EXHIBIT (c)(vi)
COLOR IMAGING INC.
Fiscal Year 2005 - 2009
Projected Condensed Financial Statements
$24 Million FY 2005 & Out Year Revisions
2005 Loss of Largest Customer & Less AIO Sales
Sales Regional VPs Increased to 6
Revision As of:
March 9, 2005
COMPANY CONFIDENTIAL
1
COLOR IMAGING, INC.
To the Board of Directors of Color Imaging, Inc.
Norcross, Georgia
PROJECTED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2005 - 2009
In connection with the compilation of the forecasted and unaudited balance
sheets and related statements of income, retained earnings, and cash flows and
summaries of significant assumptions for the periods ended December 31,
2005-2009, the following applies:
1. The financial forecasts present the Company's expected financial position,
results of operations, and cash flows for the forecast periods.
Accordingly, the forecasts reflects our judgment as of the date of these
forecasts, of the expected conditions and our expected course of action.
The assumptions disclosed herein are those that management believes are
significant to the forecasts. There will usually be differences between the
forecasted and actual results, because events and circumstances frequently
do not occur as expected, and those differences may be material.
2. The financial forecasts presents our assumptions and expected financial
position, results of operations and cash flows consistent with the
accounting policies and principles used in preparing the Company's
historical financial statements.
3. We believe the assumptions underlying the forecast are reasonable and
appropriate.
4. The balance sheet for the year-ended December 31, 2004, is audited.
Revision As of:
March 9, 2005
________________________________________________________________________________
Safe Harbor Statement under the Private Securities Litigation Reform Act 1995:
Information in these forecasts involve Color Imaging's expectations, beliefs,
hopes, plans, intentions or strategies regarding the future and forward-looking
statements included in these projections are based upon information available to
Color Imaging as of the date of the projections, and we assume no obligation to
update any such forward-looking statements. These statements are not guarantees
of future performance and actual results could differ materially from our
current expectations. Other factors and risks associated with our business are
discussed from time to time in Color Imaging's filings with the SEC including
the Form 10-K filed February 22, 2005.
2
COLOR IMAGING, INC. 03/09/05
SWOT ANALYSIS
Our competitive strengths, weaknesses, opportunities and threats/risks
1. Strengths
- ------------
More than 15 years of toner experience for OEMs and aftermarket worldwide.
Significant and ongoing research and development commitment.
Color toner experience / products with no existing competition.
Significant product / working capital support from Taiwan affiliate.
Adding strategic relationships with critical vendors, particularly chemical
toners.
Sizable & broadly experienced sales organization.
Strong financial condition and access to additional financing.
2. Weaknesses
- -------------
Growing reliance on color products, AIO & color quality issues.
Factory staff / talent base.
New to retail distribution channel / no EDI experience.
Physical presence and warehouse distribution (primarily ATL only)
Customer service/support centered in Atlanta only.
3. Opportunities
- ----------------
First to market with color for popular copiers & Others with GPI support.
Increased sales/margins with new channels: direct to retailers and dealers.
"100% New" not limited by cartridge availability.
Few competitors, other than OEMs, with the resources, stragetic vendors,
ability and commitment to develop/introduce increasingly complex products.
4. Threats
- ----------
Quality (Toner & Cartridge) - Loss of customers/sales & Other Damages
AIO Competition
Patent issues/OEM threatened lawsuits or inadvertant infringement.
Cartridge / Toner / Chip Technology Increasingly Difficult
Fullfilment challenges for large customers (EDI / Delivery / Customer
Support)
3
Color Imaging, Inc. 03/09/05
_______________________________________________________________________________
2006 Sales Changes from 2005
DECREASES
- ---------
1. Loss of another $500,000 of MICR sales.
2. Loss of remainder of histocially two largest customers sales for another
$2 million.
Total Decreases: $2,500,000
INCREASES (Copier Products)
- ---------------------------
1. Color copier of $3 million.
2. Black text copier of $1.5 million.
Total Increases: $4,500,000
Note: AIO is assumed to be a relatively small contributer.
2005 Net Sales Increase: $2,000,000
_______________________________________________________________________________
2007-9 Sales Change Assumptions
Continued decline in MICR/Laser revenues offset
by like growth in copier product revenues.
