Imprimis, Inc

Why Imprimis?

It’s commonly accepted that consultants can provide a growing company a capability that helps that organization achieve the next level of growth. Often, the consultant provides help with an acute problem, such as the design and implementation of a new process, or developing a market strategy and a product launch. Ideally, the consultant provides access to a variety of expertise to solve an immediate problem or enable a company to take the next step in its growth.

COMPANY PERFORMANCE RATIOS

RATIO

FORMULA

LOOK FOR:

LIQUIDITY RATIOS:

Current Ratio

Current Assets/Current Liabilites

2 to 1 ratio

Quick Ratio (Acid Test)

Cash+Receivables/Current Liabilites

1 to 1 ratio

Cash Ratio (Liquidity)

Cash/Current Liabilities

.2 to 1 ratio

LEVERAGE (and SOLVENCY)

Debt to Equity

Total Liabilities/Total Equity

2 to 1 ratio

Times Interest Earned

NIBT+Interest Expense/Interest Expense

3 years

Fixed Charge Coverage Ratio

Earnings before Fixed Chared/Fixed Charges (ie. sum of ...Interest, Rent, Lease pay, Debt Principal)

Increasing trend

ACTIVITY RATIOS

Days Sales Outstanding (DSO)

(Receivables/Sales) X 365

Decreasing trend

Days Sales in Inventory (DSI)

(Inventory/Cost of Sales) X 365

Decreasing trend

Business Operating Cycle

DSO + DSI

Decreasing trend

Total Asset Turnover

Net Sales/Working Capital

Increasing trend

Working Capital Turnover

Sales/Working Captial

Increasing trend

Inventory to Working Capital Ratio

Inventory/Working Captal

Decreasing trend

Accounts Payable Days

Accounts Pay + Accd. Exp/((CGS+SGA)/365)

Decreasing trend

Fixed Asset Turnover Ratio

Sales/Avg. Fixed Assets

Increasing trend

Sales to Inventory Ratio

Sales/Avg. Inventory

Increasing trend

VALUATION ISSUES

All too frequently, SGL help is request when there is already an offer on the table. The time to think of the value of your company at the time of exit should start long before there is an offer--hopefully when you are starting your company. How you position the company in the marketplace will determine a great deal of the value. Performance is also key. Review the numbers below and your company's ratios. Take a look at a typical due diligence check list and ask yourself how ready your company is...

Discussion of Multiples for Valuation Estimates

Performance Item

% of Revenue

Example (Typical) Multiple

Applies to...

SGL Comments and Observations

Revenue

100%

Capital

Range as low as 0.3 - 0.5 for low growth companies with no IP or market advantage; high of ~4 with high growth, IP protected in large market; large standard deviation--great variability

Gross Profit

50%

Capital

EBITDA

30%

Capital

EBIT

25%

Capital

EBT

18%

Equity

Net Income

10%

Equity

High Tech/High Growth companies seem to hold a P/E of ~30-40; historical market average ~15

Source: "Valuation Trends and Issues", presented to The Captial Network, Austin, Texas, by Rick A. Jenson, Business Valuation Services, Dallas, Texas, on April 24, 2002. www.bvs-inc.com.

SGL Services Matrix

PLANNING

ORGANIZATIONAL DEVELOPMENT

PROGRAM & PROJECT MANAGEMENT

ADVISING, MENTORING AND TRAINING

Executive Management Support

- Strategic Planning
Corporate Planning
- Turnaround Planning & Execution
- Positioning & Image
- Finance Planning, Analysis & Acquisition

- Management, Personnel & Entity Structure
- Management Performance
- Organizational Assessments & Documentation
- Organization Evaluation & Design

- Corporate Projects
- Assessments:

- Organization
- Compensation
- Personnel
- Process
- Market

- Valuation
- Corporate Structuring:

- Mergers & Acquisitions
- Joint Ventures
- Teaming & Strategic Alliances

- Capital Structure

- Executive Advising & Counsel
- Executive Staffing
- Leadership Development

Operations Management

- Requirements Definition
- Problem Solving
- Operational Planning
- Business Planning
- Cost Estimates & Pro Formas
- Meeting Planning, Management & Documentation

- Personnel Assessments & Requirements
- Team Building & Integration
- Conflict Resolution
- Process Evaluations, Benchmarking & Design
- Financial & Enterprise Systems
- Quality System Design & Implementation (ISO/MilQ)
- Process Improvement & Re-engineering

- Detailed Plans & Schedules
- Staffing
- Product Development
- Budgeting
- Metrics & Performance Feedback
- Program Integration
- Project Management
- Oversight

- Training & Educational Needs & Curriculum
- Management & Leadership Training
- Planning Processes & Techniques
- Process Design & Evaluation Techniques
- Customer Support
- Process Design & Re-engineering
- Quality Management
- Change Management
- Statistical Process Control

Marketing Management

i2 Capabilities

Management and Consulting

Why Imprimis?

COMPANY PERFORMANCE RATIOS

RATIO

FORMULA

LOOK FOR:

LIQUIDITY RATIOS:

LEVERAGE (and SOLVENCY)

ACTIVITY RATIOS

Discussion of Multiples for Valuation Estimates

Performance Item

% of Revenue

Example (Typical) Multiple

Applies to...

SGL Comments and Observations

SGL Services Matrix

PLANNING

ORGANIZATIONAL DEVELOPMENT

PROGRAM & PROJECT MANAGEMENT

ADVISING, MENTORING AND TRAINING