CaseExhibit-1Exhibit 1Shipments at Selling Price (thousands of dollars)As ForecastAs ForecastDec. 1978ActualSept. 19791979January$1,302$861February$1,872$672March$1,635$1,866April$1,053$1,566May$1,293$873June$1,479$1,620July$1,488$723August$1,797$507Eight months total$11,919$8,688September$1,299$2,163October$1,347$1,505November$1,311$1,604December$2,298$2,265ForecastActualJanuary$1,302$861February$1,872$672March$1,635$1,866April$1,053$1,566May$1,293$873June$1,479$1,620July$1,488$723August$1,797$507September$1,299$2,163October$1,347$1,505November$1,311$1,604December$2,298$2,265

&CHampton Machine Tool Company

CaseExhibit-2Exhibit 2Balance Sheets, 1978--1979 (thousands of dollars)19781979Nov.Dec.Mar.JuneJulyAug.Cash$2,520$491$505$1,152$1,678$1,559Accounts receivable, net$1,245$1,863$1,971$1,893$1,269$684Inventories$2,601$2,478$3,474$3,276$3,624$4,764Current assets$6,366$4,832$5,950$6,321$6,571$7,007Gross fixed assets$4,010$4,010$4,010$4,010$4,010$4,010Accumulated depreciation$2,998$3,010$3,040$3,070$3,080$3,090Net fixed assets$1,012$1,000$0$970$940$930$920Prepaid expenses$62$40$39$24$24$42Total assets$7,440$5,872$0$6,959$7,285$7,525$7,969Notes payable, bank$0$1,000$1,000$1,000$1,000$1,000Accounts payable$348$371$681$399$621$948Accruals$561$777$849$678$585$552Taxes payable*$150$74$373$354$407$479Customer advances$840$1,040$1,040$1,566$1,566$1,566Current liabilities$1,899$3,262$0$3,943$3,997$4,179$4,545Common stock ($10 par value)$1,178$428$428$428$428$428Surplus$4,363$2,182$2,588$2,860$2,918$2,996Net worth$5,541$2,610$0$3,016$3,288$3,346$3,424Total liabilities and net worth$7,440$5,872$0$6,959$7,285$7,525$7,969*Tax payments in 1979 include $75,000 due March 15 on underpayment of 1978 taxes and four equalpayments of $181,000 due on the 15th of April, June, September, and December for estimated 1979 taxliability with any underpayment of 1979 taxes due March 15, 1980.

&CHampton Machine Tool Company

CaseExhibit-3Exhibit 3Income Statements, 1978--1979 (thousands of dollars)FiscalEightYearMonthsEndingDec.1979Ending31/12/781978Jan.Feb.Mar.Apr.MayJuneJulyAug.31/8/79Net sales$7,854$1,551$861$672$1,866$1,566$873$1,620$723$507$8,688Cost of sales*$5,052$1,122$474$369$1,362$1,137$567$1,197$510$276$5,892Gross profit$2,802$429$387$303$504$429$306$423$213$231$2,796Selling and admin expenses$1,296$248$103$61$205$172$96$130$87$66$920Interest expense$0$0$15$15$15$15$15$15$15$15$120Net income before taxes$1,506$181$269$227$284$242$195$278$111$150$1,756Income taxes$723$87$129$109$136$116$94$133$53$72$842Net income$783$94$140$118$148$126$101$145$58$78$914$0Dividends$50$25$0$0$0$0$0$100$0$0$100* Includes depreciation charges of $150,000 in 1978, $12,000 in December 1987, and $10,000 per month in 1979.

&CHampton Machine Tool Company

Pro FormaHampton Machine ToolPro Forma Statements(thousands of dollars)HistoricalPro FormaJuneJulyAug.Sept.Oct.Nov.Dec.Net sales$1,620$723$507$2,163$1,505$1,604$2,265Purchases$600$600$600$600WIP inventory reduction$1,320$0$0$0Raw materials reduction$105$105$105$105Cost of goods sold$2,025$705$705$705Depreciation$10$10$14$14Other expenses$400$400$400$400Cost of sales and other expenses$1,327$597$342$2,435$1,115$1,119$1,119EBIT$293$126$165($272)$390$486$1,147Interest expense$15$15$15$15$15$20$20Net income before taxes$278$111$150($287)$375$466$1,127Income taxes$133$53$72($138)$145$223$541Net income$145$58$78($149)$230$242$586Dividends$100$0$0$0$0$0$150Earnings retained$45$58$78($149)$230$242$436Cash (plug)$1,152$1,678$1,559$699$1,007$766($331)Accounts receivable, net$1,893$1,269$684$1,323$779$1,604$2,265Inventories$3,276$3,624$4,764$3,339$3,234$3,129$3,024Current assets$6,321$6,571$7,007$5,361$5,020$5,499$4,958Gross fixed assets$4,010$4,010$4,010$4,010$4,360$4,360$4,360Accumulated depreciation$3,070$3,080$3,090$3,100$3,110$3,124$3,137Net fixed assets$940$930$920$910$1,250$1,237$1,223Prepaid expenses$24$24$42$42$42$42$42Total assets$7,285$7,525$7,969$6,313$6,312$6,778$6,223Notes payable, bank$1,000$1,000$1,000$1,000$1,350$1,350$0Accounts payable$399$621$948$600$600$600$600Accruals$678$585$552$552$552$552$552Taxes payable*$354$407$479$160$305$529$888Customer advances$1,566$1,566$1,566$726$0$0$0Current liabilities$3,997$4,179$4,545$3,038$2,807$3,031$2,040Common stock ($10 par value)$428$428$428$428$428$428$428Surplus$2,860$2,918$2,996$2,847$3,077$3,319$3,755Net worth$3,288$3,346$3,424$3,275$3,505$3,747$4,183Total liabilities and net worth$7,285$7,525$7,969$6,313$6,312$6,778$6,223Change in cash$526($119)($860)$308($241)($1,097)CAPEX$0$0$0$0$350$0$0Bank note takedown (payback)$0$0$0$0$350$0($1,350)Taxes paid$181$0$0$181Cust adv incl in sales$840$726$0$0

&CHampton Machine Tool Company

Blank Cash BudgetHampton Machine ToolProjected Cash Budget(thousands of dollars)SeptemberOctoberNovemberDecemberJanuaryCash Inflows:Collections of Receivables:Bank Loan:Total cash inflows:0.00.00.00.00.0Cash Outflows:Payments of Accounts Payable:Other Operating Outflows:Purchase New Equipment:Tax Payments:Interest Payments to Bank:Principal Repayments to Bank:Dividends:Total cash outflows:0.00.00.00.00.0Reconciliation:Begining cash balance:Net cash flow:Ending cash balance: