EX-16.(C)(4) 7 dex16c4.txt EXHIBIT 16.(C)(4) EXHIBIT 16(C)(4) BCT InternationaL, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- 11.20.01 [LOGO] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS This presentation and its analyses are only for the use of the Special Committee of the Board of Directors and are not intended to, nor should they be, relied upon by any other party, including shareholders of the Company. The consent of Capitalink is required prior to the disclosure to any third party of this presentation, its analyses, or of the assessments made by Capitalink. These materials are based solely on information contained in publicly available documents and certain other information provided to Capitalink by management and the Special Committee. Capitalink has not attempted to investigate or verify the accuracy or completeness of such publicly available information or other information provided to Capitalink. Capitalink has relied upon the accuracy and completeness of such publicly available information and other information supplied to Capitalink. These materials are being furnished, and should be considered only in connection with, the oral presentation being provided by Capitalink in connection herewith. The preparation of these materials was completed on November 16, 2001 based on information publicly available or supplied to Capitalink through such date (except that Capitalink reviewed two draft Agreements and Plans of Merger dated November 19 and 20, 2001). Capitalink is not obligated to update this presentation or its analyses to reflect any information that becomes publicly available or that is provided to Capitalink after such date. [LOGO] Smart Investment Banking (SM) BCT InternationaL, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TABLE OF CONTENTS TRANSACTION OVERVIEW ......................... 3 OVERVIEW OF COMPANY .......................... 15 VALUATION ANALYSIS ........................... 32 Page 2 BCT InternationaL, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW Page 3 BCT InternationaL, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW INTRODUCTION . The Special Committee of the Board of Directors of BCT International, Inc. ("BCT" or the "Company") has retained Capitalink, L.C. ("Capitalink") to render an opinion as to the fairness, from a financial point of view, of a proposal by Phoenix Group of Florida, Inc. ("Phoenix") to purchase, by means of merger to be voted on by the Company's stockholders, all of the Company's outstanding common stock that is not beneficially owned by Phoenix or William A. Wilkerson ("Wilkerson"), or their respective affiliates (collectively the "Phoenix Group") (the "Proposed Transaction"). . The Company's common stock is publicly traded on the over-the-counter market under the symbol "BCTI", and as of August 31, 2001, there were approximately 5,121,000 shares of the Company's common stock outstanding (excluding treasury shares). . The closing price of the Company's stock on November 16, 2001 (date presentation materials completed) and September 20, 2001 (date first offer was communicated) was $0.69 and $0.65, respectively. . The consideration proposed by Phoenix is $1.13 in cash for each share of the Company's common stock not beneficially owned by the Phoenix Group. . Wilkerson, who is also the Company's Chairman and Chief Executive Officer, owns Phoenix. . As reported in the Schedule 13D/A filed by the Phoenix Group on September 7, 2001, Phoenix beneficially owns 2,702,312 shares of common stock or 51.6% of the issued and outstanding common stock and Wilkerson beneficially owns 62,675 shares of common stock or 1.2% of the issued and outstanding common stock. In addition, Wilkerson has an option to acquire an additional 330,000 shares of the common stock pursuant to the Company's employee option plan. If this option were Page 4 BCT InternationaL, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW INTRODUCTION exercised Wilkerson would be the owner of 392,675 shares of common stock or 7.1% of the issued and outstanding common stock. . As reported in the Schedule 13D/A on or about September 1, 2001, Phoenix entered into various oral agreements to privately purchase an aggregate of 288,858 shares of common stock from several shareholders for a purchase price of $0.90 per share. In addition, Phoenix reported that it had exercised a previously disclosed option dated May 31, 2001 to purchase 623,782 shares from a private shareholder for a purchase price of $1.75 per share. . In connection with its purchases Phoenix borrowed certain funds pursuant to a $2,000,000 bank credit facility. As reported in the Company's Form 8-K filed on August 31, 2001, as a condition of the borrowing, the Company agreed to provide a corporate guaranty, including a pledge of substantially all of the Company assets. Wilkerson requested that the Company provide this guaranty. The Company formed a Special Committee of the Board of Directors consisting of Jeffrey Hewson and Phil Pisciotta to consider this request. Acting on the Special Committee's recommendation, the Company entered into an agreement with Phoenix and Wilkerson (the "Phoenix Agreement") to provide the corporate guaranty on the conditions that: 1. The last year of Wilkerson's employment agreement with the Company was eliminated, so that the agreement now terminates on February 28, 2002. 2. Wilkerson and Phoenix, jointly and severally, agreed to (i) grant the Company an assignable one-year option to repurchase all of the shares of the Company's common stock bought with the borrowed funds at the same price paid by Phoenix and (ii) pay the Company's expenses incurred in connection with the transaction described below, unless (a) Wilkerson and/or Phoenix make an offer (which may be contingent upon the receipt of financing) on or before Page 5 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW INTRODUCTION September30, 2001, to purchase for cash all of the Company's shares which are held by all other shareholders, and providing for a closing of that transaction on or before April 15, 2002 and (b) such transaction closes on terms deemed fair to the Company and its shareholders by the Special Committee. 