4
COLOR IMAGING, INC. AS OF: 12/31/04
03/09/05
HISTORICAL & PROJECTED FINANCIAL INFORMATION
WITH EBITDA
EXCLUDING DISCONTINUED OPERATIONS
NO. PERIODS 12 12 12 12 12 12
TYPE ProForma ProForma ProForma Audit Audit Audit
BALANCE SHEET 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Cash 3,187 338,463 393,981 128,501 2,213,830 2,044,989
Accounts Receivable, Net 1,085,519 3,443,901 2,894,003 2,390,019 1,941,404 2,412,354
Inventory, Including In Transit 3,561,125 4,742,888 5,604,975 5,080,237 5,624,328 4,854,939
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Net Assets, Discontinued Oper.s 823,615 1,547,228 2,264,117 - - -
Other Assets 1,404,444 632,283 605,726 387,832 202,633 199,282
Current Assets 6,877,890 10,704,763 11,762,802 7,986,589 9,982,195 9,511,564
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Fixed Assets, Costs 9,151,158 11,553,344 7,483,186 8,521,610 8,994,704 9,216,502
Accumulated Deprecn (3,744,573) (4,225,173) (470,116) (1,483,499) (2,020,870) (2,614,670)
Fixed Assets, Net 5,406,585 7,328,171 7,013,070 7,038,111 6,973,834 6,601,832
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Other Assets 1,794,413 1,262,335 1,040,631 1,088,835 939,406 582,628
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Total Assets 14,078,888 19,295,269 19,816,503 16,113,535 17,895,435 16,696,024
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Revolving Line of Credit - -
Current Portion Long-term Debt 461,607 619,123 675,232 1,115,726 719,348 463,887
Current Liabilities 3,687,053 8,813,477 7,411,105 6,189,658 3,526,621 2,096,669
Long-term Liabilities 5,575,000 5,445,792 4,797,893 4,682,730 3,149,311 2,942,888
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities 9,262,053 14,259,269 12,208,998 10,872,388 6,675,932 5,039,557
Net Worth 4,816,835 5,036,000 7,607,505 5,241,147 11,219,503 11,656,467
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Total 14,078,888 19,295,269 19,816,503 16,113,535 17,895,435 16,696,024
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
PERCENT OF ASSETS
- ------------------------------
Accounts Receivable, Net 7.7% 17.8% 14.6% 14.8% 10.8% 14.4%
Inventory 25.3% 24.6% 28.3% 31.5% 31.4% 29.1%
Working Capital (Less Discont'd Ops) 2,367,222 344,058 2,087,580 1,796,931 6,455,574 7,414,895
Current Ratio 1.87 1.21 1.59 1.29 2.83 4.54
Debt to Worth 1.92 2.83 1.60 2.07 0.60 0.43
Debt to Tangible NW (Excls Discont'd) 2.32 4.09 2.28 2.07 0.60 0.43
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
COMMON SHARES O/S 7,000,000 7,490,948 10,099,175 8,437,965 12,730,505 12,690,305
Book Value Per Share $ 0.69 $ 0.67 $ 0.75 $ 0.62 $ 0.88 $ 0.92
============================== =========== =========== =========== =========== =========== ===========
INCOME STATEMENT
- ------------------------------
Historically Largest Customers 1,020,594 12,137,543 20,763,917 18,794,971 9,148,235 6,297,882
Other Customers 9,603,327 8,343,829 9,205,851 9,205,338 11,909,366 15,537,047
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Sales 10,623,921 20,481,372 29,969,768 28,000,309 21,057,601 21,834,929
% Growth, 1-Year Ago Katun/Lanier n/a 1089.3% 71.1% -9.5% -51.3% -31.2%
% Growth, 1-Year Ago Others n/a -13.1% 10.3% 0.0% 29.4% 30.5%
% Growth, 1-Year Ago n/a 92.8% 46.3% -6.6% -24.8% 3.7%
% Growth, Cummulative Since 1999 n/a 92.8% 182.1% 163.6% 98.2% 105.5%
Cost of Sales 7,647,710 17,499,276 25,598,095 23,421,429 15,789,077 16,283,131
----------- ----------- ----------- ----------- ----------- -----------
Gross Profit 2,976,211 2,982,096 4,371,673 4,578,880 5,268,524 5,551,798
----------- ----------- ----------- ----------- ----------- -----------
Administrative Expenses 1,136,794 1,105,865 1,680,054 1,312,317 1,679,576 1,373,694
Research & Development 919,562 790,306 791,498 946,848 1,176,085 1,171,502
