Hanson Ski Products

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Exhibit 1 Hanson Ski Products, Income Statements ($000)

FY 1984 FY 1985 FY 1986

Net sales $5,753 $7,671 $9,776

Cost of goods solda 3,040 4,140 5,177

Gross margin $2,713 $3,531 $4,599

Selling, general and administration 1,585 2,109 2,519
Product development 152 189 260

Operating earnings $976 $1,233 $1,820

Interest expense 436 428 507

Income before tax and extraordinary item $540 $805 $1,313

Tax provision 314 468 400

Earnings before extraordinary item $226 $337 $913

Extraordinary item tax benefit from utilization of operating

loss carryforwards 314 468 251
Net earnings $540 $805 $1,164

Earnings per common share:

Earnings before extraordinary item 0.39 0.57 1.50
Extraordinary item 0.53 0.79 0.41

Net earnings 0.92 1.36 1.91

Weighted average number of common shares outstanding 585,889 590,566 607,761

a
Depreciation and amortization for 1984, 1985, and 1986 was $341, $396, and $561, respectively.
1,352 2,104 1,729
24% 27% 18%
Exhibit 2 Hanson Ski Products, Consolidated Balance Sheets ($000)

3/31/84 3/31/85 3/31/86

Current Assets
Cash $163 $81 $156
Receivables, net 692 1,378 1,556
Inventories 1,352 2,104 1,729
Prepaid expenses 99 124 262

Total current assets $2,306 $3,687 $3,703

Fixed Assets
Plant, property, and equipment 1,430 1,958 3,393
Less accumulated depreciation and amortization 569 836 1,255
Total net fixed assets $861 $1,122 $2,138
Other assets 171 191 207

Total Assets $3,338 $5,000 $6,048

Liabilities
Accounts payable $536 $967 $1,586
Notes payable—banks 1,100 2,082 1547
Income taxes payable 0 0 149
Current installments—long-term debt 109 35 1010

Total current liabilities $1,745 $3,084 $4,292

Long-term debt
Term loan 1,423 1,407 0
Notes payable to banks 506 0 0

Total $1,929 $1,407 0

Stockholders’ Equity:
Common stock 1,126 1,166 1,249
Additional paid-in capital 105 105 105
Retained earnings (deficit) (1,567) (762) 402

Total stockholders’ equity ($336) $509 $1,756

Total Equities $3,338 $5,000 $6,048

a
Borrowings under the revolving line of credit were personally guaranteed by the major stockholders and were secured by all
of the accounts receivable, inventories, machinery and equipment, furniture, trademarks, and patent rights.

b
Current installments on long-term debt (3/31/86):
Officers and stockholders $841,000
Installment purchases 169,000
Capital leases --
$1,010,000
Exhibit 3 FY 1987 Final Budget (June 15, 1986—$000)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

July- October-
April-June September December January-March
1986 1986 1986 1987 TOTAL

Net revenues $391 $5,893 $4,769 $832 $11,885

Cost of goods sold 344 2,630 2,176 491 5,641

Gross margin $47 $3,263 $2,593 $341 $6,244

Operating expenses 779 1,204 1,256 926 4,165

Operating income ($732) $2,059 $1,337 ($585) $2,079

Tax allowance -- 432 261 -- 693

Net income (loss) ($732) $1,627 $1,076 ($585) $1,386

Exhibit 4 FY 1987 Cash Budget and Selected Expense and Balance Sheet Items (June 15, 1986; $000)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

April-June July-September October-December January-March
1986 1986 1986 1987

Cash receipts $1,487 $1,764 $4,572 $3,800

Cash outflows
For materials, labor, and
operating expenses (except for
interest but including income
taxes)a 1,928 2,967 2,698 2,022
Interest 67 110 168 86
Capital expenditures for fixed
assets 177 238 179 301
Pay back stockholder loans - - 841 -

Depreciation 143 166 179 195

Assets at end of quarter

Planned cash balance 100 100 100 100
Receivables, net 507 4,580 4,739 1,741
Inventories 2,808 1,690 1,166 1,869
Prepaid expenses 241 294 198 283
Other assets 201 247 283 302

Liabilities at end of quarter

Accounts payable 1,849 1,717 1,755 1,664
Income taxes payable - - - -
Current installments long-term
debt 980 1,060 207 189

Notes payable—banks (to be

determined

a
In general, corporations must pay current year income taxes on a quarterly basis. However, the precise payment requirements are
based on a complex set of rules that are different for large or small corporations.
Exhibit 5 Third Quarter FY 1987 Cash Budget by Months ($000)

October November December

Cash receipts $1,000 $1,054 $2,518

Cash outflow
For materials, labor, and operating expenses 830 1,065 803
(except for interest)
Interest 54 56 58
Capital expenditures 69 62 48
Pay back stockholder loans - 841 -

Collateral for bank loans at end of month

Receivables 5,420 5,517 4,739
Inventory 1,331 1,363 1,166
ESTADO DE FLUJO DE EFECTIVO
1985 1986
Efectivo de Operación
(+) Utilidad Neta $ 805.00 $ 1,164.00
(+) Depreciacion $ 267.00 $ 419.00
(+) Cambio de Cuentas por Pagar $ 431.00 $ 619.00
(-) Cambios en Inventario $ 752.00 $ (375.00)
(-) Cambios en Cuentas por Cobrar $ 686.00 $ 178.00
(-) Cambios en Otros Activos Corrientes $ 25.00 $ 138.00

Cambio en Efectivo de Operación $ 40.00 $ 2,261.00

Efectivo de Inversion
(+) Liquidacion Activos Fijos $ - $ -
(-) Inversion en Activos Fijos $ 548.00 $ 1,451.00

Cambio en Efectivo de Inversion $ -548.00 $ -1,451.00

Efectivo de Financiamiento
(+) Emision de Deuda a Largo Plazo $ - $ -
(+) Emsion de Deuda a Corto Plazo $ 982.00 $ 975.00
(+) Emision de Acciones $ 40.00 $ 83.00
(+) Impuestos Diferidos $ - $ 149.00
(-) Amortizacion Deuda Largo Plazo $ 522.00 $ 1,407.00
(-) Amortizacion de Deuda Corto Plazo $ 74.00 $ 535.00
(-) Dividendos/Recompras de Acciones $ - $ -

Cambio en Efectivo de Financiamiento $ 426.00 $ -735.00

EFECTIVO INCIAL $ 163.00 $ 81.00

CAMBIO NETO DE EFECTIVO $ -82.00 $ 75.00
EFECTIVO FINAL $ 81.00 $ 156.00

Comprobacion $ - $ -