skymall monthly financial package

26
IV'C\)\ '7 i ··ld . . --rf""'"f) ,00 . e- i c . --- Jct· " . '(0 \ .7 'f>\ . . ., . \) .o::f,, L -r-" ,,L:)- . , _.r (J' I . .-)· -- [ -, (t f- ·-ru ... t th " ) C V/c 5:.-<f] " \ r< . ,.;, c,:J0-D" . (e, 6 SKYMALL, INC. \)CJ(" ,J-/" )'' \ I r·· -. r \j FINANCIAL REPORTING PACKAGE FOR THE MONTH ENDED MAY 31, 1993 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

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Page 1: SkyMall Monthly Financial Package

IV'C\)\ '7 i ··ld . . --rf""'"f) ,00 . e- i c . --- Jct· " . '(0 \ .7 'f>\

. . ., . \) .o::f,, L -r-" ,,L:)- . ,

_.r (J' I . .-)· -- [ - , (t f- ·-ru ... t th " ) C V/c 5:.-<f] "

\ r< . ,.;, c,:J0-D" . (e,6 SKYMALL, INC.

\)CJ(" ,J-/" )'' \ I

r·· -. r \j

FINANCIAL REPORTING PACKAGE

FOR THE MONTH ENDED MAY 31, 1993

1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 2: SkyMall Monthly Financial Package

OVERALL PROFIT AND LOSS

SkyMall was able to process a significant portion of the pending dropship backlog in May, which propelled net sales to within 95% of plan, after being held to under 80% of plan for the past three months (February - April) due to slow processing of dropships.

Unfortunately, both direct costs and fixed costs have shown an unfavorable upward trend,in both April and May, which has led to an operating loss of over $400,000 for the month.

Direct costs increased in response to handling the catch-up of dropship orders, and fixed costs were .. over plan due to higher catalog expenses.

This leaves SkyMall with a $2.5 million operating loss year-to-date, which is $1.4 million more than was planned. Reversing the trend of losses is critical to cash flow, which has already been stretched. The key priorities of the business at this point are: being in stock, accelerating dropship processing speed, and rapidly billing and collecting ad allowances from vendors.

Copyright©> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 3: SkyMall Monthly Financial Package

Actual I Plan Indices Trends '· •• DIRECT COSTS -•• •• .... ····· 120 •. - - - FIXED COSTS -----. --. --•• ••.. - I . . ... .., 100 • ••• •• I

••••• NETSALES ,.••"

. . ......... ······ .. 80 •• ............. ••••••• •••• ......... ······ .. •••• •• ••••• •• ••••••• •••

January February March April May

Copyright© 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 4: SkyMall Monthly Financial Package

NET SALES

Net sales of $2.0 million were the highest all year, but fell 5o/o ($112,000) short of planned levels. American and United were the strongest performing airlines, primarily due to increased page count on American and successful on-board discount promotions on United. Delta and USAir continued to be the weakest carriers, although both showed big improvements compared to April.

The backlog of dropship orders was reduced dramatically, with Reliable Home Office showing the most improvement among catalog vendors. Hammacher Schlemmer alone has 60% of the remaining outstanding dropship dollars, now totalling $700,000. Our target is $450,000.

Preliminary information on disappoints (lost sales due to being out of stock) shows that a potential opportunity of at least 20o/o (and perhaps 35%) may exist. While this measure is not consistently reliable enough to make definitive conclusions, there is some evidence that suggests that simply being in stock in Phoenix could deliver an incremental $400,000 in sales per month.

Copyright©> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 5: SkyMall Monthly Financial Package

120

110

100

90

80

70

60

50

40

30

20

10

0

April & May Gross Sales Index to Plan by Airline

American

·····-··-··----·············-------·-·-····-·········-·····-I I I I

I I I

-·································

"Demand Miss"

Delta USAir United

"Supply Miss" I I I -------------------------------

Continental TWA Total Copyright © 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION May, 1993

Page 6: SkyMall Monthly Financial Package

SkyMall Fulfillment vs. Vendor Drop Ship Fulfillment As of June 20, 1993 $400, 000 _,,, ... w ............. -,, •.•. , •.• , .• .,, .. ,._. ............. .,.. ..... , ..... w.w.,...-...... -,,,.. .......... .,.. ............ , ....... •.w.············w.•.w •• , •.•. , ................................................................................. , .............................................. , ..................... ·••·••••·•·• .. •

$350,000 -+---+----+---+---+-----+---+----+----!---+---+-----+---+---+-----+---+---+-------;

$300,000

$250,000 I I I .A •m ; 1 · ;, , "**<L I I I I f I $200.000 r :;;2l;; ;t **I; :r $150,000

$100,000 2121 2128 3n 3114 3/21 3128 4/4 4111 4/18 4/25 512 5/9 5/16 5/23 5/30 6/6 6/13 6/20

8 SkyMall Fulfilled Sales 8 Sent To Vendor For Fulfillment

Fulfilled Sales vs. Unfulfilled Sales As of June 20, 1993 $600,000 -;········· ............................. T .. .,.. .............. · ...... .-....-.·1······· .. .w.·.w.·.····· ................. .,.--.. .••... ...,. •...• ·.·.·.···"··· ..... ·"T·····• .............. ·.· ..................... l.·.· ............................... · ... ·.··r ................. . w.·.·.···· • · ••• · ···· ·,•,•,•.•.• ···· . ..,...,.,... .... ·.·.·.w.•.•.·,•.·.· · •"•"•"•"-'·"'····· .. ··.·.·.•,·,•,•-tN·'· •.•. ,.,•,•,,., .•.·.···v······ ·· · · • •.• ·.·.•.·.·····'""...,("•'•'"•''•''•'•'•' •.•.·.·,·.w.•,•.·.·

$500,000

$400,000

$300,000 -1--___j---1---+----l---+--+---+---+---+--+---i---t---r---r---r---i---

:::t.1 l .. I 1.1.1. t· P1'{:J 2121 2128 3n 3114 3121 3128 4/4 4111 4/18 4/25 512 5/9 5/16 5/23 5/30 6/6 6/13 6/20

8 Fufilled Sales 8 Unfulfilled Sales

Page 7: SkyMall Monthly Financial Package

---·-····-·--· .. .. -·-·········································-·····································································································-···-·········· .. ······-······-·······························"········································································· I Vendor Performance to Target - Drop Ship Manifests J outstanding Drop 24, 1993

