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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

PERFORMANCE EVALUATION REPORT, MONTH 3 PAGE 1

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+------+------Industry ------+

| Firm 6 | Worst Average Best |

------+------+------+

FINANCIAL | | |

Net Income to Revenues | 13.1%| 12.1% 12.7% 13.5%|

Change in Net Income to Revenues | 2.1%| 2.0% 2.5% 3.0%|

Return on Assets | 44.4%| 36.8% 41.2% 47.1%|

Net Asset Turns | 3.4 | 3.1 3.3 3.5 |

------+------+------+

OPERATIONAL | | |

Inventory Turnover | 2.9 | 2.0 2.4 3.0 |

Fill Rate | 100.0%| 100.0% 100.0% 100.0%|

Failure Rate | 5.0%| 5.2% 5.1% 4.9%|

Controllable Procure&Mfg to Revenues | 0.7%| 1.0% 0.8% 0.7%|

Transportation Expenses Per Unit Sold | 29.6 | 30.4 29.8 29.1 |

Forecasting Accuracy | 75.6%| 73.0% 76.9% 80.0%|

(Marketing + Service) to Revenues | 7.8%| 8.4% 8.0% 7.6%|

------+------+------+

CUSTOMER | | |

Change in Market Share | -0.1%| -0.7% 0.0% 0.7%|

Customer Satisfaction | 26.3%| 25.3% 25.8% 26.3%|

------+------+------+

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

LINKS DASHBOARD, MONTH 3 PAGE 1

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Month 2 Month 3

+------+------+

Sales Volume | 55,708 | 76,882 |

Unfilled Orders | 0 | 0 |

------+------+------+

Price | 401 | 392 |

------+------+------+

Revenues | 22,353,585 100.0% | 30,149,520 100.0% |

Product Costs | 10,355,390 46.3% | 14,053,743 46.6% |

Gross Margin | 9,337,251 41.8% | 12,703,731 42.1% |

Net Income | 2,441,305 10.9% | 3,940,270 13.1% |

+------+------+

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

CORPORATE P&L STATEMENT, MONTH 3 PAGE 2

*****************************************************************************

All Products Product 6-1 Product 6-2

------

Sales Volume 76,882 51,270 25,612

Unfilled Orders 0 0 0

Price 392 381 414

Revenues 30,149,520 19,542,690 10,606,830

- Product Costs 14,053,743 8,799,464 5,254,279

- Order Processing 1,015,448 593,760 421,688

- Replacement Parts 101,446 45,293 56,153

- Transportation Costs 2,275,152

------

Gross Margin 12,703,731 10,104,173 4,874,710

Gross Margin % 42.1% 51.7% 46.0%

Fixed & Other Costs:

Administrative O/H 1,200,000 600,000 600,000

Consulting Fees 0

Corporate O/H 500,000

Distribution FC 25,000

Emergency Procurement 21,621

Forecast Inaccuracy 292,354 222,282 70,072

Inventory Charges 144,038

Marketing 1,440,000 720,000 720,000

Plant Capacity FC 200,000

Procurement FC 12,500

Production FC 47,000

Research Studies 0

Service Outsourcing 908,178 572,092 336,086

Unfilled Handling 0

Total Fixed & Other 4,790,691 2,114,374 1,726,158

------

Operating Income 7,913,040 7,989,799 3,148,552

------

Non-Operating Income -32,501

Taxes -3,940,269

======

Net Income 3,940,270

======

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

HISTORICAL CORPORATE P&L STATEMENT, MONTH 3 PAGE 3

*****************************************************************************

Previous (Month 2) Current (Month 3)

------

Sales Volume 55,708 76,882

Unfilled Orders 0 0

Price 401 392

Revenues 22,353,585 100.0% 30,149,520 100.0%

- Product Costs 10,355,390 46.3% 14,053,743 46.6%

- Order Processing 810,972 3.6% 1,015,448 3.4%

- Replacement Parts 88,501 0.4% 101,446 0.3%

- Transportation Costs 1,761,471 7.9% 2,275,152 7.5%

------

Gross Margin 9,337,251 41.8% 12,703,731 42.1%

Fixed & Other Costs:

Administrative O/H 1,200,000 5.4% 1,200,000 4.0%

Consulting Fees 0 0.0% 0 0.0%

Corporate O/H 500,000 2.2% 500,000 1.7%

Distribution FC 25,000 0.1% 25,000 0.1%

Emergency Procurement 117 0.0% 21,621 0.1%

Forecast Inaccuracy 135,890 0.6% 292,354 1.0%

Inventory Charges 127,154 0.6% 144,038 0.5%

Marketing 1,440,000 6.4% 1,440,000 4.8%

Plant Capacity FC 200,000 0.9% 200,000 0.7%

Procurement FC 12,500 0.1% 12,500 0.0%

Production FC 47,000 0.2% 47,000 0.2%

Research Studies 0 0.0% 0 0.0%

Service Outsourcing 741,149 3.3% 908,178 3.0%

Unfilled Handling 0 0.0% 0 0.0%

Total Fixed & Other 4,428,810 19.8% 4,790,691 15.9%

------

Operating Income 4,908,441 22.0% 7,913,040 26.2%

------

Non-Operating Income -25,831 -0.1% -32,501 -0.1%

Taxes -2,441,305 -10.9% -3,940,269 -13.1%

======

Net Income 2,441,305 10.9% 3,940,270 13.1%

======

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

PRODUCT 6-1 P&L STATEMENT, MONTH 3 PAGE 4

*****************************************************************************

All Regions Region 1 Region 2 Region 3

(TOTAL ) ( U.S.A.) ( Europe) ( Pacific)

------

Active? Ch#1,2 Yes Yes Yes Yes Yes Yes

Sales Volume, Ch#1 31,836 8,867 6,183 16,786

Sales Volume, Ch#2 19,434 5,103 5,990 8,341

Unfilled Orders 0 0 0 0

Price, Ch#1,2 330 465 330 465 330 465 330 465

Revenues 19,542,690 5,299,005 4,825,740 9,417,945

- Product Costs 8,799,464 2,397,669 2,089,250 4,312,545

- Order Processing 593,760 157,940 168,492 267,328

- Replacement Parts 45,293 13,476 10,954 20,863

------

Gross Margin 10,104,173 2,729,920 2,557,044 4,817,209

Gross Margin % 51.7% 51.5% 53.0% 51.1%

Fixed Costs:

Administrative O/H 600,000 200,000 200,000 200,000

Forecast Inaccuracy 222,282 67,850 76,787 77,645

Marketing, Ch#1 360,000 120,000 120,000 120,000

Marketing, Ch#2 360,000 120,000 120,000 120,000

Service Outsourcing 572,092 140,980 139,548 291,564

Total Fixed Costs 2,114,374 648,830 656,335 809,209

------

Operating Income 7,989,799 2,081,090 1,900,709 4,008,000

======

Sales Volume Forecast, Ch#1 5,423 3,029 8,587

Sales Volume Forecast, Ch#2 3,539 4,194 5,660

Product 6-1 Configuration: H55211

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

PRODUCT 6-2 P&L STATEMENT, MONTH 3 PAGE 5

*****************************************************************************

All Regions Region 1 Region 2 Region 3

(TOTAL ) ( U.S.A.) ( Europe) ( Pacific)

------

Active? Ch#1,2 Yes Yes Yes Yes Yes Yes

Sales Volume, Ch#1 9,650 3,437 2,951 3,262

Sales Volume, Ch#2 15,962 7,492 2,246 6,224

Unfilled Orders 0 0 0 0

Price, Ch#1,2 330 465 330 465 330 465 330 465

Revenues 10,606,830 4,617,990 2,018,220 3,970,620

- Product Costs 5,254,279 2,242,075 1,066,160 1,946,044

- Order Processing 421,688 193,556 65,708 162,424

- Replacement Parts 56,153 24,579 10,940 20,634

------

Gross Margin 4,874,710 2,157,780 875,412 1,841,518

Gross Margin % 46.0% 46.7% 43.4% 46.4%

Fixed Costs:

Administrative O/H 600,000 200,000 200,000 200,000

Forecast Inaccuracy 70,072 15,328 32,488 22,256

Marketing, Ch#1 360,000 120,000 120,000 120,000

Marketing, Ch#2 360,000 120,000 120,000 120,000

Service Outsourcing 336,086 128,600 68,100 139,386

Total Fixed Costs 1,726,158 583,928 540,588 601,642

------

Operating Income 3,148,552 1,573,852 334,824 1,239,876

======

Sales Volume Forecast, Ch#1 3,417 2,738 3,209

Sales Volume Forecast, Ch#2 6,564 1,746 5,137

Product 6-2 Configuration: M66322

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

BALANCE SHEET, MONTH 3 PAGE 6

*****************************************************************************

ASSETS

------

Cash 1,818,072

Marketable Securities 0

Finished Goods Inventory:

Plant & DC1: Product 6-1 ( 14,846 units @ 171.63/unit) 2,548,018

Product 6-2 ( 4,821 units @ 205.15/unit) 989,024

Plant Investment 100,000,000

Procurement Inventory:

Plant & DC1: Alpha ( 0 units @ 0.00/unit) 0

Beta ( 0 units @ 0.00/unit) 0

Gamma ( 2,273 units @ 22.98/unit) 52,231

Delta ( 14,165 units @ 24.76/unit) 350,716

Epsilon ( 9,143 units @ 29.00/unit) 265,147

Total Assets 106,023,208

LIABILITIES AND EQUITIES

------

Corporate Capitalization 100,000,000

Dividends, Current Month -1,182,081

Dividends, Cumulative Prior To This Month -1,399,293

Loans 0

Retained Earnings, Current Month 3,940,270

Retained Earnings, Cumulative Prior To This Month 4,664,312

Total Liabilities and Equities 106,023,208

Note: These epsilon components are on-order, for delivery next month :

Region 1: 35,000Ds 35,000Da

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

FINISHED GOODS INVENTORY REPORT, MONTH 3 PAGE 7

*****************************************************************************

Product Product

6-1 6-2

------

PLANT/DC1 FG INVENTORY

------

Beginning Inventory 23,616 4,433

+ Production 42,500 26,000

= Available Inventory 66,116 30,433

- Sales, Region 1 -13,970 -10,929

- Sales, Region 2 -12,173 -5,197

- Sales, Region 3 -25,127 -9,486

= Ending Inventory 14,846 4,821

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

PROCUREMENT INVENTORY REPORT, MONTH 3 PAGE 8

*****************************************************************************

Alpha Beta Gamma Delta Epsilon

------

PLANT & DC1

------

Beginning Inventory 0 0 916 9,490 7,060

+ Purchases, Surface 368,500 368,500 18,727 13,954 25,857

+ Purchases, Air 21,000 16,000 35,000

+ Purchases, Emergency 0 0 2,775 0 2,216

= Available Inventory 368,500 368,500 43,418 39,444 70,133

- Production:

Product 6-1 -212,500 -212,500 -42,500 0 -42,500

Product 6-2 -156,000 -156,000 0 -26,000 -26,000

- Replacement Parts -918 -1,325 -1,633

+ Purchases, Delayed 2,273 2,046 9,143

= Ending Inventory 0 0 2,273 14,165 9,143

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

OTHER DECISION VARIABLES REPORT, MONTH 3 PAGE 9

*****************************************************************************

======

PROCUREMENT, RAW MATERIALS

======

DC1: Alpha 368,500

DC1: Beta 368,500

======Supplier

PROCUREMENT, SUB------

ASSEMBLY COMPONENTS A B C D E F G

======------

DC1: Gamma, Surface 0 0 0 21,000

DC1: Gamma, Air 0 0 0 21,000

DC1: Delta, Surface 0 0 16,000 0 0

DC1: Delta, Air 0 0 16,000 0 0

DC1: Epsilon, Surface 35,000 0 0 0

DC1: Epsilon, Air 35,000 0 0 0

======

MANUFACTURING 6-1 6-2

======------

Production 42,500 26,000

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

REPLACEMENT PARTS DEMAND REPORT, MONTH 3 PAGE 10

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Gamma Delta Epsilon

------

Ch#1 Ch#2 Ch#1 Ch#2 Ch#1 Ch#2

------

PRODUCT 6-1

------

DC1:Region1 159 112 0 0 146 104

DC1:Region2 99 115 0 0 90 118

DC1:Region3 257 176 0 0 226 150

PRODUCT 6-2

------

DC1:Region1 0 0 192 399 122 221

DC1:Region2 0 0 149 103 94 66

DC1:Region3 0 0 160 322 95 201

------

TOTAL Gamma: 918 Delta: 1,325 Epsilon: 1,633

% of Sales 1.8% 5.2% 2.1%

------

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

FORECASTING ACCURACY REPORT, MONTH 3 PAGE 11

*****************************************************************************

Region Forecast Actual Accuracy

------

Product 6-1, Channel 1 1 5,423 8,867 61.2%

Product 6-1, Channel 2 1 3,539 5,103 69.4%

Product 6-1, Channel 1 2 3,029 6,183 49.0%

Product 6-1, Channel 2 2 4,194 5,990 70.0%

Product 6-1, Channel 1 3 8,587 16,786 51.2%

Product 6-1, Channel 2 3 5,660 8,341 67.9%

Product 6-2, Channel 1 1 3,417 3,437 99.4%

Product 6-2, Channel 2 1 6,564 7,492 87.6%

Product 6-2, Channel 1 2 2,738 2,951 92.8%

Product 6-2, Channel 2 2 1,746 2,246 77.7%

Product 6-2, Channel 1 3 3,209 3,262 98.4%

Product 6-2, Channel 2 3 5,137 6,224 82.5%

SUMMARY: For 12 forecasts, average forecasting accuracy is 75.6%

Note: Forecasts count within the calculation of forecasting accuracy only

if the "actual" value being forecast is greater than 100 for sales volumes

(to not penalize you for "small" forecasts). Otherwise, the relevant values

of "forecast" and "actual" are only reported for reference purposes, but such

forecasts are not counted for forecasting accuracy scoring. This is the

reason why the number of forecasts referenced in "SUMMARY" may be less than

the detailed line-by-line reporting of forecasts.

