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The Case

You have been engaged by Jack and Diane Redmond to value their company, Redmond Pro Printing, Inc.(Redmond Pro) The valuation is for the purpose of giving 90 shares of Dianes stock to the FloridaConservancy for Cougars (FCC), a 501(c)(3), with headquarters in Tampa, Florida. The Valuation Dateis October 31, 2012. You have been retained to prepare a Detailed valuation report.

Redmond Pro Printing, Inc. is a closely-held company with the following stock ownership:

Jack and Diane are husband and wife. They do not have any relatives working in the business.

The contribution to the FCC is to be 90 shares of stock. The FCCs interest on the board will be represented by an attorney to be named later. Costs associated with the FCC representative to attend board meetings will be borne by FCC. Jack and Diane have agreed to this family charitable contribution.The stocks re-sale to a non-family member will be restricted for a period of five years. If a family member does not re-purchase the shares, or agree to purchase the shares, within the stipulated five years and one day, then FCC may offer the shares for sale to non-family members.

Redmond Pro Printing, Inc. is a printing company headquartered in Tampa, Florida. Mr. Redmond and a former business partner, Justin Baker, started the company in 1983 as Redmond/Baker Printing. The name of the business was changed to RB Quality Printing, Inc. shortly after formation. Jack and DianeRedmond purchased Justin Bakers interest in the business in 1986. At that time, the Redmonds changedthe name to Redmond Pro Printing, Inc. The company leases real estate from Jack & Diane Family Limited Partnership (JDFLP) which is owned by the companys principal shareholders, Jack and Diane Redmond. The lease agreement includes Redmond Pros Tampa facility and an additional property known as theCliff Building. The lease payment is $23,450 per month. This is the only related-party transaction in which the company is involved. Redmond Pro sub-leases approximately one-half of the space in the Cliff Building to another company.

Redmond Pro Printing, Inc. now has gross sales of approximately $12 million and employs about 110 people. In 1986, when the name changed, Redmond Pro had annual sales of $100,000 and only five employees. The employee turnover rate is very low by industry standards, which implies a high degree of employee satisfaction and a relative constant level of printing work. There is an adequate supply of labor in the area when occasional help is needed, and the compensation for these individuals is average for the area.

Management below the owner level is very good and capable. They are able to perform their duties without much supervision or control. The owners (Jack and Diane) work 100% of the time in the business. Jack Redmond (age 64) is the president of Redmond Pro and Diane Redmond (age 60) is the office manager. Each owner is paid $10,000 per month. It is expected that an adequate replacement for Diane can be found at an annual salary of $65,000-$75,000. Jacks salary is at the market rate for the area. The companys other key employees include: Erick Davidson (VP of Finance), Kurt Samuelson (VP of Production), Dean Richardson (Manager of the Prepress Department), Sam Erickson (Manger of the Press Department), and Tamara Forest (Manager of the Finishing Department). Redmond Pro currently has 8 sales people, all of whom are located in Tampa. In the future, Redmond Pro anticipates

Shareholder	Number of Shares	Percent
Jack Redmond	275	55.0%
Diane Redmond	225	45.0%
TOTAL	500	100.0%

Please keep a copy of everything you submit for your records.

Rev. 9/14/15

RP 1x1Page 4

Member Number: CVA EXPERIENCE REQUIREMENT

that salespeople will be added in other geographic areas. However, no definitive plans for geographic expansion existed as of October 31, 2012.

Financial statements for Redmond Pro Printing, Inc. are prepared annually on an accrual basis and are reviewed by the outside CPA. The financial statements are compiled by the outside CPA, and areavailable two weeks after the end of each month. Tax planning is done annually. The companysbanking relationship is excellentthey have a $1.50 million credit line at their bank, which they rarely need to utilize.

Redmond Pro is a printing company that offers a wide range of services, including graphic design, electronic prepress, multi-color offset printing, variable image printing, finishing, and mailing andfulfillment services. Nearly all of Redmond Pros customers are located in Tampa, Florida, and most of the companys customers are located within 75 miles of Tampa, Florida metropolitan area. However,Redmond Pro does have one large account in Miami, Florida (approximately 280 miles southeast of Tampa). Redmond Pro obtains a significant amount of revenue from a relatively small number of customer accounts. In recent years, the company had 20 to 25 customer accounts that each generated more than $90,000 of annual revenue.

Entry into this type of industry is relatively difficult as it takes large sums of money and equipment. This industry also requires high labor input.

The companys management perceived Redmond Pros strengths to be:

? Well established with over 35 years of successful operation

? Low employee turnover

? Experienced and effective management team

? Excellent product and exceptional service

? Wide variety of service offerings

? Clean, organized, and well-maintained facility

? Up-to-date equipment

? Accessible location

The scope of this engagement is limited to completing the valuation report as of October 31, 2012 and does not require you to meet the requirements for a charitable contribution under IRS Treasury Regulation 1.170A-13.

