EX-99.6 3 p65926a3ex99-6.txt EX-99.6 EXHIBIT 6 U.S. BANCORP PIPER JAFFRAY INC. Financial Institutions Group Minneapolis Menlo Park Seattle Chicago Los Angeles San Francisco New York Boston Project Wheel II London Geneva PRESENTATION TO THE SPECIAL TRANSACTION Tel Aviv COMMITTEE OF THE BOARD OF DIRECTORS December 5, 2001 Guides for the journey.(SM) [USBANCORP LOGO] Piper Jaffray(R) TABLE OF CONTENTS
Section ------- Executive Summary I Overview of Due Diligence Procedures II Selected Market Information III Summary of Analyses IV
Appendix -------- Discounted Cash Flow Analysis - Detail A Comparable Transactions and Implied Premiums Paid Analysis - Detail B Comparable Public Company Analysis - Detail C
Project Wheel II [USBANCORP LOGO] Piper Jaffray(R) EXECUTIVE SUMMARY Executive Summary Company Overview - Ugly Duckling Corporation ("Wheel" or the "Company") operates the largest chain of "buy here-pay here" used car dealerships in the United States and underwrites, finances, and services retail installment contracts generated from the sale of used cars by its 76 dealerships located in eleven metropolitan areas in eight states. The Company's primary line of business is to sell and finance quality used vehicles to customers within the sub-prime segment of the used-car market.
AS OF OR FOR THE TWELVE AS OF OR FOR THE NINE MONTHS ENDED DECEMBER 31, MONTHS ENDED SEPTEMBER 30, ----------------------------------- ------------------------- 1998 1999 2000 2000 2001 -------- -------- -------- -------- -------- SELECTED BALANCE SHEET DATA Finance Receivables, net $126,168 $365,586 $500,469 $491,880 $501,048 Inventory $ 44,145 $ 62,865 $ 63,742 $ 43,739 $ 47,414 Property and Equipment, net $ 28,631 $ 31,752 $ 38,679 $ 35,604 $ 39,487 Total Assets $337,281 $536,711 $652,121 $618,483 $657,740 Notes Payable - Portfolio $101,732 $275,774 $406,551 $362,255 $386,572 Other Notes Payable $ 15,899 $ 36,556 $ 16,579 $ 17,930 $ 41,646 Subordinated Notes Payable $ 37,980 $ 28,611 $ 34,522 $ 36,148 $ 32,600 Total Stockholders' Equity $162,767 $165,680 $155,400 $158,522 $151,550 Tangible Stockholders' Equity $148,334 $151,062 $142,873 $145,755 $139,742 SELECTED STATEMENTS OF OPERATIONS DATA Sales of Used Cars $287,618 $389,908 $483,282 $380,949 $346,342 Number of Used Cars Sold 35,964 46,120 56,870 44,996 38,365 Gross Margin $122,336 $170,871 $215,034 $168,830 $150,240 Gross Margin after Provision for Credit Losses $ 59,018 $ 67,916 $ 73,063 $ 65,953 $ 30,255 Net Interest Income $ 14,427 $ 53,977 $ 93,021 $ 68,494 $ 80,244 Income before Operating Expenses $ 99,019 $129,365 $167,939 $134,447 $110,499 Earnings (loss) before Income Taxes $ 5,806 $ 14,687 $ 15,268 $ 19,485 $ (6,737) Earnings (loss) before Extraordinary Item $ (5,703) $ 9,260 $ 9,063 $ 11,514 $ (3,975) Earnings (loss) per Common Share before Extraordinary Item: Basic $ (0.32) $ 0.61 $ 0.67 $ 0.83 $ (0.32) Diluted $ (0.31) $ 0.60 $ 0.67 $ 0.82 $ (0.32)
Project Wheel II 1-1 [USBANCORP LOGO] Piper Jaffray(R) Executive Summary Recent Performance Issues CAPITAL MARKET ISSUES - Volatile stock price performance - Small market capitalization - Limited trading volume and float - Large insider holdings - Limited institutional support - Lack of research sponsorship BUSINESS PLATFORM ISSUES - Managing credit quality of loan portfolio - Decentralizing underwriting approval process - Delegating collection efforts to dealerships - Accessing the capital markets as a financing source (i.e. securitizations) - Little benefit from declining interest rate environment Project Wheel II 1-2 [USBANCORP LOGO] Piper Jaffray(R) Executive Summary Transaction Overview - Pursuant to a previous engagement with the Special Transaction Committee of the Company's Board of Directors ("STC"), U.S. Bancorp Piper Jaffray approached other potential acquirors of the Company as highlighted below: - 60 potential acquirors approached; - 28 entities received an executive summary highlighting the Company; - 7 potential acquirors signed a confidentiality agreement; and - 0 indications of interest were received by U.S. Bancorp Piper Jaffray. - Currently the STC is considering the tender offer by Ernest C. Garcia II ("Mr. Garcia"), Chairman and Chief Executive Officer, to acquire all of the outstanding common stock not owned by Mr. Garcia for $3.53 per share (the "Offer"). As of September 30, 2001, Mr. Garcia owned over 56% of Wheel's outstanding common stock. - Valuation Overview Shares Outstanding (000s) 12,274 CSE (000s)(1) 0 --------- Fully Diluted Shares Outstanding (000s) 12,274 ========= Offer Price $ 3.53 Equity Value (000s) $ 43,327 Plus: Debt (000s)(2) $ 74,246 Less: Cash and Cash Equivalents (000s) $ (7,384) --------- Company Value (000s) $ 110,189 =========
(1) Includes vested and unvested options outstanding. No option has an exercise price less than the Offer. (2) Excludes Portfolio Notes Payable. Project Wheel II 1-3 [USBANCORP LOGO] Piper Jaffray(R) OVERVIEW OF DUE DILIGENCE PROCEDURES Due Diligence Procedures During the course of due diligence, U.S. Bancorp Piper Jaffray has, among other things, undertaken the following: - Completed general business and financial due diligence with certain members of Wheel's senior management team. Topics discussed included, but were not limited to, the background and rationale for the transaction, the financial condition, operating performance, balance sheet characteristics and additional new business prospects of Wheel; - Reviewed the Tender Offer statement, dated November 26, 2001, with respect to the transaction; - Reviewed certain publicly available business and financial information relating to Wheel which we deemed to be relevant, including Reports on Form 10-K for the fiscal years ended December 31, 2000, 1999, 1998, and Reports on Form 10-Q for the quarters ended September 30, 2001, June 30, 2001, March 31, 2001, and September 30, 2000.; - Reviewed the most recent interim financial statements and other operating data since September 30, 2001 Form 10-Q; - Reviewed quarter ended September 30, 2001 Board of Directors packages and monthly Board of Directors packages since September 30, 2001; Project Wheel II 2-1 [USBANCORP LOGO] Piper Jaffray(R) Due Diligence Procedures Continued - Reviewed financial projection models prepared by Wheel, including effects of recent increases in the provision for loan losses; - Reviewed the financial terms, to the extent publicly available, of certain merger and acquisition transactions deemed relevant; - Reviewed certain financial and market performance data of Wheel with comparable financial and other data of publicly traded entities deemed similar to Wheel; and - Reviewed such other information and performed such other analyses as we deemed necessary, including our assessment of general economic, industry and financial market conditions. Project Wheel II 2-2 [USBANCORP LOGO] Piper Jaffray(R) SELECTED MARKET INFORMATION Selected Market Information Stock Trading Summary WHEEL
