Consumer Discretionary Sector Oren Bossin Michael Cooperman

Consumer Discretionary Sector Oren Bossin Michael Cooperman Howard Weiss Student Managed Investment Portfolio Class Prof. P.V. Viswanath Spring 2002

Objective To find Consumer Discretionary stocks that are undervalued, but in a good position financially to capitalize in a recovery market.

Research Methodology Initial Universe Negative Free Cash Flows Less than 200M Market Cap Beta Greater than 2.0 Leverage and Profitability Ratios * Return on Equity * 860 735 517 502 18 5

Research Methodology Debt Capacity Regression Analysis 1st Quartile FCF/MVA 1st Quartile FCF/Revenue 1st Quartile Total Liabilities/Total Assets 1st Quartile

Research Methodology Add ROE rank to the four variables in leverage and profitability analysis and rerank all the variables with each variable receiving a weight. This provided a roughly 60-40 split of profitability and debt. We chose the top five companies from this analysis.

Initial Analysis Percentage Weights select 0.4 Rank resid from reg resid from Stock Name I Symbolreg reg TOPPS COMPANY INCORPORATED ToySport TOPP -0.29199 4 4KIDS ENTERTAINMENT ToySport INC KDE -0.29424 3 LYON WILLIAM HOMES HomeBldg WLS -0.29557 1 K-SWISS INCORPORATED Shoe Mfg CL KSWS A -0.29432 2 SHUFFLE MASTER GamingEq INCORPORATED SHFL -0.29055 5 WMS INDUSTRIES INCORPORATED GamingEq WMS -0.2877 6 TIMBERLAND COMPANY Shoe Mfg TBL -0.28233 8 ACRES GAMING INCORPORATED GamingEq AGAM -0.28192 9 EQUITY MARKETINGToySport INCORPORATED EMAK -0.28491 7 LANCASTER COLONY ConsProd CORPORATION LANC -0.27104 15 KOSS CORPORATION Applianc KOSS -0.28064 11 INDUSTRIE NATUZZIHse SPAFurn NTZ -0.27241 14 DEB SHOPS INCORPORATED ApprlStr DEBS -0.28147 10 BUCKLE INCORPORATED ApprlStr BKE -0.27497 13 FOSSIL INCORPORATED ConsProd FOSL -0.27504 12 WESCAST INDUSTRIES AutoPart INC WCST -0.23097 18 ETHAN ALLEN INTERIORS Furn StrINCETH -0.26143 17 READERS DIGEST ASSN PublishINC CL RDA A -0.19296 19 STRATTEC SECURITY AutoPart CORPORATION STRT -0.2704 16 0.2 0.05 Rank Rank FCF/MVA FCF/MVA TL/TA TL/TA 0.180935 1 0.3 0.116809 3 0.420455 0.112379 4 0.652074 0.096798 5 0.223602 0.07285 11 0.230769 0.054842 17 0.079137 0.067627 13 0.287129 0.076772 9 0.636364 0.085499 6 0.378378 0.07773 8 0.195804 0.079342 7 0.333333 0.062195 15 0.274633 0.062878 14 0.202312 0.070099 12 0.155844 0.057872 16 0.269481 0.131957 2 0.164835 0.04672 18 0.248788 0.046713 19 0.727761 0.075756 10 0.411765 12 16 18 6 7 1 11 17 14 4 13 10 5 2 9 3 8 19 15 0.1 Rank FCF/Rev FCF/Rev 0.293729 3 0.904762 1 0.108932 8 0.101695 9 0.354167 2 0.219697 4 0.089527 11 0.113636 6 0.083333 13 0.093807 10 0.128205 5 0.083694 12 0.081169 15 0.082474 14 0.076923 16 0.112903 7 0.073009 17 0.069102 18 0.068966 19 0.05 Ret On Equity Rank LFY ROE 54.33 47.62 38.31 19.06 33.82 20.45 31.58 99.99 24.3 20.62 32.1 20.34 19.67 19.48 27.13 20.62 19.64 34.57 22.11 2 3 4 19 6 14 8 1 10 13 7 15 16 18 9 12 17 5 11 0.2 Total Product shs outstanRank of Ranks (thousands)S hares 42552 3 3.4 12202 12 5.25 10618 13 5.7 6344 15 6.95 17760 10 7.05 32191 7 8.35 38818 4 8.65 9300 14 9.7 5878 16 9.7 36783 6 10.65 3648 19 11.1 54682 2 11.45 13555 11 11.55 21059 9 11.8 30170 8 12.1 5573 17 12.45 38728 5 14.35 87161 1 14.6 4113 18 15.2

