ex991q32013

Gross margin was 45.5% of revenue in Q3 2013 versus 48.7% in Q3 2012. The decrease was due to strength in the Greenfield project business which represented 42% of total revenue in Q3 versus only 35% in the year ago period. In addition, Greenfield gross margin results were negatively impacted by product mix and specific project circumstances. Adjusted EBITDA excluding management fees was $18.9 million, an increase of 1% versus the $18.7 million generated in Q3 2012.

Q3 2013 net income of $7.7 million reflected an improvement of $0.8 million versus $6.9 million generated in Q3 2012. Excluding transaction expenses from the prior year period the Company reported Q3 2012 adjusted net income of $7.2 million and $0.23 per fully diluted common share, thus Q3 2013 performance reflects growth of $0.01 per diluted share, versus Q3 2012, or 4%.

On a year to date basis the Company generated record revenue of $212.0 million reflecting 5% growth versus revenue of $202.5 million in fiscal 2012. Foreign currency negatively impacted revenue by approximately $7.1 million year to date versus fiscal 2012, an impact of approximately 3%. US Dollar strength versus the Euro and Canadian Dollar were the primary causes at $4.7 and $1.4 million, respectively. Gross margin percentage of 47.6% year to date 2013 compared to 48.2% in fiscal 2012. Adjusted EBITDA excluding management fees was $56.8 million year to date, an increase of $3.6 million or 7% versus fiscal 2012.

Net income year to date was $21.3 million, a record $0.67 per share, versus net income of $5.8 million in fiscal 2012. After excluding transaction expenses, the Company generated year to date record adjusted net income of $23.2 million and $0.73 per fully diluted common share in fiscal 2013 versus fiscal 2012 adjusted net income of $19.2 million and $0.63 per fully diluted common share, growth of 16%. Foreign currency headwinds reduced year to date earnings by $0.02 per fully diluted share versus 2012.

Thermon's senior management team, including Rodney Bingham, President and Chief Executive Officer, and Jay Peterson, Chief Financial Officer, will discuss Q3 2013 results during a conference call today at 10:00 a.m. (Central Standard Time), which will be simultaneously webcast on Thermon's Investor Relations website located at http://ir.thermon.com. Investment community professionals interested in participating in the question-and-answer session may access the call by dialing (877) 312-5421 from within the United States/Canada and (253) 237-1121 from outside of the United States/Canada. A replay of the webcast will be available on Thermon's Investor Relations website beginning two hours after the conclusion of the call.

Through its global network, Thermon provides highly engineered thermal solutions, known as heat tracing, for process industries, including energy, chemical processing and power generation. Thermon's products provide an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature maintenance, environmental monitoring and surface snow and ice melting. Thermon is headquartered in San Marcos, Texas. For more information, please visit www.thermon.com.

Disclosure in this release to “Adjusted EPS,” “Adjusted EBITDA excluding management fees,” “Adjusted net income” and “Return on equity” which are "non-GAAP financial measures" as defined under the rules of the Securities and Exchange Commission (the “SEC”), are intended as supplemental measures of our financial performance that are not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"). “Adjusted net income” and “Adjusted earnings per share (or EPS)” represents net income before certain transaction expenses and expenses related with debt redemptions, per fully-diluted common share. “Adjusted EBITDA excluding management fees” represents net income before interest expense (net of interest income), income tax expense, depreciation and amortization expense and other non-cash charges such as stock-based compensation expense, transaction expenses incurred in connection with the CHS Transactions and our initial public offering, and other transactions not associated with our ongoing operations, such as the loss on retirement of debt, as adjusted to further exclude management and termination fees paid to our private equity sponsors. “Return on equity” represents “Adjusted EBITDA excluding management fees” for the three month period ended December 31, 2012 that is multiplied times four to represent a full year's results, divided by the average of total shareholders' equity at December 31, 2012 and September 30, 2012. We believe that the average equity properly accounts for net income that occurred during the three months ended December 31, 2012.

