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TBL and the 3 Ps

TBL and the 3 Ps. People, Planet, Profits (sustainability) Changing connotations about tobacco No longer a smoked/chewed carcinogen Environmentally beneficial to the soil/air. Environmental Commitments. Organic traceability available back to farmers’ fields

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TBL and the 3 Ps

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  1. TBL and the 3 Ps People, Planet, Profits (sustainability) Changing connotations about tobacco No longer a smoked/chewed carcinogen Environmentally beneficial to the soil/air

  2. Environmental Commitments • Organic traceability available back to farmers’ fields • Polonium-210 reduced via non-phosphate fertilizers • High-density polyethylene (HDPE) plastic used • Labels user friendly yet explanatory and detailed

  3. Social Concerns • How we operate with vendors in our supply chain • Farmers and sustaining livelihoods • Rural community benefits • Partnering with agricultural schools • Drawing attention to organic stores/cooperatives

  4. Economic Concerns • How soon until profitability? • Managerial balance sheet & quarterly analyses • Adhering to governmental compliance • Utilizing the Global Reporting Initiative (GRI)

  5. Impacts • No legal obligation to serve special interests • We understand how aggressive NGOs can be • State mandates can force payroll insurance funding • Good insurance retains good employees

  6. Horizontal/Vertical Affects • Potentially have a test farm (for nitrogen levels) • Work with Kentucky agricultural school • Which retailers meet our sustainability standards • Require RFPs to include recycled content used • Successive generations find work at Gang Green?

  7. Local Impacts • Reducing incidents of vandalism to greenhouses • Less stigma to tobacco farmers • Drought and uneven drying no longer concerns • No selling at deeply discounted prices • Labor initiatives undertaken by employees

  8. Steve’s section 2 slides go next • Next are the slides where Steve discusses financial plan and projections • (Delete this instructional slide, Terra.)

  9. Financial Aspirations • 1st year’s projected net income: $11,000 • 2nd year projected income: $126,000 • 3rd year projected income: $591,000

  10. Capital Costs • Cash Flow: $4,900,000 outlay nets 6.88% IRR over 8 years • Our WACC: 6.1025% when using 55% debt, 45% owners equity, tax rate of 30% • Thus, we have a worthwhile endeavor • 1st year’s sales: $4,200,000; payroll alone is $2,000,000

  11. 3-year Pro forma sheet 2011 Total Assets: $2,292,000 2012 Total Assets: $2,604,000 2013 Total Assets: $2,982,000

  12. 1st Year Sales Per Unit • 1-liter: 120,000 @ $3 profit • 5-liter: 80,000 @ $17 profit • 50 liter: 2600 @ $170 profit • 200 liter: 3100 @ $660 profit • Total sales: $4,208,000

  13. Projections • 50,000 unit increase for 1-liter in 2nd and 3rd years • 15,000 unit increase for 5 liter in 2nd and 3rd years • These are targeted at organic markets • Just 400 unit increase for 50-liter commercial size • 200-liter size increases 16% from 1st to 2nd year; 8% increase from 2nd to 3rd year

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