3. Wilkerson and Phoenix, jointly and severally, agreed to immediately reimburse the Company and its subsidiary (Business Cards Tomorrow, Inc.) for all payments the Company (and its subsidiary) make pursuant to the corporate guaranty described above. As collateral for their reimbursement obligations, Wilkerson and Phoenix granted to the Company a first priority security interest in any and all shares of the Company's common stock which Phoenix purchases with the borrowed funds and a subordinated security interest in the 935,382 shares of the Company's common stock already owned by Phoenix and pledged to the bank. Page 6 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW SUMMARY OF PROPOSED TRANACTIONS TERMS Price: $1.13 per share. Transaction Structure: The Phoenix Group will acquire the outstanding common stock of the Company that it does not own through a merger with a wholly owned subsidiary of Phoenix with the Company, which shall continue to operate under the name BCT International, Inc. Estimated Timetable: The agreement is terminable by either party if not consummated on or prior to April 15, 2002. Dissenters Rights: The consummation of the proposed transaction is conditioned, among other things, on holders of no more than 25% of the Company's outstanding common stock exercising their right to dissent from the Proposed Transaction, under the Delaware General Corporation Law (the "DGCL"). To the extent provided by the DGCL, Phoenix will not make any payment of merger consideration with respect to shares held by any person who elects to demand appraisal of such dissenting stockholder's shares and duly and timely complies with all the provisions of the DGCL concerning the right of holders of shares to require appraisal of their shares, but such dissenting stockholders shall have the right to receive such consideration as may be determined to be due such dissenting stockholders pursuant to the DGCL. Stock Options: The Company will take necessary action to cause all outstanding options to terminate and expire upon consummation of the Proposed Transaction. Any shares issued prior to closing pursuant to the exercise of options will be acquired at $1.13 per share. Notwithstanding the foregoing, no Page 7 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW SUMMARY OF PROPOSED TRANACTIONS TERMS consideration shall be paid with respect to Company options beneficially owned by Wilkerson. Page 8 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION . May 21, 2001: Wilkerson acquires an option to purchase 623,782 shares of the Company's common stock at an exercise price of $1.75 per share from a private shareholder. . June 19, 2001: A special committee was formed consisting of Jeffrey Hewson and Phil Pisciotta. . June 29, 2001: Wilkerson files an amended Form 13D disclosing the option and that he is considering various alternative courses of action with respect to the management and ongoing operations of the Company, including without limitation: (i) the acquisition of additional common stock of the Company; (ii) the acquisition of all or substantially all of the assets of the Company or all of the remaining outstanding Common Stock of the Company (whether by means of a merger or another form of transaction); (iii) meetings and discussions with the Board of Directors of the Company (on which Wilkerson already serves) with the intent to influence the Company's business and affairs in this regard; and (iv) any other activities deemed by Wilkerson to be effective for the purpose of so influencing the business and affairs of the Company. . August 9, 2001: The Company enters into the Phoenix Agreement with Phoenix and Wilkerson in which the Company guarantees a $2,000,000 loan for the benefit of Phoenix and Wilkerson. . August 22, 2001: Phoenix and Wilkerson jointly file a Form 13D disclosing that Wilkerson transferred 935,582 shares of common stock to Phoenix and that Phoenix acquired the rights to purchase 618,442 shares of Common Stock at a price of $1.50 per share from a private shareholder. In addition, the Form 13D discloses that on August 20 and 21, 2001, Phoenix purchased 237,848 shares of common stock in private transactions for an aggregate purchase price of $214,063 ($.90 per share). . August 31, 2001: The Company files a Form 8-K disclosing the Phoenix Agreement. Page 9 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION . September 7, 2001: Phoenix and Wilkerson file an amended Schedule 13D disclosing, among other things, private purchases totaling 288,858 shares of common stock at a purchase price of $0.90 per share. . September 10, 2001: On September 10, 2001, the Company's common stock was delisted from NASDAQ National Market based on its failure to meet the minimum market value public float requirement of $5 million and began trading on the OTC Bulletin Board. . September 20, 2001: Offer letter from Phoenix to the Company's Board indicating a proposal to acquire the Company's outstanding stock not owned or controlled by the Phoenix Group for $0.85 per share in cash. The Special Committee retains Capitalink to provide the fairness opinion in connection with the Proposed Transaction. Capitalink provides Special Committee with document request list. . October 4, 2001: Capitalink reviews with the Special Committee its preliminary analysis of the Proposed Transaction and the potential valuation range of the Company. . October 16, 2001: Conference call for Capitalink to update the Special Committee on its findings. . October 18, 2001: Conference call for Capitalink to update the Special Committee on its findings. . October 22, 2001: Special Committee receives verbal offer increasing per share consideration to $0.95. . October 24, 2001: Conference call for Capitalink to update the Special Committee on its findings. Page 10 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION . October 26, 2001: Special Committee receives verbal offer increasing per share consideration to $1.10. . November 1, 2001: Conference call for Capitalink to update the Special Committee on its findings. . November 5, 2001: Special Committee receives written offer increasing per share consideration to $1.13. . November 7, 2001: Conference call for the Special Committee to discuss the $1.13 per share offer that has been verbally communicated. . November 15, 2001: Draft Agreement and Plan of Merger circulated which includes the $1.13 per share offer. . November 19, 2001: Amended Draft Agreement and Plan of Merger circulated. . November 20, 2001: Draft Final Agreement and Plan of Merger circulated. Page 11 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW SCOPE OF ENGAGEMENT . The Special Committee has retained Capitalink to render an opinion as to the fairness, from a financial point of view, of a proposal by Phoenix to purchase, by means of a merger to be voted on by the Company's stockholders, all of the Company's outstanding common stock not beneficially owned by the Phoenix Group. . For purposes of rendering its opinion, Capitalink has: . Reviewed documents relating to the Proposed Transaction, including a draft Agreement and Plan of Merger among Phoenix, Phoenix Acquisition Corp., and the Company, as received on November 20, 2001 (the "Agreement"). Capitalink assumes that the Proposed Transaction will be consummated in accordance with the terms described in the Agreement, and that any revisions thereto will not be detrimental to the Company or to the holders of its common stock, other than the Phoenix Group. . Reviewed publicly available financial information and other data with respect to the Company, including the Annual Report on Form 10-K for the fiscal year ended February 28, 2001, the Quarterly Report on Form 10-Q for the quarter ended August 31, 2001, the Current Report on Form 8-K dated August 15, 2001, the amended Schedule 13D dated June 20, 2001 filed by Wilkerson, the Schedule 13D dated August 15, 2001 filed by Phoenix and Wilkerson, the amended Schedule 13D dated August 29, 2001 filed by Steven N. Bronson, the amended Schedule 13D dated September 1, 2001 filed by Phoenix and Wilkerson, and certain other relevant financial and operating data relating to the Company made available to Capitalink. . Reviewed and analyzed certain financial characteristics of companies that were deemed to have characteristics