And the Winners Are. TOPP KDE SHFL WLS KSWS TOPPS COMPANY INCORPORATED 4KIDS ENTERTAINMENT INC SHUFFLE MASTER INCORPORATED LYON WILLIAM HOMES K-SWISS INCORPORATED CL A

WLS Anticipate Fed raising rates Result: dampen housing market Housing market tends to lag economy showing signs of slowing Did not want to focus on industry directly impacted by Fed interest rate moves

TOPP Strong financial position Not in a strategic position for growth Good debt capacity Excess cash reserves possibility of management not knowing how to manage excess cash Stock price has not moved in over 2 years

KDE Good debt capacity Available free cash flow Growth opportunities Core product (Pokemon) fading Result: Fad dies down earnings have substantially decreased Success relies too much on next big fad Risk outweighs benefit at this point in time Stock should be tracked for future investment

SHFL and KSWS Good debt capacity Available free cash flows Opportunities for growth Low relative risk

Model Value vs. Market Value Ticker Model Price Current Price Differential Status TOPP KDE 14.86 10.03 -48% undervalued SHFL 13.11 17.26 24% overvalued WLS 27.76 21.95 -26% undervalued KSWS 32.27 27.2 -19% undervalued 54.92 46.85 -17% undervalued

Corporate Analysis Considerations: Corporate Overview SWOT Analysis Damadoran 2-Stage Free Cash Flow Model Company to Index Comparison Insider activity Institutional activity

Corporate Overview Shuffle Master Inc.: Shuffle Master, Inc. develops, manufactures and markets automatic card shuffling equipment (shufflers) and gaming products such as table games, slot machine game software and slot machine operating system software for the gaming industry. The Company's card shuffler products, are automatic card shuffling machines designed to be used with table games in casinos and other legal gaming establishments. The Company's shufflers offer several benefits to its casino customers, including enhanced security and increased productivity.

Corporate Overview Products / M/A Continuous multi-deck shuffler marketed to casino customers (fiscal 2000) Featured a design that eliminated card counting and tracked productivity over the Company's multi-deck batch shuffler Acquired Gaming Products Pty Ltd. (fiscal 2001) Quick Draw shuffler product line Certain other assets related to the Gaming Products business Represents an alternate approach to continuous shuffler design Its long-term strategy is to develop a powerful, open-architecture game operating system that could run proprietary games on any slot machine.

Corporate Overview Strategy Develop or acquire gaming products and systems Market these products worldwide Card shufflers and specialty-table game lines objectives Productivity enhancing equipment New table and slot games Slot game technology Obtain licenses, patents, and other intellectual property Identify a business model to leverage and commercialize those assets Generate high-margin cash flow in line with the company’s historical gross margins (70-80%) Long-term strategy Develop a powerful, open-architecture game operating system that could run proprietary games on any slot machine

Corporate Overview Competitors Primary Competitor is WMS Gaming

SWOT Analysis Shuffle Masters Inc.: Strengths: Core business of card shuffler and specialty-table game lines are growing and providing gross margins of between 70%-80% No outstanding debt, an unused 15 million line of credit, and 23 million in cash Partnered with International Game Technology (IGT), the largest U.S. slot machine manufacturer to generate revenues using its brands and licenses Regulatory approval was given to Shuffle Master’s slot machine operating system Strong pipeline of game titles, both by themselves (15 new game titles submitted for regulatory approval) and with IGT (538 games have been installed as of January 31, 2002) Company one of the few leaders in gaming software technology Weaknesses: High R&D costs associated to keeping up with the accelerating rate at which games are being advanced and changed Success is largely dependant on approval of gaming technology by state gaming agencies Gaming industry has been hurt by September 11, which has caused a slow down in vacations (to casinos). Recovery will take some time Opportunities: Gaming system approval will allow Shuffle Master to develop proprietary games using its own titles and brands for casinos rather than partner with other manufacturers and share revenues Will soon be introducing new single- and double-deck shuffler into the previously untapped poker market sometime this summer WMS Gaming’s (WMS) (Shuffle Master’s main competitor) difficulties with its game operating system have created 1) a delay in its introduction of new titles and 2) a game base of roughly 50,000 faulty WMS video slots machines in the domestic market Threats: The interface for the WMS machines has not received regulatory approval which can cause new operating system to be delayed to market Strong competition from WMS Difficult to remain at the forefront of a changing (gaming) industry when technological advances, patents, and licenses usually have the effect of restricting product development

