Confidential Information Memorandum August 2008

CONFIDENTIAL MEMORANDUM Memorandum No. ___________

The investment bank (“the Advisor”) has been appointed exclusive financial advisor to Integrated Exhibition Services, Inc. (“IES” or “the Company”) to render advisory services in connection with the sale of the Company. This Confidential Memorandum contains certain information concerning the business and operations of the Company. This document is furnished to potential acquirers on a confidential basis solely for the purpose of a preliminary evaluation of the Company. This memorandum is for use only by the party to whom it is transmitted. It may not be reproduced in whole or in part or used for any other purpose without the express written permission of the Advisor or the Company. The Advisor and IES have prepared this document from information supplied by the Company or other sources deemed reliable. The Advisor has not independently verified all information contained herein and assumes no responsibility for its accuracy or completeness. Any estimates and projections contained herein have been prepared by the management of the Company and involve significant elements of subjective judgment and analysis, which may or may not be correct. The Advisor makes no representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained in this memorandum and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. This memorandum may not contain all of the information that may be required to evaluate the transaction. Any recipient should conduct his or her own analysis of the Company and the data contained or referenced in this document. Neither the Company nor the Advisor expects to update or otherwise revise the memorandum or other materials supplied herewith. Further, any buyer should consult his or her own counsel, accountant, and other professional advisors as to the legal, tax, accounting and related matters concerning any transaction with the Company. If you have no interest in purchasing the Company, please return this Confidential Memorandum and other documentation, if any, to the Advisor (Attention: Document Control Manager).


FORWARD LOOKING STATEMENTS Statements contained in this Confidential Information Memorandum (Memorandum) which are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements are identified by the use of forward-looking words such as “expects,” “believes,” “intends,” “may,” “will,” “should,” or “anticipates,” or the negative thereof, or other variations thereon or compatible words, or by the discussion of strategy that involves risks and uncertainties. Readers are cautioned that these forward-looking statements, including without limitation statements regarding the development of the Company’s business, the Company’s anticipated financing requirements and capital expenditures, the Company’s anticipated sources of capital, and the other statements contained herein regarding matters that are not historical, are only projections or predictions. No assurances can be given that such projections or predictions will prove correct or that the anticipated future results will be achieved. Forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by such statements. Such risks and uncertainties that may cause a difference include, but are not limited to, local, regional and national market conditions for the Company’s products, and the Company’s ability to protect its intellectual property, among other issues. Forward-looking statements are made only as of the date of this memorandum. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

FINANCIAL PROJECTIONS This memorandum includes financial projections of the future operating results of the Company. These financial projections were prepared by the management of the Company and are based upon management’s estimates of the results of the Company’s future operations. Accordingly, the financial projections are not based on actual operating results. Any error in the assumption of any of the factors stated therein could and will cause the actual results of future operations to vary considerably from those projected. Furthermore, all of the factors are subject to the effect of unforeseeable future events. In view of the foregoing, there is no assurance that the actual financial results of the operation of the Company will not vary substantially from those contained in such financial projections.



2 million in FY 2008 revenue (16.8 million (9. IES a Virginia S-Corporation and is owned completely by its General Manager.0%) Exhibit Design. increasing labor and materials costs.8 million (9. which ended on June 31.I.000 square foot studio. The Fabrication segment manufactures trade show exhibits according to the Design team’s plans in its newly retooled.0% of total revenue) and recorded an operating loss of approximately $0. IES’s Design team considers such factors as branding. streamlines operations.9 million in FY 2008 EBITDA (26.9 million (49. EXECUTIVE SUMMARY Integrated Exhibition Services. IES maintains a complementary services business model that promotes cross-sales. The Design segment recorded $3.8%) Exhibit Design $3. generating $0.0 million in revenue and approximately $3.2 million (16. The Design team also applies graphic art to finished structures in the Company’s 6. and a challenging recovery from a discontinued UK venture. Exhibit Fabrication and Trade Show Services. metals and other building materials. In FY 2008.2 million in EBITDA (15. Exhibit Fabrication. Management expects the segment to break even in FY 2010 and begin generating positive profits in FY 2011.7%) Trade Show Services $13. followed by a description of each business segment. on-site trade show services and custom rental exhibit services to corporate and government clients. the Company is an established exhibition services leader that operates in three segments: Exhibit Design. COMPANY OVERVIEW Founded in 1952. maximizing trade show visitor impact through the creative use of plastics.5 million (67. The company’s revenue breakout by service area is given below.000 square foot facility. 2008. offering custom exhibit design and fabrication services. lighting and traffic flow to create extraordinary visual designs and works closely with the Fabrication team to ensure that the exhibit captures all the client’s ideas and expectations for the exhibit.2 million (16.2% of total revenue) and is the Company’s most profitable business.0%) I&D and Management $9.2 million (16. The segment has recorded operating losses for three years due to heavy capital investments in automation.1%) Rental/Refurbish $1. In its 1. 5 .2%) Shipping Services $1. IES recorded approximately $20. Inc (“IES” or “the Company”) is a comprehensive provider of exhibition services. IES’s versatile Fabrication team produces the most complex trade show exhibits available. 17. The segment generated $3. the Exhibit Design segment applies state-of-the-art design technology to create three-dimensional blueprints for trade show exhibits. and garners customer loyalty. Figure: FY 2008 Revenue Breakout by Segment Exhibit Fabrication $3.8% margin).500 graphic art and paint facility. Providing a full-cycle set of offerings to meet its customers’ exhibition needs.9% margin).6 million.

IES offers a comprehensive set of rental alternatives and support services that make trade shows viable investments for many companies seeking to initiate a program.4 million in FY 2009 revenue and create strong. and these customers recognize and rely on IES’s knowledge to deliver top rate products and services. and is targeting new markets in which to sell these comprehensive services (namely. middle market aerospace and defense companies). customers are charged on either a long-term lease basis or a per-show basis for rental structures or components.3 % margin). The Company’s top customers include Lockheed Martin Corporation.1 million (85. The Company also often generates additional Trade Show Services revenue for installing. a fee for any rental components used. and the Company consistently offers flexibility and a strong value proposition. The convenience and versatility that IES offers in quickly responding to any request for reconfigured exhibits encourages customers to retain the Company for on-site trade show support services as well. The Company has developed an understanding of the marketing requirements of aerospace and defense clients.8% of total revenue). These design and fabrication services for rental/refurbished exhibits are 6 . IES also serves several government agencies and generated approximately $2. shipping..000 square foot warehouse facility when structures are not in use. IES plays a central role in its customers’ trade show programs. redesigning. exhibit rental programs and exhibit management services at show sites. Aerospace and defense clients contribute $17. Boeing Co. The versatility and interchangeability of IES’s exhibit components delivers considerable savings to the Company’s customers. Management is aggressively promoting cross-sales of its services to its existing customer base through favorable “package” pricing of contracts that designate IES the customers’ provider of full design. The Company has leveraged this reputation for quality and reliability in this market to develop a pipeline of 11 new aerospace and defense customers that are expected to contribute approximately $1. The Company creates all of its exhibits with interchangeable parts.4% of total revenue) from these customers. and offers storage services for exhibits in IES’s 66. modifying and managing exhibits for multiple customers up to 110 times per year for each major customer. It is also very profitable. fabrication revenue for making the modifications required by the design. Raytheon Co.5 million in FY 2008 revenue (67..Trade Show Services. allowing new structures to be created from the components of its customers’ existing exhibits. As shrinking corporate marketing budgets continue to make purchasing new structures difficult for some of its customers. The Company offers customized rental and refurbished exhibits and structural components as an alternative to purchasing new exhibits. contributing $2. fabrication and on-site support services.6% of total revenue) and encompass a loyal customer base that has an average relationship of 12 years with IES. managing and dismantling these exhibits at trade shows. With these services. The Company generates this revenue on a frequent basis. Trade Show Services contributed $13. and in turn enjoy fully customized structures that capture all of IES’s design and fabrication expertise for a lower and more dispersed cost than the high upfront cost of new exhibits. recurring revenue going forward. The Trade Show Services business provides install and dismantle (I&D). United Technologies Corporation. and a storage fee when the exhibit is not being used. IES is the established leader in trade show support services to the aerospace and defense and government services industries. The Company’s leading segment. L3 Communications Corporation.9 million in FY 2008 revenue (14. and many other aerospace and defense leaders.9 million in FY 2008 EBITDA (21. and enables IES to collect design revenue when a customer needs to create a reconfigured exhibit from its existing structures.

While IES’s rental exhibits and components are used by many of its large customers in tandem with their purchased structures. Management sees the value and versatility of rental properties as an ongoing trend and has made its rental/refurbished exhibit services a permanent and increasingly important component of IES’s business model. 7 .supported by a comprehensive set of on-site support services that include all of the Company’s trade show services offerings. securing contracts with four middle market companies for FY 2009. management believes that these services are also a strong match for growing middle market companies that wish to initiate trade show program and has started targeting these firms.

