Imageone Industries, Inc.

Imageone Industries, Inc. Arizona * Pennsylvania Manylactating & Installations Coast to Coast I Excellence, Whatever it takes. Confidential Business Review I3industries imageone The imageone industries Companies imageone dpricificat,an Specialists PI Impact TOTAL SUPPORT FACILITIES MAINTENANCE N NATIONAL BonMin, Envivonments greenlife •••• •••• lighting solutions oneconstruction Everingham & Kerr, Inc. 4. 1300 Route 73, Suite 103 Mt. Laurel, NJ 08054 Tel. Fax www.everkerr.cont EFTA01093014 Table of Contents 1. Introduction II. CunlicienthiI Business Summary 2 III. The Proposed Transaction Process 3 IV. Company Description Background 4 Services and Products 5 Divisions 7 Marketing 14 Company Websites 22 Customers 23 Locations and Facilities 24 Personnel 27 Market Analysis 30 Growth Opportunities 30 V. Financial Performance Highlights 31 Income Statement & Normalized Income Statement 32 Balance Sheet 33 Trailing Twelve Month Balance Sheet (2014) 34 Normalized Balance Sheet 35 ). Ilvorimpliinelk Kerr, In. ‘ 7 EFTA01093015 imageone industr ies CONFIDENTIAL BUSINESS REVIEW imageone i ndustr ies INTRODUCTION Imageone Industries, Inc. (the "Company" or "Imageone") has engaged Everingham & Kerr, Inc. ("E&K') as its exclusive Financial Advisor to examine strategic alternatives for the Company. This Confidential Business Review ("CBR') has been prepared for distribution on a Confidential basis to selected entrepreneurs and/or companies solely for the purpose of evaluating the proposed transaction. The information contained in this CBR has been furnished by the Company, or secured from other sources considered reliable. E&K has no reason to doubt the accuracy or integrity of the information provided, but neither the Company, nor E&K makes any representations or warranties, expressed or implied, as to the accuracy or completeness of any of the information in this report. By acceptance hereof, each recipient agrees to assume responsibility for verification of all information and figures supplied prior to consummating a purchase. Each recipient agrees that without prior written consent of the Company, it will not copy, reproduce or use information in this CBR in whole or in part for any purpose other than for review and evaluation of the proposed transaction. The information contained herein must be kept Confidential and disclosed only to those advisors who need to know such information for the purpose of reviewing and evaluating the proposed transaction, and only after the advisor has agreed to comply with the terms for secrecy and confidentiality agreed to in the prior Confidentiality Agreement executed between E&K and the recipient of this CBR. Each recipient further agrees that in the event a transaction is not consummated with the Company, all copies of this CBR and related materials will be destroyed. Everingham & Kerr, Inc. ;• EFTA01093016 D imageone industries BUSINESS SUMMARY Industry: Diversified Provider of Exterior & Interior Identity Solutions Locations: Arizona & Pennsylvania Business Highlights: ­ Company designs, engineers, manufactures, installs, services, and provides interior & exterior identity solutions for large commercial, retail, and financial organizations. o Diversified business made up of multiple divisions offering a wide range of products and services including: • Custom Signage, Storefronts & Fascia Systems. • Facilities Maintenance. • A.T.M. Environments. • Graphics & Imaging. • Specialty Contracting. • L.E.D. Lighting. ­ Marquis customer base including top Fortune 500 companies. ­ Superb management team and vastly experienced, seasoned workforce. ­ High net margin business experiencing rapid growth with outstanding short-term and long-term future growth opportunities. Financial History & Projections: For the rural Years Ended December 31. Projected, 2012 2013 2014 2015 Revenue $25,499,326 $31,056,382 $46,232,266 $51,500,000 Gromh (%) 21.8% 48.9% 11.4% Gross Profit 10,584,351 13,072,027 20,478,081 21,630,000 Percent (%) 41.5% 42.1% 44.3% 42.0% Normalized 6.131TDA 4,499,791 5,979,187 11,767,439 12,052,000 Percent (%) 17.6% 19.3% 25.5% 23.4% 2 Everingham & Kerr, Inc. :it". EFTA01093017 D imageone industr ies THE PROPOSED TRANSACTION PROCEss Everingham & Kerr and our clients do not have asking prices on any represented companies. The information contained in this CBR has been provided to enable the prospective buyer to make an informed decision as to the price to be paid for the business based on the preliminary information contained in this CBR albeit without having conducted a thorough due diligence investigation. In addition to the narrative describing the business, E&K normalized the Income Statements and Balance Sheet to provide prospective buyers with specific assets and liabilities that will be included in the transaction as well as the historical and current cash flow of the business. If you have no further interest: If upon review of the CBR it is decided that there is no further interest in acquiring the company, the CBR should be destroyed. Such parties are reminded that they will continue to be bound by all provisions of the Confidentiality Agreement. II you have further interest: Interested buyers are asked to advise E&K of their interest in the form of a non-binding Indication of Value. This can be provided by email or letter. The Indication of Value should include the following: 1. A preliminary value for the proposed transaction. 