Shuffle Master Analysis Inputs to the model Current Earnings per share Current Dividends per share Current Capital Spending/sh Current Depreciation / share Current Revenues/ share Working Capital/ share Chg. Working Capital/share Enter length of extraordinary growth period 0.63 0.04 0.20 2.72 2.30 0.45 4 Do you want to enter cost of equity directly? If no, enter the inputs to the cost of equity Beta of the stock Riskfree rate Risk Premium no 1.33 5.10% 4.00% Beta Will the beta to change in the stable period? no Capital Spending, Depreciation & Working Capital Do you want all these items to grow at the same rate as earnings ? yes Do you want to keep the current fraction of working capital to revenues? Yes Do you want to use the current debt ratio as your desired mix? Yes Worksheet Earnings Inputs Do you want to use the historical growth rate? If yes, enter EPS fromfive years ago Do you have an outside estimate of growth ? If yes, enter the estimated growth: yes 0.21 Yes 25.00% Do you want to calculate the growth rate fromfundamentals? yes If yes, enter the following inputs: Net Income Currently 11,595.00 Interest Expense Currently 0.00 Last year Book Value of Debt 11,833.00 6,604.00 Book Value of Equity 40,566.00 28,010.00 Tax Rate on Income 36.00% Thefollowingwill betheinputstothefundamental growthformulation: ROC 33.50% D/E 29.17% Retention 100.00% Interest Rate 0.00% No (Yes or No) Doyouwanttochangeanyof theseinputsfor thehighgrowthperiod? If yes,specifythevaluesfor theseinputs(Pleaseenter all variables) ROC 33.50% D/E 29.17% Retention 100.00% Interest Rate 0.00% Specify weights to be assigned to each of these growth rates: Historical Growth Rate 10.00% Outside Prediction of Growth 20.00% Fundamental Estimate of Growth 70.00% Enter growth rate in stable growth period? Capital spending and Depreciation during Stable Growth Is capital spending to be offset by depreciation in stable period? Microsoft Excel yes 5.00%

Shuffle Master Analysis Cost of Equity Output fromthe program 10.42% Proportion of Debt: Capital Spending (DR) Proportion of Debt: Working Capital (DR) Current Earnings per share (Capital Spending - Depreciation)*(1-DR) Change in Working Capital * (1-DR) Current FCFE Growth Rate in Earnings per share Growth Rate Historical Growth 24.41% Outside Estimates 25.00% Fundamental Growth 43.27% Weighted Average 37.73% The FCFE for the high growth phase are shown below (upto 6 years) 1 2 3 Earnings 0.86 1.19 1.64 - (CapEx-Depreciation)*(1-DR) (0.17) (0.24) (0.33) -Chg. Working Capital*(1-DR) 0.67 0.93 1.27 Free Cashflow to Equity 0.36 0.50 0.69 Present Value 0.33 0.41 0.51 22.58% 22.58% 0.63 (0.12) 0.35 0.40 Growth Rate in Stable Phase FCFE in Stable Phase Cost of Equity in Stable Phase Price at the end of growth phase Weight 10.00% 20.00% 70.00% Present Value of FCFE in high growth phase Present Value of Terminal Price Value of the stock Growth Rate in capital spending, depreciation and working capital High Growth Stable Growth Growth rate in capital spending 3 7.73% 5.00% Growth rate in depreciation 37.73% 5.00% Growth rate in revenues 37.73% 5.00% Working Capital as percent of revenues 84.45% 5.00% 2.04 10.42% 37.73 (in percent) Estimating the value of growth Value of assets in place Value of stable growth Value of extraordinary growth Value of the stock 3.86 3.93 19.47 27.26 1.88 25.38 27.26

Shuffle Master Ratio Comparison Price/ Earnings Price/ Book Price/ Sales Price/ Cash Flow Dividend Yield % Stock Industry S&P 500 29.84 8.94 8.4 21.3 0.0 27.5 3.5 1.2 14.3 1.2 30.0 4.2 2.3 17.1 1.2