comparable to those of BCT (however, no companies were deemed to be directly comparable to BCT). . Reviewed and analyzed the premium to be paid in the Proposed Transaction and premiums paid in certain other transactions (however, no transactions were deemed to be directly comparable to the Proposed Transaction). Page 12 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW SCOPE OF ENGAGEMENT . Reviewed and discussed with representatives of the management of BCT certain financial and operating information furnished by them, including financial analyses and projections and related assumptions with respect to the business, operations and prospects of the Company. . Considered the historical financial results and present financial condition of BCT. . Reviewed certain publicly available information concerning the trading of, and the trading market for, the common stock of BCT. . Inquired about and discussed the Proposed Transaction and other matters related thereto with BCT management, the Special Committee and its legal counsel. . Performed such other analyses and examinations as were deemed appropriate . The Capitalink opinion is necessarily based upon market, economic and other conditions, as they exist on, and could be evaluated as of, November 16, 2001. Accordingly, although subsequent developments may affect its opinion, Capitalink does not assume any obligation to update, review or reaffirm its opinion. . Capitalink has relied upon and assumed the accuracy and completeness of all of the financial and other information that was used by it without assuming any responsibility for any independent verification of any such information and has further relied upon the assurances of Company management that it is not aware of any facts or circumstances that would make any such information inaccurate or misleading. With respect to the financial projections utilized, Capitalink assumed that such projections have been reasonably prepared on a basis reflecting the best currently available estimates and judgments, and that such projections provide a reasonable basis upon which it could form an opinion. Page 13 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- TRANSACTION OVERVIEW SCOPE OF ENGAGEMENT . Capitalink has not made a physical inspection of the properties and facilities of BCT, and has not made or obtained any evaluations or appraisals of the assets and liabilities (contingent or otherwise) of the Company. . Capitalink assumed that the Proposed Transaction will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statues, rules and regulations. In addition, based upon discussions with the Company, it is assumed that the Proposed Transaction will be a taxable event to the BCT shareholders. . Capitalink has not been requested to opine as to, and the opinion does not in any manner address, the underlying business decision of BCT to proceed with or affect the Proposed Transaction. . Capitalink has not been requested to explore any alternatives to the Proposed Transaction. . The opinion does not intend to be and does not constitute a recommendation to any shareholder of BCT as to how such shareholder should vote with respect to the Proposed Transaction if such matter is put before the shareholders. Page 14 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY Page 15 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY SUMMARY . The Company operates the Business Cards Tomorrow franchise system, the world's largest wholesale franchise printing chain. . The Company was founded in 1975, and its franchises specialize in thermography products, labels, rubber stamps and business announcements for resale by retail printing providers. . Thermography is a specialized printing process that gives a raised printing effect similar to engraving and requires specialized equipment and operating techniques which commercial printers, quick printers, office superstores and other retail dealers choose not to invest in. . The franchises typically operate through the placement of business card, stationery, rubber stamp and labels catalogs with commercial and retail "quick" printers, office superstores, forms brokers, office supply companies and stationers in the franchises' trade areas. . Franchises specialize in the fast turnaround of their products, delivering many items, such as business cards, in one business day, with most products being delivered within two days of the date of order. . BCT's operations also include the Pelican Paper Products Division ("PPP") that supplies paper products, press supplies and press parts to the BCT franchises. PPP is a primary supplier of paper products for the BCT franchises. PPP purchases raw paper directly from paper mills and paper brokers and utilizes the services of converters to convert the raw material to finished paper products. Page 16 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY SUMMARY . PPP also performs converting and handling services for third parties. PPP utilizes three public storage facilities located strategically throughout the United States to house and ship out paper products to the franchises. . BCT derives revenues from five principal sources: (i) royalties, which are based on a percentage of sales of the BCT franchises; (ii) franchise fees from newly franchised franchises and resale fees from the resale of operating franchises; (iii) sales of paper products to franchisees; (iv) catalog and miscellaneous equipment and parts sales classified as printing sales; and (v) interest income from financing franchise acquisitions (primarily resales) and receivables. . Capitalink noted several general factors to be considered in connection with the status of BCT as a publicly traded company: . On September 10, 2001, the Company's common stock was delisted from NASDAQ National Market based on its failure to meet the minimum market value public float requirement of $5 million and began trading on the OTC Bulletin Board. . As noted hereinafter, the Company does not have a distinct comparable peer group. For this reason, among others, the Company does not have any analyst coverage. . The Company's common stock historically has a limited trading volume and therefore a lack of liquidity for the Company's shareholders. . The Company is not part of a high-growth industry that attracts investor interest and a high trading multiple. . The Company has not realized the benefits of public company status (i.e., ability to raise capital, use of stock as currency in acquisitions), but incurs the increased expenses necessary to comply with reporting requirements and other public company obligations. Page 17 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW . Capitalink reviewed the Company's historical financial data and noted decreasing revenue both for the three months and the six months ended August 31, 2001 as compared to the corresponding periods in the prior fiscal year. . Earnings from operations have decreased over the last two years and, on an annualized basis, for the six months ended August 31, 2001. . Capitalink also reviewed the Company's systemwide historical and projected sales information. In addition, Capitalink also reviewed Company projections for the fiscal years ending February 2002, 2003 and 2004. Page 18 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Comparative Summary Income Statements ($ in thousands except per share)
