Welcome to the 2014

Sales and Operations Summit

Welcome to Nashville, TN
Local Laws
By law, anyone who has been drinking is "sober" until
he or she "cannot hold onto the ground
You can't shoot any game other than whales from a
moving automobile
Driving is not to be done while asleep
It is legal to gather and consume road kill
In Nashville - Anyone rollerblading may not tie his or
herself to a moving vehicle on a highway
In Nashville - No person may roller skate and listen to
a personal cd player at the same time

Logistics
Breaks
Lunch
Dinner Cruise
Why Are We Here?
5. Training
4. Team Buildings
3. Build Relationships
2. Sharing the future vision of RJN

1. Celebrate and show our appreciation!
One United Leadership Team
One United Sales Force
One Operational Team
One set of goals
Shared Success

What is OneRJN?
Mission Statement
RJN is a professional engineering and
specialty field services firm providing
sustainable collection system solutions
for infrastructure owners

Vision Statement
The choice for collection system solutions

Vision Description
We recognize that our niche services are the backbone of this
organization; the common thread that binds and unifies our
geographically distributed Offices; the baseline strength that
secures a local foothold to foster new markets.
Our niche market leadership will be distinguished by providing
remarkable field and engineering solutions synonymous
with our name as the choice for collection system issues.
We will establish a niche identity in the smallest conceivable
market investing in best-in-class products and services,
augmenting and enhancing our portfolio through innovation.
Vision Description
We will continue to develop an elite corps of client-
focused managers that cultivate and maintain client
relationships and develop market partnerships.
We will lead with niche services to open new Offices,
broaden our base of public agencies beyond
municipalities and venture into Federal and Private
collection system sectors.
We will sustain regional presence on a firm base of
niche services, building strength in core services and
diversifying operational capability to capitalize on
local opportunities.

Whats Planned?
RJNs Past-Present & Future
Building a structure for growth
Our Marketplace
How we enter markets
Team Building Exercise
RJN Differentiators

Setting the Stage
Looking Back Before Looking
Forward
Session 1-2
Who Remembers 1972?
Who Remembers 1972?
Who Remembers 1972?
1972 Federal Clean Water Act Amendments
Federal Grants for WWTPs
Required Facility Plan / Infiltration Inflow Analysis and
SSES before
75% Grant for WWTP expansion/upgrade
Launched the wastewater collection system market
RJN Timeline History
1975 - Richard Nogaj started RJN Environmental
Associates, Inc.



1977 - Al Hollenbeck joins firm as 4
th
employee

RJN Timeline History
1978 - RJN develops CASS Software for DEC PDP 11
Mini-Computer



RJN Timeline History
1980 - Begin Self-Performing Field Work
RJN Timeline History
1980 1990 - Wastewater Treatment Plants in
Illinois: Belvidere, Carol Stream, Elmhurst,
Lockport, Villa Park, St. Charles

RJN Timeline History
1983 - Opening of First Branch Office: College Park
Maryland
RJN Timeline History
1984 - First Year in ENR Top 500

RJN Timeline History
1985 - First year for RJN as Exhibitor at WEFTEC (Back
then WPCF Conference) in Kansas City

RJN Timeline History
1986 - RJN acquires McCullough Associates of Texas



RJN Timeline History
1986 1990 - SSES and Rehabilitation for US Navy
Bases: East Coast

RJN Timeline History
1988 - RJN Moves Corporate Headquarters to 200 W
Front Street


RJN Timeline History
1990 - First SSES for Dallas Water Utilities



RJN Timeline History
1990 - CASSWORKS first Client- Northeast Monmouth
County


RJN Timeline History
1995 - RJN purchases Richard Nogajs stock and
becomes an ESOP

6000
6500
7000
7500
8000
8500
9000
9500
10000
10500
11000
11500
12000
12500
13000
13500
14000
14500
15000
15500
16000
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
J
a
n
-
9
6
J
a
n
-
9
7
J
a
n
-
9
8
J
a
n
-
9
9
J
a
n
-
0
0
J
a
n
-
0
1
J
a
n
-
0
2
J
a
n
-
0
3
J
a
n
-
0
4
J
a
n
-
0
5
J
a
n
-
0
6
J
a
n
-
0
7
J
a
n
-
0
8
J
a
n
-
0
9
J
a
n
-
1
0
J
a
n
-
1
1
J
a
n
-
1
2
J
a
n
-
1
3
J
a
n
-
1
4
RJN vs Dow Jones
RJN
Dow Jones
RJN Timeline History
1997 - CASSPC Rolled out Internally

