Working Capital & Liquidity Command Center

Meridian Industrial Supply Co. • As of Sep 30, 2024

Liquidity Stress Score

6.8/10

↑ +1.2 vs Q2 • Covenant Risk: Medium

DSO (Enterprise)

38d

↑ +3d vs Q2

DPO

42d

↓ -2d vs Q2

CCC

67d

↑ +9d vs Q2

Revolver Use

71%

↑ +20pp vs Jun

Inventory DOH

87d

↑ +11d vs Q2

OCF / NI Ratio

0.82

↑ +0.06 vs Q2

Quality of Earnings

Free Cash Flow Bridge: EBITDA to FCF (Q3 2024)

EBITDA $12.8M → FCF $4.1M (32% conversion) • WC drag primarily from Inventory (+$4.3M) and AR increase (+$1.8M)

DSO by Customer Tier

SMB tier breached 52-day trigger in Aug; Enterprise stable at 32d

Receivables Aging Waterfall

90+ days balances increased $1.2M QoQ; $680K provision added Sep

CCC vs Peer Benchmark

Meridian at 67d vs peer median 54d

Early-Pay Discount Capture

Capture rate declined to 22% in Sep (target: 35%)

Working Capital Tied Up

Accounts Receivable $23.1M

Inventory $19.8M

Accounts Payable -$11.4M

Net Working Capital $31.5M

↑ +$5.4M trapped vs Q2 target

Inventory Days on Hand by Product Category

Category	DOH	Value	% of Total	vs Target	Status
Fasteners & Hardware	94d	$4.2M	21%	+14d	Over
Industrial Adhesives	88d	$3.8M	19%	+12d	Over
Safety Equipment	82d	$2.9M	15%	+7d	Over
Power Tools	91d	$2.6M	13%	+16d	Over
Electrical Components	86d	$2.3M	12%	+11d	Over
Abrasives	79d	$1.8M	9%	+4d	Over
Hand Tools	74d	$1.4M	7%	-1d	OK
Cleaning Supplies	68d	$0.8M	4%	-7d	OK

7 of 8 categories above target DOH; seasonal Q3 build contributed +$4.3M inventory vs Q2

Debt Maturity Schedule (12-Month Rolling)

$8.2M term loan amortization + $3.1M notes due Q2 2025

Projected FCF vs Debt Service

DSCR forecast: 1.4x (covenant floor: 1.25x)

Revolver Utilization & Available Headroom

Facility: $25M • Drawn: $17.8M (71%) • Covenant trigger at 80% ($20M) • Headroom: $7.2M

Available Liquidity

$9.8M

Cash $2.6M + Revolver Headroom $7.2M

↓ -$3.1M vs Jun • 18 days coverage

AR >90 Days Past Due

$3.2M

13.8% of total AR • Reserve: $2.1M

↑ +$1.2M QoQ • $680K provision added Sep

WC Trapped (vs Target)

$5.4M

CCC expansion: 58d → 67d (+9 days)

At 8% cost of capital: $36K/month drag