Selling Expenses 1,017,489 881,176 1,168,585 1,331,454 1,745,811 2,370,767
----------- ----------- ----------- ----------- ----------- -----------
Operating Expenses 3,073,845 2,777,347 3,640,137 3,590,619 4,601,472 4,915,963
----------- ---------- ----------- ----------- ----------- ----------
Operating Income (97,634) 204,749 731,536 988,261 667,052 635,835
----------- ---------- ----------- ----------- ----------- -----------
Interest & Financing 256,598 469,215 395,598 330,606 164,438 90,160
Other Income (Expense) (349,793) (116,261) (39,782) 47,201 219,058 229,588
----------- ----------- ----------- ----------- ----------- -----------
Income Before Tax (704,025) (380,727) 296,156 704,856 721,672 775,263
Tax Provision (Benefit) (139,800) (134,592) (139,800) 274,246 288,700 311,000
----------- ----------- ----------- ----------- ----------- -----------
Income After Tax (564,225) (246,135) 435,956 430,610 432,972 464,263
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
INCOME STATEMENT RATIOS
- ------------------------------
Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales 72.0% 85.4% 85.4% 83.6% 75.0% 74.6%
----- ----- ----- ----- ----- -----
Gross Profit 28.0% 14.6% 14.6% 16.4% 25.0% 25.4%
----- ----- ----- ----- ----- -----
Administrative Expenses 10.7% 5.4% 5.6% 4.7% 8.0% 6.3%
Research & Development 8.7% 3.9% 2.6% 3.4% 5.6% 5.4%
Selling Expenses 9.6% 4.3% 3.9% 4.8% 8.3% 10.9%
---- ---- ----- ----- ----- -----
Operating Expenses 28.9% 13.6% 12.1% 12.8% 21.9% 22.5%
----- ----- ----- ----- ----- -----
Operating Profit -0.9% 1.0% 2.4% 3.5% 3.2% 2.9%
Interest & Financing 2.4% 2.3% 1.3% 1.2% 0.8% 0.4%
Income Before Tax -6.6% -1.9% 1.0% 2.5% 3.4% 3.6%
----- ----- ----- ----- ----- ----
Income After Tax -1.3% -0.7% -0.5% 1.0% 1.4% 1.4%
- ----------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Net Income / Common Share $ (0.08) $ (0.03) $ 0.04 $ 0.05 $ 0.03 $ 0.04
- ----------------------------- ----------- ----------- ----------- ----------- ----------- -----------
EBITDA
- ------------------------------
Net Income After Tax (564,225) (246,135) 435,956 430,610 432,972 464,263
Taxes (139,800) (134,592) (139,800) 274,246 288,700 311,000
Interest & Financing 256,598 469,215 395,598 330,606 164,438 90,160
Deprec'n & Amort. 939,473 863,574 603,100 542,661 537,371 593,800
1-Time Charges 239,934 636,353 225,083 - - -
----------- ----------- ----------- ----------- ----------- -----------
EBITDA 731,980 1,588,415 1,519,937 1,578,123 1,423,481 1,459,223
----------- ----------- ----------- ----------- ----------- -----------
EBIDTA / SALES 6.9% 7.8% 5.1% 5.6% 6.8% 6.7%
- ------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Current Portion Long-Term Debt 461,607 19,123 675,232 1,115,726 536,579 423,368
Interest & Financing Expense 256,598 469,215 395,598 330,606 164,438 90,160
----------- ----------- ----------- ----------- ----------- -----------
Fixed Charges 718,205 1,088,338 1,070,830 1,446,332 701,017 513,528
COVERAGE 1.02 1.46 1.42 1.09 2.03 2.84
- ----------------------------- ----------- ----------- ----------- ----------- ----------- -----------
FULL-TIME EQUIVALENT EMPLOYEES 98 98 92 77 91 80
SALES PER EMPLOYEE 108,407 208,994 325,758 363,640 231,402 272,937
============================== =========== =========== ========== ============ =========== ===========
COLOR IMAGING, INC. AS OF: 12/31/04
03/09/05
HISTORICAL & PROJECTED FINANCIAL INFORMATION
WITH EBITDA
EXCLUDING DISCONTINUED OPERATIONS
NO. PERIODS 12 12 12 12 12
TYPE BUDGET Projected Projected Projected Projected
BALANCE SHEET 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Cash 1,260,000 1,260,000 1,260,000 1,760,000 2,460,000
Accounts Receivable, Net 3,827,000 4,145,917 4,704,021 5,262,125 5,820,229
Inventory, Including In Transit 4,906,000 5,633,333 6,391,667 7,150,000 7,908,333