RJN Timeline History
1998 - Scanable Field Forms
RJN Timeline History
2000 - Twenty Fifth Anniversary


RJN Timeline History
2002 - ESOP Loan Paid Off


RJN Timeline History
2003 - Startup of St. Louis MSD Project


RJN Timeline History
2005 - First Strategic Plan Developed

RJN Timeline History
2005 - White Sox World Series Winner!


RJN Timeline History
2006 - Baltimore City $5.0 M Flow Monitoring Project



RJN Timeline History
2006 - Fayetteville Pump Station
RJN Timeline History
2009 - The Crumbling of America on The History
Chanel


RJN Timeline History
2009 - Mobile CASS- Trimble Cartopac


RJN Timeline History
2011 - Office Locations Total 18 in 11 States


RJN Timeline History
2011 and 2013 - Design Build Projects: Collinsville,
Illinois & Fresh Express


RJN Timeline History
2013 - Net Revenue all time high of $16.9 M
Stock Value all time high of $119/Share

0
2
4
6
8
10
12
14
16
18
20
199519961997199819992000200120022003200420052006200720082009 20102011201220132014
RJN Timeline History
2014 - Mobile SSES: I Form


RJN Timeline History
2014 - Legacy Clients > 20 Years
Illinois
Elmhurst
Wilmette
Villa Park
Glen Ellyn
Wheaton
Hanover Park
Des Plaines
Carbondale
Lombard
Wheeling
Dupage County
Illinois American
Water
Texas
DWU
Fort Worth
Arlington
Irving
Plano
Dallas County
Mesquite
Highland Park
Arkansas
Fayetteville
Little Rock
Maryland /
Delaware / Virginia
Baltimore County
Baltimore City
WSSC
Anne Arundel
County
New Castle
County
Virginia Beach
PWCSA
Other
BWSC
Tulsa
Everett Wa.
RJN Firsts
Since our founding in 1975, RJN has pioneered new
methodologies and technologies for:
Inspecting
Modeling
Analyzing
Rehabilitating
Collection Systems


RJN Firsts - 1978
CASS PDP


RJN Firsts - 1978
Infiltration/Inflow Source Quantification


RJN Firsts - 1979
Q vs. I

BASIN 04
Q vs i Regression Anal ysis --
PREDICTED i 60 OBSERVED
INFLOW Rai n INFLOW
(mgd) LOG i LOG Q (in/hr) (mgd)
0.941 -0.026 0.029 0.039 1.070 1.093
0.700 -0.155 -0.114 -0.231 0.770 0.588
0.344 -0.463 -0.456 -0.487 0.350 0.326
0.245 -0.611 -0.620 -0.577 0.240 0.265
1.352 0.131 0.204 1.600 1 Year Storm @
2.058 0.313 0.407 2.550 5 Year Storm @
2.310 0.364 0.462 2.900 10 Year Storm @
Regression Output:
-0.053 Constant
0.076 Std Err of Y Est
0.974 0.949 R Squared
4.000 No. of Observati ons
2.000 Degrees of Freedom
0.901 X Coeffi cient(s)
0.147 Std Err of Coef.
RJN Firsts - 1980
Building Inspection Programs for Private Sector I/I
RJN Firsts - 1981
Post Rehabilitation Flow Monitoring Methodology
T
o
t
a
l


I
n
f
i
l
t
r
a
t
i
o
n
/
I
n
f
l
o
w

Time - Years
Start of
Rehabilitation
1 2 6 5 4 3
RJN Firsts - 1981
Design Storm for Sanitary Sewer Systems
RJN Firsts - 1981
Charter Member of first WEF Collection Systems
Committee
RJN Firsts - 1982
I/I Source Data Flow Data Balancing

RJN Firsts - 1982
Dual Blower Smoke Testing
RJN Firsts - 1983
LineMate TDU
LineView Software
RJN Firsts - 1984
Groundwater Migration