Stock Market NASDAQ Stock Price (as of 12/3/01): -- Close $ 2.57 -- High $ 2.65 -- Low $ 2.55 -- 30 Trading Day Average $ 2.42 -- 60 Trading Day Average $ 2.73 -- Average Since Previous Offer Withdrawal $ 2.50 In the 52 week period ending 12/3/01: -- Low $ 2.00 -- High $ 4.90 -- Average Daily Volume 27,874 Summary Capitalization: Common Stock Outstanding 12,274,000 Last Close $ 2.57 ------------ Market Capitalization $ 31,544,180 ============ Dividend per Share - Annual $0.00 Dividend Yield 0.00% Dividend Payout Ratio 0.00% Analyst Coverage -- Total Number 0
WHEEL
Stock Market NASDAQ Stock Price (as of 11/15/01(1)): -- Close $ 2.49 -- High $ 2.60 -- Low $ 2.33 -- 30 Trading Day Average $ 2.44 -- 60 Trading Day Average $ 3.04 -- Average Since Previous Offer Withdrawal $ 2.49 In the 52 week period ending 11/15/01: -- Low $ 2.00 -- High $ 5.50 -- Average Daily Volume 27,883 Summary Capitalization: Common Stock Outstanding 12,274,000 Last Close $ 2.49 ------------ Market Capitalization $ 30,562,260 ============ Dividend per Share - Annual $0.00 Dividend Yield 0.00% Dividend Payout Ratio 0.00% Analyst Coverage -- Total Number 0
(1) One day prior to announcement of Offer. Project Wheel II 3-1 [USBANCORP LOGO] Piper Jaffray(R) Selected Market Information Price/Volume Performance: 11/24/00 - 12/3/01 Mr. Garcia submits proposal to acquire remaining outstanding shares of Wheel (4/16/01) Mr. Garcia withdraws proposal to acquire remaining outstanding shares of Wheel (9/24/01) Mr. Garcia submits tender offer to acquire remaining outstanding shares of Wheel (11/16/01) PRICE VOLUME Volume Date (in thousands) Price --------------------------------------------- 11/24/00 2.6 $4.69 12/26/00 19.5 $4.06 1/26/01 12.9 $4.22 2/27/01 2.9 $3.38 3/28/01 9.9 $4.13 4/27/01 32.7 $4.10 5/29/01 15.8 $4.60 6/27/01 38.5 $4.40 7/27/01 11.8 $4.16 8/27/01 0.5 $4.23 10/2/01 17.0 $2.50 10/31/01 0.1 $2.52 11/30/01 17.0 $2.59 [BAR CHART OMITTED] Project Wheel II 3-2 [USBANCORP LOGO] Piper Jaffray(R) Selected Market Information Trading Volume at Various Prices: 11/29/00 - 11/29/01 VOLUME AT VARIOUS PRICES (11/29/00 - 11/29/01) Volume Range (in thousands) ---------------------------------- $2.01-$2.50 1,210.5 $2.51-$3.00 528.2 $3.01-$3.50 498.5 $3.51-$4.00 1,945.6 $4.01-$4.50 2,447.4 $4.51-$5.00 245.9 [BAR GRAPH OMITTED] * The Weighted Average Stock Price is $3.63 Project Wheel II 3-3 [USBANCORP LOGO] Piper Jaffray(R) Selected Market Information Trading Volume at Various Prices: 9/25/01 - 12/3/01 VOLUME AT VARIOUS PRICES (9/25/01 -- 12/3/01)
Volume Range (in thousands) --------------------------------- $2.01-$2.50 121.1 $2.51-$3.00 64.4
[BAR CHART OMITTED] * The Weighted Average Stock Price is $2.49 Project Wheel II 3-4 [USBANCORP LOGO] Piper Jaffray(R) Selected Market Information Relative Price Performance: 12/3/00 - 12/3/01 RELATIVE PRICE PERFORMANCE (12/3/00 - 12/3/01)
PRICE = 100 ON 12/01/00 ------------------------------------------------------------------------- Small-Cap Used Car S&P 500 Date WHEEL Auto Finance Dealers NASDAQ Composite ---------------------------------------------------------------------------------------------- 12/1/00 100.0 100.0 100.0 100.0 100.0 1/2/01 95.8 99.3 98.5 86.6 97.6 1/31/01 88.9 115.3 114.3 104.8 103.9 3/1/01 88.9 100.0 117.4 82.5 94.4 3/29/01 83.3 100.7 169.9 68.8 87.3 4/27/01 91.1 112.4 219.7 78.5 95.3 5/25/01 94.7 116.3 309.9 85.1 97.2 6/25/01 97.8 145.1 307.7 77.5 92.1 7/24/01 95.6 171.8 352.7 74.1 89.1 8/21/01 94.4 141.4 334.2 69.2 88.0 9/25/01 64.9 109.8 217.9 56.8 77.0 10/23/01 50.7 117.2 368.3 64.4 82.5 11/20/01 55.8 137.0 381.9 71.1 86.9
Small-Cap Auto Finance (1) Used Car Dealers (2) [LINE GRAPH OMITTED] (1) Includes: CACC, ONYX, UACA and WFSI. (2) Includes: CNGR, KMX and SCHA. Project Wheel II 3-5 [USBANCORP LOGO] Piper Jaffray(R) SUMMARY OF ANALYSES DISCOUNTED CASH FLOW ANALYSIS Overview - The discounted cash flow analysis is used to calculate a range of theoretical values for Wheel based upon the following: (i) the net present value of future projected cash flows through year 2005 and (ii) the net present value of a terminal value in 2005, which is an estimate of the future value of the Company and calculated as a multiple of estimated after-tax operating income. Key Assumptions - Projected net income derived from Wheel's projection model, which assumes a 32.7% loss provision. - After-tax operating income multiples ranged from 6.0x to 12.0x Wheel's fiscal 2005 after-tax operating income. - Discount rates ranged from 14.0% to 20.0%. Project Wheel II 4-1 [USBANCORP LOGO] Piper Jaffray(R) DISCOUNTED CASH FLOW ANALYSIS (in thousands, except per share data)
NET PRESENT VALUE CALCULATION 9/30/01 NPV of Free Cash Flow $ 51,775.6 NPV of Terminal Value $ 54,453.1 ---------- COMPANY VALUE $106,228.8 Plus: Cash and Cash Equivalents $ 7,384.0 Less: Debt Excluding Portfolio Borrowings $(74,246.0) ----------- EQUITY VALUE $ 39,366.8 Fully Diluted Share Outstanding (000s) 12,274 EQUITY VALUE PER SHARE $3.21
ASSUMPTIONS After-tax Operating Income Multiple: 8.0x Discount Rate: 18.0%
SENSITIVITY ANALYSIS -- EQUITY VALUE DISCOUNT RATE AFTER TAX 16.0% 18.0% 20.0% OPERATING 6.0x $31,218.3 $25,753.5 $20,709.2 INCOME 8.0x $45,857.4 $39,366.8 $33,384.0 MULTIPLE 10.0x $60,496.5 $52,980.0 $46,058.8
SENSITIVITY ANALYSIS -- EQUITY VALUE PER SHARE (FULLY-DILUTED) DISCOUNT RATE AFTER TAX 16.0% 18.0% 20.0% OPERATING 6.0x $2.54 $2.10 $1.69 INCOME 8.0x $3.74 $3.21 $2.27 MULTIPLE 10.0x $4.93 $4.32 $3.75
Project Wheel II 4-2 [USBANCORP LOGO] Piper Jaffray(R) COMPARABLE TRANSACTIONS ANALYSIS OVERVIEW - The comparable transactions analysis completed by US Bancorp Piper Jaffray included a review of transactions involving companies deemed similar to Wheel. The transactions analyzed included companies in the following categories: - Auto Dealers & Distributors - Auto Finance, Including Sub-Prime - Consumer Finance, Sub-Prime - The group of transactions analyzed had announcement dates ranging from January 1, 1997 to present and deal values not exceeding $250 million for the Consumer Finance, Sub-Prime transactions. - Disclosed information regarding such transactions is often incomplete, however, especially for transactions involving acquisitions of or by privately held companies. US Bancorp Piper Jaffray's analysis is based upon information obtained from SEC filings, public company disclosures, press releases, industry and popular press reports, certain databases and other sources believed to be reliable. Project Wheel II 4-3 [USBANCORP LOGO] Piper Jaffray(R) COMPARABLE TRANSACTIONS ANALYSIS
AUTO DEALERS & DISTRIBUTORS OFFER COMPARABLE TRANSACTION MULTIPLES --------------------------- ----- ----------------------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- MULTIPLE ANALYSIS DEAL VALUE / LTM REVENUE 0.28x 0.22x 0.32x 0.02x 1.37x DEAL VALUE / LTM EBITDA 7.68x 8.22x 9.02x 3.22x 21.77x DEAL VALUE / LTM EBIT NM 8.84x 10.45x 3.65x 26.78x DEAL VALUE / LTM NET INCOME NM 17.69x 21.33x 5.13x 44.07x