2. The anticipated transaction structure that includes: a. Whether the price will be paid in all cash. b. How much of the price will be borrowed from institutions and what portion will be in the form of invested equity? c. Any other terms that would be material to the seller and its advisors in determining which prospective buyers it will select for further discussions. 3. A suggested time frame for closing a transaction that takes into account due diligence and legal documentation. 4. Financial documentation that validates the buyer's capability to perform as proposed. 5. Information about the buyer's company or person that describes the fit with the business. Letter of Intent: Potential acquirers submitting Indications of Value within an acceptable range will be invited to meet the management team. If after meeting with the seller there is still interest in consummating a transaction a non-binding Letter of Intent will be requested for negotiation of the salient business terms of the transaction. In addition to price, the seller will consider other factors when selecting the buyer including terms, timing, tax structure and the buyer's ability to obtain the funds required to close. Due Diligence, Purchase Agreement, Closing: After the Letter of Intent is signed, the buyer will be given the opportunity, together with its legal, financial and other advisors, to conduct further due diligence with respect to the seller, its business and prospects. Concurrent with due diligence review, it is expected that the parties and their counsel will negotiate the Purchase Agreement and proceed to a Closing. omact In ormation: Please contact Daniel R. Everingham at or via email at Under no circumstances should any employees, vendors, customers or shareholders of the Company be contacted without prior approval of Everingham & Kerr. 3 Everingham & Kerr, Inc. .16 EFTA01093018 imageone industries COMPANY DESCRIPTION IWK(anAND Imageone is a national, full-service, Diversified Company that designs, engineers, manufactures, installs, services, and provides interior & exterior identity solutions for large commercial, retail, and financial organizations including top Fortune 500 companies. The Company is made up of multiple divisions offering a wide range of products and services including custom signage, storefronts & fascia systems, graphics & imaging, lighting, M. environments, specialty contracting, maintenance, and consulting. Imageone is headquartered in Bensalem, Pennsylvania (approximately 20 miles northeast of Philadelphia) with additional facilities in Goodyear, Arizona (approximately 20 miles west of Phoenix). The business is an "S" Corporation. Imageone was incorporated in Pennsylvania in April 2007 as the fulfillment of a vision of its owner, Jim Mikula, who personally has over 30 years of industry experience. Imageone has grown rapidly as Mr. Mikula has assembled a team of corporate officers, senior management staff and an employee pool that shares his passion and vision of quality performance and superior customer service. The Imageone team is a well-matured group of professionals with over 500 years of cumulative experience. The Company has and continues to grow rapidly by leveraging the team's existing relationships as well as word-of-mouth referrals and in 2014 is also launching an aggressive marketing campaign. In 2015, the Company is conservatively projecting over $50 million in sales with over $12 million in Normalized EBITDA. Management believes they can grow the Company to $100 million in revenue within the next 36-48 months. The Company's founder and 100% shareholder, Jim Mikula, is seeking to partner with a qualified acquirer at this time. Imageone's platform has been built and the Company is poised to go to the next level. Following a transaction, Mr. Mikula is interested in remaining with Imageone and expects his management team to be retained by the acquirer. Mr. Mikula is interested in re- investing alongside the buyer (on a pari passu basis of course) for a 20% (+/-) ownership stake in the Company going forward. This acquisition opportunity is ideal for a private equity firm and our client has a strong preference to partner with a private equity firm. This will afford the owner the opportunity to have a liquidity event now while maintaining ownership to take advantage of the projected dramatic growth over the next few years positioning him for the proverbial "second bite." • imageone i riaustr ie8 4 4 Iverhophoes & Kerr, loc.' 7 EFTA01093019 0 imageone industries SERVICES & PRODUCTS Imageone assists growing organizations by providing high quality and cost effective products through an efficient, organized approval, manufacturing, and installation process, with relentless dedication to customer satisfaction. The Company is recognized for its leadership in the development and introduction of numerous new sign concepts, innovative designs, manufacturing techniques and project