EXHIBIT 11.1
MASTER GRAPHICS, INC.
COMPUTATION OF NET EARNINGS (LOSS) PER COMMON SHARE (1)(2)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED THREE MONTHS ENDED THREE MONTHS ENDED
YEAR SIX MONTHS DECEMBER 31, 1997 MARCH 31, 1997 MARCH 31, 1997
ENDED ENDED ---------------------- -------------------- ----------------------
JUNE 30, DECEMBER 31, PRO FORMA, PRO FORMA
1997 1997 PRO FORMA AS ADJUSTED 1997 1998 PRO FORMA AS ADJUSTED
--------- ------------ --------- ----------- --------- --------- --------- -----------
Net earnings
(loss)............ $ (1,273) $ (3,819) $ (5,482) $ 893 $ (249) $ 443 $ (1,073) $ 156
Less preferred
stock dividends... -- -- 114 114 29 29
Less accretion of
preferred stock
discount.......... -- -- 116 116 -- -- 29 29
--------- --------- --------- --------- --------- --------- --------- ---------
Net earnings
(loss) applicable
to common
shares........... $ (1,273) $ (3,819) $ (5,712) $ 663 (249) 443 $ (1,131) $ 98
========= ========= ========= ========= ========= ========= ========= =========
Basic:
Weighed average
common shares
outstanding...... 4,000,000 4,000,000 4,000,000 7,666,664(3) 4,000,000 4,000,000 4,000,000 7,666,664
========= ========= ========= ========= ========= ========= ========= =========
Basic earnings
(loss) per
share........... $ (0.32) $ (0.95) $ (1.43) $ 0.09 $ (0.06) $ 0.11 $ (0.28) $ 0.01
========= ========= ========= ========= ========= ========= ========= =========
Diluted:
Weighted average
common shares
outstanding...... 4,000,000 4,000,000 4,000,000 7,666,664 4,000,000 4,000,000 4,000,000 7,666,664
Assumed
conversion of
preferred stock.. -- -- 177,776 177,776 -- -- 177,776 177,776
Assumed exercise
of warrants...... -- 355,552 449,997 183,333 -- 444,440 449,997 183,333
Assumed exercise
of the stock
option clause in
the deferred
compensation
agreements....... -- -- -- 83,333 -- -- -- 83,333
--------- --------- --------- --------- --------- --------- --------- ---------
4,000,000 4,355,552 4,627,773 8,111,106 4,000,000 4,444,440 4,627,773 8,111,106
========= ========= ========= ========= ========= ========= ========= =========
Diluted earnings
(loss) per
share(4)........ $ (0.32) $ (0.88) $ (1.18) $ 0.11 $ (0.06) $ 0.10 $ (0.23) $ 0.02
========= ========= ========= ========= ========= ========= ========= =========
THREE MONTHS ENDED
MARCH 31, 1998
----------------------
PRO FORMA,
PRO FORMA AS ADJUSTED
---------- -----------
Net earnings
(loss)............ $ (656) $ 370
Less preferred
stock dividends... 29 29
Less accretion of
preferred stock
discount.......... 29 29
---------- -----------
Net earnings
(loss) applicable
to common
shares........... $ (714) $ 312
========== ===========
Basic:
Weighed average
common shares
outstanding...... 4,000,000 7,666,664
========== ===========
Basic earnings
(loss) per
share........... $ (0.18) $ 0.04
========== ===========
Diluted:
Weighted average
common shares
outstanding...... 4,000,000 7,666,664
Assumed
conversion of
preferred stock.. 177,776 177,776
Assumed exercise
of warrants...... 449,997 183,333
Assumed exercise
of the stock
option clause in
the deferred
compensation
agreements....... -- 83,333
---------- -----------
4,627,773 8,111,106
========== ===========
Diluted earnings
(loss) per
share(4)........ $ (0.14) $ 0.05
========== ===========
- ----
Notes:
(1) Computation of net earnings (loss) per common share for the fiscal years
1993 through 1996 is not shown as the Company's capital structure during
those periods consisted solely of 4,000,000 (as adjusted) shares of common
stock and there were no potential equity instruments issued.
(2) Shares are adjusted to reflect an anticipated 40,000 to 1 stock split.
(3) Includes shares issued in connection with the Offering (3,400,000 shares)
and shares issued upon exercise of a warrant (266,664 shares).
(4) Diluted earnings (loss) per share is set forth herein in accordance with
Item 601 of Regulation S-K. The resulting historical diluted earnings
(loss) per share for the six months ended December 31, 1997 were anti-
dilutive and, therefore, are not disclosed in the statement of operations.
Earnings (loss) per share on a pro forma basis were anti-dilutive due to
the preferred stock conversions and the warrant exercise, and, therefore
have not been assumed in the unaudited pro forma condensed consolidated
statement of operations (pro forma column). Earnings per share on a pro
forma as adjusted basis for the year ended December 31, 1997 was anti-
dilutive due to the preferred stock conversion, and, therefore, that
conversion was not assumed in the unaudited pro forma condensed
consolidated statement of operations (as adjusted column).