for 6 months ended LTM for years ended February 28/29, August 31, August 31, ------------------------------------------------- ------------------ ---------- 1997 1998 1999 2000 2001 2000 2001 2001 ------------------------------------------------- ------------------ ---------- Royalties and Franchise Fees $ 4,852 $ 4,921 $ 5,356 $ 5,394 $ 5,267 $ 2,757 $ 2,614 $ 5,124 Paper and Printing Sales 10,118 11,734 12,817 13,881 13,424 6,911 6,385 12,898 Sales of Franchises 40 44 87 27 46 24 22 44 Other Fees - - - - 262 169 173 266 ------------------------------------------------- ------------------ ---------- Total Revenue 15,010 16,699 18,260 19,302 18,999 9,861 9,194 18,332 ------------------------------------------------- ------------------ ---------- Cost of Paper and Printing Sales 8,823 9,857 10,939 11,574 11,605 5,877 5,527 11,255 Selling, General & Administrative 5,820 4,171 4,290 6,619 6,455 2,553 3,240 7,142 Depreciation and Amortization 247 199 186 189 232 101 114 245 ------------------------------------------------- ------------------ ---------- Total Operating Expenses 14,890 14,227 15,415 18,382 18,292 8,531 8,881 18,642 ------------------------------------------------- ------------------ ---------- Operating Income (Loss) 120 2,472 2,845 920 707 1,330 313 (310) Interest Income (Expense) 206 321 340 336 381 100 139 420 Other Income (Expense) - 2 6 952 49 - - 49 ------------------------------------------------- ------------------ ---------- Pre-tax Income (Loss) 326 2,795 3,191 2,208 1,137 1,430 452 159 Income Tax (Benefit) 54 986 690 837 442 557 176 61 ------------------------------------------------- ------------------ ---------- Income (Loss) from Continuing Operations 272 1,809 2,501 1,371 695 873 276 98 Discontinued Operations, net of Taxes (657) (244) (327) (357) (31) (31) - - ------------------------------------------------- ------------------ ---------- Net Income (Loss) $ (385) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 842 $ 276 $ 98 ================================================= ================== ========== Property & Equipment Depreciation & Amortization $ 221 $ 173 $ 160 $ 163 $ 206 $ 87 $ 100 $ 219 ================================================= ================== ========== Total Depreciation & Amortization $ 247 $ 199 $ 186 $ 189 $ 232 $ 101 $ 114 $ 245 ================================================= ================== ========== Capital Expenditures, net of Disposals (CAPEX, net) $ 240 $ 88 $ 82 $ 262 $ 150 $ 132 $ 51 $ 69 ================================================= ================== ========== Basic Earnings Per Share: From Continuing Operations $ 0.05 $ 0.35 $ 0.47 $ 0.26 $ 0.13 $ 0.17 $ 0.05 $ 0.01 ================================================= ================== ========== From Extraordinary Items $ (0.13) $ (0.05) $ (0.06) $ (0.07) $ (0.01) $ (0.01) $ - $ - ================================================= ================== ========== Net Income (Loss) $ (0.08) $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02 ================================================= ================== ========== Weighted Average Shares Outstanding (thousands) 5,018 5,230 5,323 5,257 5,214 5,231 5,124 ================================================= ================== Diluted Earnings Per Share: From Continuing Operations $ 0.05 $ 0.33 $ 0.45 $ 0.25 $ 0.13 $ 0.17 $ 0.05 $ 0.01 ================================================= ================== ========== From Extraordinary Items $ (0.13) $ (0.04) $ (0.06) $ (0.07) $ (0.01) $ (0.01) $ - $ - ================================================= ================== ========== Net Income (Loss) $ (0.08) $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02 ================================================= ================== ========== Weighted Average Shares Outstanding (thousands) 5,018 5,540 5,596 5,388 5,235 5,246 5,124 ================================================= ==================
-------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 19 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Common Sized Summary Income Statements
for 6 months ended LTM for years ended February 28/29, August 31, August 31, -------------------------------------------- ------------------ ---------- 1997 1998 1999 2000 2001 2000 2001 2001 -------------------------------------------- ------------------ ---------- Royalties and Franchise Fees 32.3% 29.5% 29.3% 27.9% 27.7% 28.0% 28.4% 28.0% Paper and Printing Sales 67.4% 70.3% 70.2% 71.9% 70.7% 70.1% 69.4% 70.4% Sales of Franchises 0.3% 0.3% 0.5% 0.1% 0.2% 0.2% 0.2% 0.2% Other Fees 0.0% 0.0% 0.0% 0.0% 1.4% 1.7% 1.9% 1.5% -------------------------------------------- ------------------ ---------- Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% -------------------------------------------- ------------------ ---------- Cost of Paper and Printing Sales 58.8% 59.0% 59.9% 60.0% 61.1% 59.6% 60.1% 61.4% Selling, General & Administrative 38.8% 25.0% 23.5% 34.3% 34.0% 25.9% 35.2% 39.0% Depreciation and Amortization 1.6% 1.2% 1.0% 1.0% 1.2% 1.0% 1.2% 1.3% -------------------------------------------- ------------------ ---------- Total Operating Expenses 99.2% 85.2% 84.4% 95.2% 96.3% 86.5% 96.6% 101.7% -------------------------------------------- ------------------ ---------- Operating Income (Loss) 0.8% 14.8% 15.6% 4.8% 3.7% 13.5% 3.4% -1.7% Interest Income (Expense) 1.4% 1.9% 1.9% 1.7% 2.0% 1.0% 1.5% 2.3% Other Income (Expense) 0.0% 0.0% 0.0% 4.9% 0.3% 0.0% 0.0% 0.3% -------------------------------------------- ------------------ ---------- Pre-tax Income (Loss) 2.2% 16.7% 17.5% 11.4% 6.0% 14.5% 4.9% 0.9% Income Tax (Benefit) 0.4% 5.9% 3.8% 4.3% 2.3% 5.6% 1.9% 0.3% -------------------------------------------- ------------------ ---------- Income (Loss) from Continuing Operations 1.8% 10.8% 13.7% 7.1% 3.7% 8.9% 3.0% 0.5% Discontinued Operations, net of Taxes -4.4% -1.5% -1.8% -1.8% -0.2% -0.3% 0.0% 0.0% -------------------------------------------- ------------------ ---------- Net Income (Loss) -2.6% 9.4% 11.9% 5.3% 3.5% 8.5% 3.0% 0.5% ============================================ ================== ========== Property & Equipment Depreciation & Amortization 1.5% 1.0% 0.9% 0.8% 1.1% 0.9% 1.1% 1.2% ============================================ ================== ========== Total Depreciation & Amortization 1.6% 1.2% 1.0% 1.0% 1.2% 1.0% 1.2% 1.3% ============================================ ================== ========== Capital Expenditures, net of Disposals (CAPEX, net) 1.6% 0.5% 0.4% 1.4% 0.8% 1.3% 0.6% 0.4% ============================================ ================== ==========
-------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 20 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Comparative Summary Balance Sheets ($ in thousands, except per share)
