Service Request for Riordan Manufacturing (Virtual Company)

sales_marketing_-_riordan_9.zip

This paper is a group project and is split up within 5 parts (Global Systems, Interorganizational Systems, Enterprise Systems, Functional & Management Information Systems, and Transaction Processing, Personal and Productivity Systems) and assuming that this paper will be presented to an executive management committee. My part is Interorganizational Systems. The paper must include the following: Each type of business system and subsystem, description of each business system and subsystem, and identification of the interrelationships of business systems and subsystems.

Sales_Marketing_-_Riordan_9 x

Sales & Marketing

The firm is attempting to consolidate customer information to deliver better value to the customer. The firm has historical records in many disparate databases, as well as in paper files and microfiche. Below is a listing of information the firm has available to consolidate into a CRM system.
Historical Sales
Riordan has a system to track historical sales. In the past, most sales data was recorded using paper and pencil. In the last few years, the firm has managed the information electronically. Information available includes the following:
· Dates including order, delivery, and payment dates by order.
· Unit and dollar volume of each product including plastic bottles, fans, heart valves, medical stents, and custom plastic parts rolled up to be examined by product group and customer.
· Sales by customer to include price paid, cost, margin, and discount given.

Files of Past Marketing Research, Marketing Plans, and Design Awards
The marketing organization wants to build on past knowledge. As a result, past marketing plans and results from past market research studies are stored in a file cabinet in the marketing department. The firm has a showcase in the lobby to display the various design awards earned. The firm is assessing the possibility of hiring a part-time college student to scan the documents electronically.

Sales Database
The company has 15 – 20 major customers, including a government contract for fans. The firm has 12 minor customers. Each member of the sales force maintains his/her own set of customer records using a variety of tools. Some sales team members use paper and pencil, others sales management software such as Act, and others a hybrid. In order to better understand and anticipate customer needs, the firm is evaluating a new integrated customer management system to accompany the new team selling approach that will be soon rolled out.

Production Records
The production plan maintains records of the number of units produced of each item by shift, which can be rolled up to the product group and year.

Profit and Loss Statements by Item and Group
The marketing department, with the support of the finance and production departments, maintains profit and loss statements, by item and by group.

Marketing Budget
The firm has historical and current annual budget allocations for marketing communications and marketing research.
Marketing Communications activities include:
· Sales force promotions
· Price / volume discounts to key accounts
· Public relations
· Brand development
· Tradeshows, events, and sponsorships
· Customer user group underwriting
· Literature and other collateral material

Marketing Research expenditures include:
· Market size / opportunity studies
· Customer focus groups
· Brand development research

Marketing Budget Anticipated Results
Two year plan to reach the $50 million revenue mark. This objective was developed collaboratively with Dr. Riordan along with the executive team. It incorporates the input of the line managers closest to the day-to-day operations. The objective will be achieved through:
· Increased sales to existing customers by increasing sales force promotions, price discounts, and customer user group services.
· Expanded sales to new customers by implementing public relations activities, trade shows, brand development and sales force promotions.

Sales & Marketing

Sales Plan – Riordan Manufacturing – 2006

The purpose of this sales plan is to help the sales organization prioritize activities and resources for 2006 in an effort to meet or exceed the stated sales objectives.
Our two year plan to reach the $50 million revenue mark.
This objective was developed collaboratively with Dr. Riordan along with the executive team. It incorporates the input of the line managers closest to the day-to-day operations. This means we need to be moving toward that objective this year, laying the groundwork and achieving results.
The $50 million goal will be achieved through:
· Increased sales to existing customers by increasing sales force promotions, price discounts, and customer user group services.
· Expanded sales to new customers by implementing public relations activities, trade shows, brand development and sales force promotions.

Riordan Manufacturing- Sales Plan 2006
Theme: Reaching the $50 Million Mark!

· Increased Sales to Existing Customers
· Expanded Sales to New Customers

Part 1: Strategic sales objectives with corresponding financial goals and roll-out schedules

Increased Sales to Existing Customers

Existing customers are expected to account for 60% of the incremental sales that will get us to our $50 million mark by the end of 2007. Therefore, we must take a consultative sales approach to understanding the current needs and anticipate and influence the future needs of our customers. Our plan is to work with customers before they release RFPs, so that they are developed around the products, services, and solutions we offer.

Quarter

Activity

1Q2006

· Complete customer information system training.
· Input customer information into new system and use it to document customer needs assessment.
· Top 20 Large Accounts – complete needs assessment and develop sales growth plan.
· Sponsor and coordinate industry specific user group meetings.

2Q2006

· 12 Small to Mid-Size Accounts – complete needs assessment and develop sales growth plan.
· Large Accounts – RFP updates.
· All accounts – Profit margin reports and improvement plans.

3Q2006

· Small and Mid-Size Accounts – RFP updates.
· Active support of the new services solutions development.

4Q2006

· Customer needs action plans due.

Expanded Sales to New Customers

We expect 40% of the incremental sales to help us to our $50 million mark will be through sales to new customers. We will reach new customers by attending tradeshows and leveraging market research reports. It is important to input all new information into the new system.

Quarter

Goals

1Q2006

· Each sales team ember should attend 6 tradeshows in a new industry or segment. The firm should not have been previously represented in the segment. An expenditure justification report should be submitted before committing to the event. Scan key contacts in the new system.

2Q2006

· Attend 3 – 6 tradeshows in a new industry or segment. Scan key contacts into the new system.
· Complete 9 sales calls on new customers.
· Sign 2 new customers with first orders over $50,000.

3Q2006

· Attend 3 – 6 tradeshows in a new industry or segment. Scan key contacts into the new system.
· Complete 9 sales calls on new customers.
· Sign 2 new customers with first orders over $50,000.

4Q2006

· Attend 3 – 6 tradeshows in a new industry or segment. Scan key contacts into the new system.
· Complete 9 sales calls on new customers.
· Sign 2 new customers with first orders over $50,000.

Part 2: Tactics by marketing mix, timing, and relationship to strategic sales objectives

Product

Marketing and product development are committed to developing products and value added services to help us compete to win bids. If you find that you need a specific service or product to gain a new customer, bring it to the attention of your management. We will assess whether the new service is feasible and in line with our positioning and objectives and act accordingly.

Pricing

Our pricing strategy will remain the same as in previous years, a cost-plus method. However, sales managers now have more leverage when working with customers and can assign discounts to customers without approval of headquarters provided the sale still meets the minimum profit margins.

Promotions

Sales Team Promotions:
Employees reporting under the sales group are eligible for the sales bonus program if all goals and initiatives for existing customers are successfully completed in the given quarter. For every new customer added that spends $100,000 in their first order, the sales manager will receive a $5000 bonus, plus an additional $2000 to allocate to any supporting team members. There is no upper limit to the number of $7000 ($5000 + $2000) incentives that one can obtain.

Customer Promotions:
Customers will be excited about our promotion to buy 100 cases of the same item and get 5 cases for free. We encourage you to use this promotion, as it is outside of the minimum profit margin requirement and can help us reach our revenue targets.

Place (expansion, emphasis on locations or customer regions)

We are in the process of completing a comprehensive market study which will be available early 2Q2006. Based upon that plan, we will have better direction regarding with industries, segments, and geographies provide the best opportunities for growth.

Part 3: Customer Relationship Management Strategies

This year, we want to strengthen our relationship with our existing customers. The new sales information system will help us better understand our customers’ needs so that we can shape products and solutions to respond to those needs. This can only work with your help. Part of your annual assessment will reflect the extent to which you support and use the new system.
In addition, we are shaping and nurturing relationships with new customers. We need every member of our team to get out there and connect with new customer segments. We are providing resources such as financial incentives, tradeshow funding, and market research reports to support your effort.

Sales & Marketing

Download Microsoft Excel™ version of Customer List

Customer List – 2005

Name

Address

City

State / Providence

Postal Zone

Country

Telephone No.

Cust. No.

Alexander & Sons – Importers/Exporters

Shvernik Street, 27 building 6

Moscow

117449

Russia

8 (926) 568-01

2004008

Antunes Medical Supply Distributing

1000 Rama 9 Sol 55, Rama 9 Road, Suan Luang

Bangkok

10250

Thailand

02-659-90001

1997080

Armijo Pharmaceuticals Ltd.

301 Barrack Road

Mumbai

400 020

India

22 666-5336

1990010

Bejarano Electronic Bulk Materials

No.3310, South BaiYun Avenue

GuangZhou

GuangDong

510405

China

86-20-8618772

2000025

Benedek Wholesale Goods

Avenida Euclides Figueiredo, 2525

São Luís

65076-820

Brazil

98-400-4200

1997032

Borze Medical Device Supply

Avenida Nossa Senhora das Gracas, 369

Sao Paulo

Diadema

09980-000

Brazil

11 306-9223

2003005

Bottomley Sundry Supply Company

4257 Trafford Wharf Road

Manchester

M17 1TE

United Kingdom

44-16-836-400

1995066

Bradley Beverage Group, Ltd.

635 Eastern Ave.

Toronto

Ontario

M4M 2V6

Canada

416-555-0189

2005062

Carver Creative Storage Solutions, Inc.

201 S. Erie St.

Toledo

43604

United States

419-555-0153

1993024

Davis Springs

2751 W. Main St.

Bozeman

59718

United States

406-555-0165

2002043

Drotos Manufacturing

No. 77, Lane 215, GongYuán Rd.

Hsinchu City

300

Taiwan

03-561-62779

2001062

Eichling Großhandel Medizinische Geräte

Glienicker Weg 335

Berlin

Deutschland

12489

Germany

49 30 2389

2002786

Gibb Production Company, Inc.

816 W. Las Vegas St.

Colorado Springs

Colorado

80903

United States

719-555-0191

1997055

Holloway & Associates

No. 341, Lane 286, Gongxue Road

Tainan City

709

Taiwan

06-221-99669

2004009

Iyer Manufacturing and Assembly

27-6 Songdo-dong

Incheon

Yeonsugu

South Korea

32-835-10008

2005001

Kilgore Wholesale Electronic Supplies

65094 Airport Way S.

Seattle

98108

United States

206-555-0190

1992001

Knuth Company

Building 210 Shidongxia Road

Foshan

GuangDong

528000

China

86-757-8801680

2005001

Kubli Medical Technologies

F,6 Hongcheng Road

Nanchang

Jiangxi

330002

China

07-91-611111

2004087

Lamer Wholesale Cosmetic Supplies

1530 Saline St.

Kansas City

64116

United States

816-555-0147

1998021

Loehr’s Wholesale Supply Co.

Via di Mascherona, 45

Genova

16123

Italy

010-86-0263

2002013

Machuca Electric Supplies

5134 Nanhu Road

Shenzhen

518001

China

86-755-8336528

2000037

Moksvold Family Investment Trust

1200 Ute Ave.

Aspen

81611

United States

970-555-0168

2005004

Palmer Organic Wines

9048 Brooks Road South, PMB 1006

Windsor

95492

United States

707-555-0101

2005005

Sherman Scientific

46765 S. 102 Street, Suite 350

Omaha

68127

United States

402-555-0187

1995001

Smith Systems Consulting

801 Jefferson Ave.

Houston

77002

United States

713-555-0199

2005006

Stanley Juice Company

8560 SW US Hwy 27

Fort White

32038

United States

386-555-0162

2005007

Taylor Group

251 Mercer Street, Suite 450

New York

10012

United States

212-555-0134

2005021

Thorton Toy Emporium, Inc.