Product-Specific Product Product

Forecasting Accuracy Overall 6-1 6-2

------

Forecasting Accuracy 75.6% 61.4% 89.7%

Number of Forecasts 12 6 6

Region-Specific Region Region Region

Forecasting Accuracy Overall 1 2 3

------

Forecasting Accuracy 75.6% 79.4% 72.4% 75.0%

Number of Forecasts 12 4 4 4

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

FORECASTING ACCURACY REPORT, MONTH 3 PAGE 12

*****************************************************************************

Month Month Month

SALES HISTORY 1 2 3

------

REGION 1

Hyperware

Product 6-1H, Ch#1 5,423 5,147 8,867

Product 6-1H, Ch#2 3,539 4,343 5,103

Industry 53,772 54,566 72,808

Industry Unfilled 0 0 0

Metaware

Product 6-2M, Ch#1 3,417 4,126 3,437

Product 6-2M, Ch#2 6,564 7,032 7,492

Industry 59,886 60,344 65,717

Industry Unfilled 0 0 0

REGION 2

Hyperware

Product 6-1H, Ch#1 3,029 3,719 6,183

Product 6-1H, Ch#2 4,194 4,141 5,990

Industry 43,338 43,591 65,242

Industry Unfilled 0 0 0

Metaware

Product 6-2M, Ch#1 2,738 3,041 2,951

Product 6-2M, Ch#2 1,746 1,831 2,246

Industry 26,904 26,969 29,214

Industry Unfilled 0 0 0

REGION 3

Hyperware

Product 6-1H, Ch#1 8,587 7,845 16,786

Product 6-1H, Ch#2 5,660 5,757 8,341

Industry 85,482 83,555 121,548

Industry Unfilled 0 0 0

Metaware

Product 6-2M, Ch#1 3,209 2,423 3,262

Product 6-2M, Ch#2 5,137 6,303 6,224

Industry 50,076 51,150 53,595

Industry Unfilled 0 0 0

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

SET-TOP BOX INDUSTRY BULLETIN, MONTH 3 PAGE 13

*****************************************************************************

Welcome to the month 3 issue of the Set-Top Box Industry Bulletin.

Notable set-top box industry developments are highlighted in the Bulletin.

INDUSTRY NEWS HEADLINES

Total industry PMS profits were 22,056,725 this month.

Firm 4 leads industry PMS in market share (17.9%).

Firm 6 has the second-highest market share in industry PMS (17.3%).

Industry PMS inventory investment decreased from 35,553,618 to

31,847,752 this month.

SUB-ASSEMBLY COMPONENT COSTS: Month 4

Supplier

------

A B C D E F G

------

Gamma 11 13 - 11 - 24 +

Delta 13 - 15 26 + 13 - 13

Epsilon 30 + 18 - 17 - 19 -

Notes: "n/a" denotes unavailable spot-market suppliers. A "+" ("-") after

a cost denotes an increase (a decrease) since last month.

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FIRM 6: ?????????????????????????????????????????????????? INDUSTRY PMS

DECISION VARIABLE CHECKS AND MESSAGES, MONTH 3 PAGE 14

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FORECASTING DECISION VARIABLE CHECKS [Firm PMS6]

12 forecasts are unchanged. Forecasts are normally changed every month .

INVENTORY CHARGES DETAILS

$ Begin $ End $ Average Inventory Inventory

Inventory Inventory Inventory Cost (%) Charges

------

DC1: SAC Gamma 20,152 52,231 36,191 3.0 1,085

DC1: SAC Delta 227,760 350,716 289,238 3.0 8,677

DC1: SAC Epsilon 204,740 265,147 234,943 3.0 7,048

DC1: FinGoods 6-1 4,038,336 2,548,018 3,293,177 3.0 98,795

DC1: FinGoods 6-2 906,548 989,024 947,786 3.0 28,433

Total Inventory Charges (Reported on the Corporate P&L Statement) 144,038

PRODUCTION SHIFTS AND PLANT CAPACITY FC CALCULATION DETAILS

Production 6-1 = 42,500 units.

Production 6-2 = 26,000 units.

Total Production = 68,500 units.

Production Shifts = 2.

Plant Capacity FC = 200,000.