AUTO FINANCE, INCLUDING SUB-PRIME OFFER COMPARABLE TRANSACTION MULTIPLES --------------------------------- ----- ----------------------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- MULTIPLE ANALYSIS DEAL VALUE / LTM NET INCOME NM 6.13x 6.13x 6.04x 6.23x DEAL VALUE / BOOK VALUE 0.29x 0.87x 1.20x 0.74x 2.00x
CONSUMER FINANCE, SUB-PRIME OFFER COMPARABLE TRANSACTION MULTIPLES --------------------------- ----- ----------------------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- MULTIPLE ANALYSIS DEAL VALUE / LTM NET INCOME NM 6.04x 5.92x 2.84x 9.33x DEAL VALUE / BOOK VALUE 0.29x 1.36x 1.47x 0.46x 3.44x
Project Wheel II 4-4 [USBANCORP LOGO] Piper Jaffray(R) IMPLIED PREMIUMS PAID ANALYSIS OVERVIEW - US Bancorp Piper Jaffray reviewed premiums paid relative to pre-announcement trading prices for a group of merger and acquisition transactions involving companies deemed similar to Wheel and certain other Going Private transactions. The transactions analyzed included companies in the following categories: - Auto Dealers & Distributors - Auto Finance, Including Sub-Prime - Consumer Finance, Sub-Prime - Going Private Transactions - Transactions analyzed had announcement dates ranging from January 1, 1997 to present for Auto Dealers & Distributors and January 1, 1998 to present for all other categories. - No relevant data was available for the Auto Dealers & Distributors category. - This analysis examines the difference between the transaction value and the target's market capitalization at distinct points in time prior to the announcement of the transaction. US Bancorp Piper Jaffray's analysis is based upon information obtained from SEC filings, public company disclosures, press releases, industry and popular press reports, certain databases and other sources believed to be reliable. Project Wheel II 4-5 [USBANCORP LOGO] Piper Jaffray(R) IMPLIED PREMIUMS PAID ANALYSIS
AUTO FINANCE, INCLUDING SUB-PRIME OFFER COMPARABLE PREMIUMS --------------------------------- ----- ------------------- $3.53 MEDIAN MEAN MINIMUM MAxIMUM ----- ------ ---- ------- ------- PREMIUM ANALYSIS (%) 1 DAY PREMIUM 41.77 44.45 54.60 30.67 88.67 1 WEEK PREMIUM 42.91 50.36 45.88 20.62 66.66 1 MONTH PREMIUM 45.87 37.35 51.42 26.45 90.47
CONSUMER FINANCE, SUB-PRIME OFFER COMPARABLE PREMIUMS --------------------------- ----- ------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- PREMIUM ANALYSIS (%) 1 DAY PREMIUM 41.77 35.59 51.64 30.67 88.67 1 WEEK PREMIUM 42.91 45.45 44.24 20.62 66.66 1 MONTH PREMIUM 45.87 60.00 58.97 26.45 90.47
GOING PRIVATE TRANSACTIONS OFFER COMPARABLE PREMIUMS -------------------------- ----- ------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- PREMIUM ANALYSIS (%) 1 DAY PREMIUM 41.77 32.08 39.83 (11.11) 220.00 1 WEEK PREMIUM 42.91 38.89 43.17 (5.14) 113.33 1 MONTH PREMIUM 45.87 41.18 48.32 2.94 166.67
Project Wheel II 4-6 [USBANCORP LOGO] Piper Jaffray(R) COMPARABLE PUBLIC COMPANY ANALYSIS OVERVIEW - The objective of the comparable public company analysis is to compare Wheel to a group of publicly traded companies deemed similar to Wheel. US Bancorp Piper Jaffray reviewed and compared certain publicly available financial, operating and market performance data for Wheel's comparable public company group. - The comparable public company group was selected based upon, in part, U.S. Bancorp Piper Jaffray's review of companies in the auto finance and auto dealership industry. In particular, U.S. Bancorp Piper Jaffray focused on the small-capitalization auto finance companies, new and used car dealerships and used car dealerships. - Our analysis includes a comparison of Wheel's financial data with the comparable public company group, including, among others, total revenues, net income, book value and projected earnings per share. Selected financial and market performance data for the comparable public company group and Wheel is summarized on the following page. - The comparable public company group was analyzed with respect to Wheel's price/LTM earnings, price/2001 calendar year earnings, price/2002 calendar year earnings, company value/LTM revenue, company value/LTM EBITDA, company value/LTM EBIT, equity value/book value, and equity value/tangible book value. Project Wheel II 4-7 [USBANCORP LOGO] Piper Jaffray(R) COMPARABLE PUBLIC COMPANY ANALYSIS
SMALL-CAP AUTO FINANCE OFFER COMPARABLE COMPANY MULTIPLES ---------------------- ----- ---------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- PRICE / LTM EARNINGS NM 7.67x 8.22x 3.95x 13.59x PRICE / 2001 EARNINGS NM 12.32x 12.32x 11.85x 12.79x PRICE / 2002 EARNINGS 5.68x 10.04x 10.04x 8.63x 11.45x EQUITY VALUE / BOOK VALUE 0.29x 1.10x 1.09x 0.38x 1.77x EQUITY VALUE / TANGIBLE BOOK VALUE 0.31x 1.10x 1.09x 0.38x 1.77x
CAR DEALERS, NEW AND USED OFFER COMPARABLE COMPANY MULTIPLES ------------------------- ----- ---------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- PRICE / LTM EARNINGS NM 12.61x 12.74x 11.44x 14.16x PRICE / 2001 EARNINGS NM 13.18x 12.73x 10.75x 13.39x PRICE / 2002 EARNINGS 5.68x 10.94x 10.75x 8.68x 12.14x COMPANY VALUE / LTM REVENUE 0.28x 0.27x 0.25x 0.16x 0.31x COMPANY VALUE / LTM EBITDA 7.68x 7.64x 7.29x 4.97x 8.24x COMPANY VALUE / LTM EBIT NM 8.65x 8.47x 6.00x 9.93x
USED CAR DEALERS OFFER COMPARABLE COMPANY MULTIPLES ---------------- ----- ---------------------------- $3.53 MEDIAN MEAN MINIMUM MAXIMUM ----- ------ ---- ------- ------- PRICE / LTM EARNINGS NM 19.86x 19.86x 8.47x 31.25x PRICE / 2001 EARNINGS NM 27.78x 27.78x 27.78x 27.78x PRICE / 2002 EARNINGS 5.68x 22.99x 22.99x 22.99x 22.99x COMPANY VALUE / LTM REVENUE 0.28x 0.72x 0.57x 0.25x 0.74x COMPANY VALUE / LTM EBITDA 7.68x 6.59x 7.81x 5.01x 11.82x COMPANY VALUE / LTM EBIT NM 7.30x 8.90x 5.76x 13.65x
Project Wheel II 4-8 [USBANCORP LOGO] Piper Jaffray(R) DISCOUNTED CASH FLOW ANALYSIS - DETAIL PROJECT WHEEL II -------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Detail Year Ended December 31 $ in 000s except per share data
--------------------------------------------------------- PROJECTIONS --------------------------------------------------------- 2001 2002 2003 2004 2005 --------------------------------------------------------- OPERATING INCOME $ (7,339) $ 22,814 $ 20,038 $ 20,541 $ 23,312 Income Taxes (41%) (3,009) 9,354 8,216 8,422 9,558 --------------------------------------------------------- After Tax Operating Income (4,330) 13,460 11,822 12,119 13,754 Depreciation and Amortization 2,400 8,000 8,000 8,004 8,004 (Increase) Decrease in Working Capital -- -- -- -- -- Capital Expenditures -- -- -- -- -- --------------------------------------------------------- FREE CASH FLOW (1,930) 21,460 19,822 20,123 21,758 Plus: Terminal Value @ 8.0x After-tax Operating Income 110,033 --------------------------------------------------------- TOTAL CASH FLOW $ (1,930) $ 21,460 $ 19,822 $ 20,123 $131,791
NET PRESENT VALUE CALCULATION 9/30/01 ----------------------------------------------------------- NPV of Free Cash Flow $ 51,775.6 NPV of Terminal Value $ 54,453.1 --------- COMPANY VALUE $ 106,228.8 Plus: Cash and Cash Equivalents $ 7,384.0 Less: Debt Excluding Portfolio Borrowings $ (74,246.0) --------- EQUITY VALUE $ 39,366.8 Fully Diluted Share Outstanding (000s) 12,274 EQUITY VALUE PER SHARE $ 3.21 ASSUMPTIONS --------- After-tax Operating Income Multiple: 8.0x Discount Rate: 18.0%
