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Footwear Industry Report

FIR 31-Jul-2019

Industry 1 Biegala MGT495-01

Summer

Year 15

© GLO-BUS Software, Inc.

Year 15 Scoreboard    

Rank

   

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

  Change

from Y14

1 J - Doyen 117 100 109 +1 2 K ASM 115 86 101 -1 3 B Cielo 113 78 96 +2 4 DTigers 112 76 94 +7 5 H Road Runner 100 64 82 -8 6 E Elite Footwear 98 63 81 +9 7 FFlying wings 83 56 70 -10 8 ADragons 72 50 61 +12 9 IPure Steps 63 46 55 -6

10 G - Star 60 44 52 -20 11 C Shoe 58 43 51 -2

Game-To-Date Scoreboard    

Rank

   

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

  Bonus Points

Overall G-T-D Score

1 J - Doyen 117 100 109 3 112 2 K ASM 115 85 100 1 101 3 B Cielo 114 80 97 3 100 4 DTigers 114 77 96 0 96 5 H Road Runner 109 76 93 1 94 6 E Elite Footwear 94 62 78 2 80 7 FFlying wings 87 60 74 1 75 8 G - Star 76 53 65 1 66 8 IPure Steps 76 53 65 1 66

10 ADragons 72 52 62 2 64 11 C Shoe 64 47 56 0 56

Investor Expectation Score (I.E.)

Investors and company boards of directors have established targets for the five scoring measures that appear on pages 2 and 3 of this report. The I.E. score ranges from 0 to 120 (if all targets are exceeded by 40% or more). Click the Help button (upper-right) for more information.

Best-In- Industry Score (B­I­I)

The B-I-I score measures each company's performance relative to the best performing company on each of the five scoring measure. The B-I-I score ranges from 0 to 100. To score 100 a company must be the best performing company in the industry on all five scoring measures.

Weighted Average Score

The weighted average score combines the Investor Expectation Score and the Best-In-Industry Score using a 50%-50% weighting as specified by the course instructor. Detailed explanations of scoring are provided in the Help documents asociated with pages 1, 2, and 3 of this report.

Page 1

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Industry 1 SCORING MEASURES Year 15  

Earnings Per Share ($ per share)

Earnings Per Share scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected EPS shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date EPS scores are based on a weighted average of the annual EPS performances.

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (3.50) I.E. B­I­I

Y15 Score I.E. B­I­I

G-T-D Score

A 2.57 2.94 1.89 1.74 3.16 2.46 14 5 14 7 A B 4.61 4.22 4.79 6.70 8.58 5.78 24 13 24 15 B C 2.26 2.57 1.10 2.19 1.91 1.97 8 3 11 5 C D 2.37 4.59 5.19 5.21 7.79 5.04 24 12 24 13 D E 1.42 2.94 2.97 3.66 5.23 3.26 22 8 19 9 E F 1.48 3.86 3.96 4.14 3.96 3.47 18 6 20 9 F G 2.32 2.84 2.90 3.58 2.09 2.75 9 3 16 7 G H 4.05 6.74 7.40 6.57 6.02 6.16 23 9 24 16 H I 2.71 3.11 2.70 2.87 2.32 2.75 10 4 16 7 I J 2.27 4.74 7.14 10.47 13.10 7.53 24 20 24 20 J K 2.31 4.19 5.29 7.81 9.46 5.74 24 14 24 15 K

Return On Equity (%)

Return On Equity scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected ROE shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date ROE scores are based on a weighted average of the annual ROE performances.