1501 Mitchell St.

Fayetteville

72701

United States

479-555-0123

2005008

Yilmaz Wholesale Supply

430-0946 Naka-ku Hamamatsu 109-18

Hamamatsu City

Shizuoka

109-18

Japan

53-459-01119

2000067

Sales & Marketing

Product Catalog – 2005

Item Number

Description

Cost

Price

1010001

Cooling Fan 120mm

$8.27

$10.00

1010002

Cooling Fan 250mm

$10.34

$12.50

1010003

Cooling Fan 80mm

$6.20

$7.50

1010004

Cooling Fan 140mm

$3.31

$4.00

1010005

Cooling Fan 92mm

$5.38

$6.50

1010006

Cooling Fan 360mm

$14.47

$17.50

1020001

Desk Fan 100mm

$8.27

$10.00

1020002

Desk Fan 180mm

$10.75

$13.00

1020003

Desk Fan 300mm

$12.41

$15.00

1020004

Desk Fan 400mm

$10.34

$12.50

1030001

Personal Fan 25mm

$4.96

$6.00

1040001

Window Fan

$16.54

$20.00

2010001

Coronary Stent

$136.91

$165.55

2020001

Ureteral Stent

$107.01

$129.40

2030001

Prostatic Stent

$103.63

$125.31

2040001

Vascular Stent

$98.04

$118.55

3010001

Opaque Bottle w/ embossed logo (Custom) 12oz

$0.54

$0.65

3010002

Opaque Bottle w/ embossed logo (Custom) 6oz

$0.27

$0.33

3010003

Opaque Bottle w/ embossed logo (Custom) 3oz

$0.14

$0.17

3020001

Clear Plastic Bottle (Custom) 1 liter

$0.30

$0.36

3020002

Clear Plastic Bottle (Custom) 0.5 liter

$0.23

$0.28

3030001

Pyramid Bottle (Custom) 680ml

$0.36

$0.44

3040001

Clear Plastic Bottle (Custom) 1 liter

$0.30

$0.36

3040002

Clear Plastic Bottle (Custom) 0.5 liter

$0.23

$0.28

4010001

White Bottle w/ Screw Lid 1oz

$0.04

$0.05

4010002

White Bottle w/ Screw Lid 3oz

$0.12

$0.15

4010003

White Bottle w/ Screw Lid 6oz

$0.25

$0.30

4010004

White Bottle w/ Screw Lid 8oz

$0.33

$0.40

4020001

Pink Bottle w/ Screw Lid 1oz

$0.04

$0.05

4020002

Pink Bottle w/ Screw Lid 3oz

$0.12

$0.15

4020003

Pink Bottle w/ Screw Lid 6oz

$0.25

$0.30

4020004

Pink Bottle w/ Screw Lid 8oz

$0.33

$0.40

4030001

Blue Bottle w/ Screw Lid 1oz

$0.04

$0.05

4030002

Blue Bottle w/ Screw Lid 3oz

$0.12

$0.15

4030003

Blue Bottle w/ Screw Lid 6oz

$0.25

$0.30

4030004

Blue Bottle w/ Screw Lid 8oz

$0.33

$0.40

5010001

Storage Container w/ lid (Custom) 1qt

$0.25

$0.30

5010002

Storage Container w/ lid (Custom) 0.5qt

$0.12

$0.15

5010003

Storage Container w/ lid (Custom) 0.25qt

$0.07

$0.08

6010001

Prototype Fabrication – Expenses

6010002

Prototype Fabrication – Set Up Fee

Legal_-_Riordan_0

Legal

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Corporate Governance Plan

Lowell Bradford, Chief Legal Counsel, oversees all legal matters for Riordan Manufacturing. All contracts have to be approved by Mr. Bradford before they can be signed. Department heads forward all legal questions to Mr. Bradford who answers them from his personal knowledge and experience or after consulting with the attorneys at Litteral & Finkel, the law firm retained by Riordan Manufacturing.

Mr. Bradford and Rick Ethridge handle all the company’s patent applications. Litigation, tax issues and real estate matters are referred to Litteral & Finkel, but closely supervised by Mr. Bradford. Per Mr. Bradford’s instructions, all communications between Litteral & Finkel pass through Mr. Bradford’s office.

Litteral & Finkel have been representing Riordan Manufacturing since its inception. Dr. Riordan’s cousin was a partner in the firm and the close relationship between the two firms has continued even though Dr. Riordan’s cousin passed away eight years ago. Riordan Manufacturing pays Litteral & Finkel a monthly retainer to assure prompt response to any legal inquiries. If legal matters arise, legal fees are charged against the retainer. If the amount of the month’s legal fees exceeds the retainer, excess charges are billed to Riordan Manufacturing at the end of the month. Unused retainer amounts are not carried forward.

Litteral & Finkel is a large international law firm that practices in all areas of the law. The firm has offices in a number of cities including:

· San Jose, CA

· Los Angeles, CA

· New York, NY

· Chicago, IL

· Atlanta, GA

· Detroit, MI

· Washington, D.C.

· Cleveland, OH

· Mexico City, Mexico

· London, United Kingdom

· Paris, France

· Geneva, Switzerland

· George Town, Grand Cayman

· Sydney, Australia

· Perth, Australia

· Dublin, Ireland

· Tokyo, Japan

· Seoul, South Korea

· Kuwait, Kuwait

· Doha, Qatar

· Moscow, Russia

Litteral & Finkel has provided Riordan Manufacturing with legal services in the areas of tax law, real estate transactions, employment law, immigration matters, civil litigation, workers compensation, labor law, and customs regulations. With its vast resources, Litteral & Finkel can immediately provide a team of attorneys, paralegals and clerks to any legal issue that confronts Riordan Manufacturing. With its international network, it can send attorneys from its closest offices and within a few hours be on the scene to provide legal advice anywhere in the world.

Legal

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Overview
|
Communications
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Corporate Governance Plan

Corporate Governance Policies

Selection of Board

Board Leadership Roles

Board Composition and Performance Criteria

Board Meeting Etiquette and Proceedings

Committee Matters and Membership

Board Responsibility to Operations and Financial Activities

Download PDF copy of Governance Plan

Corporate Governance Policies

The Riordan Manufacturing Board of Directors carries the responsibility of overall management of business affairs of the Company in accordance with state corporation requirements, the Articles of Incorporation, and its By-Laws. The encompassing role of the board is to govern and manage the affairs of the Company for the benefit of shareholders. The Board endeavors to faithfully fulfill its obligations through oversight of quality management personnel who carry out the daily activities on behalf of the Board of Directors of Riordan.
Top

Selection of Board

1. Criteria for Board Membership
The Board shall maintain a Nominating Committee with responsibility to review the skills and characteristics of the members of the Board. Those attributes sought in retaining and adding members of the Board will include industry knowledge, financial literacy, availability to participate, and commitment to act in the capacity of a Board member of Riordan.

2. Director Independence
The Company shall engage a majority of Board members independent of current management of Riordan, as stipulated through standards set out by regulation. The Nominating Committee will review the relationship of each Director to the company on a regular basis.

3. The Board will have the responsibility to select new members to its body. The Board, under the supervision of the Nominating Committee, will be responsible to recommend new members. New Board members will be provided with information concerning the Company and be given access to senior management in an effort to orient them to their new position on the Board.
Top

Board Leadership Roles

1. Selection of Board Chairman and CEO
The Board may designate as its Chief Executive Officer any current officer of the Company. The Chairman of the Board of Directors may be designated from any current seated member of the Board, including the Chief Executive Officer, if also a member of the Board of Directors.
Top

Board Composition and Performance Criteria

1. Size of Board
The size of the Board shall be no larger than necessary to manage the operations of the Company. The Board shall, from time to time, assess the number of Directors and overall size in relationship to Company operations and size.

2. Assessing Board Performance
The Nominating Committee shall assist the Board in carrying out a self-assessment of performance. The Nominating Committee, along with the Auditing Committee, shall compile performance reviews to present to the full Board for the purpose of evaluating overall performance and effectiveness of Board activities.

3. Resignation or Removal
A Director may, for personal or other reasons, such as a conflict of interest, submit his or her resignation to the Chairman of the Board. The full Board may accept or reject the tendered resignation based on the best interests of the Company. For just cause, the Board, assisted by the Nominating Committee, may request and/or vote on an approved request for removal of a Board member.

4. Board Compensation
Company Human Resources staff will provide an annual review of Corporate Board compensation. The report will provide the basis for proposed compensation of Board members, based on the recommendation of the Chairman of the Board.
Top

Board Meeting Etiquette and Proceedings

1. Board Member Attendance
All Board members are expected to be present at a minimum of three quarters of the regularly scheduled meetings in a calendar year. Absences should be reported to the Board Secretary in advance, when possible, to allow the Board to disseminate Board business to the absentee member.

2. Selection of Agenda Items
The Chairman of the Board will establish the agenda, based on advance submission of requested items from other Board members or the Chief Executive Officer of the Company.

3. Distribution of Board Materials
Information pertaining to the agenda items for the upcoming Board meeting will be distributed to Board members, when feasible, three days prior to the Board meeting date. All reports, financial or otherwise, and any presentations should be included in the Board Meeting Package and distributed on behalf of the Board Secretary.
Top

Committee Matters and Membership

1. Committees will be established to support overall Board operations. A minimum of the following committees will be established and maintained during the life of the Company: Executive, Auditing, and Nominating. Other committees may be created by recommendation of the Chairman of the Board and approval by the full Board.

2. Committee Membership
All committee members will be appointed by the Chairman of the Board with approval of the full Board. The Nominating Committee shall solicit membership from the full Board, based on desired participation of individual Board members.

3. Committee Meeting Frequency and Participation
Frequency of committee meetings, length, and agenda will be the responsibility of the Committee Chairman, as elected by the seated Committee membership. Committee members are expected to participate in committee meetings as often as possible. The Committee Chairman is responsible for distributing materials to committee members prior to the meeting date and reporting committee findings and recommendations to the full Company Board through the Chairman of the Board.
Top

Board Responsibility to Operations and Financial Activities

The Board of Directors designates its authority to operate the Company to senior management and Company staff, passing to them the responsibility to carry out Board policies and report back activity. The Board of Directors holds the ultimate fiduciary responsibility of managing affairs through its designated senior managers, with the right to remove senior management when it is in the best interests of the Company and its shareholders. The daily activity of operations shall by governed by departments through the development of a Departmental Governance Plan.

Human_Resources_-_Riordan_1

Human Resources

Organizational Charts

Job Classifications

Job Descriptions

Policies & Procedures

HRIS

EEOC Reports

Work Force Demographics

Employees

Employee Files

Reports

Communications

Employee Handbook

Executive
Senior V.P. – R & D

– Staff Information

Chief Operating Officer

– V.P. Transportation

– V.P. Sales & Marketing

– Chief Financial Officer

– Dir. of Acct. & Finance

– Dir. of HR

– Chief Legal Counsel

– V.P. Product Support

– V.P. Operations

– Dir. Plant Ops.: Pontiac

– Dir. Plant Ops.: Albany

– V.P. International Operations

– Chief Information Officer

Human Resources

Organizational Charts

Job Classifications

Job Descriptions

Policies & Procedures

HRIS

EEOC Reports

Work Force Demographics

Employees

Employee Files

Reports

Communications

Employee Handbook

Job Titles & Locations

# of Incumbants

EEO Class

FLSA Status

Pay Band

Corporate

Pontiac, MI

Albany, GA

Joint Venture, China

Tele-commute

President & CEO

Executive

Executive Asst.

