The Case

You have been engaged by Jack and Diane Redmond to value their company, Redmond Pro Printing, Inc. (Redmond Pro) The valuation is for the purpose of giving 90 shares of Dianes stock to the Florida Conservancy for Cougars (FCC), a 501(c)(3), with headquarters in Tampa, Florida. The Valuation Date is October 31, 2012. You have been retained to prepare a Detailed valuation report.

Redmond Pro Printing, Inc. is a closely held company with the following stock ownership:

Shareholder

Number of Shares Percent

Jack Redmond 275, 55.0%

Diane Redmond 225, 45.0%

TOTAL: 500, 100.0%

Jack and Diane are husband and wife. They do not have any relatives working in the business. The contribution to the FCC is to be 90 shares of stock. The FCCs interest on the

board will be represented by an attorney to be named later. Costs associated with the FCC representative to attend board meetings will be borne by FCC. Jack and Diane have agreed to this family charitable contribution.

The stocks re-sale to a non-family member will be restricted for a period of five years. If a family member does not re-purchase the shares, or agree to purchase the shares, within the stipulated five years and one day, then FCC may offer the shares for sale to non-family members.Redmond Pro Printing, Inc. is a printing company headquartered in Tampa, Florida. Mr. Redmond and a former business partner, Justin Baker, started the company in 1983 as Redmond/Baker Printing. The name of the business was changed to RB Quality Printing, Inc.

shortly after formation. Jack and DianeRedmond purchased Justin Bakers interest in the business in 1986. At that time, the Redmonds changed the name to Redmond Pro Printing, Inc. The company leases real estate from

Jack & Diane Family Limited Partnership (JDFLP) which is owned by the companys principal shareholders, Jack and Diane Redmond. The lease agreement includes Redmond Pros Tampa facility and an additional property known as the

Cliff Building. The lease payment is $23,450 per month.This is the only related-party transaction inwhich the company is involved. Redmond Pro sub-leases approximately one-half of the space in the Cliff Building to another company. Redmond Pro Printing, Inc. now has gross sales of approximately $12 million and employs about 110people. In 1986, when the name changed, Redmond Pro had annual sales of $100,000 and only five employees. The employee turnover rate is very low by industry standards, which implies a high degree ofemployee satisfaction and a relative constant level of printing work. There is an adequate supply of labor in the area when occasional help is needed, and the compensation for these individuals is average for the area. Management below the owner level is very good and capable. They are able to perform their duties without much supervision or control. The owners (Jack and Diane) work 100% of the time in thebusiness. Jack Redmond (age 64) is the president of Redmond Pro and Diane Redmond (age 60)is the office manager. Each owner is paid $10,000 per month. It is expected that an adequate replacement for Diane can be found at an annual salary of $65,000-$75,000. Jacks salary is at the market rate for the area. The companys other key employees include: Erick Davidson (VP of Finance), Kurt Samuelson(VP of Production), Dean Richardson (Manager of the Prepress Department), Sam Erickson (Manger of the Press Department), and Tamara Forest (Manager of the Finishing Department). Redmond Pro currently has 8 sales people, all of whom are located in Tampa. In the future, Redmond Pro anticipates that salespeople will be added in other geographic areas. However, no definitive plans for geographic expansion existed as of October 31, 2012.Financial statements for Redmond Pro Printing, Inc. are prepared annually on an accrual basis and are reviewed by the outside CPA. The financial statements are compiled by the outside CPA, and are available two weeks after the end of each month. Tax planning is done annually. The companys banking relationship is excellentthey have a $1.50 million credit line at their bank, which they rarely need to utilize. Redmond Pro is a printing company that offers a wide range of services, including graphic design, electronic prepress, multi-color offset printing, variable image printing, finishing, and mailing and fulfillment services. Nearly all of Redmond Pros customers are located in Tampa, Florida, and most of the companys customers are located within 75 miles of Tampa, Florida metropolitan area. However, Redmond Pro does have one large account in Miami, Florida (approximately 280 miles southeast of Tampa). Redmond Pro obtains a significant amount of revenue from a relatively small number of customer accounts. In recent years, the company had 20 to 25 customer accounts that each generated more than $90,000 of annual revenue. Entry into this type of industry is relatively difficult as it takes large sums of money and equipment. This industry also requires high labor input. The companys management perceived Redmond Pros strengths to be:

Well established with over 35 years of successful operation

Low employee turnover

Experienced and effective management team

Excellent product and exceptional service

Wide variety of service offerings

Clean, organized, and well-maintained facility

Up-to-date equipment

Accessible location

The scope of this engagement is limited to completing the valuation report as of October 31, 2012 and does not require you to meet the requirements for a charitable contribution under IRS Treasury Regulation 1.170A-13.