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (23.0) I.E. B­I­I

Y15 Score I.E. B­I­I

G-T-D Score

A 21.8 20.2 11.2 9.2 14.9 14.8 12 9 13 9 A B 36.0 24.5 22.1 24.5 24.5 25.4 20 15 21 16 B C 19.4 18.6 7.7 12.4 9.7 12.6 8 6 11 8 C D 22.7 41.5 38.4 24.4 27.3 29.5 21 17 23 18 D E 12.6 21.9 18.1 18.3 21.1 18.9 17 13 16 12 E F 13.2 28.1 23.3 24.6 26.3 23.5 21 16 20 15 F G 19.9 20.0 19.2 21.9 10.9 17.9 9 7 16 11 G H 33.0 38.7 29.4 19.9 15.7 24.4 13 10 21 15 H I 22.9 21.0 15.3 14.1 10.0 15.7 8 6 14 10 I J 19.6 31.8 34.2 35.3 32.9 32.2 23 20 24 20 J K 19.8 28.1 26.9 32.8 33.0 29.3 23 20 23 18 K

Stock Price ($ per share)

Stock Price scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected stock price shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based solely on the most recent year's stock price.

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. B­I­I

Y15 Score I.E. B­I­I

G-T-D Score

A 33.46 45.06 18.88 8.82 27.24 5 2 5 2 A B 121.59 83.05 88.69 130.89 188.88 24 11 24 11 B C 22.86 21.18 8.49 14.03 13.22 3 1 3 1 C D 48.77 120.70 122.75 99.07 159.71 24 9 24 9 D E 11.86 35.44 32.74 58.32 86.32 17 5 17 5 E F 11.76 58.38 68.43 72.32 45.87 9 3 9 3 F G 20.47 31.72 57.28 38.44 16.03 3 1 3 1 G H 102.76 178.88 185.71 124.92 94.96 19 6 19 6 H I 35.55 46.77 24.37 24.71 18.73 4 1 4 1 I J 22.39 102.04 186.55 275.83 340.67 24 20 24 20 J K 26.32 92.42 111.75 191.48 222.74 24 13 24 13 K

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Industry 1 SCORING MEASURES Year 15 (concluded)  

Credit Rating Credit Rating scores are based on a 20% (20-point) weighting. A bolded credit rating indicates achievement of the investor expected credit rating shown below each yearly column head. Game-To-Date credit rating scores are based solely on the most recent year's credit rating performance.

Y11 (B+)

Y12 (B+)

Y13 (B+)

Y14 (A–)

Y15 (A–)

Y16 (A–)

Y17 (A)

Y18 (A)

Y19 (A)

Y20 (A) I.E. B­I­I

Y15 Score I.E. B­I­I

G-T-D Score

A A A A– A A+ 24 20 24 20 A B A A+ A+ A+ A+ 24 20 24 20 B C A– A A+ A+ A+ 24 20 24 20 C D A A– B– A A 22 19 22 19 D E B A A+ A– A 22 19 22 19 E F B A A+ A A– 20 18 20 18 F G A– A A+ A+ A+ 24 20 24 20 G H A A A A+ A+ 24 20 24 20 H I A A A A+ A+ 24 20 24 20 I J A– A A+ A+ A+ 24 20 24 20 J K A– A A+ A A 22 19 22 19 K

Image Rating Image Rating scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected image rating shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based on an average of the most recent three years.

Y11 (70)

Y12 (72)

Y13 (72)

Y14 (75)

Y15 (75)

Y16 (77)

Y17 (77)

Y18 (80)

Y19 (80)

Y20 (80)

Y13-Y15 Average I.E. B­I­I

Y15 Score I.E. B­I­I

G-T-D Score

A 70 67 61 58 62 60 17 14 16 14 A B 75 74 76 82 83 80 21 19 21 18 B C 68 57 64 51 57 57 15 13 15 13 C D 71 68 81 76 84 80 21 19 21 18 D E 68 69 68 75 77 73 20 18 20 17 E F 76 73 72 67 58 66 15 13 18 15 F G 65 68 66 64 58 63 15 13 17 14 G H 84 85 84 78 81 81 21 19 21 19 H I 68 65 68 62 65 65 17 15 18 15 I J 64 71 83 85 87 85 22 20 21 20 J K 74 87 84 90 87 87 22 20 22 20 K

High Average Low Total Dollars ($000s)

High Average Low Per Unit Sold ($/unit)

Industry 1 Cash Outlays for Corporate Social Responsibility and Citizenship

High Average Low

Image Rating Points Generated from

CSRC Expenditures

Year 11 15,457 8,714 0 1.85 1.03 0.00 5 3 0 Year 12 15,222 4,502 0 1.77 0.51 0.00 9 4 0 Year 13 18,323 6,596 0 1.45 0.61 0.00 12 6 0 Year 14 22,403 5,486 0 2.13 0.53 0.00 15 7 0 Year 15 12,725 6,926 0 2.86 0.79 0.00 18 8 0 Year 16 Year 17 Year 18 Year 19 Year 20

Corporate Social Responsibility and Citizenship

Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a distinguished award to the company making the highest cash outlays as a percentage of revenues for corporate social respon- sibility and citizenship initiatives.

Award Winner 2nd Place

Y14 E Elite Footwear K ASM Y15 FFlying wings C Shoe Y16 Y17 Y18 Y19 Y20

Corporate Responsibility Award for Exemplary Corporate Citizenship

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Industry 1 BONUS POINT AWARDS Year 15  

BULL'S  EYE  AWARD for Accurately Forecasting Total Revenues,

Earnings Per Share, and Image Rating

One bonus point added to any company's game-to-date score when actual performance on Total Revenues AND Earnings Per Share vary by no more than 5% from projected performance AND when Image Rating varies by no more than 4 points from the projected image rating.

Year 15 Forecast

Year 15 Actual

Percent Variance

Revenues (within ± 5%) Year 15

Forecast Year 15 Actual

Percent Variance

EPS (within ± 5% or ± 10¢) Year 15

Forecast Year 15 Actual

Point Variance

Image Rating (within ± 4 points) Year 15 Bull's Eye

Award

Cumu- lative

Awards A 651,705 570,237 -12.5% 4.53 3.16 -30.2% 67 62 -5 pts. No 1 A B 1,124,415 1,119,705 -0.4% 8.81 8.58 -2.6% 85 83 -2 pts. Yes 3 B C 569,047 477,896 -16.0% 3.06 1.91 -37.7% 63 57 -6 pts. No 0 C D 1,011,334 1,114,752 +10.2% 6.62 7.79 +17.7% 83 84 +1 pts. No 0 D E 769,937 760,645 -1.2% 5.36 5.23 -2.4% 80 77 -3 pts. Yes 2 E F 317,669 280,357 -11.7% 4.70 3.96 -15.7% 62 58 -4 pts. No 0 F G 345,766 331,258 -4.2% 2.44 2.09 -14.5% 61 58 -3 pts. No 1 G H 990,490 972,470 -1.8% 6.48 6.02 -7.1% 76 81 +5 pts. No 1 H I 619,997 597,066 -3.7% 2.77 2.32 -16.1% 66 65 -1 pts. No 1 I J 1,379,303 1,293,555 -6.2% 14.63 13.10 -10.5% 92 87 -5 pts. No 2 J K 970,657 1,024,955 +5.6% 8.95 9.46 +5.6% 83 87 +4 pts. No 0 K

Trends in Variances Between Projected and Actual Performance (company and industry variances bertween projected and actual revenues, EPS, and image rating)