Professional

SVP R & D

Executive

Executive Asst.

Professional

Mgr. – Product Development

Manager

Materials Engineers

Professional

Packaging Engineers

Professional

Development Engineers

Professional

Administrative Asst.

Administration

CAD Operators

Technician

Mgr. – Research

Manager

Research Program Manager

Professional

Chief Operating Officer

Executive

Executive Asst.

Professional

VP Transportation

Executive

Administrative Asst.

Administration

Mgr. – Logistics

Manager

Logistics Planner

Professional

Transportation Manager

Manager

VP Sales & Mktg.

Executive

Executive Asst.

Professional

Director of Sales, Custom Plastic

Executive

Sales Asst.

Administration

Sales Representative

Sales

Director of Sales, Plastic Beverages

Executive

Sales Asst.

Administration

Sales Representative

Sales

Director of Sales, Fans

Executive

Sales Asst.

Administration

Sales Representative

Sales

Director of Sales, International

Executive

Sales Asst.

Administration

Int’l. Sales Reps are contract mfg. reps

N/A

Marketing Manager

Manager

Administrative Asst.

Administration

Market Analyst

Professional

Product Specialist

Professional

Chief Financial Officer

Executive

Executive Asst.

Professional

Director of Human Resources

Executive

Recruiter — Professional Staff

Professional

Compensation & Benefits Manager

Manager

Compensation Analyst

Professional

Benefits management is outsourced

Training & Development Specialist

Professional

Employee Relations Manager

Manager

Employee Relations Specialist

Professional

Payroll Manager

Manager

Payroll and Tax Clerk

Administration

Safety Manager

Manager

Safety Technician

Technician

Director of Accounting & Finance — Corporate Controller

Executive

Cost Accountant

Professional

General Accounting Supervisor

Manager

Accounts Receivable Clerk

Administration

Accounts Payable Clerk

Administration

General Accountant

Professional

Credit Manager

Manager

Credit Analyst

Professional

Tax Accountant

Professional

Audit is outsourced to a third party firm

Financial Planning Manager

Manager

Financial Planner/Budget Specialist

Professional

Chief Legal Counsel

Executive

Administrative Asst.

Administration

Patent Specialist

Professional

VP Product Support

Executive

Customer Service Representative

Professional

Warranty Service Technician

Technician

VP Operations

Executive

Director, Plant Operations (Albany)

Executive

Assistant Plant Manager

Manager

Production Control Technician

Technician

Recruiter – Hourly Employees

Professional

Team Superintendent

Manager

Production Employee

Production

Shipping Employee

Production

Transportation Coordinator

Administration

Logistics Coordinator

Administration

Manufacturing Engineer

Professional

Director, Plant Operations (Pontiac)

Executive

Assistant Plant Manager

Manager

Production Control Technician

Technician

Recruiter – Hourly Employees

Professional

Team Superintendent

Manager

Production Employee

Production

Shipping Employee

Production

Transportation Coordinator

Administration

Logistics Coordinator

Administration

Manufacturing Engineer

Professional

Purchasing Manager

Manager

Purchasing Agent

Professional

Quality Manager

Manager

Administrative Asst.

Administration

VP International Operations

Executive

Administrative Asst.

Administration

Director, Plant Operations (China) – Expatriate

Assistant Plant Manager (host country national)

Production Supervisor

All other production employees

238

Chief Information Officer

Executive

Administrative Asst.

Administration

Manager IT Services, San Jose

Manager

Network Administrator

Professional

Programmer Analyst

Professional

Database Analyst

Professional

CAD/CAM Support Specialist

Technician

Web Support Specialist

Technician

Telecommunications Specialist

Professional

Manager IT Services, Field

Manager

Network Administrator

Professional

Programmer Analyst

Professional

Database Analyst

Professional

CAM Support Specialist

Technician

Manager IT Services, China (host country national)

Staff is contract

Total Employees

113

130

249

Note: Employees located in China are not considered for EEO purposes

Human Resources

Organizational Charts

Job Classifications

Job Descriptions

Policies & Procedures

HRIS

EEOC Reports

Work Force Demographics

Employees

Employee Files

Reports

Communications

Employee Handbook

Job Title

Description

Education and/or experience required

Accounts Payable Clerk

Compiles, classifies, records, verifies and maintains data and payments to vendors.

Must have high school diploma and excellent math skills. Good attention to detail is required as well.

Accounts Receivable Clerk

Compiles, classifies, records, verifies and maintains data and payments from customers.

Must have high school diploma and excellent math skills. Good attention to detail is required as well.

Administrative Assistant

Provides administrative support (copying, word processing, scheduling, etc.) for one or more managers.

Must have high school diploma and skilled at word processing, use of spreadsheets and calendaring software.

Assistant Plant Manager

Assists the plant director with day-to-day operations. Supervises teams of production workers, reviews daily and weekly schedules, ensures that all production targets are met. Troubleshoots as necessary.

Bachelor’s degree with experience in all areas of production preferred.

CAD Operator

Work with CAD systems creating, modifying and releasing drawings and word drawings under direct supervision of a supervisor for use by other departments and customers.

Degree from a recognized CAD training facility and 2 years experience, or 4 to 6 years experience in CAD systems.

CAD/CAM Support Specialist

Work with CAD systems creating, modifying and releasing drawings and word drawings under direct supervision of a supervisor for use by other departments and customers. In addition, support computer-aided manufacturing processes as they are designed.

Degree from a recognized CAD training facility and 2 years experience, or 4 to 6 years experience in CAD systems.

CAM Support Specialist

Support computer-aided manufacturing processes within assigned plant. Provide technical assistance to computer system users. Answer questions or resolve computer problems for clients in person, via telephone or from remote location. May provide assistance concerning the use of computer hardware and software.

Degree from a recognized CAM training program and 2 years experience, or 4 to 6 years experience in CAD systems.

Chief Financial Officer

Direct the accounting, finance and Human Resources functions toward achievement of the company’s key results while upholding company values.

Requires MBA or CPA and 5-7 years experience.

Chief Information Officer

Chief IS/IT officer of organization. Develops strategy for information systems department based on long term corporate goals.

Requires BS and 5 – 7 years experience. Masters degree highly desirable.

Chief Legal Counsel

Advises corporation concerning legal rights, obligations and privileges.

Requires current law license in California and 5 – 7 years experience in corporate law.

Chief Operating Officer

Directs, administers and coordinates the activities of the organization in support of policies, goals and objectives established by the chief executive officer and the Board of Directors.

Requires MBA or MM and 5 – 7 years experience.

Compensation & Benefits Manager

Determine overall compensation and benefits philosophy for the organization. Supervise compensation analyst as well as third party provider of benefit services.

Requires MBA or MM and 5 – 7 years experience. Certification in HR or Compensation highly preferable.

Compensation Analyst

Assists in the development and administration of employee salary administration programs by performing job analysis, conducting and analyzing salary surveys and assisting managers in writing legally compliant job descriptions.

Requires bachelor’s degree and 3 – 5 years experience. Certification in Compensation is highly preferable.

Cost Accountant

Applies principles of cost accounting to conduct studies which provide detailed cost information not supplied by general accounting systems.

Requires bachelor’s degree in accounting, with a CPA, CMA or MBA strongly preferred.

Credit Analyst

Analyzes credit data to estimate degree of risk involved in extending credit or lending money to firms.

Requires bachelor’s degree in accounting.

Credit Manager

Directs and coordinates activities of workers engaged in conducting credit investigations and collecting delinquent accounts of customers.

Bachelors’ degree in finance or accounting with 3 – 5 years related experience.

Customer Service Representative

Interviews customers and records interview information into computer for customer service.

Bachelors’ degree preferred.

Database Analyst

Designs logical and physical databases and coordinates database development.

Requires 2 – 4 years relevant professional experience or equivalent combination of education and experience.

Development Engineer

Designs and develops new products and product improvements.

Requires bachelors’ degree in mechanical or materials engineering.

Director of Accounting & Finance – Corporate Controller

Directs financial activities of an organization.

Requires bachelors’ degree in accounting or finance, along with CPA, CMA, or CPA certification, 5 – 7 years of experience are also required.

Director of Human Resources

Develops policy and directs and coordinates human resources activities, such as employment, compensation, labor relations, benefits, training and employee services.

Requires bachelors’ degree. MBA or MM preferred, along with professional HR certification. 5 – 7 years of experience.

Director of Sales

Manages sales activities of organization.

Requires bachelors’ degree. MBA or MM preferred, along with 5 – 7 years of sales experience.

Director, Plant Operations

Directs production, distribution and marketing operations for branch plant, or assigned territory of industrial organization.

Requires bachelors’ degree. MBA or MM preferred, along with 5 – 7 years of production and/or operations experience.

Employee Relations Manager

Supervises employee-related programs, manages resolution of employee relations problems and develops new employee-related programs.

Requires bachelors’ degree. Professional HR certification preferred, along with 3 – 5 years of experience.

Employee Relations Specialist

Coordinates employee-related programs, participates in resolution of employee relations problems and gathers information on worker attitudes to facilitate employee satisfaction.

Requires bachelors’ degree. Professional HR certification preferred, along with 1 – 3 years of experience.

Executive Assistant

Provides assistance to a senior executive, including board activities, publications, volunteerism and special events planning, to create and maintain favorable public image.

Associates degree in business, along with 3 – 5 years business experience.

Financial Planner/Budget Specialist

Applies principles of accounting to analyze past and present financial operations and estimates future revenues and expenditures to prepare budget.

Requires bachelors’ degree in accounting or finance along with 1 – 3 years of experience.

Financial Planning Manager

Manages financial planning activities for the organization. Supervises financial planners and budget specialists in the development of departmental and corporate budgets.

Requires bachelors’ degree in accounting or finance, along with 3 – 5 years of experience.

General Accountant

Applies principles of accounting to analyze financial information and prepare financial reports. Responsible for maintaining general ledger for the organization.

Requires bachelors’ degree in accounting or finance, along with 1 – 3 years of experience.

General Accounting Supervisor

Supervises accounting activities, including A/P, A/R and general accounting.

Requires bachelors’ degree in accounting or finance, along with 3 – 5 years of experience.

Logistics Coordinator

Analyzes production schedules and determines inbound and outbound logistics needs for assigned plant.

High school diploma or equivalent.

Logistics Planner

Directs and coordinates program activities designed to vendors and customers with logistics technology that ensures effective and economical support concerned for manufacturing or servicing of products.

High school diploma or equivalent.

Manager IT Services

Directs and coordinates local area computer network activities.

Requires degree and 5 years related experience.

Manufacturing Engineer

Plans, directs and coordinates activities concerned with design, construction, modification and maintenance of equipment and machinery in industrial plant.

Requires bachelors’ degree in mechanical or industrial engineering.

Market Analyst

Designs marketing research projects and analyzes results.

