Sparton Corporaon Fourth Quarter and Fiscal Year 2016 ......“an.cipate,” “project,” “plan,” “es.mate,” “will” or “intend” and similar words or expressions as

SpartonCorpora*onFourthQuarterandFiscalYear2016FinancialResults

September7,2016

SafeHarborStatement

Certain statements herein cons.tute forward-looking statements within the meaning of the Securi.es Act of 1933, asamended and the Securi.es Exchange Act of 1934, as amended. When used herein, words such as “believe,” “expect,”“an.cipate,”“project,”“plan,”“es.mate,”“will”or“intend”andsimilarwordsorexpressionsastheyrelatetotheCompanyoritsmanagementcons.tuteforward-lookingstatements.Theseforward-lookingstatementsreflectourcurrentviewswithrespect to future events and are based on currently available financial, economic and compe..ve data and our currentbusinessplans.TheCompanyisundernoobliga.onto,andexpresslydisclaimsanyobliga.onto,updateoralteritsforward-looking statementswhether as a result of such changes, new informa.on, subsequent events or otherwise.Actual resultscouldvarymateriallydependingonrisksanduncertain.esthatmayaffectouropera.ons,markets,pricesandotherfactors.Important factors that could causeactual results todiffermaterially from those forward-looking statements include thosecontainedundertheheadingofriskfactorsandinthemanagement’sdiscussionandanalysiscontainedfrom.me-to-.meintheCompany’sfilingswiththeSecuri.esandExchangeCommission.

Whenwecalculateadjustedearningsper share,adjustedEBITDAandotheradjustments to the statementsof income,weexcludecertainexpensesandincome,includingdiscretetaxbenefits,becausewebelievethattheyarenotrelateddirectlytotheunderlyingperformanceofourfundamentalbusinessopera.ons.Weexcludethesemeasureswhenreviewingfinancialresultsandforbusinessplanning.Althoughtheseeventsarereflected inourGAAPfinancialstatements,thesetransac.onsmay limit thecomparabilityofour fundamentalopera.onswithpriorandfutureperiods.WebelieveEBITDAandadjustedEBITDA are commonly used by financial analysts and others in the industries in which the Company operates and, thus,provideuseful informa.ontoinvestors.TheCompanydoesnot intend,norshouldthereaderconsider,EBITDAoradjustedEBITDAtobeanalterna.ve toopera.ng income,net income,netcashprovidedbyopera.ngac.vi.esoranyother itemscalculated in accordance with GAAP. The Company's defini.on of adjusted EBITDA may not be comparable with othercompanies.Accordingly,themeasurementhaslimita.onsdependingonitsuse.

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•  OverviewofRecentDevelopments

•  FourthQuarterandFiscalYear2016FinancialResults

!  Consolidated!  EBITDA! MDSSegment

!  ECPSegment

!  Liquidity&CapitalResources

•  OtherFourthQuarterHighlightsandOutlook

•  Q&A

Today’sAgenda

3

OverviewofRecentDevelopments

•  Fourthquarterfinancialandopera.ngperformance

•  Con.nuedimprovementinSG&Afootprint

•  AmendmenttoCreditFacility

•  StrongfreecashflowinQ4andFY2016

•  StrengtheningpipelineandNewProgramwinsinMDSSegment

•  Write-offofimpairedgoodwillinMDSSegment

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ConsolidatedFinancialResults

5

SELECTEDFINANCIALDATAQ4FY16 Q3FY16 Q4FY15 2016 2015

Netsales 106,967$ 102,175$ 126,393$ 419,362$ 382,125$Grossprofit 21,422 19,067 28,090 80,148 74,814Grossprofitmargin 20.0% 18.7% 22.2% 19.1% 19.6%Sellingandadministrativeexpenses 13,460$ 13,727$ 16,220$ 55,151$ 46,969$Adjustedsellingandadministrativeexpenses(non-GAAP) 12,446 12,605 15,968 51,883 45,647Adjustedsellingandadministrativeexpenses,%ofsales(non-GAAP) 11.6% 12.3% 12.6% 12.4% 11.9%Impairmentofgoodwill 64,174$ -$ -$ 64,174$ -$Operatingincome(loss) (59,417) 2,676 8,809 (51,789) 17,252Adjustedoperatingincome(nonGAAP) 5,875 3,740 11,604 16,329 21,760Earnings(loss)pershare-diluted (4.30) 0.12 0.51 (3.91) 1.10Adjustedearningspershare(nonGAAP) 0.50 0.34 0.81 1.56 1.74EBITDA(non-GAAP) (55,594) 6,546 12,398 (36,021) 28,647AdjustedEBITDA(nonGAAP) 10,019 7,865 15,361 33,542 34,307AdjustedEBITDAmargin(nonGAAP) 9.4% 7.7% 12.2% 8.0% 9.0%Freecashflow 25,953$ 6,235$ 1,296$ 42,034$ 8,950$

FortheQuartersEnded FortheFiscalYearEnded

(Dollarsinthousands)