5% 5.8% 3.5 1. Increases in these metrics and in the number of aerospace and defense trade shows indicate growing demand for show services in this space despite decreasing demand for new exhibit construction.6 1. The Company believes that strained corporate marketing budgets will continue to impact its new design and fabrication projects and those of its peers.2% 4.4% 2. alternate stream of recurring revenue. Attendees No.0% 3.5% 5.2% 4.7 million exhibit manufacturing space is expected to grow 4.1% 4.6 4.7% for CY 2008 and 5.9% 5.6% 1.2 1.1 1.0 1.9% 3. Exhibitors Net Square Footage 2006 16.8% in CY 2009.4 1. Rental and refurbished exhibit services are growing in importance. The trade show services market is sized at $5.2 billion and is forecast to grow 5.5 2010E 19.4% 4.2% 5.4% 6.0% 1.2% 3.6% 5. Management believes that the most agile firms will strive to establish significant streams of revenue from these alternative services.2 2009E 18.0 1.6 4.2% on the CEIR Index.1% 3.MARKET The markets for exhibit design. Figure: Key Market Sizing and Growth Data Calender Year.2% 5. These trends point to a strong market opportunity for IES and management expects these developments to continue to support IES’s Trade Show Services business going forward.8 5. Management believes that the following market trends will continue to affect IES’s business.0 1.0% 3.9 5.5% during CY 2009.2% for CY 2008 and 5.2% 3. Management believes that its efforts in establishing this business line will mitigate future lost revenue from new projects and create a healthy.6% 1.9% 3. The impact of tightening corporate marketing budgets on new design and fabrication projects has placed greater importance on the development of rental/refurbished exhibit programs to insulate revenue.2 1. an index that measures trade show growth by industry based on a composite of attendee growth.1% 6.3% year over year. exhibit fabrication and trade show services represent an $8.3% 5. IES is a pioneer in rental/refurbished exhibit services and has grown this business every year since its inception in 2005.5 1.2% 3. Revenue ($B) Trade Show Industry Exhibit Design Market Exhibit Fabrication Market Trade Show Services Market Revenue % Grow th Trade Show Industry Exhibit Design Market Exhibit Fabrication Market Trade Show Services Market Other Key Metrics % Grow th US GDP No.7 2007 17.9 2008E 18.7% 6.2% 3.1% for CY 2008 and 4.0% 4.4% 4.0% 4.3% 4. The $1. While the trade show market for all industries grew only 3. Reduced budgets have increased the average exhibit lifecycle from three years in 2004 to seven years in 2008. The $1.1 billion market for new exhibit design services is projected to grow 4.5% 4. IES’s niche aerospace and defense market grew 8.3% in CY 2009.4% 8 . Strong aerospace and defense market performance despite low overall growth.9% 4. as the Company adds new customers and continues to garner increasing business from its existing customer base.7 5. exhibitor growth and net square footage growth.9% 5.0% in CY 2008 and 6.0 billion industry that is expected to grow at a weighted average rate of 4.9% 5.2% 3.1% in CY 2009.0% 2.3% 5. Tightening corporate marketing budgets are affecting new projects.9 6.

price-sensitive exhibit manufacturing market. The customer loyalty and reputation for quality that IES has developed over the years represents a significant competitive advantage to the Company. The new facilities added nearly 25% more fabrication capacity and feature automated tools that are fully integrated with the software used by the Design team. and trade show services needs of aerospace and defense companies. These companies recognize IES’s expertise. representing a significant cost advantage over its peers in the competitive. The Company has developed an intimate understanding of the design specifications.4 million in FY 2009 revenue and provide a strong and recurring stream of future revenue. IES delivers flexibility and value to its customers through its use of interchangeable components in manufacturing its exhibits and through its growing rental/refurbish service offering. and consistently choose to work with IES over larger companies. redesigning. Market leadership and brand identity. fabrication and trade show services. manufacturing and trade show services to the aerospace & defense and government industries. 9 . While offering this versatility to its customers. IES has recently made significant investments in the retooling of its fabrication facilities. and the Company is the recognized leader of exhibit design. Its customers realize significant savings in the ability to create new exhibits and booths from the components of their existing exhibits and to mix and match these components with rental parts to create an even broader range of exhibit possibilities. materials. Customer pipeline and new opportunities in existing markets. Modern design and manufacturing facilities. The IES name is synonymous with quality and creativity. with more than 60 years’ experience in the trade show industry. The Company is a pioneer in both of these areas. IES’s reputation for quality and reliability in the aerospace and defense market has attracted new business in this space. fabrication requirements. improving IES’s market share and making its market position even more defensible. Flexible. The Company is one of the oldest and most reputable exhibit manufacturers in North America.COMPETITIVE ADVANTAGES IES has several competitive advantages that have enabled the Company to outmaneuver its competitors and establish its place as a leader in the markets for exhibit design. The Company has added 11 new aerospace & defense customers that are expected to generate $1. The Company generates this revenue frequently. reconfiguring and managing exhibits up to 110 times per year for major customers. IES generates revenue from all of its core business plus a fee for any rental parts used. Management expects that the CNC Alphacam integration routers and the other CAD-driven manufacturing tools that IES has recently purchased will generate considerable production. innovative service offerings. and labor cost savings.

IES now serves eight rental/refurbished exhibit customers and this business is outpacing growth in every other business line. Increase market share in aerospace and defense space. With its new fleet of trucks. This plan has paid off immediately: IES has already booked 11 new aerospace and defense clients for FY 2009. Management has introduced measures to promote design revenue growth through more competitive pricing and through cross-sales with the other segments.BUSINESS STRATEGY The Company’s management has developed a business strategy designed to increase revenue. management sees a strong revenue opportunity in its shipping services. including employing cross-sales.6% year over year in FY 2008. The company currently generates the smallest portion of its total revenue from its most profitable service lines: design. Finally. management believes that it can institute low single digit percentage price increases on certain services without any impact on its customer base. Additionally. Management intends to increase same show revenue. However. increasing revenue 45. Management is targeting middle market companies in the aerospace and defense industry. rental/refurbished exhibits and shipping. most of these companies’ limited marketing budgets make developing a trade show program a costly and unviable option. Many middle market companies have grown to the point that a trade show program would represent a powerful marketing tool and a professional means of exposure to new clients and industry participants. Management believes that the Company can leverage its reputation for delivering quality products and services to the aerospace and defense to win new business and increase its market share in the space. management sees an especially strong opportunity to market its rental/refurbished exhibit services to these companies. adding new large aerospace and defense customers and targeting middle market aerospace and defense customers. Increase same-show revenue. profitability and market share within its targeted business segments.4 million in additional revenue for the fiscal year. providing an estimated $1. Management is addressing this challenge by rolling out a more affordable line of services designed specifically to fit the needs of these middle market firms. Management also sees great promise in rental/refurbished exhibit services and plans to promote these services with aggressive pricing to new customers. and has geared pricing favorably toward sales of these combined design. the Company has added four middle market companies to its customer roster. Increase revenue in profitable business lines. Management is aggressively seeking other means to increase per show customer volume. the Company has established a growing exhibit shipping business 10 . to $1.8 million. IES’s investment in a truck fleet has enabled it to serve more customers per show. Management has begun several efforts to further capture the synergies inherent in its complementary services business model. Management’s early recognition of customers’ demand for rental and refurbished exhibits rather than new exhibits allowed the Company to outplay its competitors and develop a solid rental/refurbished exhibit business early on. The key components of the strategy are detailed below. Capture segment synergies. fabrication and on-site services packages. Management has introduced integrated packages designed to further promote cross sales. For FY 2009. placing special focus on middle market companies that are interested in started trade show programs. a central driver of business value for the Company. In addition. Access middle market aerospace and defense firms. The Company has also started to further integrate the segments’ technological infrastructures.

that is contributing an increasing proportion of total revenue.8 million. The Company is enjoying strong growth in its Trade Show Services business. To support and streamline the shipping business. middle market aerospace and defense firms) and leverage its recent fabrication automation investment to realize production. management plans to increase Fabrication revenue and restore the segment’s cost structure to lower historical levels. deteriorating company EBITDA. The Company intends to rationalize contract labor. Restore profitability in Fabrication business. In FY 2008. Reaching breakeven revenue has been a serious challenge for IES. A difficult recovery from a discontinued UK operation. management has invested in logistics and inventory optimization technology. negative demand trends for new exhibits. equipment rental and materials costs through improved forecasting and resource planning in order to create a leaner segment cost structure. labor. growing 20. shipping revenue was $1. management expects the segment to break even in FY 2010 and begin generating positive EBITDA in FY2011. 11 . With these measures. To address this issue. To turnaround the Fabrication segment. The Fabrication business carries a high degree of operating leverage. magnifying profits when business is strong and compounding losses when business is slow. and large capital investments have driven operating losses in the Fabrication business segment for the last three years.0% year over year. management plans to promote cross-sales with the Trade Show Services segment. and management is initiating controls to better manage this growth. Control costs in Trade Show Services segment. and materials cost savings. access new customer markets (namely.

4% 2008A 3.018 7.4% 20.7% 198.4%) 2.3% 15.392 28.7% 12 .9% 5.567 104 6.7% 14.7% 19.0% 10.4% NA 24.FINANCIAL OVERVIEW In FY 2008.711 9.6% 1.4% 9.118 19.6% NA NA NA NA 2007A 2.677 17.100 10.130 29.415 3.5% 24.3% 2012E 4.1% 26.7% 23.5% NA 19.8% 12.2% 36.4 million in EBITDA (19.0% NA 18.3% 22.1% NM 25.7% 48.4% 3.225 3.439 4.8%) 9.966 10.5 million.4 million.691 16. which ended on June 31. Figure: IES Segment Financial Summary (000s) 2006A Revenue Exhibit Design Exhibit Fabrication Trade Show Services Total Revenue Revenue Grow th Exhibit Design Exhibit Fabrication Trade Show Services Total Revenue Grow th EBITDA Exhibit Design Exhibit Fabrication Trade Show Services Total EBITDA EBITDA Margin Exhibit Design Exhibit Fabrication Trade Show Services Consolidated Margin EBITDA Grow th Exhibit Design Exhibit Fabrication Trade Show Services Total EBITDA Grow th 2.5% 18.9% 2010E 4.530 21. 2008.544 22.0% 10.6% 18.264 11.689 31. to $22.809 28.0% 2009E 3.862 21.3% 27.9% NM 21. these forecasts assume that management will be able to unlock further segment synergies that have not been realized.7%.9% 1.876 31.6% 1.666 30.242 NA NA NA NA 575 (452) 2.5% margin).705 31.593 4.7% 1.7% NA 24.8% margin).544 19.366 10.3% 29.494 10. Also.161 26. the Company generated approximately $20.2 million in EBITDA (15.5% margin).9% (5.739 2.675 2.5% 15.3% 11.378 35 5.3% NM 22.7% 1.8% 26.5% 14.5% 13.9% CAGR through FY 2012.5% 13. The forecasts consider the Company’s margin improvement potential.376 12.5% 2.466 5.8% 1.5% 12. largely through the planned turnaround of the Fabrication segment and the realignment of the Trade Show Services segment’s cost structure.644 25.577 3.7% NA (11.1% 19. and to post $4.4% 38.7 million (24.209 (8) 4.004 (204) 3.2% 17.0% 2011E 4. and to improve EBITDA to $7.6% 14. to $31. management expects revenue to increase 12.341 12. The Company is expected to grow revenue at a 9.5% 867 (595) 2.4% 12.302 16.889 3.1% 0.197 13.5% NM 24.0% 12.292 6. In CY 2009.0% 13.4% 10.373 15.021 3.971 4.1% NM 23.9% 855 (140) 2.0 million in total revenue and recorded $3.921 3. strong market opportunity and brand identity within the government contracting community.

