Q&A Session with the Chief Financial Officer

What attracted you to join Baldwin Technology Company?

I was impressed with the plans to grow the Company, and I could see that there was a role for the Chief Financial Officer to help drive those plans. Baldwin has a broad global footprint, important customer relationships, and superior product technology. It is a company that values integrity, reliability and laser-sharp customer focus.

What is your evaluation of the Company’s financial position?

Baldwin is well-positioned to execute its strategic plan. The balance sheet is solid with cash available to be coaxed from working capital, providing funds, leverage, and the opportunity to attract equity capital under the right circumstances and terms for certain acquisition opportunities. The Company has achieved stability with several years of increasing sales and profits, while maintaining an investment quality balance sheet.

How, specifically, will you be able to increase shareholder value?

At its most elementary level, shareholder value is created by increasing return on invested capital. We will increase return by executing on our operating plan to grow sales, reduce cost and improve earnings. We will continue to improve the quality of the balance sheet by disciplined management of investment, especially in working capital.

Does Baldwin have the capacity to continue to make acquisitions?

We will continue to seek alliances that leverage the Company’s brand and operating strengths for larger-than-category growth. Where acquisitions make strategic sense, we will target those that are accretive and contribute to the Company’s return on invested capital while maintaining prudent levels of debt. The Company has additional capacity in the existing balance sheet, and where there is not sufficient debt capacity for a targeted acquisition, the Company would consider prudent addition of equity capital.

Has Oxy-Dry been a good acquisition for Baldwin?

Oxy-Dry has a good history in the industry and an excellent product line of brush cleaning systems that complements our legacy product offerings. We believe that the Oxy-Dry operation offers Baldwin even more opportunity, and we have initiatives in action to capture those benefits.

Has the Company considered paying dividends or initiating a share buy-back?

The Company initiated a share repurchase program in 1999 that is currently inactive, but that is also restricted by the terms of our bank agreements. However, our plan is one that anticipates growth, and the cash we generate from operations will be needed to maintain debt at prudent levels while we expand. Our objective is to create more shareholder value by executing that growth strategy than we would otherwise generate with dividends or share repurchases.

How do the Company’s financial ratios compare to best practices? How will you get them to best practice levels?

The Company has a significant investment in working capital due in part to the regional nature of the Company’s global business. Thus our operating and balance sheet ratios are not as good as we would like them to be, nor are they as good as best practices. We have initiatives and incentives in place in all operating units to improve working capital management and to achieve better financial ratios.

The Company increased its debt to total capital ratio with the purchase of Oxy-Dry and Hildebrand, and our focus on reducing investments in working capital and executing the operating plan will help drive down debt balances. The Company’s objective is to maintain prudent debt levels to leverage shareholder investment and improve return on invested capital.