Financial Statements & Forward Looking Information

Historical information is not necessarily an indication of future performance. Financial forecasts and projections, while made in good faith, are based on underlying assumptions which may or may not prove to be accurate. There will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material.

Advertising – Employment

Advertising costs are expensed as incurred and are primarily related to employment advertising.

Financial Summary

FY 2003 Highlights

• Essentially achieved a “break-even” operating profit
• 4% productivity improvement over FY 2002
• Oversaw the distribution of nearly 500 million copies
• Ensured compliance with Do-Not-Call telemarketing legislation

Forward Looking Highlights

• Revenue Growth
• Total net revenues grow 3.5% - 5% during plan period
• Operating Profit (EBITDA) Improvement
• Expected to improve from breakeven in FY 2003 to $9.5M by FY 2006
• Reduce Debt and Reinvest in Infrastructure
• $18M revolving line of credit reduced to $9.4M by end of FY 2006
• Capital expenditures increase to $4.0M per year in FY 2005 and FY 2006

Early Bird Income Statement
($ Millions)
	ACTUAL RESULTS				FORWARD LOOKING INFORMATION
	FY 2002		FY 2003		FY 2004		FY 2005		FY 2006
Revenues
Distribution	$153.7		$165.8		$174.3		$180.9		$188.4
Customer Care	18.3		19.7		20.7		20.7		21.0
Sales Development	19.1		18.8		17.6		17.8		17.5
Administrative Fees	15.2		14.7		14.7		17.2		17.9
Client Rebates	(4.0)		(6.7)		(7.6)		(6.0)		(6.4)
Total Net Revenues	202.3		212.3		219.7		230.6		238.4
Cost of Sales
Distribution	155.1		158.5		163.9		169.8		173.7
Customer Care	16.2		15.0		16.5		15.7		16.2
Sales Development	19.5		17.8		15.2		15.1		15.0
Total	190.8		191.3		195.6		200.6		204.9
Gross Margin	$11.5		$21.0		$24.1		$30.0		$33.5
Gross Margin Percentage	5.7%		9.9%		11.0%		13.0%		14.1%
General & Administrative	19.0		21.1		21.6		22.9		24.0
Total Operating Costs	209.8		212.4		217.2		223.5		228.9
Operating Profit / (Loss)	($7.5)		($0.1)		$2.5		$7.1		$9.5
Operating Margin Percentage	-3.7%		0.0%		1.1%		3.1%		4.0%
Revenue Sharing	0.0		0.0		0.0		0.0		0.0
Interest Expense	0.5		0.5		0.4		0.3		0.2
Depreciation Expense	3.6		2.9		3.1		3.2		3.5
Other Expense/(Income)	0.0		0.0		0.7		0.0		0.0
	4.1		3.4		3.5		3.5		3.7
Net Income/(Loss) Before Taxes	(11.6)		(3.5)		(1.7)		3.6		5.8
Income Tax (Expense)/Benefit	4.6		1.4		0.7		(1.4)		(2.3)
Net Income / (Loss)	($7.0)		($2.1)		($1.0)		$2.2		$3.5
Net margin Percentage	-3.5%		-1.0%		-0.5%		1.0%		1.5%

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