Ann: Goldman Sachs Small & Mid Cap Conference Presentation, page-6

I don't think it is that simple. I'll take a guess at a few of reasons he might have chosen to sell at that time. Since the issue of re-affirming guidance is being questioned, I'll make a few points on that issue specifically. Just to clarify, I do not recall when/if broker guidance was re-affirmed.

Generally speaking, it is my observation that re-affirming guidance is typically based upon: 1) the historical financial information available to the company at such time and 2) whether there is any reason for the company to think something will change in the near future which would impact how the company is tracking. So specifically as it relates to EML, if guidance was re-affirmed as late as the AGM in mid-Nov, the information available to the company at that time would have been based on the Q1FY18 (+ maybe Oct). Due to the significant seasonality of the business, Nov & Dec had a huge impact on the H1FY18 results. Based on my understanding of industry norms I would estimate Nov & Dec gift cards sales are in the range of about 70-75% of the total gift card sales for the H1FY18. I realize the company does more than gift cards, but that variable (still unknown in Mid-Nov) has a significant impact on H1FY18 results. My point being, in mid-Nov I just don't see how the company had as much information about the H1FY18 results as is being implied here. The facts just don't seem to line up with that opinion.

In my opinion, there is more relevant context regarding the timing of that sale than the issue above.

1) I think EML (like many companies) has a pretty restrictive trading policy, which significantly limits the opportunities employees have to sell shares. As I understand, the periods before the AGM, half year results & full year results would have locked out insiders from selling for a minimum 3 months of the year -- probably closer to 4 months in reality. That's before any additional lock out periods when there are significant new contracts in the works or anything else going on which is deemed material. Taking all those restrictions into consideration & simply looking back at the dates of EML press releases (with all the new contract wins announced by the company between mid-Sept thru mid-Nov), it would be logical to conclude that Tom was locked out from selling shares going back to at least late June (probably earlier since contracts typically take months to negotiate) until after the AGM in Nov.

2) Keeping in mind that the half year financial results were pretty good by most standards (not bad at all), and that a significant amount of the value of EML shares is/was due to the high growth expectations, I would make the point that the expected future contribution to earnings of the several contract wins in that period could easily out-weigh any potential miss in the H1FY18 results -- which again was likely unknown at the time. In short, in mid-Nov I think the company had better prospects for the future with those 4 significant contract wins, whether or not the H1FY18 results were a little off.

3) The $4m of stock needs to be taken in context. Tom had a 40x return on the original investment mentioned above in my previous post. Wouldn't you want to sell some shares if you were sitting on a 40x return (several million $) if that had become a substantial portion of your net worth?

So if you're Tom, you've put in several years of work as the CEO to do your part to drive the value of the company from where you bought in, the company had recently landed several significant contracts in calendar year 2017 (going back to McMillan Shakespeare in early 2017), & he can't sell when the stock price reflects those achievements...after being restricted from selling for several months?