management of multi-location and national programs. Imageone's focus is to meet its customers' objectives in identification, strengthening visual image and product branding. Below is a breakdown of the primary services provided by Imageone followed by a breakdown of the Company's expansive product offering: Services: 0 0 0 0 Design Value Engineering Process Management o Permit Procurement o Zoning / Due Diligence o Surveys Manufacturing & Installation o Steel o Aluminum o Plastic o Maintenance Management o Specialty Metals o Stainless / Copp Products: 0 Exterior / Interior Sign o Illuminated / No • Retail ▪ Corporate • Financial • Entertainment • Architectural • Food / Beverage • Petroleum • Stadium • Travel P • Airport 1-Illuminated Ian o Finishes o Polyurethane Paints (Matthews, DuPont) o Dryvit / Stucco o Brick o Lighting o Fluorescent o Neon o LED o Building Systems o Fascia Systems o Store Fronts o Entryways o Canopy Systems o Graphics and Imaging o ATM Environments o Surrounds o Interior/ Exterior Kiosks o Buildings o Illuminated Walls / Interior o LED Illumination 5 lverleghas & Kerr, Inc. Ile EFTA01093020 imageone industries Services & Products Performed In-House vs. Outsourced: Fabrication: ­ Depending on Imageone's capacity and workload at a given time, the Company handles approximately 80% to 90% of the manufacturing in-house. ­ Custom fabrication especially is done in-house. ­ Management is always focused on the bottom-line; therefore, the Company will outsource the fabrication of commodity products whenever it makes sense. Installation: The Company outsources 100% of national installations throughout the country with an Imageone field manager present. yaintenance: Imageone outsources 100% of the maintenance work through its extensive vendor network. 1 imageone industries 6 Everingham & Kerr, Inc. „7". EFTA01093021 imageone i ndustries DIVISIONS Imageone is a Diversified Company made up of multiple divisions: o Identification Specialists o Facilities Maintenance o Banking Environments o Graphics & Imaging o Storefronts & Fascia Systems o Lighting Specialists On the following pages, we have provided a breakdown of the Company's core divisions: UM* imageone Everingham & Kerr, Inc. ..7). EFTA01093022 imageone industries Identification Specialists Division: Imageone's Identification Specialists division provides exterior and interior identity solutions and signage consulting for many of the top Fortune 500 companies. The Company's goal is to offer a cost effective solution for its customers' interior and exterior signage needs for large or small projects. Its expertise is in major sign and identity conversion projects as well as new signage and identity projects for nationally and internationally recognized commercial and retail customers. Imageone ensures that its customers' image is represented in the manner it deserves. Pler I Imparts imageone i ndustr i es Everingham& Kerr, Inc. :kr. EFTA01093023 a imageone industries Facilities Maintenance Division: Imageone's Facilities Maintenance division effectively integrates its customers' existing contractors into the Company's extensive vendor management system. The Company offers on- site inspection and manages operations for the following services: HVAC, Electrical, Masonry, Flooring, Sign Maintenance, Carpentry and more. • imageone i nduLi tr i es 9 averIngham & Kerr, lee. EFTA01093024 imageone industries Banking Environments Division: The Company's Banking Environments division is on the cutting edge of innovation and design and is currently the only sign company that has successfully developed and deployed the fully illuminated (floor to ceiling and wall to wall) ATM Wall of Light. Imageone is well versed in all aspects of the ATM Environment from ATM Bezels to Remote Walk-Up and Drive-Up buildings to completely enclosed (heated and air conditioned) structures. Imageone has the experience, design capability and manufacturing expertise to deliver ultra-high quality products, on-lime and within budget. WELLS FARGO imageone i ndustries 10 Everingham & Kerr, Inc. ;• EFTA01093025 a imageone industries Graphics & ImaRinE Division: Imageone's Graphics and Imaging division supplies the highest quality digital graphics. The Company handles all of its customers' imaging needs from large format wall, window, and floor graphics to point-of-purchase displays. Imageone's design and illustration team works closely with its customers' marketing and display departments to produce images (either direct to substrate or on self-adhesive vinyl) whether it be a "one-off' large format window or wall display or hundreds of point-of-purchase prints. C PROTECT THIS HOUSE 4. ...., r 7,70 C K,- s SPORTING GOODS imageone industries 11 Everingham & Kerr, Inc. 47). EFTA01093026 imageone industries Storefronts & Fascia Systems Division: The Company's Contracting division handles all levels of projects from interior and exterior storefront renovations to ground-up, new build fascia systems. Imageone ensures a smooth transition from design through opening day to make sure that, no matter how large, or small the project, the job is completed on-time and on-budget. • imageone U U U r I C S 12 Everingham& Kerr, Inc. EFTA01093027 a imageone industries Liaghtinz Specialists Division: The Company's Lighting division focuses on interior and exterior lighting retrofits (Fluorescent to LED). In addition, Imageone handles parking lot fixtures and conversions, security lighting, energy consumption audits, and more. 1 f .