1

INVESTOR PRESENTATION NYSE: SPA

July 2014

2

Safe Harbor Statement

Certain statements herein constitute forward-looking statements within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. When used herein, words such as “believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,” “will” or “intend” and similar words or expressions as they relate to the Company or its management constitute forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are based on currently available financial, economic and competitive data and our current business plans. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Actual results could vary materially depending on risks and uncertainties that may affect our operations, markets, prices and other factors. Important factors that could cause actual results to differ materially from those forward-looking statements include those contained under the heading of risk factors and in the management’s discussion and analysis contained from time-to-time in the Company’s filings with the Securities and Exchange Commission.

Adjusted EBITDA and related reconciliation presented here represents earnings before interest, taxes, depreciation and amortization as adjusted for restructuring/impairment charges, gross profit effects of capitalized profit in inventory from acquisition and acquisition contingency settlement, and gain on sale of investment. The Company believes Adjusted EBITDA is commonly used by financial analysts and others in the industries in which the Company operates and, thus, provides useful information to investors. The Company does not intend, nor should the reader consider, Adjusted EBITDA an alternative to net income, net cash provided by operating activities or any other items calculated in accordance with GAAP. The Company's definition of Adjusted EBITDA may not be comparable with Adjusted EBITDA as defined by other companies. Accordingly, the measurement has limitations depending on its use.

3

Investment Considerations

Continued EPS

Growth

Established

Growing

Business

Expanded

EBITDA Margins

Solid

Balance Sheet

Repositioned the

Company for Growth

113 year old business with market leadership in defense and

medical sectors; 19% sales increase in fiscal 2013; 33% year-over-

year adjusted EBITDA increase in fiscal 2013

As of March 31, 2014, Debt to EBITDA coverage of 1.2x with $35

million borrowed, $30 million unused and a $35 million accordion on

the line of credit.

Fiscal 2013: 8.1% Fiscal 2010: 4.5%

Fiscal 2012: 7.6% Fiscal 2009: -4.8%

Fiscal 2011: 7.4% Fiscal 2008: -2.0%

Fiscal 2013: $ 1.17 Fiscal 2010: $ (0.40)

Fiscal 2012: $ 0.91 Fiscal 2009: $ (1.61)

Fiscal 2011: $ 0.64 All adjusted and include dilution.

New Programs

New Customers

Potential Annualized Revenue 39.4$

FY12

40

20

23.8$ 17.7$

FY13

71

12

FY11

26

11

4

Mission

Sparton will continue to differentiate itself as a premier supplier

of sophisticated electromechanical devices, sub-assemblies

and related services for highly regulated environments in the

Medical, Military & Aerospace, and Industrial markets by

leveraging and expanding its capabilities and offerings within

the electromechanical value stream.

5

• Sparton is in one single line of business called Electromechanical Devices

• Sparton is currently segmented into three financial reporting business units

Defense & Security Design and Manufacturing (both as a contractor and OEM)

Medical Device Contract Design, Manufacturing, and Assembly

Complex Systems Commonly referred to within legacy Sparton as EMS, but

currently consists of circuit card assembly and box build

(contract manufacturing and assembly) outside of the medical

and defense markets. In the future, may include electro-

mechanical based B2B products as well as EMS services.

• Sparton currently serves three electronics markets

– Military & Aerospace

– Medical

– Industrial & Instrumentation

Our Business

6

Strategically Located

• Nine domestic and one low-cost country

manufacturing facilities; four engineering

centers

– De Leon Springs, FL (Orlando)

– Birdsboro, PA (Philadelphia)

– Strongsville, OH (Cleveland)

– Watertown, SD (Sioux Falls)

– Frederick, CO (Denver)

– Brooksville, FL (Tampa)

– Plaistow, NH (Boston)

– Irvine, CA “Aubrey” (Los Angeles)

– Irvine, CA “eMT” (Los Angeles)

– Ho Chi Minh City, Viet Nam

• 1,500+ employees worldwide

• 100+ engineers on staff

MX

2

7

Senior Management Team

Cary B. Wood, Chief Executive Officer

• Appointed CEO November 2008

• Formerly Chief Operating Officer of Citation Corporation, a private company with foundry, machinery and assembly operations with 20+ years of experience at GM, United Technologies & Elkay Manufacturing

• Developed a track record with performance turn-around and growth strategies in both private and public company settings

Mark Schlei, Chief Financial Officer

• Appointed CFO in November 2012

• Previously CFO at Paperworks Industries, Thetford Corporation, and Lake City Industries as well as Corporate Controller for Littelfuse, Inc. and various financial roles at Newell Company.

