NEIGHBORHOOD INTELLIGENCE, INC.

Integration and Operating Progress

Year to date, the combined companies have removed more than $50 million of SG&A as each business has taken steps to improve its individual cost structure. As the businesses come together, the Company has identified at least an additional $30 million of savings opportunities through contract consolidation and renegotiation, technology consolidation, organizational simplification and the elimination of unnecessary duplication.

Following A&M’s comprehensive supply chain assessment, the Company has reconfigured its supply chain team and strategy to accelerate improvements in inventory flow, distribution, fulfillment and efficiency. Since the July 11 closing of The Container Store transaction, the Company has also been rebalancing and rebuilding inventory to support its sales objectives and has begun exiting several dozen locations, with those closures expected to be completed by year-end.

“We have spent the quarter taking deliberate actions to position the business for profitable growth,” said Amy Sullivan, President of Neighborhood Intelligence. “We are improving inventory, supply chain and productivity while removing unnecessary expense and complexity. The assessment work is largely behind us; our focus now is execution.”