Financial Statements

CLARKSON LUMBER COMPANY

INCOME STATEMENTS ($1,000s)

1st Qtr.
1993 1994 1995 1996
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Net sales $2,921 $3,477 $4,519 $1,062
Cost of goods sold
Beginning inventory 330 337 432 587
Purchases 2,209 2,729 3,579 819
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$2,539 $3,066 $4,011 $1,406
Ending inventory 337 432 587 607
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Total cost of goods sold $2,202 $2,634 $3,424 $799

GROSS PROFIT 719 843 1095 263

Operating expense 622 717 940 244

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Earnings before interest and taxes 97 126 155 19
Interest expense 23 42 56 13
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Net income before taxes $74 $84 $99 $6
Provision for income taxes 14 16 22 1
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Net income $60 $68 $77 $5

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 Financial Statements

BALANCE SHEETS ($1000s)

1st Qtr.
1993 1994 1995 1996
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Cash $43 $52 $56 $53
Accounts receivable, net 306 411 606 583
Inventory 337 432 587 607
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Current assets $686 $895 $1,249 $1,243
Property, net 233 262 388 384
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Total assets $919 $1,157 $1,637 $1,627

Notes payable, bank $0 $60 $390 $399

Notes payable, Mr. Holtz 0 100 100 100
Notes Payable, trade 0 0 127 123
Accounts payable 213 340 376 364

Accrued expenses 42 45 75 67
Term loan, current portion 20 20 20 20
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Current liabilities $275 $565 $1,088 $1,073
Term loan 140 120 100 100
Note payable, Mr. Holtz 0 100 0 0
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Total liabilities $415 $785 $1,188 $1,173
Net worth 504 372 449 454
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Total liabilities and net worth $919 $1,157 $1,637 $1,627

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 Financial Statements

Comps
Low Profit
1993 1994 1995 AVERAGE --------------
Percent of Sales
COGs 76.90%
Operating Expense 22.00%
Cash 1.30%
A/R 13.70%
Inventory 12.00%
Net Fixed Assets 12.10%
Total Assets 39.10%

Percent of Assets
Current Liab. 52.70%
Long Term Liab. 34.80%
Equity 12.50%

Return on Sales -0.70%

Return on Assets -1.80%
Return On Equity -14.30%

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

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 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%

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Clarkson Lumber Company

PRO FORMA INCOME STATEMENT

% of sales 1996
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Net sales $5,500 Forecast
Cost of goods sold
Beginning inventory 587 1995 Ending Inventory
Purchases
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Ending inventory 12.32% 677 $5,550*12.32%. The 12.32% is average INV/Sales over the la
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Total cost of goods sold 75.64% $4,160 $5,550*75.64%. The 75.645% is average COGS/Sales over t

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
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Total assets

Notes payable, bank Plug

Notes payable, Mr. Holtz
Notes Payable, trade
Accounts payable =10/365*Purchases (Assuming all discounts taken)

Accrued expenses
Long-term debt, current portion 20
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Current liabilities
Long-term debt (term loan) 80
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Total liabilities
Net worth 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