Industry 1 Variance

Largest Average Smallest

Company D Variance

Year 11 +9.6% -0.4% -7.4% -3.7%

Year 12 +30.1% +5.2%

-15.2% +27.9%

Year 13 +27.4%

-3.3% -20.0% +27.4%

Year 14 +10.0%

-4.8% -18.9%

-5.7%

Year 15 +11.5%

-5.6% -21.1% +9.7%

Year 16 Year 17 Year 18 Year 19 Year 20

Y11 Score Δ

Y12 Score Δ

Y13 Score Δ

Y14 Score Δ

Y15 Score Δ

Y16 Score Δ

Y17 Score Δ

Y18 Score Δ

Y19 Score Δ

Y20 Score

Current-Year Scores and Net Changes Cumu- lative

Awards A 83 -5 78 -22 56 -7 49 +12 61 1 A B 107 -15 92 +1 93 +1 94 +2 96 0 B C 74 -8 66 -15 51 +2 53 -2 51 0 C D 86 +11 97 -6 91 -4 87 +7 94 0 D E 55 +23 78 -6 72 0 72 +9 81 0 E F 58 +32 90 -3 87 -7 80 -10 70 1 F G 73 +2 75 +2 77 -5 72 -20 52 0 G H 105 +3 108 -3 105 -15 90 -8 82 0 H I 84 -5 79 -14 65 -4 61 -6 55 0 I J 73 +22 95 +13 108 0 108 +1 109 1 J K 77 +19 96 +2 98 +4 102 -1 101 1 K

Δ = net change in score between years Highlighted figure = Leap Frog Award winner

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3b

for Most Improved Overall Score (current year to current year)

LEAP  FROG  AWARD Beginning in Year 12, one bonus point is added to the game-to-dateoverall score of the company whose current-year overall score is most improved over the prior year. If all companies fail to improve their scores from one year to the next, then no Leap Frog bonus is awarded.

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Industry 1 INDUSTRY OVERVIEW Year 15  

Materials Prices

Price Adjustments

Materials Usage Facilities Utilization

Base Prices of Materials ($ per pair)

Materials Prices in Year 15 ($ per pair)

$6.00 -0.16 +0.26 $6.10

Standard $12.00 +1.22 +0.52

$13.74

Superior High industry-wide superior materials usage (45.1%) lead to superior materials prices that were 10.2% above the base and standard materials prices that were 2.6% below the base. Industry-wide utilization of production capability was above 110% and resulted in materials price increases of 4.3%.

Notes

Footwear Production and Sales

Branded Demand

(000s of pairs) Forecast Actual

Stockouts No. of Companies Unfilled Orders (000s)

Pairs Available (000s)

Pairs Sold (internet + wholesale)

Private Label

Demand Forecast (000s of pairs) Pairs Offered (000s) Pairs Sold (000s)

Superior Materials Usage Utilization of Production Capability

North America

45% 102.7% 39,976 35,622 35,904 35,904

5 0

3,696 3,110 2,168

Europe Africa

45% 120.0% 35,182 30,419 30,393 30,392

2 1

3,696 2,266 2,266

Asia Pacific

44% 119.3% 37,662 26,906 27,247 27,245

0 0

4,037 4,400 4,037

Latin America

49% 120.0% 34,027 27,066 27,951 27,947

1 1

4,037 3,221 3,221

Average or Total

45% 114.3% 146,847 120,013 121,495 121,488

  2

15,466 12,997 11,692

⇦ % usage down 0.1 points from Year 14. ⇦ % usage up 1.6 points from Year 14.

⇦ 20.9% higher than Year 15 demand.

⇦ From page 4 of FIR for Year 14. ⇦ Actual branded demand was 1.2% higherthan forecast branded demand due to

increased competitive intensity.

⇦ Extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies.

⇦ From page 4 of FIR for Year 14. ⇦ Private-label pairs offered was lower than

actual private-label demand by 16.0%.

Notes

Demand Forecast

Branded Demand (internet + wholesale)

Year 16 Year 17 Year 18

Private-Label Demand Year 16 Year 17 Year 18

North America

37,103 38,589 40,133 4,026 4,389 4,785

Europe Africa 31,573 32,832 34,148 4,026 4,389 4,785

Asia Pacific 29,198 31,536 34,064 4,477 4,972 5,522

Latin America

30,088 32,497 35,103 4,477 4,972 5,522

Global Total

127,962 135,454 143,448

17,006 18,722 20,614

Global demand for Y11-Y15 is expected to grow by 7%-9% annually, slowing to 5%-7% during Y16-Y20. The projected growth rates are not the same for all regions, as shown in the table on page 5 of the Player's Guide. Actual demand growth may vary from the forecast due to stronger or weaker competitive efforts on the part of rival companies.