as of February 28/29, as of August 31, -------------------------------------------------- -------------------- 1997 1998 1999 2000 2001 2000 2001 -------------------------------------------------- -------------------- Assets Current Assets Cash & Equivalents $ 314 $ 989 $ 1,143 $ 1,906 $ 1,799 $ 1,316 $ 3,170 Accounts and Notes Receivable, net 1,641 2,418 3,252 3,293 3,568 3,100 2,043 Inventory 2,468 2,354 2,122 2,359 2,352 2,648 2,375 Deferred Income Taxes 312 919 476 482 321 408 321 Prepaid & Other 523 950 1,281 408 134 351 261 -------------------------------------------------- -------------------- Total Current Assets 5,258 7,630 8,274 8,448 8,174 7,823 8,170 Property & Equipment 1,437 1,331 1,442 1,633 1,707 1,690 1,759 Less Accumulated Depreciation (675) (794) (982) (1,104) (1,234) (1,119) (1,336) -------------------------------------------------- -------------------- Property & Equipment, net 762 537 460 529 473 571 423 Accounts and Notes Receivable, net 3,209 5,376 6,052 7,275 6,362 7,635 6,511 Deferred Income Taxes 1,569 214 246 722 925 819 809 Intangible Assets, net 337 311 284 258 232 245 219 Other Assets 94 89 90 89 24 24 24 -------------------------------------------------- -------------------- $ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156 ================================================== ==================== Liabilities & Stockholders' Equity Current Liabilities Accounts Payable $ 1,032 $ 1,264 $ 844 $ 1,111 $ 597 $ 950 $ 286 Accrued Expenses 291 777 753 1,349 403 604 563 Interest Bearing Debt 49 105 113 104 86 104 86 Interest Bearing Debt, Affiliates - - - - - - - Other 272 339 311 218 167 218 167 -------------------------------------------------- -------------------- Total Current Liabilities 1,644 2,485 2,021 2,782 1,253 1,876 1,102 Long Term Interest Bearing Debt 215 539 433 330 236 271 194 Long Term Interest Bearing Debt, Affiliates - - - - - - - Other Long Term - - - 453 417 372 320 -------------------------------------------------- -------------------- Total Liabilities 1,859 3,024 2,454 3,565 1,906 2,519 1,616 Stockholders' Equity Preferred Stock 60 60 60 - - - - Common Stock 216 223 230 233 233 233 233 Paid in Capital 12,056 12,254 12,506 12,597 12,597 12,597 12,605 Accumulated Earnings (Deficit) (2,403) (845) 1,322 2,334 2,998 3,176 3,274 Treasury Stock (559) (559) (1,166) (1,408) (1,544) (1,408) (1,572) -------------------------------------------------- -------------------- Total Stockholders' Equity 9,370 11,133 12,952 13,756 14,284 14,598 14,540 -------------------------------------------------- -------------------- $ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156 ================================================== ==================== Net Working Capital $ 3,614 $ 5,145 $ 6,253 $ 5,666 $ 6,921 $ 5,947 $ 7,068 ================================================== ==================== Book Value per Share $ 1.81 $ 2.09 $ 2.46 $ 2.68 $ 2.78 $ 2.79 $ 2.84 ================================================== ====================
-------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 21 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Common Sized Summary Balance Sheets
as of February 28/29, as of August 31, ---------------------------------------- ---------------- 1997 1998 1999 2000 2001 2000 2001 ---------------------------------------- ---------------- Assets Current Assets Cash & Equivalents 2.8% 7.0% 7.4% 11.0% 11.1% 7.7% 19.6% Accounts and Notes Receivable, net 14.6% 17.1% 21.1% 19.0% 22.0% 18.1% 12.6% Inventory 22.0% 16.6% 13.8% 13.6% 14.5% 15.5% 14.7% Deferred Income Taxes 2.8% 6.5% 3.1% 2.8% 2.0% 2.4% 2.0% Prepaid & Other 4.7% 6.7% 8.3% 2.4% 0.8% 2.1% 1.6% ---------------------------------------- ---------------- Total Current Assets 46.8% 53.9% 53.7% 48.8% 50.5% 45.7% 50.6% Property & Equipment 12.8% 9.4% 9.4% 9.4% 10.5% 9.9% 10.9% Less Accumulated Depreciation -6.0% -5.6% -6.4% -6.4% -7.6% -6.5% -8.3% ---------------------------------------- ---------------- Property & Equipment, net 6.8% 3.8% 3.0% 3.1% 2.9% 3.3% 2.6% Accounts and Notes Receivable, net 28.6% 38.0% 39.3% 42.0% 39.3% 44.6% 40.3% Deferred Income Taxes 14.0% 1.5% 1.6% 4.2% 5.7% 4.8% 5.0% Intangible Assets, net 3.0% 2.2% 1.8% 1.5% 1.4% 1.4% 1.4% Other Assets 0.8% 0.6% 0.6% 0.5% 0.1% 0.1% 0.1% ---------------------------------------- ---------------- 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ======================================== ================ Liabilities & Stockholders' Equity Current Liabilities Accounts Payable 9.2% 8.9% 5.5% 6.4% 3.7% 5.6% 1.8% Accrued Expenses 2.6% 5.5% 4.9% 7.8% 2.5% 3.5% 3.5% Interest Bearing Debt 0.4% 0.7% 0.7% 0.6% 0.5% 0.6% 0.5% Interest Bearing Debt, Affiliates 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other 2.4% 2.4% 2.0% 1.3% 1.0% 1.3% 1.0% ---------------------------------------- ---------------- Total Current Liabilities 14.6% 17.6% 13.1% 16.1% 7.7% 11.0% 6.8% Long Term Interest Bearing Debt 1.9% 3.8% 2.8% 1.9% 1.5% 1.6% 1.2% Long Term Interest Bearing Debt, Affiliates 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other Long Term 0.0% 0.0% 0.0% 2.6% 2.6% 2.2% 2.0% ---------------------------------------- ---------------- Total Liabilities 16.6% 21.4% 15.9% 20.6% 11.8% 14.7% 10.0% Stockholders' Equity Preferred Stock 0.5% 0.4% 0.4% 0.0% 0.0% 0.0% 0.0% Common Stock 1.9% 1.6% 1.5% 1.3% 1.4% 1.4% 1.4% Paid in Capital 107.4% 86.6% 81.2% 72.7% 77.8% 73.6% 78.0% Accumulated Earnings (Deficit) -21.4% -6.0% 8.6% 13.5% 18.5% 18.6% 20.3% Treasury Stock -5.0% -3.9% -7.6% -8.1% -9.5% -8.2% -9.7% ---------------------------------------- ---------------- Total Stockholders' Equity 83.4% 78.6% 84.1% 79.4% 88.2% 85.3% 90.0% ---------------------------------------- ---------------- 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ======================================== ================ Net Working Capital 32.2% 36.3% 40.6% 32.7% 42.7% 34.7% 43.7% ======================================== ================
------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 22 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Comparative Financial Analysis ($ in thousands, except per share)
as of & as of & for 6 months for LTM as of & for years ended February 28/29, ended August 31, August 31, ------------------------------------------------- ------------------ ---------- 1997 1998 1999 2000 2001 2000 2001 2001 ------------------------------------------------- ------------------ ---------- Financial Review Revenue $ 15,010 $ 16,699 $ 18,260 $ 19,302 $ 18,999 $ 9,861 $ 9,194 $ 18,332 Paper and Printing Sales Gross Margin $ 1,295 $ 1,877 $ 1,878 $ 2,307 $ 1,819 $ 1,034 $ 858 $ 1,643 Operating Income $ 120 $ 2,472 $ 2,845 $ 920 $ 707 $ 1,330 $ 313 $ (310) Pre-tax Income (Loss) $ 326 $ 2,795 $ 3,191 $ 2,208 $ 1,137 $ 1,430 $ 452 $ 159 Profit (Loss) from Continuing Operations $ 272 $ 1,809 $ 2,501 $ 1,371 $ 695 $ 873 $ 276 $ 98 Net Income (Loss) $ (385) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 842 $ 276 $ 98 Earnings before Interest & Taxes (EBIT) $ 120 $ 2,474 $ 2,851 $ 1,872 $ 756 $ 1,330 $ 313 $ (261) Earnings before Interest, Tax, Deprec $ 367 $ 2,673 $ 3,037 $ 2,061 $ 988 $ 1,431 $ 427 $ (16) & Amort (EBITDA) Basic Earnings Per Share $ (0.08) $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02 Diluted Earnings Per Share $ (0.08) $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02 Total Assets $ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156 $ 16,156 Net Worth $ 9,370 $ 11,133 $ 12,952 $ 13,756 $ 14,284 $ 14,598 $ 14,540 $ 14,540 Tangible Net Worth $ 9,033 $ 10,822 $ 12,668 $ 13,498 $ 14,052 $ 14,353 $ 14,321 $ 14,321 Total Interest Bearing