Exhibit 1

Rockboro Machine Tools Corporation

Consolidated Income Statements (in thousands of dollars, except per-share data)

Projected
2012 2013 2014 2015

Net sales ### ### ### ###

Cost of sales 811,121 752,186 748,319 824,625
Gross profit 476,273 471,782 386,638 480,375

Research & development 116,516 105,818 113,126 115,875

Selling, general, & administ 344,957 335,450 346,511 317,250
Restructuring costs 98,172 0 134,116 0
Operating profit (loss) (83,372) 30,515 (207,115) 47,250

Other income (expense) (6,750) 1,598 (5,186) (6,300)

Income (loss) before taxes (90,122) 32,112 (212,301) 40,950
Income taxes (benefit) 1,861 12,623 (1,125) 13,923
Net income (loss) ($91,982) $19,490 ### $27,027

Earnings (loss) per share ($3.25) $0.69 ($7.57) $0.98

Dividends per share $0.64 $0.64 $0.32 $0.39

Note: A dividend payout ratio of 40% is assumed for 2015.

Source: Author estimates.

r-share data)
Exhibit 2
Rockboro Machine Tools Corporation
Consolidated Balance Sheets (in thousands of dollars)

Projected
2013 2014 2015

Cash & equivalents $ 20,876 $ 33,345 $ 38,498

Accounts receivable 312,812 280,853 326,265
Inventories 345,513 305,832 325,832
Prepaid expenses 21,389 19,524 22,517
Other 33,276 31,071 31,500
Total current assets 733,865 670,625 744,611
Property, plant, & equipment 491,405 538,262 616,482
Less depreciation 251,121 275,229 308,295
Net property, plant, & equipment 240,284 263,033 308,187
Intangible assets 14,144 3,149 2,273
Other assets 23,585 26,532 26,954

Total assets ### $ 963,338 ###

Bank loans $ 51,294 $ 107,018 $ 112,472

Accounts payable 54,674 51,359 56,291
Current portion of long-term debt 450 225 2,273
Accruals and other 194,061 242,450 274,521
Total current liabilities 300,479 401,051 445,556
Deferred taxes 25,479 20,654 24,789
Long-term debt 13,500 13,163 45,032
Deferred pension costs 67,185 96,488 105,240
Other liabilities 3,477 8,166 11,258
Total liabilities 410,120 539,520 631,874
Common stock, $1 par value 28,283 28,283 28,253
Capital in excess of par 161,811 161,861 161,834
Cumulative translation adjustment (9,849) 30,312 40,485
Retained earnings 437,247 219,098 235,313
Less treasury stock at cost: (15,735) (15,735) (15,735)
Total shareholders’ equity 601,757 423,818 450,149

Total liabilities & equity ### $ 963,338 ###

Note: Projections assume a dividend-payout ratio of
40%.

Source: Author estimates.

Exhibit 3
Rockboro Machine Tools Corporation
Economic Indicators and Projections
(all figures are percentages)

Projected
2011 2012 2013 2014 2015 2016
Three-month Treasury bill 0.1% 0.1% 0.1% 0.1% 0.3% 1.2%
10-year Treasury note yie 2.8% 1.8% 2.4% 2.5% 2.2% 2.9%
AAA corporate bond rate 4.6% 3.7% 4.2% 4.2% 3.8% 4.6%

Percent change in:

Real gross domestic p 1.6% 2.3% 2.2% 2.4% 2.3% 2.9%
Industrial production 3.3% 3.8% 2.9% 4.2% 0.5% 3.6%
Consumer price index 3.1% 2.1% 1.5% 1.6% 0.3% 2.2%

Data source: "Value Line Investment Survey," August 2015.

Exhibit 4
Rockboro Machine Tools Corporation
Stockholder Comparative Data
(thousands of shares)

2004 2014
Shares Percentage Shares Percentage

Founders’ families 3,585 13% 5,113 18%

Employees and families 5,516 20% 4,443 16%
Institutional investors
Growth oriented 3,585 13% 1,602 6%
Value oriented 2,207 8% 3,409 12%
Individual investors
Long term; retiremen 10,205 37% 6,767 24%
Short term; trading o 1,379 5% 3,409 12%
Other; unknown 1,103 4% 3,153 11%