Q4Consolida*ngFinancialInforma*on

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Corporate MDS ECP Total

NetSales -$ 68,719$ 38,248$ 106,967$Costofgoodssold - 58,987 26,558 85,545Grossprofit - 9,732 11,690 21,422Operatingexpenses:

Sellingandadministrative 7,199 3,155 3,106 13,460Sellingandadministrative-Corpallocations (3,449) 2,281 1,168 -Internalresearchanddevelopment - - 832 832Amortizationofintangibleassets - 1,879 390 2,269Restructuringcharges - 104 - 104Impairmentofgoodwill - 64,174 - 64,174

Totaloperatingexpenses 3,751 71,593 5,495 80,839Income(loss)fromoperations (3,751) (61,861) 6,195 (59,417)Interestexpense,net (1,059) - - (1,059)Otherincome (126) 52 32 (43)Incometaxes 18,498 (61) - 18,437Netincome(loss) 13,563$ (61,870)$ 6,226$ (42,082)$

Depreciation,includedinSG&Aabove 402$ 968$ 226$ 1,596$

EBITDA,excludingcorporateallocation (6,922)$ (56,681)$ 8,009$ (55,594)$

Adjustmentsfornonrecurringoperatingexpenses(NON-GAAP):Impairmentofgoodwill - 64,174 - 64,174CostsrelatedtopotentialsaleofCompany 671 - - 671Restructuringcosts 60 104 - 164Othernonrecurringcosts,net 329 - 275 604

AdjustedEBITDA,before corporateallocation (5,862)$ 7,597$ 8,284$ 10,019$

AdjustedEBITDA,after corporateallocation (2,414)$ 5,316$ 7,117$ 10,019$

FY2016Consolida*ngFinancialInforma*on

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Corporate MDS ECP Total

NetSales -$ 265,048$ 154,314$ 419,362$Costofgoodssold - 230,260 108,954 339,214Grossprofit - 34,788 45,360 80,148Operatingexpenses:

Sellingandadministrative 29,379 14,621 11,151 55,151Sellingandadministrative-Corpallocations (13,523) 9,192 4,331 -Internalresearchanddevelopment - - 2,344 2,344Amortizationofintangibleassets - 7,938 1,654 9,592Restructuringcharges - 2,206 - 2,206Reversalofcontingentconsideration (1,530) - (1,530)Impairmentofgoodwill - 64,174 - 64,174

Totaloperatingexpenses 15,856 96,601 19,480 131,937Income(loss)fromoperations (15,856) (61,813) 25,880 (51,789)Interestexpense (3,808) 5 - (3,803)Otherincome (113) 168 38 93Incometaxes 17,301 (85) - 17,216Netincome(loss) (2,476)$ (61,725)$ 25,918$ (38,283)$

DepreciationincludedinSG&Aabove 1,276$ 3,888$ 919$ 6,083$

EBITDA,excludingcorporateallocation (28,214)$ (40,627)$ 32,821$ (36,021)$

Adjustmentsfornonrecurringoperatingexpenses(NON-GAAP):Impairmentofgoodwill - 64,174 - 64,174CostsrelatedtopotentialsaleofCompany 1,101 - - 1,101Restructuringcosts 979 2,206 - 3,185Othernonrecurringadjustments,net 1,453 (946) 596 1,103

AdjustedEBITDA,before corporateallocation (24,681)$ 24,808$ 33,417$ 33,542$

AdjustedEBITDA,after corporateallocation (11,158)$ 15,616$ 29,086$ 33,542$

AdjustedEBITDA(non-GAAP)

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Q4FY16 Q3FY16 Q4FY15 2016 2015

Netincome(loss) (42,081)$ 1,136$ 5,098$ (38,283)$ 10,989$Interestexpense 1,059 956 894 3,803 2,456Incometaxes (18,437) 612 2,846 (17,216) 3,966Depreciationandamortization 3,865 3,842 3,560 15,675 11,236EBITDA (55,594) 6,546 12,398 (36,021) 28,647AdjustmentsImpairmentofgoodwill 64,174 - - 64,174 -CostsrelatedtopotentialsaleoftheCompany 671 430 - 1,101 -Restructuringcharges 164 113 - 3,185 -Stock-basedcompensation 321 255 167 1,445 1,885Othernonrecurringadjustments,net 283 521 2,796 (342) 3,775Totaladjustments 65,613 1,319 2,963 69,563 5,660AdjustedEBITDA 10,019$ 7,865$ 15,361$ 33,542$ 34,307$

AdjustedEBITDAmargin 9.4% 7.7% 12.2% 8.0% 9.0%



Reconcilia*onofEBITDA

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Q4FY16 Q3FY16 Q4FY15 2016 2015