Segment turnaround potential. all the elements are in place to prepare the segment for a profitable future. For this segment. expertise and customer loyalty in place to sustain its leading market position going forward. This available capacity reduces the need for a potential acquirer to make significant capital investments in the near future. an acquirer could gain market share in a space that could take years to penetrate organically. fabrication and trade show services industries are all expected to outpace the growth for the overall trade show industry. The Company has a deep understanding of aerospace and defense trade show requirements and has leveraged its stellar reputation to book 11 new aerospace and defense customers for FY 2009. With the purchase of IES. The segment’s high cost of sales in FY 2008 was due mainly to one-time expenses associated with the recent retooling of the Fabrication facility and residual costs associated with a discontinued UK venture in 2005. An acquirer could exploit the complementary nature of IES’s service lines to aggressively cross-sell the Company’s products and services and initiate cost-savings programs (through further integration of the business segments) that could improve profitability considerably. helping to drive and support future cash flows. For an acquirer. Top aerospace and defense firms and government agencies continually choose IES over the Company’s larger competitors to serve their exhibition services needs because they recognize IES’s deep understanding of their exhibition requirements. While the Fabrication business is currently operating at a loss. management believes that the Company has the capacity to support approximately $30 million in revenue and currently operates at about 65% of its total capacity. IES offers an acquirer access to a growing market that has flourished despite economic downturn in recent years. Profitability with excess capacity. which generates most of the Company’s revenue and profits. The Company’s Trade Show Services business serves 26 customers at more than 350 shows per year. An acquirer would gain a predictable source of recurring revenue with the purchase of IES. The complementary nature of the three segments is attractive for the integration opportunities that the current business model offers a potential acquirer. Recurring revenue and pipeline visibility. the increasing average size of these shows and the growing number of show attendees offer a strong market opportunity for a potential acquirer. a turnaround of the Fabrication segment presents a strong value creation opportunity. Segment synergy opportunities. IES has the reputation. 13 .INVESTMENT CONSIDERATIONS Deep customer roster and strong pipeline. which average three to five years. IES has developed the scale and bargaining power to secure these bookings. creating a reliable and profitable stream of recurring revenue. contract arrangements with customers are a common convention. reduced materials waste. materials and labor cost savings through increased efficiency. The design. The increasing number of aerospace and defense trade shows held each year. defensible market position. With its expansive facilities. Strong. a potential acquirer could reduce capacity and realize significant rent savings. The Company’s new automation is expected to generate significant production. Market opportunity. and reduced headcount. For both strategic and financial buyers. Management has yet to realize the total segment synergies available to the Company. IES has served its core customers for an average of 12 years and has developed a reputation for quality and excellence. Equally.

and IES has recently completed the only major capital projects that the company will need to execute for the next several years: the retooling of the Fabrication facility and the purchase of a truck fleet. The company carries no debt and $2. The Company’s management team has developed deep operational experience and strong relationships in the trade show industry. Energetic. experienced management team. Both strategic and financial buyers stand to gain from management’s skill. this cash could be used to pay down acquisition financing debt or to deliver strong equity returns to investors. The management team understands the subtleties of the business and is passionate about improving company performance. Moreover.2 million to support acquisition financing.Low capital expenditure requirements. Due to these investments and the level of capacity in place. Clean balance sheet. expertise and understanding of the Company’s business model and target markets. Management’s success in containing operating costs and developing an impressive customer pipeline attests to the caliber of leadership that the Company has in place.7 million in cash on its balance sheet. making the Company an attractive investment for both strategic and financial buyers from a balance sheet perspective. it has a relatively strong asset base of $7. an acquirer would need to make only minimal capital outlays in coming years. For a financial or strategic buyer. allowing the acquirer to develop a strong cash position in this time. The nature of IES three business segments requires low levels of capital investment to begin with. 14 .

full service exhibit manufacturer and trade show services provider. The Company provides its clients with a complete line of in-house exhibit design and fabrication services that combine the most advanced design software available with the work of seasoned craftsmen. To this end. The Company employs approximately 75 permanent full time people. 17. and creating a lean business model that consistently delivers value and flexibility to the IES’s customers. IES was established in 1952 under the name IES Associates. Additionally. including custom design. a 6. production facilities and storage space in a 100.500 square foot paint and graphic production facility and 66. integrated services model has driven IES’s historical financial performance and its strong reputation for superior quality and service. IES’s Trade Show Services workforce is unionized. The Company remains the clear leader in its niche aerospace and defense space. 15 . accuracy and customer satisfaction. fabrication and on-site trade show services. The Company was incorporated in the Commonwealth of Virginia in 1960 and is currently owned solely by its General Manager. IES’s success derives largely from its product innovation. This comprehensive.000 square foot design lab.000 square feet of plastic. its ability to build on core strengths and its reputation for quality in the aerospace. due to management’s commitment to developing its product and services. These facilities accommodate an expansive 1. Virginia and house the Company’s offices. as well as complete logistical support for the most aggressive exhibit programs. The Company’s revenue breakout by service area is given below. SERVICES AND CUSTOMERS IES is a state-of-the-art. the Company has created increasingly sophisticated management tools to match the constant development of its products and services. technology intersects with craftsmanship. defense and government markets. while non-union personnel perform fabrication and graphic production.II. IES’s headquarters are located in Springfield. IES’s new proprietary Job Tracking platform and its updated inventory management system are two examples of new technologies that are expected deliver considerable cost savings and improve process efficiency. PRODUCTS AND SERVICES In IES’s catalog of product and service offerings. followed by a description of IES’s core services. PRODUCTS.000 square foot complex that has recently been renovated to streamline operations. The Company applies its proprietary management technology at every stage of its projects to ensure efficiency. A privately held company. employing cutting edge technology. metal and woodworking fabrication space. The Company’s products and services are outlined in detail in the following section.000 feet of customer exhibit storage space to support the Trade Show Services segment’s operations. IES has continually refined its portfolio of services while building a reputation for quality that has earned the Company a strong roster of global clients. the Company offers on both a purchase and rental basis revolutionary exhibits and structural components made with interchangeable parts that enable existing exhibits to be reconfigured into new structures. The Company provides a range of exhibit manufacturing and management services.

1 2.5 $31. and numerous other factors that affect the success of the client’s exhibit experience. the Company also has licensed welders and electricians on staff to complete projects within industry safety standards.6 2.8 15. lighting. With capabilities spanning wood.0 $28.5 2.0 $25. new exhibits from their existing structures and to customize the message that they deliver at each show.3 25. including AutoCAD.3 2.0 2006 2007 Install & Dismantle 2008 Shipping 2009E Rental 2010E Design 2011E Fabrication 2012E Exhibit Design The IES Design team has more than 50 years’ experience working with clients to provide a wide range of innovative.9 9. Each exhibit is designed and built at IES so that the structure can be broken down and stored cost effectively and so that the structure can be quickly reconfigured using minimal extra parts.1 2. the IES Fabrication team understands how to deliver its customers’ messages through the lightest and most cost effective exhibit structures available.3 12.1 2.0 20. The recently retooled fabrication facility features new AlphaCAM – Anderson CNC routing automation that is fully integrated with the advanced technology used by IES’s designers.0 2. creative and contemporary solutions to meet all of their visual communication needs. and Vectorworks.9 1.2 3. branding. These realistic blueprints feature walk-around and walk-through models and allow the designers to specify fabrication techniques that will capture every aspect of the customer’s vision for the exhibit structure and maintain the integrity of the design.2 2.9 3. increases accuracy and improves operating efficiency.2 1. Applying state-of-the-art 3D Design software.7 14. metalworking and casework.9 $22.000 square foot fabrication shop.0 4.Figure: Revenue Breakout by Service Area Revenue ($M) 35. IES delivers stunning color renderings and line drawings that clearly show all aspects of the proposed structure.8 1. In addition to its permanent staff. metal and wire fabrication.8 1. The fabrication team’s capabilities and experience result in the most efficient methods of constructing and refurbishing its customers’ event marketing assets. Whether proposing new structures or working with existing components.5 3. Exhibit Fabrication With 173 years’ combined experience in solid surfacing.4 3.4 4.7 0. paint.9 11.1 5. plastics.2 1. Autodesk Viz 4.7 4.1 3.0 10.7 3.2 2. and this flexibility enables these customers to create fresh.0 $16.0 8. 16 .0 $20. Architectural Desktop.0 5.7 4.1 15. Many of IES’s customers feature exhibits at more than 100 shows per year.5 3. IES’s experienced designers understand the subtleties of the design process and consider traffic flow.5 0. electrical and more.5 $16. the Company’s 12-person exhibit fabrication team brings designs to reality in the Company’s 17.4 30.4 3. This improved technology limits wasted materials. plastic.8 7.