RJN Firsts - 1984
Sanitary / Storm Cross Connections
RJN Firsts - 1990

CASSWORKS

RJN Firsts - 1996 1999
CMOM Regulations/ FAC Meetings
RJN Firsts - 1993
Houston Predictive Performance Model

RJN Firsts - 2006 2012
CASS PC Enhancements
RJN Firsts - 2006
CanStruction- St. Louis Office
RJN Firsts- 2010
RJN Online
RJN Firsts- 2010
RPM System
How Do We Build on Our Legacy?
The Choice for Collection System Solutions
Continue to invest in New Technology, training and career paths
Stay active in technical societies
Take our experience/methodology to new regions
Other ideas for discussion- today & tomorrow
RJN Its Time for Sustained Growth
2014- New Organizational Structure
President / CEO, COO, CSO, CFO

RJN - The Future
2015 and Beyond: New Organization Structure
and Our Market will support 10% Annual Growth!

0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20082009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Setting the Stage
Building for Growth
Financial Overview
Session 1-3
Financial Statements
There are three basic financial statements for a
company
Balance
Sheet
Income
Statement
Statement of
Cash Flows
Balance Sheet
The Balance Sheet generally tell you what the company
owns and owes


Some Key Indicators
Current Ratio
Total Liabilities to Total Assets
Debt Service Ratio
Income Statement
Generally tells you what the company is earning
Key Components
Net Revenue
Gross Profit
Indirect Labor
Indirect Costs
Contribution Margin
Group Support Allocation
Net Income
Statement of Cash Flows
Generally tells you the sources of cash as well as the
use of the cash

Income Statement (aka P & L)
A Simple P & L

This is an example of part
of a Profit & Loss
statement for an office
Notice it stops at the
Contribution Margin
What is the Contribution
used for?
Where does a projects
P & L stop?
Gross Revenues 1,000,000
- Other Direct Costs 300,000
Net Revenue 700,000 100%
- Direct Labor 197,200 28%
Gross Margin 502,800 72%
- Indirect Labor 141,400 20%
- Office Overhead 165,000 24%
Contribution Margin 196,400 28%
Effective Labor Multiplier 3.55
(700,000/197,200)
Labor Multiplier
Company P & L
If we see the labor
multiplier mapped against
the P & L, then we can
see how a single multiplier
can affect the company
profit.

We can also see how our
overhead costs can affect
the multiplier calculation.
Gross Revenues 23,300,000
- Other Direct Costs 6,990,000
% of NR % of Direct Labor
Net Revenue 16,310,000 100% 344%
- Direct Labor 4,736,000 29% 100%
Gross Margin 11,574,000 71%
- Indirect Labor 6,360,900 39%
228%
Overhead 4,450,000 27%
Net Income 763,100 5% 16%
Effective Labor Multiplier 3.44
(16,310,000/4,736,000)
Healthy Companies
Net Revenues are growing

Net Income is growing

Billing is current and WIP is low

Cash flow is positive and cash reserves are
growing
Healthy Companies
Days Sales Outstanding (DSO) is low for the
industry

Current Ratio is greater than 2.0

Reinvestment for the future is occuring
Financial Health
13,000
13,500
14,000
14,500
15,000
15,500
16,000
16,500
17,000
17,500
2007 2008 2009 2010 2011 2012 2013 2014
F
Net Revenue
Net Revenue
Trend
0
200
400
600
800
1000
1200
1400
1600
1800
2007 2008 2009 2010 2011 2012 2013 2014
F
Net Income before ESOP Contribution
Net Income before
ESOP Contribution
Trend
Financial Health
Our DSO is 49 days versus the industry average
of 77 days

Our WIP has historically been low (WSSC has
impacted the recent past)
RJN Financial Health
We are investing in the future of our company
through hiring, upgrading the infrastructure, and
systems such as RPM

According to A/E Clarity, it costs us about $70k
to bring in a new hire plus the amount of lost
productivity to current staff to do training. This
impacts the P & L as we have seen this year
Goals and Areas for Improvement
Our Current Ratio is at 1.2. We need to increase it to 2.0
or higher

For the last couple of years, we had no debt. With our
growth, we have been financing more. We need to pay
off our loans within 2 years.

