EP Inc.

Summary Balance Sheets

Fiscal Years Ended 2003 - 2006
($ in thousands)
Projections
Audited
2003
Cash and Marketable Securities
Accounts Receivable - Net ADA
Inventories
Prepaid Expenses
Assets Held for Sale
Total Current Assets

Audited
2004

Audited
2005

Audited
2006

Forecast
2007

Forecast
2008

Forecast
2009

Forecast
2010

Forecast
2011

2,440
1,279
443
108
350
4,620

368
1,746
614
221
0
2,949

2,202
1,637
657
253
0
4,749

762
2,406
720
286
0
4,174

1,347
3,114
910
286
0
5,656

2,722
3,917
1,144
286
0
8,069

4,751
4,927
1,440
286
0
11,404

7,610
6,198
1,811
286
0
15,905

11,518
7,797
2,278
286
0
21,879

11,987
11,987

10,508
10,508

9,837
9,837

9,119
9,119

8,643
8,643

8,226
8,226

7,862
7,862

7,543
7,543

7,264
7,264

287
16,894

216
13,673

253
14,839

263
13,556

263
14,562

263
16,559

263
19,529

263
23,711

263
29,406

955
1,226
119
572
2,872

996
1,085
0
16
2,097

948
974
0
27
1,949

1,288
1,604
0
27
2,919

1,563
1,816
0
27
3,406

1,966
2,285
0
27
4,278

2,473
2,874
0
27
5,374

3,111
3,615
0
27
6,754

3,914
4,548
0
27
8,489

Senior Debt
Subordinated Junior Debt
Capital Lease Obligations
Deferred Rent
Due to Related Party
Total LT Liabilities

200
10,566
469
163
0
11,398

1,166
11,315
30
128
0
12,639

2,180
12,108
42
100
250
14,680

0
12,955
25
146
250
13,376

0
12,956
25
146
250
13,377

0
12,956
25
146
250
13,377

0
12,956
25
146
250
13,377

0
12,956
25
146
250
13,377

0
12,956
25
146
250
13,377

Total Liabilities

14,270

14,736

16,629

16,295

16,783

17,655

18,751

20,131

21,866

1
35,506
(32,883)
2,624

1
35,505
(36,569)
(1,063)

1
35,505
(37,296)
(1,790)

1
35,505
(38,245)
(2,739)

1
35,506
(37,728)
(2,221)

1
35,506
(36,603)
(1,096)

1
35,506
(34,729)
778

1
35,506
(31,927)
3,580

1
35,506
(27,967)
7,540

16,894

13,673

14,839

13,556

14,563

16,559

19,529

23,711

29,406

1.6
1.3

1.4
1.0

2.4
2.0

1.4
1.1

1.7
1.3

1.9
1.6

2.1
1.8

2.4
2.0

2.6
2.3

35.8
13.7
29.6
37.9

38.9
19.0
30.8
33.6

31.4
19.4
27.9
28.7

34.1
16.2
29.0
36.1

35.1
17.1
29.3
34.1

35.1
17.1
29.3
34.1

35.1
17.1
29.3
34.1

35.1
17.1
29.3
34.1

35.1
17.1
29.3
34.1

81.1%
78.7%

109.3%
109.0%

114.3%
113.9%

126.7%
126.4%

120.6%
120.4%

109.2%
109.0%

94.3%
94.2%

78.4%
78.3%

63.3%
63.2%

(0)

(0)

(0)

(0)

(0)

Property, Plant, Equipment

Net PPE
Security Deposits, Trademarks & Other Assets
Total Assets
Accounts Payable
Accrued Liabilities
SBA Debt
Current Portion of Capital Lease Obligations
Total Current Liabilities

Common Stock
Additional Paid-in-Capital
Accumulated Deficit
Shareholders' Equity
Total Liabilities & Shareholders' Equity
Current Ratio
Quick Ratio
Days
Days
Days
Days

Sales in AR
COGS in Inventory
COGS in Accounts Payable
COGS in Accrued Liabilities

Total LT Debt/Total Capital

Total Debt/Total Capital
Balance Sheet Test
Assumptions
Prepaid Expenses/Other Current Assets
Assets Held for Sale
Security Deposits, Trademarks & Other Assets
SBA Debt
Current Portion of Capital Lease Obligations
Senior Debt
Subordinated Junior Debt
Capital Lease Obligations
Deferred Rent
Due to Related Party
Common Stock
Additional Paid-in-Capital
Growth in PPE
Days Sales in AR
Days COGS in Inventory
Days COGS in AP
Days COGS in Accrued Expenses

286
0
263
0
27
0
12956
25
146
250
1
35506
-7.5%
35.1
17.1
29.3
34.1

EP Inc.
Summary Income Statements
Fiscal Years Ended 2003 - 2006
($ in thousands)
Projections
Audited
2003