reflecting reduced corporate marketing budgets and the increased average lifecycle of trade show exhibits. Custom Exhibit Rental Services. IES’s onsite teams are easily accessible and provide immediate assistance and show site repairs when needed. Moreover. when it invested in a fleet of seven new trucks. the Company employs a highly skilled labor force that provides innovative craftsmanship and attention to detail in meeting customers’ exhibit assembly and tear-down needs. These contacts are extremely valuable to IES’s clients for expediting permits. IES’s account executives have a vested interest in the success of its customers’ shows and are available at every stage of the journey. I&D. Materials Handling and Storage. These services enable the Company’s customers to maintain aggressive trade show programs without the costs of purchasing new structures. This fleet has improved efficiency considerably. IES’s management staff operates on-site at both national and international shows. allowing all scheduling for shipping. The Company’s database benefits the client by enabling real-time transfer of data and an electronic approval process for on-going projects. Install and Dismantle (I&D) Services. The Company provides customized services ranging from fully managed lease programs to per show exhibit rentals. At shows. reducing transportation and freight costs and enabling the Company to both establish a profitable revenue stream and serve more customers per show. The services offered by the segment are detailed below. IES has the capabilities and assets in place to exploit these trends and to provide these services to a growing market of customers. Shipping. and other burdensome and time-consuming requirements. trade show venues. from planning to production. By often serving multiple customers at the same show. With its I&D team. IES has improved operating efficiency and established a high margin set of services that create recurring revenue. The Company currently provides these services to 26 customers at over 350 domestic and international shows. The Company outsourced its exhibit shipping services until 2006. These services make the customer experience both productive and proficient while maintaining simplicity. height approvals. IES offers its customers the flexibility of selecting either new exhibits or customized rental exhibits and structural components. IES has developed a proprietary management database and technology platform to coordinate and drive the Trade Show Services business’ operations. travel and other general information to be readily available to IES personnel with just 17 . The database benefits the Company by tracking every aspect of trade show management information. materials handling services during shows. Exhibit Management Services. and storage services between shows at its 66. The Company’s I&D teams travel with its customers’ exhibits.Trade Show Services IES’s Trade Show Services offerings include shipping. Rental and refurbished exhibit services are rapidly growing in popularity among exhibitors. providing a higher level of service and delivering experienced labor whenever necessary. exhibit rental programs and exhibit management services. and decorators. IES provides exhibit shipping services to and from trade shows. The Company has developed close relationships with major associations. coordinating and managing every aspect of the exhibition process. install and dismantle (I&D) services. The company continues to use third-party air shipping services for shows that are located beyond the truck fleet’s capabilities. As its customers’ official services contractor IES coordinates a seamless chain of events for accuracy and precision. nationally. wireless connectivity at booths.000 warehousing facility.

a few key strokes. Figure: Project Workflow under IES’s Proprietary Management Technology 18 . Workflow based on IES’s proprietary management technology is detailed in the diagram below.

758 1.0% 1.753 491 414 362 259 207 155 155 259 2.187 836 735 618 518 3.3% 100.597 1.5% 8.048 1.570 1.8% 9.6% 20.113 17.187 1.1% 83.0% 16.1% 22. DRS Technologies SRA International Combat Support Associates.7% 3. Honeywell International and other federal contractors.7% 6. The Company sees a tremendous opportunity in these new pipeline customers and intends to grow each of these accounts steadily. IES’s revenue breakout by current and pipeline customers is given in the below table.189 1.875 842 637 478 455 2. most of which operate in the aerospace & defense industry (85.8% 2.8% 2. Northrop Grumman Corp.8% 6.1% 9.8% 3.6% 85.817 1.0% 6.4 million in revenue (6.7% 4.853 781 666 579 405 260 174 203 434 3. These include General Dynamics Corporation.275 2.7% 6. United Technologies Corp BAE Systems Boeing Co.CUSTOMERS The Company has 34 total customers.008 827 646 4. Harris Corp. and believes that it can execute similarly with the Company’s new customers.412 957 724 543 517 2.9% 0.7% 2.6% 3.302 1.537 1.7% 1.504 1.1% 0.301 25.0% 4. IES continues to do business on a contract basis with each of its customers as it has done for an average of 12 years with these companies.812 2. Raytheon Company (9.6% 3. Other Total Pipeline Total Revenue Percentage Contribution to Total Revenue 2008 2009E 2010E 2011E 9.0% 7.5% 0.9% 1.069 933 796 637 4.346 18.1% 2. These include: Lockheed Martin Corporation (9. Inc. For FY 2009.0%).939 1. BAE Systems (8.8% 3. Boeing Company (7.4% 0. followed by profiles of the Company’s key customer relationships. Other Total Corporate Gove rnm ent Custom e rs USAF US Navy US Army Other Total Governm ent Pipeline Custom ers General Dynamics QinetiQ NA Honeyw ell International EDS Corp. United Technologies Corporation (8.9% 4.922 958 679 619 619 2.0%).0% 1.0% 100.1% 80.9% 3.3% 9. Management developed its current top customers with this approach. Management intends to further penetrate the middle market by providing affordable packages that make fielding a trade show program viable.2% 2.797 1.711 19.0% 2.013 781 550 550 2.1% 3. Raytheon Co.0% 10.8% 6.3% of total revenue).1% 9.048 2.0% 0.100 897 723 4.0% 8.3% 2.433 22.7% 4.9% 2007 1.6% 6.5% 0.6% 1.5% 4.7% 2.8% 7.1% 2.4% 3.9% 4.5% 16.0% 9.5% 4.9%).4% 3.8% 4.8% 77.593 1.6% 8.3% 7.091 2.327 2.5% 3.8% 19.2% 9.1% 14.5% 12.017 1.727 14.939 19 . Government defense agencies also contribute a significant level of business (14.6% 0.740 1.489 2.894 100.5% 2.199 1.0% 8.1% 9. Computer Sciences Corporation URS Corp.071 2.966 296 250 205 137 159 114 114 159 1. Figure: Revenue Breakout by Customer (000s) 2007 Corporate Cus tom e rs Lockheed Martin Corp.908 2.327 2.9% 10.0% 7.502 28.7% 2.9%).1% 3.8% 8.547 2.0% 6.0% 8.4% 3. management has contracts in place with 11 new customers that are expected to contribute $1.4% 1.0% 1.1% 2.939 1. The Company has considerable customer concentration with six companies (48.9% of total revenue).3% 88.6% 0.6% 9.790 Revenue Contribution by Customer 2008 2009E 2010E 2011E 1.1% 5.547 2. QinetiQ North America.5% 2.862 22.398 1.0% 7.7% 1. and L-3 Communications Corporation (6.6% 3.6% of total revenue).0%).0% 8.8% 0.798 1.2% 3.4% 3.7% 0.6% 1. promoting strong pipeline visibility.1% 100.554 1.9% 1.5% 18.0% 685 518 368 351 1.1% 3.1% 11.9% 100. winning new business each year.3% 1.387 1.9% 8. This list also includes four middle market aerospace and defense firms that are initiating trade show programs.9% 7.1% 7.2% 2.9% 4.679 20.758 1.1%).544 9.4% of total revenue).6% 0. L-3 Communications Corp.9% 0.0% 10.777 1.1% 2.378 978 839 679 719 4.

As a leading technology company.8 million) from the Raytheon account. IES is there for United Technologies every step of the way. In its 10-year relationship with United Technologies. Raytheon Co Raytheon Co. broadening its exhibiting capabilities considerably. IES has worked closely with the Lockheed Martin marketing team to develop creative ways to deliver Lockheed’s intended messages using advanced exhibit structures. Since then. In its 13 year relationship with Raytheon. or $1. United Technologies fields an aggressive 160 show program and strives to convey ingenuity and fresh thinking at every stop. providing support services at every show and storing all of Untied Technologies’ exhibit assets in its warehousing facility when the structures are not being used. 20 . United Technologies Corporation IES has managed all of United Technologies Corporation’s trade show requirements since 1998 and now derives 8. Over the years.1%. the Company has enjoyed a 100% win rate for all design. Lockheed Martin’s exhibit structures so that they can be quickly reconfigured for use in many different applications and when Lockheed Martin it uses more than one exhibit at a show.Lockheed Martin Corporation IES has managed the Lockheed Martin trade show program since 1994. Raytheon has added a considerable number of rental structures and components to its extensive set of purchased exhibits. and the Lockheed Martin account now comprises 9. Since becoming IES’s first rental customer in 2005. IES has never lost a design.9% of its total revenue ($1. fabrication and trade show services.0% of its revenue ($1.8 million) from this account. first contacted IES to create its trade show exhibits in 1995. IES now derives 9. During its relationship with Lockheed Martin. The Company has a contract in place until 2012 for complete trade show and exhibit support and has never lost a re-compete for business with United Technologies. Like many of IES’s customers. Lockheed Martin uses very technology-oriented exhibits to communicate its innovative nature to trade show attendees. IES has worked alongside its marketing team to develop some of the most revolutionary trade show booths and exhibits on the aerospace and defense trade show circuit.8 million of the Company’s total revenue. the Company has come to provide Raytheon with full set of exhibit structures as well as trade show support at approximately 165 annual events and conferences throughout the United States and internationally. The Company has worked with Lockheed Martin for 14 years and has contracts in place to service Lockheed’s trade show requirements until 2010. The Company manages approximately 150 conferences and exhibit events for Lockheed Martin annually. Raytheon stores its collection of purchased and rental structures in IES’s expansive warehousing facilities so that the Company can rapidly meet any requests for new designs and modifications and ship the exhibits to their destination via IES’s truck fleet or a competitively priced third party carrier. IES has a contract in place with Raytheon for complete services until 2012. fabrication or trade show services contract and remains Raytheon’s sole supplier of these services.

