G-F ORCE F OOTWEAR Stockholders Presentation by: Anthony Garwood Teikisha Williams Brooke Kessing Shannon Long
G OALS AND S TRATEGY Low-cost provider with few models Increased number of models to be competitive Began selling in the Private Label market Added celebrity endorsement
P AST P ERFORMANCE Close competitors G G E K E K
P AST P ERFORMANCE CONTINUED Close competitors include company E and K Both companies also have few models at a low price and star quality In the past we have offered rebates to wholesale buyers, fast delivery time, and celebrity appeal We are recently the lowest price in the internet market
P AST P ERFORMANCE C ONTINUED We should have offered more models on the internet and as wholesale We should have increased our star quality
P AST PERFORMANCE CONTINUED In the beginning we should have come up with a more detailed and long term strategy that would have ensured a better image and EPS, instead of deciding what to do year to year.
C URRENT S TANDINGS
C LOSE R IVALS : G ROUP E ( LIME GREEN ) & G ROUP K ( PURPLE )
B ALANCE S HEET
S TATEMENT OF C ASH F LOWS
F INANCIAL S TATISTICS
F UTURE P LANS Expand market share in wholesale market, primarily in the AP market Lower price and adjust marketing costs as needed Expanding plant capacity in EA or LA Either would be prudent, but LA would provide better returns based on estimates This may also help us increase our market share in the wholesale segment Improve image rating Enhance styling/features over time Maintain celebrities bids Improve market share will also improve our image rating Five year Plans Build a Latin American plant with 2000 capacity to expand global operations Lower reject rate Make specific improvements in Plant Operations Upgrades
Year 21Year 22Year 23Year 24Year 25 Gross Revenues$000s Internet 45,710 48,773 52,041 55,527 59,248 Wholesale 201, , , , ,346 Private-Label 78,871 84,865 91,315 98, ,722 Gross Revenues from Footwear Sales 326, , , , ,316 ± Exchange Rate Adjustment (1,777) Net Revenues from Footwear Sales 324, , , , ,539 Cost of Pairs Sold (187,803) (196,081) (204,820) (214,051) (223,806) Warehouse Expenses (24,002) (25,060) (26,177) (27,357) (28,604) Marketing Expenses (56,114) (58,587) (61,198) (63,957) (66,871) Administrative Expenses (10,704) (11,176) (11,674) (12,200) (12,756) Operating Profit 45,734 47,750 49,880 52,126 54,502 Interest Costs 1,969 Pre-Tax Profits 47,703 49,719 51,849 54,095 56,471 Income Taxes (14,272) (14,901) (15,565) (16,266) (17,008) Net Profits 33,431 34,818 36,284 37,829 39,463 Shares of Stock Outstanding (000s) 7,500 Earning Per Share ($ per share) Pro Forma Income Statement
B EHIND THE N UMBERS Averages based on years – pivotal growth years Average Gross Revenue Growth Rates: Internet: 6.7% Wholesale: 2.6% - expected to increase at higher rate Private Label: 7.6% Average Exchange Rate Adjustment: ($1777) Average Interest Costs/Income: $1969 Will vary due to operations expansion Plant building will be 20-50% financed