the great game of business an src holdings company “creating businesses of business people”

The Great Game of Business An SRC Holdings Company

“Creating Businesses of Business People”

Copyright 2001 All rights reserved

I. Know & Teach the Rules

II. Follow the Action & Keep Score

III. Stake in the Outcome

The Great Game of Business


High Involvement Planning

Business Training

Ya Gotta Wanna

I. Know & Teach the Rules


Market Analysis

Market Competitive Data

Mid-Year Actual & Year-End Projections

Contingencies

Market Budget vs. Plan

5 Year History in Dollars

Customer Survey Results

Our Strategy to Accomplish Growth



S.R.C. Industry

Profitability Year 1 Year 2 Year 3 Upper Median Lower

PBT 7.2% 5.6% 7.1% 7.9% 5.8% 1.3%

PAT 3.6% 2.3% 4.2% 4.5% 2.8% .7%

EBITDA Margin

9.2% 7.5% 9.3% 9.0% 6.9% 2.5%

EBITDA Growth

N/a -20.2% 16.1% N/a N/a N/a

R.O.A. 9.2% 6.2% 12.7% 7.7% 3.9% .6%

R.O.E. 13.5% 7.1% 26.5% 19.8% 10.9% 3.2%

Gross Margin

18.4% 15.6% 16.3% 31.0% 24.3% 17.6%

SRC Key Financial Numbers


S.R.C. Industry

Efficiency Year 1 Year 2 Year 3 Upper Median Lower

Asset Turnover

2.6 2.7 3.1 2.8 1.7 0.7

Inventory Turnover

4.9 4.4 5.9 20.2 8.8 5.0

A/R Turnover

10.9 9.6 11.7 13.1 10.9 6.1

Collection Period

33.4 38.0 31.1 37.8 51.1 69.8

EBITDA / Sales

9.2% 7.5% 9.4% 9.4% 7.9% 5.2%

Employees 338 329 320

Sales / Employee

$149 k $152 k $173 k



S.R.C. Industry

Solvency Year 1 Year 2 Year 3 Upper Median Lower

Financed Debt / Equity

0.1 0.1 0.3 0.2 0.5 0.8

Total Debt / Equity

0.5 0.2 1.1 0.5 1.4 2.4

Current Ratio

3.4 14.2 1.7 3.0 1.6 1.2



The Bank Peer Group

Total Assets Net

Earnings Loan Loss Allowance Bank Name

Total Loans

Net Interest Margin

Efficiency Ratio ROE

$ 144,048 3 $ 721 2 $1,577,000 1.30% 2

THE BANK Springfield, MO $ 119,763 3 3.95% 2 56.24% 1 9.15% 3

$ 138,375 $ 481 $1,100,000 1.00%

Signature Bank Springfield, MO $ 109,402 4 4.01% 1 63.08% 2 6.41% 5

$ 61,439 $ 54 $288,000 .94%

Village Bank Springfield, MO $ 30,262 10 2.32% 9 80.78% 7 1.56% 9

$ 147,284 $ 262 $956,000 .76%

Community First Harrison, AR $ 125,619 1 3.69% 4 81.91% 9 3.70% 6

$ 49,055 $ 210 $576,000 1.60% 1

Community First West Plains, MO $ 35,537 9 3.94% 3 75.02% 6 6.69% 4

$ 168,037 1 $ 281 $1,398,000 1.14%

Community National Waterloo, IA $ 121,522 2 2.97% 8 74.37% 5 3.55% 7

$ 114,654 $ 274 $935,000 1.25%

Bank of Murfreesboro Murfressboro, $ 73,925 8 3.41% 6 81.54% 8 3.15% 8

$ 125,261 $ 734 1 $1,109,000 1.12%

First Security Bank Lexington, KY $ 98,336 5 3.47% 5 63.68% 4 10.92% 1

Benchmarking Criteria


Income Statement

Cash Flow Statement

Balance Sheet



Cash• Debt• Equipment/Building• Compensation• Inventory Growth• Shareholder Buyout• Save• Receivables• Taxes

The Disbursement


BONUSPROGRAM



Succession PlanningThree People Deep

Stock Options

Top Guns

Annual Employee Reports



Employee Retention

Classroom / Formal Training

Tuition Refund

Interactive / Informal Training

Business Training


You Gotta Wanna



II. Follow The Action & Keep Score

Opening The Books

Huddling

Create Wins


Opening The Books

Converting stories, activities and performances into numbers

You have the playbook, now execute the plays


Huddling

Create a uniform financial format

Forecast numbers and the activities that will cause them

Report results to all employees within 48 hours in the same format


HuddlingDivision Jan Feb Mar Apr May June

Heavy Duty Plan

Opinion

Actual

Corporate Plan

Opinion

Actual

GGOB Plan

Opinion

Actual

Avatar Plan

Opinion

Actual

Combined Plan

Opinion

Actual

SRC Corporation and Subsidiaries Current Sales Opinion


HuddlingSRC Corporation and Subsidiaries Monthly Income Statement

Heavy Duty Corp. GGOB Avatar Combined

Sales

COGS

Gross Income

Gross Margin %

Expenses

Engineering

Sales

G & A

Warranty

Total Expenses

Operating Income

Non-Operating Exp

Profit Before Tax

Taxes

Profit After Tax


HuddlingSRC Corporation and Subsidiaries Monthly Cash Flow Statement

Heavy Duty Corp. GGOB Avatar Combined

Net Collections

Less Payments

Gross Cash Inflow

Less Engineering

Sales

G & A

Warranty

Add Back Deprec.

Net Operating Cash

Less Non-Op Exp.

Proj. Gross Cash

Less Taxes

Net Projected Cash


Follow The ActionCommunication Process

Daily Facility Monitoring

Financial Plan

AUDIT

AUDIT

Weekly Updates To All

Employees

Deviation Management

Bi-Weekly Corporate Reporting


Create WinsWinning is a process

You need to design achievement in your game plans

Little wins add up to big wins

Self-esteem, pride and teamwork don’t happen by accident


Instant Recognition

Career Opportunities

Ownership

III. Provide a Stake in the Outcome


Employee Job Satisfaction Survey

0

10

20

30

40

50

60

70

80

90

100

HeavyDuty

Corporate GGOB Avatar Megavolt

Prior 2 Prior 1 Current


Employee Stock Ownership

401K Investment

Equity Positions

Internal Stock Exchange

Ownership


1983SRCCorp

100%

1985SequelCorp

SOLD

1987SRC ofCanada

100%

SRC Holdings Corporation 1988

Engines Plus

100%

1989Avatar Comp

100%

1990Megavolt

Ltd.

60%1990

NewstreamEnterprises

51%

1991Great Game of Business

100%

1994Encore

100%

1996K&K

Machine

100%

1997The Bank

5%

1997CCRC

100%

1998REGEN

50%

1998SRC Auto

100%

2000Quest Capital

25%


1983 2001

SRC Holdings Corp.Pre-split Stock Performance


“Where employees Feel, Think and Act like OwnersOwners.”


the great game of business an src holdings company “creating businesses of business people”

Documents

rights reserved huddling

format slide

disbursement slide

wins slide

plays slide

great game of business

year history

bank peer group slide