Green Design Group, LLC
Projected Financials
DEVELOPMENT COSTS Ongoing operations are to be financed by the design consulting fees generated by Green Design Group LLC. One hundred fifty thousand dollars ($150,000) in financing is sought to fund office personnel and marketing activities. Key office personnel includes a sales manager and production manager. Marketing activities include promotional materials, direct sales efforts and development costs of sample designs. Individual projects are explained in Current Business Development. REVENUES The Company projects revenues of $285,500 in 1997. Revenues increase to $2,875,000 by year three. Included in this projection are sales revenues from TeeShirt design and manufacturing which is explained in Current Business Development. (A detailed four-year projected income statement can be found in Appendix F.) For the first three years, salaries and operating expenses are kept low to generate funds for growth and expansion. The business projects Earnings Before Interest and Taxes (EBIT) of $1,354,314 in year three, which is a net margin before taxes of 47%. The largest expense other than employees is Marketing/Research and Development and Travel Expenses. It is anticipated in the start-up phase of the new business model that numerous proposals and expenses will be incurred in attempts to attract clients and accounts. Financials including a Balance Sheet, Projected Income Statements and Projected Cash Flow Statements along with a Four-Year Projected Income Statement can be found in Appendices D, E, and F. Industry Pricing Structure As compared to a Traditional Branded Apparel Company
Traditional Branded Co. Retail Chain Branded Co. Client Client Manufacturer's FOB cost (materials and labor) Production Commission by DG. Total FOB Landed Duty Paid (approximate) (cost to branded company) Wholesale Price(cost to retailer) $24.00 $48.00 50% margins Retail Price(cost to consumer $96.00 $20.00 $20.00 $1.25 $21.25 $25.50 $48.00 46% margins $96.00 $56.64 $0.00 $20.00 $3.60 $23.60 $28.32 $28.32 Promotional Client $20.00 $6.66 $26.66 $31.99 $31.99
before mark-downs) 50% margins 50% margins 50% margins
Balance Sheet - April 1, 1997
Current Assets Cash Accounts Receivable Prepaid and other Total Current Assets Fixed Assets at Fair Market Value Computer Equipment Computer Software Office Equipment (Phones, Fax, Copier, etc.) Office Furniture Accumulated Depreciation Art Books 125 @ $45.00 each Total Fixed Assets Total Assets Current Liabilities Accounts Payable Taxes Payable on 4/15/97 Total Current Liabilities Shareholder Equity Common Stock Retained Earnings Total Shareholder Equity Total Liabilities and Equity $57,666 $64,133 $1,848 $4,619 $6,467 $10,756 $2,266 $1,500 $1,586 ($4,839) $5,625 $16,894 $64,133 $46,139 $0 $1,100 $47,239
Projected Income Statement by Quarters for 1997
1st Quarter 2nd Quarter 3rd Quarter 4th quarter Revenues Consulting Fees (a) Production Royalties/Commission Product Sales (c) Total Revenues Expenses General Office Research and Development $9,500 $1,500 $12,000 $5,500 $15,000 $5,500 $15,000 $5,500 $51,500 $18,000 $41,500 $0 $0 $41,500 $27,500 $9,500 $0 $37,000 $68,750 $22,000 $0 $90,750 $41,250 $179,000 $45,000 $25,000 $76,500 $25,000 TOTALS
$111,250 $280,500
Travel Marketing Expenses Misc. Expenses COGS Employees Taxes and Govt. Fees Commissions Loan Payment Total Expenses EBIT per month
$3,500 $0 $500 $0 $4,800 $1,440 $0 $0 $21,240 $20,260
$6,500 $15,500 $500 $0 $32,000 $9,600 $2,500 $0 $84,100 ($47,100)
$7,500 $18,000 $500 $0 $38,500 $11,550 $0 $0 $96,550 ($5,800)
$11,000 $8,500 $500 $12,500 $11,550 $2,500 $0
$28,500 $42,000 $2,000 $12,500 $34,140 $5,000 $0
$38,500 $113,800
$105,550 $307,440 $5,700 ($26,940)
(a) One client will renew for Fall 1998 design season, GDG will land two additional clients for Fall 1998 design season (b) 1997 - 2nd qtr: Lanzera Production, 3rd qtr: Crable royalties, Apex royalties, 4th qtr: Crable royalties, Apex royalties (c) 1997 – Tee-shirt and product sales for Holiday '97
Projected Income Statement by Quarters for 1998