Shuffle Master Insider Transactions Date* NamePosition Action 3/18/02 3/18/02 1/31/02 1/31/02 12/28/01 SUTTON THOMAS A Director SUTTON THOMAS A Director CRUZEN PATRICK R Director CRUZEN PATRICK R Director ROBSON KEN Director Planned Sale Sale Planned Sale Sale Buy 40,000 32,900 36,000 18,000 200 755,200 622,275 648,000 324,720 3,200 10/26/01 10/26/01 9/20/01 9/20/01 7/24/01 LAHTI JOSEPH JOHN Director LAHTI JOSEPH JOHN Director ROBSON KEN Director SUTTON THOMAS A Director ROBSON KEN Director Planned Sale Sale Buy Buy Buy 56,257 56,252 300 200 100 795,403 815,654 3,096 2,250 1,610 6/13/01 6/13/01 1/22/01 1/17/01 1/17/01 CRUZEN PATRICK R Director CRUZEN PATRICK R Director CRUZEN PATRICK R Director CRUZEN PATRICK R Director SUTTON THOMAS A Director Planned Sale Sale Sale Planned Sale Planned Sale 13,500 13,500 9,000 9,000 10,000 391,500 392,676 157,062 153,000 180,813 LAHTI JOSEPH JOHN CEO LAHTI JOSEPH JOHN CEO SUTTON THOMAS A Director SUTTON THOMAS A Chairman SUTTON THOMAS A Chairman Planned Sale Sale Sale Planned Sale Planned Sale 150,000 150,000 10,000 7,500 0 2,587,500 2,631,855 180,813 105,469 0 1/16/01 1/16/01 1/16/01 12/21/00 12/21/00 Shares Value

Shuffle Master Insider Activity

Shuffle Master Institutional Ownership Fund Ownership Total # of Funds Major Fund Owners Fund Name Liberty Acorn Z Nations Small Company Inv A PIMCO Micro Cap Instl Heritage Aggressive Growth A Fremont Institutional U.S. Micro-Cap STI Classic Small Cap Growth Stk Flex Consulting Group Small Cap Growth SEI Instl Mgd Small Cap Growth A Turner Small Cap Growth Heritage Small Cap Stock A Oppenheimer Discovery A Heritage Mid Cap Stock A Vanguard Small Cap Index Artisan Small Cap Forward Hoover Small Cap Equity FBR Small Cap Value A Vanguard Explorer Quant Small Cap Ord Oppenheimer Main St Small Cap A Evergreen Global Opportunities A 5,505,600 shares 31% 68 % ofSharesHeld % ofFund Assets 8.8 2.99 1.69 1.49 1.43 1.3 1.13 1.1 0.72 0.7 0.63 0.61 0.59 0.52 0.39 0.39 0.32 0.3 0.3 0.3 0.49 0.99 2.3 4.04 1.47 0.72 0.49 0.41 0.85 1.14 0.14 1.12 0.04 1.23 1.12 4.05 0.02 1.53 0.15 0.46 Change(000) inOwnership 512 247 0 265 255 0 0 0 24 88 112 91 2 -22 41 0 0 -12 -19 -17

Corporate Overview K-Swiss Inc.: K-Swiss Inc. designs, develops and markets a growing array of athletic footwear for high performance sports use, fitness activities and casual wear. The Company was founded in 1966, by two Swiss brothers, who introduced one of the first leather tennis shoes in the United States. The shoe, the K-Swiss "Classic," has remained relatively unchanged from its original design, and accounts for a significant portion of the Company's sales. The Company sells its products in the United States through independent sales representatives, primarily to specialty athletic footwear stores, pro shops, sporting good stores and department stores. K-Swiss also sells its products to a number of foreign distributors. The Company now has sales offices or distributors throughout the world. KSwiss’s goal is to become retailing’s most profitable vendor.

Corporate Overview Footwear The Classic Category - High Performance Tennis Shoes (1966) Classic Originals K-S Collection Limited Edition High-End Performance 7.0 System launched in 1997 Sold in tennis specialty and pro-shops Training - To differentiate lines from competitors (2000) Speed Strength Endurance moderately priced running shoes moderately priced cross-training shoes trail running shoes

Corporate Overview Apparel and Accessories K-Swiss branded apparel and accessories Designed with the same classic strategies used in the footwear line Complement its performance 7.0 footwear (Men & Women) The product line consists of: Appeal to a variety of new markets from an urban distribution to an upscale suburban consumer New 7.0 line of high tech tennis apparel (1999) skirts shorts tops dresses warm-ups Collection for the casual athletic consumer tee shirts caps socks bags

Corporate Overview Competitors Domestic Nike Adidas International Nike Adidas Reebok