IES has won increasing business with L-3.4 million in FY 2008 revenue from L-3 (6. The Company was worked with L-3 Communications since 2000.0% of total revenue). IES has manufactured a significant collection of structures for Boeing and has worked on some of its largest and most complex projects with Boeing. IES has won 90% of its total re-competes for BAE Systems’ business and is contracted until 2012 to support BAE on a minimum of 130 shows annually. BAE stores most of its trade show assets in IES’s warehouses and continually calls on the Company to both produce new structures and reconfigure existing structures’ components into new exhibits.4 million in FY 2008 revenue (7. IES provides 80% of the total services rendered to BAE Systems and its subsidiaries on their extensive 165-show circuit.9% of total revenue). On average. IES is contracted until 2011 to provide comprehensive support at all of L-3’s US shows. Since then. in 1993 and remains Boeing’s sole exhibit provider and its supplier of trade show services at more than 85% of the 170 shows in which Boeing and its subsidiaries participate each year.BAE Systems IES generated $1. The Boeing account delivered $1. IES performs this set of services 60 times per year for BAE and generates considerable revenue from these recurring business processes. has never lost a re-compete and derived $1. including the unveiling of the new 787 Dreamliner aircraft in 2007. The Company has won more than 90% of its re-competes for Boeing’s business and has contacts in place until 2013 to provide services to Boeing at minimum of 110 shows annually. Boeing Co. IES began producing exhibits for Boeing Co. The Company has manufactured a state-of-the-art collection of exhibits for BAE and provides extensive rental services to the aerospace and defense leader.0% of total revenue) from the BAE Systems account and has served the UK-based company in both the US and internationally since 1999. L-3 Communications Corp. 21 . when it was approached by L-3’s marketing team to develop a comprehensive set of trade show assets and provide services at 30 shows. The Company now supplies an extensive mix of both new and rental structures to L-3 and its subsidiaries and provides support services at more than 120 shows annually.6 million in FY 2008 revenue (8.

and the markets that the Company serves. MARKET Despite a weak economy. high price levels and growing unemployment.9 2.4 3.0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08E Q4 08E Q1 09E Q2 09E Q3 09E Q4 09E 6.0 6. ECONOMY The markets that IES serves are affected by the overall economy and typically track GDP growth and other major economic indicators. and the stability of the aerospace and defense industry has helped to insulate IES’s revenue and actually decrease its risk despite its considerable customer concentration in this space.1 2. Macroeconomic developments suggest that the US economy may be working toward recovery. While the index fell by the largest amount over the course of the year since 1990. THE U. well above the -0. reflecting increasing money supply and a steep yield curve. low overall growth rate projections for trade show metrics and negative marketing budget trends. number of exhibitors and net square footage has decreased in almost every major industry. Despite two quarters marked by low output growth. job creation programs.S.0 5. Banc of America Capital Markets pegs the expected fiscal package at a minimum of $300 billion (2. recession is expected to continue until at least mid-2009.5% of GDP) and expects it to draw on tax cuts for middle and lower income households.0 1. the trade show industry. The strength of IES’s customer industries also drives demand for the Company’s services.0 3. The US economy.9 7. The weakened economy has had a significant effect on trade show industry behavior. sentiment regarding economic improvement in the remainder of CY 2008 is positive.0 4.0 2. The condition of the overall economy is a major driver of corporate marketing budgets.3%. subsidies for distressed homeowners. as discussed in the following section.0% growth predicted for the trade show industry in CY 2008.5 4. Moreover.2 3. block grants to states and tax credits for new home buyers.3 4.0 6.2% median analyst forecast. it ended June 2008 with a rise of 0.0 3.1 3. the markets in which IES operates are all expected to outpace the 3.3 3.0 0.III. the trade show industry and IES’s primary markets are discussed in greater detail below. Still. and economic activity is likely to reflect expected stimulus efforts by the President and Congress.0 3. The index of leading indicators ended a slow Q2 2008 with a June gain. while growth in the number of attendees. the aerospace & defense industry posted strong growth in these key metrics. The current macroeconomic picture for the US is mixed despite the credit crisis and other catalysts of the current recession. Figure: Historical and Forecast GDP Growth GDP % Growth 8.3 22 .

which includes the markets for exhibitor space.5%. these metrics drive same show revenue. Trade show industry revenue has been limited by weakened economic conditions and tightened corporate marketing budgets. The number of show attendees impacts exhibitors’ decisions about whether to book future shows.5% 10.0% 92. In consequence.0 2005 2006 2007 2008 2009E 2010E Revenue Growth 2011E 2012E 16.0 Revenue Growth % 5. a primary determinant of company value in the Company’s trade show support services market. For this reason.0% Number of Exhibitors 18. Figure: Trade Show Industry Revenue and Revenue Growth Revenue ($B) 25. these metrics share high correlations with one another.0% 35. and net square footage.0% - For such trade show services providers as IES.5% 15.0 billion to US GDP.0% 26.0% 2.0 4. which in turn affects the size (net square footage) of future shows.0% 87. Attendees.0% 1.0% 82.5% Industry Revenue The condition of the trade show industry is closely tied to the condition of the US economy and is measured primarily by growth in the number of attendees.0% 82.0% 1.6 20. exhibitors follow suit and trade show square footage increases.9 17. industry revenue grew only 3. GDP growth forecasts for Q3 2008 onward are driving similarly moderate growth projections for the industry as a whole.0 16. trade show management services and the support services that IES provides (exhibit design. In consequence. trade show services providers are able to increase customer volumes per show and generate stronger same show revenue. exhibitors and net square footage have each increased steadily for more than three 23 . and with US macroeconomic metrics. exhibit fabrication and on-site support services) contributes approximately $18.0% Number of Attendees 35.THE TRADE SHOW INDUSTRY The trade show industry.0% 87.0 18.8 19. Within the trade show industry the markets for IES’s services account for approximately $8.5% 20. number of exhibitors. as shown in the correlation matrix provided below.0% Net Square Footage 26. Historical and forecast industry revenue and revenue growth are given in the below chart.0 3.3 0. Through CY 2012 industry revenue is expected to grow at a compound annual growth rate of 3.0 billion. Figure: Correlation Matrix for Key Tradeshow Metrics US GDP US GDP Number of Exhibitors Number of Attendees Net Square Footage 18.0 2.4 18.5% 5.0% 92.0% 4.4 0.2% in CY 2007.4 21.0% 3.0% 0. As attendees increase.

0 2003 2004 2005 2006 Exhibitor Growth (%) 2007 2008E 2009E NSF Growth (%) Attendee Growth (%) PRIMARY MARKETS The exhibit design.0 2. operators in this market are experiencing tightening margins due to intensifying price competition.0 -0.8% on a weighted average basis in CY 2009.3 4.0 billion market that is expected to grow 5.0 6.7 4.decades. The exhibit design and fabrication markets are fragmented and very competitive.2 1. growth in these measures has been more moderate.2 6.8 5. GES Exposition Services.0 8.0 1. claiming approximately a 20% market share.5 5.0 1.0 0. While the overall demand for trade show services is increasing. with the largest company.0 1.9 $7. The primary markets for IES’s products and services are discussed in greater detail below.0 6. though. considerably outpacing the 3.8 8.0 3.0 1.0 7.0 5.7 4.9 5.5 0.6 3. with the largest player. Figure: Growth in Exhibitors.1 6.2 2.0 3.4% growth projected for the overall trade show industry.0 5.0 8.5 $8.0 -1.8 3. exhibit manufacturing and trade show services spaces comprise an $8.6 6.0 3. reflecting a weaker economy and reduced corporate marketing budgets.6 1.0 1.0 2.0 2006 2007 2008 Exhibit Fabrication 2009E 2010E Exhibit Design 1.9 3.4 3.6 1. ExhibitGroup/Giltspur.3 $7. The trade show services market is more concentrated.0 $9.0 9.0 7. Fabrication and Trade Show Services Industry Revenue Revenue ($B) 10. The recent growth trends for these measures are given in the below chart.6 3.5 2.2 Trade Show Services 24 .2 1.1 1.6 $8. Recently.0 1.1 1. commanding less than a 10% market share.7 1.9 4.8 1.8 3. and experienced accelerated growth through CY 2006.0 4.2 5.0 4.5 5. Attendees and Net Square Footage Growth (%) 9. Figure: Design.

2% for CY 2008 and 5. Impressive aerospace & defense trade show performance. for example.1% for CY 2008 and 4. competitive. customer diversification and cost advantages central to success in this competitive market. exhibitor growth and net square footage growth. The Company believes that the following trends and characteristics of the trade show services market continue to impact IES’s business.5% in CY 2009. 25 .1 billion market for exhibit design services is expected to grow 4. square footage and number of trade shows indicate stable demand for show services despite decreasing demand for new exhibit design and construction. The Trade Show Services Market The $5. Rental and refurbished exhibit services growing in importance.3% year over year.2 billion market for on-site trade show services is expected to grow 5. Tightening corporate marketing budgets. Fragmented. While the trade show market for all industries grew only 3. The market for exhibit manufacturing is sized at $1. These competitive and market pressures make customer pipeline. Management believes that the following trends and characteristics of the exhibit design and fabrication markets will continue to affect IES’s business. IES management has developed the market leadership and cost advantages to compete with and win business from the largest exhibit design and fabrication firms. The Company believes that strained corporate marketing budgets will continue to impact its new exhibit design and manufacturing projects and those of its peers. controls less than a 10% share and has not been profitable since 2000 despite the execution of several acquisitions and cost savings programs. These services enable exhibitors to field aggressive trade show programs without having to commit large one-time marketing expenditures on new structures. These trends point to a strong market opportunity for the Company and management expects these developments to continue to support the Trade Show Services business going forward. low margin industry environment with few barriers to entry.The Exhibit Design and Fabrication Markets The $1. low barriers to entry.3% in CY 2009. as IES adds new customers and continues to gain increasing business from its existing customer base. The exhibit design & manufacturing market is dominated by competitive small and middle market firms.1% during CY 2009. Management believes that the most agile firms will strive to establish significant revenue streams from these alternative services and has established a strong and growing rental/refurbished exhibit business to provide its customers flexibility and to meet their exhibition requirements. These attributes create a very fragmented. Limited corporate marketing budgets have placed greater importance on the development of rental/refurbished exhibit services to insulate revenue streams.7 billion and is expected to grow 4.2% on the CEIR Index. Market leader ExhibitGroup/Giltspur. many of which have very high degrees of customer concentration. an index that measures trade show growth by industry based on a composite of attendee growth.0% in CY 2008 and 6. IES’s niche aerospace and defense market grew 8. attendees. Increases in exhibitors. Growth in these measures and in the number of aerospace and defense trade shows indicate growing demand for show services in this space. Reduced corporate marketing budgets have increased the average exhibit lifecycle from three years in 2004 to approximately seven years in 2008.