Notes

Supply / Demand Analysis

Beginning Year 16 Inventory Potential Y16 Production (with OT)

Potential Global Supply

25,359 158,400 183,759

Potential Footwear Suppy in Year 16 Branded Demand Forecast Private-Label Demand Forecast

Expected Global Demand

127,962 17,006

144,968

Expected Footwear Demand in Year 16 Potential global supply (at max OT) in the upcoming year is 26.8% greater than projected global demand. This much excess potential supply is certain to greatly intensify competition for the next few years and reduce industry profitability. It is advisable to NOT add more production capability at this time.

Analysis

Facility Space Production Equipment

N.A. E-A A-P L.A.

Year 15 Facility Space (000s of pairs available for prod. equipmernt)

N.A. E-A A-P L.A.

Construction of New Space (initiated in Y15 and available in Y16)

Total Space

Available in Y16 N.A. E-A A-P L.A. Total

Year 15 Production Equipment (000s of pairs available for production)

A 5,000 0 6,000 0 1,000 0 1,000 0 13,000 A 4,000 0 5,000 0 9,000 A B 6,000 1,000 7,000 2,000 0 1,000 0 2,000 19,000 B 5,000 1,000 6,000 2,000 14,000 B C 6,000 1,000 6,000 1,000 0 0 0 0 14,000 C 3,500 0 4,250 0 7,750 C D 7,000 4,000 7,000 4,000 0 1,000 0 1,000 24,000 D 5,000 4,000 7,000 4,000 20,000 D E 6,000 1,000 7,000 1,000 0 0 0 1,000 16,000 E 3,750 1,000 4,500 750 10,000 E F 5,000 1,000 6,000 1,000 0 0 0 0 13,000 F 0 0 4,250 0 4,250 F G 5,000 0 6,000 0 0 3,000 0 3,000 17,000 G 5,000 0 3,750 0 8,750 G H 5,000 0 8,000 2,000 0 0 0 0 15,000 H 1,000 0 8,000 2,000 11,000 H I 5,000 0 6,000 0 0 0 0 0 11,000 I 3,250 0 5,000 0 8,250 I J 5,000 0 10,000 7,000 0 0 2,000 2,000 26,000 J 5,000 0 10,000 7,000 22,000 J K 5,000 0 8,000 4,000 0 0 0 3,000 20,000 K 5,000 0 8,000 4,000 17,000 K

60,000 8,000 77,000 22,000 1,000 5,000 3,000 12,000 188,000 40,500 6,000 65,750 19,750 132,000

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Industry 1 FINANCIAL PERFORMANCE SUMMARY Year 15  

Income Statement Data ($000s)

Internet Wholesale P-label Total Net Sales Revenues Cost of

Pairs Sold Warehouse Expenses

Marketing Expenses

Admin Expenses

Operating Profit

Interest Exp (Inc)