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Net Assets, Discontinued Oper.s - - - - -
Other Assets 37,000 37,000 37,000 37,000 3 7,000
Current Assets 10,030,000 11,076,250 12,392,688 14,209,125 16,225,563
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Fixed Assets, Costs 10,170,000 10,870,000 11,320,000 11,770,000 12,220,000
Accumulated Deprecn (3,201,000) (3,801,000) (4,401,000) (5,001,000) (5,601,000)
Fixed Assets, Net 6,969,000 7,069,000 6,919,000 6,769,000 6,619,000
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Other Assets 13,000 11,800 10,600 9,400 8,200
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Total Assets 17,012,000 18,157,050 19,322,288 20,987,525 22,852,763
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Revolving Line of Credit -
Current Portion Long-term Debt 410,000 595,000 80,000 85,000 90,000
Current Liabilities 2,627,552 3,096,178 2,639,670 2,302,060 1,811,419
Long-term Liabilities 2,577,572 1,982,572 1,902,572 1,817,572 1,727,572
- ------------------------------ ----------- ----------- --------- ----------- -----------
Total Liabilities 5,205,124 5,078,750 4,542,242 4,119,632 3,538,991
Net Worth 11,806,876 13,078,300 14,780,046 16,867,893 19,313,771
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Total 17,012,000 18,157,050 19,322,288 20,987,525 22,852,763
- ------------------------------ ----------- ----------- ----------- ----------- -----------
PERCENT OF ASSETS
- ------------------------------
Accounts Receivable, Net 22.5% 22.8% 24.3% 25.1% 25.5%
Inventory 28.8% 31.0% 33.1% 34.1% 34.6%
Working Capital (Less Discont'd Ops) 7,402,448 7,980,072 9,753,018 11,907,065 14,414,143
Current Ratio 3.82 3.58 4.69 6.17 8.96
Debt to Worth 0.44 0.39 0.31 0.24 0.18
Debt to Tangible NW (Excls Discont'd) 0.44 0.39 0.31 0.24 0.18
- ------------------------------ ----------- ----------- ----------- ----------- -----------
COMMON SHARES O/S 12,690,305 12,690,305 12,690,305 12,690,305 12,690,305
Book Value Per Share $ 0.93 $ 1.03 $ 1.16 $ 1.33 $ 1.52
============================== =========== =========== =========== =========== ===========
INCOME STATEMENT
- ------------------------------
Historically Largest Customers 2,039,574 - - - -
Other Customers 20,295,426 26,000,000 29,500,000 33,000,000 36,500,000
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Sales 24,000,039 26,000,000 29,500,000 33,000,000 36,500,000
% Growth, 1-Year Ago Katun/Lanier -67.6% -100.0% n/a n/a n/a
% Growth, 1-Year Ago Others 30.6% 28.1% 13.5% 11.9% 10.6%
% Growth, 1-Year Ago 9.9% 8.3% 13.5% 11.9% 10.6%
% Growth, Cummulative Since 1999 125.9% 144.7% 177.7% 210.6% 243.6%
Cost of Sales 16,345,802 17,420,000 19,765,000 22,110,000 24,455,000
Gross Profit 7,654,237 8,580,000 9,735,000 10,890,000 12,045,000
----------- ----------- ----------- ----------- -----------
Administrative Expenses 1,661,670 1,648,000 1,750,000 1,950,000 2,150,000
Research & Development 1,211,754 1,533,000 1,687,000 1,855,000 2,041,000
Selling Expenses 3,086,985 3,241,350 3,403,418 3,573,588 3,752,268
----------- ----------- ----------- ----------- -----------
Operating Expenses 5,960,409 6,422,350 6,840,418 7,378,588 7,943,268
----------- ----------- ----------- ----------- -----------
Operating Income 1,693,828 2,157,650 2,894,583 3,511,412 4,101,732
----------- ----------- ----------- ----------- -----------
Interest & Financing 62,536 57,511 77,240 58,065 62,169
Other Income (Expense) 69,428 18,900 18,900 26,400 36,900
----------- ----------- ----------- ----------- -----------
Income Before Tax 1,700,720 2,119,039 2,836,243 3,479,746 4,076,464
Tax Provision (Benefit) 680,372 847,616 1,134,497 1,391,898 1,630,585
----------- ----------- ----------- ----------- -----------
