Exhibit 1 Price trend of color separations to scan, assemble, proof and output

printer specified film for a hypothetical direct mail catalog page with one image

Price/Page of work ($):

1991

1992

1993

1994

1995

Colorscope

1,100

900

750

650

600

400

425

450

475

500

Service-Bureau

2 Service -Bureaus such as Kinko's and Alphagraphics typically do jobs that are cheaper, and
involve fewer and/or smaller pages.

Exhibit 4 Time/Cost Breakdown for the Catalog Producer

Direct mail catalogers constituted over 90% of Colorscope's customers. To produce an
average project run, in this example, 1 million copies of a 52-page catalog, costs would
break down as follows:

Design (3 weeks),
writing copy,
producing layouts,
gaining
management
approvals.

Photography (2
weeks), 200300 images,
studio and
location shots.

Prepress (2
weeks), 2
rounds of
proofs to
the project
manager.

Printing (3 days),
cutting, binding,
addressing for
national distribution

Distribution (23 weeks),

second class
bulk rate post.

$10,000

$50,000

$30,000

$1,300,000

$120,000

Exhibit 5 Top American Pre-press Competitors (does not include printers that have integrated forward)
Company

WACE USA
Applied Graphics Technologies
Black Dot Group
Schawk, Inc.

Sales Employees
(M$US)
200
130
109
104

1,850
1,060
900
729

American Color

76

840

Intaglio Vivi-Color
Enteron Group

60
56

450
400

Kwik International
Color Associates
TSI Graphics
Blanks Color Imaging
Kreber Graphics, Inc.

41
37
27
24
22

110
390
313
230
165

Facilities Primary Business

(sites)
20
13
12
12

magazines, direct mail, packaging

magazines, direct mail, packaging
mags, dir. mail, packaging, books
mags, dir. mail, packaging, agency

16 mags, dir. mail, pkg, agncy, newsp

13 packaging
4 mags, dir. mail, pkg, agncy, books
1
1
4
1
2

packaging, agency
packaging, publishing, catalogs
mags, dir. mail, packaging, books
mags, dir. mail, packaging, agency
mags, dir. mail, pkg, agncy, retail

Exhibit 8: Jobs completed in June 1996*

Job #

61001
61002
61003
61101
61102
61201
61202
61203
61204
61301
61401
61402
61403
61404
61405
61501
61502
61601
61602
61603
61701
61702
61801
61901
61902
62001
Total
Cost of Idle
Time
Total
Rent on
unused Floor
Space
Net Profit

Customer # Pages

10
10
10
11
11
12
12
12
12
13
14
14
14
14
14
15
15
16
16
16
17
17
18
19
19
20

*All figures are disguised

16
16
32
16
16
16
32
32
32
128
16
16
16
16
16
16
16
32
4
4
16
16
4
4
16
1
545

Revenue

9600
9,600
23,000
12,000
11,000
11,000
23,000
22,000
20,000
50,000
7,800
8,000
8,000
9,000
9,800
11,000
11,000
20,000
2,000
1,400
8,000
10,000
4,000
2,000
12,000
0
315200

Materials Gross Margin

5400
3500
4500
1800
1500
1500
3300
3400
3200
13000
1800
3100
3900
2100
2000
2200
3600
3300
600
1000
2100
2500
1600
1700
2200
200
75000

4200
6100
18500
10200
9500
9500
19700
18600
16800
37000
6000
4900
4100
6900
7800
8800
7400
16700
1400
400
5900
7500
2400
300
9800
-200
240200

Job
Preparati
on
Scanning
295.28 3,212.30
221.46 2,409.23
516.73 4,015.38
295.28 1,606.15
295.28 1,606.15
295.28 1,606.15
516.73 3,212.30
442.91 3,413.07
442.91 3,011.53
1,107.28 13,049.97
369.09 1,405.38
295.28 1,907.30
295.28 2,007.69
295.28 2,208.46
295.28 2,007.69
295.28 2,108.07
295.28 2,007.69
516.73 2,609.99
147.64
501.92
147.64
501.92
295.28 2,007.69
295.28 2,007.69
73.82
501.92
147.64
501.92
369.09 1,907.30
73.82
100.38
8637
61435
3174.206 2810.763
11,811.00 64,246.00

Assembly
3,034.89
2,745.86
5,419.45
2,167.78
2,023.26
2,312.30
4,191.04
4,624.60
4,191.04
18,064.84
2,312.30
2,312.30
2,456.82
2,601.34
2,601.34
2,818.12
2,890.38
4,335.56
722.59
794.85
2,818.12
2,962.63
794.85
867.11
3,034.89
144.52
83243

Quality
Output Control
Net profit
1,185.56
604.23 -4132.26
1,185.56
690.55 -1152.65
2,371.12
690.55
5486.77
592.78
345.28
5192.74
592.78
345.28
4637.26
592.78
517.91
4175.58
1,185.56
431.59 10162.77
1,185.56
517.91
8415.95
1,185.56
690.55
7278.40
4,742.24 2,589.56 -2553.90
592.78
345.28
975.17
1,185.56
604.23 -1404.67
592.78
258.96 -1511.52
592.78
431.59
770.56
592.78
345.28
1957.65
592.78
345.28
2640.48
1,185.56
604.23
416.87
1,185.56
776.87
7275.28
148.20
86.32
-206.67
296.39
86.32 -1427.12
592.78
258.96
-72.81
592.78
431.59
1210.03
296.39
86.32
646.70
148.20
86.32 -1451.19
592.78
431.59
3464.34
148.20
86.32
-753.24
24156
12689
50041