Debt $ 264 $ 644 $ 546 $ 434 $ 322 $ 375 $ 280 $ 280 Net Interest Bearing Debt $ (50) $ (345) $ (597) $ (1,472) $ (1,477) $ (941) $ (2,890) $ (2,890) Total Capitalization $ 9,634 $ 11,777 $ 13,498 $ 14,190 $ 14,606 $ 14,973 $ 14,820 $ 14,820 Common Shares Outstanding (thousands) 5,184 5,322 5,257 5,231 5,136 5,231 5,121 5,121 Book Value per Share $ 1.81 $ 2.09 $ 2.46 $ 2.68 $ 2.78 $ 2.79 $ 2.84 $ 2.84 Tangible Book Value per Share $ 1.74 $ 2.03 $ 2.41 $ 2.58 $ 2.74 $ 2.74 $ 2.80 $ 2.80 Financial Strength Quick Ratio 1.7 2.1 3.0 2.2 4.6 2.8 5.3 5.3 Current Ratio 3.2 3.1 4.1 3.0 6.5 4.2 7.4 7.4 Total Liabilities to Net Worth 19.8% 27.2% 18.9% 25.9% 13.3% 17.3% 11.1% 11.1% Total Interest Bearing Debt to Net Worth 2.8% 5.8% 4.2% 3.2% 2.3% 2.6% 1.9% 1.9% Total Interest Bearing Debt to Total Capitalization 2.7% 5.5% 4.0% 3.1% 2.2% 2.5% 1.9% 1.9% Net Interest Bearing Debt to Total Capitalization -0.5% -2.9% -4.4% -10.4% -10.1% -6.3% -19.5% -19.5% Interest Expense to Interest Bearing Debt na na na na na na na na Total Interest Bearing Debt to EBITDA 0.7 0.2 0.2 0.2 0.3 0.3 0.7 na EBITDA to Interest Expense na na na na na na na na EBITDA less CAPEX, net to Interest Expense na na na na na na na na Effectiveness and Efficiency Accounts Receivable Turnover na 8.2 6.4 5.9 5.5 3.1 3.3 7.1 Inventory Turnover na 4.1 4.9 5.2 4.9 2.3 2.3 4.5 Asset Turnover na 1.3 1.2 1.2 1.1 0.6 0.6 1.1 Days Sales Outstanding na 44.4 56.7 61.9 65.9 59.6 56.1 51.2 Days Inventory Outstanding na 89.3 74.7 70.7 74.1 78.4 79.1 81.4 Days Payable Outstanding na 27.4 23.4 17.1 12.1 22.5 9.3 12.3 EBIT to Average Assets na 19.5% 19.3% 11.4% 4.5% na na -1.6% EBIT to Average Net Worth na 24.1% 23.7% 14.0% 5.4% na na -1.8% EBITDA to Average Assets na 21.1% 20.5% 12.6% 5.9% na na -0.1% EBITDA to Average Net Worth na 26.1% 25.2% 15.4% 7.0% na na -0.1% Net Income to Average Assets na 12.3% 14.7% 6.2% 4.0% na na 0.6% Net Income to Average Net Worth na 15.3% 18.1% 7.6% 4.7% na na 0.7%
-------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 23 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Comparative Financial Analysis Continued ($ in thousands, except per share)
as of & as of & for 6 months for LTM as of & for years ended February 28/29, ended August 31, August 31, ------------------------------------------------- ------------------ ---------- 1997 1998 1999 2000 2001 2000 2001 2001 ------------------------------------------------- ------------------ ---------- Profitability Ratios Paper and Printing Sales Gross Margin 12.8% 16.0% 14.7% 16.6% 13.6% 15.0% 13.4% 12.7% The following Ratios are as % of Revenue SG&A 38.8% 25.0% 23.5% 34.3% 34.0% 25.9% 35.2% 39.0% Operating Income 0.8% 14.8% 15.6% 4.8% 3.7% 13.5% 3.4% -1.7% Pre-tax Income (Loss) 2.2% 16.7% 17.5% 11.4% 6.0% 14.5% 4.9% 0.9% Profit (Loss) from Continuing Operations 1.8% 10.8% 13.7% 7.1% 3.7% 8.9% 3.0% 0.5% Net Income (Loss) -2.6% 9.4% 11.9% 5.3% 3.5% 8.5% 3.0% 0.5% EBIT 0.8% 14.8% 15.6% 9.7% 4.0% 13.5% 3.4% -1.4% EBITDA 2.4% 16.0% 16.6% 10.7% 5.2% 14.5% 4.6% -0.1% Growth Rates Revenue na 11.3% 9.3% 5.7% -1.6% na -6.8% -3.5% Operating Income na 1960.0% 15.1% -67.7% -23.2% na -76.5% -143.8% Pre-tax Income (Loss) na 757.4% 14.2% -30.8% -48.5% na -68.4% -86.0% Profit (Loss) from Continuing Operations na 565.1% 38.3% -45.2% -49.3% na -68.4% -85.9% Net Income (Loss) na na 38.9% -53.4% -34.5% na -67.2% -85.2% EBIT na 1961.7% 15.2% -34.3% -59.6% na -76.5% -134.5% EBITDA na 628.3% 13.6% -32.1% -52.1% na -70.2% -101.6% Basic Earnings Per Share na na 36.7% -53.7% -31.6% na -68.8% -84.6% Diluted Earnings Per Share na na 39.3% -51.3% -31.6% na -68.8% -84.6% Total Assets na 26.1% 8.8% 12.4% -6.5% na -5.6% -0.2% Net Worth na 18.8% 16.3% 6.2% 3.8% na -0.4% 1.8% Tangible Net Worth na 19.8% 17.1% 6.6% 4.1% na -0.2% 1.9% CAPEX, net na -63.3% -6.8% 219.5% -42.7% na -61.4% -54.0% Cumulative Average Growth Rate (CAGR) Statistics Revenue na 11.3% 10.3% 8.7% 6.1% na na na Operating Income na 1960.0% 386.9% 97.2% 55.8% na na na Pre-tax Income (Loss) na 757.4% 212.9% 89.2% 36.7% na na na Profit (Loss) from Continuing Operations na 565.1% 203.2% 71.5% 26.4% na na na Net Income (Loss) na na na na na na na na EBIT na 1961.7% 387.4% 149.9% 58.4% na na na EBITDA na 628.3% 187.7% 77.7% 28.1% na na na Basic Earnings Per Share na na na na na na na na Diluted Earnings Per Share na na na na na na na na Total Assets na 26.1% 17.1% 15.5% 9.6% na na na Net Worth na 18.8% 17.6% 13.7% 11.1% na na na Tangible Net Worth na 19.8% 18.4% 14.3% 11.7% na na na CAPEX, net na -63.3% -41.5% 3.0% -11.1% na na na Depreciation & Capital Spending Depreciation to CAPEX, net 92.1% 196.6% 195.1% 62.2% 137.3% 65.9% 196.1% 317.4% CAPEX, net to Revenue 1.6% 0.5% 0.4% 1.4% 0.8% 1.3% 0.6% 0.4%
-------------------------------------------------------------------------------- Sources of information: Company Financial Statements and Management Page 24 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY FINANCIAL REVIEW Systemwide Actual and Projected Sales Review
Sales ---------------------------------------------------------------------------------- Actual Projected ------------------------------------------ --------------------------------------- FY 1999 FY 2000 FY 2001 FY2002 FY 2003 FY 2004 ------------------------------------------ --------------------------------------- Printing Sales Systemwide $105,328,121 $107,685,767 $107,185,301 $101,551,214 $ 94,688,309 $ 93,826,516 Number of Plants 87 86 87 83 74 74 Highest Plant $ 3,595,387 $ 3,806,428 $ 3,723,336 $ 3,663,390 $ 3,844,675 $ 4,036,909 Average Plant $ 1,210,668 $ 1,237,767 $ 1,232,015 $ 1,167,255 $ 1,088,371 $ 1,078,466 Median Plant $ 972,334 $ 1,045,389 $ 1,125,191 $ 1,007,492 $ 914,929 $ 875,628 Lowest Plant (1) $ 12,785 $ 12,542 $ 68,330 $ 77,763 $ 73,875 $ 77,569 Total Top 10 Plants $ 27,029,595 $ 28,114,873 $ 27,146,357 $ 26,810,424 $ 27,156,727 $ 27,691,457 Total Top 20 Plants $ 45,156,731 $ 46,974,683 $ 46,045,662 $ 44,955,726 $ 45,064,845 $ 45,611,841 Total Top 30 Plants $ 59,478,452 61,625,333 $ 60,668,063 $ 59,597,446 $ 59,648,800 $ 60,188,854 As % of Total Plants Sales Top 10 Plants 25.66% 26.11% 25.33% 26.40% 28.68% 29.51% Top 20 Plants 42.87% 43.62% 42.96% 44.27% 47.59% 48.61% Top 30 Plants 56.47% 57.23% 56.60% 58.69% 62.99% 64.15% Growth Compound Growth --------------------------------------------------- ------------------- Actual Projected Actual Projected --------------------------------------------------- ------------------- FY 2000 FY 2001 5mFY02 FY 2002 FY 2003 FY 2004 '99-'01 '99-'04 --------------------------------------------------- ------------------- Printing Sales Systemwide 2.24% -0.46% -5.01% -5.26% -6.76% -0.91% 0.88% -2.89% Number of Plants -1.15% 1.16% na -10.84% -10.84% 0.00% 0.00% -3.19% Highest Plant 5.87% -2.18% na 4.95% 4.95% 5.00% 1.76% 2.34% Average Plant 2.24% -0.46% na -6.76% -6.76% -0.91% 0.88% -2.29% Median Plant 7.51% 7.63% na -9.19% -9.19% -4.30% 7.57% -2.07% Lowest Plant (1) -1.90% 444.81% na -5.00% -5.00% 5.00% 131.18% 43.42% Total Top 10 Plants 4.02% -3.44% na 1.29% 1.29% 1.97% 0.22% 0.49% Total Top 20 Plants 4.03% -1.98% na 0.24% 0.24% 1.21% 0.98% 0.20% Total Top 30 Plants 3.61% -1.55% na 0.09% 0.09% 0.91% 1.00% 0.24% As % of Total Plants Sales Top 10 Plants Top 20 Plants Top 30 Plants