Requires degree and 1 – 3 years related experience.

Marketing Manager

Manages design and production of planned marketing programs.

Requires degree and 3 – 5 years related experience.

Materials Engineer

Evaluates technical and economic factors, recommending engineering and manufacturing actions for attainment of design objectives of process or product.

BS/MS in Materials Engineering required. PhD preferred.

Manager, Logistics

Manages the logistics operations for the organization, including oversight of plant personnel.

Requires degree and 3 – 5 years related experience.

Manager, Product Development

Directs and guides the product development process for the organization, including capital budgeting and project proposals.

Requires degree and 5 years related experience. Engineering degree preferred.

Manager, Research

Leads research activities into future customer needs.

Requires degree and 5 years related experience.

Network Administrator

Installs, configures, and troubleshoots local area computer networks and associated assemblies.

Requires a bachelor’s degree in a related area and 0 – 2 years of experience in the field or in a related area.

Packaging Engineer

Plans and directs activities concerned with design and development of protective packaging containers.

Requires bachelors’ degree in packaging engineering.

Patent Specialist

Researches patents, investigates facts and prepares documents to assist Lawyer in filing for patents. Follows through on patent applications.

Requires paralegal certification, along with 1 – 3 years in patent administration.

Payroll and Tax Clerk

Compiles payroll data to maintain payroll records. Files all necessary payroll tax forms, ensuring accuracy.

Associates’ degree preferred, with 1 – 3 years of experience.

Payroll Manager

Supervises and coordinates activities of workers engaged in recording hours of work, processing time records, compiling payroll statistics, maintaining payroll control records and calculating payrolls.

Requires degree and 5 years related experience.

President & CEO

Determine and formulate policies and business strategies and provide overall direction of private sector organizations. Plan, direct, and coordinate operational activities at the highest level of management with the help of subordinate managers.

Product Specialist

Directs the development of a comprehensive product marketing cycle in a post-development environment. Ensures that product line statistics are maintained and analyzed. Assesses product line performance compared with expectations.

Requires degree and 1 – 3 years related experience.

Production Control Technician

Coordinates and expedites flow of materials, parts and assemblies between sections or departments.

High school diploma, or equivalent, along with 1 year of related experience.

Production Employee

Performs repetitive bench or line assembly operations to mass-produce products. Operates numerically-controlled machinery in the production of high-quality plastic products.

High school diploma, or equivalent, along with appropriate training on NC machinery.

Programmer Analyst

Analyzes requirements and develops computer programs.

Requires degree and 0 to 2 years of experience.

Purchasing Agent

Coordinates activities involved with procuring goods and services such as raw materials, equipment, tools, parts and supplies for organization.

Requires degree and 0 to 2 years of experience.

Purchasing Manager

Directs and coordinates activities of personnel engaged in purchasing and distributing materials, equipment and supplies in an organization.

Requires degree and 5 years related experience.

Quality Manager

Plans, coordinates and directs quality control program designed to ensure continuous production of products consistent with established standards.

Requires degree and 5 years related experience.

Recruiter

Recruits, researches, interviews, screens and refers job candidates for job openings.

Requires degree and 0 to 2 years of experience.

Research Program Manager

Manages research and development activities for organizational products, services or ideologies as assigned by Research.

Requires degree and 5 years related experience.

Safety Manager

Plans, directs and implements organization safety program to ensure safe, healthy and accident-free work environment.

Requires degree and 5 years related experience.

Safety Technician

Inspects machinery, equipment and working conditions in industrial or other setting to ensure compliance with Occupational Safety and Health Administration regulations.

Requires degree and 0 to 2 years of related experience.

Sales Assistant

Provides administrative support (copying, word processing, scheduling, etc.) for one or more managers. In addition, provides limited sales advice directly to customers in support of sales representatives.

Must have high school diploma and skilled at word processing, use of spreadsheets and calendaring software.

Sales Representative

Sells products for manufacturer to business and industrial establishments at customer’s place of business.

Requires degree and 2 – 3 years of related experience.

Shipping Employee

Verifies and keeps records on incoming and outgoing shipments and prepares items for shipment. Loads trucks and operates forklift equipment.

High school diploma, or equivalent, along with appropriate training on forklift equipment. Must pass and maintain certification on forklift.

Senior VP R & D

Directs and coordinates activities of R & D and aids Chief Executive Officer in formulating and administering organization policies.

Tax Accountant

Prepares federal, state, or local tax returns of organization. Assesses opportunities for reducing tax liabilities.

Requires bachelor’s degree in accounting, with a CPA, CMA or MBA strongly preferred. Experience in corporate tax is also preferred.

Team Superintendent

Directs and coordinates activities concerned with production of company product(s).

Requires degree and 1 – 3 years related experience.

Telecommunications Specialist

Installs and repairs telecommunications systems and equipment.

Requires an associate’s degree or its equivalent and at least 5 years of experience in the field or in a related area.

Training & Development Specialist

Develops and conducts training programs for employees of organization.

Requires degree and 0 to 2 years of experience.

Transportation Coordinator

Compiles and computes freight rates, passenger fares and other charges for transportation services, according to rate tables and tariff regulations. Schedules inbound and outbound shipments.

High school diploma or equivalent.

Transportation Manager

Conducts studies on company freight and passenger classifications, rates and tariffs and formulates changes required to provide for increased revenues and profitability of operations.

Requires degree and 3 – 5 years related experience.

VP International Operations

Directs and coordinates activities of international operations and aids Chief Operating Officer in formulating and administering organization policies.

VP Operations

Directs and coordinates activities of operations and aids Chief Operating Officer in formulating and administering organization policies.

VP Product Support

Directs and coordinates activities of product support and aids Chief Operating Officer in formulating and administering organization policies.

VP Sales & Marketing

Directs and coordinates activities of sales and marketing and aids Chief Operating Officer in formulating and administering organization policies.

VP Transportation

Directs and coordinates activities of the transportation department and aids Chief Operating Officer in formulating and administering organization policies.

Warranty Service Technician

Receives, records and distributes work orders to service crews upon customers’ requests for service. Repairs products under warranty as needed.

High school diploma or equivalent, along with 1 year of related experience.

Web Support Specialist

Supports Web-based products and services through email support, desktop support and telephone support. Interacts with customers and troubleshoots problems to provide a high level of customer satisfaction.

Requires a bachelor’s degree with at least 4 years of experience in the field.

Human Resources

Organizational Charts

Job Classifications

Job Descriptions

Policies & Procedures

HRIS

EEOC Reports

Work Force Demographics

Employees

Employee Files

Reports

Communications

Employee Handbook

Annual Pay Adjustments

Compensation Philosophy

Employee and Labor Relations

Employee Recognition Programs

Global Operations

Key Jobs

Pay Grades

Recruitment & Selection Practices

Training & Development

Annual Pay Adjustments

The company has a process for annual performance evaluations and pay adjustments, which happens on a fiscal year basis, with all raises taking effect the first day of the new fiscal year.

Managers complete a performance appraisal with each employee using a behaviorally-anchored rating scale. At the end of the performance appraisal, each employee receives an overall rating of “does not meet expectations” “meets expectations,” or “exceeds expectations.” Managers receive a pool of merit increase dollars, which are divided among employees using the following matrix (where “x” is the average percentage of wage increase). Managers may not allocate more money for raises than they receive in their increase budget.

Does Not Meet

Meets

Exceeds

Position in relation to the external market … Above market median

½x

Position in relation to the external market … Near market median (+ or – 10%)

1.5x

Position in relation to the external market … Below market median

1.5x

^Top

Compensation Philosophy and Rewards Practices

Our Employees

· We will maintain an innovative and team-oriented working environment.

· By assuring that our employees are well informed and properly supported, we will provide a climate focused on the long term viability of our company.

Other Factors

· R & D is critical to the mission (industry leader in identifying industry trends).

· Exceeding ISO 9000 standards is important to the organization.

Compensation Philosophy

The purpose of the pay program at Riordan Manufacturing is to help the company achieve its mission and goals by attracting, motivating and retaining the most highly-qualified people, with a particular focus on attracting people in critical disciplines such as R & D and quality. Base pay opportunities will be competitive by targeting the median of the appropriate external comparative group for average or satisfactory performance. Because we are focused on creating a team oriented working environment, teams who perform in an above average manner will have the opportunity to earn variable pay to improve their competitive pay position. The company is closely held, therefore, stock options will be available only to officers of the corporation.

Our pay bands are broad ranges which allow for considerable flexibility in rewarding individual performers based on their specific skills and contributions. We expect managers to make base pay decisions based on market information, which is provided annually during the salary review process.

Incentive plans for teams are developed individually, based on the specific results that each team is expected to achieve.

Because we want to properly support our employees, we will offer the following benefits to all full-time, U.S. employees, in addition to those benefits required by law, such as social security and workers’ compensation.

· Health insurance for employees and their dependents

· Dental insurance for employees and their dependents

· Life insurance for employees

· Flexible working schedules, when approved by individual managers or teams

· 401(k) savings program, with a company match

· Vacation (schedule varies with seniority)

· Paid holidays

· Educational assistance/tuition reimbursement

We also provide the following benefits through our flexible benefits program.

· Child care reimbursement account

· Medical reimbursement account (flexible spending account)

International pay and benefits are based on applicable laws in the country in which we operate.

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Employee and Labor Relations

Currently, all of Riordan’s facilities are non-union facilities. Employee relations are part of the Human Resources department.

Key employee relations policies include the following:

1. The company has an “open-door” policy, where employees are encouraged to share any concerns with higher-level supervisors if they are not satisfied with a supervisor’s decision. The process is loosely defined, and employees do not have a formal process for appealing supervisory decisions.

2. There is an employee handbook given to employees on their first day of employment. Employee policies, such as attendance, etc. are explained in the handbook. Employees are encouraged to read and understand the handbook.

3. Safety technicians are in place to encourage safe and healthy work practices.

The Pontiac facility is a provider of parts to the automotive industry. To date, there have been no attempts by any union to organize the facility; however, there are rumors that an organizing drive may be focused on the plant during the next 12 months. While the company has officially agreed to remain neutral if there is an organizing campaign (as required in its vendor agreement), unofficially, company officials are opposed to unionization and would prefer to stay union-free.

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Employee Recognition Programs

In addition to compensation and team-based incentives, the company has some programs for recognizing outstanding employees.

1. Outstanding Employee Award — One employee per year is named as the outstanding employee of the year. Employees are nominated by their peers, and a committee of executives and employees selects the winner. The criteria for this award are as follows:

a. Performed above and beyond normal job duties

b. Demonstrated a high level of teamwork and support for others

c. Modeled respect for diversity

2. Employee Suggestion Program — Employees can make suggestions for improving products or the work process. When a suggestion is adopted, employees receive a $25 check for their contribution and their picture in the company newsletter.

3. Seniority Awards — These awards are given to employees upon their first, fifth, tenth, and 20th year of employment, as follows:

a. One year — 1 day off with pay

b. Fifth year — Silver company logo lapel pin

c. Tenth year — Gold company logo lapel pin

d. 20th year — Gold watch and induction into the “20-year club” – Annual dinner with Riordan president for the club.

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Global Operations

The company has a joint venture facility in Hangzhou, China, where plastic fan parts are produced. Riordan owns 60% of the joint venture, and the plant manager is an expatriate from the United States who is one year into a three-year assignment. All of the other employees are host-country nationals.

