Communication Software Transformer Conduit and Wire Power Distribution / Control Panel Heating Cable / Power Connection Thermal Insulation RTD/Temperature Sensor 3

  4. Global Footprint Provides Access to High-Growth Markets Worldwide Russia: Thermon #2 Europe: Thermon #2 Canada: Thermon #1 Japan: Thermon #1 USA: Thermon #2 Korea: Thermon #1 China: Thermon #2 Mexico: Thermon #1 India: Thermon #1 South America: Thermon #2 Sales and engineering Production plants Fabrication plants Turnkey construction offices Source: Heat tracing market analysis prepared by Alvarez & Marsal, April 2012. • Global footprint, local presence • Sales in more than 90 countries worldwide • Over 800 employees in more than 15 countries (380 full-time employees in San Marcos) • Over 100 independent sales agents and distributors in over 30 countries • Manufacturing facilities in the U.S., Europe, Canada and India 4

  5. Customer Case Studies Greenfield: Imperial Oil’s Kearl Oil Sands Project MRO / UE: Irving Oil Project • Phase 1 • Phase 2 • Original contract value of $6.3 million • Recurring revenue generated by small site projects and material purchases • Average annual revenue continues to be approximately $0.5 million, or 7.5% of original contract value • Total feet of heat tracing: • % of total pipes traced: • Total heat tracing expenditure: • Total projectcost: • ~1.5 million • ~44% • ~$64 million • ~$8 billion • ~2.0 million • ~47% • ~$58 million • ~$9 billion 5

  6. Customer Case Studies Sakhalin Island: ExxonMobil’s Arkutun-Dagi Project Emissions Monitoring: Calaveras Power’s J.K. Spruce 2 Upgrade • Total feet of heat tracing: • % of total pipes traced: • Total heat tracing expenditure: • Total project cost: • 350,000 • 40% • $14 million • ~$1.5 billion • Total feet of tubing bundles: • Total tubing bundle expenditure: • Total emissions monitoring upgrade cost: • 1,975 • $89,000 • $750,000 6

  7. Serving a Large and Diverse Base of Loyal Customers Loyal Relationships with Customers and Strategic Partners, Some for 50+ Years No customer represents > 10% of the Company’s revenue 7

  8. Impressive Financial Performance ($ Millions) Revenue Growth and Consistent Margins Since 1990 6-Year Revenue CAGR: 14.7% Revenue CAGR: 8.4% Average Gross Margin: 44% 6-Year Average Gross Margin: 47% Note: Results for fiscal years ended March 31. Gross margin results for fiscal years ended March 31, 2008 and 2011 exclude non-cash purchase accounting adjustments of $7.1 million and $7.6 million related to the Audax and CHS private equity transactions, respectively. 8

  9. Manufacturing Capacity Increase New manufacturing facility recently completed; approximately 48,000 square ft We estimate that the increased production capacity resulting from this expansion will support growth to a revenue threshold of $400-$500 million. 9

  10. Manufacturing Capacity Increase • Recently completed a total upgrade of manufacturing facility now dedicated exclusively to our panel production; approximately 25,000 square ft • The increased production capacity resulting from this upgrade will allow us to take full advantage of the release of our new control system by building more of these systems in-house. 10

  11. Platform for Growth Pursue Organic Growth,Including Commercial Market, Steam-to-Electric Conversion and Re-Invest in Business Next Generation Thermal Control Products & Solutions Leverage Installed Baseto Expand RecurringRevenue Stream Drive Growth ThroughAlliances with MajorCustomers and Suppliers Pursue Value-Added Acquisitions Support Alternative Energy Initiatives and Environmental Compliance Mandates 11

  12. Thank You! 12

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