9249.2 5483.215 1122.144

92,492.00 29,639.00 13,811.00

21839.53
28201.00

13000
15201.00

Customer
Initiated
Rework Cost Material
2,700
1,100
0
0
0
0
0
0
0
1,000
0
0
0
0
0
0
1,500
0
0
0
0
0
1,000
1,000
0
0
8,300

Inhouse
Correction
Cost Material

Customer
Inhouse
Initiated
Correctio
Rework Cost - n Cost Labour
Labour
0
3094.16125
0
2088.3675
0
0
0
0
0
0
0
1,000 1841.180625 898.5231
0
1,000
2528.637
1,000
2398.184
0
0
0
0
1201.62625
0
0
500
739.945
0
0
0
465.3575
0
463.240625
0
0
3,500
9,154
6,565

Total
Cost of
Cusomer
Rework
5,794
3,188
0
0
0
0
0
0
0
2,841
0
0
0
0
0
0
2,702
0
0
0
0
0
1,465
1,463
0
0
17,454

Total
Cost of
House
Error
0
0
0
0
0
0
0
0
0
1,899
0
3,529
3,398
0
0
0
0
0
0
1,240
0
0
0
0
0
0
10,065

Net Extra
Cost
5,794
3,188
0
0
0
0
0
0
0
4,740
0
3,529
3,398
0
0
0
2,702
0
0
1,240
0
0
1,465
1,463
0
0
27,519

Net Profit after

adjustment for
extra cost
incurred
1661.90
2035.72
5486.77
5192.74
4637.26
4175.58
10162.77
8415.95
7278.40
2185.81
975.17
2123.97
1886.67
770.56
1957.65
2640.48
3118.50
7275.28
-206.67
-187.18
-72.81
1210.03
2112.06
12.06
3464.34
-753.24
77559.75
21839.53
55720.22

0
55720.22

Exhibit 9: Hours clocked at different workstations in June 1996*

JOB#
61001
61002
61003
61101
61102
61201
61202
61203
61204
61301
61401
61402
61403
61404
61405
61501
61502
61601
61602
61603
61701
61702
61801
61901
61902
62001
Idle Time
Capacity

Job
Preparation Scanning Assembly
4
32
42
3
24
38
7
40
75
4
16
30
4
16
28
4
16
32
7
32
58
6
34
64
6
30
58
15
130
250
5
14
32
4
19
32
4
20
34
4
22
36
4
20
36
4
21
39
4
20
40
7
26
60
2
5
10
2
5
11
4
20
39
4
20
41
1
5
11
2
5
12
5
19
42
1
1
2
43
28
128
160
640
1280

Output
8
8
16
4
4
4
8
8
8
32
4
8
4
4
4
4
8
8
1
2
4
4
2
1
4
1
37
200

Hours clocked in different work stations include rework hours given in Exhibit 10.
* All figures are disguised

Quality
Control
Total
7
93
8
81
8
146
4
58
4
56
6
62
5
110
6
118
8
110
30
457
4
59
7
70
3
65
5
71
4
68
4
72
7
79
9
110
1
19
1
21
3
70
5
74
1
20
1
21
5
75
1
6
13
249
160
2440

Exhibit 10: Rework hours*

Rework due to change in specifications by customer

JOB#
61001
61002
61301
61502
61801
61901
Total

Job Preparation Scanning Assembly Output

0
16
10
4
0
8
6
4
2
5
10
2
1
4
8
1
0
1
3
1
1
1
4
0
4
35
41
12

Quality
Control
2
3
2
0
0
0
7

Total
32
21
21
14
5
6
99

Quality Control initiated rework of house errors

JOB#
61301
61402
61403
61603
Total

Job Preparation Scanning

1
3
0
9
0
10
1
3
2
25

* All figures are disguised

Assembly Output
4
1
16
2
14
2
3
1
37
6

Quality
Control Total
1
10
2
29
1
27
0
8
4
74

Exhibit 11: Selected Financial Information for June 1996

Description
Wages
Depreciation
Rent
Others
Total Overhead
Labour Hour
Overhead Rate/hr
Floor Space in sq.
ft.
* All figures are disguised

Job
Preparation Scanning Assembly
$8,000
$32,000
$64,000
$500
$25,000
$10,000
$2,000
$2,000
$8,000
$1,311
$5,246
$10,492
$11,811
$64,246
$92,492
160
640
1280
$73.82
$100.38
$72.26
1000
1000
4000

Quality
Output Control
$10,000 $11,000
$14,000
$500
$4,000
$1,000
$1,639
$1,311
$29,639 $13,811
200
160
$148.20
$86.32
2000
500

Idle

Total
$125,000
$50,000
$13,000 $30,000
$19,999
$13,000 $224,999

6,500

15,000

Exhibit 12: Materials expense in June 1996*

Job#
61001
61002
61003
61101
61102
61201
61202
61203
61204
61301
61401
61402
61403
61404
61405
61501
61502
61601
61602
61603
61701
61702
61801
61901
61902
62001
Total

Total Materials
expense3
5400
3,500
4,500
1,800
1,500
1,500
3,300
3,400
3,200
13,000
1,800
3,100
3,900
2,100
2000
2200
3,600
3,300
600
1,000
2100
2,500
1,600
1,700
2,200
200
75000

*All figures are disguised

3

Includes materials for rework.

Customer initiated
rework
Correction of house error
2,700
1,100

1,000

1,000
1,000
1,000

1,500

500

1,000
1,000

8,300

3,500