The plant manager is compensated on a home-country based method. His pay level is comparable to that of the plant managers in Pontiac and Albany. The plant manager also participates in a management incentive plan, which is based on overall corporate performance, not performance of the joint venture.

Specific allowances for expatriate duties include the following:

· Foreign service premium — 25% of base pay

· Home visit leave — One visit to the US per year with his family (not counted as part of regular vacation)

· Relocation benefits

· Educational assistance for two children (tuition at a school for English-speaking students)

· Housing allowance

· Cost of living adjustment based on international survey data

The company uses a balance sheet approach in calculating benefits, including equalization of taxes.

The manager has been asked to develop a host-country national who can assume the plant manager position at the end of his three year assignment and the manager will receive a one-time incentive payment if he does this successfully.

Engineering personnel may travel between the US and China for specific projects, but there are no expatriate engineers from the US in China, and no Chinese employees currently work in the US operations.

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Key Jobs

As a company that specializes in leading in R & D, engineering jobs, particularly in R & D are critical. In addition, those who work on patent and legal issues are very important to the organization.

Another group of employees that are very important to operations are the CAM support specialists—most of the products manufactured are produced by NC machinery. If this machinery is down, production schedules cannot be met.

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Pay Grades

Jobs Included

FLSA Status

# of Incumbents

Executive Band

All Officers, Vice Presidents and Directors

Exempt

Manager

All positions with supervisory responsibility

Exempt

Professional

All other exempt professional positions – no supervisory responsibility

Exempt

Sales 1

Sales representative

Exempt

Technicians

All technicians

Nonexempt

Administration

All non-exempt, clerical or administrative positions

Nonexempt

Production

All production and shipping employees

Nonexempt

127

Remaining employees are in China and on a home-country pay system.

^Top

Recruitment and Selection Practices

Riordan Manufacturing currently recruits employees primarily from outside the organization for entry-level jobs, whether they are hourly or professional. The company also recruits most engineering staff from outside the organization. The organization uses the following methods for recruitment:

· Online advertisements at Monster.com

· Local newspaper advertisements

· Employee referrals

· Use of employees from temporary agencies

· Attendance at engineering conferences

There is a formal job-posting process in the company when there are openings. However, the company does not pay for relocation from one facility to another unless the position has budgeted for relocation as part of the hiring process. In the past two years, two managerial positions have been filled by internal candidates. There is currently no formal succession planning process.

The company uses contract workers for some engineering work, international sales and IT support in China. It has some part-time jobs, and there are two women who job-share in the corporate office. Benefits administration has been outsourced to a third-party provider.

Riordan is a small employer in both Pontiac and Albany and sometimes has trouble attracting the types of employees it would like. It also has had some difficulty attracting employees in San Jose although its reputation is somewhat better there.

Average turnover rates are low; most employees have been with the company for longer than two years.

The selection process uses the following tools:

· Application

· Résumé review

· Face-to-face interviews with the HR recruiter

· Face-to-face interviews with hiring managers (In the case of production teams, these are group interviews with team members.)

The company does not conduct reference checks and does not use any form of testing, other than testing all prospective employees for drugs using standard testing methods.

The company has no federal contracts and does not have any affirmative action plans or goals.

^Top

Training & Development

Riordan provides the following mandatory training for all employees within 90 days of hire:

· New employee orientation (1 day) — offered once per month

· Six Sigma — for all production, shipping and quality employees

Supervisors are also expected to attend the following workshops within 12 months of becoming a supervisor:

· Interviewing guidelines

· Preventing EEO claims and sexual harassment in the workplace

· Performance reviews

Self-directed teams operate throughout the plants in Pontiac, Albany and China. Team members cross-train on jobs within the team, as well as attend training sessions on goal setting, scheduling, selection processes and managing conflict. These are provided on an “as-needed” basis by the HR employee relations specialist at each site.

The company offers tuition reimbursement for work-related educational activities.

The company will also pay for professional organization fees for engineers in order to encourage them to stay current in their field.

Human Resources

Organizational Charts

Job Classifications

Job Descriptions

Policies & Procedures

HRIS

EEOC Reports

Work Force Demographics

Employees

Employee Files

Reports

Communications

Employee Handbook

HRIS System

The company’s HRIS system was installed in 1992. It is a part of the financial systems package and keeps track of the following employee information:

· Personal information (such as name, address, marital status, birth date, etc.)

· Pay rate

· Personal exemptions for tax purposes

· Hire date

· Seniority date (which is sometimes different than the hire date)

· Organizational information (department for budget purposes, manager’s name, etc.)

· Vacation hours (for non-exempt employees)

Changes to this information are submitted in writing (on special forms) by the employee’s manager and are entered into the system by the payroll clerk.

Training and development records are kept in an Excel worksheet by the training and development specialist.

Each recruiter maintains applicant information for open positions. Résumés are filed in a central storage area, and an Excel spreadsheet is used to track the status of applicants.

Workers’ compensation is managed by a third-party provider, which keeps its own records.

Employee files are kept by individual managers; there is no central employee file area. Managers are also responsible for tracking FMLA absences and any requests for accommodation under the ADA.

The compensation manager keeps an Excel spreadsheet with the results of job analyses, salary surveys and individual compensation decisions.

Employee relations specialists track information about complaints, grievances, harassment complaints, etc. in locked files in their offices.

Communications_Memo_-_Riordan_2

M E M O R A N D U M

To: Charles Williamson, Dale Edgel, Lowell Bradford, Clyde Cousins, Maria Trinh, Robert
Lord
From: Hugh McCauley
Re: China Relocation

Confidential

Our initial decision to locate our China operations in Hangzhou was driven largely by the fact
that our Chinese partners already had facilities there and the city’s proximity to the Qiantang
River. We thought that the river access which led on to Hangzhou Bay would be sufficient to
handle our shipping needs.

As the production volume from the China plant has increased, we are seeing that significant
savings can be had by utilizing container shipping companies such as the China Shipping
Container Lines, a branch of the China Shipping (Group) Company. Most of the container
shipping companies utilize ports in Hong Kong and Shanghai.

While the Shanghai port is only 180 kilometers away from our current location, we are incurring
additional logistical steps in shipping out of Shanghai.

• Currently, our products are trucked to a port on the Qiantang River and loaded into
shipping containers. The containers are then loaded onto barges that make their way to
the Shanghai port. The barges dock in Shanghai where the containers are offloaded
and trucked to another area of the port where they are loaded onto to the ships that will
take them to their final destinations.

• Alternatively, we could transport the products by truck to the port at Shanghai where
they would be loaded into containers and then directly onto the ships that will be taking
them to their final destinations. However, the trucking companies, knowing that they are
being used as an alternative to the local shipping companies to move the same products
to the Shanghai ports, generally charge just as much as the shipping companies for the
same volume of goods.

We believe that the relocation of the China operations to the city of Shanghai will result in
significant cost savings, will provide our operations with a more substantial urban infrastructure
and will put us into a better position to market and ship our Chinese products throughout Asia
and Europe.

China Relocation Memo
Page 2

We have incorporated a move of the China operations to Shanghai within the next five years
into the strategic planning of Riordan Manufacturing and Riordan Industries. Please begin
drafting strategic plans for how such a move will impact your areas of responsibility and how
your areas will facilitate the relocation.

Capital_Budget_Executive_Summary_-_Riordan_3

Riordan Manufacturing, Inc.
Capital Budget Executive Summary

FY 2005

Financial Reporting Systems

As discussed in the Finance and Accounting section of the Riordan Intranet site, the financial
reporting systems need a complete overhaul. Extensive research has revealed a state-of-the-
art system that will resolve many of the issues discussed. The remaining issues will be resolved
with internal policy changes and additional training.

The cost of this system is $1,350,000. Riordan’s CFO has agreed to make two cash payments
of $250,000 each in January and April. The remaining amount will be financed through the
bank at an annual interest rate of 8%. The loan will be for a term of 60 months beginning on
May 1st of 2005. The CFO has incorporated the $250,000 payments into the cash flow forecast
but has not had time to build in the interest expense to the financial forecasts.

Manufacturing Equipment

The VP of Manufacturing has submitted a capital budget calling for $1 million of new
manufacturing equipment and supplies. He estimates that this equipment will result in annual
operating savings of $250,000 over the next six years. The equipment will be depreciated on a
straight-line basis for internal reporting purposes. This project has not been incorporated into
the company’s financials at this time. The VP would like to place the equipment in service on
June 30th of this year.

Miscellaneous Capital Items

The CFO has placed $350,000 into the cash budget as an outflow in July to cover other capital
items that may be required.

Cost of Capital

Riordan Manufacturing’s holding company, Riordan Industries, is willing to fund projects as long
as their hurdle rate of 12% is met or exceeded and a positive net present value can be

Riordan Manufacturing, Inc.
Capital Budget Executive Summary
FY 2005
Page 2

demonstrated. The CFO will propose that the manufacturing equipment discussed above be
funded through Riordan Industries.

Economic_Forecast_-_Riordan_4

ECONOMIC FORECAST FOR RIORDAN
MANUFACTURING

June 16, 2005

Riordan Manufacturing is a global plastics manufacturer with projected annual
earnings of $46 million. The company is wholly owned by Riordan Industries.
Riordan Industries is a Fortune 1000 enterprise with revenues in excess of $1
billion. Riordan Manufacturing is an industry leader in the field of plastic injection
molding creating innovative plastic designs that have earned international
acclaim. Riordan Manufacturing uses state-of-the art design capabilities in its
processes to facilitate extreme precision and enthusiastic quality control. Riordan
Manufacturing’s products include plastic bottles, fans in all sizes, heart valves,
medical stents, and custom plastic parts. The firm’s major customers and
markets include; automotive parts manufacturers, aircraft manufacturers,
beverage makers and bottlers, appliance manufacturers, health care, and the
Department of Defense. The firm has operations in Georgia, Michigan, California,
and a joint venture in China and employs over 300 employees plus 250
employees in its joint venture in China. The firm’s products include plastic
beverage containers produced at its plant in Albany, Georgia, custom plastic
parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at
its facilities in Hangzhou, China. Research and development is done at the
corporate headquarters in San Jose.

Economic Overview
The markets for plastic bottles, fans, and custom plastic parts are affected by
changing economic conditions. As a result, it is the impact of the economy on
Riordan Manufacturing’s major customers and markets that must be analyzed in
order to determine how the future direction of the economy will affect Riordan
Manufacturing. Automotive parts manufacturers, aircraft manufacturers, and
appliance manufacturers are all impacted by the strength of the overall economy,
and appliance manufacturers are also affected by the strength of the housing
market. Beverage makers and bottlers are impacted by changes in demand for
the drink products that are contained in the bottles they produce, but overall
demand for drink products is only marginally affected by the overall economy. In
general, it can be assumed that a strong economy will support continued sales of
the products produced by beverage makers and bottlers, but the competitive
business decisions made by Riordan Manufacturing’s customers are significant.

The demand for heart valves, medical stents, and health care services in general
is primarily affected by demographic trends and the availability of health
insurance. The question related to health insurance is too uncertain to analyze
here. The demographic question is easier to address. The baby boomer group
includes more than one-fourth of the population in the United States, and as it
ages, it is natural to assume that the demand for health care services, including
heart valves, medical stents, will increase as this demographic cohort ages.

