Description You will find the question "requirements" for the case in the attached PDF documents. ...
Description You will find the question "requirements" for the case in the attached PDF documents. ** Note that I will attach two samples for the same case, but they have different purposes of valuation. You are to use the two examples as a guideline. Do not copy paste from the guideline, please. But, if you take some information from the guideline then please paraphrase the sentences you took by changing the structure of the sentence and change some words. OUR PURPOSE IS "SALE" HOWEVER THIERS ARE "CHARITABLE" AND "GIFT" FILES ATTACHED: OUR CASE FILE, TWO EXAMPLES FILES. 3 attachments Slide 1 of 3 attachment_1 attachment_1 attachment_2 attachment_2 attachment_3 attachment_3 UNFORMATTED ATTACHMENT PREVIEW Member Number: CVA EXPERIENCE REQUIREMENT EXPERIENCE REQUIREMENT TEST CASE INSTRUCTIONS PLEASE READ INSTRUCTIONS COMPLETELY BEFORE BEGINNING YOUR VALUATION REPORT. 1. You are to prepare a written “Detailed” valuation report, as defined in NACVA’s standards effective August 1, 2015, resulting in a Conclusion of Value, on Redmond Pro Printing, Inc. Be sure to keep a complete copy of your report, notes, and workpapers before you submit your report for peer review. You will need to resubmit your report if it becomes lost for any reason. 2. Your written report will be scored by the NACVA Peer Review Team, comprised of highly experienced and credentialed valuation analysts. There are six specific scored areas of the experience requirement. These are shown below. A scoring worksheet is included in this packet for your reference. Six Exam Scoring Sections: ? ? ? ? ? ? 3. The valuation report case analysis will be evaluated on the basis of: ? ? ? ? ? ? ? ? ? 4. Report Fundamentals Qualitative Foundations Analytical Foundation Valuation Foundation Valuation Adjustments Conclusion of Value Adherence to NACVA Professional Standards released on August 1, 2015 Professional content Quality and flow of overall presentation Meaningful use of information and data Reference to and use of resources Objective and logical analysis Clarity of thought and expression Completeness (the peer reviewer only has your report in hand to decide whether you know how to perform a business valuation and whether or not to recommend awarding certification) Substantiation of your conclusions Automatic failure results if any of the following critical elements are not included: ? Summary and Dates o The effective date of the valuation o The date of the report o The shares/units or ownership interest to be valued o An overview of the company o Historical operating performance o A conclusion of value stated in total and per share/unit or in ownership interest as appropriate Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 1 Member Number: 5. CVA EXPERIENCE REQUIREMENT ? Limiting Conditions and Assumptions o A statement of disinterestedness in the report o A statement that the report complies with various organizations standards as applicable to the report writer o A statement that the report is for a single purpose only and for only the stated valuation date o A statement that the data received has been relied on with/without independent verification o Limiting conditions ? Purpose and Function of the Valuation o Statement as to why the company is being valued o The style (Estate Tax, Gifting, ESOP, Divorce, etc.) of the valuation o The premises of value (going concern, liquidation, etc.) ? Standard of Value o A definition of the Standard of Value selected o The reason (e.g., the statute or buy/sell agreement or other reason which may dictate its use) the selected Standard of Value is the most appropriate to value the subject interest ? Methods of Valuation o All 3 valuation approaches (asset, market, income) must be considered ? Workpapers o The workpapers must be included There are various areas in the information provided within this packet that will require you to formulate assumptions. The information included herein is fictitious, and therefore limited. If information or a lack of specific information causes you to question something, state the way you would handle this question, and state, in your valuation analysis, what assumptions you made. Fully document these assumptions in your workpapers. The purpose in providing this simulated case study is to show that you know the steps in performing a valuation analysis, and that you can write a cohesive report based on your analysis and conclusions. You will not be scored on your assumptions. In completing a “real world” or