SWOT K-Swiss: Analysis Strengths: Focused distribution and allocation strategy Senior management team has almost 16 years of experience in the industry President, Mr. Nichols, has been at the helm since he led the company's buyout in December 1986 Significant operating leverage from a low fixed - cost structure, resulting from efficient distribution and administrative operations Strong financial position - at the end of 4Q01, K-Swiss had 61.6 million in cash on its balance sheet with essentially no debt Weaknesses: International revenue only comprised 15% of 2001 total revenue Potential income loss due to a delay in starting the 2002 advertising campaign compared with that of 2001 Expected decrease in gross margins and increase in expenses due to investments in National Geographic and Royal Elastic Brands Opportunities: International markets present an attractive opportunity, and are performing well - international revenue increased 55.5% to 6.5 million Beginning to see increased sales in some key markets - Asia, Europe (Classic #1 shoe in Japan) Joint venture with Rugged Shark to license, produce and market a men's, women's and children's collection of National Geographic casual footwear Acquired the rights and business of Australian designer and manufacturer, Royal Elastics (elasticated footwear) Niche within the footwear market, with approximately 8 million in sales Threats: Spreading out into newly formed Joint Venture and Acquisition might hurt brand image and brand strength Core business ie. “Classic” shoe sales represent 70% of company’s total sales Might not be able to recover lost market share from 98’ product withdrawal overseas

K-Swiss Analysis Inputs to the model Current Earnings per share Current Dividends per share Current Capital Spending/sh Current Depreciation / share Current Revenues/ share Working Capital/ share Chg. Working Capital/share 2.28 0.06 0.12 0.20 28.45 12.86 0.77 Enter length of extraordinary growth period 6 Do you want to enter cost of equity directly? If no, enter the inputs to the cost of equity Beta of the stock Riskfree rate Risk Premium no 0.73 5.10% 4.00% no Capital Spending, Depreciation & Working Capital Do you want all these items to grow at the same rate as earnings ? yes Do you want to keep the current fraction of working capital to revenues? Yes Earnings Inputs Do you want to use the historical growth rate? If yes, enter EPS fromfive years ago yes Do you have an outside estimate of growth ? If yes, enter the estimated growth: 0.35 yes 10.00% Do you want to calculate the growth rate fromfundamentals? Yes If yes, enter the following inputs: Net Income Currently 23,309.00 Interest Expense Currently 1,804.00 Last year Book Value of Debt 36,440.00 37,208.00 Book Value of Equity 1,672,628.55 1,665,033.15 Tax Rate on Income 36.00% Thefollowingwill betheinputstothefundamental growthformulation: ROC Retention ROC Retention 1.44% 97.36% yes D/E Interest Rate (Yes or No) 2.18% 4.95% 5.00% 97.36% D/E Interest Rate 2.18% 4.95% Specify weights to be assigned to each of these growth rates: Historical Growth Rate 10.00% Outside Prediction of Growth 20.00% Fundamental Estimate of Growth 70.00% Yes Enter growth rate in stable growth period? Capital spending and Depreciation during Stable Growth Is capital spending to be offset by depreciation in stable period? Worksheet Doyouwanttochangeanyof theseinputsfor thehighgrowthperiod? If yes,specifythevaluesfor theseinputs(Pleaseenter all variables) Beta Will the beta to change in the stable period? Do you want to use the current debt ratio as your desired mix? Microsoft Excel yes 3.50%

K-Swiss Analysis Cost of Equity Output fromthe program 8.02% Proportion of Debt: Capital Spending (DR) 2.13% Proportion of Debt: Working Capital (DR) 2.13% Current Earnings per share 2.28 (Capital Spending - Depreciation)*(1-DR) (0.07) Change in Working Capital * (1-DR) 0.76 Current FCFE 1.59 Growth Rate in Stable Phase 3.50% FCFE in Stable Phase 3.39 Cost of Equity in Stable Phase 8.02% Price at the end of growth phase 75.01 Growth Rate in Earnings per share Growth RateWeight Historical Growth 45.43% 10.00% Outside Estimates 10.00% 20.00% Fundamental Growth 4.91% 70.00% Weighted Average 9.98% Present Value of FCFE in high growth phase 7.70 Present Value of Terminal Price 47.22 Value of the stock 54.92 Growth Rate in capital spending, depreciation and working capital High Growth Stable Growth Growth rate in capital spending 9.98% 3.50% Growth rate in depreciation 9.98% 3.50% Growth rate in revenues 9.98% 3.50% Working Capital as percent of revenues 45.22% The FCFE for the high growth phase are shown below (upto 6 years) 1 2 3 4 Earnings 2.50 2.75 3.03 3.33 - (CapEx-Depreciation)*(1-DR) (0.08) (0.08) (0.09) (0.10) -Chg. Working Capital*(1-DR) 1.26 1.38 1.52 1.67 Free Cashflow to Equity 1.32 1.46 1.60 1.76 Present Value 1.23 1.25 1.27 1.29 (in percent) Estimating the value of growth Value of assets in place Value of stable growth Value of extraordinary growth Value of the stock 19.81 16.57 18.54 54.92 5 3.66 (0.11) 1.84 1.94 1.32