Income After Tax 1,020,348 1,271,424 1,701,746 2,087,848 2,445,878
- ------------------------------ ----------- ----------- ----------- ----------- -----------
INCOME STATEMENT RATIOS
- ------------------------------
Sales 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Sales 68.1% 67.0% 67.0% 67.0% 67.0%
----- ----- ----- ----- -----
Gross Profit 31.9% 33.0% 33.0% 33.0% 33.0%
----- ----- ----- ----- -----
Administrative Expenses 6.9% 6.3% 5.9% 5.9% 5.9%
Research & Development 5.0% 5.9% 5.7% 5.6% 5.6%
Selling Expenses 12.9% 12.5% 11.5% 10.8% 10.3%
----- ----- ----- ----- -----
Operating Expenses 24.8% 24.7% 23.2% 22.4% 21.8%
----- ----- ----- ----- -----
Operating Profit 7.1% 8.3% 9.8% 10.6% 11.2%
Interest & Financing 0.3% 0.2% 0.3% 0.2% 0.2%
Income Before Tax 7.1% 8.2% 9.6% 10.5% 11.2%
---- ---- ----- ----- -----
Income After Tax 2.8% 3.3% 3.8% 4.2% 4.5%
- ----------------------------- ----------- ----------- ----------- ----------- -----------
Net Income / Common Share $ 0.08 $ 0.10 $ 0.13 $ 0.16 $ 0.19
- ----------------------------- ----------- ----------- ----------- ----------- -----------
EBITDA
- ------------------------------
Net Income After Tax 1,020,348 1,271,424 1,701,746 2,087,848 2,445,878
Taxes 680,372 847,616 1,134,497 1,391,898 1,630,585
Interest & Financing 62,536 57,511 77,240 58,065 62,169
Deprec'n & Amort. 586,330 600,000 600,000 600,000 600,000
1-Time Charges - - - - -
----------- ----------- ----------- ----------- -----------
EBITDA 2,349,586 2,776,550 3,513,483 4,137,812 4,738,632
----------- ----------- ----------- ----------- -----------
EBIDTA / SALES 9.8% 10.7% 11.9% 12.5% 13.0%
- ------------------------------ ----------- ----------- ----------- ----------- -----------
Current Portion Long-Term Debt 410,000 595,000 80,000 85,000 90,000
Interest & Financing Expense 62,536 57,511 77,240 58,065 62,169
----------- ----------- ----------- ----------- -----------
Fixed Charges 472,536 652,511 157,240 143,065 152,169
COVERAGE 4.97 4.26 22.34 28.92 31.14
- ----------------------------- ----------- ----------- ----------- ----------- -----------
FULL-TIME EQUIVALENT EMPLOYEES 85 88 91 94 97
SALES PER EMPLOYEE 282,353 295,455 324,176 351,064 376,289
============================== =========== =========== =========== =========== ===========
PROJECTED CONDENSED BALANCE SHEETS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005-2009
Revision As of:
09-Mar-05 Audit ($ Thousands)
- ---------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS 31-Dec-04 31-Dec-05 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09
- ---------------------------------------------------------------------------------------------------------------------
CASH $ 488 $ 450 $ 450 $ 450 $ 450 $ 450
INVESTMENTS 1,557 810 810 810 1,310 2,010
ACCOUNTS RECEIVABLE 2,412 3,827 4,146 4,704 5,262 5,820
REFUNDABLE INCOME TAXES 3 3 3 3 3 3
OTHER RECEIVABLES 21 21 21 21 21 21
INVENTORY 4,855 4,906 5,633 6,392 7,150 7,908
RELATED PARTY PORTION IDR BOND 93 - - - - -
OTHER ASSETS 83 13 13 13 13 13
---------- ---------- ---------- ---------- ---------- ----------
TOTAL CURRENT ASSETS 9,512 10,030 11,076 12,393 14,209 16,226
---------- ---------- ---------- ---------- ---------- ----------
FIXED ASSETS
COMPUTER, FF&E 339 488 513 538 563 588
R&D EQUIPMENT 785 993 1,143 1,293 1,443 1,593
MACHINERY & EQUIPMENT 6,728 7,267 7,767 8,017 8,267 8,517
LEASEHOLD IMPROVEMENTS 1,365 1,422 1,447 1,472 1,497 1,522
DEPRECIATION (2,615) (3,201) (3,801) (4,401) (5,001) (5,601)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FIXED ASSETS 6,602 6,969 7,069 6,919 6,769 6,619
---------- ---------- ---------- ---------- ---------- ----------
OTHER ASSETS
PREPAID BOND ISSUANCE 21 7 6 5 3 2
RELATED PARTY PORTION IDR BOND 555 - - - - -
OTHER ASSETS 6 6 6 6 6 6
