3/8/2019 BSG Decisions & Reports

Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.22 $2.50 Net Revenues ($000s) 515,891 +19.2%
ROE (return on equity) 19.6% 21.0%
Net Profit ($000s) 44,225 +10.6%
Credit Rating A– B+
Image Rating 83 70 Ending Cash ($000s) 4,901 -1,173

North America Europe-Africa Asia-Pacific Latin America

B F P Facility Facility Facility Facility
Branded Materials Standard Materials % 68 % 0% 46 % 0%
(see anticipated materials
Production Superior Materials %
prices at bottom of page) 32 % 0 % 54 % 0 %
Specs Number of Models / Styles (50 to 500 models) 250 250
Enhanced Styling / Features ($000s per model) $ 37 k/model $ 0 k/model $ 34 k/model $ 0 k/model
TQM / 6-Sigma Quality Program ($/pr. produced) $ 5.00 per pair $ 0.00 per pair $ 5.00 per pair $ 0.00 per pair

Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 7.2★ 0.0★ 7.3★ 0.0★
Projected Reject Rate (percentage of pairs that will fail inspection) 1.7% 0.0% 4.5% 0.0%

Maximum Y11 Production Capability Without Overtime 5,000 pairs 0 pairs 6,000 pairs 0 pairs
(assuming all unused facility space is filled at the
beginning of the year with production equipment) Maximum Overtime 6,000 pairs 0 pairs 7,200 pairs 0 pairs
This figure is an approximation given beginning inventories, projected reject rates, and entries that currently
Total Branded Production Needed in Year 11 9,600 pairs reside on the Internet and Wholesale Marketing decision pages. The company must schedule production of
(to satisfy projected demand in all four regions) (before rejects) about this many pairs to satisfy projected demand and inventory requirements.

Note: To install production equipment at the beginning of the current year in a facility that currently has unused
space, go to the Production Facilities decision entry page (the next item in the decision entries menu).

Year 11 Production Regular-Time 4,250 pairs 0 pairs 4,250 pairs 0 pairs

Capability (000s of pairs Overtime (20% maximum) 850 0 850 0
before rejects)
Total Production Capability 5,100 pairs 0 pairs 5,100 pairs 0 pairs

Branded Pairs to be Manufactured in Y11 (000s) Total = 8,282 4033 pairs 0 pairs 4249 pairs 0 pairs

Branded Footwear Regular-Time Production 4,033 pairs 0 pairs 4,249 pairs 0 pairs
Production (000s of pairs) Overtime Production 0 0 0 0
Rejected Pairs (and reject rate) 69 (1.7%) 0 (0.0%) 191 (4.5%) 0 (0.0%)
Net Branded Production 3,964 pairs 0 pairs 4,058 pairs 0 pairs
Production Capability Remaining for Private-Label Operations 1,067 pairs 0 pairs 851 pairs 0 pairs

Cost of Rejected Pairs (in $000s and $ per pair produced) $2,022 $0.51 $0 $0.00 $4,910 $1.21 $0 $0.00

$000s $/pair $000s $/pair $000s $/pair $000s $/pair

Costs Associated with Materials Cost 31,686 7.99 0 0.00 38,946 9.60 0 0.00
the Production of Labor Cost (including supervisory costs) 38,086 9.61 0 0.00 22,833 5.63 0 0.00
Branded Footwear Enhanced Styling/Features 9,250 2.33 0 0.00 8,500 2.09 0 0.00
TQM / 6-Sigma Quality Program 20,165 5.09 0 0.00 21,245 5.24 0 0.00
Production Run Set-Up 6,000 1.51 0 0.00 6,000 1.48 0 0.00
Maintenance (of facilities and equipment) 2,975 0.75 0 0.00 3,822 0.94 0 0.00
Depreciation (of facilities and equipment) 9,854 2.49 0 0.00 8,245 2.03 0 0.00
Total Branded Production Cost 118,016 29.77 0 0.00 109,591 27.01 0 0.00
Beginning figures represent actual
Anticipated Y11 Materials Prices Standard Materials $ 6.00 per pair Superior Materials $ 12.00 per pair materials prices from the prior year.

Anticipated Global materials prices are a function of industry-wide usage of superior versus standard materials and industry-wide utilization of
Materials available footwear production capability — see page 4 of the Footwear Industry Report for Year 10. You may enter estimates of
Prices Year 11 materials prices above. The more accurate the estimates, the more accurate your projected production costs will be.

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