K-Swiss Ratio Comparison Stock Industry S&P 500 20.2 26.4 30.0 Price/ Book 3.5 4.3 4.2 Price/ Sales 1.8 1.7 2.3 Price/ Cash Flow 12.4 19.9 17.1 Dividend Yield % 0.1 0.8 1.2 Price/ Earnings

K-Swiss Insider Transactions Insider Activity Date* NamePosition Action 3/5/02 3/1/02 2/28/02 2/28/02 2/14/02 SMITH JANICE LYNN Officer WORLEY PETER KENT Officer FLORA EDWARD Unknown FLORA EDWARD Officer FINE STEPHEN A Director Sale Sale Planned Sale Sale Sale 1,000 10,000 1,000 1,000 70,000 37,000 368,010 35,000 35,000 2,363,234 2/13/02 2/13/02 2/12/02 2/11/02 8/10/01 GREEN LEE General Counsel POWLICK GEORGE EDWARD CFO GREEN LEE Unknown POWLICK GEORGE EDWARD CFO MITCHELL DEBORAH A Divisional Officer Sale Planned Sale Planned Sale Sale Planned Sale 5,000 3,840 5,000 3,840 5,000 169,177 131,112 172,000 131,112 175,000 2/20/01 2/15/01 2/15/01 2/13/01 2/13/01 MITCHELL DEBORAH A Vice President MITCHELL DEBORAH A Vice President SMITH JANICE LYNN Controller NICHOLS FAMILY TRUST Chairman NICHOLS STEVEN CEO Planned Sale Planned Sale Planned Sale Planned Sale Sale 10,000 5,000 1,000 30,000 30,000 316,563 155,000 31,000 876,000 900,940 WORLEY PETER KENT Unknown POWLICK GEORGE EDWARD CFO SULLIVAN BRIAN Vice President SULLIVAN BRIAN Vice President POWLICK GEORGE EDWARD CFO Planned Sale Buy Planned Sale Planned Sale Buy 9,999 10,700 9,000 3,000 7,500 255,000 216,588 153,000 51,000 100,938 10/23/00 8/11/00 7/26/00 7/26/00 5/12/00 Shares Value

K-Swiss Insider Activity

K-Swiss Institutional Ownership Fund Ownership Total # of Funds Major Fund Owners Fund Name CGM Focus STI Classic Small Cap Growth Stk Flex Vanguard Strategic Equity One Group Small Cap Growth A Vanguard Small Cap Index SEI Instl Mgd Small Cap Growth A Yacktman Scudder-Dreman Small Cap Value A Turner Micro Cap Growth AXP Small Company Index A American Century Veedot Inv Standish Small Cap Tax-Sensitive Vanguard Small Cap Growth Index Golden Oak Small Cap Value Instl Oppenheimer Main St Small Cap A UAM Sirach Special Equity Instl Vanguard Tax-Managed Small Cap Ret Vantagepoint Growth Nations Small Cap Index Inv A Pitcairn Small Cap 1,208,090 shares 78 % ofSharesHeld 2.49 1.18 0.5 0.45 0.4 0.4 0.38 0.36 0.35 0.3 0.27 0.26 0.25 0.22 0.22 0.2 0.16 0.16 0.11 0.1 13% % ofFund Assets 4.5 0.65 0.18 0.38 0.03 0.16 1.14 0.28 0.58 0.09 0.33 0.92 0.16 1.4 0.1 0.56 0.08 0.02 0.08 0.66 Change(000) inOwnership 231 15 46 42 -3 37 -20 0 0 1 10 0 23 -10 21 19 -1 13 0 9

Re-Cap Recommend buy SHFL and KSWS Watch KDE for future investment