---------- ---------- ---------- ---------- ---------- ----------
TOTAL OTHER ASSETS 582 13 12 11 9 8
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $ 16,696 $ 17,012 $ 18,157 $ 19,322 $ 20,988 $ 22,853
======================================================================================================================
CURRENT LIABILITIES
Adjustment (1,513) (1,312) (1,752) (2,592) (3,586)
Calculated from Sales05 1,625 3,414 3,699 4,196 4,694 5,192
ACCOUNTS PAYABLE $ 1,625 $ 1,901 $ 2,386 $ 2,445 $ 2,102 $ 1,606
REVOLVING CREDIT LINE - - - - - -
CURRENT PORTION LONG TERM DEBT 6 5 - - - -
CURRENT PORTION IDR BOND 390 405 595 80 85 90
CURRENT PORTION RELATED PARTY 68 - - - - -
OTHER CURRENT LIABILITIES 8 115 115 115 115 115
CURRENT TAXES PAYABLE - 202 - - - -
---------- ---------- ---------- ---------- ---------- ----------
TOTAL CURRENT LIABILITIES 2,097 2,628 3,096 2,640 2,302 1,811
---------- ---------- ---------- ---------- ---------- ----------
LONG TERM LIABILITIES
NOTES PAYABLE 5 - - - - -
IDR BOND 2,335 1,673 1,078 998 913 823
NOTES PAYABLE RELATED PARTY - - - - - -
DEFERRED TAX LIABILITY 603 905 905 905 905 905
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LONG-TERM LIABILITIES 2,943 2,578 1,983 1,903 1,818 1,728
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 5,040 5,205 5,079 4,542 4,120 3,539
---------- ---------- ---------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY
COMMON STOCK 127 122 122 122 122 122
PAID IN CAPITAL 12,681 11,817 11,817 11,817 11,817 11,817
RETAINED EARNINGS (1,616) (1,152) (132) 1,139 2,841 4,929
CURRENT EARNINGS 464 1,020 1,271 1,702 2,088 2,446
---------- ---------- ---------- ---------- ---------- ----------
TOTAL EQUITY 11,656 11,807 13,078 14,780 16,868 19,314
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES & EQUITY $ 16,696 $ 17,012 $ 18,157 $ 19,322 $ 20,988 $ 22,853
======================================================================================================================
Net Operating Loss Carry Forward (1,532) (757) - - - -
---------- ---------- ---------- ---------- ---------- ----------
Net Income Before Tax 775 775 1,700 2,119 2,836 3,480
Applied to:
Reduce NOL CF 775 757 - - - -
Accrued Taxes Payable - 18 - - - -
---------- ---------- ---------- ---------- ---------- ----------
NOL Carry Forward Ending (757) - - - - -
======================================================================================================================
PROJECTED STATEMENTS OF OPERATION
FOR THE PERIOD ENDING DECEMBER 31, 2005
($ Thousands)
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
09-Mar-05 ENDED ENDED ENDED ENDED ENDED ENDED
- ----------- 31-Dec-04 31-Dec-05 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09
------------ ------------ ------------ ------------ ------------ ------------
SALES $ 21,835 $ 24,000 $ 26,000 $ 29,500 $ 33,000 $ 36,500
C0ST OF SALES 16,283 16,346 17,420 19,765 22,110 24,455
------------ ------------ ------------ ------------ ------------ ------------
GROSS PROFIT 5,552 7,654 8,580 9,735 10,890 12,045
------------ ------------ ------------ ------------ ------------ ------------
% SALES 25.4% 31.9% 33.0% 33.0% 33.0% 33.0%
Increases from 2005
-------------------
ADMINISTRATIVE 5% 1,374 1,662 1,648 1,750 1,950 2,150
6.3% 6.9% 6.3% 5.9% 5.9% 5.9%
RESEARCH & DEVELOPMENT 10% 1,172 1,212 1,533 1,687 1,855 2,041
5.4% 5.1% 5.9% 5.7% 5.6% 5.6%
SALES & MARKETING 5% 2,371 3,087 3,241 3,403 3,574 3,752
10.9% 12.9% 12.5% 11.5% 10.8% 10.3%
----- ----- ----- ----- ----- -----
OPERATING EXPENSES 4,917 5,961 6,422 6,840 7,379 7,943
% SALES 22.5% 24.8% 24.7% 23.2% 22.4% 21.8%
OPERATING PROFIT 635 1,693 2,158 2,895 3,511 4,102
------------ ------------ ------------ ------------ ------------ ------------
% SALES 2.9% 7.1% 8.3% 9.8% 10.6% 11.2%
OTHER INCOME 230 69 19 19 26 37