Income Taxes

Net Profit

A 143,486 362,926 37,195 570,237 286,344 50,946 122,539 19,797 90,611 251 27,108 63,252 A B 252,740 792,651 13,503 1,119,705 540,592 80,792 227,777 24,895 245,649 577 73,522 171,550 B C 105,951 350,398 21,547 477,896 247,147 44,514 97,523 20,073 68,639 586 20,416 47,637 C D 293,882 783,234 0 1,114,752 516,667 99,915 208,735 34,294 255,141 11,523 72,355 168,827 D E 256,822 503,823 0 760,645 357,307 74,708 143,720 24,295 160,615 7,023 46,078 107,514 E F 92,641 187,716 0 280,357 103,390 33,265 14,830 19,678 109,194 3,340 31,756 74,098 F G 138,503 192,755 0 331,258 160,329 39,288 38,050 31,325 62,266 1,496 17,931 41,839 G H 229,603 565,774 72,878 972,470 515,951 95,349 164,864 21,295 175,011 3,762 50,861 118,676 H I 171,970 358,208 44,332 597,066 334,544 60,746 121,847 16,445 63,484 599 18,866 44,019 I J 311,947 828,601 131,012 1,293,555 622,675 104,851 167,851 30,797 367,381 2,556 109,448 255,377 J K 203,902 668,371 135,278 1,024,955 503,336 77,183 142,723 29,547 272,166 15,509 76,227 177,863 K

200,132 508,587 41,431 776,627 380,753 69,232 131,860 24,767 170,014 4,293 49,506 115,514

Selected Balance Sheet Data ($000s)

Cash On Hand

Current Assets

Fixed Assets

Total Assets

Assets Current Liabilities

Long-Term Loans

Total Liabilities

Liabilities Beginning

Equity Stock Sale (Purchase)

Earnings Retained

Ending Equity

Shareholder Equity

A 58,460 236,672 281,280 517,952 32,364 29,700 62,064 392,636 0 63,252 455,888 A B 112,540 388,810 477,456 866,266 51,652 29,700 81,352 613,364 0 171,550 784,914 B C 60,772 235,171 337,596 572,767 31,450 29,700 61,150 466,480 0 45,137 511,617 C D 150,669 548,896 682,342 1,231,238 223,758 410,000 633,758 638,998 -210,345 168,827 597,480 D E 4,698 166,289 445,663 611,952 32,145 29,700 61,845 466,980 -24,387 107,514 550,107 E F 26,358 88,726 231,181 319,907 14,838 28,800 43,638 287,789 -29,548 18,028 276,269 F G 100,072 164,963 374,208 539,171 36,282 97,700 133,982 363,350 0 41,839 405,189 G H 210,705 422,510 387,108 809,618 31,235 0 31,235 733,602 -64,045 108,826 778,383 H I 46,925 176,247 288,745 464,992 24,397 0 24,397 437,786 -26,010 28,819 440,595 I J 0 310,656 671,710 982,366 89,925 29,700 119,625 691,385 -84,021 255,377 862,741 J K 0 272,791 647,384 920,175 92,196 200,000 292,196 450,116 0 177,863 627,979 K

70,109 273,794 438,607 712,400 60,022 80,455 140,477 503,862 -39,851 107,912 571,924

Selected Financial Statistics

Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Profitability Measures Div. Per Share ($/share)

Total Div. Payment

($000s)

Payout (percent of  net profit)

Dividend Data Credit Rating Measures Interest Coverage

Ratio

Debt to Assets Ratio

Default Risk Ratio

Risk of

Default Current Ratio

Days of Inventory

Shares of Stock

Outstanding (000s of shares)

A 49.8% 15.9% 11.1% 0.00 0 0.0% 361.00 0.12 8.54 Low 7.31 128 days 20,000 A B 51.7% 21.9% 15.3% 0.00 0 0.0% 425.73 0.09 20.87 Low 7.53 59 days 20,000 B C 48.3% 14.4% 10.0% 0.10 2,500 5.2% 117.13 0.11 7.18 Low 7.48 128 days 25,000 C D 53.7% 22.9% 15.1% 0.00 0 0.0% 22.14 0.51 8.82 Low 2.45 164 days 21,668 D E 53.0% 21.1% 14.1% 0.00 0 0.0% 22.87 0.10 2.56 Medium 5.17 36 days 20,540 E F 63.1% 38.9% 26.4% 3.00 56,070 75.8% 32.69 0.14 0.87 High 5.98 54 days 18,690 F G 51.6% 18.8% 12.6% 0.00 0 0.0% 41.62 0.25 6.35 Low 4.55 39 days 20,000 G H 46.9% 18.0% 12.2% 0.50 9,850 8.3% 46.52 0.04 4.23 Low 13.53 56 days 19,700 H I 44.0% 10.6% 7.4% 0.80 15,200 34.5% 105.98 0.05 6.58 Low 7.22 37 days 19,000 I J 51.9% 28.4% 19.7% 0.00 0 0.0% 143.73 0.12 31.09 Low 3.45 50 days 19,500 J K 50.9% 26.6% 17.4% 0.00 0 0.0% 17.55 0.32 9.17 Low 2.96 67 days 18,800 K