We believe these non-GAAP financial measures are meaningful to our investors to enhance their understanding of our financial performance and are frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report Adjusted EPS, Adjusted EBITDA, Adjusted net income or Return on equity. Adjusted EPS, Adjusted EBITDA excluding management fees, Adjusted net income and Return on equity should be considered in addition to, not as substitutes for, income from operations, net income, net income per share and other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted EPS, Adjusted EBITDA excluding management fees, Adjusted net income and Return on equity may not be comparable to similarly titled measures reported by other companies. For a description of how Adjusted EPS, Adjusted EBITDA excluding management fees, Adjusted net income and Return on equity are calculated from our net income and a reconciliation of our Adjusted EPS, Adjusted EBITDA excluding management fees, Adjusted net income and Return on equity to net income per share and net income, as applicable, see the sections of this release titled "Reconciliation of Net Income to Adjusted EBITDA excluding management fees and Return on Equity" and “Reconciliation of Net Income to Adjusted Net Income and EPS.”

This release may include forward-looking statements within the meaning of the U.S. federal securities laws in addition to historical information. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. When used, the words "anticipate," "assume," "believe," "budget," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "will," "future" and similar terms and phrases are intended to identify forward-looking statements in this release. Forward-looking statements reflect our current

expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial condition, results of operations and cash flows.

Actual events, results and outcomes may differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, (i) general economic conditions and cyclicality in the markets we serve; (ii) future growth of energy and chemical processing capital investments; (iii) changes in relevant currency exchange rates; (iv) our ability to comply with the complex and dynamic system of laws and regulations applicable to international operations; (v) a material disruption at any of our manufacturing facilities; (vi) our dependence on subcontractors and suppliers; (vii) our ability to obtain standby letters of credit, bank guarantees or performance bonds required to bid on or secure certain customer contracts; (viii) competition from various other sources providing similar heat tracing products and services, or other alternative technologies, to customers; (ix) our ability to attract and retain qualified management and employees, particularly in our overseas markets; (x) our ability to continue to generate sufficient cash flow to satisfy our liquidity needs; (xi) the extent to which federal, state, local and foreign governmental regulation of energy, chemical processing and power generation products and services limits or prohibits the operation of our business; and (xii) other factors discussed in more detail under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, as filed with the Securities and Exchange Commission on June 8, 2012.



	Thermon Group Holdings, Inc. and Subsidiaries
	Condensed Consolidated Balance Sheet
	(in Thousands)

		December 31, 2012 (Unaudited)		March 31, 2012
Assets
Current assets:
Cash and cash equivalents		$	28,389	$	21,468
Accounts receivable, net of allowance for doubtful accounts of $858 and $1,434 as of Dec. 31, 2012 and March 31, 2012, respectively		55,899		50,037
Inventories, net		40,923		38,453
Costs and estimated earnings in excess of billings on uncompleted contracts		2,674		1,996
Income taxes receivable		5,070		5,193
Prepaid expenses and other current assets		7,099		6,853
Deferred income taxes		3,396		3,664
Total current assets		143,450		127,664

Property, plant and equipment, net		31,097		27,661
Goodwill		117,984		118,007
Intangible assets, net		136,320		144,801
Debt issuance costs, net		4,570		7,446
Total assets		$	433,421	$	425,579

Liabilities and shareholders' equity
Current liabilities:
Accounts payable		$	24,156	$	15,728
Accrued liabilities		15,057		22,442
Current portion of long term debt		—		21,000
Obligations due to settle the CHS Transactions		3,325		3,528
Billings in excess of costs and estimated earnings on uncompleted contracts		2,178		2,446
Income taxes payable		2,385		1,374
Total current liabilities		47,101		66,518

Long-term debt, net of current maturities		118,145		118,145
Deferred income taxes		43,073		45,999
Other noncurrent liabilities		2,702		2,437
Total liabilities		211,021		233,099

Common Stock		31		30
Additional paid in capital		200,807		191,998
Foreign currency translation adjustment		3,147		3,362
Retained earnings accumulated deficit		18,415		(2,910		)
Total shareholders' equity		222,400		192,480
Total liabilities and shareholders' equity		$	433,421	$	425,579



Thermon Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
(Unaudited, in Thousands except per share amounts)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	Dec. 31, 2012			Dec. 31, 2011			Dec. 31, 2012			Dec. 31, 2011

Sales (a)	$	76,750		$	69,197		$	211,951		$	202,483
Cost of sales (a)	41,799			35,506			111,022			104,852
Gross profit	34,951			33,691			100,929			97,631
Operating expenses:
Marketing, general and administrative and engineering	16,410			15,242			46,525			45,006
Stock compensation expense	475			58			869			6,456
Management fees (b)	—			—			—			8,141
Amortization of other intangible assets	2,813			2,809			8,405			8,572
Income from operations	15,253			15,582			45,130			29,456