The Department of Defense is another customer whose demand is largely
unaffected by changing economic conditions. The ability of the Department of
Defense to meet its current and anticipated obligations is affected by funding and

appropriations. The Congressional Budget Office’s March 2005 Baseline for
Discretionary Spending for Defense indicates $422 billion in 2005 and $432 in
2006 following $486 billion in 2004 (figure impacted by the ongoing wars). These
figures indicate continued strong levels of discretionary spending for defense.

Given the above, it is important to consider future economic conditions when
planning for the next two years for the demand by appliance manufacturers,
automotive parts manufacturers, aircraft manufacturers, and to a lesser extent
beverage makers and bottlers. The focus here will be on real GDP growth,
inflation, labor cost, and the value of the dollar, interest rates, and transportation
and shipping costs (fuel prices). More detailed discussion related to the
appliance, automotive parts, and aircraft markets will also be presented below.

Real Gross Domestic Product (GDO) Growth
The United States economy has shown some weakness during the first half of
2005. This weaker growth has led to a slight decrease in estimates for economic
growth in 2005 and 2006. One reason for this relative weakness in the economy
is the large and persistent trade deficit, a factor that continues to reduce
estimates for economic growth. The high level of oil prices is another important
contributor to weaker than expected economic growth early this year. Consumers
are adjusting to the reality that oil prices will remain high rather than being a
temporary event, and even if oil prices fall the decrease will be small. Another
problem confronting the economy is the weak labor market. One last factor was
the end of accelerated depression. On the positive side, consumer demand
continued to be strong, and capital spending has been stronger than expected.

An important contributor to economic growth starting in 2001 has been very
stimulative fiscal and monetary policies. We should expect slower increases in
government spending, and possible tax increases in 2006 in order to reduce the
government budget deficit from excessively high levels. At the same time, the
Federal Reserve has been raising its target for the Federal Funds rate. This
should continue throughout at this year. These policies should tend to reduce
economic growth in the near future. The greatest immediate uncertainty is the
impact of these policies on long-term interest rates. Long-term interest rates are
more impacted by the bond market than Federal Reserve policy.

To summarize, the economy will continue to demonstrate slower but still a good
level of economic growth. Consumer spending will moderate, capital spending
should continue show relative strength, the housing market will slow only to
strong rather than the very strong levels we see today. Lower oil prices will tend
to support economic growth. A stabilizing factor for consumer spending will be
the large increase in the net worth of households we have seen due to the strong
housing market. Offsetting these positive trends will continue to be the sizeable
trade deficit, slightly higher interest rates, and high levels of household debt.

Percent Change-Gross Domestic Product (GDP) 2004 2005 2006

Congressional Budget Office – January 2005 4.40% 3.80% 3.70%

Mortgage Bankers Association – May 2005 4.40% 3.40% NA

National Association for Business Economics – May 2005 4.40% 3.40% 3.40%

RSQE Forecasts – May 2005 4.40% 3.30% 3.50%

The Value of the Dollar
The large trade deficit will lead to further declines in the trade weighted value of
the dollar. This decline will lead to the dollar/euro exchange rate continuing to
equal about 1.25 dollar to the Euro. Uncertainty due to the rejections of the
constitution for European Union will lead to a short-term increase in the value of
the dollar relative to the Euro, but this trend will not persist due to the trade
deficit. The dollar should also lose value relative to the yen. It is expected that
China will not maintain its currency peg with the dollar and as a result the value
of the dollar will decline relative to China’s currency, but this decline will not be
significant. It is expected that foreign exporters, including those from China, will
be will to accept lower profits rather than raising prices and risking losing market
share. It is the persistently large trade deficit caused by the combination of the
relatively strong economy in the United States, the relatively weak economies of
the majority of our trading partners, and continued strong consumer spending in
the United States, that will ultimately lead to a weaker dollar.

Real Trade-Weighted Value of the U.S. Dollar-Broad Index 2004 2005 2006

National Association for Business Economics – May 2005 99.8 96.0 94.2

RSQE Forecasts – May 2005 /1 99.8 95.2 90.3

Note:
/1 Based on the actual value in 2004 and forecasted percent changes.

Inflation Rate
High oil prices, and to a lesser extent the weaker dollar, are contributing to raised
expectations for inflation. An expected decrease in the rate of increase in labor
productivity is another factor that it contributing to higher inflation expectations.
On the other hand, there are factors that are contributing to lower inflation
expectations. These include the fact that while it is expected that the rate of
increase in labor productivity will decline, productivity gains are still relatively
good or at least on trend. Other important factors are the relatively weak labor
market (wage gains should be small but on an increasing trend), the expectation
that Federal Reserve policies will restrain inflation, strong competition in the retail
market, and strong international economic competition. These factors all balance
to forecasts for the inflation rate continuing to be less than 3.00%.

Percent Change-Consumer Price Index (CPI) 2004 2005 2006

Congressional Budget Office – January 2005 2.70% 2.40% 1.90%

Mortgage Bankers Association – May 2005 2.70% 3.00% NA

National Association for Business Economics – May 2005 2.70% 2.80% 2.50%

RSQE Forecasts – May 2005 2.70% 2.90% 2.40%

Labor Costs
Labor costs are expected to increase during the course of the next two years.
Continued economic growth will lead to higher payrolls and begin to exert greater
upward pressure on wages. In addition, decreases in productivity growth to levels
more consistent with long-term trends will lead to increases in labor costs per unit
of output. Another important factor is the continued fact that the costs of
providing benefits, especially health benefits, will continue to increase at an
above average rate.

Unemployment Rate 2004 2005 2006

Congressional Budget Office – January 2005 5.50% 5.20% 5.20%

Mortgage Bankers Association – May 2005 5.50% 5.20% NA

National Association for Business Economics – May 2005 5.50% 5.20% 5.10%

RSQE Forecasts – May 2005 5.50% 5.20% 5.00%

Percent Change-Employment Cost Index 2004 2005 2006

Congressional Budget Office – January 2005 2.70% 3.10% 3.30%

Percent Change-Private Nonfarm Compensation/Hour 2004 2005 2006

National Association for Business Economics – May 2005 4.50% 4.20% 4.40%

Interest Rates
The Federal Reserve is expected to raise the Federal Funds rate through the
balance of this year. This will allow the Federal Reserve to raise short-term rates
to a level that is considered “neutral” and will allow the Federal Reserve to have
the flexibility needed to act if the economy weakens unexpectedly. This will
contribute to restraining inflation in the face of continued economic growth and
increases in inflation expectations due to high oil prices. The effect of this will be
higher short-term lending rates.

Long-term interest rates should also increase but at a slower rate. The reason for
this is continued relatively low inflation expectations discussed above. The
biggest contributor to the low interest rates the economy has experienced
recently has been relatively low inflation expectations. The reasons for this
include the still relatively poor labor market, wage increases less than the

inflation rate contributing to the expectation that aggregate demand will suffer in
the future, domestic and foreign competition restraining price increases, and the
belief that the Federal Reserve will act to control the inflation rate. The effect of
the higher short-term interest rates identified above is slightly reduced rates of
economic growth, a factor that will tend to reduce increases in long-term interest
rates. Another important factor is continued demand for long-term U.S. Treasury
bonds by foreign central banks and other foreign investors, an activity supported
by the dollars received by foreign firms due to the large U.S. trade deficit
discussed above. The impact of this is lower long-term interest rates. The
reliance on foreign investors to support increased borrowing by the U.S.
government and American consumers and firms may not be sustainable raising
the risk that long-term interest rates may increase. This suggests that financing
to expand operations, replace equipment, or other purposes, should be secured
sooner rather than later.

Federal Funds Rate 2004 2005 2006

Mortgage Bankers Association – May 2005 1.35% 3.10% NA

National Association for Business Economics – May 2005 1.35% 3.20% 4.00%

3 – Month Treasury Bill Rate 2004 2005 2006

Congressional Budget Office – January 2005 1.40% 2.80% 4.00%

RSQE Forecasts – May 2005 1.40% 3.10% 3.80%

10 – Year Treasury Rate Yield 2004 2005 2006

Congressional Budget Office – January 2005 4.27% 4.80% 5.40%

Mortgage Bankers Association – May 2005 4.27% 4.50% 5.10%

National Association for Business Economics – May 2005 4.27% 4.58% 5.20%

RSQE Forecasts – May 2005 4.27% 4.70% 5.40%

Fuel Prices
Oil prices at level above $50 per barrel as they are now are much higher than
they were at this time last year. However, despite the significant increases in
demand we have seen from China and India, it is expected that slower world
wide economic growth and increases in supply should lead to prices below $45
per barrel by next year.

As reported in the May, 2005, NABE Outlook, a National Association for
Business Economics panel’s average response to a request for a forecast of the
price of West Texas Intermediate oil (WTI) at the end of calendar year 2005 was
$46.17 per barrel. This compares to prices that are currently in the range of $50
to $55 per barrel. RSQE Forecasts reported in their report, The U.S. Economic
Outlook for 2005-2006, Executive Summary: May 2005, the expectation that the

average price per barrel will fall to $47 per barrel by year-end 2005 and $38 per
barrel by year-end 2006.

Jet Fuel Prices (FY 2004 $) 2004 2005 2006

Federal Aviation Administration 101.73 126.96 117.38

Appliance Manufacturers
Sales of appliances are influenced to a great extent by the strength of the
housing market. People tend to purchase new household appliances when they
purchase a new or existing home. Given this, it is important to evaluate the
housing market and its future strength. The strength of the housing market during
recent years has been fueled by low interest rates. Other factors include the
relatively strong economy, increasing home prices, uncertainty related to the
financial markets since the stock market bubble burst in 2000, and moves to
perceived secure assets after 9/11. The future strength of the housing market will
also be affected by changes in these factors. Since relatively low interest rates
have been the greatest contributor to the strength of the housing market, the
future strength of the housing market will also be affected by changes in interest
rates in the future.

30 – Year Fixed Rate Mortgage 2004 2005 2006

Mortgage Bankers Association – May 2005 5.80% 5.90% 6.30%

National Association of Homebuilders – May 2005 5.80% 5.90% 6.60%

RSQE Forecasts – May 2005 5.80% 6.10% 6.80%

As of June 3, 2005 the 10-Year Treasury rate Yield equaled approximately 3.95
percent, the 30-Year Fixed Rate Mortgage rate equaled 5.65 percent, and the
15-Year Fixed Rate Mortgage rate equaled 5.25 percent. Given the above
forecasts, and conditions that should tend to limit further increases in the inflation
rate, I expect only marginal increases in the 15 and 30-Year mortgage rates
between now and the end of this fiscal year, and only .75 to 1.00 percentage
point increases in mortgage rates by the end of Fiscal Year 2006. This implies
continued strength in the housing market.

Housing Starts (Thousands) 2004 2005 2006

Mortgage Bankers Association – May 2005 1,952 1,947 1,790

National Association of Home Builders – May 2005 1,952 1,936 1,820

National Association for Business Economics – May 2005 1,952 2,000 1,800

RSQE Forecasts – May 2005 1,952 2,007 1,894

These forecasts, when compared to historical data, indicate the expectation that
the national housing market will continue to be relatively strong. It is likely that

there will be real estate markets that will experience weakness due to the
potential for corrections or declines in home prices. If this occurs, this will largely
be confined to markets on the west coast, Florida, and some markets in the New
England area. It is suggested that these local markets be monitored in order to
plan sales and marketing efforts. Overall, it the data and forecasts related to
long-term interest rates and mortgage rates, and housing starts, is positive in the
near term suggesting that the demand for appliances will continue to be strong.