Gordon Madlock, Senior Vice President – Operations

• 30+ years experience improving manufacturing quality and productivity at companies including Citation Corporation, Lear Corp. and United Technologies

Mike Osborne, Senior Vice President – Corporate Development

• Responsible for driving corporate and business unit strategic planning and development, M&A activity, business development & customer retention, and investor relations

Steve Korwin, Senior Vice President – Quality & Engineering

• Extensive experience leading manufacturing operations and improving quality processes to increase profitability and sales

Larry Brand, Vice President – Corporate HR

• Considerable experience providing strategic leadership and tactical direction for the overall Human Resources function to senior management and company leadership teams

8

X X X X P P P

Complex Systems Complex Systems

Market Dynamics

Medical Industrial &

Instrumentation

Military &

Aerospace Computer Automotive Consumer Communication

Electronics Market ($1.3 trillion)

Total 2010 EMS/ODM Outsourced Market: $276 billion

2010 – 2013 Compounded Annual Growth Rate: 7.6%

Defense & Security

Navigation & Exploration Medical

= business segment market focus

Highly regulated

market (FDA)

High growth

Blue chip

customers

New to

outsourcing

Contract design,

mfg, and assembly

roll-up opportunity

Highly regulated

market (ITAR,

COMSEC)

Moderate growth

Blue chip

customers

Preferred supplier

status

Contract design,

mfg, and assembly

roll-up opportunity

Moderate growth

Blue chip

customers

Preferred supplier

status

New to

outsourcing

Contract design,

mfg, and assembly

roll-up opportunity

Highest growth

sector

No current

customers

Volume &

commodity pricing

resulting in low

margins

OEMs are experts

at outsourcing

High growth

High volume

production drives

lower margins

Outsourcing

mostly in low cost

country regions

Complexity is

general low

Moderate growth

High volume

production drives

lower margins

Outsourcing

mostly in low cost

country regions

OEMs are experts

at outsourcing

Moderate growth

High volume

production drives

lower margins

Outsourcing

mostly in low cost

country regions

OEMs are experts

at outsourcing

Source: Technology Forecasters Inc, Dec. 2010

Market: $15B

Growth: 9.3%

Market: $6B

Growth: 6.2%

Market: $20B

Growth: 6.6%

Market: $10B

Growth: 12.9%

Market: $44B

Growth: 7.8%

Market: $84B

Growth: 6.8%

Market: $98B

Growth: 3.1%

9

Vision

Sparton will become a $500 million revenue entity by

fiscal 2015 by attaining key market positions in our

primary lines of business and through complementary

and compatible acquisitions; and will consistently

rank in the top half of our peer group in return on

shareholder equity and return on net assets.

10

122

137 145

127

147 148 156

212 209 200

183

192

175

0

50

100

150

200

250

($ in

mill

ion

s)

Medical 55%

DSS 29%

Complex Systems

16%

Backlog

Shifting Revenue Mix To

Higher Margin Businesses

DSS 20% - 25%

Medical 13% - 16%

Complex Systems 9% - 12%

FY2013 by Reporting Segment (Revenue of $266 million)

FY2009 by Segment (Revenue of $221 million)

Complex

Systems

18%

DSS 34%

Medical 48%

FY2014 Target Gross Margin by Segment

FY2013 by Market (Revenue of $266 million)

Medical

29%

DSS

19%

EMS

52%

Medical48%MilAero

42%

Industrial 10%

11

• Develop, design, and manufacture security

products, primarily anti-submarine warfare

detection devices for the U.S. and other free-

world governments

• Develop and manufacture ruggedized flat-

panel monitors and systems

• Commercially develop spin-off technology for

existing and alternate markets (Navigation &

Exploration)