•.,ili 1 f .•.,. ' filfri. • ••• imageone industries 13 Everingham & Kerr, Inc. „7". EFTA01093028 D imageone industries MARKETING Since inception, the Company has grown rapidly primarily by leveraging its team's existing relationships as well as word-of-mouth referrals. The significant growth of the Company to-date has been achieved primarily without formal advertising and marketing. Imageone's platform is now built and the Company is ready to go to the next level and begin marketing and growing each division aggressively. Imageone's business model is designed to allow its sales force to go into a prospective new customer either as a diversified company that can provide a wide range of products and services or as a focused specialist, depending on the needs of each particular prospective new customer. On the following pages are some examples of marketing materials: 14 i i, Ind l' sghemo & Kerr, Inc. ' EFTA01093029 0 0 imageone i ndust r i es The imageone industries Companies imageone TOTAL Identification Specialists NEN • M NEN g • • • MEM GRAPHIC BRANDING 111 SPECIALTY DECOR ELEMENTS act SUPPORT FACILITIES MAINTENANCE oneconstruction - _._ NATIONAL Banking Environments •••• •••• •••• •••• greenlife lighting solutions EFTA01093030 imageone Identification Specialists - Exterior Branding & Signage - Architectural Features - Directories & Wayfinding - Pylon & Monument Signage - Custom Signage & Displays - Commodity Signage - Modular / Fascia System Signage - Canopies & Structural Signage - Value Engineering & Design - Program Management - Preventative & Emergency Maintenance Nationwide Service with location from coast to coast. Branding & Signage Services and Solutions that will enh he image of your brand. 44. mis L911 • 3453 3158 • BSI 677 Dunksferry Road, Bensalem, PA 19020 // 978 S. Camino Oro Drive, Goodyear, AZ 85338 WWW.I I laS.COM EFTA01093031 TOTA SUPPORT FACILITIES MAINTENANCE - Signage Service & Maintenance - General Facilities Repair & Maintenance - Flooring / Roofing - Electrical - Commercial Kitchen Repair & Installation - Landscaping & Groundskeeping - Snow & Ice Removal - HVAC - Plumbing - Janitorial - Disaster Relief Nationwide Service with locations from coast to coast. Total Support Services and Solutions that will maintain & enhance the image of your facility. What can we do for you? 677 Dunksferry Road, Bensalem, PA 19020 // 978 S. Camino Oro Drive, Goodyear, AZ 85338 855-881-4999 www.totalfmservices.com EFTA01093032 Innovative Banking Environment Solutions that will enhance the image of your institution. NATIONAL Banking Environments - Exterior & Interior Signage - Drive-Thru Area / Canopy Signage - Entry/Exit Signage & Directionals - ATM Toppers & Kiosks - ATM Surrounds & Enclosures - Illuminated LED Walls - Climate Controlled Stand-Alone Buildings - Walk-Up/Drive-up Buildings - Digitally Printed Graphics & Multimedia Displays Nationwide Service with locations from coast to coast. www.nationalbe.com 677 Dunksferry Road, Bensalem, PA 19020 // 978 S. Camino Oro Drive, Goodyear, AZ 85338 EFTA01093033 ■ Imact GRAPHIC BRANDING SPECIALTY DECOR ELEMENTS - Digitally Printed Graphics - Interior Accents & Decor - Large Format Wad Coverings - Multimedia Displays - Point of Purchase Displays - Interactive Touch Screen Displays - Millwork & Fixtures - Floor Graphics - Interior Accent Lighting - Digitally Printed Banners - Internally Illuminated Columns - Window Graphics & Vinyl Nationwide Service with locations from coast to coast. 677 Dunksferry Road, Bensalem, PA 19020 // 978 S. Camino Oro Drive, Goodyear, AZ 85338 make an um•ac www.impactil.com EFTA01093034 Innovative Construction Services & Solutions that will enhance the image of your brand. oneconstruction - Modular Fascia Systems - Fabrication & Installation - Fascia & Storefront Restoration - Full Exterior / Interior Renovations - Carpentry - Interior & Exterior Finishing - Construction & Demolition - Plumbing - Architectural Elements Nationwide Service with locations from coast to coast. DUNKIN' DONUTS 677 Dunksferry Road, Bensalem, PA 19020 // 978 S. Camino Oro Drive, Goodyear, AZ 85338 www.onecsc.com EFTA01093035 *::: greenlife •••• .... lighting solutions - LED Conversions - LED Flat Panel Retrofits (2x2 & 2x4 Fixtures) - LED Tube Lamps (Replace Fluorescents) - Self Ballasted LED PAR Lamps - Wall Packs - Parking Lot Fixtures & Conversions - Security Lighting - Energy Consumption Audits Nationwide Service with locations from coast to coast. Energy efficient & green lighting solutions that will illuminate the image of your brand. www.greenlifelighting.com 677 Dunksferry Road, Bensalem, PA 19020 II 978 S. Camino Oro Drive, Goodyear, AZ 85338 EFTA01093036 a imageone industries COMPANY WEBSITES To learn more about Imageone, please visit the Company's informative, interactive website which allows customers to view services, products, divisions, work completion