Automotive Parts Manufacturers
Sales of automotive parts are greatly affected by light vehicle sales, a variable
that is greatly affected by changes in real GDP. Projections are for little change in
sales of light vehicles. The reason for this is the expectation that economic
growth measured by changes in real GDP should be moderate, and interest rates
are expected to continue to be relatively low. These conditions are good for
consumer spending on all items, including automobiles and other light vehicles.
The important risk to monitor is a decrease in domestic automobile production
due to weak sales.

Light Vehicle Sales (Millions of Units) 2004 2005 2006

National Association for Business Economics – May 2005 16.8 16.7 16.8

RSQE Forecasts – May 2005 16.8 16.8 17.1

Aircraft Manufacturers
The details presented above relate to overall economic conditions and interest
rates supports continued purchases of new aircraft by airliners and other
businesses. The economy will continue to demonstrate relatively slow if not
spectacular economic growth. Consumer spending will moderate, but the trend
continues to be positive. The inflation rate will be less than 3.00%, low enough to
not pressure consumers too much to limit airline travel. Short and long-term
interest rates are both expected to increase only moderately. This suggests that
financing the acquisition and construction of aircraft will continue to be feasible.
Finally, relatively high fuel prices will continue to encourage the purchasing of
new aircraft to promote fuel efficiency and reduce costs. This indicates continued
strong demand for Riordan Manufacturing’s products by aircraft manufacturers.
The following forecasts by the Federal Aviation Administration support these
trends.

Passenger Jet Aircraft – Total Jets 2004 2005 2006

Federal Aviation Administration 4,046 4,151 4,320

Cargo Jet Aircraft 2004 2005 2006

Federal Aviation Administration 974 996 1,011

Summary
The data presented to this point indicates positive economic conditions for
Riordan Manufacturing and opportunities to leverage relatively low interest rates
into new investments to enter new markets and increase productivity. Economic
growth is expected to be steady, although at a lower rate than 2004 level of
4.40% growth in real GDP. The inflation rate may decline, and interest rates will
increase moderately. Oil prices are expected to fall, and as a result, reduce
transportation and shipping costs. The value of the dollar will decline, marginally
improving export opportunities. If China removes its practice of pegging its
currency to the dollar then sales by the China joint venture may decline a little but
not significantly. The labor market should strengthen and this will result in larger
payrolls nationally and higher labor costs for Riordan Manufacturing, but also will
support consumer spending. The appliance and aircraft markets are expected to
continue to be strong. Projections for sales of automobiles suggest consistent
sales of automotive parts, but Riordan Manufacturing should expect pressure
from domestic automakers to cut costs. Continued sizeable increases in the
costs of providing employee benefits are highly likely to continue. Despite this
particular issue related to costs, the stable economy described in the forecast
presented above should provide for the basis to at least meet the firm’s sales
goals.

Sources for reputable forecasts include:
1. Mortgage Bankers Association of America includes mortgage finance

information and economic forecasts. This is a resource for information
related to residential finance, commercial and multifamily finance including
industry surveys and statistics, state and local Mortgage Bankers
Association initiatives, and conferences. Mortgage and market data
including interest rate data, reports on housing activity, special reports are
also available. The address is: http://www.mbaa.org/

2. National Association of Homebuilders Resources here includes
economic and housing data including economic forecasts. Additional
information include details about NAHB, Home Builders Institute, NAHB
Research Center, National Housing Endowment, publications, news, and
resources related to land development and housing. The website address
is: http://www.nahb.com/

3. See the Congressional Budget Office for current budget and economic
forecasts, publications, and other budget and economics information. The
website address is: http://www.cbo.gov/

4. RSQE Forecasts is another source for economic forecasts and other
economics information. RSQE Forecasts is published by Research Seminar
in Quantitative Economics, University of Michigan. The website address is:
http://rsqe.econ.lsa.umich.edu/

5. National Association for Business Economics (NABE) is an excellent
resource for professional economics. Membership in NABE is required to
view forecasts and other resources. The website address is:
http://www.nabe.com/

http://www.mbaa.org/

http://www.nahb.com/

http://www.cbo.gov/

http://rsqe.econ.lsa.umich.edu/

http://www.nabe.com/

6. Federal Aviation Administration is an excellent source for economic
forecasts, and forecasts and actual data related to the aviation industry. The
website address is: http://www.faa.gov

Economic Overview
Real Gross Domestic Product (GDO) Growth
The Value of the Dollar
Inflation Rate
Labor Costs
Interest Rates
Fuel Prices
Appliance Manufacturers
Automotive Parts Manufacturers
Aircraft Manufacturers
Summary
Sources for reputable forecasts

Finance_Accounting_-_Riordan_5

Finance & Accounting

Riordan Manufacturing has three operating entities…Georgia, Michigan and California…plus a joint venture in the People’s Republic of China. Basically, the operating entities each have their own Finance & Accounting Systems and they provide input that is consolidated at Corporate…San Jose. The basic components of each system are as follows:

· General Ledger

· Accounts Payable

· Accounts Receivable

· Order Entry

· Procurement

· Sales and Purchasing History

· Invoicing and Shipping

· Payroll

· Financial Reporting

· EDI*
· Bar Code Reading*
· EDSS (Executive Decision Support System)*

*San Jose Only

Background:

During the due diligence process in which Riordan acquired the operating entities in Michigan and Georgia the matter of F & A System’s compatibility was not addressed.

Current Situation Regarding F & A Systems:

· San Jose has a license for a fully integrated Windows based ERP manufacturing, distribution and financial management software application specifically designed for plastics processors and process and assembly manufacturers. The license does not include application source code.

· Michigan had purchased a vendor developed software application and the attendant source code for their Fd & A and process application. The vendor is no longer in business. The application runs on a pair of DEC Alpha’s, using the VMS operating system, VAX4000 work stations and programmed in C.

· Georgia had purchased a vendor (different from Michigan) developed software application and the attendant source code for their F & A and manufacturing process applications. The systems run on a pair of AS400’s, using UNIX operating system, use PC’s (Windows) as workstations, and is programmed in RPG400.

Challenge:

The F & A Department has been unable to achieve anything remotely resembling “seamless compatibility”. Some F & A data is provided to corporate via data files; some data is provided via hardcopy reports and must be re-entered; some data is provided via data files but must be converted (redirected) to the proper account codes and the list goes on. Subsequently, Riordan has the following situation regarding F & A system outputs at the consolidated level:

· Consolidated close of the General Ledger and subsequently the Income Statement and Balance Sheet is labor intensive and normally not completed until 15-20 days after month end.

· Audit (to include external auditors) is required each month and is costly and labor intensive.

· Compliance with new government required reporting requirements at the consolidated level is difficult at best.

· Riordan Enterprises finds the situation unacceptable and has mandated a solutions(s)/alternatives be recommended soonest.

NOTE: This situation is transparent to customers and suppliers as each operating entity has maintained invoicing, payments, etc., as was prior to acquisition.

Finance & Accounting

Download Historic Balance Sheet Data

Riordan Manufacturing, Inc.

Consolidated Balance Sheet

Fiscal Year Ending
September 30th

2005

2004

Assets

Current Assets

Cash

$305,563

$357,216

Accounts Receivable

$6,062,838

$5,657,216

Current Portion of Notes Receivable

$70,825

$117,888

Inventories

$7,850,970

$7,854,112

Deferred Income Taxes – net

$328,832

Prepaid Expenses and Other Items

$264,896

$328,192

Total Current Assets

$14,555,092

$14,643,456

Notes Receivable, less current portion

$256,583

$177,408

Investment in Joint Venture

$283,504

$133,504

Property, Plant and Equipment – net

$19,114,830

$18,511,360

Intangible Assets – net

$329,405

$336,128

Other Assets

$52,768

$54,400

Total Assets

$34,592,182

$33,856,256

Liabilities and Stockholders’ Equity

Current Liabilities

Current Portion of Long-Term Debt

$1,219,258

$1,106,304

Accounts Payable

$3,650,073

$3,573,248

Accrued Liabilities

$1,350,144

Income Taxes Payable

$754,619

Total Current Liabilities

$6,974,094

$6,029,696

Bank Line of Credit

$253,727

$487,936

Long-Term Debt – less current portion

$2,763,752

$2,535,552

Deferred Income Taxes – net

$2,485,354

$3,107,072

Total Liabilities

$12,476,927

$12,160,256

Common Stock
Stated par value is $.01.
20,000,000 shares authorized.
Issued and Outstanding 15,801,332 net of treasury shares.

$29,055,488

Other Accummulated Comprehensive Losses

($202,496)

Accumulated Deficit

($6,940,233)

($7,156,992)

Total Stockholders’ Equity

$22,115,255

$21,696,000

Total Liabilities and Stockholders’ Equity

$34,592,182

$33,856,256

Finance & Accounting

Download Historic Income Statement Data

Riordan Manufacturing, Inc.