' $21,750 : ' '

$35,009 : ' ' '

Bits & Pieces

Hammacher Schlemmer

JetCetera

Lillian Vernon

Reliable Home Office

Right Start

Stuart McGuire

SyberVision

$1,1

$1,1

)15 '

)39 : ' ' ' '

$21,750 : I : $23,302 \

Ill $29,001

1$5.168

It $43,501 l $34,352 :

' ' ' ' '

Ii ' $29,001 :

$43,238 :

' ' '

$422,833

$11E i,002

' ' ' :al Dropship $

Team Up I $11,600 1 To1

$749 j Tai .... ·aet Outstanding Dropships $450,000

Upper Deck

Other

' ' ' ' '

I! $36,251 i

,828 : ' ' ' ' '

ii.m i $92 ' '

$3,

,901

$0 $100,000 $200,000 $300,000

• Drop Ship Target IB Drop Ship Actual

$400,000 $500,000

Page 8: SkyMall Monthly Financial Package

GROSS MARGIN

Gross margin on merchandise fell to 47.3o/o, or 3.8 points below the planned level of 50.1 %. Two main factors were the cause of this unfavorable variance: the dropship backlog catch-up for discontinued catalog vendors and the United on-board sales promotion.

Discontinued catalog vendors made up over $200,000 of the month's gross sales, or 10%. Processing dropships in May that were from March and April orders affected the mix of orders in May. The margins on these outgoing vendors are well below the planned levels of 50%, as follows: Bloomingdales, 25%; Chef's, 20%-35%, The Nature Company, 35%, and Self Care, 40%. This unfavorable mix impact accounted for approximately 2.0 points of the 3.8 point shortfall.

In the case of United, $200,000, or 10% of the month's sales were connected to the 15% discount special offer when passengers ordered while in flight. We received 5,600 Airfone calls on United alone in May. The discounts reduced net sales by an incremental $30,000, which reduced the overall weighted average gross margin for the month by approximately 1.0 point of the 3.8 point shortfall.

Copyright©> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 9: SkyMall Monthly Financial Package

Gross Margin Trends

PLAN 5001o I I I ....... + ........... "' ................. I .....

* '* '* .... ... ;18,. .... .. ,.

45o/o I I ....... ""'* ..... I ..... I ............

40°/o .. #4 ...

•• fl> •*

"'4 ... .... ·r r

January February April March May Copyright © 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 10: SkyMall Monthly Financial Package

FREIGHT-OUT MERCHANDISE

Freight Out Merchandise costs were $48,000 (36%) over plan, primarily not being in stock in Phoenix, which caused shipping inefficiencies.

The dropship vendor program is based upon approximately 35%-40% of the total sales quantities being fulfilled from the Phoenix warehouse. This proportion is to fill multiple-cataloger orders, plus Jetcetera and American Traveler. Only 60o/o-65% of orders were planned to be fulfilled by dropship vendors, and these were to be single-cataloger orders only.

When items are out of stock in Phoenix this creates a backorder situation. Backorders forced many multiple-cataloger orders to be split into several single-cataloger orders, which were then dropshipped by the catalog vendor. While we collect one $5.95 shipping and handling fee for a multiple-cataloger order, many of these items actually had to be sent separately, which caused two (or more) UPS charges per original order. This also negatively affected the direct fulfillment costs, explained below.

Copyright <C> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 11: SkyMall Monthly Financial Package

Freight Out Costs as a Percent of Net Sales

[ACTUAL-

12o/o

9%

6%

3o/o

0% Jan Feb Mar Apr May

Copyright© 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 12: SkyMall Monthly Financial Package

Shipping & Handling Fee Income as a Pct of Net Sales

15%-.----------------------1 ACTUAL - PLAN - I

9%

6o/o

3%

0% Jan Feb Mar Apr May

Copyright © 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 13: SkyMall Monthly Financial Package

DIRECT FULFILLMENT COSTS

Direct Order Taking and Direct Fulfillment Costs were over plan by more than 33o/o, or $70,000. This was during a month when net sales were below plan by 5%, which magnified these inefficiencies.

Higher costs for GTE Airfone contributed $50,000 of the plan miss, primarily due to the United on-board promotion.

The catch-up in backlogged dropships also caused increased costs, as items shipped increased 50% from last month to 43,000 items. Most of these incremental labor costs are captured in the Direct Order Taking line element, as the work done (for releasing dropships) by SkyMall's FAST Division is primarily Customer Service (reconciling manifests and processing credit card charges.)

Copyright©> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 14: SkyMall Monthly Financial Package

Direct Order Taking Costs as a Pct of Sales

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Direct Fulfillment Costs as a Pct of Sales

12%

10% if UAL

v \ '

'-............. /" .........

8%

6%

4% PLAN

2%

0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Copyright e 1993 SkyMall, Inc. AU Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 15: SkyMall Monthly Financial Package

CATALOG COSTS

Catalog costs were 31o/o ($109,000) over plan, primarily due to the incremental costs of the April reprint and sharply higher costs for the American Traveler.

The April SkyMall catalog reprint upcharges had to be amortized over only two months, which has made May's catalog expense the highest in the company's history. The upcharges were incurred due to overtime and rush charges necessitated with changing the Spring catalog from 12 catalog vendors to only 8 when the margins were renegotiated from an average of 40 points to 50 points.

While the increase in margin was greater than the incremental catalog costs incurred, the overtime/rush charges diminished the savings generated by improving the gross margin on merchandise.

The American Traveler's higher cost is due to increased size, plus a temporary change in cost-sharing with AMR leaves SkyMall with a greater share of the ultimate catalog cost. AMR's Purchasing unit has taken over the procurement process and costs for subsequent catalogs will be much lower.