non-fictitious valuation you usually find it necessary to do a site visit to get answers to questions you have. We suggest, in this instance, you create a simulated site visit. Note in your work papers what questions you sought answers to and what answers you got from management in your simulated site visit. A simulated site visit is not required; its absence will not affect your score. Many have completed the report successfully without one. It is strictly up to you to decide whether or not you wish to include it. Again, the purpose for this case study experience requirement is to let you demonstrate your knowledge of the process of valuation. There will be issues presented in this case analysis that require you to talk to the business owner. Since Mr. and Mrs. Redmond are fictitious, you must develop a reasonable scenario and set of assumptions, based on a set of questions you devise along with their responses, and include these assumptions in your analysis. We remind you, a valuation is not an audit. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 2 Member Number: 6. CVA EXPERIENCE REQUIREMENT The dollar value assigned to your conclusion is subjective to the assumptions you’ve made. There is no right or wrong answer. However, you must substantiate your conclusion of value and the math must be correct. Consider both the pros and cons in your valuation, in IRS Revenue Ruling 59-60 (if applicable), in your choice of approaches and methods used to value the company and justify all your assumptions. Your report will be scored on your inclusion of an opinion letter, description of the company, economic and industry analysis, your approaches to valuation, your conclusions, workpapers, financial analysis, and adjustments of financial statements and comparative analysis. 7. For purposes of your performing a valuation on this company, you will use information from the Commercial Printers SIC codes: 2752, 2754, and 2759 (NAICS code 323110) for your industry and economic data. The following information has been provided to assist you in preparing your valuation report: ? ? ? ? ? ? ? ? Historical income statements, un-audited Historical balance sheets, un-audited Appraisal letter for real estate rented—for your report, you may assume the number provided in the appraisal letter is substantiated and correct. Appraisal letter for equipment owned—you may assume the number provided in the appraisal letter is substantiated and correct. Industry sources advisory on reasonable compensation is substantiated and correct. An entry on the historical balance sheet for “Land (Investment Property)” at $225,000 is land adjacent to the current operating location intended for future expansion. If the company were to be sold, this land would be included in the sale. For simplification you may assume the land was purchased at the listed value and has not appreciated or depreciated since. Redmond Pro Printing, Inc. records its inventory using a last-in first-out (LIFO) basis. For the time periods shown, the price for inventory has been increasing due to inflation. The inventory was recorded at $496,000 as of October 31, 2012 and the inventory workpapers indicate that the LIFO reserve at that date was $9,000, resulting in an inventory value under a first-in first-out (FIFO) basis of $505,000. Depreciation is GAAP based. 8. For purposes of performing your valuation, your managing partner has instructed you to make normalization adjustments and apply discounts for Lack of Control and Lack of Marketability. 9. We have included a valuation checklist filled in with information found within this case, along with areas marked VA (valuer assumption). It is within these areas where you, the valuer, would find your answers in an interview or a site visit or other such activity. You may make, and document, your own descriptions and assumptions where noted. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 3 Member Number: CVA EXPERIENCE REQUIREMENT Purpose: Potential Sale The Case You have been engaged by Jack and Diane Redmond to value Diane Redmond’s 225 shares in Redmond Pro Printing, Inc. (“Redmond Pro”). The valuation is for the purpose of a potential sale to a third-party. The Valuation Date is October 31, 2012. You have been retained to prepare a “Detailed” valuation report. Redmond Pro Printing, Inc. is a closely held company with the following stock ownership: Shareholder Jack Redmond Diane Redmond TOTAL Number of Shares 275 225 500 Percent 55.0% 45.0% 100.0% Jack and Diane are husband and wife. They do not have any relatives working in the business. The Redmond