OTHER EXPENSE 90 62 58 77 58 62
INCOME BEFORE TAXES 775 1,700 2,119 2,836 3,480 4,076
------------ ------------ ------------ ------------ ------------ ------------
% SALES 3.5% 7.1% 8.2% 9.6% 10.5% 11.2%
PROVISION (BENEFIT)
FOR TAX 311 680 848 1,134 1,392 1,631
------------ ------------ ------------ ------------ ------------ ------------
NET PROFIT/(LOSS) $ 464 $ 1,020 $ 1,271 $ 1,702 $ 2,088 $ 2,446
============ ============ ============ ============= ============ ===========
% SALES 2.1% 4.2% 4.9% 5.8% 6.3% 6.7%
PRIOR PERIOD RETAINED
EARNINGS (1,616) (1,152) (132) 1,139 2,841 4,929
------------ ------------ ------------ ------------ ------------ ------------
CURRENT PERIOD RETAINED EARNINGS $ (1,152) $ (132) $ 1,139 $ 2,841 $ 4,929 $ 7,375
============ ============ ============ ============= ============ ============
COMMON STOCK
Number of Shares End of Period 12,690,305 12,690,305 12,690,305 12,690,305 12,690,305 12,690,305
Earnings / No. Share at End
of Period $ 0.04 $ 0.08 $ 0.10 $ 0.13 $ 0.16 $ 0.19
EBITDA $ 1,455 $ 2,348 $ 2,777 $ 3,513 $ 4,138 $ 4,739
ANNUALIZED
ENTERPRISE VALUE Multiplier ($ Thousands)
EBITDA 6.5 $ 9,458 $ 15,261 $ 18,048 $ 22,838 $ 26,896 $ 30,801
EBIT (Operating Income) 10.0 $ 6,350 $ 16,930 $ 21,577 $ 28,946 $ 35,114 $ 41,017
Market Capitalization (P/E) 15.0 $ 6,960 $ 15,298 $ 19,071 $ 25,526 $ 31,318 $ 36,688
Sales 0.5 $ 10,918 $ 12,000 $ 13,000 $ 14,750 $ 16,500 $ 18,250
PER SHARE ($ Per Share)
EBITDA $ 0.75 $ 1.20 $ 1.42 $ 1.80 $ 2.12 $ 2.43
EBIT (Operating Income) $ 0.50 $ 1.33 $ 1.70 $ 2.28 $ 2.77 $ 3.23
Market Capitalization (P/E) $ 0.55 $ 1.21 $ 1.50 $ 2.01 $ 2.47 $ 2.89
Sales $ 0.86 $ 0.95 $ 1.02 $ 1.16 $ 1.30 $ 1.44
03/09/05
PROJECTED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE FISCAL YEAR ENDED, DECEMBER 31, 2005 - 2009
($ Thousands)
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09
----------- ----------- ----------- ----------- ----------- -----------
Cash flows from operating activities:
Net income (loss) $ 464 $ 1,020 $ 1,271 $ 1,702 $ 2,088 $ 2,446
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 594 586 600 600 600 600
Decrease (increase) in:
Accounts and other receivables (471) (1,415) (319) (558) (558) (558)
Inventories 769 (51) (727) (758) (758) (758)
Prepaid expenses 272 14 1 1 1 1
Due from related party - IDR bond 88 648 - - - -
Increase (decrease) in:
Accounts payable and accrued
liabilities (1,174) 383 486 58 (343) (496)
Income taxes payable - 202 (202) - - -
Deferred income taxes 310 302 - - - -
----------- ----------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities 852 1,758 1,110 1,045 1,030 1,235
----------- ----------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures (222) (953) (700) (450) (450) (450)
Net cash provided by (used in)
investing activities (222) (953) (700) (450) (450) (450)
----------- ----------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Net borrowings (payments)
under line of credit - - - - - -
Net borrowings (payments) long-term debt (6) (6) (5) - - -
Net borrowings (payments) of bonds (370) (647) (405) (595) (80) (85)
Net borrowings (payments) related parties (396) (68) - - - -
Repurchases/treasury stock retired (27) - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
financing activities (799) (1,590) (410) (595) (80) (85)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash (169) (785) - (0) 500 700
Cash at beginning of period 2,214 2,045 1,260 1,260 1,260 1,760
----------- ----------- ----------- ----------- ----------- -----------
Cash at end of period $ 2,045 $ 1,260 $ 1,260 $ 1,260 $ 1,760 $ 2,460
----------- ----------- ----------- ----------- ----------- -----------
03/09/05
FOR THE FISCAL YEAR ENDED, DECEMBER 31, 2005 - 2009
DEBT SCHEDULE
Unaudited
INTEREST PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