Copyright©> 1993 SkyMall, Inc. All Rights Reserved. CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 16: SkyMall Monthly Financial Package

Catalog Costs Trend I • ACTUAL • PLAN I

300

200

100

0 Jan Feb Mar Apr May

Copyright © 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION June, 1993

Page 17: SkyMall Monthly Financial Package

%of Net Actual Actual

NET SALES 1,971,226 100.0%

Cost of Goods Sold 1,088,288 55.2%

GROSS MARGIN 882,939 44.8%

DIRECT COSTS Airline Commissions 169,072 8.6%

Credit Card Fees 45,614 2.3%

Net Shipping Costs/(Revenue) 7,762 0.4%

Order & Fulfillment 293,441 14.9%

Total Direct Costs 515,889 26.2%

CONTRIBUTION MARGIN 367,050 18.6%

FIXED COSTS Catalog 456,992 23.2%

Labor & Benefits 175,340 8.9%

Facilities 37,099 1.9%

General & Administrative 110, 160 5.6%

Total Fixed Costs 779,592 39.5%

Operating Profit/(Loss) (412,542) (20.9%)

Other (lncome)/Expense 79,722 4.0%

Net Profit/(Loss) (492,264) (25.0%)

Copyright SkyMall, Inc. All Rights Reserved

SKYMALL, INC. TOP LINE PROFIT AND LOSS

1993 ACTUALS

May

Actual B/ %of Net (W)Than Act/Plan

Plan Plan Plan Index Actual

2,083,400 100.0% (112,174) 95 7,696,397

1,053,500 50.6% (34,788) 103 4,421,629

1,029,900 49.4% (146,961) 86 3,274,768

165,000 7.9% (4,072) 102 759,400 48,200 2.3% 2,586 95 199,221 (41,800) (2.0%) (49,562) NIM 84,458

222,700 10.7% (70,741) 132 1,190,987 394,100 18.9% (121,789) 131 2,234,066

635,700 30.5% (268,650) 58 1,040,702

348,500 16.7% (108,492) 131 2,093,295 146,600 7.0% (28,740) 120 789,674

42,900 2.1% 5,801 86 191,783 98,200 4.7% (11,960) 112 454,260

636,200 30.5% (143,392) 123 3,529,012

(400) (0.0%) (412,142) NIM (2,488,310)

79,900 3.8% 178 100 (1,210,431)

(80,200) (3.8%) (412,064) NIM (1,277,879)

CONFIDENTIAL AND PROPRIETARY INFORMATION

MayYTD

Actual B/ %of Net %ofNet (W) Than Act/Plan Actual Plan Plan Plan Index

100.0% 8,968,600 100.0% (1,272,203) 86

57.5% 4,835,300 53.9% 413,671 91

42.5% 4,133,300 46.1% (858,532) 79

9.9% 821,200 9.2% 61,800 92

2.6% 206,100 2.3% 6,879 97

1.1% (177,200) (2.0%) (261,658) NIM

15.5% 1,112,300 12.4% (78,687) 107

29.0% 1,962,400 21.9% (271,666) 114

13.5% 2,171,000 24.2% (1, 130,298) 48

27.2% 1,777,600 19.8% (315,695) 118

10.3% 721,000 8.0% (68,674) 110

2.5% 208,800 2.3% 17,017 92

5.9% 513,400 5.7% 59,140 88

45.9% 3,220,800 35.9% (308,212) 110

(32.3%) (1,050,000) (11.7%) (1,438,310) NIM

(15.7%) 343,000 3.8% 1,553,431 NIM

(16.6%) (1,393,000) (15.5%) 115, 121 NIM

Tue Jun 22 1993

Page 18: SkyMall Monthly Financial Package

Full Dollar

"'of Net 1993Actual Adual

GroM Revenue• Revenue 2,139,367 108.5%

Revenues 0 0.0% Fulfillment Revenue 0 0.0% Conclergct Revenue 35,931 1.8%

Revenue 0 0.0% SMFO Revenue 2,388 0.1%

0 0.0% Other Revenue 21,136 1.1%

Total Groee Revenuee 2,198,822 111.5% Retume & Allowances

Retuma & Allowances 225,639 11.4% Customer Bad Debts 1,957 0.1% Total Returne & Allowance• 227,596 11.5%

Net Revenue• 1,971,226 100.0% Coat of Goode Sold

Merchandise COGS 1,039,627 52.7% COGS 28,281 1.4%

Fre.!9._ht In-Merchandise 17,481 0.9% Fre_.!i_ht·Retums 2,899 0.1% Total Coat of Goode Sold 1,088,288 56.2%

882,939 44.8% Direct Coate

Airline Commissions 169,072 8.6% Commlsslona 0 0.0%

Credit Csrd Discounts 45,614 2.3% Fre.!i_ht Out-Merchandise 181,440 9.2% Sh!PPing_ & Handllng_Fees l173,67fu_ (8.8%) Direct Order TaklnJl. Costs

Salarles-Order TakhJl. 56,599 2.9% Emj>_ Ben & Taxes • Dir. Order 13,240 0.7% Telecomm. - Inbound 41,433 2.1% Teleoomm. • Inbound Alrlone 56,413 2.9% Outside Contractor Costs 11,025 0.6% Total Direct Order TaklnJl. Costs 178,709 9.1%

Direct Fulfillment Costs Salarles-Fulfillment 68,378 3.5% Em..e_ Ben & Taxes • Fulfillment 14,8n 0.8%

9,125 0.5% Outside Contractor Costs 22,352 1.1% Total Direct Fulfillment Costs 114,732 5.8%

Total Direct Coate 515,889 26.2%

Contribution Ma!'.l!n 367,050 18.6%

SKYMALL, INC. - CONSOLIDATED PROFIT AND LOSS STATEMENT

FOR THE MONTH ENDED MAY 31, 1993

May

%of Nel Actual B/(W) Acl/Plan 1993 Plan Plan than Plan Index 1993 Actual

2,257,600 108.4% ]18,233.l 115 8,201,556 0 0.0% 0 NIM 0 0 0.0% 0 NIM 0

28,800 1.4% 7,131 125 121,725 0 0.0% 0 NIM 0

11,400 0.5% 19.012 21 34,3n 0 0.0% 0 NIM 0

26,800 1.3% (5,664) 7ll 171,661

2,324,600 111.8% 115 8,529,318

238,600 11.5% 12,961 115 826,420 2,700 0.1% 743 72 6,502

241,300 11.6% 13,704 94 832,921

2,083,400 100.0% J:l12,174 115 7,696,397

1,019,300 48.9% J?o,3i_tt 102 4,217,880 16,900 0.8% J:l 1,38!2_ 187 80,791 15,000 0.7% _(2,481) 117 85,682