SENSITIVITY ANALYSIS - EQUITY VALUE ------------------------------------------------------------------- DISCOUNT RATE AFTER-TAX 16.0% 18.0% 20.0% --------------------------------------- OPERATING 6.0x $31,218.3 $25,753.5 $20,709.2 INCOME 8.0x $45,857.4 $39,366.8 $33,384.0 MULTIPLE 10.0x $60,496.5 $52,980.0 $46,058.8
SENSITIVITY ANALYSIS - EQUITY VALUE PER SHARE ------------------------------------------------------------------- (FULLY DILUTED) DISCOUNT RATE AFTER-TAX 16.0% 18.0% 20.0% --------------------------------------- OPERATING 6.0x $2.54 $2.10 $1.69 INCOME 8.0x $3.74 $3.21 $2.72 MULTIPLE 10.0x $4.93 $4.32 $3.75
COMPARABLE TRANSACTIONS AND IMPLIED PREMIUMS PAID ANALYSIS - DETAIL PROJECT WHEEL II -------------------------------------------------------------------------------- COMPARABLE TRANSACTION AND IMPLIED PREMIUMS PAID ANALYSIS - DETAIL: AUTO DEALERS & DISTRIBUTORS ANNOUNCEMENT: 1/1/1997 - PRESENT
MULTIPLE ANALYSIS -------------------------------- DEAL DEAL DEAL DEAL VALUE/ VALUE/ VALUE/ VALUE/ DEAL LTM NET LTM LTM LTM VALUE INCOME REVENUE EBIT EBITDA ANNOUNCE DATE BUYER NAME TARGET NAME ($M) (x) (x) (x) (x) ------------------------------------------------------------------------------------------------------------------------------ 04/18/2001 Pendragon PLC Hornburg 12.9 NA 0.14 6.12 NA 09/06/2000 Pinnacle Business Management All Pro Group of Cos 19.5 NA 1.30 NA NA 07/26/2000 Carbiz.com Inc Financial Business Systems Inc 1.2 NA 1.37 NA NA 07/11/2000 Holiday RV Superstores Hall Enterprises Inc 2.0 NA 0.15 NA NA 10/18/1999 Lithia Motors Inc Tri-Cities Dodge 3.9 NA 0.12 NA NA 08/25/1999 Sonic Automotive Inc FirstAmerica Automotive Inc 229.2 44.07 0.24 10.92 9.57 09/03/1998 Republic Industries Inc Cross-Continent Auto Retailers 147.9 23.10 0.26 8.06 7.57 08/27/1998 Lithia Motors Inc Camp Automotive Inc 11.0 5.24 0.13 5.08 3.22 06/19/1998 FirstAmerica Automotive Inc Burgess Honda 5.6 14.00 0.23 12.56 11.45 02/09/1998 Republic Industries Inc Webb Automotive Group 112.0 NA 0.27 NA NA 12/18/1997 Group 1 Automotive Inc Carroll Automotive Group 38.5 38.52 0.16 7.77 6.72 11/03/1997 Republic Industries Inc Emich Automotive Group 54.0 NA 0.18 NA NA 09/26/1997 United Auto Group Inc Young Automotive Group 85.6 NA 0.19 NA NA 08/29/1997 Smart Choice Automotive Group First Choice Stuart 1 0.5 NM 0.02 NA NA 07/17/1997 Lithia Motors Inc Dick Donnelly Automotive 12.8 42.67 0.16 26.78 21.77 03/19/1997 Republic Industries Inc Bledsoe Dodge Inc 40.6 NA 0.27 NA NA 03/05/1997 Ugly Duckling Corp E-Z Plan Inc 26.3 NM 0.62 9.62 8.88 03/03/1997 Cross-Continent Auto Retailers Sahara Nissan Inc 12.5 5.21 0.19 3.65 3.49 02/28/1997 Lithia Motors Inc Magnussen-Barbee Ford Lincoln 6.9 NA 0.29 NA NA 02/24/1997 Republic Industries Inc Kendall Toyota 44.2 NA NA NA NA 02/12/1997 United Auto Group Inc Gary Hanna Nissan Inc 13.7 NA 0.20 NA NA 02/06/1997 Saratoga Brands Inc Global Auto Group Inc 9.8 NA 0.39 NA NA 02/03/1997 Republic Industries Inc Wallace Automotive Group 70.3 20.68 0.25 16.02 NA 01/24/1997 Cross-Continent Auto Retailers Toyota West Sales & Svc,1 Oth 40.0 5.13 0.20 4.50 4.31 01/14/1997 Republic Industries Inc Maroone Automotive Group 219.0 14.70 0.31 14.33 13.26 ----------------------------------------- MAXIMUM 44.07 1.37 26.78 21.77 MEAN 21.33 0.32 10.45 9.02 MEDIAN 17.69 0.22 8.84 8.22 MINIMUM 5.13 0.02 3.65 3.22 -----------------------------------------
PREMIUM ANALYSIS ------------------------- DEAL 1 DAY 1 WEEK 1 MONTH VALUE PREMIUM PREMIUM PREMIUM ANNOUNCE DATE BUYER NAME TARGET NAME ($M) (%) (%) (%) ----------------------------------------------------------------------------------------------------------------------- 04/18/2001 Pendragon PLC Hornburg 12.9 NA NA NA 09/06/2000 Pinnacle Business Management All Pro Group of Cos 19.5 NA NA NA 07/26/2000 Carbiz.com Inc Financial Business Systems Inc 1.2 NA NA NA 07/11/2000 Holiday RV Superstores Hall Enterprises Inc 2.0 NA NA NA 10/18/1999 Lithia Motors Inc Tri-Cities Dodge 3.9 NA NA NA 08/25/1999 Sonic Automotive Inc FirstAmerica Automotive Inc 229.2 NA NA NA 09/03/1998 Republic Industries Inc Cross-Continent Auto Retailers 147.9 NA NA NA 08/27/1998 Lithia Motors Inc Camp Automotive Inc 11.0 NA NA NA 06/19/1998 FirstAmerica Automotive Inc Burgess Honda 5.6 NA NA NA 02/09/1998 Republic Industries Inc Webb Automotive Goup 112.0 NA NA NA 12/18/1997 Group 1 Automotive Inc Carroll Automotive Group 38.5 NA NA NA 11/03/1997 Republic Industries Inc Emich Automotive Group 54.0 NA NA NA 09/26/1997 United Auto Group Inc Young Automotive Group 85.6 NA NA NA 08/29/1997 Smart Choice Automotive Group First Choice Stuart 1 0.5 NA NA NA 07/17/1997 Lithia Motors Inc Dick Donnelly Automotive 12.8 NA NA NA 03/19/1997 Republic Industries Inc Bledsoe Dodge Inc 40.6 NA NA NA 03/05/1997 Ugly Duckling Corp E-Z Plan Inc 26.3 NA NA NA 03/03/1997 Cross-Continent Auto Retailers Sahara Nissan Inc 12.5 NA NA NA 02/28/1997 Lithia Motors Inc Magnussen-Barbee Ford Lincoln 6.9 NA NA NA 02/24/1997 Republic Industries Inc Kendall Toyota 44.2 NA NA NA 02/12/1997 United Auto Group Inc Gary Hanna Nissan Inc 13.7 NA NA NA 02/06/1997 Saratoga Brands Inc Global Auto Group Inc 9.8 NA NA NA 02/03/1997 Republic Industries Inc Wallace Automotive Group 70.3 NA NA NA 01/24/1997 Cross-Continent Auto Retailers Toyota West Sales & Svc,1 Oth 40.0 NA NA NA 01/14/1997 Republic Industries Inc Maroone Automotive Group 219.0 NA NA NA ---------------------------------- MAXIMUM NA NA NA MEAN NA NA NA MEDIAN NA NA NA MINIMUM NA NA NA ----------------------------------
PROJECT WHEEL II -------------------------------------------------------------------------------- COMPARABLE TRANSACTION AND IMPLIED PREMIUMS PAID ANALYSIS - DETAIL: AUTO FINANCE, INCLUDING SUB-PRIME ANNOUNCEMENT: 1/1/1998 - PRESENT
MULTIPLE ANALYSIS ----------------- DEAL DEAL VALUE / VALUE / DEAL LTM NET BOOK VALUE INCOME VALUE ANNOUNCE DATE BUYER NAME TARGET NAME ($M) (X) (X) --------------------------------------------------------------------------------------------------------------- 11/18/2001 Consumer Portfolio Services Inc. MFN Financial Corp. 103.1 6.23 0.74 09/21/2001 Capital One Financial Corporation PeopleFirst.com 149.4 NA NA 11/18/1999 Susquehanna Bancshares, Inc. Boston Svc. Co. t/a Hann Finl. 41.9 NA NA Corp. 11/12/1999 Associates First Capital Corporation Arcadia Financial Ltd. 217.5 6.04 0.87 08/23/1999 E-LOAN, Inc. CarFinance.com 64.1 NA NA 01/28/1999 Bank of America Corporation Fleetwood Credit Corp. 227.0 NA NA 09/09/1998 First Investors Financial Services Auto Lenders Acceptance Corp. 74.8 NA 2.00 Group, Inc. 07/16/1998 Capital One Financial Corporation Summit Acceptance Corp. 55.0 NA NA -------------------------- MAXIMUM 6.23 2.00 MEAN 6.13 1.20 MEDIAN 6.13 0.87 MINIMUM 6.04 0.74 --------------------------