photographs, and other important information online: imageone industries Excellence, Whatever it takes. featured project who we are emergency service In addition to the above website, Imageone is launching separate websites for each division of the Company. This will further support its sales force with the ability to go into a prospective new customer either as a diversified company that can provide a wide range of products and services (if needed) or as a focused specialist (if needed), depending on what each particular prospective new customer is seeking. The websites include: •Imageone Identification Specialists - www.ilids.com (site under construction) *Total Support Facilities Maintenance — www.totalfmservices.com (site up and running) *National Banking Environments — www.nationalbe.com (site up and running) *Impact Graphics — www.impactil.com (site under construction) •One Construction — www.onecsc.com (site under construction) •Greenlife Lighting Solutions — www.greenlifelighting.com (site under construction) 22 $ Ilverhogban & Kerr, loc.!' v EFTA01093037 imageone industries CUSTOMERS With over 500 years of collective experience in-house, Imageone provides design / value engineering, manufacturing, installation and service of custom identity solutions for many of America's largest corporations, retail and financial organizations. The Company currently services the entire continental United States as well as Canada. Imageone has a laser focus on working with recurring, perpetual clients that the Company does work for on a year-in and year-out basis. The Company also participates in major rebranding I sign conversion projects when the opportunities arise. These types of conversion projects tend to have lower margins; therefore, these projects are not the core focus at Imageone. Imageone's marquis customer base includes national and international commercial and retail customers such as Bank of America, Wells Fargo, Sovereign Bank / Santander, Dick's Sporting Goods, Staples, Pier One Imports, NHL, MLB, Rite Aid, Walgreens, University of Phoenix and more (below is a partial list of the Company's marquis customer base). DICKS Bank of America c.-e-r. Sprint att. lot Waegteas PlerlImporls verfal.sess DUNKIN' ICI DONUTS Sovereign GOLF WELLS FARGO f4,, University of Phoenix stompts iiISALADIVORKS V natural TRLFAUMIER 4* 8 l a DilatimIc • fr ARAMARK GilmoreGroup * invotorsRank LA I FITNESS Ceboostmobiie IOND LANG LASALLE 4 Santander uifi cacEI.Aft„E RITE AID imageone industries a Columbia sank DOW 23 Everingham & Kerr, Inc. EFTA01093038 El imageone industries LOCATIONS AND FACILITIES Imageone is headquartered in Bensalem, Pennsylvania (approximately 20 miles northeast of Philadelphia) with additional facilities in Goodyear, Arizona (approximately 20 miles west of Phoenix). Illustrated below is a map highlighting the locations of the Company's facilities: West Coast Facilities Good sr. AZ Coast to Coast Coverage Below and on the following pages is a detailed breakdown of Imageone's facilities by square footage, function, ownership, etc.: East Coast — Building #1 - In May 2011, the owner of Imageone purchased and moved the Company into a new, state-of-the-art facility / headquarters comprising approximately 60,000 square feet of manufacturing space, 5,000 square feet of warehouse space, and 14,000 square feet of offices, which sits on approximately 3 acres of land (with room for expansion). Building #2 - In 2012, the owner of Imageone purchased the building located directly behind building #1, which provides an additional 30,000 square feet of manufacturing and 4,000 square feet of warehouse space. Building #3 — Imageone leases building #3 from an independent third party. It is located directly behind building #2, which provides an additional 75,000 square feet of manufacturing and 8,000 square feet of warehouse space. West Coast — Building #4 - In 2013, the owner of Imageone purchased a facility in Arizona comprising approximately 35,000 square feet of manufacturing, 3,000 square feet of warehousing, and 4,500 square feet of offices, which sits on approximately 5 acres of land (with room for expansion). 24 i i, lintrisghemo & Kerr, Inc. ‘ ' EFTA01093039 a imageone industries East Coast - Building 1 East Coast - Building 2 -)st - Building 3 Building #1 - Main Facility 14,000 Sq Ft Offices 60,000 Sq Ft Manufacturing 5,000 Sq Ft Raw Materials/ Finished Goods Storage 79,000 Sq Ft Total Building #2 - Structural Steel Fabrication & WeIA Shop 30,000 Sq Ft Manufacturing 4,000 Sq Ft Raw Materials/ Finished Goods Storage 34,000 Sq Ft Total Building #3 - Manufacturing and Finished Goods Storage 75,000 Sq Ft Manufacturing 8,000 Sq Ft Raw Materials/ Finished Goods Storage 83,000 Sq Ft Total 25 Everingham & Kerr, Inc. EFTA01093040 imageone industries West Coast Facility O Building #4 - Main Facility O 4,500 Sq Ft Offices O 35,000 Sq Ft Manufacturing O 3,000 Sq Ft Raw Materials/ Finished Goods Storage O 5 Acre Lot for Expansion 42,500 Sq Ft Total imageone i ndustries Total Facilities Capability Total Manufacturing Square Footage: 200,000 sq. ft. Total Raw Materials/Finished Goods Storage: 20,000 sq. ft. Total Exterior Finished Goods Storage: 7.5 Acres All of the buildings and land (except for building #3) are commonly owned by the sole shareholder of Imageone, held in a separate entity, and leased to the Company. The estimated fair market value of the real estate is $6.6 million and the estimated fair market annual rent is $500,000. The owner is willing to sell the real estate in conjunction with the business; however, he is also willing to consider a long-term lease. 