2,400 0.1% 121 37,276 1,053,500 !50.8% {34,788) 103 4,421,629

1,029,900 49.4% ]146,961 86 3,274,768

165,000 7.11% J.4,072) 102 759,400 0 0.0% 0 NIM 0

48,200. 2.3% 2,586 ll5 199,221 133,400 6.4% _i48,04Qij 136 804,241

J:l 75,200.l (8.4%) _i1,52!}j NIM J?19,783.l

80,000 3.8% 23,401 71 284,301 20,000 1.0% 6,760 86 67,048 25,500 1.2% 182 143,642

6,900 0.3% 818 116,421 0 0.0% NIM 38,287

132,500 8.4% (46,209) 135 649,700

56,800 2.7% 120 325,417 14,200 0.7% 105 75,479

6,000 0.3% J..3,125) 152 51,619 13,300 0.8% . 168 88,n2 90,200 4.3% 127 541,288

394,100 18.9% (121,789) 131 2,234,066

635,700 30.5% J:268,6SO) 58 1,040,702

A PRnPRIFTARV INFf'\RUATlnt.t

MayYTD

"'of Net Actual B/(W) Acl/Plan % of Net Actual 1993 Plan Plan than Plan Index

106.8% 9,744,800 108.7% }1,543,244 84 0.0% 0 0.0% 0 NIM 0.0% 0 0.0% 0 HIM 1.8% 120,800 1.3% 925 101 0.0% 0 0.0% 0 NIM 0.4% 73,600 0.8% 47 0.0% 0 0.0% 0 NIM 2.2% 70,600 0.8% 101,061 243

110.8% 10,009,800 111.8% 85

10.7% 1,029,500 11.5% 203,080 80 0.1% 11,700 0.1% 5,198 58

10.8% 1,041,200 11.8% 208,279 80

100.0% 8,968,600 100.0% 86

54.8% 4,686,600 52.3% 468,720 90 1.0% 72,900 0.8% (7,891 111 1.1% 65,600 0.7% 131 0.5% 10,200 0.1% J.27,07tlli 385

57.5% 4,835,300 53.9% 413,671 91

42.5% 4,133,300 46.1% 79

9.9% 821,200 9.2% 61,800 112 0.0% 0 0.0% 0 NIM 2.8% 206,100 2.3% 6,879 97

10.4% 622,600 6.9% J.181,64!1 129 (9.4%) __@9,800] (8.9%) l80,0!ZLJ NIM

3.7% 407, 100 4.5% 122,799 70 0.9% 101,800 1.1% 34,752 86 1.9% 121,500 1.4% 118 1.5% 32,800 0.4% J_83,62!}j 355 0.5% 0 0.0% (38,2@: NIM 8.4% 663,100 7.4% 13,400 98

4.2% 283,800 3.2% 115 1.0% 71,000 0.8% 108 0.7% 45,700 0.5% 113 1.2% 48,700 0.5% 182 7.0% 449,200 5.0% 121

29.0% 1,962,300 21.9% (271,766) 114

13.5% 2,171,000 24.2% 48

Page 19: SkyMall Monthly Financial Package

Full Dollar

"'of Net 1993 Actual Actual

Fixed EXDense• Fixed cmk>G Expense•

Total Fixed Ex_.E!!)_ses 456,992 23.2% Fixed People Expen-

Total Fixed PeopleEXPenses 175,340 8.9%

FacllHIH Expemn Total Facilities Expenses 37,099 1;9%

Admlnlstnltlve Expense• Total Administrative ExpenS&s 110,160 5.6%

Total Fixed Expense• 779,592 39.5%

I }412,542}" (20.9%) Othetijncom;)iEii);ilH

Depreciation Expense 38,345 1.9% Amortization Expense 17,844 0.9% Interest expense 24,333 1.2% Interest Income 0 0.0% Rental Income (0.0%)

Other 0 0.0% Total Other (Jncome[/Expense 79,722 4.0%

Net ProfH/(Lo .. ) Before Texee (492,264) (25.0%)

Copyright C 1993 SkyMalt Inc. Alt Rights RllMrved

SKYMALL, INC.· CONSOLIDATED PROFIT AND LOSS STATEMENT

FOR THE MONTH ENDED MAY 31, 1993

May % of Net Actual B/(W) Ad/Plan

1993 Plan Plan than Plan Index 1993 Actual

348,500 16.7% (108,492) 131 2,093,295

146,600 7.0% (28,740 120 789,674

42,900 2.1% 5,801 86 191,783

98,200 4.7% (11,960). 112 454,260 636,100 30.5% (143,492) 123 3,529,012

(400) (0.0%) (412,142) i'VM (2,488,310)1

38,700 1.9% 355 99 187,946 18,000 0.9% 156 99 89,219 26,700 1.3% 2,367 91 36,611

0 0.0% 0 i'VM 2,642 j?,5oo} (0.2%) (2,100) i'VM (28,907)

0 0.0% 0 i'VM (1,497,942) 79,900 3.8% 178 100 (1,210,431) (80,200) (3.8%) (412,064) i'VM (1,277,879)

CONFIOENTIAL & PROPRIETARY INFORMATION

MayYTD

%ofNet Actual B/(W) Acl/Pian % of Net Actual 1993 Plan Plan than Plan Index

27.2% 1,777,600 19.8% (315,695 118

10.3% 721,000 8.0% 110

2.5% 208,800 2.3% 17,017 92

5.9% 513,400 5.7% 59,140 88 45.9% 3,221,000 35.9% (308,012) 110

(32.3%) J.1,050,000J. (11.7%) ]1,438,31Ql i'VM

2.4% 190,500 2.1% 2,554 99 1.2% 90,000 1.0% 781 99 0.5% 80,000 0.9% 43,389 '46 0.0% 0 0.0% ]2,642) i'VM

(0.4%) (17,5001 (0.2%) 11,407 i'VM (19.5%) 0 0.0% 1,497,942 i'VM (15.7%) 343,000 3.8% 1,553,431 i'VM (16.6%) (1,393,000) (15.5%) 115,121 i'VM

Tue Jun 22 1993

Page 20: SkyMall Monthly Financial Package

Full Dollar

""'ol Nee 1993 Actual Actual

Fixed cata!OG ... 456,927 23.2""

Fees _ffi7,000 (2.9%) Costs 41,667 2.1%

Fre.!9_ht 15,398 0.8% Total Fixed Catai09: 456,992 23.2""