PREMIUM ANALYSIS ------------------------- DEAL 1 DAY 1 WEEK 1 MONTH VALUE PREMIUM PREMIUM PREMIUM ANNOUNCE DATE BUYER NAME TARGET NAME ($M) (%) (%) (%) ----------------------------------------------------------------------------------------------------------------------- 11/18/2001 Consumer Portfolio Services Inc. MFN Financial Corp. 103.1 88.67 66.66 90.47 09/21/2001 Capital One Financial Corporation PeopleFirst.com 149.4 NA NA NA 11/18/1999 Susquehanna Bancshares, Inc. Boston Svc. Co. t/a Hann Finl. 41.9 NA NA NA Corp. 11/12/1999 Associates First Capital Corporation Arcadia Financial Ltd. 217.5 30.67 20.62 26.45 08/23/1999 E-LOAN, Inc. CarFinance.com 64.1 44.45 50.36 37.35 01/28/1999 Bank of America Corporation Fleetwood Credit Corp. 227.0 NA NA NA 09/09/1998 First Investors Financial Services Auto Lenders Acceptance Corp. 74.8 NA NA NA Group, Inc. 07/16/1998 Capital One Financial Corporation Summit Acceptance Corp. 55.0 NA NA NA ---------------------------------- MAXIMUM 88.67 66.66 90.47 MEAN 54.60 45.88 51.42 MEDIAN 44.45 50.36 37.35 MINIMUM 30.67 20.62 26.45 ----------------------------------
PROJECT WHEEL II -------------------------------------------------------------------------------- COMPARABLE TRANSACTION AND IMPLIED PREMIUMS PAID ANALYSIS - DETAIL: CONSUMER FINANCE, SUB-PRIME ANNOUNCEMENT: 1/1/1998 - PRESENT DEAL VALUE < $250 million
Multiple Analysis ----------------- Deal Deal Value / Value / Deal LTM Net Book Value Income Value Announce Date Buyer Name Target Name ($M) (x) (x) ---------------------------------------------------------------------------------------------------------------------- 11/18/2001 Consumer Portfolio Services Inc. MFN Financial Corp. 103.1 6.23 0.74 08/07/2000 Undisclosed Buyer United CreditServ card business 134.0 NM NA 03/24/2000 Centura Banks, Inc. NCS Mortgage Services LLC orig. ops 1.7 NA NA 03/20/2000 New Century Financial Corporation Worth Funding Inc. 0.2 NA 1.36 02/29/2000 HomeGold Financial, Inc. HomeSense Financial Corp. 18.4 NA NA 02/04/2000 Investor Group BNC Mortgage Inc. 46.7 9.33 1.38 11/12/1999 Associates First Capital Corporation Arcadia Financial Ltd. 217.5 6.04 0.87 09/14/1999 National Penn Bancshares, Inc. RBO Funding Inc. 1.3 NA NA 08/03/1999 Doral Financial Corporation Sana Mortgage Bankers Inc. 6.0 5.00 NA 07/23/1999 Household International, Inc. Decision One Mortgage Co. 62.2 NA NA 07/08/1999 Altiva Financial Corporation Money Centre Inc. 19.6 2.84 3.44 07/02/1999 First Alliance Corporation Coast Security Mortgage Corp. 4.1 NA NA 05/05/1999 Goldman Sachs Group, Inc. Southern Pacific Funding Corp. 38.8 NA 0.46 02/09/1999 First Chesapeake Financial Corporation Mortgage Concepts Inc. 4.1 5.48 NA 01/21/1999 Wells Fargo & Company Mid-Penn Consumer Discount Co. 7.5 NA NA 12/31/1998 First Tennessee National Corporation McGuire Mortgage Co. 13.1 NA NA 10/14/1998 Westmark Group Holdings, Inc. wholesale subprime origination ops 0.2 NA NA 09/09/1998 First Investors Financial Services Auto Lenders Acceptance Corp. 74.8 NA 2.00 Group, Inc. 07/16/1998 Capital One Financial Corporation Summit Acceptance Corp. 55.0 NA NA 01/28/1998 AMRESCO, Inc. City Federal Funding and Mortgage 17.4 NA NA 01/10/1998 FiNet.com, Inc. Coastal Federal Mortgage Co. 5.2 6.50 NA -------------------------- MAXIMUM 9.33 3.44 MEAN 5.92 1.47 MEDIAN 6.04 1.36 MINIMUM 2.84 0.46 --------------------------
Premium Analysis ------------------------- 1 Day 1 Week 1 Month Premium Premium Premium Announce Date Buyer Name Target Name (%) (%) (%) -------------------------------------------------------------------------------------------- -------------------------- 11/18/2001 Consumer Portfolio Services Inc. MFN Financial Corp. 88.67 66.66 90.47 08/07/2000 Undisclosed Buyer United CreditServ card business NA NA NA 03/24/2000 Centura Banks, Inc. NCS Mortgage Services LLC orig. ops NA NA NA 03/20/2000 New Century Financial Corporation Worth Funding Inc. NA NA NA 02/29/2000 HomeGold Financial, Inc. HomeSense Financial Corp. NA NA NA 02/04/2000 Investor Group BNC Mortgage Inc. 35.59 45.45 60.00 11/12/1999 Associates First Capital Corporation Arcadia Financial Ltd. 30.67 20.62 26.45 09/14/1999 National Penn Bancshares, Inc. RBO Funding Inc. NA NA NA 08/03/1999 Doral Financial Corporation Sana Mortgage Bankers Inc. NA NA NA 07/23/1999 Household International, Inc. Decision One Mortgage Co. NA NA NA 07/08/1999 Altiva Financial Corporation Money Centre Inc. NA NA NA 07/02/1999 First Alliance Corporation Coast Security Mortgage Corp. NA NA NA 05/05/1999 Goldman Sachs Group, Inc. Southern Pacific Funding Corp. NA NA NA 02/09/1999 First Chesapeake Financial Corporation Mortgage Concepts Inc. NA NA NA 01/21/1999 Wells Fargo & Company Mid-Penn Consumer Discount Co. NA NA NA 12/31/1998 First Tennessee National Corporation McGuire Mortgage Co. NA NA NA 10/14/1998 Westmark Group Holdings, Inc. wholesale subprime origination ops NA NA NA 09/09/1998 First Investors Financial Services Auto Lenders Acceptance Corp. NA NA NA Group, Inc. 07/16/1998 Capital One Financial Corporation Summit Acceptance Corp. NA NA NA 01/28/1998 AMRESCO, Inc. City Federal Funding and Mortgage NA NA NA 01/10/1998 FiNet.com, Inc. Coastal Federal Mortgage Co. NA NA NA ---------------------------------- MAXIMUM 88.67 66.66 90.47 MEAN 51.64 44.24 58.97 MEDIAN 35.59 45.45 60.00 MINIMUM 30.67 20.62 26.45 ----------------------------------
PROJECT WHEEL II -------------------------------------------------------------------------------- COMPARABLE TRANSACTIONS AND IMPLIED PREMIUMS PAID ANALYSIS - DETAIL: GOING PRIVATE TRANSACTIONS NON-STOCK DEALS DEAL VALUE < $100 MILLION % OWNED BEFORE ACQUIRING REMAINING INTEREST > 50% ANNOUNCEMENT: 1/1/1998 - PRESENT
1 DAY 1 WEEK 1 MONTH PREMIUM PREMIUM PREMIUM CONSIDERATION ANNOUNCEMENT TARGET NAME ACQUIROR NAME (%) (%) (%) OFFERED -------------------------------------------------------------------------------------------------------------------------- 06/04/2001 Cobalt Group Inc Warburg Pincus Equity Partners 79.5 84.2 70.7 Cash 12/20/2000 Vitaminshoppe.com Inc Vitamin Shoppe Industries Inc 220.0 113.3 166.7 Cash 09/01/2000 Minolta-QMS Inc(Minolta Co) Minolta Investments Co 100.0 100.0 95.9 Cash 07/20/2000 JLK Direct Distribution Inc Kennametal Inc 48.9 94.4 68.7 Cash 07/11/2000 In Home Health Inc Manor Care Inc 23.3 28.7 23.3 Cash 05/04/2000 Petroglyph Energy Inc Intermountain Industries 42.5 107.3 75.4 Cash 01/31/2000 Thermo Optek Corp Thermo Instrument Systems Inc 6.7 (5.1) 41.2 Cash 01/31/2000 ONIX Systems Inc Thermo Instrument Systems Inc 2.9 16.1 38.5 Cash 01/19/2000 Conning Corp Metropolitan Life Insurance Co 15.6 38.9 52.1 Cash 12/08/1999 Robertson-Ceco Corp Heico Companies LLC 46.0 43.8 41.5 Cash 06/04/1999 Intek Global Corp Securicor Communications 32.1 26.9 22.1 Cash 05/21/1999 ThermoSpectra(Thermo Instr) Thermo Instrument Systems Inc 39.1 43.8 61.0 Cash 05/05/1999 Thermo Power Corp Thermo Electron Corp 5.5 (1.5) 41.2 Cash 04/29/1999 Killearn Properties Inc Killearn Inc 10.0 10.0 7.3 Cash 04/12/1999 Meadowcraft Inc Investor Group 65.0 63.3 77.8 Cash 03/09/1999 Sun Energy Partners LP Kerr-McGee Corp 41.6 43.8 50.9 Cash 03/08/1999 ENStar Inc Investor Group 56.3 58.7 51.5 Cash 01/22/1999 Treadco Inc Arkansas Best Corp 38.5 46.9 24.1 Cash 11/16/1998 Western Beef Inc Cactus Acquisitions Inc 25.0 14.7 22.7 Cash 11/12/1998 Aquila Gas Pipeline Corp UtiliCorp United Inc 23.1 17.4 68.4 Cash 10/21/1998 Capital Factors Holdings Inc Union Planters Bk Nat Assoc 4.5 9.0 2.9 Cash 07/21/1998 Forum Retirement Partners LP Forum Group(Crestline Capital) 24.3 24.3 24.3 Cash 03/31/1998 Thermo Voltek Corp Thermedics(Thermo Electron) 45.5 60.0 40.0 Cash 03/05/1998 XLConnect Solutions Inc Xerox Corp (11.1) 15.1 22.1 Cash 01/08/1998 Rayonier Timberlands LP Rayonier Inc 11.2 25.3 17.5 Cash ------------------------------------------------------------ MAXIMUM 220.0 113.3 166.7 MEAN 39.8 43.2 48.3 MEDIAN 32.1 38.9 41.2 MINIMUM (11.1) (5.1) 2.9 ------------------------------------------------------------