Sales ------------------------------------------------------------------------------- Actual Projected ------------------------------------- ---------------------------------------- FY 1999 FY 2000 FY 2001 FY2002 FY 2003 FY 2004 ------------------------------------- ---------------------------------------- Paper Sales Systemwide na $13,641,759 $13,455,224 $12,557,761 $11,720,158 $10,938,423 Highest Plant na $ 562,184 $ 576,980 $ 538,495 $ 502,578 $ 469,056 Average Plant na $ 152,593 $ 154,658 $ 144,342 $ 134,714 $ 125,729 Median Plant na $ 126,770 $ 132,394 $ 123,563 $ 115,322 $ 107,630 Lowest Plant (1) na $ 25,670 $ 20,593 $ 19,219 $ 17,938 $ 16,741 Total Top 10 Plants na $ 3,831,955 $ 3,820,878 $ 3,566,025 $ 3,328,172 $ 3,106,182 Total Top 20 Plants na $ 6,142,096 $ 6,192,476 $ 5,779,438 $ 5,393,949 $ 5,034,173 Total Top 30 Plants na $ 7,966,964 $ 8,050,597 $ 7,513,622 $ 7,012,464 $ 6,544,732 As % of Total Plants Sales Top 10 Plants na 28.9% 28.4% 28.4% 28.4% 28.4% Top 20 Plants na 46.3% 46.0% 46.0% 46.0% 46.0% Top 30 Plants na 60.0% 59.8% 59.8% 59.8% 59.8%
Growth Compound Growth ---------------------------------------------------- ------------------- Actual Projected Actual Projected ------------------------- -------------------------- ------------------- FY 2000 FY 2001 5mFY02 FY 2002 FY 2003 FY 2004 '00-'01 '00-'04 ------------------------- -------------------------- ------------------- Paper Sales Systemwide na -1.37% 17.23% -6.67% -6.67% -6.67% -1.37% -5.37% Highest Plant na 2.63% na -6.67% -6.67% -6.67% 2.63% -4.43% Average Plant na 1.35% na -6.67% -6.67% -6.67% 1.35% -4.73% Median Plant na 4.44% na -6.67% -6.67% -6.67% 4.44% -4.01% Lowest Plant (1) na -19.78% na -6.67% -6.67% -6.67% -19.78% -10.14% Total Top 10 Plants na -0.29% na -6.67% -6.67% -6.67% -0.29% -5.11% Total Top 20 Plants na 0.82% na -6.67% -6.67% -6.67% 0.82% -4.85% Total Top 30 Plants na 1.05% na -6.67% -6.67% -6.67% 1.05% -4.80% As % of Total Plants Sales Top 10 Plants na 28.9% 28.4% 28.4% 28.4% 28.4% Top 20 Plants na 46.3% 46.0% 46.0% 46.0% 46.0% Top 30 Plants na 60.0% 59.8% 59.8% 59.8% 59.8%
-------------------------------------------------------------------------------- (1) Excludes Plants with no reported sales. Sources of information: Company Financials, Projections and Management. Page 25 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW . Capitalink reviewed the daily closing market price and trading volume of the BCT common stock over the period from November 16, 2000 through November 16, 2001. . Capitalink compared the daily closing market price performance of the BCT common stock for such period to both the Comparable Companies (as defined hereinafter) and the Russell 3000 Index. . Capitalink calculated total trading volumes at various closing price ranges of BCT common stock. In addition, the number of trading days, and the respective percentages, at certain trading volumes, was set forth. . There was a total of 103 trading days, or 41.4%, where the daily trading volume was less than 1,000 shares or the stock did not trade. Page 26 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW BCT Closing Price & Trading Volume History November 16, 2000 - November 16, 2001 [GRAPH APPEARS HERE] BCT International Page 27 -------------------------------------------------------- Date Volume Close -------------------------------------------------------- 16-Nov-01 1000 0.69 15-Nov-01 5500 0.7 14-Nov-01 9700 0.56 13-Nov-01 2500 0.56 12-Nov-01 1600 0.56 9-Nov-01 0 0.6 8-Nov-01 400 0.6 7-Nov-01 0 0.6 6-Nov-01 18500 0.6 5-Nov-01 85400 0.5 2-Nov-01 0 0.66 1-Nov-01 0 0.66 31-Oct-01 12500 0.66 30-Oct-01 600 0.57 29-Oct-01 11300 0.55 26-Oct-01 0 0.65 25-Oct-01 0 0.65 24-Oct-01 0 0.65 23-Oct-01 200 0.65 22-Oct-01 0 0.66 19-Oct-01 3200 0.66 18-Oct-01 3400 0.65 17-Oct-01 1000 0.75 16-Oct-01 15000 0.66 15-Oct-01 500 0.75 12-Oct-01 0 0.71 11-Oct-01 200 0.71 10-Oct-01 2500 0.8 9-Oct-01 3800 0.78 8-Oct-01 0 0.71 5-Oct-01 14300 0.71 4-Oct-01 0 0.63 3-Oct-01 45300 0.63 2-Oct-01 3200 0.59 1-Oct-01 0 0.58 28-Sep-01 0 0.58 27-Sep-01 200 0.58 26-Sep-01 45200 0.61 25-Sep-01 1500 0.75 24-Sep-01 5400 0.65 21-Sep-01 4500 0.65 20-Sep-01 100 0.65 19-Sep-01 2700 0.63 18-Sep-01 2700 0.65 17-Sep-01 0 0.57 10-Sep-01 6200 0.57 7-Sep-01 0 0.76 6-Sep-01 200 0.76 5-Sep-01 23800 0.8 4-Sep-01 1000 0.8 31-Aug-01 6200 0.8 30-Aug-01 8000 0.75 29-Aug-01 0 0.9 28-Aug-01 9500 0.9 27-Aug-01 0 0.84 24-Aug-01 5300 0.84 23-Aug-01 7800 0.84 22-Aug-01 14800 0.85 21-Aug-01 8300 0.85 20-Aug-01 2000 0.83 17-Aug-01 1200 0.85 16-Aug-01 100 0.85 15-Aug-01 1000 0.85 14-Aug-01 4100 0.91 13-Aug-01 6500 0.86 10-Aug-01 0 0.94 9-Aug-01 100 0.94 8-Aug-01 1000 0.86 7-Aug-01 0 0.87 6-Aug-01 0 0.87 3-Aug-01 400 0.87 2-Aug-01 5000 0.86 1-Aug-01 8600 0.9 31-Jul-01 100 0.95 30-Jul-01 13600 0.9 27-Jul-01 25600 0.88 26-Jul-01 39600 0.85 25-Jul-01 30700 0.76 24-Jul-01 0 1.01 23-Jul-01 0 1.01 20-Jul-01 13400 1.01 19-Jul-01 2600 1.02 18-Jul-01 2100 1.03 17-Jul-01 6500 1.06 16-Jul-01 100 1.04 13-Jul-01 0 1.04 12-Jul-01 2600 1.04 11-Jul-01 1500 0.98 10-Jul-01 300 1 9-Jul-01 1100 1.02 6-Jul-01 8000 1.03 5-Jul-01 8800 1.1 3-Jul-01 1500 1.08 2-Jul-01 1800 1.1 29-Jun-01 5700 1.03 28-Jun-01 11400 1.08 27-Jun-01 0 0.95 26-Jun-01 0 0.97 25-Jun-01 200 0.97 22-Jun-01 4900 0.97 21-Jun-01 2200 0.96 20-Jun-01 1700 0.98 19-Jun-01 4100 1 18-Jun-01 23800 1.01 15-Jun-01 0 1.05 14-Jun-01 0 1.05 13-Jun-01 6600 1.05 12-Jun-01 7700 1 11-Jun-01 26900 0.91 8-Jun-01 8800 1.01 7-Jun-01 2000 1.02 6-Jun-01 12700 1.03 5-Jun-01 4700 1.16 4-Jun-01 1700 1.27 1-Jun-01 0 1.26 31-May-01 5500 1.26 30-May-01 300 1.15 29-May-01 10300 1.12 25-May-01 0 1.26 24-May-01 5700 1.26 23-May-01 0 1.4 22-May-01 0 1.4 21-May-01 200 1.4 18-May-01 5700 1.26 17-May-01 36500 1.26 16-May-01 900 1.29 15-May-01 400 1.3 14-May-01 14600 1.24 11-May-01 0 1.29 10-May-01 2100 1.29 9-May-01 1600 1.3 8-May-01 2300 1.3 7-May-01 2000 1.31 4-May-01 0 1.22 3-May-01 0 1.22 2-May-01 500 1.22 1-May-01 5100 1.25 30-Apr-01 300 1.25 27-Apr-01 0 1.25 26-Apr-01 0 1.25 25-Apr-01 0 1.25 24-Apr-01 0 1.25 23-Apr-01 500 1.25 20-Apr-01 0 1.4 19-Apr-01 7500 1.4 18-Apr-01 12000 1.25 17-Apr-01 0 1.19 16-Apr-01 0 1.19 12-Apr-01 700 1.19 11-Apr-01 0 1.11 10-Apr-01 1000 1.11 9-Apr-01 1800 1.1 6-Apr-01 7800 0.9375 5-Apr-01 6000 1.0625 4-Apr-01 4000 1 3-Apr-01 13000 1 2-Apr-01 10100 1.0938 30-Mar-01 200 1.1562 29-Mar-01 1100 1.1562 28-Mar-01 1500 1.1562 27-Mar-01 1000 1.1875 26-Mar-01 1700 1.1875 23-Mar-01 0 1.2188 22-Mar-01 1300 1.2188 21-Mar-01 5800 1.25 20-Mar-01 0 1.3125 19-Mar-01 0 1.3125 16-Mar-01 2100 1.3125 15-Mar-01 0 1.375 14-Mar-01 600 1.375 13-Mar-01 0 1.375 12-Mar-01 1800 1.375 9-Mar-01 900 1.375 8-Mar-01 1700 1.375 7-Mar-01 500 1.375 6-Mar-01 3500 1.375 5-Mar-01 2000 1.5 2-Mar-01 0 1.5625 1-Mar-01 0 1.5625 28-Feb-01 10500 1.5625 27-Feb-01 4600 1.4375 26-Feb-01 36300 1.4375 23-Feb-01 19100 1.375 22-Feb-01 34900 1.25 21-Feb-01 8500 1.2188 20-Feb-01 100 1.25 16-Feb-01 100 1.25 15-Feb-01 4500 1.1875 14-Feb-01 7400 1.1875 13-Feb-01 2000 1.2188 12-Feb-01 6200 1.2188 9-Feb-01 3900 1.25 8-Feb-01 0 1.375 7-Feb-01 200 1.375 6-Feb-01 5600 1.25 5-Feb-01 0 1.2812 2-Feb-01 400 1.2812 1-Feb-01 200 1.375 31-Jan-01 4500 1.375 30-Jan-01 15700 1.375 29-Jan-01 0 1.2812 26-Jan-01 3000 1.2812 25-Jan-01 4700 1.2188 24-Jan-01 200 1.3125 23-Jan-01 800 1.2812 22-Jan-01 24600 1.3125 19-Jan-01 0 1.3125 18-Jan-01 1100 1.3125 17-Jan-01 200 1.3125 16-Jan-01 0 1.3125 12-Jan-01 16500 1.3125 11-Jan-01 2900 1.3125 10-Jan-01 2900 1.3125 9-Jan-01 0 1.3125 8-Jan-01 2800 1.3125 5-Jan-01 20200 1.3438 4-Jan-01 500 1.3125 3-Jan-01 6100 1.375 2-Jan-01 2000 1.375 29-Dec-00 18000 1.3125 28-Dec-00 43800 1.3125 27-Dec-00 15600 1.375 26-Dec-00 23200 1.375 22-Dec-00 51100 1.375 21-Dec-00 15100 1.375 20-Dec-00 90100 1.375 19-Dec-00 10600 1.4375 18-Dec-00 22700 1.5 15-Dec-00 3200 1.375 14-Dec-00 1600 1.375 13-Dec-00 100 1.375 12-Dec-00 10500 1.3125 11-Dec-00 6100 1.25 8-Dec-00 9800 1.1875 7-Dec-00 21700 1.3438 6-Dec-00 0 1.3125 5-Dec-00 0 1.3125 4-Dec-00 5000 1.3125 1-Dec-00 2000 1.4375 30-Nov-00 0 1.5156 29-Nov-00 30700 1.5156 28-Nov-00 500 1.4844 27-Nov-00 13700 1.5625 24-Nov-00 6500 1.5312 22-Nov-00 2200 1.5312 21-Nov-00 2800 1.5312 20-Nov-00 4400 1.5625 17-Nov-00 18700 1.625 16-Nov-00 4100 1.5625