Fixed People EXP8n-Salaries.Clerical 0 0.0%

9,712 0.5% Salaries-Merchandlsl!!e_ 13,990 0.7% Salaries-MIS 14,196 0.7% Salaries-Administrative 107,078 5.4% Enlfl_ Ben & Taxes • Fixed 29,778 1.5%

Search, Adv., & Reio. 322 0.0% Tralnln_.9._ & Development 264 0.0% Total Fixed People EXilenses 175,340 6.9%

Rental-Land & BulldllJ.9... 10,388 0.5% 4,235 0.2%

Utllllles 4,596 0.2"" & Malnt-Bulldlrlg_ 5,205 0.3% & Malnt-1;9.ulpment 7,222 0.4%

Sacl!rity·Bulldln_.9._ 2,229 0.1% Business Insurance 3,223 0.2"" Total Facllltles Expenses 37,099 1.9%

Admlnlatratlve Advertising. & Marketlrlg 22,694 1.2""

& Accountln_.9._Fees 9,000 0.5% Consulting & Outside Prof. Fees 10,698 0.5%

17,410 0.9% & Com_puter 5,685 0.3%

OfflceEXPense 3,862 0.2"" Admln. Posta_ge & ;icpress 7,223 0.4% Travel & Entertainment 16,885 0.9% Division Advances 0 0.0% lntercompany EXPense 0 0.0% OlherEXilense 16,703 0.8% Total Administrative Expenses 110,160 5.6%

Total Fixed ExpenM9 779,592 39.5%

Copyrlghl 0 19113 SlcyMall Inc. All Alghta A9Mrved

SKYMALL, INC. - CONSOLIDATED PROFIT AND LOSS STATEMENT

FOR THE MONTH ENDED MAY 31, 1993

May

""'ol Nel Actual B/(W) Act/Plan 1993 Plan Plan than Plan ln<J.x 1993 Actual

347,800 16.7% 131 2,012,646 ]34,000 (1.7%) 22,200 NIM _1_133, 191) I

35,000 1.7% 119 133,333 400 0.0% 3,850 80,507

348,500 16.7% J_108,492 131 2,093,295

1,600 0.1% 1,600 NIM 0 10,800 0.5% 1,088 90 42,609 12,100 0,8% _0,890 118 61,949 15,000 0.7% 804 95 59,312 82,300 4.0% ]24,77fill 130 468,002 24,400 1.2"" J.5,37hlj 122 140,285

0 0.0% J..32W NIM 4,841 500 0.0% 236 53 12,677

146,600 7.0% }28,74Q}_ 120 789,674

11,800 0.6% 1,412 88 54,309 1,700 0.1% 2411 15,708

11,900 0.8% 7,304 39 45,352 2,500 0.1% 208 30,193

10,000 0.5% 2,778 72 25,535 2,400 0.1% 171 93 9,816 2,500 0.1% 1211 10,871

42,900 2.1% 5,801 88 191,783

19,000 0.9% -:@,694)" 119 77,223 12,500 0.8% 3,500 72 72,969

7,100 0.3% 151 23,996 9,000 0.4% J..8,41Q}_ 193 69,991

13,500 0.8% 7,815 42 30,452 4,500 0.2% 638 88 39,219 4,900 0.2% 147 34,554

18,800 0.9% 1,915 90 54,181 0 0.0% 0 NIM 0 0 0.0% 0 NIM 0

8,800 0.4% 190 51,675 98,200 4.7% _tl1,96!!!_ 112 454,260

636,100 30.5% (143,492) 123 3,529,012

CONFIDENTIAi. & PAOPRIET AAY INFORMATION

MayYTD ""'ol Net Actual B/(W) Act/Plan

% of Nee Aetual 1993 Plan Plan than Plan ln<J.x

26.2% 1,770,800 111.7% }241,846 114 (1.7%) (108,000 (1.2%) 25, 191 . NIM 1.7% 110,000 1.2"" ]?3,333 121 1.0% 4,800 0.1% 1,sn

27.2% 1,m,eoo 1D.8% 118

0.0% 8,400 0.1% 8,400 NIM 0.6% 48,100 0.5% 5,491 eg

0.8% 62,000 0.7% 51 100 0.8"/o 75,000 0.8% 15,688 79 6.1% 399,900 4.5% 117 1.8% 118,700 1.3% 118 0.1% 0 0.0% ]4,84i}_ NIM 0.2% 9,000 0.1% _@,@ 141

10.3% 721,000 8.0% J..68,67'!}_ 110

0.7% 58,800 0.7% 4,491 112 0.2% 8,500 0.1% 185 0.8% 50,300 0.6% 4,948 90 0.4% 12,700 0.1% 238 0.3% 54,000 0.6% 28,465 47 0.1% 12,000 0.1% 2,184 82 0.1% 12,500 0.1% 1,629 87 2.5% 208,800 2.3% 17,017 112

1.0% 93,000 1.0% 15,m 83 0.9% 62,500 0.7% 117 0.3% 41,100 0.5% 17,104 58 0.9% 45,000 0.5% ]?4,99fI 158 0.4% 80,200 0.9% 49,748 38 0.5% 22,700 0.3% 173 0.4% 24,100 0.3% ]10,454} 143 0.7% 98,600 1.1% 44,419 55 0.0% 0 0.0% 0 NIM 0.0% 0 0.0% (0) NIM 0.7% 46,200 0.5% 112 5.9% 513,400 5.7% 59,140 88

45.9% 3,221,000 35.9% (308,012) 110

Tuo Jun 22 19113

Page 21: SkyMall Monthly Financial Package

Full Dollar

Jan Feb Mar Groaa Revenuea

Revenue 1,624,420 1,229,789 1,724,380 Revenues 0 0 0

FuHlllment Revenue 0 0 0 Concle_.!9._e Revenue 23,076 19,444 20,523

Revenue 0 0 0 SMFO Revenue 8,940 10,081 7,599 lntercompany Revenue 0 0 ]_o Other Revenue 52,898 36,539 51,743

Total Groaa Revenuea 1,709,334 1,295,853 1,804,245 Return• A Allowance•

Returns & Allowances 209,128 85,278 120,665 Customer Bad Debts 1,497 774 2,353 Total Return• A Allowance• 210,625 86,052 123,018