REDMOND PRO PRINTING, INC. HISTORICAL INCOME STATEMENTS SUMMARY

October 31 2012

$ 12,011,000 $ 8,376,000

$ 3,635,000

$ 276,000 $ 281,400 $ 240,000 $ 30,028 $ 1,715,146 $ 96,600 $ 12,011 $ 120,060 $ 11,250 $ 180,160 $ 630,345

$ 3,593,000

$ 42,000

$ - $ 44,000

October 31 2011

$ 13,049,000 $ 9,025,000

$ 4,024,000

$ 149,000 $ 281,400 $ 240,000 $ 60,055 $ 1,717,474 $ 37,250 $ 13,049 $ 120,223 $ 15,000 $ 195,450 $ 908,099

$ 3,737,000

$ 287,000

$ - $ -

October 31 October 31 2010 2009 2008

October 31

Revenue Gross Revenues CostofSales

Gross Profit

Operating Expenses Depreciation Lease Expense Officer Compensation Advertising & Sales Salaries & Wages Repairs & Maintenance Bad Debts

Pension & Profit Sharing Meals & Entertainment Legal & Professional Other Expenses

Operating Expenses

Income From Operations

Other Income Interest Expense Gain/Loss on Sale of Assets

$ 12,350,000 $ 11,636,000 $ 8,599,000 $ 8,399,000

$ 3,751,000 $ 3,237,000

$ 197,000 $ 475,000 $ 150,000 $ 150,000 $ 240,000 $ 240,000 $ 65,245 $ 61,750 $ 1,716,310 $ 1,710,492 $ 49,250 $ 118,750 $ 12,350 $ 11,636 $ 120,142 $ 119,734 $ 12,750 $ 11,500 $ 200,100 $ 175,565 $ 700,853 $ 161,573

$ 3,464,000 $ 3,236,000

$ 287,000 $ 1,000

$ - $ (1,000) $ 7,000 $ (8,000)

$ 11,484,000 $ 8,482,000

$ 3,002,000

$ 235,000 $ 150,000 $ 240,000 $ 58,180 $ 1,688,148 $ 58,750 $ 11,484 $ 118,170 $ 11,000 $ 150,000 $ 363,268

$ 3,084,000

$ (82,000)

$ - $ (10,000)

$ 64,000 $ 58,000 $ 23,000 $ 8,000 $ 16,000

Total Other Income/(Expense) $ 108,000 $ 58,000 $ 30,000 $ (1,000) $ 6,000 Net Income Before Taxes $ 150,000 $ 345,000 $ 317,000 $ - $ (76,000)

Income Taxes $ 63,000 $ 186,000 $ 105,000 $ (6,000)

$-

NetIncome $ 87,000 $ 159,000 $ 212,000 $ 6,000 $ (76,000)

Redmond Pro Printing, Inc.
Historical Balance Sheet Summary
For the Year Ended October 31 (in 000's)					2012	2011	2010	2009	2008
Assets
	Current Assets
		Cash & Equivalents			2,486	2,405	1,801	1,043	428
		Accounts Receivable			1,340	1,610	1,567	1,435	1,804
		Other Receivables			44	61	34	36	27
		Inventory			496	444	340	416	297
		Deposit on Equipment			-	-	-	-	80
		Prepaid Expenses			131	83	79	81	83
		Prepaid Income Taxes			44	-	107	18	18
		Prepaid Sales Taxes			14	8	11	2	1
		Deferred Tax Assets			53	52	49	104	118
		Other Current Assets			-	-	-	-	-
			Total Current Assets		4,608	4,663	3,988	3,135	2,856
Fixed Assets
	Land				225	225	225	225	225
	Leasehold Improvements				168	168	168	168	168
	Furniture, Fixtures & Equipment				9,783	9,695	10,118	10,313	10,356
	Vehicles				131	140	127	137	114
		Total Fixed Assets			10,307	10,228	10,638	10,843	10,863
		Less: Accumulated Depreciation			(8,967)	(8,741)	(8,890)	(8,701)	(8,230)
			Net Fixed Assets		1,340	1,487	1,748	2,142	2,633
Other Assets
	Cash Surrender Value of Life Insurance				234	246	235	223	214
	Investments				-	140	114	112	111
	Deferred Tax Asset				-	-	-	-	-
		Total Other Assets			234	386	349	335	325
TOTAL ASSETS					6,182	6,536	6,085	5,612	5,814
Liabilities & Equity
	Current Liabilities
		Notes Payable			-	-	-	-	276
		Accounts Payable			439	634	537	408	451
		Customer Deposits			68	26	80	136	48
		Accrued Wages & Bonuses			393	453	367	246	216
		Profit Sharing Contribution			75	83	74	36	30
		Accrued Income Taxes			-	94	-	-	-
		Other Accrued Liabilities			58	58	53	54	50
			Total Current Liabilities		1,033	1,348	1,111	880	1,071
	Long-Term Liabilities
		Long-Term Debt			-	-	-	-	-
		Deferred Income Taxes			224	240	150	112	130
			Total Long-Term Liabilities		224	240	150	112	130
			Total Liabilities		1,257	1,588	1,261	992	1,201
	Stockholders' Equity
		Common Stock			3	3	3	3	3
		Additional Paid-In Capital			166	254	305	313	322
		Retained Earnings			4,756	4,669	4,510	4,298	4,291
		Unrealized Gain / (Loss) on Investments			-	22	6	6	(3)
			Total Stockholders' Equity		4,925	4,948	4,824	4,620	4,613
TOTAL LIABILITIES & EQUITY					6,182	6,536	6,085	5,612	5,814

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Qestions:

1- Establish the Financial Review

2- Valuation Methodologies

3- valuate the business using the Income Approach

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