Total 27,578 100% 27,896 100%

Note: The investor-relations department identified these categories from company records.
The type of institutional investor was identified from promotional materials stating the
investment goals of the institutions. The type of individual investor was identified from a
survey of subsamples of investors.
Source: Author estimates.
Exhibit 5
Rockboro Machine Tools Corporation
Per-Share Financial & Stock Data1
Shares
Sales/ Stock price Average PayoutDividendoutstanding
Year share EPS2 DPS2 CPS2 High Low Avg. P/E ratio yield (millions)
2000 $ 16.12 $ 1.19 $ 0.37 $ 2.03 ### ### ### 12.5 31% 2.5% 23.4
2001 15.00 1.28 0.39 2.14 21.23 8.20 13.50 10.5 30% 2.9% 24.1
2002 15.23 0.45 0.40 1.17 18.50 10.18 13.35 29.7 89% 3.0% 26.8
2003 16.37 0.86 0.42 1.65 22.48 12.17 18.36 21.3 49% 2.3% 27.1
2004 21.08 1.27 0.45 2.13 23.84 18.01 21.00 16.5 35% 2.1% 27.6
2005 24.93 1.90 0.47 2.86 26.70 18.25 22.73 12.0 25% 2.1% 28.0
2006 30.10 2.67 0.51 3.75 34.34 22.75 30.31 11.4 19% 1.7% 28.1
2007 34.59 3.07 0.59 4.22 44.13 32.66 38.29 12.5 19% 1.5% 28.2
2008 37.80 3.24 0.64 4.41 46.73 20.81 36.58 11.3 20% 1.7% 28.3
2009 26.61 0.75 0.64 1.52 33.00 15.52 25.07 33.4 85% 2.6% 28.0
2010 31.82 1.03 0.64 1.92 20.31 14.16 17.03 16.5 62% 3.8% 28.1
2011 41.94 1.29 0.64 2.04 18.42 13.36 16.27 12.6 50% 3.9% 28.1
2012 45.49 (3.25) 0.64 2.86 16.82 12.74 14.50 nmf nmf 4.4% 28.3
2013 43.25 0.69 0.64 1.99 13.30 9.28 11.26 16.3 93% 5.7% 28.3
2014 40.68 (7.57) 0.32 (0.97) 14.03 11.85 13.00 nmf nmf 2.5% 27.9

1
Adjusted for 3-for-2 stock split in January 2005.
2
EPS = earnings per share; DPS = dividend per share; CPS = cash earnings per share
nmf = not a meaningful figure

Source: Author estimates.

Exhibit 6
Rockboro Machine Tools Corporation
Comparative Industry Data
Annual growth
rate of cash flow
(%)1 Current
Sales Current dividen Debt/ Insider
($million Last 5 Next 3- payout d yield equity(% owner- P/E
s) years 5 years ratio (%) (%) )2 ship (%) ratio

Rockboro Machine Tools Corp. 1,135 −1.5% 15.0% nmf 0% 28.4% 34.3% nmf

CAD/CAM companies (software and hardware)

Autodesk, Inc. 2,512 3.0% 10.5% 0% 0% 33.7% 1.0% nmf
Ansys, Inc. 941 14.5% 6.5% 0% 0% 0.0% 1.9% 23.0
Cadence Design 1,702 0.0% 10.0% 0% 0% 26.1% 3.2% 17.6
Mentor Graphics 1,244 43.0% 4.0% 0% 0% 18.1% 2.6% 16.9
PTC 1,357 8.5% 4.5% 0% 0% 68.7% 1.4% 26.4
Synopsys, Inc. 2,058 11.0% 7.5% 0% 0% 1.5% 1.4% 15.4

Electrical-industrial equipment manufacturers

Emerson Electric Company 22,304 3.5% 3.5% 47% 3% 52.8% 0.8% 17.6
Hubbell Inc. 3,359 7.5% 6.0% 37% 2% 31.0% 1.3% 21.3
Rockwell Auto 6,624 12.5% 5.5% 39% 2% 34.1% 1.5% 19.9

Machine tool manufacturers

Actuant Corp. 1,400 6.0% 5.5% 2% 0.1% 38.5% 3.7% 19.2
Lincoln Electric Holdings, Inc. 2,813 11.5% 3.5% 24% 1% 0.2% 3.3% 18.3
Milacron, Inc. 1,211 nmf nmf 0% 0% 265.1% 0.0% nmf
Snap-On Inc. 3,278 9.5% 8.5% 26% 2% 39.1% 3.4% 16.8

nmf = not a meaningful figure

1
Rockboro cash flow growth calculations use an adjusted cash flow for 2014 that omits the restructuring costs.
Based on book values.
2

Data source: "Value Line Investment Survey," February 2016.