COMPARABLE PUBLIC COMPANY ANALYSIS - DETAIL PROJECT WHEEL II Comparable Public Company Analysis - Detail: Small-Cap Auto Finance ($ in millions except per share)
Average LTM Net Market Daily Stock Ticker Quarter Net Margin Value Volume Price Symbol Company Date Revenues Income (%) of Equity (000s) 12/03/01 ------ ------- ---- -------- ------ --- --------- ------ -------- COMPARABLE COMPANY GROUP CACC CREDIT ACCEP CORP MICH 9/01 $140.8 $27.6 19.6 $366.0 28.9 $8.70 ONYX ONYX ACCEPTANCE CORP 9/01 $61.8 $4.9 8.0 $24.1 11.9 $4.75 UACA UNION ACCEPTANCE CORP -CL A 9/01 $54.4 ($22.6) NM $156.1 16.8 $5.05 WFSI WFS FINANCIAL INC 9/01 $635.1 $65.8 10.4 $796.3 27.0 $22.87 ------------------------------------------------------------------------------------------------------------------------- MAXIMUM $635.1 $65.8 19.6 $796.3 MEAN $223.0 $18.9 12.7 $335.6 MEDIAN $101.3 $16.3 10.4 $261.1 MINIMUM $54.4 ($22.6) 8.0 $24.1 ------------------------------------------------------------------------------------------------------------------------- UGLY UGLY DUCKLING CORP 9/01 $396.2 (1) ($6.1) NM $31.5 28.0 $2.57
12/03/01 Stock Ticker Price as 52 Week Price Range a % of 52 ------------------- Symbol Company Week High Low High ------ ------- --------- --- ---- COMPARABLE COMPANY GROUP CACC CREDIT ACCEP CORP MICH 72.5% $4.25 - $12.00 ONYX ONYX ACCEPTANCE CORP 64.4% $2.50 - $7.38 UACA UNION ACCEPTANCE CORP -CL A 53.4% $3.75 - $9.45 WFSI WFS FINANCIAL INC 69.4% $14.92 - $32.97 MAXIMUM 72.5% MEAN 64.9% MEDIAN 66.9% MINIMUM 53.4% UGLY UGLY DUCKLING CORP 46.0% $2.00 - $5.59
(1) Net of provision for credit losses and portfolio interest expense. Project Wheel II Comparable Public Company Analysis - Detail: Small-Cap Auto Finance ($ in millions except per share)
P/E Ratios 2001 ----------------------------- Market Market Fiscal P/E Fiscal Latest 2001 2002 Company Value/ Value/ as a % of Year Twelve Calendar Calendar Value/ Tangible Common 5-Year EPS Company End Months Year Year Revenue Equity Equity Growth ------- --- ------ ---- ---- ------- ------ ------ ------ Comparable Company Group CREDIT ACCEP CORP MICH 12/00 13.6x 12.8x 11.4x 3.9x 1.3x 1.3x 71.1% ONYX ACCEPTANCE CORP 12/00 4.9x NA NA 4.9x 0.4x 0.4x NA UNION ACCEPTANCE CORP -CL A 6/01 3.9x NA NA 4.4x 0.9x 0.9x NA WFS FINANCIAL INC 12/00 10.4x 11.8x 8.6x 7.2x 1.8x 1.8x 62.4% Maximum 13.6x 12.8x 11.4x 7.2x 1.8x 1.8x 71.1% Mean 8.2x 12.3x 10.0x 5.1x 1.1x 1.1x 66.7% Median 7.7x 12.3x 10.0x 4.6x 1.1x 1.1x 66.7% Minimum 3.9x 11.8x 8.6x 3.9x 0.4x 0.4x 62.4% UGLY DUCKLING CORP 12/00 NM NA NA 0.2x 0.2x 0.2x NA
EPS Estimates ------------------------------- 2001 2002 EPS Calendar Calendar Company (LTM) Year Year ------- ----- ---- ---- Comparable Company Group CREDIT ACCEP CORP MICH $0.64 $0.68 $0.76 ONYX ACCEPTANCE CORP $0.96 NA NA UNION ACCEPTANCE CORP -CL A $1.28 NA NA WFS FINANCIAL INC $2.20 $1.93 $2.65 Maximum Mean Median Minimum UGLY DUCKLING CORP ($0.45) NA NA
PROJECT WHEEL II COMPARABLE PUBLIC COMPANY ANALYSIS - DETAIL: SMALL-CAP AUTO FINANCE ($ IN MILLIONS EXCEPT PER SHARE)
FISCAL FISCAL YEAR END YEAR END COMPOUND COMPOUND REVENUE % EPS % GROWTH GROWTH RATES RATES 5-YEAR REVENUES (-2 YEARS EARNINGS PER SHARE (-2 YEARS ESTIMATED ------------------------ TO -------------------------- TO EPS % LATEST -2 -1 LATEST LATEST -2 -1 LATEST LATEST GROWTH COMPANY YEAR YEARS YEAR YEAR YEAR) YEARS YEAR YEAR YEAR) RATE ------- ---- ----- ---- ---- ----- ----- ---- ---- ----- ---- COMPARABLE COMPANY GROUP CREDIT ACCEP CORP MICH 12/00 $142.3 $116.1 $123.8 (9.7) $ 0.53 ($0.23) $ 0.53 0.0 18.0 ONYX ACCEPTANCE CORP 12/00 $ 75.0 $107.2 $115.6 24.1 $ 0.95 $ 1.50 $ 1.00 2.6 15.0 UNION ACCEPTANCE CORP -CL A 6/01 $ 99.7 $110.3 $102.5 1.4 $ 1.08 $ 1.28 $ 0.30 (47.3) 17.5 WFS FINANCIAL INC 12/00 $191.3 $336.3 $498.8 61.5 ($0.64) $ 1.91 $ 2.35 NM 19.0 MAXIMUM 61.5 2.6 19.0 MEAN 19.3 (14.9) 17.4 MEDIAN 12.8 0.0 17.8 MINIMUM (9.7) (47.3) 15.0 UGLY DUCKLING CORP 12/00 $332.5 $466.0 $604.9 34.9 $ 0.19 $ 0.57 $ 0.67 87.8 22.5
PROJECT WHEEL II Comparable Public Company Analysis - Detail: Small-Cap Auto Finance ($ in millions except per share)
Book Value ------------------------- FYE Quarterly Recent Shares Intangible Stockholders' Price Outstanding Market Company Assets Equity 12/03/01 x (000s) = Capitalization ------- ------ ------ -------- ------ -------------- COMPARABLE COMPANY GROUP CREDIT ACCEP CORP MICH $ 0.0 $ 281.0 $ 8.70 42,067 $ 366.0 ONYX ACCEPTANCE CORP $ 0.0 $ 62.8 $ 4.75 5,078 $ 24.1 UNION ACCEPTANCE CORP -CL A $ 0.0 $ 173.6 $ 5.05 30,915 $ 156.1 WFS FINANCIAL INC $ 0.0 $ 450.2 $ 22.87 34,818 $ 796.3 UGLY DUCKLING CORP $ 12.5 $ 151.6 $ 2.57 12,274 $ 31.5
Latest Quarterly Data ---------------------------------------------------------------- Cash on Long-Term Short-Term Preferred Balance "Company Company + Debt + Debt + Stock - Sheet = Value" ------- ---- ---- ----- ----- ------ COMPARABLE COMPANY GROUP CREDIT ACCEP CORP MICH $ 231.0 $ 0.0 $ 0.0 $ 42.4 $ 554.6 ONYX ACCEPTANCE CORP $ 282.4 $ 0.0 $ 0.0 $ 6.0 $ 300.6 UNION ACCEPTANCE CORP -CL A $ 167.1 $ 0.0 $ 0.0 $ 82.2 $ 241.0 WFS FINANCIAL INC $3,830.5 $ 0.0 $ 0.0 $ 39.9 $4,586.9 UGLY DUCKLING CORP $ 74.2(1) $ 0.0 $ 0.0 $ 7.4 $ 98.4
(1) Debt excludes Portfolio Borrowings. PROJECT WHEEL II ------------------------------------------------------------------------------- Comparable Public Company Analysis - Detail: Car Dealers, New and Used ($ in millions except per share)
LTM Net Market Ticker Quarter Net Margin Value Symbol Company Date Revenues EBITDA EBIT Income (%) of Equity ------ ------- ---- -------- ------ ---- ------ --- --------- COMPARABLE COMPANY GROUP AN AUTONATION INC 9/01 $19,542.4 $832.8 $689.6 $297.3 1.5 $3,607.1 SAH SONIC AUTOMOTIVE INC -CL A 9/01 $ 6,192.3 $221.3 $196.5 $ 70.4 1.1 $ 784.6 UAG UNITED AUTO GROUP INC 9/01 $ 5,843.8 $185.0 $153.5 $ 39.6 0.7 $ 396.8 GPI GROUP 1 AUTOMOTIVE INC 9/01 $ 3,797.6 $142.0 $125.1 $ 47.5 1.3 $ 679.2 LAD LITHIA MOTORS INC -CL A 9/01 $ 1,755.6 $ 67.8 $58.9 $ 21.3 1.2 $ 252.2 HCAR HOMETOWN AUTO RETAILERS 9/01 $ 268.5 ($3.3) ($4.5) ($5.1) NM $ 4.9 ---------------------------------------------------------------------------------------------------------------------------- MAXIMUM $19,542.4 $832.8 $689.6 $297.3 1.5 $3,607.1 Mean $ 6,233.4 $240.9 $203.2 $ 78.5 1.2 $ 954.1 Median $ 4,820.7 $163.5 $139.3 $ 43.6 1.2 $ 538.0 Minimum $ 268.5 ($3.3) ($4.5) ($5.1) 0.7 $ 4.9 ---------------------------------------------------------------------------------------------------------------------------- UGLY UGLY DUCKLING CORP 9/01 $ 396.2 (1) $ 14.3 (2) ($0.1)(2) ($6.1) NM $ 31.5