• FY2013 Sales: $77 million, consistently

profitable business

• Visible Business: $59 million in government

funded backlog as of March 31, 2014

• Key Customers:

Defense & Security Systems

Sonobuoys Navigation

Sensors

Ruggedized Flat

Panel Displays

12

Defense & Security Systems Market Outlook

• Government FY2009 production peak was realized primarily in Sparton’s FY2011

– Reduced U.S. Navy sonobuoy production volume in Sparton’s FY2012 will be partially offset by the pursuit of new developmental engineering funds from the DoD for Antisubmarine Warfare related applications ($37 million over 5 years of engineering funds already announced)

• Limited risk of a negative impact of sonobuoy sales to the U.S. Navy if sequestration occurs

– Anti-Submarine Warfare budget line item is less than $250 million

– Budget is a small fraction of the cost of a single ship

• Foreign sales are still somewhat unpredictable

– Continued military actions taken by North Korea and China should have an impact in the use of sonobuoys in that region

– The leak of government sensitive information may also put foreign nations on guard and require more monitoring of their territorial waterways

• The Boeing P-8 Poseidon aircraft to become the new launch vehicle for sonobuoys

– U.S. Navy plans to buy 117 P-8A anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft to replace its existing P-3 fleet. Initial operational capability is scheduled for 2013.

– The Indian navy signed a contract for eight P-8I aircraft in January 2009. Boeing will deliver the first P-8I within 48 months of contract signing and the remaining seven by 2015.

$5

$6

$10

$11 $11

$8

$10

$11 $11 $12

$12

$13 $13

$-

$2

$4

$6

$8

$10

$12

$14

$16

0

20

40

60

80

100

120

140

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E FY2016E FY2017E FY2018E FY2019E FY2020E

$ s

pe

nd

(in

mill

ion

s)

# o

f e

ngi

ne

ers

DSS Engineering Activity

Engineers (FTE) Engineering Project Spend - Gov't & IR&D ($ in mil)

$31.1

$53.7

$40.9 $42.3 $49.3

$53.0

0

20

40

60

80

100

120

140

160

180

200

GFY 2008 GFY 2009 GFY 2010 GFY 2011 GFY 2012 GFY 2013 GFY2014E

GFY2015E

GFY2016E

GFY2017E

GFY2018E

GFY2019E

GFY2020E

Spe

nd

($

in m

illio

ns)

DoD Estimated ASW Budgets / SPA Historical Spend

Source: Navy Budget (Actual/Estimate) Navy Spend on Buoys (Actual) Navy Spend on Buoys (Estimate) Sparton Awards (Actual)

13

Medical

• Design and manufacture medical devices

and instruments for the In Vitro Diagnostics

and Therapeutics Device markets

• Work with OEMs and biomedical companies to

interface their core technology into a complex medical

laboratory instrument or point of care device

• Manufacturer of The NeuroStar® TMS Therapy

System, the first and only Transcranial Magnetic

Stimulation (TMS) device cleared by the FDA for the

treatment of depression

• Recurring revenue due to highly regulated

medical industry

• FY2013 Sales: $147 million of consistently

profitable business

• Visible Business: $80 million of backlog as of

March 31, 2014

• Key Customers:

Analyzers

Neurology

Blood Separation

14

Complex Systems

• Manufacturer of circuit card assemblies and

electronic based box build products primarily

for the military and commercial aerospace

markets

• New prototyping capabilities to shorten

development and introduction lead times for

customers

• Consolidated business from old and

inefficient sites to state-of-the-art and

technologically advanced facilities in Florida

and Viet Nam for improved efficiencies and

capacity utilization

• FY2013 External Sales: $42 million

• Visible Business: $36 million of backlog as of

March 31, 2014

• Key Customers:

Circuit Board

Assembly Sub Assembly

Complete System Box Build

15

Growth Investments Summary

Focus: Use growth investments to achieve sustainable year-over-year revenue and profit

increases and to further place protective barriers around Sparton.