EBITDA,beforecorporateallocations:MDS 7,597$ 5,235$ 7,244$ 24,424$ 25,335$ECP 8,009 8,140 12,027 32,821 29,602TotalsegmentEBITDA 15,606 13,375 19,271 57,245 54,937Less:Corporatesellingandadministrative (7,428) (7,213) (7,077) (30,368) (27,004)Plus:Corporatedepreciation 402 384 204 1,276 714Plus:Stock-basedcompensation 321 255 167 1,445 1,885EBITDAbeforenonrecurringitems 8,901 6,801 12,565 29,598 30,532Nonrecurringitems 1,118 1,064 2,796 3,944 3,775AdjustedEBITDA-CONSOLIDATED 10,019$ 7,865$ 15,361$ 33,542$ 34,307$

FortheFiscalYearEndedFortheQuartersEnded

MDSSegmentFinancialResults

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Grosssales 72,346$ 68,187$ 84,749$ 282,076$ 263,940$Intercompanysales (3,627) (3,532) (6,592) (17,028) (17,756)Netsales 68,719 64,655 78,157 265,048 246,184Grossprofit 9,732 7,771 13,094 34,788 36,461Grossprofitmargin 14.2% 12.0% 16.8% 13.1% 14.8%Sellingandadministrativeexpenses 3,155$ 3,608$ 6,744$ 14,621$ 11,934$Allocationofcorporateexpenses 2,281 2,242 1,886 9,192 6,681Totalsellingandadministrativeexpenses,%ofnetsales 7.9% 9.0% 11.0% 9.0% 7.6%Amortizationofintangibleassets 1,879 1,948 1,801 7,938 5,811Impairmentofgoodwill 64,174 - - 64,174 -Operatingincome(loss) (61,861)$ 231$ 2,663$ (61,813)$ 9,535$SegmentEBITDA,excludescorporateallocationandgoodwillimpairment 7,597 5,235 7,244 24,424 25,335



ECPSegmentFinancialResults

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Grosssales:Domesticsonobuoys 20,753$ 19,639$ 23,159$ 76,094$ 81,437$Foreignsonobuoys 5,811 6,313 10,070 25,839 15,298Engineering 2,764 3,760 4,639 17,358 13,466Ruggedandother 8,934 7,854 10,437 35,268 26,114Grosssales 38,262 37,566 48,305 154,559 136,315Intercompanysales (14) (46) (69) (245) (374)Netsales 38,248 37,520 48,236 154,314 135,941Grossprofit 11,690 11,296 14,961 45,360 38,353Grossprofitmargin 30.6% 30.1% 31.0% 29.4% 28.2%Sellingandadministrativeexpenses 3,115$ 2,837$ 2,513$ 11,128$ 8,107$Allocationofcorporateexpenses 1,168 1,061 981 4,354 2,931Totalsellingandadministrativeexpenses,%ofnetsales 11.2% 10.4% 7.2% 10.0% 8.1%Amortizationofintangibleassets 390$ 413$ 438$ 1,654$ 780$Operatingincome 6,196 6,424 10,286 25,880 25,033SegmentEBITDA,excludescorporateallocation 8,009 8,140 12,027 32,821 29,602



Liquidity&CapitalResources

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(1)–AscalculatedundertheCreditRevolverAgreement.

1,796 1,669 11,539

32,972

139,586

97,623

-

0.50

1.00

1.50

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

300,000

Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Deb

t-to-

Equi

ty R

atio

Net

Deb

t ($

'000

)

Debt-to-EBITDALeverage1=3.0x

($ in '000) FY15Q4 FY16Q1 FY16Q2 FY16Q3 FY16Q4

Cash and equivalents 14,914 2,187 4,830 834 132 Credit Availability* 119,800 135,800 140,700 150,700 76,939

Total 134,714 137,987 145,530 151,534 77,071


Credit Revolver 154,500 138,800 133,800 123,400 97,206 Lease Obligations - - - 604 549


Net Inventory 79,503 86,589 76,717 79,959 77,871 Net Inventory Turns 4.8 4.6 4.5 4.4 4.2

* As of June 2015, includes Letters of Credit.

Cash Availability

Debt

Inventory

OtherFourthQuarterHighlightsandOutlook

•  66newprogramwinsintheMDSSegmentwithexpectedannualrevenueof$15millionwhenfullyrampedupintoproduc.on

•  TotalnewprogramwinsintheMDSSegmentinfiscal2016of$61millionofexpectedannualrevenuewhenfullyrampedupintoproduc.on

•  $54millionawardfortheproduc.onofdomes.csonobuoys•  $11millioninawardsfortheproduc.onofforeignsonobuoys•  Backlogof:

"  $138millionintheMDSSegment"  $142millionintheECPSegmentprincipallyincluding:

" $117millionindomes.csonobuoys" $6millioninforeignsonobuoys" $14millioninruggeddisplays

•  Q1FY2016Guidance:"  Revenuesof$97to$101million"  Grossprofitmarginofapproximately18%"  Segmentrevenuestoprovideasimilarrela.onshiptoQ4opera.ngresults

•  Poten.alsaleoftheCompany

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Q&A

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Documents

Sparton Corporaon Fourth Quarter and Fiscal Year 2016 ......“an.cipate,” “project,” “plan,” “es.mate,” “will” or “intend” and similar words or expressions as