EMAIL DETAILS

Hey guys,


I did some model tinkering based on our call yesterday and how we can look
at the business as "Lines of Business" and perhaps to start to move in that
direction in terms of operations, focus, teams, etc.


Take a look at the model scenarios: 1 Current State (estimated), 2 Core
Build Out - next 12 months and 3 Core Build Out plus Analytics - next 12
months+


. All of the Gross and Net percentages are where each of those lines
of business should be in terms of industry benchmarks.


. The "Cost of Service" is essentially the headcount, COGS,
contractors, whatever the "delivery" costs are include % of time of people
(i.e., the Corporate Advisory pays for 20% of Neil's base because he spends
20% of his time delivering on that business)


. All travel etc are all pass through to client and have already
been netted out (we have Net Revenue, not Gross Revenue).


. Each LOB is hit with a 12% charge to cover Overhead - sales,
office space, mail, computers - and headcount doing admin (i.e., 10% of
Devon's bases in charged to overhead for his time spent selling, or doing
the taxes, etc.)


. This basically leave Net Income for each LOB , or "contribution
margin" meaning how much has each LOB contributed to the business.


. Then I leave a bonus pool that gets filled once the contribution
margin target is filled and this pool is distributed to the LOB Management.
(say 20%, it could go higher, or be different by LOB)


. After that is Net Income for distribution to shareholders and/or
additional bonus pool and/or corporate initiatives and investments.


I know this is a lot for an email, but it's a straight forward model once
you take a look.


Let me know if you all want to get on the phone and review.


Best,


Neil


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Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965 |
212-796-4037

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile)

866-749-8879 (fax)