0 35. Figure: Historical and Projected Customer Revenue ($B) 50. with the two largest players. Customer industry downturns typically result in a tightening of corporate marketing budgets. The trade show services market is also seasonal in nature. Operators in this market enjoy a high degree of pipeline visibility. While nearly every sector of stocks is suffering.Strong pipeline visibility. commanding 40% of market share. Recent performance of the S&P 500 Aerospace and Defense index is plotted against S&P 500 and Nasdaq Composite indices in the chart provided below.0 45. making cost advantages important differentiators for operators.0 25. CUSTOMER MARKETS Providers of the trade show support services that IES offers are highly sensitive to the financial condition of their customers’ industries. including trade show budgets.0 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E Lockheed Martin Corp. expand core capabilities and gain additional market share. Honeywell International General Dynamics Corp. as contract arrangements with customers are a common convention among operators with the scale and bargaining power to secure these three to five year bookings. the rescheduling and movement of trade shows to different months and cities and the replacement of certain trade shows with other shows create some revenue variability in this otherwise relatively predictable market. The historical and expected revenue behavior of IES’s key customers support the idea that the Company has a strong market opportunity in spite of a weak macroeconomic outlook.0 15.0 20. The trade show services market is moderately concentrated. and the remaining market consisting of competitive middle market companies. as larger player seek to access new spaces. Too. IES has developed the scale to secure these long-term contracts. Concentrated but competitive. Raytheon Co. Consolidation is accelerating in this market. aerospace and defense equities are outperforming the market and showing little sensitivity to overall market conditions. Price sensitivity and show rotation.0 10. GES Exposition Services and The Freeman Companies. 26 .0 40. with revenue peaking in the first and second quarters of the calendar year and bottoming in the third quarter. and has enjoyed more than a 95% win rate for its contracts over the last five years.0 30. The aerospace & defense industry in which IES’s core customers operate has a history of strength and growth. The market is price sensitive.

27 4/10/2008 7/4/2005 6/6/2006 1/3/2007 5/9/2007 8/1/2007 . including private equity groups. Figure: Aggregate Deal Value and Volume. Selected 2007 and 2008 trade show services transactions are provided in the table below. 2001-2007 Number of Deals 70 60 50 49 40 30 20 18 10 0 2001 2002 2003 Number of Deals 2004 2005 2006 2007 0 66 2.Index Level S&P 500 Aerospace and Defense Industry Index . mega exhibition companies and small strategic players. companies that provide these services are seeing tighter margins due to increasing competition. Aggregate deal volume and value trends are depicted below. and many larger trade show services firms are using acquisitions to create growth.4 123.500 33 23 34 10/24/2007 1.Figure: Aerospace and Defense Equities Are Outperforming the Market 163.000 500 Agg. access new markets and expand capabilities.Index Level S&P 500 Index (^SPX) . suggesting a recent consolidation in the exhibit manufacturing and trade show support services spaces. Value ($M) 2.4 93.4 133. Recent deal activity has been characterized by a wide variety of buyers.4 113.4 5/23/2005 8/15/2005 9/26/2005 11/7/2005 1/31/2006 3/14/2006 4/25/2006 7/18/2006 8/29/2006 2/14/2007 3/28/2007 6/20/2007 9/12/2007 12/5/2007 1/17/2008 2/28/2008 12/19/2005 10/10/2006 11/21/2006 NASDAQ Com posite Index (^COM P) . Value ($M) While the overall demand for trade show services is increasing.500 Agg.000 52 1. creating a competitive market for acquisitions. increase market share.4 153.4 103.Index Level INDUSTRY M&A TRENDS M&A deal activity has increased consistently since 2003.4 143. Organic growth is becoming more difficult to achieve.

The Freeman Companies The Freeman Companies manufactures exhibits and provides on-site services at corporate trade shows in the US and internationally.A. ExhibitGroup / Giltspur. Ltd. overhead sign rigging. The company posted $750 million in FY 2007 revenue and is expecting $785 million in FY 2008 revenue. including material handling. staging. Talking Points Ltd. GES commands the largest share in the market for trade show services (approximately 20%). Core Creative Nichols.J. Ltd. carpet and furnishings. temporary electrical equipment. Promotor International. It is headquartered in Las Vegas. LLC CMP Information. McBride Communications EXPOFormer AG Advanstar. IL with facilities throughout the US and Europe. The company is headquartered in Rosselle. Decorex International Ltd. is the exhibit design and fabrication segment of Viad Corporation (NYSE:VVI). It provides exhibit design. Melville Exhibition & Event Services. Exhibitgroup/Giltspur posted $152 million in FY 2007 revenue and is expecting FY 2008 revenue of $160 million. Inc. The company specializes in I&D services. It commands the second largest share in the trade show services market.Figure: Selected 2007 and 2008 Exhibition Services M&A Transactions Target / Issuer MICE Display Works Tex-As GMBH Fairs and Exhibitions Ltd. Corporate Hospitality Services Buyer / Investor JPB Capital Partners M4e AG (DB:MU4) Tarsus Group plc (LSE:TRS) Exhibit Effects East. Ltd. as well as promotions and pre-trade show marketing campaigns. Inc. Utility. Lane Marketing Communications Andreas Messerli AG New York Lif e Capital Partners Haw thorne Co. Krause & Associates Tarsus Group plc (LSE:TRS) GL Events (ENXTPA:GLO) TSX Group SIGMA Marketing Group. manufacturing and program management services. BCD Meetings & Incentives Real Aff inity plc (AIM:RAF) MAJOR COMPETITORS GES Exposition Services. Ithaca Business Media. Inc. Moss. Ltd. Convention Management Group. Inc. Inc. Canada and the United Kingdom. Commanding the largest share of the exhibit design and fabrication markets (approximately 10%). Inc. GES Exposition Services is the trade show services segment of Viad Corporation (NYSE:VVI). PLASTIMAGINE Mexico SEPIC SAS Agor SAS The Equicom Group Creative Communications. The company also leases modular panel systems. Viad Corp (NYSE:VVI) Naylor Publications. Inc. LLC GL Events (ENXTPA:GLO) E. Inc.p. CMP Information.B. double-deck systems and hanging signs. S. NV and has facilities throughout the US. E. Inc. next 28 . and freight services. Exhibit group / Giltspur. Inc.

Through its subsidiaries. Other Key Competitors Cznarnowski Display Services Champion Exposition Services Blaine Exhibition Services. theme parks. PA. Inc. Sparks commands a significant share of the exhibit design and fabrication markets. Sparks Exhibits & Environments. Fern Company. Formerly Marlton Technologies. GES Exposition Services. production and sale of exhibits and environments for trade shows.J. product launches and other strategic communications initiatives. Inc. entertainment and healthcare industries. Sparks Exhibits & Environments. Inc Melville Event Services EWI Worldwide The Becker Group Atlantic Expo Services 29 . The Freeman Companies was founded in 1927 and is headquartered in Dallas. Krause & Associates Skyline Exhibits Brede Exposition Services SmthBucklin Corporation Moss. arenas and corporate lobbies for customers in the retail. George E. Hargrove. is engaged in the custom design. The company is headquartered in Philadelphia. exhibit/display design and fabrication services and comprehensive creative services for trade shows. the company provides creative services. E. government. museums. TX.

A. She holds a B. followed by profiles of key management personnel. She has a thorough understanding of the trade show industry. finance. This position requires continuous communication with various customer and IES departments. from the University of Virginia’s McIntire School of Commerce and an MBA from the University of Virginia’s Darden School of Business. She has an indepth knowledge of logistics. She holds a B. Figure: Organizational Structure Scott Jackson General Manager Account Managers Graphic Director Business Development Director HR & Accounting Director IT Director Design Director Fabrication Manager Warehouse Manager Installation & Dismantle Manager General Manager and Owner Joining the Company in 1981. He holds a B. IES’s owner and General Manager develops strategic initiatives and has significant business development responsibilities. transportation companies. and is extremely effective in collaborating with general contractors.S. Business Development Director IES’s Business Development Director has managed large corporate programs and accounts for more than 14 years. in Business Management from the University of Maryland and served five years in the US Army. He has 13 years’ experience in the trade show industry and has 30 .IV. CORPORATE STRUCTURE AND MANAGEMENT TEAM IES was incorporated in 1960 as a Virginia S-Corporation and is owned completely by its General Manager. in Public Relations from Hofstra University. United Technologies and L-3 Communications accounts. which generate more than 250 shows annually. including the special skills required to successfully negotiate complex trade show management requirements. Raytheon. The nine member senior management team has 193 years’ combined industry experience.S. Senior Account Manager IES’s Senior Account Manager joined the Company in 2002 and serves as Senior Coordinator for the Lockheed Martin. and show services providers. He is responsible for launching the Company’s flagship tradeshow services business unit and initiating nearly all of the Company’s technological infrastructure investments. She has extensive experience developing and implementing business plans and budgets that serve as the basis for accomplishing and monitoring major multi-task operations over multi-year periods. She conducts both risk analysis and cost/benefit analysis to develop and recommend optimal solutions for client engagements. Human Resources & Accounting Director The Company’s Human Resources Director has 26 years’ experience in accounting. The company’s organizational structure is depicted below. human resources and business administration.

