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Strategic Plan Fall 2008: Business Review Oct 2, 2008

Strategic Plan Fall 2008: Business Review Oct 2, 2008. 2009 Pro-forma P&L: Revenue Assumptions. $ K. GV: ADM, Cedar Hill Capital, Coca-Cola, Intel, Suez, Wash Grp, Wexford Capital, NG, ITT. Total $205K (see page 15 for detail). Intl: NOV $454K, plus $60K Wal-Mart. Total $514K.

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Strategic Plan Fall 2008: Business Review Oct 2, 2008

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  1. Strategic Plan Fall 2008: Business Review Oct 2, 2008 V. 1

  2. 2009 Pro-forma P&L: Revenue Assumptions $ K GV: ADM, Cedar Hill Capital, Coca-Cola, Intel, Suez, Wash Grp, Wexford Capital, NG, ITT. Total $205K (see page 15 for detail). Intl: NOV $454K, plus $60K Wal-Mart. Total $514K Public Policy: AF&PA, Dow Corning, Exxon Mobil, NMA, Wal-Mart. Total $608K (see page 16 for detail). Security/PI: Dell, Deloitte, Emerson, Google, Pritzker, Ziff, Unidentifed. Total $472.2K (see p. 16 for detail). Website: $1.425M/Qtr. Total $5.7M E-Brief: AICPA, CIG, Gen Re, JP Morgan Asset Mgt, JP Morgan, RBC, Rimrock, UBS, Valero. Total $172K (see p. 17 for detail). V. 1

  3. $ K 2009 Pro-forma P&L by Business OIE is other income and expense. Consists of contract settlements, penalties and interest, taxes, bad debt expense, and bank fees. This is separated from Operating Margin due to its temporal, non-operating nature. V. 1

  4. 2009 Pro-forma P&L: Labor Example (Intl) A total of $509K was identified to Intl P&L. $384K was directly from the survey, while $120K was indirectly identified via discussions with those employees. V. 1

  5. 2009 Pro-forma P&L: Labor Example (Intl) Dollars by individual based on identified hours plus allocation of intellectual overhead based on identified hours. V. 1

  6. 2009 Pro-forma P&L: Labor Assumptions For those directly involved in the time study, recall that they identified their CIS client work (Intl, Policy, etc), identified their website work, and identifed the “intellectual overhead” hours spent researching in order to fulfill their customer-specific (incl website) requirements. The key point here is that the client identified and web identified hours are used as a base for allocating the intellectual O/H and training. V. 1

  7. 2009 Pro-forma P&L: Labor Assumptions These hours were summarized at what I’ll call the department level i.e. Briefers, CT, Geopol, Graphics, etc. There are eight departmental bases. As an example of a departmental base, let’s use Geopol above. There are 487 client-specific hours (take 95 hrs from Client Work (this is CIS & GV) above and 392 hours from Web Prod to add to 487 hours. V. 1

  8. 2009 Pro-forma P&L: Labor Assumptions Other Departmental Bases: These departmental bases were then used to allocate labor dollars to each of the six P&Ls. Add’l departmental bases are on the next page. V. 1

  9. 2009 Pro-forma P&L: Labor Assumptions Other Departmental Bases: V. 1

  10. 2009 Pro-forma P&L: Labor Assumptions For those not involved in the time study or indirectly involved, identification of their hours/costs to business was done via consultation. Some examples below: In some cases, a compound base was used. For example, to identify Walt’s costs, a labor base (identified hours from the time study) consisting of analysts(Geopol and Sec), writers, OSINT, and graphics was used. V. 1

  11. $ K 2009 Pro-forma P&L Detail – Allocation Basis These are the Labor dollars by P&L. These percentages will form the (effort) base on which we will allocate operating and facilities costs, and OIE as well. V. 1

  12. $ K Stratfor 2009 Pro-forma P&L Detail - Operating There are $436K of operating expenses. We will remove $90K for email marketing which is directly identifiable to the website, and allocate the remainder $346K on the labor effort base. V. 1

  13. $ K Stratfor 2009 Pro-forma P&L Detail - Facilities There are $594K of facilities expenses. We will remove $419K for costs not associated with P-Pol (Rent, Network, Parking) and allocate based on labor effort base. We will then do a secondary allocation without P-Pol for remaining $419K. V. 1

  14. $ K 2009 Pro-forma P&L Detail - OIE OIE is other income and expense. Consists of contract settlements, penalties and interest, taxes, bad debt expense, and bank fees. V. 1

  15. 2009 Pro-forma P&L Detail – Rev Detail: GV & Intl + $60K Added $60K to Intl for WM based on inputs from Don. Int total $514K. V. 1

  16. 2009 Pro-forma P&L Detail – Rev Detail: PI & P-Pol + $24K Added $24K to Intl for WM based on inputs from Don. PI total $472K. V. 1

  17. 2009 Pro-forma P&L Detail – Rev Detail: EB V. 1

  18. 2009 Pro-forma P&L Detail – COGS $60K Intel expense is contingency for GF to use for Intl operations. V. 1

  19. Take Aways Currently right at B/Even (PBT). Given the highly fixed nature of our cost structure, additional costs should come with reasonably high expectations (ideally this would be quantified) of delta revenue generation. This hits squarely where we are currently emphasizing efforts, i.e, site tuning, add’l traffic and FL joins from P/R, new inst sales person, low-cost add’l p’ships, etc. Underutilized (from a revenue generation perspective) factory. This speaks to a careful selection of additional CIS ops (leverage through re-purposing) and perhaps a portfolio pruning plan. V. 1

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