After our loans are paid off, our goal is to return our Line
of Credit balance to less than or equal to on payroll
amount
Growth Goals
Revenue growth of 8% annually

Achieve Operating Income before ESOP
contributions of 11% of Net Revenue
consistently and then drive it up to 15%

Drive overhead costs below 195%
RJN Stock Price vs. Dow
6000
6500
7000
7500
8000
8500
9000
9500
10000
10500
11000
11500
12000
12500
13000
13500
14000
14500
15000
15500
16000
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
J
a
n
-
9
6
J
a
n
-
9
7
J
a
n
-
9
8
J
a
n
-
9
9
J
a
n
-
0
0
J
a
n
-
0
1
J
a
n
-
0
2
J
a
n
-
0
3
J
a
n
-
0
4
J
a
n
-
0
5
J
a
n
-
0
6
J
a
n
-
0
7
J
a
n
-
0
8
J
a
n
-
0
9
J
a
n
-
1
0
J
a
n
-
1
1
J
a
n
-
1
2
J
a
n
-
1
3
J
a
n
-
1
4
RJN vs Dow Jones
RJN Dow Jones
Share Price
$101.00
$110.00
$98.30
$95.25
$104.00
$100.50
$105.30
$119.00
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY12 FY13
Share Price
Recent Contributions to our ESOP
423
188
495
500
850
830
650 650
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2013 2014 F
ESOP Contributions
Comparison to the Industry
0%
2%
4%
6%
8%
10%
12%
14%
2009 2010 2011 2012 2013
Retirement Contributions
(Percentage of Total Labor Cost)
Industry
RJN Group
What can we do to impact the stock price?
Price projects well with a good margin

Execute projects at or below budgeted costs (no
overruns)

Document extra services or out of scope and
ask for change orders when appropriate

Hold our subs to their budgets
What can we do to impact the stock price?
Treat equipment gently to reduce repair costs

Scheduled replacement cycles for vans and
computers

What other ways to hold down overhead can you
suggest?
Questions??
Setting the Stage
Believing We Can Get There?
Session 1-4
Believing We Can Get There
Planning Process
Gold Team
Ops Summit
New Org structure
Strengthening our Bench
Technology Impacts


Believing We Can Get There - Planning
Gold Team
Validate Strategic Plan
Financial Structure (P&L, Motivators)
Operational Consistency
Leadership Structure
Outside Consultant


Planning
Operational Issues Summary
Unity
Tear Down Silos
Resource Sharing and Management
Centralized Services - Practice Centers / Leaders
Standards
Standardized field tasks
Final Report Process
Talent Development
Recruitment Assistance
Field Training
Career Paths
Competency Matrices
Technical Directors
Developing Powerhouse Senior PMs
Planning
Operational Issues Summary
Technology
Cartopac Alternative costs and downtime
Consolidate data collection, software, software services and IT
Bolt-on CityWorks, InfoMaster, Riva
I/I Tools
Efficiency
Optimize PM and OPS Managers Time
Production Statistics
Financial Efficiencies

Planning
Operational Issues Key Priorities
Upgrade hand-held data interface
Standardize Field Tasks
Implement Structured Training
Develop Career paths
Revise P&L Incentives

New Organizational Structure
Principal Commitment
Infrastructure for Growth
Authority Aligns with Responsibility
Common Performance Goals
Provides for Employee Career Paths
Leadership Transition Plan



Strengthening our Bench
Develop execution resources to support sales
Hire and mature staff talent
Encourage resource sharing across Offices
Being ready, flexible, available, mobile, nimble
Identify and mature service competence
Improve Efficiency
Become more Price Competitive
Broaden choices for stand-alone Senior PMs


Supporting Growth
Technology and Differentiation
Incorporate best-in-class tools and services
Improve efficiency, production and quality
Become more cost competitive, drive bottom line
Provide Added Value
High quality deliverables
Bolt-on Services
Value-added Proposition
Regain innovation and leadership recognition


Whats in it for me
Get involved in building our organization infrastructure
Pursue career growth opportunities
Encourage employee morale in a growing company
Secure long-term stability
Increase profits for reinvestment
Increase ownership profit sharing distributions