Exhibit 7
Rockboro Machine Tools Corporation
Selected Healthy Companies witth High- and Zero-Dividend Payouts

Expected return Expected growth Current Current Expected growth Current

on total capitalrate of dividends dividend dividend rate of sales P/E
Industry (next 3-5 years)(next 3-5 years) payout yield (next 3-5 years) ratio
High-Payout Companies
Pfizer Pharmaceutical 13.0% 6.0% 73.8% 3.6% 1.5% 21.1
Suburban Propane Oil/gas pipeline—MLP 1
8.0% 1.0% 212.1% 8.2% 1.5% 24.5
CenturyLink, Inc. Telecommunications utili 5.5% 3.0% 86.4% 6.7% 3.0% 12.8
Southern Company Electric utility 6.5% 3.0% 75.1% 4.8% 3.5% 16.5
Dow Chemical Chemical manufacturing 10.5% 11.0% 46.0% 4.6% 7.0% 12.4
Ford Motor Co. Auto manufacturer 7.5% 14.5% 43.1% 4.1% 2.5% 8.3

Zero-Payout Companies
AutoZone Auto parts 38.5% 0.0% 0.0% 0.0% 12.8% 19.7
Popeyes Fried chicken fast food 21.0% 0.0% 0.0% 0.0% 14.5% 28.8
Manhatttan Assoc Supply chain IT 27.5% 0.0% 0.0% 0.0% 10.0% 50.1
Biogen Biotechnology 27.0% 0.0% 0.0% 0.0% 14.0% 16.6
Sirius XM Entertainment radio 26.5% 0.0% 0.0% 0.0% 8.5% 26.4
Amazon.com, Inc. Online retail 15.0% 0.0% 0.0% 0.0% 17.5% nmf

Data source: "Value Line Investment Survey," August 2015.

1
A master limited partnership (MLP) paid no corporate taxes. All income taxes were paid by shareholders on their share of taxable earnings.
Exhibit 8
Rockboro Machine Tools Corporation
Projected Sources-and-Uses Statement Assuming a 40% Payout Ratio (in millions of dollars)¹
Assumptions: 2015 2016 2017 2018 2019 2020 2021

Sales Growth Rate: 15% 15% 15% 15% 15% 15% 15%
Net Income as % of Sales 2.1% 4.0% 5.0% 5.5% 6.0% 6.5% 6.5%
Dividend Payout Ratio 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%

Projections Total
2015 2016 2017 2018 2019 2020 2021 2015–21
Sales $1,305 $1,501 $1,726 $1,985 $2,283 $2,625 $3,019 $14,444
Sources:
Net income 27.0 60.0 86.3 109.2 137.0 170.6 196.2 786.4
Depreciation 33.9 39.0 44.9 51.6 59.4 68.3 78.5 375.6
Total 61.0 99.1 131.2 160.8 196.3 238.9 274.7 1,161.9
Uses:
Capital expend. 65.3 75.0 86.3 99.3 102.7 118.1 135.9 682.6
Change in working capital 29.3 33.6 38.7 44.5 51.2 58.8 67.7 323.7
Total 94.5 108.7 125.0 143.7 153.9 177.0 203.5 1,006.3
Excess cash/(borrowing needs) (33.6) (9.6) 6.2 17.1 42.4 61.9 71.2 155.7
Dividend 5.4 12.0 17.3 21.8 27.4 34.1 39.2 157.3
After dividend
Excess cash/(borrowing needs) ($39.0) ($21.6) ($11.1) ($4.8) $15.0 $27.8 $32.0 ($1.6)

Beginning Debt $ 120 $ 159.4 $ 181.0 $ 192.1 $ 196.8 $ 181.8 ### $ 122.0
Beginning Equity 424 445 493 563 650 759 896 1053
Debt/Equity Ratio 28.4% 35.8% 36.7% 34.1% 30.3% 23.9% 17.2% 11.6%
¹This analysis ignores the effects of borrowing on interest expense.

Source: Author estimates.

Debt capacity $170
Unused debt capacity $49