From: Marcus Webb <mwebb@brickfieldep.com>
To: Jennifer Liu <jliu@brickfieldep.com>
Date: December 01, 2024 12:00 AM
Subject: Portfolio company concerns - Meridian Holdings

**From:** Sarah Johnson, Senior Associate  
**To:** David Thompson, Managing Director  
**Date:** October 15, 2023  
**Subject:** Concerns Regarding Meridian Holdings' Q3 Performance  

Dear David,

I hope this message finds you well. I wanted to bring to your attention some concerns regarding our portfolio company, Meridian Holdings, following their Q3 performance review.

As you may recall, Meridian's financial targets for this quarter were set at $15 million in EBITDA, reflecting a 10% increase year-over-year. However, preliminary results indicate they are trending towards approximately $12 million, which is about 20% below our expectations. This decline appears to be driven primarily by two factors: a significant decrease in demand for their core product line and increased competition in the market.

Our recent discussions with the management team revealed that the supply chain disruptions from Q2 have severely impacted their ability to meet production goals, which in turn has affected sales. Additionally, the entry of a new competitor has led to aggressive pricing strategies that have further pressured Meridian's margins. As of today, their gross margin has dropped to 38% from 45% in the previous quarter, a significant red flag for a company that traditionally maintained healthy profitability levels.

Given these issues, I suggest we schedule a meeting with Meridian's leadership team to reassess their operational strategies and financial forecasts. We need to ensure they have a clear action plan to address these challenges. It would also be prudent to evaluate potential restructuring options or strategic initiatives, such as diversifying their product offerings or exploring partnerships that could bolster their competitive positioning.

Please let me know your availability for a discussion this week. I believe it is crucial for us to act swiftly to mitigate any long-term impacts on our investment in Meridian Holdings.

Best regards,

Sarah Johnson  
Senior Associate  
[Your PE Firm Name]  
[Your Contact Information]  