12/03/01 AVERAGE STOCK Daily Stock Price as 52 Week Price Range Ticker Volume Price a % of 52 ------------------- Symbol Company (000s) 12/03/01 Week High Low High ------ ------- ------ -------- --------- --- ---- COMPARABLE COMPANY GROUP AN AUTONATION INC 1,089.9 $11.10 88.2% $ 4.63 - $12.59 SAH SONIC AUTOMOTIVE INC -CL A 226.9 $19.45 82.1% $ 5.69 - $23.69 UAG UNITED AUTO GROUP INC 65.8 $16.99 77.4% $ 6.00 - $21.95 GPI GROUP 1 AUTOMOTIVE INC 125.9 $29.86 85.3% $ 8.06 - $34.99 LAD LITHIA MOTORS INC -CL A 19.3 $19.50 91.2% $11.25 - $21.38 HCAR HOMETOWN AUTO RETAILERS 11.8 $ 0.68 52.3% $ 0.31 - $ 1.30 --------------------------------------------------------------------------------------------- MAXIMUM 91.2% Mean 79.4% Median 83.7% Minimum 52.3% --------------------------------------------------------------------------------------------- UGLY UGLY DUCKLING CORP 28.0 $ 2.57 46.0% $ 2.00 - $ 5.59
(1) Net of provision for credit losses and portfolio interest expense. (2) Excludes portfolio interest expense. PROJECT WHEEL II ------------------------------------------------------------------------------- COMPARABLE PUBLIC COMPANY ANALYSIS - DETAIL: CAR DEALERS, NEW AND USED ($ in millions except per share)
P/E Ratios -------------------------------- Fiscal Latest 2001 2002 Company Company Company Year Twelve Calendar Calendar Value/ Value/ Value/ Company End Months Year Year Revenue EBITDA EBIT ------- --- ------ ---- ---- ------- ------ ---- COMPARABLE COMPANY GROUP AUTONATION INC 12/00 12.6x 13.1x 11.1x 0.2x 5.0x 6.0x SONIC AUTOMOTIVE INC -CL A 12/00 11.4x 10.7x 8.7x 0.3x 7.6x 8.6x UNITED AUTO GROUP INC 12/00 14.2x 13.3x 12.1x 0.3x 8.2x 9.9x GROUP 1 AUTOMOTIVE INC 12/00 12.9x 13.4x 10.9x 0.3x 7.6x 8.7x LITHIA MOTORS INC -CL A 12/00 12.6x 13.2x 10.9x 0.3x 8.0x 9.2x HOMETOWN AUTO RETAILERS 12/00 NM NA NA 0.2x NM NM ---------------------------------------------------------------------------------------------------------------------------- MAXIMUM 14.2x 13.4x 12.1x 0.3x 8.2x 9.9x MEAN 12.7x 12.7x 10.8x 0.2x 7.3x 8.5x MEDIAN 12.6x 13.2x 10.9x 0.3x 7.6x 8.7x MINIMUM 11.4x 10.7x 8.7x 0.2x 5.0x 6.0x ---------------------------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP 12/00 NM NA NA 0.2x 6.9x NM
2001 EPS Estimates Market Market Fiscal P/E --------------------------------- Value/ Value/ as a % of 2001 2002 Tangible Common 5-Year EPS EPS Calendar Calendar Company Equity Equity Growth (LTM) Year Year ------- ------ ------ ------ ----- ---- ---- COMPARABLE COMPANY GROUP AUTONATION INC 3.8x 0.9x NA $0.88 $0.85 $1.00 SONIC AUTOMOTIVE INC -CL A NM 1.6x 62.1% $1.70 $1.81 $2.24 UNITED AUTO GROUP INC NM 0.8x 96.2% $1.20 $1.28 $1.40 GROUP 1 AUTOMOTIVE INC NM 2.5x 69.4% $2.31 $2.23 $2.73 LITHIA MOTORS INC -CL A 4.0x 1.3x NA $1.55 $1.48 $1.79 HOMETOWN AUTO RETAILERS 1.0x 0.2x NA ($0.73) NA NA --------------------------------------------------------------------------------------------------------------------- MAXIMUM 4.0X 2.5X 96.2% MEAN 2.9x 1.2x 75.9% MEDIAN 3.8x 1.1x 69.4% MINIMUM 1.0x 0.2x 62.1% --------------------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP 0.2x 0.2x NA ($0.45) NA NA
PROJECT WHEEL II ------------------------------------------------------------------------------- COMPARABLE PUBLIC COMPANY ANALYSIS - DETAIL: CAR DEALERS, NEW AND USED ($ in millions except per share)
Fiscal Year End Compound Revenue % Revenues Growth Rates Latest ------------------------------------- (-2 Years to Company Year -2 Years -1 Year Latest Year Latest Year) ------- ---- -------- ------- ----------- ------------ COMPARABLE COMPANY GROUP AUTONATION INC 12/00 $12,664.6 $20,111.8 $20,609.6 26.0 SONIC AUTOMOTIVE INC -CL A 12/00 $ 1,603.7 $ 3,350.8 $ 6,052.5 94.3 UNITED AUTO GROUP INC 12/00 $ 3,343.1 $ 4,022.5 $ 4,884.0 20.9 GROUP 1 AUTOMOTIVE INC 12/00 $ 1,630.1 $ 2,508.3 $ 3,586.1 48.3 LITHIA MOTORS INC -CL A 12/00 $ 714.7 $ 1,242.7 $ 1,658.6 52.3 HOMETOWN AUTO RETAILERS 12/00 $ 121.5 $ 285.5 $ 279.8 51.8 -------------------------------------------------------------------------------------------------------- MAXIMUM 94.3 MEAN 48.9 MEDIAN 50.0 MINIMUM 20.9 -------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP 12/00 $ 332.5 $ 466.0 $ 604.9 18.4
Fiscal Year End Compound EPS % 5-Year Earnings Per Share Growth Rates Estimated ------------------------------ (-2 Years to EPS % Company -2 Years -1 Year Latest Year Latest Year) Growth Rate ------- -------- ------- ----------- ------------ ----------- COMPARABLE COMPANY GROUP AUTONATION INC $ 1.06 $0.66 $0.91 (7.3) NA SONIC AUTOMOTIVE INC -CL A $ 0.74 $1.27 $1.69 51.1 17.3 UNITED AUTO GROUP INC ($0.04) $1.04 $1.02 NM 13.8 GROUP 1 AUTOMOTIVE INC $ 1.16 $1.55 $1.88 27.3 19.3 LITHIA MOTORS INC -CL A $ 1.14 $1.60 $1.76 24.3 NA HOMETOWN AUTO RETAILERS ($0.28) $0.13 ($0.60) NM NA ---------------------------------------------------------------------------------------------------------- MAXIMUM 51.1 19.3 MEAN 23.8 16.8 MEDIAN 25.8 17.3 MINIMUM (7.3) 13.8 ---------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP $ 0.19 $0.57 $0.67 87.8 22.5
PROJECT WHEEL II ------------------------------------------------------------------------------- COMPARABLE PUBLIC COMPANY ANALYSIS - DETAIL: CAR DEALERS, NEW AND USED ($ in millions except per share)
Book Value --------------------------- FYE Quarterly Recent Shares Intangible Stockholders' Price Outstanding Market Company Assets Equity 12/03/01 x (000s) = Capitalization ------- ------ ------ -------- ------ -------------- COMPARABLE COMPANY GROUP AUTONATION INC $2,920.2 $3,878.5 $11.10 324,967 $3,607.1 SONIC AUTOMOTIVE INC -CL A $ 668.8 $ 489.9 $19.45 40,337 $ 784.6 UNITED AUTO GROUP INC $ 664.5 $ 494.0 $16.99 23,354 $ 396.8 GROUP 1 AUTOMOTIVE INC $ 285.9 $ 275.8 $29.86 22,745 $ 679.2 LITHIA MOTORS INC -CL A $ 133.9 $ 196.5 $19.50 12,934 $ 252.2 HOMETOWN AUTO RETAILERS $ 24.8 $ 29.9 $ 0.68 7,175 $ 4.9 UGLY DUCKLING CORP $ 12.5 $ 151.6 $2.57 12,274 $ 31.5
Latest Quarterly Data -------------------------------------------------- Cash on Long-Term Short-Term Preferred Balance "Company Company + Debt + Debt + Stock - Sheet = Value" ------- ---- ---- ----- ----- ------ COMPARABLE COMPANY GROUP AUTONATION INC $611.3 $8.3 $0.0 $ 89.1 $4,137.6 SONIC AUTOMOTIVE INC -CL A $448.9 $559.9 $0.0 $103.4 $1,690.0 UNITED AUTO GROUP INC $463.6 $669.1 $0.0 $ 4.7 $1,524.8 GROUP 1 AUTOMOTIVE INC $100.5 $450.2 $0.0 $147.4 $1,082.4 LITHIA MOTORS INC -CL A $ 73.3 $252.0 $5.8 $ 43.5 $ 539.9 HOMETOWN AUTO RETAILERS $ 8.5 $ 32.9 $0.0 $ 4.1 $ 42.3 UGLY DUCKLING CORP $ 74.2(1) $ 0.0 $0.0 $ 7.4 $ 98.4