Net Revenuea 1,498,709 1,209,801 1,681,227 Coat of Gooda. Sold

Merchandise COGS 910,797 676,351 910,367 Concl4!!9._e COGS 15,070 11,501 14,211 Fre!9._ht In-Merchandise 17,674 9,588 25,231 Fre!s_ht·Retums 12,750 8,651 8,574 Total Coat of Gooda Sold 956,292 706,090 958,383

GrOMM_!i!n 542,417 503,711 722,844 Direct Coata

Alr11ne Commissions 131,494 143,329 159,633 All!_ncy Commissions 0 0 0 Credit Cald Discounts 41,619 39,917 37,842 Fre]glit Out-Merchandise 203,736 119,562 125,007

]17,32?1 J.:148,34?[ Direct Order Takln_11.Costs

Salarles-Order Takkl_g_ 54,640 57,714 50,974 Ben & Taxes ·Dir. Order 12,471 13,699 12,469

Telecomm. • Inbound 21,672 32,131 21,024 Telecomm. ·Inbound Afrfone 8,025 10,160 21,736 Outside Contractor Costs 2,749 388 9,595 Total Direct Order Taking Costs 99,556 114,092 115,798

Direct FuHfllment Costs Salarfes.FuHlllment 58,8n 61,528 64,114 Em.e_ Ben & Taxes • FuHfllment 16,008 12,419 16,959 Sl!E2!1es-FuHillment 17,722 12,004 2,363 Outside Contractor Costs 10,820 24,658 16,847 Total Direct FuHlllment Costs 103,427 110,609 100,282

Total Direct Coata 429,948 410,183 390,216

Contribution Ma!i_ln 112 470 93,528 332,629

Copyright Cl 1993 SkyMall Inc. All Rights Reserved

SKYMALL, INC.· CONSOLIDATED PROFIT AND LOSS STATEMENT

1993 ACTUAL

1993 Actual Jun Jul

1,483,600 2,139,367 0 0 0 0 0 0 0 0 0 0

22,751 35,931 0 0 0 0 0 0

5,369 2,388 0 0 0 0 0 0

9,345 21,136 0 0

1,521,065 2,198,822 0 0

185,709 225,639 0 0 1,957 0 0

185,631 227,596 0 0

1,335,434 1,971,226 0 0

680,738 1,039,627 0 0 11,729 28,281 0 0 15,707 17,481 0 0 4,403 2,899 0 0

712,577 1,088,288 0 0

622,857 882,939 0 0

155,871 169,072 0 0 0 0 0 0

. 34,229 45,614 0 0 174,496 181,440 0 0

0 0

64,375 56,599 0 0 15,170 13,240 0 0 27,382 41,433 0 0 20,088 56,413 0 0 14,531 11,025 0 0

141,545 178,709 0 0

72,521 68,378 0 0 15,216 14,877 0 0 10,406 9,125 0 0 14,095 22,352 0 0

112,237 114,732 0 0 487,831 515,889 0 0

135,026 367,050 0 0

CONFIDENTIAL & PROPRIETARY INFORMATION

S!E._ Oct Nov Dec Full Year

0 0 0 0 0 8,201,556 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 121,725 0 0 0 0 0 0 0 0 0 0 0 34,3n 0 0 0 0 0 0 0 0 0 0 0 171,661 0 0 0 0 0 8,529,318

0 0 0 0 0 826,420 0 0 0 0 0 6,502 0 0 0 0 0 832,921 0 0 0 0 0 7,696,397

0 0 0 0 0 4,217,880 0 0 0 0 0 80,791 0 0 0 0 0 85,682 0 0 0 0 0 37,276

0 0 0 0 0 4,421,629 0 0 0 0 0 3,274,768.

0 0 0 0 0 759,400 0 0 0 0 0 0 0 0 0 0 0 199,221 0 0 0 0 0 804,241 0 0 0 0 0 J.719,783_1

0 0 0 0 0 284,301 0 0 0 0 0 67,048 0 0 0 0 0 143,642 0 0 0 0 0 116,421 0 0 0 0 0 38,287 0 0 0 0 0 649,700

0 0 0 0 0 325,417 0 0 0 0 0 75,479 0 0 0 0 0 51,619 0 0 0 0 0 88,772 0 0 0 0 0 541,288

0 0 0 0 0 2,234,066 0 0 0 0 0 1,040,702

Tue Jun 22 1993

Page 22: SkyMall Monthly Financial Package

Full Dollar

Jan Feb Mar Fixed

Fixed Catalog Total Fixed Catalog Expenses 408,905 394,307 392,989

Fixed Peo_.e_le ExpenM• Total Fixed 162,872 148,175 146,318

F1ell1tl .. Expen ... Total Facllltles Exp-as 42,957 36,529 34,596

Total Administrative Expenses 76,194 109,361 78,377 Total Fixed Expenses 690,928 688,372 652,281

I Operatln_g_ Prof...!!1_Loa!l_ J_578,45ijl

Exp-e 36,864 37,633 37,538 Amortlzatlon_Elci>_ense 17,844 17,844 17,844 Interest Expense 1,377 1,121 778 Interest Income ]0,78Ql 14,466 Rental Income 15,103I }6,04fil] Other 0 0 0 Total Other (lncome)/Expense 40,201 50,174 63,831

Net Profltl(Lou) Before Taxes (618,660) (645,018) (383,483)

Copyright e 1993 SkyMall Inc. All Rights Reserved

SKYMALL, INC.· CONSOLIDATED PROFIT AND LOSS STATEMENT

1993ACTUAL

1993 Actual Aer May Jun Jul

440,102 456,992 0 0

156,969 175,340 0 0

40,601 37,099 0 0

80,168 110,160 0 0 717,840 779,592 0 0

lsa2,81olli 0 0

37,566 38,345 0 0 17,844 17,844 0 0 9,002 24,333 0 0

0 0 0 ]rn,16fr ]8001 0 0

0 0 0 (1,444,361) 79,722 0 0

861,546 (492,264) 0 0

CONFIDENTIAL & PROPRIETARY INFORMATION

S!!E_ Oct Nov Dec Full Year

0 0 0 0 0 2,093,295

0 0 0 0 0 789,674

0 0 0 0 0 191,783

0 0 0 0 0 454,260 0 0 0 0 0 3,529,012 0 0 0 0 0

0 0 0 0 0 187,946 0 0 0 0 0 89,219 0 0 0 0 0 36,611 0 0 0 0 0 2,642 0 0 0 0 0 J28,90.11 0 0 0 0 0 0 0 0 0 0 (1,210,431) 0 0 0 0 0 (1,277 ,879)