Audited
2004

Audited
2005

Audited
2006

Forecast
2007

Forecast
2008

Forecast
2009

Forecast
2010

Forecast
2011

Net Sales
Cost of Goods Sold
Gross Profits

13,026
11,796
1,230

100.0%
90.6%
9.4%

16,389
11,787
4,602

100%
72%
28.1%

19,019
12,381
6,638

100%
65%
34.9%

25,774
16,233
9,541

100%
63%
37.0%

32,422
19,453
12,969

100%
60%
40.0%

40,785
24,471
16,314

100%
60%
40.0%

51,305
30,783
20,522

100%
60%
40.0%

64,539
38,723
25,816

100%
60%
40.0%

81,186
48,712
32,474

100%
60%
40.0%

SG&A Expenses
Gain on Disposal of PPE
Impairment of PPE
Depreciation/Amort. Expense
Recovery of Insurance Claim
Other (income) Expense
Operating Income/(Loss)

4,239
(37)
2,393
2,225
0
249
(7,839)

32.5%
-0.3%
18.4%
17.1%
0.0%
1.9%
-60.2%

5,309
(298)
0
1,586
0
(20)
(1,975)

32.4%
-1.8%
0.0%
9.7%
0.0%
-0.1%
-12.1%

5,769
0
0
1,217
(1,418)
11
1,059

30.3%
0.0%
0.0%
6.4%
-7.5%
0.1%
5.6%

6,073
0
0
1,231
0
445
1,792

23.6%
0.0%
0.0%
4.8%
0.0%
1.7%
7.0%

9,632
0
0
1,141
0
500
1,696

29.7%
0.0%
0.0%
3.5%
0.0%
1.5%
5.2%

12,116
0
0
1,082
0
500
2,616

29.7%
0.0%
0.0%
2.7%
0.0%
1.2%
6.4%

15,242
0
0
1,029
0
500
3,751

29.7%
0.0%
0.0%
2.0%
0.0%
1.0%
7.3%

19,173
0
0
984
0
500
5,159

29.7%
0.0%
0.0%
1.5%
0.0%
0.8%
8.0%

24,119
0
0
944
0
500
6,912

29.7%
0.0%
0.0%
1.2%
0.0%
0.6%
8.5%

5,975
45.9%
(13,814) -106.0%
32
0.2%
(13,846) -106.3%

1,723
(3,698)
(12)
(3,686)

10.5%
-22.6%
-0.1%
-22.5%

(1,767)
(708)
18
(726)

-9.3%
-3.7%
0.1%
-3.8%

(2,705)
(913)
35
(948)

-10.5%
-3.5%
0.1%
-3.7%

912
784
266
517

2.8%
2.4%
0.8%
1.6%

912
1,704
579
1,125

2.2%
4.2%
1.4%
2.8%

912
2,839
965
1,874

1.8%
5.5%
1.9%
3.7%

912
4,247
1,444
2,803

1.4%
6.6%
2.2%
4.3%

912
6,000
2,040
3,960

1.1%
7.4%
2.5%
4.9%

(1,975)
1,586
(389)

-12.1%
9.7%
-2.4%

1,059
1,217
2,276

5.6%
6.4%
12.0%

1,792
1,231
3,023

7.0%
4.8%
11.7%

1,696
1,141
2,837

5.2%
3.5%
8.7%

2,616
1,082
3,698

6.4%
2.7%
9.1%

3,751
1,029
4,780

7.3%
2.0%
9.3%

5,159
984
6,142

8.0%
1.5%
9.5%

6,912
944
7,856

8.5%
1.2%
9.7%

Interest Expense/(Income)
Pre-Tax Income/(Loss)
Provision for Income Taxes
Net Income/(Net Loss)
Operating Income/(Loss)
Add: Depr. & Amort. Expenses
EBITDA

(7,839)
2,225
(5,614)

Capital Expenditures
Dividends

-60.2%
17.1%
-43.1%

1,441
0

Growth in Net Sales

Return on Assets
Return on Equity
EBITDA/Interest Expense

143
0

N/A
-82.0%
-527.7%
-0.9

Assumptions
Net Sales Growth
COGS as % of Sales
SGA Expenses as % of Sales
Depreciation Expense % of Prior Years Fixed Asset

25.8%
60%
29.7%
12.5%

Interest Rate on Subordinated Junior Debt

Interest Rate on Capital Lease Obligations
Interest Income
Other Expenses
Other Income
Tax Rate
Capital Expenditures
Asset Dispositions

7%
9.75%
0
500
0
34%
665
0

25.8%
-27.0%
346.8%
-0.2

546
0
16.0%
-4.9%
40.6%
-1.3

513
0
35.5%
-7.0%
34.6%
-1.1

665
0

665
0

665
0

665
0

665
0

25.8%
3.6%
-23.3%
3.1

25.8%
6.8%
-102.6%
4.1

25.8%
9.6%
240.9%
5.2

25.8%
11.8%
78.3%
6.7

25.8%
13.5%
52.5%
8.6

Notes:
Have sales growth percentage for each year. He used case facts to determine growth for each
year.
Set formula for retained earnings and subtract dividends even if there aren't any.
What case facts support growth rates you pick? Does the case say we will perform well/lots of
room to expand?
Run percentage change in each of the goven years to give you an idea if it is a narrow
percentage change or not.
BEWARE of averages.
PPE= last year PPE + capex - depreciation expense (FIXED)
Make sure interest expense also includes current portion of debt (FIXED)
Add DuPonte ROE formula to Income stmt