Financial Statements

CLARKSON LUMBER COMPANY

INCOME STATEMENTS ($1,000s)

Net sales
Cost of goods sold
Beginning inventory
Purchases

Ending inventory
Total cost of goods sold
GROSS PROFIT
Operating expense
Earnings before interest and taxes
Interest expense
Net income before taxes
Provision for income taxes
Net income

1st Qtr.
1993
1994
1995
1996
-------------- -------------- -------------- -------------$2,921
$3,477
$4,519
$1,062
330
337
432
587
2,209
2,729
3,579
819
-------------- -------------- -------------- -------------$2,539
$3,066
$4,011
$1,406
337
432
587
607
-------------- -------------- -------------- -------------$2,202
$2,634
$3,424
$799
719

843

1095

263

622
717
940
244
-------------- -------------- -------------- -------------97
126
155
19
23
42
56
13
-------------- -------------- -------------- -------------$74
$84
$99
$6
14
16
22
1
-------------- -------------- -------------- -------------$60
$68
$77
$5

Page 1

Financial Statements

BALANCE SHEETS ($1000s)

Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total assets
Notes payable, bank
Notes payable, Mr. Holtz
Notes Payable, trade
Accounts payable
Accrued expenses
Term loan, current portion
Current liabilities
Term loan
Note payable, Mr. Holtz
Total liabilities
Net worth
Total liabilities and net worth

1st Qtr.
1993
1994
1995
1996
-------------- -------------- -------------- -------------$43
$52
$56
$53
306
411
606
583
337
432
587
607
-------------- -------------- -------------- -------------$686
$895
$1,249
$1,243
233
262
388
384
-------------- -------------- -------------- -------------$919
$1,157
$1,637
$1,627
$0
0
0
213

$60
100
0
340

$390
100
127
376

$399
100
123
364

42
45
75
67
20
20
20
20
-------------- -------------- -------------- -------------$275
$565
$1,088
$1,073
140
120
100
100
0
100
0
0
-------------- -------------- -------------- -------------$415
$785
$1,188
$1,173
504
372
449
454
-------------- -------------- -------------- -------------$919
$1,157
$1,637
$1,627

Page 2

Financial Statements

1993

1994

1995 AVERAGE

Comps
Low Profit
--------------

Percent of Sales
COGs
Operating Expense
Cash
A/R
Inventory
Net Fixed Assets
Total Assets

76.90%
22.00%
1.30%
13.70%
12.00%
12.10%
39.10%

Percent of Assets
Current Liab.
Long Term Liab.
Equity

52.70%
34.80%
12.50%

Return on Sales
Return on Assets
Return On Equity

-0.70%
-1.80%
-14.30%

Days Receivables
Days Payables (Purchases)
Days Payables (excluding notes)
Inventory Turnover (Year End)
Inventory Turnover (Avg. Inv.)

Page 3

Financial Statements

High Profit
-------------- -------------75.10%
20.60%
1.10%
12.40%
11.60%
9.20%
34.30%

29.20%
16.00%
54.80%
4.30%
12.20%
22.10%

Page 4

Clarkson Lumber Company

PRO FORMA INCOME STATEMENT

Net sales
Cost of goods sold
Beginning inventory
Purchases

% of sales
1996
-------------- -------------$5,500 Forecast
587 1995 Ending Inventory
--------------

Ending inventory

12.32%

Total cost of goods sold

75.64%

677 $5,550*12.32%. The 12.32% is average INV/Sales over the la

-------------$4,160 $5,550*75.64%. The 75.645% is average COGS/Sales over th

Gross profit
Purchase discounts

2% of Purchases. Remember some purchases have been m

Operating expense
Interest expense
New bank loan
Existing fixed rate debt

10%xRemaining Balance on the term loan

--------------

Net income before taxes

Provision for income taxes

See FN C in Exhibit 1 of the case

--------------

Net income
PRO FORMA BALANCE SHEET
1996
-------------Cash
Accounts receivable, net
Inventory
-------------Current assets
Property, net
-------------Total assets
Notes payable, bank
Notes payable, Mr. Holtz
Notes Payable, trade
Accounts payable
Accrued expenses
Long-term debt, current portion
Current liabilities
Long-term debt (term loan)
Total liabilities
Net worth

Plug

=10/365*Purchases (Assuming all discounts taken)

20
-------------80
--------------

Last Years NW plus this years RE. So will depend on NI for t

-------------Total liabilities and net worth

verage INV/Sales over the last three years

average COGS/Sales over the last three years

me purchases have been made in the first quarter without the discount.

l discounts taken)

E. So will depend on NI for this year