Tue Jun 22 1993

Page 23: SkyMall Monthly Financial Package

Full Dollar

Jan Feb Mar Fixed ExJ!!!IMI

Fixed cm!Oi ExJHtnee• 389,059 384,211 386,670

Fees 0 18,682 Partlc1Ji8nt Costs 0 0 0

Out.eatalOQs 19,846 18,778 16,319 Total Fixed 408,905 394,307 392,989

Fixed Peo_e_le Salarles-Clerlcal 0 0 0

9,281 8,077 7,769 Salarles-Merchandlsl1!9_ 11,741 11,832 11,192 Salaries-MIS 11,045 11,357 11,357 Salaries-Administrative 95,418 86,591 85,196 Em_e_Ben & Taxes - Fixed 31,084 28,459 23,428

Search, Adv., & Reio. 4,288 144 88 & Dev&iOPment 15 1,715 7,288

Total Fixed Peoj)le 162,872 148,175 146,318

Rental-Land & 10,203 12,330 11,531 2,435 3,744 3,429

Utllttlea 13,136 7,049 9,136 & 5,019 7,634 5,084 & 9,898 803 1,416

355 3,057 2,089 Business Insurance 1,912 1,912 1,912 Total FacllttlesEXP8nses 42,957 36,529 34,596

Administrative Expen-Advertlsll}g_ & Marketll}g_ 25,551 15,054 7,120 Leg_al & Accounting Fees 17,153 16,955 17,000

& Outside Prof. Fees 1,326 3,916 1,879 Te..!!e!lOlle-Admlnlstratlve 11,354 17,733 9,104 SU,.Ee!les-Offlce & Com...e_uter 3,295 5,528 7,758 Office Ex..E!!!_se 12,137 10,330 4,053 Admln. & EX?ress 4,217 6,730 10,322 Travel & Entertainment 17,483 13,144 Division Advances 0 0 0

Expense 0 0 0 5,372 15,633 7,997

Total Administrative 76,194 109,361 78,377

Copyright e 1993 SkyMall Inc. All Rights Reserved

SKYMALL, INC.· CONSOLIDATED PROFIT AND LOSS STATEMENT

1993ACTUAL

1993 Actual Mq_ Jun Jul

395,780 456,927 0 0 }57,ooo..lJ 0 0

91,667 41,667 0 0 10,164 15,398 0 0

440,102 456,992 0 0

0 0 0 0 7,769 9,712 0 0

13,192 13,990 0 0 11,357 14,196 0 0 93,720 107,078 0 0 27,535 29,778 0 0

0 322 0 0 3,395 264 0 0

156,969 175,340 0 0

9,858 10,388 0 0 1,865 4,235 0 0

11,435 4,596 0 0 7,251 5,205 0 0 6,195 7,222 0 0 2,085 2,229 0 0 1,912 3,223 0 0

40,601 37,099 0 0

6,804 22,694 0 0 12,861 9,000 0 0 6,177 10,698 0 0

14,389 17,410 0 0 8,187 5,685 0 0 8,837 3,862 0 0 6,062 7,223 0 0

10,881 16,885 0 0 0 0 0 0 0 0 0 0

5,970 16,703 0 0 80,168 110,160 0 0

CONFIDENTIAL & PROPRIETARY INFORMATION

Aug_ Sei>_ Oct Nov Dec Full Year

0 0 0 0 0 2,012,646 0 0 0 0 0 J:133,19IT 0 0 0 0 0 133,333 0 0 0 0 0 80,507 0 0 0 0 0 2,093,295

0 0 0 0 0 0 0 0 0 0 0 42,609 0 0 0 0 0 61,949 0 0 0 0 0 59,312 0 0 0 0 0 468,002 0 0 0 0 0 140,285 0 0 0 0 0 4,841 0 0 0 0 0 12,6n

0 0 0 0 0 789,674

0 0 0 0 0 54,309 0 0 0 0 0 15,708 0 0 0 0 0 45,352 0 0 0 0 0 30,193 0 0 0 0 0 25,535 0 0 0 0 0 9,816 0 0 0 0 0 10,871 0 0 0 0 0 191 783

0 0 0 0 0 77,223 0 0 0 0 0 72,969 0 0 0 0 0 23,996 0 0 0 0 0 69,991 0 0 0 0 0 30,452 0 0 0 0 0 39,219 0 0 0 0 0 34,554 0 0 0 0 0 54,181 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 51,675 0 0 0 0 0 454,260

Tue Jun 22 1993

Page 24: SkyMall Monthly Financial Package

SKVMALL, INC. - CONSOLIDATED BALANCE SHEET

1993 ACTUAL

May

1993 Plan Current Assets

Cash 891,300 Restricted Cash 61,900 Receivables-Charge Cards 564,400 Receivables-Other 50,000 Inventory 1,800,000 Prepaid Catalogs 800,000 Prepaid-Other 30,000 Total Current Assets 4,197,600

Fixed Assets Fixed Assets, at cost 3,750,000 Accumulated Depreciation (1, 134,000) Net Fixed Assets 2,616,000

Other Assets Other Assets 1,250,000 Accumulated Amortization (425,100) Net Other Assets 824,900

Total Assets 7,638,500 Current Liabilities

Accounts Payable 1,800,000 Sales Taxes Payable 208,300 Interest Payable 29,700 Other Accrued Liabilities 400,000 Capital Leases-Current Portion 45,000 Notes Payable-Current Portion ' 10,000 Notes Payable-Other 0 Total Current Liabilities 2,493,000

Long-Term Liabilities Capital Leases-LT: Portion 0 Notes Payable-LT. Portion 35,000 Long-Term Debt 4,000,000 Total Long-Term Liabilities 4,035,000

Total Liabilities 6,528,000 Shareholders' Equity

Capital Stock 0 Additional Paid-in-Capital 17,933,200 Retained Earnings

Beginning Retained Eamings/(Deficit) (16,742,500) Net ProfiV(Loss) for the Period (80,200) Ending Retained Eamings/(Deficit) (16,822, 700)

Total Shareholders' Equity 1,110,500 Total Liab. & Shareholders' Equity 7,638,500