1st Quarter 2nd Quarter 3rd Quarter 4th quarter Revenues Consulting Fees (a) Production Royalties/Commis Product Sales (c) Total Revenues Expenses General Office Research and Development Travel Marketing Expenses Misc. Expenses COGS Employees Taxes and Govt. Fees Commissions Loan Payment Total Expenses EBIT per month $15,000 $7,500 $7,500 $12,500 $500 $42,500 $38,500 $11,550 $8,500 $0 $144,050 $29,700 $15,000 $3,200 $7,500 $5,500 $500 $55,000 $38,500 $11,550 $11,000 $0 $147,750 $37,250 $15,000 $10,500 $13,000 $15,000 $500 $95,000 $44,800 $13,440 $19,000 $0 $226,240 $103,760 $15,000 $8,000 $11,000 $12,000 $500 $60,000 $29,200 $39,000 $45,000 $2,000 $68,750 $20,000 $85,000 $173,760 $55,000 $20,000 $110,000 $185,000 $55,000 $85,000 $190,000 $330,000 $41,250 $220,000 $25,000 $150,000 $125,000 $510,000 $191,250 $880,000 TOTALS
$62,500 $255,000 $48,000 $169,800 $14,400 $12,500 $0 $50,940 $51,000 $0
$183,900 $701,940 $7,350 $178,060
(a) For Calendar Year 1998, GDG will have 4 seasonal design clients (b) 1998 - 1st qtr: Apex royalties, 2nd qtr. Apex royalties, 3rd qtr: Crable royalties, Apex royalties, 4th qtr: Apex royalties (c) 1998 - $500,000 in Product Sales
Projected Cash Flow Statement by Quarters for 1997 - 1998 Does not Include $150,000 Investment Funds
1997 1st Quarter Sources Revenues Cash From Principal Investment Outflows General Office Research and Development Travel Marketing Expenses Misc. Expenses COGS Employees Taxes and Govt. Fees Commissions Loan Payment Total Outflows Cumulative Cash Position $9,500 $1,500 $3,500 $0 $500 $0 $4,800 $1,440 $0 $0 $21,240 $12,000 $5,500 $6,500 $15,500 $500 $0 $32,000 $9,600 $2,500 $0 $15,000 $5,500 $7,500 $18,000 $500 $12,500 $38,500 $11,550 $0 $0 $15,000 $5,500 $11,000 $8,500 $500 $42,500 $38,500 $11,550 $2,500 $0 $15,000 $7,500 $7,500 $12,500 $500 $55,000 $38,500 $11,550 $8,500 $0 $156,550 ($42,800) $41,500 $0 $0 $27,500 $29,760 $0 $68,750 $22,000 $0 $66,250 $45,000 $0 $113,750 $0 $0 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter
1998 2nd Quarter 3rd Quarter
4th Quarte
$160,000 $250,000 $256,25 $0 $0 $15,000 $3,200 $7,500 $5,500 $500 $95,000 $38,500 $11,550 $11,000 $0 ($27,750) $0 $0 $15,000 $10,500 $13,000 $15,000 $500 $44,800 $13,440 $19,000 $0 $56,260
$0
$0
$15,00
$8,000
$11,00
$12,00
$500
$62,500 $110,00
$48,00
$14,40
$12,50
$0
$84,100 $109,050 $135,550
$187,750 $193,740 $231,40
Cash Position before Taxes $20,260 ($26,840) ($18,300) ($24,300)
$24,85
$20,260 ($26,840) ($45,140) ($69,440) ($112,240) ($139,990) ($83,730) ($58,880
Projected Cash Flow Statement by Quarters for 1997 - 1998 Includes $150,000 Investment Funds
1997 1st Quarter Sources Revenues Cash From Principal Investment Outflows General Office Research and Development Travel Marketing Expenses Misc. Expenses COGS Employees Taxes and Govt. Fees $9,500 $1,500 $3,500 $0 $500 $0 $4,800 $1,440 $12,000 $5,500 $6,500 $15,500 $500 $0 $32,000 $9,600 $15,000 $5,500 $7,500 $18,000 $500 $12,500 $38,500 $11,550 $15,000 $5,500 $11,000 $8,500 $500 $42,500 $38,500 $11,550 $15,000 $7,500 $7,500 $12,500 $500 $55,000 $38,500 $11,550 $15,000 $3,200 $7,500 $5,500 $500 $95,000 $38,500 $11,550 $15,000 $10,500 $13,000 $15,000 $500 $44,800 $13,440 $15,000 $8,000 $11,000 $12,000 $500 $48,000 $14,400 $41,500 $0 $27,500 $29,760 $68,750 $22,000 $0 $66,250 $113,750 $160,000 $250,000 $256,250 $45,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 1998 2nd Quarter 3rd Quarter 4th Quarter
$0 $150,000
$62,500 $110,000
Commissions Loan Payment Total Outflows Cumulative Cash Position
$0 $0 $21,240
$2,500 $0
$0 $0
$2,500 $0
$8,500 $0
$11,000 $0
$19,000 $0 $56,260 $66,270
$12,500 $0 $24,850 $91,120
$84,100 $109,050 $135,550 $156,550 $187,750 $193,740 $231,400 $80,560 $37,760 $10,010
Cash Position before Taxes $20,260 $123,160 ($18,300) ($24,300) ($42,800) ($27,750) $20,260 $123,160 $104,860
Projected Four Year Income Statement 1997 - 2000
1997 Revenues Consulting Fees Production Royalties/Commissions Product Sales Total Revenues Expenses General Office Research and Development Travel Marketing Expenses Misc. Expenses COGS Employees Taxes and Govt. Fees Commissions Loan Payment Total Expenses EBIT per month Net Margin (before taxes) $51,500 $18,000 $28,500 $42,000 $2,000 $60,000 $29,200 $39,000 $45,000 $2,000 $66,000 $29,200 $45,000 $55,000 $5,500 $475,000 $255,000 $66,222 $95,000 $180,000 $72,600 $32,120 $65,000 $75,000 $6,500 $700,000 $350,000 $79,466 $140,000 $0 $179,000 $220,000 $76,500 $150,000 $25,000 $510,000 $218,875 $450,000 $525,000 $950,000 1998 1999 2000
$950,000 $1,400,000
$280,500 $880,000 $1,618,875 $2,875,000
$12,500 $255,000 $113,800 $169,800 $34,140 $5,000 $0 $50,940 $51,000 $0
$307,440 $701,940 $1,271,922 $1,520,686 ($26,940) $178,060 -9.60% 20.23% $346,953 $1,354,314 21.43% 47.11%