Interest expense, net	(2,860		)	(3,795		)	(8,959		)	(11,685		)
Acceleration of unamortized debt cost	—			(174		)	(2,318		)	(3,096		)
Debt cost amortization	(220		)	(162		)	(806		)	(1,003		)
Loss on retirement of debt	—			(229		)	—			(3,195		)
Interest expense, net	(3,080		)	(4,360		)	(12,083		)	(18,979		)

Other expense	(274		)	(215		)	(137		)	(1,402		)
Income before provision for taxes	11,899			11,007			32,910			9,075
Income tax expense	4,161			4,074			11,585			3,294
Net income	$	7,738		$	6,933		$	21,325		$	5,781

Net income per common share:

Basic income per share	$	0.25		$	0.23		$	0.70		$	0.20
Diluted income per share	$	0.24		$	0.22		$	0.67		$	0.19
Weighted -average shares used in computing net income per common share:
Basic common shares	30,947			29,587			30,673			28,937
Fully-diluted common shares	31,871			31,216			31,726			30,480



	Thermon Group Holdings, Inc. and Subsidiaries
	Reconciliation of Net Income to Adjusted EBITDA excluding management fees and Return on Equity
	(Unaudited, in Thousands except per share amounts)

Adjusted EBITDA excluding management fees and Return on Equity		Three Months Ended Dec. 31, 2012		Three Months Ended Dec. 31, 2011		Nine Months Ended Dec. 31, 2012		Nine Months Ended Dec. 31, 2011
Net income		$	7,738	$	6,933	$	21,325	$	5,781
Interest expense, net		3,080		4,360		12,083		18,979
Income tax expense		4,161		4,074		11,585		3,294
Depreciation and amortization expense		3,450		3,285		10,306		10,623
EBITDA-non-GAAP basis		$	18,429	$	18,652	$	55,299	$	38,677
Stock compensation expense		475		58		869		6,457
Refinance revolving line of credit expense included in operating expense		—		—		94		—
Fiscal 2013 Shelf Registration and secondary offering expenses		—		—		536		—
Adjusted EBITDA-non-GAAP basis		$	18,904	$	18,710	$	56,798	$	45,134
Termination of management fee agreement with private equity sponsor		—		—		—		8,104
Adjusted EBITDA excluding management fees - non-GAAP basis		$	18,904	$	18,710	$	56,798	$	53,238



Adjusted Net Income and EPS	Three Months Ended Dec. 31, 2012		Three Months Ended Dec. 31, 2011			Nine Months Ended Dec. 31, 2012			Nine Months Ended Dec. 31, 2011			Adjustment to:

GAAP Net income	$	7,738	$	6,933		$	21,325		$	5,781

Acceleration of stock compensation in connection with the IPO	—		—			—			6,341			Operating expense
Management fees which terminated at the IPO	—		—			—			8,105			Operating expense
Fiscal 2013 Shelf Registration and secondary offering expenses	—		—			536			—			Operating expense
Refinance revolving line of credit expense - operating expense	—		—			94			—			Operating expense
Premium paid on redemption of long term debt	—		229			—			3,195			Loss on retirement of debt
Acceleration of unamortized debt costs - optional bond redemptions	—		174			871			3,096			Loss on retirement of debt
Acceleration of unamortized debt cost - refinance revolving line of credit	—		—			1,447			—			Acceleration of unamortized debt

Tax effect of financial adjustments	—		(141		)	(1,042		)	(7,278		)	Income tax benefit
Adjusted Net Income - non-GAAP basis	$	7,738	$	7,195		$	23,231		$	19,240


Adjusted fully-diluted earnings per common share - non-GAAP basis	$	0.24	$	0.23		$	0.73		$	0.63

Fully-diluted common shares	31,871		31,216			31,726			30,480


•	Backlog at Q3 was $107.1 million an increase of $4.9 million or 5%


•	Return on equity of 35% measured by annualized Q3 Adjusted EBITDA


(a)	Prior period freight billings have been reclassified from a reduction of cost of sales to sales in order to conform to current period presentation.


(b)	Management fees for the nine month period ended December 31, 2011 includes $7.8 million in termination fees paid to our private equity sponsors at the completion of the IPO in Q1 2012. The fees were paid in settlement of the remaining term of the management services agreement that was in place prior to the IPO.



Adjusted EBITDA Q3 - Annualized for a full fiscal year	$	75,616



Average total shareholders' equity for the three month period ended December 31, 2012	$	217,331


•	Revenue of $76.8 million, growth of 11%