1993 Actual

(119,140) 61,900

588,721 144,621

1,206,667 1,193,654

66,347 3,142,770

3,738,627 (1,131,402) 2,607,226

1,244,045 (424,286) 819,759

6,569,755

2,416,917 152,441 24,761

426,316 26,705 11,446

3,058,586

35,591 3,750,000 3,785,591 6,844,177

0 16,433,248

(16,215,406) (492,264)

(16,707,670) (274,422)

6,569,755

Copyright© 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION Tue Jun 22 1993

Page 25: SkyMall Monthly Financial Package

Current Assets Cash Restricted Cash Receivables-Charge Cards Receivables-Other Inventory Prepaid Catalogs Prepaid-Other Total Current Assets

Fixed Assets Fixed Assets, at cost Accumulated Depreciation Net Fixed Assets

Other Assets Other Assets Accumulated Amortization Net Other Assets

Total Assets Current Liabilities

Accounts Payable Sales Taxes Payable Interest Payable Other Accrued Liabilities Capital Leases-Current Portion Notes Payable-Current Portion Notes Payable-Other Total Current Liabilities

Long-Term Liabilities Capital Leases-LT. Portion Notes Payable-LT. Portion Long-Term Debt Total LonQ-'. Term Liabilities

Total Liabilities Shareholders' Equity

Capital Stock Additional Paid-in-Capital Retained Earnings

SKVMALL, - CONSOLIDATED CALENDARIZED BALANCE SHEET

1993

1993 Actual Jan Feb Mar

429,171 176,893 (16,124) 61,900 61,900 61,900

368,897 78,859 200,348 62,887 84,419 120,065

1,961,368 1,395,696 916,501 1,239,548 1:;.n,898 1,148,069

4,640 14,050 22,852 4,128,411 3,089,715 2,453,611

3,678,333 3,695,285 3,702,868 (980,319) (1,017,953) (1,055,491)

2,698,014 2,6n,332 2,647,3n

1,245,493 1,240,494 1,244,103 (352,910) (370,755) (388,598) 892,583 869,739 855,505

7,719,008 6,636,786 5,956,493

5,012,414 4,751,300 4,484,467 137,140 134, 188 159,308

3,612 3,612 3,176 583,170 416,045 367,363

47,142 42,041 36,985 11,446 11,446 11,446

0 0 5,794,924 5,358,633 5,062,745

0 0 0 39,285 38,373 37,453

0 0 0 39,285 38,373 37,453

5,834,209 5,397,006 5,100,198

0 0 0 17,933,248 17,933,248 17,933,248

Beginning Retained Eamings/(Deficit) (15,429,791) (16,048,451) (16,693,469) Net ProfiV(Loss) for the Period (618,660) (645,018) (383,483) Ending Retained Earnings/(Deficit) (16,048,451) (16,693,469) (17,076,952)

Total Shareholders' Equity 1,884,797 1,239,n9 856,296 Total Liab. & Shareholders' Equity 7,719,006 6,636,785 5,956,494

Apr May

(796,434) (119,140) 61,900 61,900

193,552 588,721 129,858 144,621

1,304,544 1,206,667 1,414,556 1,193,654

73,310 66,347 2,381,286 3,142,no

3,728,594 3,738,627 (1,093,056) (1,131,402) 2,635,537 2,607,226

1,244,045 1,244,045 (406,442) (424,286) 837,603 819,759

5,854,426 6,569,755

1,992,381 2,416,917 115,284 152,441

11,190 24,761 437,886 426,316

31,873 26,705 11,446 11,446

2,600,060 3,058,586

36,526 35,591 3,000,000 3,750,000 3,036,526 3,785,591 5,636,586 6,844,1n

0 0 16,433,248 16,433,248

(17,076,952) (16,215,406) 861,546 (492,264)

(16,215,406) (16,707,670) 217,842 (274,422)

5,854,428 6,569,755

Copyright © 1993 SkyMall, Inc. All Rights Reserved INFORMATION

CONFIDENTIAL AND PROPRIETARY Tue Jun 22 1993

Page 26: SkyMall Monthly Financial Package

SKYMALL, INC. - CONSOLIDATED CASH FLOW STATEMENT

1993 ACTUAL

May

1993 Plan

Beginning Cash Balance 740,100 Sources of Cash

lncr/(Decr) in Accounts Payable 300,000 lncr/(Decr) in Sales Taxes Payable 3,000 lncr/(Decr) in Interest Payable 0 lncr/(Decr) in Other Accrued Liab. 0 lncr/(Decr) in Capital Leases 0 lncr/(Decr) in Notes Payable (1,000) lncr/(Decr) in Long-Term Debt 0 lncr/(Decr) in Capital Stock/Adcl'I PIC 0 Total Sources of Cash ·- 302,000

(Uses) of Cash Net Profit/(Loss) (80,200) less- Depree. & Amortiz. Expense 56,700 (lncr)/Decr in Restricted Cash 0 (lncr)/Decr in Recvbls-Charge Card (9,300) (lncr)/Decr in Recvbls-Other 0 (lncr)/Decr in Inventory 100,000 (lncr)/Decr in Prepaid Catalogs (200,000) (lncr)/Decr in Prepaid-Other 0 (lncr)/Decr in Fixed Assets (18,000) (lncr)/Decr in Other Assets 0 Total Uses of Cash (150,800)

Net Cash Flow ' 151,200 Ending Cash Balance 891,300

Actual Loan Covenants Net Working Capital (Ex. Banc One Note) Shareholders' Equity (Minimum) Equity to Assets Ratio (Minimum) Debt to Equity Ratio EBITDA

Target Loan Covenants (6/30193) Net Working Capital (Ex. Banc One Note)1 Shareholders' Equity (Minimum) Equity to Assets Ratio (Minimum) Debt to Equity Ratio EBITDA

1993 Actual

(796,431)

424,536 37,157 13,572

(11,570) (5,168)

(935) 750,000

0 1,207,591

(492,264) 56,189

0 (395,169) (14,762) 97,8n

220,902 6,963

(10,034) 0

(530,299) 677,293 (119,139)

84,183 (274,422)

-4.2% -24.94

(412,542)

1,071,500 571,500

0 12

(23,700)

Copyright© 1993 SkyMall, Inc. All Rights Reserved CONFIDENTIAL AND PROPRIETARY INFORMATION Tue Jun 22 1993