. 2002 2001 '01 to '02 . $ % of Sales $ % of Sales % increase Net sales 62349545 26072585 139.1% Cost of Goods Sold 51402174 82.4% 21010605 80.6%

. 2002 2001 '01 to '02 . $ % of Sales $ % of Sales % increase Net sales 62349545 26072585 139.1% Cost of Goods Sold 51402174 82.4% 21010605 80.6% 144.6% Gross Profit 10947371 17.6% 5061980 19.4% 116.3% Advertising 1818126 2.9% 327479 1.3% 455.2% General & Administrative 8067331 12.9% 4162408 16.0% 93.8% Total Operating Exp 9885457 15.9% 4489887 17.2% 120.2% Income from Operations 1061914 1.7% 572093 2.2% 85.6% Interest Income 17977 0.0% 16237 0.1% 10.7% Gain on Marketable Securities 0.0% 41962 0.2% -100.0% Interest Expense -2400 0.0% -3184 0.0% -24.6% Total Other 15577 0.0% 55015 0.2% -71.7% Income Before Taxes 1077491 1.7% 627108 2.4% 71.8% Taxes 536143 0.9% 161000 0.6% 233.0% Net Income 541348 0.9% 466108 1.8% 16.1% Consider the following questions in your evaluation: What was the percentage increase in sales from 2001 to 2002? What impact did the new sales have on the gross profit? Were the new sales more or less profitable sales based upon their impact on the gross profit? What happened to the advertising expenses ($ & %)? Is the change in advertising likely to be long term? Why? What impact did the new sales have on G&A (General & Administrative)? Why? Are total operating expenses up or down as a percentage? What impact does the change in operating expenses have on the bottom line? Is income from operations up or down ($ & %)? Is total other a significant dollar amount? Percentage increase? Look at the amount of taxes paid. Why is the change so significant? Compare the increases in sales to the increase in profit after taxes. Was it worth it from an operations point of view? From the stockholders point of view?