family plans to sell the printing company and Erick Davidson, who is an employee of Redmond Pro, is interested. They have a gentleman’s agreement to use the value of the company as of October 31, 2012. Jack has not said he would sell to Davidson nor has Davidson guaranteed he would buy. A valuation is being done as a basis for further negotiations with the family. Redmond Pro Printing, Inc. is a printing company headquartered in Tampa, Florida. Mr. Redmond and a former business partner, Justin Baker, started the company in 1983 as Redmond/Baker Printing. The name of the business was changed to RB Quality Printing, Inc. shortly after formation. Jack and Diane Redmond purchased Justin Baker’s interest in the business in 1986. At that time, the Redmonds changed the name to Redmond Pro Printing, Inc. The company leases real estate from Jack & Diane Family Limited Partnership (JDFLP), which is owned by the company’s principal shareholders, Jack and Diane Redmond. The lease agreement includes Redmond Pro’s Tampa facility and an additional property known as the Cliff Building. The lease payment is $23,450 per month. This is the only related-party transaction in which the company is involved. Redmond Pro sub-leases approximately one-half of the space in the Cliff Building to another company. Redmond Pro Printing, Inc. now has gross sales of approximately $12 million and employs about 110 people. In 1986, when the name changed, Redmond Pro had annual sales of $100,000 and only five employees. The employee turnover rate is very low by industry standards, which implies a high degree of employee satisfaction and a relative constant level of printing work. There is an adequate supply of labor in the area when occasional help is needed, and the compensation for these individuals is average for the area. Management below the owner level is very good and capable. They are able to perform their duties without much supervision or control. The owners (Jack and Diane) work 100% of the time in the business. Jack Redmond (age 64) is the president of Redmond Pro and Diane Redmond (age 60) is the office manager. Each owner is paid $10,000 per month. It is expected that an adequate replacement for Diane can be found at an annual salary of $65,000-$75,000. Jack’s salary is at the market rate for the area. The company’s other key employees include: Erick Davidson (VP of Finance), Kurt Samuelson (VP of Production), Dean Richardson (Manager of the Prepress Department), Sam Erickson (Manger of the Press Department), and Tamara Forest (Manager of the Finishing Department). Redmond Pro currently has 8 sales people, all of whom are located in Tampa. In the future, Redmond Pro anticipates that salespeople will be added in other geographic areas. However, no definitive plans for geographic expansion existed as of October 31, 2012. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 4 Member Number: CVA EXPERIENCE REQUIREMENT Financial statements for Redmond Pro Printing, Inc. are prepared annually on an accrual basis and are reviewed by the outside CPA. The financial statements are compiled by the outside CPA, and are available two weeks after the end of each month. Tax planning is done annually. The company’s banking relationship is excellent—they have a $1.50 million credit line at their bank, which they rarely need to utilize. Redmond Pro is a printing company that offers a wide range of services, including graphic design, electronic prepress, multi-color offset printing, variable image printing, finishing, and mailing and fulfillment services. Nearly all of Redmond Pro’s customers are located in Tampa, Florida, and most of the company’s customers are located within 75 miles of Tampa, Florida metropolitan area. However, Redmond Pro does have one large account in Miami, Florida (approximately 280 miles southeast of Tampa). Redmond Pro obtains a significant amount of revenue from a relatively small number of customer accounts. In recent years, the company had 20 to 25 customer accounts that each generated more than $90,000 of annual revenue. Entry into this type of industry is relatively difficult as it takes large sums of money and equipment. This industry also requires high labor input. The company’s management perceived Redmond Pro’s strengths to be: ? ? ? ? ? ? ? ? Well established with over 35 years of successful operation Low employee turnover Experienced and effective management team Excellent product and exceptional service Wide variety of service offerings Clean, organized, and well-maintained facility Up-to-date equipment Accessible location Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 5 Member Number: CVA EXPERIENCE REQUIREMENT Personnel Consultants 1200 E. Floribraska Avenue Tampa, FL 33611 November 30, 2012 Courtney Black, Esq. Black, Grey & White, LLC 1254 Vineyard Road Tampa, FL 33610 Dear Ms. Black: In the general course of performing our services to find and retain capable individuals for positions in operating a commercial printing company, our firm does annual salary surveys. We have reviewed the surveys for the industry, and in our opinion, the reasonable annual compensation for Jack Redmond would be approximately $120,000, and the reasonable annual compensation for Diane Redmond would be approximately $70,000. Given time to search for qualified candidates, we believe we would be able to find an acceptable, qualified, and experienced candidate for either position in the stated ranges. This excludes consideration for relocation or any signing bonus which a given applicant may require to relocate. A candidate with lesser experience—perhaps 10-15 years in lieu of 25+ but otherwise qualified— commands an annual salary approximately 20% less. Our fees for candidate search vary. We have included a summary fees structure for our services with this letter. If we can be further service, please feel free to call. Yours truly, Jane Williams Recruiter Enclosure Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 6 Member Number: CVA EXPERIENCE REQUIREMENT Quality Appraisal Company 18572 Millennial Blvd. Tampa, FL 33611 December 5, 2012 Courtney Black, Esq. Black, Grey & White, LLC 1254 Vineyard Road Tampa, FL 33610 Dear Ms. Black: Included herewith is an appraisal for the equipment owned and used by Redmond Pro Printing, 339 N. Tampa St., Tampa, FL 33602. We have concluded the current market value to be $1,800,000 at October 31, 2012. In the report attached and made part of this letter, you will find an itemized list of all equipment appraised, along with criteria used as the basis for this appraisal. If we can be of further service, please feel free to call. Respectfully, Jack Sprat, ASA Enc: Appraisal of assets of Redmond Pro Printing, Inc., dated November 30, 2012. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 7 Member Number: CVA EXPERIENCE REQUIREMENT Commercial Realty Company 8930 Lemon Drive Tampa, FL 33611 November 30, 2012 Courtney Black, Esq. Black, Grey & White, LLC 1254 Vineyard Road Tampa, FL 33610 Dear Ms. Black: Pursuant to your request of September 8, 2012, we have conducted a survey of rents in the two mile radius, with the center point of that area being an address commonly known as 339 N. Tampa St., Tampa, FL 33602, the Cliff Building. The area is primarily industrial, although there are a few residences scattered among the industrial properties. These residences were not included in our survey. The industries varied in nature, with the majority of the industries classed as light industrial and construction. The area is zoned for light industry/manufacturing/construction. When the residences are demolished or purchased, the special use permits allowing dwelling to be in place will be revoked. The minimum rent paid in that area for a comparable facility is $19,000 per month. The maximum rent paid in the area for a comparable facility is $25,000 per month. We have reviewed the leases you sent to us, and in our opinion the market value for the facility occupied by Redmond Pro Printing, Inc. is $22,500 per month. If we can be of further service, please do not hesitate to call. Sincerely, Sue Land Realtor Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 8 Member Number: CVA EXPERIENCE REQUIREMENT Redmond Pro Printing, Inc. Jack & Diane Redmond, Owners Erick Davidson VP Finance Jack Redmond Diane Redmond President Office Manager Sales Account Reps. Kurt Samuelson VP Production Dean Richardson Manager Prepress Dept. Sam Erickson Manager Press Dept. Tamara Forest Manager Finishing Dept. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 9 Member Number: CVA EXPERIENCE REQUIREMENT REDMOND PRO PRINTING, INC. HISTORICAL INCOME STATEMENTS SUMMARY October 31 2012 October 31 2011 October 31 2010 October 31 2009 October 31 2008 Revenue Gross Revenues Cost of Sales Gross Profit $ 12,011,000 $ 8,376,000 $ 3,635,000 $ 13,049,000 $ 9,025,000 $ 4,024,000 $ 12,350,000 $ 8,599,000 $ 3,751,000 $ 11,636,000 $ 8,399,000 $ 3,237,000 $ 11,484,000 $ 8,482,000 $ 3,002,000 Operating Expenses Depreciation Lease Expense Officer Compensation Advertising & Sales Salaries & Wages Repairs & Maintenance Bad Debts Pension & Profit Sharing Meals & Entertainment Legal & Professional Other Expenses $ 276,000 $ 281,400 $ 240,000 $ 30,028 $ 1,715,146 $ 96,600 $ 12,011 $ 120,060 $ 11,250 $ 180,160 $ 630,345 $ 149,000 $ 281,400 $ 240,000 $ 60,055 $ 1,717,474 $ 37,250 $ 13,049 $ 120,223 $ 15,000 $ 195,450 $ 908,099 $ 197,000 $ 150,000 $ 240,000 $ 65,245 $ 1,716,310 $ 49,250 $ 12,350 $ 120,142 $ 12,750 $ 200,100 $ 700,853 $ 475,000 $ 150,000 $ 240,000 $ 61,750 $ 1,710,492 $ 118,750 $ 11,636 $ 119,734 $ 11,500 $ 175,565 $ 161,573 $ 235,000 $ 150,000 $ 240,000 $ 58,180 $ 1,688,148 $ 58,750 $ 11,484 $ 118,170 $ 11,000 $ 150,000 $ 363,268 Operating Expenses $ 3,593,000 $ 3,737,000 $ 3,464,000 $ 3,236,000 $ 3,084,000 Income From Operations $ 42,000 $ 287,000 $ 287,000 $ 1,000 $ (82,000) Other Income Interest Expense Gain/Loss on Sale of Assets Miscellaneous Other Income $ $ $ 44,000 64,000 $ $ $ 58,000 $ $ $ 7,000 23,000 $ $ $ (1,000) (8,000) 8,000 $ $ $ (10,000) 16,000 Total Other Income/(Expense) $ 108,000 $ 58,000 $ 30,000 $ (1,000) $ 6,000 Net Income Before Taxes Income Taxes Net Income $ $ $ 150,000 63,000 87,000 $ $ $ 345,000 186,000 159,000 $ $ $ 317,000 105,000 212,000 $ $ $ (6,000) 6,000 $ $ $ (76,000) (76,000) Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 10 Member Number: CVA EXPERIENCE REQUIREMENT Redmond Pro Printing, Inc. Historical Balance Sheet Summary For the Year Ended October 31 (in 000's) Assets Current Assets Cash & Equivalents Accounts Receivable Other Receivables Inventory Deposit on Equipment Prepaid Expenses Prepaid Income Taxes Prepaid Sales Taxes Deferred Tax Assets Other Current Assets Total Current Assets Fixed Assets Land Leasehold Improvements Furniture, Fixtures & Equipment Vehicles Total Fixed Assets Less: Accumulated Depreciation Net Fixed Assets Other Assets Cash Surrender Value of Life Insurance Investments Deferred Tax Asset Total Other Assets 2012 2011 2010 2009 2008 2,486 1,340 44 496 131 44 14 53 4,608 2,405 1,610 61 444 83 8 52 4,663 1,801 1,567 34 340 79 107 11 49 3,988 1,043 1,435 36 416 81 18 2 104 3,135 428 1,804 27 297 80 83 18 1 118 2,856 225 168 9,783 131 10,307 (8,967) 1,340 225 168 9,695 140 10,228 (8,741) 1,487 225 168 10,118 127 10,638 (8,890) 1,748 225 168 10,313 137 10,843 (8,701) 2,142 225 168 10,356 114 10,863 (8,230) 2,633 234 234 246 140 386 235 114 349 223 112 335 214 111 325 TOTAL ASSETS 6,182 6,536 6,085 5,612 5,814 Liabilities & Equity Current Liabilities Notes Payable Accounts Payable Customer Deposits Accrued Wages & Bonuses Profit Sharing Contribution Accrued Income Taxes Other Accrued Liabilities Total Current Liabilities 439 68 393 75 58 1,033 634 26 453 83 94 58 1,348 537 80 367 74 53 1,111 408 136 246 36 54 880 276 451 48 216 30 50 1,071 224 224 240 240 150 150 112 112 130 130 1,257 1,588 1,261 992 1,201 3 166 4,756 4,925 3 254 4,669 22 4,948 3 305 4,510 6 4,824 3 313 4,298 6 4,620 3 322 4,291 (3) 4,613 6,182 6,536 6,085 5,612 5,814 Long-Term Liabilities Long-Term Debt Deferred Income Taxes Total Long-Term Liabilities Total Liabilities Stockholders' Equity Common Stock Additional Paid-In Capital Retained Earnings Unrealized Gain / (Loss) on Investments Total Stockholders' Equity TOTAL LIABILITIES & EQUITY Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 11 Member Number: CVA EXPERIENCE REQUIREMENT Comprehensive Business Valuation Development Checklist Redmond Pro Printing, Inc. Workpapers Page Reference I. ANALYSIS OF THE SUBJECT INTEREST OWNERSHIP INFORMATION Company Information Name: Redmond Pro Printing, Inc. Street address: 339 N. Tampa St. City: Tampa Tel: (407) 305-8135 Fax: DBA (if applicable): Not applicable State: FL ZIP: 33602 E-mail: Organizational Information Common Shares ? ? ? ? ? ? ? • Corporation type: C Corporation Date incorporated: January 1983 State of incorporation: Florida S election: Merger date: Recapitalization Agreement: • • # of shares authorized: 500 # of shares issued and outstanding: 500 Restrictions, if any: Family members have right of first refusal Treasury Shares Preferred Shares ? ? ? ? • # of shares held: None Date of purchase: Purchase price: Date of cancellation: • • • # of shares authorized: None # of shares issued and outstanding: Description of preference: Dividend %: Shareholder Information ——— Common ——— # of Shares % 275 55.0 225 45.0 Name Jack Redmond Diane Redmond Totals: 500 100.0 ——— Preferred ——— # of Shares % None None 0 0 VA = Valuator Assumption; document valuation assumptions you make as part of your workpapers. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 12 Member Number: CVA EXPERIENCE REQUIREMENT Workpapers Page Reference Participation Name % of Time Devoted to Business Title Jack Redmond—(64) Diane Redmond—Wife (60) Amy Redmond—Child (38) John Redmond—Child (36) Co-owner; President Co-owner; Office Manager None None 100% 100% None None Duties Bidding, Marketing, Supervision Office Manager Related Party Information Name Relationship Jack & Diane Family Limited Partnership (JDFLP) JDFLP owns company’s facilities Involvement Described Leases facilities to company Recent Stock Sale Information ? ? ? ? ? ? ? ? ? ? ? ? Type of stock sold: None Sold to: # of shares sold: Price of shares sold: Date of sale: % sold: Restrictions, if any: Reason for sale: How valued: Stock options: Terms: Type: • • • • • • • • • • • • Type of stock sold: Sold to: # of shares sold: Price of shares sold: Date of sale: % sold: Restrictions, if any: Reason for sale: How valued: Stock options: Terms: Type: II. VALUATION ESSENTIALS Purpose of Valuation ? ? ? Purpose of valuation: Potential sale of company, 225 shares of stock. Valuation date: October 31, 2012 # of shares to be valued: 225 • % of interest to be valued: 45% Standard / Premise of Valuation ? ? Define standard of value: Fair Market Value Define premise of value: Going concern Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 13 Member Number: CVA EXPERIENCE REQUIREMENT Workpapers Page Reference Requesting Party Name: Jack and Diane Redmond Street address: 339 N. Tampa St. City: Tampa Tel: (407) 305-8135 Fax: Relationship: Husband and wife Title: Shareholders State: FL ZIP: 33602 Email: Contact Person Name: Jack Redmond Street address: 339 N. Tampa St. City: Tampa Tel: (407) 305-8135 Fax: Relationship: Title: President and Controlling Owner State: FL ZIP: 33602 E-mail: III. NON-FINANCIAL INFORMATION ? History / background: Redmond Pro Printing, Inc. is a printing company headquartered in Tampa, Florida. Justin Baker, a former partner of Jack Redmond, started the company in 1983 as Redmond/Baker Printing. The name of the business was changed to RB Quality Printing, Inc. shortly after formation. Jack and Diane Redmond purchased Justin Baker’s interest in the business in 1986 and changed the name to Redmond Pro Printing, Inc. ? Major historical events: In 1986, when the Redmonds purchased the company, it had gross sales of $100,000 and five employees. Redmond Pro Printing, Inc. now has gross sales of approximately $12 million and employs about 110 people. The employee turnover rate is very low by industry standards. VA: Valuer should create a story about this company that discusses how it grew from gross revenues of $100,000 to gross revenues of $12 million. The story should reflect what you asked about and learned during the site visit to this fictitious company. ? Annual gross revenues: $12,000,000 • Average # of employees: 110 people Location Information Location 339 N. Tampa St., Tampa, FL Date Occupied January 1986 Leased/ Owned Leased Function Office, Warehouse, and Workshop Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 14 Member Number: CVA EXPERIENCE REQUIREMENT Workpapers Page Reference ? SIC code: 2752-Commercial Printing; Lithographic • SIC code: 2754-Commercial Printing; Gravure • SIC code: 2759-Commercial Printing; Not Else. Cl. • ? Principle activity: The U.S. industry comprises establishments primarily engaged in lithographic (i.e., offset) printing without publishing (except books, grey goods, and manifold business forms). This industry includes establishments engaged in lithographic printing on purchased stock materials, such as stationery, letterhead, invitations, labels, and similar items, on a job order basis. NAICS code: 323110-Commercial Lithographic Printing NAICS code: NAICS code: IV. MANAGEMENT Key Management Name Jack Redmond Diane Redmond Erick Davidson Kurt Samuelson Dean Richardson Sam Erickson Tamara Forest Title Co-Owner; President Co-Owner; Office Mgr. VP of Finance VP of Production Manager of Prepress Dept. Manager of Press Dept. Manager of Finishing Dept. Duties Overall supervision; management Staffing, personnel, office supplies Head of accounting department Head of prepress, press & finishing Prepress scheduling & operations Schedules press runs & operations In charge of finishing department Age / Health 64 / good 60 / good 48 / good 55 / good 43 / good 50 / poor 35 / good ? Describe key management background, education, longevity, and experience: The owners (Jack and Diane) work 100% of the time in the business. Jack Redmond is the president of Redmond Pro and is responsible for managing the overall business, marketing, and supervising eight sales reps. Jack has been involved in the industry for over 30 years. Diane is the office manager. She directs all office activities, including staffing and human resources. Erick Davidson, the VP of finance, has a master of accountancy degree and 26 years of experience in accounting and finance. Kurt Samuelson, the VP of production, has no formal college degree, but completed a professional printer training program and has over 35 years of industry experience. Dean Richardson is the manager of the prepress department. Mr. Richardson has a bachelor of science degree in philosophy and has been with Redmond Pro Printing since graduating in 1990. Sam Erickson is the manager of the press department and has been at the company for 15 years. Mr. Erickson is in poor health and is working reduced hours as he undergoes treatment. Tamara Forest is the manager of the finishing department and has a bachelor degree in graphic design. Ms. Forest has been with the company for seven years. Redmond currently has eight sales reps, all of whom are located in Tampa. In the future, Redmond Pro anticipates that salespeople will be added in other geographic areas. However, no definitive plans for geographic expansion existed as of October 31, 2012. ? Are employment contracts in place? Not for staff. • Are key man policies in place? No. Describe: Contracts are done for larger jobs. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 15 Member Number: CVA EXPERIENCE REQUIREMENT Workpapers Page Reference Identify Basis of Officer / Owner Compensation Name Jack Redmond Diane Redmond Basis of Title Compensation Co-Owner; President Salary of $10,000 per month Co-Owner; Office Manager Salary of $10,000 per month Board of Directors Name Jack Redmond Diane Redmond Erick Davidson Kurt Samuelson Title Co-Owner; President Co-Owner; Office Manager VP of Finance VP of Production Basis of Compensation Salary Salary Salary, profit sharing Salary, profit sharing V. PRODUCTS / SERVICES AND MARKETS ? Describe products / services (indicate proprietary nature, if any): Redmond Pro Printing, Inc. is a printing company headquartered in Tampa, Florida, serving primarily commercial clients. It offers a wide range of services, including graphic design, electronic prepress, multi-color offset printing, variable image printing, finishing, and mailing and fulfillment services. VA: Create the revenue by product or service category for the company (if needed) to match the story you created from your site visit. VA: Describe a special market niche (if needed) to match the story. VA: Assume that no lawsuits have been brought against Redmond Pro Printing by its clientele. ? Describe customers: Redmond Pro Printing, Inc. is a commercial printing company. Nearly all of its customers are located in Tampa, FL, most are located within 75 miles of the Tampa metropolitan area. Redmond Pro has one large account in Miami, FL. Currently, the company has 20 customer accounts that each generated more than $100,000 of annual revenue. In recent years, the company had 20-25 customer accounts that each generated more than $90,000 of annual revenue. VA: These are repeat customers. Create background on the largest of these customers, including sales volume for the largest customer in Miami, to match the story you created to match information gathered from your site visit. ? Describe market area: Nearly all of Redmond Pro’s customers are in Tampa, FL, and most are located within 75 miles of the Tampa metropolitan area. However, Redmond Pro does have one large account in Miami, FL (approximately 280 miles southeast of Tampa). Redmond Pro’s market is relatively large and stable. VA: Redmond Pro Printing advertises primarily in the Tampa, Florida area. Work outside of this area is limited and comes from referrals. ? Estimated market share: 0.75% of greater Tampa market. Please keep a copy of everything you submit for your records. Rev. 9/14/15 RP 3x1—Page 16 Member Number: CVA EXPERIENCE REQUIREMENT Workpapers Page Reference ? Describe cyclical or seasonal: VA: Create fictitious facts. ? Describe distribution channels: Many of the company’s services are marketed through the reputation of the company and its long standing within the business community. Redmond Pro Printing advertises in regional business magazines, trade publication, as well as local radio spots, where Jack Redmond is a well-known local business personality. ? Summary of barriers to market entry: Entry is moderately difficult as it requires money, equipment, and a skilled workforce. Exit is relatively easy. VI. COMPETITION AND PRODUCT DIFFERENTIATION Identify Major Competitors Estimated Name Location Market Share VA: This is a fictitious company. Loc