Strategic M&A

Internal Research &

Development (IP)

Targeted Business

Development

Supported by market research & go-to-

market programs

Aubrey Group

New Programs

New Customers

Potential Annualized Revenue

Acquisitions

New Business Awards

FY13

71

Fiscal 2011

Delphi Medical

Byers Peak

12

FY11

26

11

Fiscal 2015

eMT

Fiscal 2014

PHOD-1

Aydin Displays

Beckwood Services

Fiscal 2013

Onyx EMS

Creonix

FY12

40

20

23.8$ 17.7$

Internal Research & Development

Fiscal 2011

Gyro-enhanced digital compass

Hydrophone

39.4$

GEDC-6

Fiscal 2012

AHRS-8 Temperature compensated attitude heading reference system

Fiscal 2014

IMU-10 Harsh environment inertial sensing system

16

Acquisition Update

eMT(Jul ’14)

• $25 million in revenue

• Device mfg for the Industrial,

Medical & mil/aero market

• Stand-alone in Irvine, CA

• Major Customers are Cypher,

ASML, Alcon LenSx, Teal, Exelis,

and Raytheon.

Aydin Displays (Aug ’13)

• $18 million in revenue

• Ruggedized video displays

• Located near Philadelphia

• Major Customers are the U.S.

Navy, BAE, and the FAA

Aubrey Group (Mar ’14)

• $8 million in revenue

• Product development and

engineering in the Medical market

• Located in Irvine, CA

• Major Customers are Life Sciences,

Kimberly Clark and Nanomix

Beckwood Services (Nov ’13)

• $18 million in revenue

• Industrial control panels & Patriot

missile launcher controls

• Located near Boston

• Major Customers are Trumpf,

Raytheon, and ESI

17

• Acquired assets of Delphi Medical in August 2010

and certain assets and liabilities of Byers Peak in

March 2011 (both FY11)

• Immediately replaced the General Manager at

Delphi and developed a 100 day plan

• Deployed the Sparton Production System

– Instilled a culture of safety

– Aligned the organization to Sparton’s Corporate

Values

– Implemented Sparton’s balanced scorecard

methodology

– Consolidated 3 facilities into 1 location

– Reduced fixed overhead structure by $1.2 million

– Applied S&OP to reduce inventory and increase on-

time delivery from 70% to 95%+

• Grew the business at a 17% CAGR

– Account expansion with key customers increased

quickly once service level issues were resolved

– Won new business opportunities through acquired

funnels and from the recently launched national

business development process & organization

• Leveraged the Vietnam location to multiple

customers (3 programs were transferred)

Acquisition Reconciliation Delphi Medical & Byers Peak (now Frederick)

ACQUISITION RESULTS (7/1/09 to 6/30/13)

Revenue FY11 $39 million

FY12 $67 million

FY13 $74 million

Days Inventory FY11 126 days

On-Hand (DIO) FY12 92 days

FY13 73 days

On-Time FY11 70%

Delivery (OTD) FY12 88%

FY13 96%

95% increase in sales

26 percentage point improvement

42% reduction

ROI: 68.1%

Payback: 2.0 years

18

Financial Highlights

19

• Quarterly revenue grew 29% to $84 million as compared to the same

quarter of the prior year

– Organic growth, net of acquisitions, increased 11% from the same quarter of

the prior year.

• Adjusted EBITDA grew 120% in the quarter and 73% YTD as compared

to the prior year periods

• 20 new business programs awarded with potential annualized sales of

$6.1 million

• Completed the acquisition of Aubrey Group, Inc.

3rd Quarter Highlights

20

Consolidated Financial Results Fiscal 2014 YTD

(Adjusted)

2014 2013 2014 2013

Net Sales $ 242,691 $ 183,203 $ 242,691 $ 183,203 $ 59,488

Gross Profit 43,597 30,220 43,853 30,786 13,067

18.0% 16.5% 18.1% 16.8%

Selling and Administrative Expense 25,139 19,650 25,139 19,650 (5,489)

10.4% 10.7% 10.4% 10.7%

Internal R&D Expense 1,004 889 1,004 889 (115)

Amortization of intangible assets 2,323 984 2,323 984 (1,339)