26 lverteghes a K.rr, Inc.* EFTA01093041 a imageone industries PERSONNEL. The Company employs a highly-seasoned senior management team which leads a total staff of approximately 104 professionals that have over 500 years of collective experience. The Imageone staff includes skilled manufacturing technicians, a complete engineering and design department, a well-schooled project management department, an outstanding sales team and a well-rounded group of support personnel. Imageone offers comprehensive employee benefits including full health insurance coverage. The Company also has a contributory 401(K) Profit Sharing Plan which is available to all MI time employees with one year or more of continuous service. Contributions under the Plan are at the discretion of the Company. Below and on the following pages is an approximate breakdown of the personnel by department / function: I I EMI irr- 'Tr. me. ® IEEE SZE le Sales & Marketinf - 7S77- I a - Mr.L W- r." w -Tritrwsrab IEEE Ii® IEEI MEM • Jim Mikula (Owner/President) • Director of National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing • National Sales & Marketing o Sales & Marketing Support Group Mr- r-itr. t- =11 as - 27 Reeringham& Kerr, Inc. A7). EFTA01093042 O imageone industries Manufacturine & Operations. Engineerimi, Design & Illustration. and Materials / Purchasing - o EVP of Manufacturing • Plant Manager / Special Projects • Plant Manager o Manufacturing & Operations Support Group • Director of Engineering • Design Engineer • Design Engineer • Design Engineer o Engineering Support Group • Art Director • 3D Modeling / Graphic Artist • Graphic Artist • Graphic Artist o Design & Illustration .Support Group • Materials Manager / Director of Purchasing • Purchasing o Materials /Purchasing Support Group Field Installations, Accounting, Service & Maintenance, Graphics & Imaging, Project Manageme►►t and Permits - o EVP of Operations • Director of Accounting • Controller • Accounting Manager • Accounting o Accounting Support Group • VP — Field Installations • Field Supervisor • Field Supervisor • Field Supervisor • Field Supervisor o Field Installations Support Group 28 Iveringham & Kerr, Inc. ;11. EFTA01093043 0 imageone industries Continued from previous page... • Director of Service & Preventative Maintenance • Service & Maintenance Manager • Service & Maintenance Manager • Service & Maintenance Manager o Building Maintenance & Services Support Group • Director of Graphics & Imaging • Project Manager • Project Manager • Project Manager • Project Manager • Project Manager • Administrative Assistant o Graphics & Imaging Support Group • Director of Project Management • Director of Project Management • Sr. Project Manager • Sr. Project Manager • Sr. Project Manager • Project Manager • Project Manager • Project Manager • Project Manager • Project Manager • Project Manager • Project Manager • Project Manager o Project Management Support Group • Senior Project Manager • Permit Expediter • Permit Expediter o Permit Support Group imageone Industries 29 Everingham & Kerr, Inc. „7". EFTA01093044 D imageone industries .\I N R K ET ANALYSIS Imageone competes directly with other national signage suppliers throughout the country. The Company is able to successfully compete on a national level due to its unwavering dedication to Quality and Customer Service. Management believes some of its primary competitors are the following companies: • Icon Identity Solutions (Elk Grove Pillage, IL) • Philadelphia Sign Company (Palmyra, NJ) • Blair Companies (Altoona, PA) • Chandler Signs (Dallas, TX) • Coast Sign (Anaheim, CA) Imageone and its divisions also compete with other facilities maintenance, graphics & imaging, lighting, ATM, etc. companies. GROWTH OPPORTUNITIES Management believes there are numerous opportunities for continued rapid growth: • Since inception, the Company has grown rapidly by leveraging the Imageone team's existing relationships as well as word-of-mouth referrals. The significant growth of the Company to-date has been achieved primarily without formal advertising and marketing. With the implementation of its aggressive advertising campaign and marketing strategy, Imageone expects to continue to increase sales and exposure. o The Company can increase revenue by continuing to hire additional sales personnel. o Imageone can continue to develop and grow its divisions under the Imageone "umbrella". • The Company realized significant growth throughout the recession. Imageone is well- positioned to continue on its growth path as the economy continues to recover. • Imageone's core customer base is projecting significant growth in the near future. • The Company recently expanded out west and is poised to grow and continue to service the United States and Canada in a cost effective manner. • There are numerous new perpetual clients that have been added and are currently in development stages. Some of the new customers are potentially very large. o Imageone is currently in discussions with numerous prospective new clients. • There are several types of strategic acquisitions that make sense for Imageone. 