pulling and preparing exhibits for shows. ATCA and numerous other trade shows. L-3 Communications. United Technologies. He designed and developed IES’s proprietary project management technology. After working on the Woodmark. He and his 12-person team ensure the highest commitment to quality.S. Since joining IES in 2001. and the application of technology to customer requirements via SaaS – based information services.S. His responsibilities include the development and maintenance of IES’s technological assets. Northrop Grumman and URS Corporation. He is responsible for recruiting and hiring the Company’s executive. he helped to establish the excellent service standards that have come to define IES’s install and dismantle operation. detail and accuracy in all of the Company’s exhibit manufacturing operations. Architectural Desktop. in Political Science from the Catholic University of America and a B. His detailed knowledge of these customer’s products and trade show requirements. and in the process. Install and Dismantle Manager IES’s Install and Dismantle (I&D) Manager joined the Company in 1987 as an apprentice in the Exhibit Fabrication segment. Design Director The Company’s Design Director has 19 years’ experience managing Design operations. In his 24 years with IES. as well as several US government agencies. His department is responsible for warehousing and tracking exhibit properties. guiding its IT infrastructure from an environment of a few stand-alone computers to an integrated architecture of solutions typically employed by only larger corporations. The IT Director has a B. His proficiency with CAD integrated fabrication tools has placed the Company at a cutting edge position in today’s exhibit fabrication industry. traveling the US as I&D supervisor for these customers’ exhibits. Oracle. he has successfully completed more than 300 exhibit structures for more than 50 companies. IT Director IES’s IT Director has been with the Company for more than 17 years. He is thoroughly trained in AlphaCAM and AutoCAD technologies. AlphaCAM – Anderson CNC routing automation and many others. combined with his work on thousands of trade show booths has contributed to his success in recording impressive increases in these customers’ accounts almost every year he has been with the company. in Interior Design from Marymount University.assembled administrative teams for Skyline Displays and the Freeman Companies. Autodesk Viz 4. and installing and dismantling exhibit structures at more than 350 events annually. He currently manages a staff of four designers/detailers. and is charged with hiring. he has worked closely with all aspects of the Lockheed Martin. training and supervising all shop employees. Vectorworks. and BAE Systems accounts and has supported these customers at AUSA Fall. IES’s Fabrication Manager worked his way through the ranks to his current position. administrative and labor teams. advancing IES’s use of automation technology in exhibit manufacturing. The I&D Manager coordinates and manages all field operations for Raytheon. assigning teams for each project and ensuring full-cycle quality control throughout the manufacturing process. he became the lead I&D technician for these accounts. Dornier Aviation and Revlon exhibit fabrication teams. ITSEC. Fabrication Manager With more than 26 years’ exhibit production experience. 31 . controlling workflows through the Fabrication business. Handling a wide range of exhibitors and exhibit properties enabled the I&D Manager to build a breadth of knowledge about custom exhibiting. He helped oversee the recent retooling of the Company’s fabrication facilities.S. He holds a B. in Computer Science from the University of Maryland. Raytheon. The Design Director is proficient in such technologies as AutoCAD.

In addition to these key personnel. Controller The Company’s Controller has 26 years of progressive experience in accounting. 32 . The Company’s I&D workforce is unionized. human resources and business administration. The Warehouse and Logistics Manager has a firm command of all of the technology that drives IES’s inventory and logistics management processes and is responsible for training his team of 30 employees with these technologies. IES maintains a staff of welders and electricians to complete projects within industry safety standards. doubling in size during the major show season. He joined IES in 1994 and has assembled an administrative team that supports every aspect of the Company’s operations. finance. In addition. maintenance and logistical planning associated with IES’s truck fleet. IES’s Warehouse and Logistics Manager delivers strong inventory and logistics management services in an environment of constantly changing technology.Warehouse and Logistics Manager In the fast-paced exhibit industry. he is responsible for the scheduling.

0 10. total revenue is projected to grow at a 9.0% 16.5% 11.7 10.0 25.0% 5.0% 10.0% EBITDA Margin % 30.4% 3.2% Figure: Operating Cost Breakout (Percentage of Revenue) OPEX % Revenue 45.2% 10.5 15.7 5.8% 8.7% 5.4% 4. These expected improvements.0% 5.5% 4.0% 6.3% of revenue reduction in FY 2008 operating expenses.2% 6.6% 20. In FY 2009. Figure: Revenue and EBITDA by Business Segment ($M) Revenue and EBITDA ($M) 35.5 million.9% 4.2% 10.V.8% 5.1% 40.7% 40.1 3.1% 6. HISTORICAL AND FORECAST FINANCIAL PERFORMANCE IES posted approximately $20.3% 38. management expects to grow revenue 12.4% 6.2% Manufacturing and Other Contract Labor Benefits and Bonuses Salaries & Wages FY 2008 EBITDA grew only 1.3% 50.9% 8.4% 11.9% 10.2% 5.8% 31.2 million in EBITDA (15.0 million in FY 2008 revenue (19.1% 7.4 million.0 15. and EBITDA margin is expected to increase to 19. The Company’s cost of sales and operating cost breakouts are given below.0 25.4% 9.0 2006 2007 2008 2009E 2010E 2011E 2012E 3.2% 10.0% 31.5% CAGR through FY 2012.9% 8.0% 40.6% 9.6% 4. due to the cost of sales increases discussed above.5% 48.7% 7. EBITDA is expected to increase to $4.0% 28. The EBITDA impact of this increase would have been more severe if not partially offset by a 5.6% 12.0% 16. total cost of sales grew 42.0% 7.9 0.0% 2006 Other 2007 Total Rent 2008 2009E 2010E 2011E 9. causing gross margin to deteriorate from 56.8% 5.8% 7.2% 10.0 30.2%.2% 5.5% 11.2% 20.0% 42.0% 9.3% 8.3% 10.1% 11.5% year-over-year growth) and recorded $3.1% 3.0% 15.9% to 48.3% 11.9% 46.2% 5.0 5.3% 10.2% 30.4 million.0% 22. to $31.4% 30. In FY 2009.7% 4.9% 3.4% 6.9%.0% 5.3% 7.4% 11.7% 0.7 6.2 4.4 20.0% 4.3% 11.7 - Total Revenue Total EBITDA EBITDA Margin In FY 2008.5% 7. materials and equipment rental savings.0% 0. per show customer volume growth and other revenue enhancement initiatives.3% 8.7%.7% 6. realignment of the Trade Show Services and Fabrication segments’ cost structures is expected to improve IES’s gross margin to 51. to $22.5%. attributable to the continued turnaround of the Fabrication segment and to labor.4 25.4% 30.0% 45.7%.8% 6.8% margin).8% 5. In FY 2009.7% 10.3% 14. Figure: Cost of Sales Breakout (Percentage of Revenue) COGS % Revenue 60.8% 7.0% 5.0% 30.2%.4 7.0 20. increased revenue from existing customer accounts.0% 51.9% 35.5% 43.2 16. are in line with management’s historical effectiveness in 33 .4% 32.4% 25.0% 2006 2007 Materials 2008 Freight 2009E Equip Rental 2010E 2011E Labor 11. Driven by new customer revenue.0% year-over-year and EBITDA margin decreased 2.3 20.0% 10.0 2.

9% 6. Management expects to grow segment revenue 10. to $7.9% 2010E 25.1% 7.9% 6.3% 1.0 million in segment EBITDA (29.474 33.7% 2.7% 9.7% 34 .7% 867 26.4% 1.325 37.6% NA 2007A 16.1% 8.852 64. including cross-sales and access to new markets.7% 10.494 12.1% 14.459 30.9% 7.966 19.366 11.351 33.194 64.971 12.7% NA 598 568 NA 585 668 770 561 799 806 170 495 842 221 507 862 272 511 864 319 471 BUSINESS UNIT FINANCIAL PERFORMANCE Exhibit Design The Company’s smallest but most profitable segment.9% 5.150 35. and projects approximately $1.4% 2011E 4.7% 6.7% 3.4% 2008A 19.506 56. Figure: Exhibit Design Financial Summary (000s) Exhibit De sign Total Revenue % Growth Cost of Sales % Revenue Gross Profit % Margin Operating Expenses % Revenue EBITDA % Margin % Grow th 2006A 2.0% 2. While negative corporate marketing budget trends limit the market opportunity for exhibit design.0% 1.6% 18.567 31.5% CAGR.559 63.705 23. to $3.7% 1.225 10.4% 29.5% 38.209 30.4% 1.5% 13.2% 3. Through FY 2012.4% 2.558 32.7% 1.497 51.392 19.4% 1.205 43.921 9.832 42.1% 9.666 22.461 36.229 45.9% 11.485 53.1% 7. management is exploring strategies for growing this profitable revenue stream.9% in FY 2009.305 48.336 54.3% 48.148 54.0% 2012E 4.9% 15.586 35.8% 575 21.719 48.8% 1.2% 7.3% 17.2 million in FY 2008 revenue (10.819 30.9% margin).376 38.7 million.242 NA 6.208 37.548 40.630 30.577 10.1% 20. EBITDA is expected to grow at a 19.7% 2008A 3.3% 2.6% 4.410 57.998 48. These estimates assume that management will be able to derive considerable revenue from exhibit reconfiguration and rental projects.6% 1.1% 15.252 63.689 24.6% 1.030 45.6% 2.9% 1.7% 11.021 12.880 70.5% NA 2007A 2.6 million.172 40.7% margin).856 46.439 10.3% 1.5%.004 28.0% 1.9% 1.341 12.3% 2.9% 1.8% 3.862 17.1% 855 29.711 2. and EBITDA margin is forecast to increase to 24.3% 1.9 million in FY 2008 EBITDA (26. Figure: Consolidated Financial Summary ($000s) 2006A Total Revenue % Growth Cost of Sales % Revenue Gross Profit % Margin Operating Expenses % Revenue EBITDA % Margin % Growth Cash Flow Data Non-Cash Working Capital Depreciation Capital Expenditures 16.130 18.7% 9.018 62.3% 2012E 31.104 31.248 34.247 51.2% 894 30.675 NA 795 29.6% 14.378 31.0% 2011E 28.027 69.4% 6.7% 2010E 4.2% 1.4% 1.5% 14.9% 13.3% 9.5% 10.0% 2009E 22.1% 9.376 10.4% year-over-year growth) and approximately $0.containing operating costs.628 32.5% 2009E 3.161 15.7% 1.777 35.8% 13. the Exhibit Design business generated $3.

