Exhibit 1 Sippican Corporation: Operating Results (March 2006) Exhibit 2 Product Profitability Analysis (March 2006) Valves Pumps Flow Controllers Sales Direct Labor Expense Direct Materials Expense Contribution Margin Manufacturing Overhead $1,847,500 351,000 100% Direct labor costa $12.35 $16.25 $13.00 458,000 $1,038,500 Direct material cost 16.00 20.00 22.00 56% Manufacturing overhead (@185%) 22.85 30.06 24.05 Standard unit costs $51.20 $66.31 $59.05 Target selling price $78.77 $102.02 $90.85 Planned gross margin (%) 35% 35% 35% Machine-related expenses $334,800 Actual selling price $79.00 $70.00 $95.00 Setup labor 117,000 Actual gross margin $27.80 Receiving and production control 15,600 Actual gross margin (%) 35% $3.69 5% $35.95 38% Engineering 78,000 Packaging and shipping 109,200 Exhibit 3 Product Data Total Manufacturing Overhead 654,600 35% Gross Margin 383,900 21% General, Selling & Administrative Expenses 350,000 19% Product Lines Valves Operating Income (pre-tax) $33,900 1.8% Materials per unit 4 components 2 @ $2=$ 4 5 components 3 @ $2 = $ 6 Source: Casewriter. Exhibit 4 Monthly Production and Operating Statistics (March 2006) 2 @ 6=12 2 @ 7=14 Materials cost per unit Direct labor per unit Machine hours per unit Setup hours per run $16 $20 Pumps Flow Controllers 10 components 4 @ $1 = $ 4 5@2=10 1 @ 8=8 $22 0.38 DL hours 0.50 DL hours 0.5 0.5 5 0.40 DL hours 0.3 6 12 Valves Pumps ow Controlle Total Production (units) 7,500 Machine hours (run time) 3,750 12,500 6.250 Production runs 20 100 4,000 1,200 225 24,000 11,200 Setup hours (labor and machines) 100 600 2,700 345 3,400 Number of shipments 40 100 200 340 Hours of engineering work 60 240 600 900 The full compensation, including fringe benefits, for direct and indirect employees (other than engineers) was $3,900 per month. Employees worked an average of 20 days per month (holidays and vacations accounted for the remaining 2-3 business days per month). "Direct labor costs were charged at $32.50 per hour. The average daily compensation for days worked was $195 per day ($3,900 per month divided by 20 working days per month). The hourly rate was calculated by dividing $195 by the six hours per day. available for productive work.