30 Everingham & Kerr, Inc. 16 EFTA01093045 D imageone industries FINANCIAL PERFORMANCE HIGHLIGHTS Sales, Gross Profit, & EBITDA History & Projections: In 2015, the Company is conservatively projecting over $50 million in sales with over $12 million in Normalized EBITDA. Management believes they can grow the Company to $100 million in revenue within the next 36-48 months. For the Fiscal Years Ended December 3I„ Projected, 2012 2013 2014 2015 Revenue $25,499,326 $31,056,382 $46,232,266 551,500,000 Growth (%) 21.8% 48.9% 11.4% Gross Profit 10,584,351 13,072,027 20,478,081 21,630,000 Percent (%) 41.5% 42.1% 44.3% 42.0% Normalized [BMA 4,499,791 5,979,187 1 1,767,439 12,052,000 Percent (%) 17.6% 19.3% 25.5% 23.4% Working Capital: The Company experiences seasonality with Q I being the slowest time of year due to weather and other factors. The amount of working capital conveyed in the transaction will need to be mutually agreed upon. Equipment: The Company utilizes state-of-the-art technology and equipment. The book value of the major equipment included in the transaction is approximately $2 million. Of course, this does not reflect the higher market value of these assets. Financial Statements: On the following pages we have provided spreadsheets of Imageone's financial statements. 31 i i. Iverhaghtmt & Kerr, Inc. 4 EFTA01093046 Imageone Industries, Inc. Page 32 Income Statement For the Fiscal Years Ended December 31, Projected, 2012 2013 2014 2015 Revenue $25,499,326 100.0% $31,056,382 100.0% 546,232,266 100.0% $51,500,000 100.0% Cost of Goods Sold Cost of Goods Sold 14.914.975 58.5% 17.984.355 57.9% 25.754.185 55.7% 29.870.000 58.0% Total Cost of Goods Sold 14,914,975 58.5% 17,984,355 57.9% 25,754,185 55.7% 29,870,000 58.0% Gross Profit $10,584,351 41.5% 413,072,027 42.1% 520,478,081 44.3% $21,630,000 42.0% Overhead Expenses Officer's Salary 600,000 2.4% 600,000 1.9% 600,000 1.3% 600,000 1.2% Payroll 2,802,751 11.0% 3,553,022 11.4% 4,476,738 9.7% 4,924,000 9.6% Payroll Taxes 254,399 1.0% 334,520 1.1% 444,427 1.0% 522,000 1.0% Employee Benefits 277,916 1.1% 313,378 1.0% 271,819 0.6% 300,000 06% Sales 626,641 2.5% 718,700 2.3% 772,244 1.7% 840,000 1.6% Auto and Truck Expense 43,072 0.2% 46,657 0.2% 79,190 0.2% 84,000 0.2% Shop Supplies 109,087 0.4% 84,601 0.3% 126,810 0.3% 144,000 0.3% Depreciation 295,435 1.2% 210,440 0.7% 299,605 0.6% 300,000 0.6% Office Expense 327,665 1.3% 353,248 1.1% 347,126 0.8% 420,000 0.8% Telephone 51,044 0.2% 55,245 0.2% 65,246 0.1% 72,000 0.1% Utiltics 73,353 0.3% 76,371 0.2% 122,002 0.3% 126,000 0.2% Rent 295,500 1.2% 361,250 1.2% 492,000 1.1% 492,000 1.0% Insurance 101,726 0.4% 138,672 0.4% 200,359 0.4% 216,000 0.4% Legal and Accounting 58,736 0.2% 35,584 0.1% 116,389 0.3% 108,000 0.2% Taxes 82,696 0.3% 39,480 0.1% 113,687 0.2% 108,000 0.2% Union 46,336 0.2% 52,094 0.2% 67,455 0.1% 70,000 0.1% Other 333.638 1.3% 330.018 1.1% 915.151 2.0% 552.000 1.1% Total Overhead Expenses 6,379,995 25.0% 7,303,280 23.5% 9,510,247 20.6% 9,878,000 19.2% Operating Income 54.204,356 16,5% 55,768,747 13.6% 510.967.834 217% 511,752,000 228% Normalized Income Statement For the Fiscal leafs Ended December 31, Projected, Normalization 2012 2013 2014 2015 Operating Income $4,204,356 16.5% $5,768,747 13.6% $10,967,834 23.7% $11,752,000 .22.8% Depreciation 295,435 1.2% 210,440 0.7% 299.605 0.6% 300,000 0.6% Non-Recurring One-Time Expense 500.000 1.1% Overlie's...1k Kerr, Sc. iTh EFTA01093047 Imageone Industries, Inc. Page 33 Assets Current Assets As of the Fiscal Year Ending December 31, 2011 2012 2013 Cash S 548,551 6% S 3,981,906 36% S 409,682 1% Accounts Receivable 4,106,137 48% 3,198,895 29% 9,391,017 51% Inventories 1,998,235 23% 2,306,517 21% 6,412,189 36% Prepaid Expenses 23,638 0% 41,651 0% 71,580 0% Total Current Assets 6,676,561 77% 9,528,969 87% 16,284,468 9/% Fixed Assets Fixed Accers 2,425,637 211% 2,478,472 13% 2,981,277 Less Accumulated Depreciation (794,764) .9% (1,090,200) .10% (1,300,640) Total Fixed Assets 1,630,873 19% 1,388,272 13% 1,680,637 Other Assets Other Assets (Deposits, Employee Advances, etc.) 336,475 4% 47,018 0% 2,000 Total Other Assets 336,475 4% 47,018 0% 2.000 tr. Total Assets S 8.&43,908 100% S 10.964.259 M0% S 17.967,105 100% As of the Fiscal Year Ending December 31, Liabilities & Equity 2011 2012 2013 Liabilities Accounts Payable S 966,443 11% S 840,854 8% S 2,723,753 15% Accrued Expenses 341,672 4% 166,814 2% 519,006 3% Sales Taxes Payable 893,496 10% 1,025,930 9% 1,130,839 6% Customer Deposits 250,737 4% 275,416 3% 2,548,978 14% Total Current Liabilities 2,452,348 26% 2,309,014 11% 6,922,576 39% Debt Liabilities Debt Liabilities 44,217 Pi 327,546 3% 2,557,155 14% Total Debt Liabilities 44,217 Pi 327,546 3% 2,557,155 14% Shareholder!. Equity Retained Earnings 2,910,781 34% 6,142,343 36% 8,322,699 46% Shareholder Distributions (3,123,244) .36% (2,024,000) .18% (5,609,060) .31% Capital Stock 5,000 0% 5,000 0% 5,000 0% Net Income 6,354,805 74% 4,204,357 38% 5,768,735 31% Total Shareholder's Equity 6,147,343 71% 8,327,700 76% 8,487,374 47% Total Liabilities & Equity S 8.643.908 tote. S 10,964.259 W0% S 17.967.105 /00% Evoringbamit Kong Inc. .rv. EFTA01093048 Intageone Industries, Inc. Pegs 34 19.1:like. Slit% i Anon ( env nun Dark. 71•2110433233 as of swathe l0. NW Ov13 8.4.13 Dre.13 Jam.14 Fdp14 Mar.14 49-11 Mw•14 Jon14 4YM 9!8-14 Cash S 419131 Si S 1.134261 a S 312477 2% S 11.2.723 la S 2.10113711 In S 2.414.704 13% S 499133 a S 205120 In. 