51.0% 21.9% 14.9% 0.40 7,602 11.3% 121.54 0.17 9.66   6.15 74 days 20,263

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Industry 1 PERFORMANCE BENCHMARKS Year 15  

Production Benchmarks

North America Low Average High Industry 1 Company

D

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

73% 37,228 4,893 8.16

62,436 20% 1.00

22,706 27.31 3.0% 4.11

85% 44,323 5,124 9.12

64,152 45% 2.00

43,057 30.30 7.1% 5.46

100% 49,888 5,415 9.85

72,197 60% 5.00

129,595 39.08 9.8% 6.69

80% 47,204 5,097 9.81

62,436 50% 2.00

40,000 29.34 5.6% 5.54

Europe-Africa Low Average High Industry 1 Company

D

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

50% 22,645 3,892 6.18

37,462 20% 1.00

3,000 23.09 4.1% 5.56

72% 25,740 3,963 6.87

37,712 41% 2.67

4,544 32.24 7.4% 5.95

100% 29,186 4,067 7.84

37,837 52% 5.00

13,719 44.73

11.2% 6.41

50% 29,186 3,892 7.84

37,837 50% 2.00

13,719 28.91

11.2% 5.56

Asia-Pacific Low Average High Industry 1 Company

D

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 14,109 3,439 4.15

26,016 2%

0.90 24,198 16.97 2.7% 2.83

33% 16,731 3,755 4.67

26,453 41% 1.97

52,217 23.08 7.3% 4.31

72% 19,480 4,168 5.32

29,236 72% 5.00

141,970 26.43

12.1% 5.17

57% 19,480 4,038 5.06

26,016 50% 2.00

48,459 23.13 5.8% 4.45

Latin America Low Average High Industry 1 Company

D

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

50% 12,487 3,772 3.58

26,016 20% 1.00

2,790 19.61 4.1% 4.22

84% 16,675 4,290 4.13

26,190 50% 2.05

9,262 26.05 7.4% 4.81

100% 20,972 6,098 5.03

26,798 64% 5.00

20,400 32.52

11.2% 5.94

50% 18,660 3,873 5.03

26,276 50% 2.00

13,589 25.67

11.2% 4.94

Note:  To protect individual companies from having competitively sensitive data revealed to rival companies, only the industry averages are reported for regions with 2 or 3 production facilities. Industry low and high numbers are reported only for regions with 4 or more production facilities. No benchmark data is reported for regions with only 1 production facility.

 

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Industry 1 PERFORMANCE BENCHMARKS Year 15 (concluded)  