Restructuring/impairment charges 188 - - - -

Other operating expense, net (14) 16 (14) 16 30

Operating Income 14,957 8,681 15,401 9,247 6,154

6.2% 4.7% 6.3% 5.0%

Income Before Provision For Income Tax 14,873 8,665 15,317 9,231 6,086

Provision For (Benefit From) Income Taxes 4,857 831 5,002 3,086 (1,916)

Net Income $ 10,016 $ 7,834 $ 10,315 $ 6,145 $ 4,170

4.1% 4.3% 4.3% 3.4%

Income per Share (Basic) $ 0.99 $ 0.77 $ 1.02 $ 0.60 $ 0.42

Income per Share (Diluted) $ 0.99 $ 0.77 $ 1.02 $ 0.60 $ 0.42

($ in 000’s, except per share)

(adjusted removes certain gains and charges)

(Reported) (Adjusted)

9 months ended Mar 31, 9 months ended Mar 31, Total YoY

Variance

21

Consolidated Financial Results Adjusted EBITDA

2014 2013 2014 2013 Variance

Net Income $ 4,246 $ 1,536 $ 10,016 $ 7,834 $ 2,182

Interest expense 187 136 547 390 157

Interest income - (48) (2) (99) 97

Provision for (benefit from) income taxes 2,014 832 4,857 831 4,026

Depreciation and amortization 2,270 1,564 5,910 3,036 2,874

Restructuring/impairment charges - - 188 - 188

Capitalized profit in inventory from acquisition 148 - 256 566 (310)

Adjusted EBITDA $ 8,865 $ 4,020 $ 21,772 $ 12,558 $ 9,214

10.6% 6.2% 9.0% 6.9%

3 months ended Mar 31, 9 months ended Mar 31,

22

Historical Performance EBITDA Margin & EPS

* EBITDA margins and EPS results are based on as adjusted financial statements.

$1.02

-4.8%

4.5%

7.4% 7.6% 8.1%9.0%

$(1.61)

$0.40

$0.64 $0.91

$1.17

$(2.00)

$(1.50)

$(1.00)

$(0.50)

$-

$0.50

$1.00

$1.50

$2.00

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

FY09 FY10 FY11 FY12 FY13 FY14 YTD

EPS YTD ($) EBITDA Margin EPS ($)

23

Liquidity & Capital Resources

1,796 1,669

11,539

30,006

26,331

36,437

0.26

0.34

-

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0

25,000

50,000

Jun-11 Jun-12 Jun-13 Sep-13 Dec-13 Mar-14

Deb

t:E

qu

ity R

ati

o

Ou

tsta

nd

ing

Deb

t ($

'000)

Debt-to-EBITDA

Leverage = 1.2x

($ in '000) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

Cash and equivalents 4,358 6,085 2,719 1,009 7,502

LOC Availability* 87,000 90,000 71,000 75,000 65,000

Total 91,358 96,085 73,719 76,009 72,502

* Includes a $35 million accordian feature as part of the existing credit facility.

($ in '000) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

Credit Revolver 13,000 10,000 28,500 25,000 35,000

IRB (Ohio) 1,572 1,539 1,506 1,472 1,437

Total 14,572 11,539 30,006 26,472 36,437

($ in '000) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

Net Inventory 46,928 46,334 55,658 52,393 51,466

Cash Availability

Debt

Inventory

24

• Implementation of the strategic growth plan

– Continue to grow organically

– Maintain our level of investment in internal research & development to commercially

extend our product lines

– Continue to enable our engineering workforce to develop new and innovative

proprietary solutions for our end markets

– Continue to seek out complementary and compatible acquisitions

– Further leverage Viet Nam as a low cost country alternative and in-region provider

• Focus on sustained profitability

– Continue margin improvements across the entire company

– Increase capacity utilization

– Continue additional improvements in operating performance through lean and quality

efforts

• Complete the integration of Beckwood Services, Aubrey Group & eMT

Fiscal 2014/2015 Outlook

25

Sparton Corporation NYSE: SPA

Cary Wood, President & CEO

425 N. Martingale Road

Suite 2050

Schaumburg, IL 60173