PRINCIPAL OUTSTANDING RATE 31-Dec-04 31-Dec-05 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09
- --------------------- ----- ----------- ----------- ----------- ----------- ----------- -----------
Revolving Line 5.05% 0 0 0 0 0 0
Current Portion, Term Debt
Lease Financing 7.90% 5,547 5,462 - - - -
IDR Bond, Net 2.85% 297,336 405,000 595,000 80,000 85,000 90,000
Related Party Loans
Mr. Jui-Hung Wang 6.00% 152,117 - - - - -
Mr. Jui-Chi Wang 6.00% 30,425 - - - - -
Mr. Sueling Wang 6.00% 52,500 - - - - -
------ ----------- ----------- ----------- ----------- ----------- -----------
Subtotal, Related Party 235,042 - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total, Current Portion 537,925 410,462 595,000 80,000 85,000 90,000
----------- ----------- ----------- ----------- ----------- -----------
Long-term Portion, Term Debt
Lease Financing 5,962 - - - - -
IDR Bond, Net 1,780,236 1,672,572 1,077,572 997,572 912,572 822,572
Related Party Loans
Mr. Jui-Hung Wang - - - - - -
Mr. Jui-Chi Wang - - - - - -
Mr. Sueling Wang - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Subtotal, Related Party - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total, Long-term Portion 1,786,198 1,672,572 1,077,572 997,572 912,572 822,572
TOTAL DEBT 2,324,123 2,083,034 1,672,572 1,077,572 997,572 912,572
- -----------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE RATE
- ---------------- ----
Revolving Line 5.05% - - - - -
Current Portion, Term Debt
Lease Financing 7.90% 438 431 - - -
IDR Bond 2.85% 8,474 15,593 28,858 4,680 5,823
Related Party Loans
Mr. Jui-Hung Wang 6.00% 2,282 - - - -
Mr. Jui-Chi Wang 6.00% 456 - - - -
Mr. Sueling Wang 6.00% 788 - - - -
----------- ----------- ----------- ----------- -----------
Subtotal, Related Party 3,526 - - - -
----------- ----------- ----------- ----------- -----------
Total, Current Portion 12,438 16,024 28,858 4,680 5,823
Long-term Portion, Term Debt
Lease Financing 7.90% - - - - -
IDR Bond 2.85% 47,668 41,487 48,382 53,385 56,346
Related Party Loans
Mr. Jui-Hung Wang 6.00% - - - - -
Mr. Jui-Chi Wang 6.00% - - - - -
Mr. Sueling Wang 6.00% - - - - -
----------- ----------- ----------- ----------- -----------
Subtotal, Related Party - - - - -
----------- ----------- ----------- ----------- -----------
Total, Long-term Portion 47,668 41,487 48,382 53,385 56,356
Total, Interest Expense 60,106 57,511 77,240 58,065 62,169
IDR Bond Interest Expense 56,142 57,079 77,240 58,065 62,169
Other Interest Expense 3,964 431 - - -
----------- ----------- ----------- ----------- -----------
TOTAL INTEREST EXPENSE 60,106 57,511 77,240 58,065 62,169
- -----------------------------------------------------------------------------------------------------------------------------
IDR BOND SUMMARY
- ----------------
Current Portion IDR Bond 390,000 405,000 595,000 80,000 85,000 90,000
Long-term Portion IDR Bond 2,335,000 1,672,572 1,077,572 997,572 912,572 822,572
----------- ----------- ----------- ----------- ----------- -----------
Total, IDR Bond 2,725,000 2,077,572 1,672,572 1,077,572 997,572 912,572
KINGS BROTHERS, LLC
- -------------------
Current Portion IDR Bond 92,664 - - - - -
Long-term Portion IDR Bond 554,764 - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total, KB's IDR Bond 24.76% 647,428 - - - - -
COLOR IMAGING, INC.
- -------------------
Current Portion IDR Bond 297,336 405,000 595,000 80,000 85,000 90,000
Long-term Portion IDR Bond 1,780,236 1,672,572 1,077,572 997,572 912,572 822,572
----------- ----------- ----------- ----------- ----------- -----------
Total CI IDR Bond 2,077,572 2,077,572 1,672,572 1,077,572 997,572 912,572
- ----------------------------------------------------------------------------------------------------------------------------