Branded Operating Benchmarks

North America Low Average High Industry 1 Company

D

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.18 22.21 3.49

16.26 17.9%

3.25 -6.99

-13.2%

7.47 29.31 19.30 24.20

27.5% 10.78 10.64

18.0%

12.44 32.86 28.47 32.87

37.7% 17.57 25.29

42.1%

5.18 30.03 16.34 23.77

28.0% 10.86 13.78

23.0%

Europe-Africa Low Average High Industry 1 Company

D

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.75 24.60 3.25

14.54 16.2%

2.84 3.95

7.5%

10.79 32.17 19.04 24.07

26.6% 9.14

11.06 18.4%

14.38 41.28 28.12 34.98

36.1% 15.19 22.25

37.7%

5.75 30.67 15.80 22.04

26.4% 10.76 11.87

20.1%

Asia-Pacific Low Average High Industry 1 Company

D

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

3.81 18.57 3.56

10.31 12.1%

0.78 6.21

11.7%

6.09 25.08 22.95 20.50

24.8% 9.94

12.09 22.2%

10.40 28.48 44.01 27.87

38.9% 16.55 25.22

44.0%

3.81 24.13 20.65 21.12

26.0% 12.33 14.69

25.7%

Latin America Low Average High Industry 1 Company

D

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.17 24.91 3.59

11.61 13.1%

2.98 1.84

3.3%

11.92 32.08 19.69 24.46

26.7% 8.82

11.74 19.4%

17.27 37.37 32.09 37.04

43.3% 12.28 24.21

37.3%

6.54 27.52 17.08 25.57

30.1% 11.11 15.70

26.2%

Private-Label Operating Benchmarks

Low Average High Industry 1 Company

D

North America Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 25.57 +2.74

28.96 +6.43

30.91 +10.47

0.00 0.00

Europe-Africa Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 27.44 +4.97

28.17 +11.44

28.66 +14.81

0.00 0.00

Asia-Pacific Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 21.00 +2.90

24.63 +9.83

28.86 +16.13

0.00 0.00

Latin America Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 21.13 +1.65

27.80 +13.32

40.85 +22.86

0.00 0.00

Footwear Industry Report © 2018 GLO-BUS Software, Inc. Page 7

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Industry 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS Year 15  

Celebrity Endorsements

Celebrity Year 16

Contract Holder No. of Offers

Highest Offer

2nd Highest

3rd Highest

Most Recent Contract Offers (letter in parens indicates company that made offer)

Judy Judge ADragons 6 10,001 (A) 9,001  (I) 7,000 (H) Kimmie Jimmel B Cielo 6 13,000 (B) 9,999 (J) 9,001  (I) Bud Birkenstock B Cielo 5 13,000 (B) 9,001  (I) 8,900 (H) Jose Montana IPure Steps 4 9,001  (I) 7,000 (H) 5,009 (K) Samuelle Jackson J - Doyen 4 9,000 (J) 2,000 (G) 1,500 (E) Bronko Mars J - Doyen 4 8,800 (J) 8,000 (D) 1,500 (E) Steff Caraway J - Doyen 4 9,100 (J) 2,009 (E) 2,000 (G) Jay XYZ E Elite Footwear 4 9,100 (J) 2,005 (E) 2,000 (G) Nunchuck Norris DTigers 5 8,001 (B) 8,000 (D) 8,000 (J) Roger Federation K ASM 5 11,000 (B) 7,779 (K) 7,000 (H) Nick Shavan E Elite Footwear 4 5,500 (J) 3,525 (E) 3,500 (D) Anderson Blooper J - Doyen 4 10,505 (J) 7,000 (H) 6,001  (I) Mic Jagermeister DTigers 5 8,800 (J) 8,001 (B) 8,000 (D) Jim Hardball J - Doyen 4 10,605 (J) 6,001  (I) 6,000 (H) LaBron Game B Cielo 5 9,050 (B) 8,600 (J) 8,000 (D)

Co. N.A. E-A A-P L.A. A 85 65 60 40 B 270 250 220 215 C 0 0 0 0 D 170 180 175 140 E 145 145 125 145 F 0 0 0 0 G 0 0 0 0 H 0 0 0 0 I 60 50 60 95 J 305 315 395 375 K 75 85 65 100

Avg. 101 99 100 101

Year 16 Consumer Appeal (sum of consumer appeal indexes for   each company in the upcoming year)

Pricing and S/Q Rating Trends

NORTH AMERICA EUROPE-AFRICA

ASIA-PACIFIC LATIN AMERICA

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 8

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