Income Statement
For the 12 months ending September 30, 2005

2005

2004

Sales

$50,823,685

$46,044,288

Direct Cost of Goods Sold

$42,037,624

$37,480,050

Gross Margin

$8,786,061

$8,564,238

Operating Expenses

Sales, Marketing & Other

$1,012,974

$920,886

Depreciation

$343,445

$349,937

Quality Assurance

$1,139,688

$1,095,854

Research & Development

$911,676

$828,797

General & Administrative

$1,706,953

$1,524,066

Machining & Systems

$628,505

$598,576

Total Operating Expenses

$5,743,241

$5,318,115

Profit Before Interest & Taxes

$3,042,820

$3,246,122

Non-Operating Expenses

Interest Expense

$143,175

$230,221

Taxes

$943,274

$1,025,406

Total Non-Operating Expenses

$1,086,449

$1,255,628

Net Profit After Taxes

$1,956,371

$1,990,495

Finance & Accounting

Download Microsoft Excel™ Spreadsheet

Item Number

Description

Price

Qty. on Hand 9/30/2005

Extension

1010001

Cooling Fan 120mm

$10.00

7200

$72,000.00

1010002

Cooling Fan 250mm

$12.50

7200

$90,000.00

1010003

Cooling Fan 80mm

$7.50

7200

$54,000.00

1010004

Cooling Fan 140mm

$4.00

7200

$28,800.00

1010005

Cooling Fan 92mm

$6.50

7200

$46,800.00

1010006

Cooling Fan 360mm

$17.50

7200

$126,000.00

1020001

Desk Fan 100mm

$10.00

7200

$72,000.00

1020002

Desk Fan 180mm

$13.00

7200

$93,600.00

1020003

Desk Fan 300mm

$15.00

7200

$108,000.00

1020004

Desk Fan 400mm

$12.50

7200

$90,000.00

1030001

Personal Fan 25mm

$6.00

7200

$43,200.00

1040001

Window Fan

$20.00

7200

$144,000.00

2010001

Coronary Stent

$165.55

5040

$834,372.00

2020001

Ureteral Stent

$129.40

5040

$652,176.00

2030001

Prostatic Stent

$125.31

5040

$631,562.40

2040001

Vascular Stent

$118.55

5040

$597,492.00

3010001

Opaque Bottle w/ embossed logo (Custom) 12oz

$0.65

7200

$4,680.00

3010002

Opaque Bottle w/ embossed logo (Custom) 6oz

$0.33

7200

$2,376.00

3010003

Opaque Bottle w/ embossed logo (Custom) 3oz

$0.17

7200

$1,224.00

3020001

Clear Plastic Bottle (Custom) 1 liter

$0.36

7200

$2,592.00

3020002

Clear Plastic Bottle (Custom) 0.5 liter

$0.28

7200

$2,016.00

3030001

Pyramid Bottle (Custom) 680ml

$0.44

7200

$3,168.00

3040001

Clear Plastic Bottle (Custom) 1 liter

$0.36

7200

$2,592.00

3040002

Clear Plastic Bottle (Custom) 0.5 liter

$0.28

7200

$2,016.00

4010001

White Bottle w/ Screw Lid 1oz

$0.05

7200

$360.00

4010002

White Bottle w/ Screw Lid 3oz

$0.15

7200

$1,080.00

4010003

White Bottle w/ Screw Lid 6oz

$0.30

7200

$2,160.00

4010004

White Bottle w/ Screw Lid 8oz

$0.40

7200

$2,880.00

4020001

Pink Bottle w/ Screw Lid 1oz

$0.05

7200

$360.00

4020002

Pink Bottle w/ Screw Lid 3oz

$0.15

7200

$1,080.00

4020003

Pink Bottle w/ Screw Lid 6oz

$0.30

7200

$2,160.00

4020004

Pink Bottle w/ Screw Lid 8oz

$0.40

7200

$2,880.00

4030001

Blue Bottle w/ Screw Lid 1oz

$0.05

7200

$360.00

4030002

Blue Bottle w/ Screw Lid 3oz

$0.15

7200

$1,080.00

4030003

Blue Bottle w/ Screw Lid 6oz

$0.30

7200

$2,160.00

4030004

Blue Bottle w/ Screw Lid 8oz

$0.40

7200

$2,880.00

5010001

Storage Container w/ lid (Custom) 1qt

$0.30

7200

$2,160.00

5010002

Storage Container w/ lid (Custom) 0.5qt

$0.15

7200

$1,080.00

5010003

Storage Container w/ lid (Custom) 0.25qt

$0.08

7200

$576.00

$3,727,922.40

I.T._Budget_-_Riordan_6.xls
Sheet1

Riordan Manufacturing, Inc

FY2004

Consolidated Operating Budget – Cost Center IT

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

Compensation

Wages & Salaries $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 92,666 $ 1,111,992

Benefits 21,313 21,313 21,313 21,313 21,313 21,313 21,313 21,313 21,313 21,313 21,313 21,313 $ 255,758

Bonuses 50,000 50,000 50,000 50,000 $ 200,000

Total 113,979 113,979 163,979 113,979 113,979 163,979 113,979 113,979 163,979 113,979 113,979 163,979 $ 1,567,750

Other Expenses

Conferences 1,500 1,500 750 $ 3,750

Contracts (1) 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 $ 43,200

Hardware (2) 1,500 1,500 2,000 2,000 1,500 $ 8,500

Leased Lines 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 $ 50,400

Maintenance 250 250 250 250 250 250 250 250 250 250 250 250 $ 3,000

Office supplies 100 100 100 100 100 100 100 100 100 100 100 100 $ 1,200

Postage 50 50 50 50 50 50 50 50 50 50 50 50 $ 600

Shipping 200 200 200 200 200 200 200 200 200 200 200 200 $ 2,400

Software Licenses 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 $ 42,000

Special Projects 150,000 $ 150,000

Subscriptions 50 50 50 50 50 50 50 50 50 50 50 50 $ 600

Telephone 250 250 250 250 250 250 250 250 250 250 250 250 $ 3,000

Training 500 500 500 $ 1,500

Travel 1,500 1,500 1,500 1,500 3,500 1,500 1,500 1,500 3,500 1,500 1,500 1,500 $ 22,000

Entertainment 200 200 400 200 400 $ 1,400

Total $ 17,400 $ 13,700 $ 15,400 $ 163,700 $ 18,600 $ 13,700 $ 15,400 $ 15,700 $ 16,600 $ 14,450 $ 15,200 $ 13,700 $ 333,550

Total Operating Expenses $ 131,379 $ 127,679 $ 179,379 $ 277,679 $ 132,579 $ 177,679 $ 129,379 $ 129,679 $ 180,579 $ 128,429 $ 129,179 $ 177,679 $ 1,901,300

Notes:

(1) Contracts covered: a: Off site data storage, b: Web Hosting, c: Hardware Maintenance

(2) Capital threshold is $2,000…all purchases, to include hardware, $1,999 or less will be expensed

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Mission_History_-_Riordan_7

Riordan Manufacturing

Riordan Manufacturing is a global plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion.

Its products include plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at its facilities in Hangzhou, China. The company’s research and development is done at the corporate headquarters in San Jose. Riordan’s major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.

Mission

Our Focus

· Six Sigma, leading edge R&D and exceeding ISO 9000 standards define the attitude and abilities of Riordan Manufacturing.

· We are industry leaders in using polymer materials to provide solutions to our customers challenges.

· Our R&D is, and will remain, the industry leader in identifying industry trends.

Our Customer Relationships

· We will strive to be a solution provider for our customers and not be a part of our customers challenges.

· Long-term relationships will be sought by maintaining rigorous quality controls, innovative solutions, a responsive business attitude and reasonable pricing.

Our Employees

· We will maintain an innovative and team oriented working environment.

· By assuring that our employees are well informed and properly supported, we will provide a climate focused on the long term viability of our company.

Our Future

· We must be focused in achieving and maintaining reasonable profitability to assure that the financial and human capital is available for sustained growth.

History

The company was founded by Dr. Riordan, a professor of chemistry, who had obtained several patents relative to processing polymers into high tensile strength plastic substrates. Sensing the commercial applications for his patents, Dr. Riordan started Riordan Plastics, Inc. in 1991.

Initially, the company’s focus was on research and development and the licensing of its existing patents, but in 1992 Dr. Riordan obtained venture capital which he used to purchase a fan manufacturing plant in Pontiac, MI. At that time, the company’s name was changed to “Riordan Manufacturing, Inc.” In 1993, the company expanded into the production of plastic beverage containers when it acquired a manufacturing plant in Albany, GA.

The company’s most recent expansion took place in 2000 when it opened its operations in China. At that time, the entire fan manufacturing operation was moved from Michigan to China and the Pontiac, MI facility was retooled for the manufacture of custom plastic parts.

Operating_Cash_Budgets_-_Riordan_8.xls
Operating-Cash Budget

Riordan Manufacturing, Inc.

Operating Budget FY 2005

Oct.
2004 Nov.
2004 Dec.
2004 Jan.
2005 Feb.
2005 Mar.
2005 Apr.
2005 May
2005 Jun.
2005 Jul.
2005 Aug.
2005 Sep.
2005 Annual

Sales $3,976,000 $4,182,000 $4,798,000 $4,182,000 $4,190,000 $3,846,000 $3,460,000 $3,578,000 $5,210,600 $5,350,200 $4,726,000 $2,765,221 $50,264,021

Direct cost of Goods Sold $3,236,464 $3,404,148 $3,905,572 $3,404,148 $3,410,660 $3,130,644 $2,816,440 $2,912,492 $4,241,428 $4,355,063 $3,846,964 $2,250,890 $40,914,913

Gross Margin $739,536 $777,852 $892,428 $777,852 $779,340 $715,356 $643,560 $665,508 $969,172 $995,137 $879,036 $514,331 $9,349,108

Operating Expenses

Sales, Marketing & Other $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $1,020,000

Depreciation $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $432,000

Quality Assurance $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $98,500 $1,182,000

Research & Development $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $75,250 $903,000

General & Administrative $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $151,000 $1,812,000

Machining & Systems $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $54,500 $654,000

Total Operating Expenses $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $6,003,000

Profit Before Interest & Taxes $239,286 $277,602 $392,178 $277,602 $279,090 $215,106 $143,310 $165,258 $468,922 $494,887 $378,786 $14,081 $3,346,108

Non-Operating Expenses

Interest Expense $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $257,400

Taxes $74,064 $87,092 $126,048 $87,092 $87,598 $65,843 $41,432 $48,895 $152,140 $160,969 $121,494 ($2,505) $1,050,161

Total Non-Operating Expenses $95,514 $108,542 $147,498 $108,542 $109,048 $87,293 $62,882 $70,345 $173,590 $182,419 $142,944 $18,945 $1,307,561

Net Profit after Taxes $143,772 $169,060 $244,680 $169,060 $170,042 $127,813 $80,428 $94,913 $295,331 $312,469 $235,842 ($4,863) $2,038,547

Riordan Manufacturing, Inc.

Cash Budget FY 2005

Oct.
2004 Nov.
2004 Dec.
2004 Jan.
2005 Feb.
2005 Mar.
2005 Apr.
2005 May
2005 Jun.
2005 Jul.
2005 Aug.
2005 Sep.
2005

Cash Inflows

Collections from Sales $2,535,000 $3,976,000 $4,182,000 $4,798,000 $4,182,000 $4,190,000 $3,846,000 $3,460,000 $3,578,000 $5,210,600 $5,350,200 $4,726,000

Interest Income $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500

Total Cash Inflows $2,546,500 $3,987,500 $4,193,500 $4,809,500 $4,193,500 $4,201,500 $3,857,500 $3,471,500 $3,589,500 $5,222,100 $5,361,700 $4,737,500

Cash Outflows

Payments for Raw Materials $735,000 $1,132,762 $1,191,452 $1,366,950 $1,191,452 $1,193,731 $1,095,725 $985,754 $1,019,372 $1,484,500 $1,524,272 $1,346,437

Payments for Direct Labor $2,103,702 $2,212,696 $2,538,622 $2,212,696 $2,216,929 $2,034,919 $1,830,686 $1,893,120 $2,756,928 $2,830,791 $2,500,527 $1,463,078

Operating Expenses $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250 $500,250

Depreciation ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000) ($36,000)

Interest Expense $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450 $21,450

Corporate Tax Payments $287,203 $240,532 $242,467 $279,957

Capital Expenditures $250,000 $250,000 $350,000

Total Cash Outflows $3,574,402 $3,831,159 $4,502,977 $4,315,346 $3,894,081 $3,954,882 $3,762,111 $3,364,574 $4,504,468 $4,800,991 $4,510,499 $3,575,173

Net Cash Flows ($1,027,902) $156,341 ($309,477) $494,154 $299,419 $246,618 $95,389 $106,926 ($914,968) $421,109 $851,201 $1,162,327

Beginning Cash on Hand $357,216 ($670,686) ($514,344) ($823,821) ($329,668) ($30,248) $216,370 $311,758 $418,684 ($496,284) ($75,174) $776,027

Ending Cash on Hand ($670,686) ($514,344) ($823,821) ($329,668) ($30,248) $216,370 $311,758 $418,684 ($496,284) ($75,174) $776,027 $1,938,354

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