666 73.725 55. Figure: Exhibit Fabrication Financial Summary (000s) Exhibit Fabrication Total Revenue % Growth Cost of Sales % Revenue Gross Profit % Margin Operating Expenses % Revenue EBITDA % Margin % Growth 2006A 2. EBITDA margins decreased negligibly as cost of sales grew 45.5 million in total revenue.0% 2.726 54.0% (595) NM NA 2009E 3.192 48.214 53. and can be considered one-time expenses that will not recur in future periods.264 NA 1.7% (8) NM NA 2011E 4. a 26.5% year over year growth) and expects the segment’s operating loss position to improve to approximately $0.865 50.5% 1.5% 1. the Company had to employ many temporary resources to meet the increased demand. the Company grew its accounts significantly with several customers and was not fully prepared for this increase in business. Management has improved its forecasting and resource planning.5% 1.131 35.5% Trade Show Services In FY 2008 the Trade Show Services business recorded approximately $13.050 46. made staffing adjustments. Management believes that the Fabrication segment will breakeven in FY 2010 and begin to contribute positively to company profits from FY 2011 onward. Management projects $3.4% year over year (15.3% 104 2.1%.0% 2.585 51.6 million in FY 2008.535 45.6% 2.4 million in FY 2009 revenue (5.5% (204) NM NA 2010E 3.034 49.3% 198.7% year over year increase.049 49.4%.5% 1.100 36.Exhibit Fabrication The Fabrication business recorded $3. In FY 2008.233 49. Driving this proliferation in cost of sales were increased fixed manufacturing costs and rising labor and materials costs.1% 2. and earned approximately $2.6% 1. As a result. The increase in labor and materials costs resulted from overstaffing and over-purchasing of materials from expensive suppliers.197 3. The increase in manufacturing expenses resulted from high up-front costs associated with the recent retooling of the Company’s Fabrication facilities and from residual costs related to a discontinued UK operation.515 48.3% margin) for the fiscal year.5% 1.6% 1. contract labor.9% as a percentage of revenue) while segment revenue grew only 3.530 10.9% 1.1% 1.4% 2.2 million.9 million in EBITDA (21.084 50. promotional pricing and access to middle market aerospace and defense customers.838 54.4% 1.118 12.677 9.373 5. While FY 2008 was a banner year for revenue and operating profits.6% 2.066 64.8% NA 2012E 4. equipment rental and materials expenses all grew considerably in FY 2008.4% 2. In particular.820 49.2 million in FY 2008 revenue and saw an operating loss of approximately $0. Management has also initiated several measures to revive revenue for the Fabrication business through cross-sales.8% 35 0.6% (140) NM NA 2008A 3. when cost of sales for the segment grew 36.337 51.857 50.0% 1. and renegotiated materials prices with its suppliers. the Fabrication segment is expected to again generate positive profits and contribute to Company EBITDA. As revenue increases and the Company’s cost structure returns to alignment.9% 1.4% 1.6% (452) NM NA 2007A 3. 35 .739 51.

809 12.2% 2.691 (5.9% 3.7% 36 .8% 7. Figure: Trade Show Services Financial Summary (000s) Trade Show Services Total Revenue % Growth Cost of Sales % Revenue Gross Profit % Margin Operating Expenses % Revenue EBITDA % Margin % Growth 2006A 11.6% 6.5% 2012E 21.117 26.1% 3.1% 24.5% 6.739 24.5% 5.575 48.107 25.466 25. management is projecting approximately $3.834 50.3% 2011E 19.5 million and believes that managing this growth more effectively and applying improved resource planning will lead to a leaner segment cost structure and greater profitability.4%) 4.3% 9.8% 5.4% 4.895 55.018 27.5% 8.409 47. such capacity reductions could lead to dramatic improvements in operating profitability and represent a possibility that any potential acquirer should explore in its analysis of IES.710 49.796 44.4% of segment revenue).1% 5.1% 6.292 26.4% 10.9% 5.4% 2010E 17.6% 2.603 26.3% 19.682 27.7% 6.889 21.000 square feet of storage space and pays more than $1.480 32. While these cost savings assumptions are not built into our model for this transaction.8%) 2008A 13.876 10.260 46.570 48. Management has leased its storage and office space to third-party renters in the past and believes that it can reduce capacity and rent expense in this manner in the future.302 NA 4.316 55.973 51.986 44.1% 4.2% NA 2007A 10.577 31.6% (11.6% 2.6% 4.6 million in FY 2009 segment EBITDA and expects to improve EBITDA margin to 23. The Trade Show Services segment uses approximately 65% of its 66.8% in FY 2009.1% through these cost savings measures.400 52.9% 11.6% 2009E 15.415 22.598 25.544 14. Accordingly.644 13.7% 18.5% 3.3% 24.6% 9. Management believes that segment profitability could improve even further through capacity reductions.616 53.5% 10.593 23. to approximately $15.5% 3.4% 7.Management expects revenue to grow 14.069 51.544 26.5% 13.0 million in segment rent expense (7.

3% 301 6.032 7.392 19.207 9.2% 3.376 10.978 1.6% 45.742 1.721 737 6.193 1.3% 30.7% 364 7.8% 3.6% 6.366 11.819 30.9% 18.809 8.711 2.9% 17.341 12.5% (2.9% 1.130 18.3% 32.222 (1.198) 5.483 15.091 8.172 1.264 13.6% NA 598 2.638 11.7% 29.523 10.544 6.161 15.9% 9.9% 30.9% 31.1% 23.264 (679) 1.0% 2.966 19.0% 561 2.521 609 1.9% 5.5% 2009E 15.672 709 6.689 24.6% 51.544 6.9% 2008A 13.556 28.5% 1.644 7.921) 4.585 9.7% 9.4% 29.222 18.727 2.109 1.8% 2.405 22.1% 2.4% 6.3% 48.325 (2.482 1.8% 4.7% 15.2% 56.4% 585 2.7% 9.405 (1.0% 238 5.302 4.1% 40.0% 3.5% 12.6% 1.371 1.410 57.Figure: Historical and Forecast Income Statements (000s) 2006A Revenue Trade Show Services Exhibit Design & Fabrication Total Revenue % Growth Cost of Sales Labor Contract Labor Equip Rental Freight Materials Other Total Cost of Sales % Revenue Gross Profit % Margin Operating Expenses Salaries & Wages Benefits Bonuses & Prof it Sharing Insurance Total Rent Other Total Operating Expenses % Revenue EBITDA % Margin % Growth Depreciation & Amortization EBIT % Margin Interest Expense Total Other Nonoperating Items Pretax Income Plus: Mezzanine Interest Book Income Taxes Net Income Net Margin Margins and Growth Rates Total Revenue Grow th (%) EBITDA Grow th (%) COGS Grow th (%) OpEx Grow th (%) COGS % of Revenue SG&A % of Revenue Gross Margin (%) EBITDA Margin (%) 11.573 2.832 42.336 54.3% 17.853 500 1.640 437 725 366 1.8% 30.9% 2.2% 3.876 9.205 43.7% 19.8% 1.820 9.3% 57.6% 4.7% 24.9% 2.1% 19.630 30.524 10.242 1.8% 13.9% 11.9% 2012E 21.128 16.7% 2011E 19.1% 46.5% 14.1% 2.8% 10.0% 7.1% 54.9% 53.9% 10.229 45.657 907 948 678 900 6.041 1.6% 14.939 16.1% 9.319 1.902 1.488 2.628) 3.459 30.017 14.387 1.8% 48.3% NA NA NA NA 42.800 15.143 482 2.1% 2.073 1.115 1.4% 54.879 1.148 54.824 13.9% 18.6%) 43.1% 3.3% 7.021 16.7% 38.559 446 933 384 1.1% 9.325 23.719 48.402 1.506 56.691 6.9% 7.6% 2.294 426 880 360 1.7% 2.242 NA 2007A 10.200 2.558 32.376 38.2% 9.3% 9.206 1.361 8.501 31.8% 3.666 22.7% 2.2% 2.247 51.956 13.4% 5.8% 12.0% 42.856 46.697 25.600 13.030 45.022 431 2.104 31.548 1.8% 51.030 983 7.494 12.3% 2.897 884 7.586 1.531 3.485 53.1% 38.182 559 1.1% 2.2% 22.998 48.497 51.428 (1.862 17.267) 2.5% 38.854 2.945 (583) 1.362 416 777 363 1.4% 45.950 22.9% 170 4.705 23.423 19.548 40.545 15.190 2.773 824 6.4% 11.9% 15.2% (600) 1.586 691 836 1.265 533 2.6% 18.604 2.4% 5.3% 9.324 1.600 (780) 1.6% 10.428 21.3% 8.1% 7.5% 37 .950 1.7% 2010E 17.945 1.

411 19.3% 495 1.1 56.376 14.1% 13.140 11.271 16.212 2009E 5.494 10.306 2012E 18.908 14.140 5.0% 43.8% 0.8% 0.530 229 262 38 22.229 18.512 1.550 19.9 6.570 24.392 2.2 0.956 8.1% 13.561 583 2.502 0 25.191 2.386 518 2.096 10.2 0.990 204 212 31 12.311 14.5% 41.895 2.1 58.1 60. Assets Cash Accounts Receivable Inventory Prepaid Expenses Other Current Assets Total Current Assets Net PP&E Transaction Goodw ill Deferred Financing Fees Total Assets Liabilities and Equity Accounts Payable Accruals Other Current Liabilities Total Current Liabilities Total Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liabilities & Equity Balance Check Total Revenue Cost of Sales Working Capital Noncash Working Capital Change in Noncash Working Capital Forecast Assumptions CAPEX % Revenue DSO Inventory Turns Prepaid Expenses % Revenue Other Current Assets % Revenue AP Days of COGS Accruals % Revenue Other Current Liabilities % Revenue Projected PP&E Schedule Beginning Balance CAPEX Depreciation & Amortization Ending Balance 2008A 2.9 6.1% 13.071 806 36 2.702 24.025 507 (221) 2.8% 0.140 2.Figure: Historical and Forecast Balance Sheets (000s) Year Ended June 31.2% 2.311 511 (272) 2.670 2.440 770 NA 4.195 3.862 862 20 1.311 2.417 0 22.064 2.766 389 1.417 2010E 8.025 2.2 0.755 2.025 10.0% 45.9 6.1% 13.2% 2.502 2011E 13.2% 44.321 5.140 6.550 471 (319) 2.757 2.700 495 (170) 2.700 7.3% 540 1.550 2.1 56.9 6.072 2.702 38 .072 5.8% 0.966 10.998 6.005 3.1 0.1 62.597 842 36 2.251 432 2.748 653 2.2% 2.265 2.9 6.1% 13.933 722 3.768 11.895 5.869 864 2 1.3% 1.3% 450 1.2% 2.195 5.321 2.140 16.595 2.465 183 170 25 5.715 196 188 28 8.212 0 19.8% 0.856 9.306 0 28.3% 2.2 0.595 5.000 3.030 13.366 13.8% 42.341 11.140 7.247 3.269 217 237 35 16.766 0 31.2% 418 1.430 21.

Sign up to vote on this title
UsefulNot useful