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Ca MA ri•ed "al. 1334.034 is 1353446 A% 1840.1116 0% 102464 13% 11.57471 a% 1659.201 13% 1414.231 a% 1,913.1175 2043.921 09 1.00.710 129 2.052.721 1984.12* cm .4.1........, 0101011999. Wenn Athaai 392391 2% 7.19.49.1 P. 99401 P. 96.414 P. 99.1127 P. 110.3112 t% 218.270 29 819.525 P. 173353 Po 306.414 P. 132.491 Pe 147374 1n4 Otto Avis 391391 2% 739693 P. 99.005 Pe 19.414 Pe 99.427 P. 114.02 Pe 213.270 2% 149325 P. 173353 Po 300.4111 P. 131.491 Pe 147374 TOM/tans J 6 16. ....ttv5 1mi 517991497 Mn S 17.907.105 Mn S 17258205 Mn S 11353.981 Mn S 16276220 Mn '5 14361213 Ma S 16304.172 Mrs S 16313.40 Ina S 16.771.721 Mn S 1 71C32110 Ina S 1 *362.137 MP. TAWS: 71.0.4.Waras S. OfSrpnVe NM (abilities A Evalor 0.4-13 Naval Dre.13 lawn 1.1..14 Mar.14 li IS -14 J=34 .141.14 A. P14 949344 %Mann AarlIff • Neal. S 2089421 09 5 105.31* r% 5 1,840401 lea $ 1,610.1177 la $ 1,157467 la S 1350.460 lea $ 1347.924 In $ 1336.711 a% S 2314474 1:9 $ 251640 11% S 2006.172 09 $ 1.00127.1 MN 1111931 1 4999% 3312613 23% 1...115.323 In 3.019.611 IT. 47940 a 501312 .11. 511414 Ps 511373 1% 470.751 )% 439331 Ps 577.172 a 405.491 21. 61140 21 Sda Inn lipable 865.328 1% 1452301 4% 1,130.82+ 4% .014.3.41 4% 861.48S 4% 840.473 1% 112•494 4% 41#72 4% 939.453 4% 84341* 19 836361 1% 1,003.170 89 Gavin Densiu 14185 a 17,10 49 8482 39 1375413 0% 1405.302 in 1410.10 a 01763 1% Mat 4% 04237 1% 502.732 1% 5•19066 J% 319417 a Tnal Onus 1/4/11150 iv% IMOMiles Dal Listiliiie. 63143116 1.721.127 41% 09 6.00-37 1,942.352 14% us 6.059.71. 2.557.155 1.P. eis 3510.174 1,09.467 .1P. 129 4.1.98:44 414.562 1/4. 1% 3320392 532454 30. a 1.476./60 525 An 15% 99 3317.175 517418 111. a 9611..6. 541.714 14% a 4310.423 535484 Pa a 4.114.374 527.710 12% a 4.61145$ 518475 219 1% MA Debi lishana 1.729.127 09 1142352 II% 2.557.155 (is 1399.467 119 414.562 " 532.154 " 515329 99 517311 a 541.716 a 535484 a 527.710 4% 518.975 1% (984.49.9 &non Raval Emig, 9.197.471 /a 9,117473 51% 9,147473 51% 9345221 8.9 9345.231 en 9345.221 879 9345.211 4.9 9,345.23/ /49 9345.211 8.9 9345.211 569 9345.2311 51% 9349231 8.4% Stur.l.,118 Inorkumns 14.71020)01 ..18% 15,019360) 33% 19098160) ..121. 1110400/ .In 12710.400) •(/** 13373300/ 314. 13373300/ 314. 13373300/ .10% 19012300) .121 ( nail 59.9 9.. 5100 a 5400 49 51/00 4% SA00 a SA00 a 5/100 3% 5/100 3% SA00 3% SA00 3% SA00 3% SA00 3% 5400 a 3219730 219 3.775493 .4" S.710A25 121, 577321 P. 13$0.12.1 rk• 2.471.531 131. 2.700.117 an. 4-V9.741 181. 9616221 14% 9951374 139 6.456.211 la 11100304 01 Teeny 901 SlaVoldels /gob 7.710393 4119 294.9.101 539 935023.1 5P. 9327.919 SP. 10.730301 219 11.101374 7.0. 14459224 11% 12.149371 In 11.623.404 60% 11930212 11% 12.433.491 24% 13352301 12'. Torsi Liabilities £g0i1' S 1641908 1649 S 17311497 ma $ 17,017.10S ma S 17258365 Mn S 15353.98* ma S 19276236 ma S 14,661213 ma S 16024...72 mn S 19813313 ma S 113775.721 ma S 12823280 ma S 11562437 Ma liverinbe & ksn, Sc. IP EFTA01093049 Imageone Industries, Inc. Page 35 Normalized Balance Sheet As of September 30, 2014 Assets 2014 Adjustments Proforma 2014 Current Assets Cash S 1,215,917 (1,215,917) to $ Accounts Receivable 8,732,197 (2,166,126) (b) 6,566,072 Inventories 6,374,139 412,400 t" 6,786,539 Prepaid Expenses 108,879 (34,298) "4 74,581 Total Current Assets 16,431,133 13,427,192 Fixed Assets Fixed Assets (Net of Depreciation) 1,984,128 1,984,128 Total Fixed Assets 1,984,128 1,984,128 Other Assess Other Assets (Deposits. Employee Advances, etc.) 147,576 (147,576) ft Total Other Assets 147,576 Total Assets S 18,562,837 S 15,411,321 Liabilities & Equity 2014 Liabilities Accounts Payable S 3,001,276 Accmcd Expenses 361,695 Sales Taxes Payable 1,003,170 Customer Deposits 325,417 Total Current Liabilities 4,691,558 Debt Liabilities Debt Liabilities 518,975 Total Debt Liabilities 518,975 Shareholder's Equity. Retained Earnings 9,345,238 Shareholder Distributions (4,018,500) Capital Stock 5,000 Net Income 8,020,566 Total Shareholder's Equity 13,352,304 Total Liabilities & Equity S 18,562,837 Ad ailments Proforma 2014 S (1,625,595) RS S 1,375,681 (44,827) (b) 316,868 (153,140) RS 850,030 587,758 (b) 913,176 3,455,755 (518,975) ill Net Business Assets on Proforma Basis I Estimated Fair Market Value of Real Estate (d) S 11,955,566 S 15,411,321 $ 6,600,000 fotal Net Assets on Proforma Basis $ 18,555,5661 Is) Remove cash and other assets. 1to Adjust to the trailing 12 month average. 4`) Remove debt. (dl The real estate is commonly ouned - $3.3M headquarters , building #1, S1.7M building #2, SI.6M Arizona building #4. • i• Ivorlaiphas fig Korn lac. b EFTA01093050