(1) Debt excludes Portfolio Borrowings. Project Wheel II Comparable Public Company Analysis - Detail: Used Car Dealers ($ in millions except per share)
LTM Net Ticker Quarter Net Margin Symbol Company Date Revenues EBITDA EBIT Income (%) ------------------------------------------------------------------------------------------------------------------------------------ Comparable Company Group KMX CIRCUIT CITY STRS CARMAX GRP 8/01 $2,849.9 $140.3 $122.0 $69.3 2.4 CNGR CROWN GROUP INC 7/01 $340.4 $37.1 $33.4 $4.4 1.3 SCHA SMART CHOICE AUTO GRP 7/01 $215.0 $13.5 $11.7 ($3.7) NM ------------------------------------------------------------------------------------------------------------------------------------ Maximum $2,849.9 $140.3 $122.0 $69.3 2.4 Mean $1,135.1 $63.6 $55.7 $23.3 1.9 Median $340.4 $37.1 $33.4 $4.4 1.9 Minimum $215.0 $13.5 $11.7 ($3.7) 1.3 ------------------------------------------------------------------------------------------------------------------------------------ UGLY UGLY DUCKLING CORP 9/01 $396.2 (1) $14.3 (2) ($0.1)(2) ($6.1) NM
12/03/01 Average Stock Market Daily Stock Price as 52 Week Price Range Ticker Value Volume Price a % of 52 -------------------- Symbol Company of Equity (000s) 12/03/01 Week High Low High ------------------------------------------------------------------------------------------------------------------------------------ Comparable Company Group KMX CIRCUIT CITY STRS CARMAX GRP $725.4 300.5 $20.00 95.2% $3.69 - $21.00 CNGR CROWN GROUP INC $33.7 18.2 $5.00 83.3% $3.10 - $6.00 SCHA SMART CHOICE AUTO GRP $2.9 1.0 $0.30 20.9% $0.28 - $1.44 ------------------------------------------------------------------------------------------------------------------------------------ Maximum $725.4 95.2% Mean $254.0 66.5% Median $33.7 83.3% Minimum $2.9 20.9% ------------------------------------------------------------------------------------------------------------------------------------ UGLY UGLY DUCKLING CORP $31.5 28.0 $2.57 46.0% $2.00 - $5.59
(1) Net of provision for credit losses and portfolio interest expense. (2) Excludes portfolio interest expense. Project Wheel II Comparable Public Company Analysis - Detail: Used Car Dealers ($ in millions except per share)
P/E Ratios ----------------------------------- Fiscal Latest 2001 2002 Company Company Year Twelve Calendar Calendar Value/ Value/ Company End Months Year Year Revenue EBITDA -------------------------------------------------------------------------------------------------------------------------------- Comparable Company Group CIRCUIT CITY STRS CARMAX GRP 2/01 31.3x 27.8x 23.0x 0.2x 5.0x CROWN GROUP INC 4/01 8.5x NA NA 0.7x 6.6x SMART CHOICE AUTO GRP 4/01 NM NA NA 0.7x 11.8x -------------------------------------------------------------------------------------------------------------------------------- Maximum 31.3x 27.8x 23.0x 0.7x 11.8x Mean 19.9x 27.8x 23.0x 0.6x 7.8x Median 19.9x 27.8x 23.0x 0.7x 6.6x Minimum 8.5x 27.8x 23.0x 0.2x 5.0x -------------------------------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP 12/00 NM NA NA 0.2x 6.9x
2001 EPS Estimates Market Market Fiscal P/E ---------------------------------- Fiscal Company Value/ Value/ as a % of 2001 2002 Year Value/ Tangible Common 5-Year EPS EPS Calendar Calendar Company End EBIT Equity Equity Growth (LTM) Year Year ---------------------------------------------------------------------------------------------------------------------------- Comparable Company Group CIRCUIT CITY STRS CARMAX GRP 5.8x 1.7x 1.6x NA $0.64 $0.72 $0.87 CROWN GROUP INC 7.3x 0.7x 0.6x NA $0.59 NA NA SMART CHOICE AUTO GRP 13.6x 0.3x 0.2x NA ($0.38) NA NA ---------------------------------------------------------------------------------------------------------------------------- Maximum 13.6x 1.7x 1.6x Mean 8.9x 0.9x 0.8x Median 7.3x 0.7x 0.6x Minimum 5.8x 0.3x 0.2x ---------------------------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP NM 0.2x 0.2x NA ($0.45) NA NA
Project Wheel II Comparable Public Company Analysis - Detail: Used Car Dealers ($ in millions except per share)
Fiscal Year End Compound Revenue % Revenues Growth Rates Latest -------------------------------------------- (-2 Years to Company Year -2 Years -1 Year Latest Year Latest Year) ------------------------------------------------------------------------------------------------------------------------------------ Comparable Company Group CIRCUIT CITY STRS CARMAX GRP 2/01 $1,466.3 $2,015.0 $2,501.0 17.2 CROWN GROUP INC 4/01 $111.3 $237.6 $342.8 75.5 SMART CHOICE AUTO GRP 4/01 $70.7 $130.6 $221.9 77.1 ------------------------------------------------------------------------------------------------------------------------------------ Maximum 77.1 Mean 56.6 Median 75.5 Minimum 17.2 ------------------------------------------------------------------------------------------------------------------------------------ UGLY DUCKLING CORP 12/00 $332.5 $466.0 $604.9 18.4
Fiscal Year End Compound EPS % 5-Year Earnings Per Share Growth Rates Estimated ---------------------------------------- (-2 Years to EPS % Company -2 Years -1 Year Latest Year Latest Year) Growth Rate --------------------------------------------------------------------------------------------------------------------------------- Comparable Company Group CIRCUIT CITY STRS CARMAX GRP ($0.24) $0.01 $0.43 NM NA CROWN GROUP INC $1.68 $1.54 $0.74 (33.6) 28.0 SMART CHOICE AUTO GRP ($197.11) $0.37 ($0.06) NM NA ------------------------------------------------------------------------------------------------------------------------------- Maximum (33.6) 28.0 Mean (33.6) 28.0 Median (33.6) 28.0 Minimum (33.6) 28.0 ------------------------------------------------------------------------------------------------------------------------------- UGLY DUCKLING CORP $0.19 $0.57 $0.67 87.8 22.5
Project Wheel II Comparable Public Company Analysis - Detail: Used Car Dealers ($ in millions except per share)
Book Value -------------------------------- FYE Quarterly Recent Shares Intangible Stockholders' Price Outstanding Market Company Assets Equity 12/03/01 x (000s) = Capitalization ----------------------------------------------------------------------------------------------------------------------------------- Comparable Company Group CIRCUIT CITY STRS CARMAX GRP $25.2 $449.0 $20.00 36,272 $725.4 CROWN GROUP INC $8.9 $59.2 $5.00 6,735 $33.7 SMART CHOICE AUTO GRP $2.1 $13.8 $0.30 9,762 $2.9 UGLY DUCKLING CORP $12.5 $151.6 $2.57 12,274 $31.5
Latest Quarterly Data ---------------------------------------------------------------- Cash on Long-Term Short-Term Preferred Balance "Company Company + Debt + Debt + Stock - Sheet = Value" ------------------------------------------------------------------------------------------------------------------------- Comparable Company Group CIRCUIT CITY STRS CARMAX GRP $0.8 $1.4 $0.0 $24.6 $703.0 CROWN GROUP INC $196.0 $16.6 $0.0 $2.2 $244.1 SMART CHOICE AUTO GRP $147.4 $9.7 $0.0 $0.9 $159.2 UGLY DUCKLING CORP $74.2 (1) $0.0 $0.0 $7.4 $98.4
(1) Debt excludes Portfolio Borrowings.