Start End High Average Median Low Avg. Volume Median Volume ------------------- ------------------ ------------------ -------- --------- ----------------- ------------ ------------- 16-Nov-00 S 1.5625 16-Nov-01 S 0.6900 17-Nov-00 S 1.6250 S 1.0869 S 1.1562 5-Nov-01 S 0.5000 6,350 2,000
-------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc. Page 27 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW BCT vs Comparable Company Index (1) and Russell 3000 Index November 16, 2000 - November 16, 2001 [GRAPH APPEARS HERE] Indexed -------------------------------------------------- Date Company Comparables Russell 3K ------------------------------------------------------------------------- 16-Nov-01 44.2 143.88 82.8 15-Nov-01 44.8 145.12 83.0 14-Nov-01 35.8 145.38 83.0 13-Nov-01 35.8 145.24 82.7 12-Nov-01 35.8 146.37 81.2 9-Nov-01 38.4 140.69 81.2 8-Nov-01 38.4 142.96 81.2 7-Nov-01 38.4 144.38 81.1 6-Nov-01 38.4 144.00 81.3 5-Nov-01 32.0 148.77 80.1 2-Nov-01 42.2 149.69 79.0 1-Nov-01 42.2 148.47 78.9 31-Oct-01 42.2 145.31 77.2 30-Oct-01 36.5 146.62 77.1 29-Oct-01 35.2 141.48 78.5 26-Oct-01 41.6 143.54 80.3 25-Oct-01 41.6 145.26 80.0 24-Oct-01 41.6 146.66 78.9 23-Oct-01 41.6 152.33 78.8 22-Oct-01 42.2 155.16 79.2 19-Oct-01 42.2 156.32 78.1 18-Oct-01 41.6 160.18 77.6 17-Oct-01 48.0 162.16 78.3 16-Oct-01 42.2 163.52 79.8 15-Oct-01 48.0 165.22 79.2 12-Oct-01 45.4 162.57 79.3 11-Oct-01 45.4 161.65 79.8 10-Oct-01 51.2 157.68 78.4 9-Oct-01 49.9 159.63 76.6 8-Oct-01 45.4 158.74 77.0 5-Oct-01 45.4 160.64 77.6 4-Oct-01 40.3 157.17 77.6 3-Oct-01 40.3 157.56 77.7 2-Oct-01 37.8 156.25 76.1 1-Oct-01 37.1 149.09 75.2 28-Sep-01 37.1 149.94 75.5 27-Sep-01 37.1 148.76 73.8 26-Sep-01 39.0 146.34 73.0 25-Sep-01 48.0 148.36 73.5 24-Sep-01 41.6 134.32 72.9 21-Sep-01 41.6 127.86 70.2 20-Sep-01 41.6 134.39 71.6 19-Sep-01 40.3 144.91 73.9 18-Sep-01 41.6 154.39 75.2 17-Sep-01 36.5 161.27 75.8 10-Sep-01 36.5 167.59 79.7 7-Sep-01 48.6 173.35 79.4 6-Sep-01 48.6 175.31 80.9 5-Sep-01 51.2 182.19 82.6 4-Sep-01 51.2 184.55 82.9 31-Aug-01 51.2 191.16 82.9 30-Aug-01 48.0 191.12 82.6 29-Aug-01 57.6 192.05 83.9 28-Aug-01 57.6 191.96 84.8 27-Aug-01 53.8 190.75 86.0 24-Aug-01 53.8 184.59 86.4 23-Aug-01 53.8 186.36 84.8 22-Aug-01 54.4 187.07 85.0 21-Aug-01 54.4 188.00 84.4 20-Aug-01 53.1 183.63 85.4 17-Aug-01 54.4 184.62 84.8 16-Aug-01 54.4 185.19 86.2 15-Aug-01 54.4 179.78 86.0 14-Aug-01 58.2 181.52 86.6 13-Aug-01 55.0 182.77 86.9 10-Aug-01 60.2 183.46 86.7 9-Aug-01 60.2 182.61 86.2 8-Aug-01 55.0 183.31 86.3 7-Aug-01 55.7 178.79 87.8 6-Aug-01 55.7 183.27 87.6 3-Aug-01 55.7 188.94 88.6 2-Aug-01 55.0 189.20 89.0 1-Aug-01 57.6 190.89 88.7 31-Jul-01 60.8 184.12 88.2 30-Jul-01 57.6 176.14 87.8 27-Jul-01 56.3 167.49 87.9 26-Jul-01 54.4 158.57 87.6 25-Jul-01 48.6 149.42 86.6 24-Jul-01 64.6 144.98 85.4 23-Jul-01 64.6 148.38 86.9 20-Jul-01 64.6 149.52 88.2 19-Jul-01 65.3 148.03 88.5 18-Jul-01 65.9 145.76 88.0 17-Jul-01 67.8 141.18 88.6 16-Jul-01 66.6 140.44 87.6 13-Jul-01 66.6 139.19 88.7 12-Jul-01 66.6 139.19 88.2 11-Jul-01 62.7 140.71 86.1 10-Jul-01 64.0 141.06 86.3 9-Jul-01 65.3 140.96 87.6 6-Jul-01 65.9 145.19 87.0 5-Jul-01 70.4 144.24 89.1 3-Jul-01 69.1 152.15 90.2 2-Jul-01 70.4 154.63 90.4 29-Jun-01 65.9 146.35 89.8 28-Jun-01 69.1 144.84 89.7 27-Jun-01 60.8 145.71 88.5 26-Jun-01 62.1 141.35 88.8 25-Jun-01 62.1 137.02 88.9 22-Jun-01 62.1 138.29 89.4 21-Jun-01 61.4 132.86 90.3 20-Jun-01 62.7 138.27 89.4 19-Jun-01 64.0 148.47 88.5 18-Jun-01 64.6 152.62 88.3 15-Jun-01 67.2 153.01 88.7 14-Jun-01 67.2 153.40 89.1 13-Jun-01 67.2 152.08 90.8 12-Jun-01 64.0 156.55 91.8 11-Jun-01 58.2 156.92 91.7 8-Jun-01 64.6 157.16 92.6 7-Jun-01 65.3 156.93 93.5 6-Jun-01 65.9 155.26 92.9 5-Jun-01 74.2 150.25 93.9 4-Jun-01 81.3 151.06 92.5 1-Jun-01 80.6 149.22 92.1 31-May-01 80.6 144.66 91.6 30-May-01 73.6 145.93 91.0 29-May-01 71.7 151.64 92.5 25-May-01 80.6 150.86 93.4 24-May-01 80.6 146.45 94.4 23-May-01 89.6 144.46 94.1 22-May-01 89.6 141.87 95.7 21-May-01 89.6 140.38 95.9 18-May-01 80.6 135.25 94.2 17-May-01 80.6 136.85 93.9 16-May-01 82.6 141.38 93.5 15-May-01 83.2 134.53 91.0 14-May-01 79.4 136.43 90.9 11-May-01 82.6 136.74 90.7 10-May-01 82.6 131.27 91.4 9-May-01 83.2 128.89 91.5 8-May-01 83.2 129.32 91.9 7-May-01 83.8 128.60 92.0 4-May-01 78.1 123.74 92.3 3-May-01 78.1 124.05 91.0 2-May-01 78.1 123.25 92.4 1-May-01 80.0 123.16 92.2 30-Apr-01 80.0 118.82 91.0 27-Apr-01 80.0 116.62 91.0 26-Apr-01 80.0 118.82 89.7 25-Apr-01 80.0 114.86 89.2 24-Apr-01 80.0 117.84 87.7 23-Apr-01 80.0 115.93 88.7 20-Apr-01 89.6 115.11 90.2 19-Apr-01 89.6 110.11 91.0 18-Apr-01 80.0 108.50 89.7 17-Apr-01 76.2 107.33 86.5 16-Apr-01 76.2 104.45 85.5 12-Apr-01 76.2 105.80 85.9 11-Apr-01 71.0 106.84 84.6 10-Apr-01 71.0 105.33 84.7 9-Apr-01 70.4 105.62 82.4 6-Apr-01 60.0 106.82 81.7 5-Apr-01 68.0 106.54 83.4 4-Apr-01 64.0 107.04 79.8 3-Apr-01 64.0 113.29 80.1 2-Apr-01 70.0 114.92 83.0 30-Mar-01 74.0 114.96 84.3 29-Mar-01 74.0 109.53 83.3 28-Mar-01 74.0 113.65 83.7 27-Mar-01 76.0 113.51 85.8 26-Mar-01 76.0 113.84 83.8 23-Mar-01 78.0 112.08 82.8 22-Mar-01 78.0 114.54 81.2 21-Mar-01 80.0 115.21 81.6 20-Mar-01 84.0 116.22 83.1 19-Mar-01 84.0 114.65 85.1 16-Mar-01 84.0 119.64 83.6 15-Mar-01 88.0 115.38 85.3 14-Mar-01 88.0 119.77 85.0 13-Mar-01 88.0 121.64 87.2 12-Mar-01 88.0 121.79 85.8 9-Mar-01 88.0 122.73 89.6 8-Mar-01 88.0 123.25 91.9 7-Mar-01 88.0 122.20 91.9 6-Mar-01 88.0 122.55 91.4 5-Mar-01 96.0 123.46 90.5 2-Mar-01 100.0 121.70 90.0 1-Mar-01 100.0 123.13 90.3 28-Feb-01 100.0 128.23 90.2 27-Feb-01 92.0 128.46 91.5 26-Feb-01 92.0 122.45 92.5 23-Feb-01 88.0 122.31 90.8 22-Feb-01 80.0 124.08 91.1 21-Feb-01 78.0 127.81 91.5 20-Feb-01 80.0 128.11 93.2 16-Feb-01 80.0 125.94 95.0 15-Feb-01 76.0 115.60 96.7 14-Feb-01 76.0 116.41 95.8 13-Feb-01 78.0 116.20 95.8 12-Feb-01 78.0 113.79 96.7 9-Feb-01 80.0 112.56 95.6 8-Feb-01 88.0 110.15 96.8 7-Feb-01 88.0 112.67 97.5 6-Feb-01 80.0 113.50 98.4 5-Feb-01 82.0 114.13 98.3 2-Feb-01 82.0 114.80 98.1 1-Feb-01 88.0 114.47 99.9 31-Jan-01 88.0 112.55 99.4 30-Jan-01 88.0 113.28 100.1 29-Jan-01 82.0 116.90 99.4 26-Jan-01 82.0 120.24 98.6 25-Jan-01 78.0 118.72 98.7 24-Jan-01 84.0 120.13 99.4 23-Jan-01 82.0 121.26 99.1 22-Jan-01 84.0 121.36 97.6 19-Jan-01 84.0 120.16 97.6 18-Jan-01 84.0 113.75 98.1 17-Jan-01 84.0 137.43 97.0 16-Jan-01 84.0 144.14 96.7 12-Jan-01 84.0 145.43 96.0 11-Jan-01 84.0 120.68 96.5 10-Jan-01 84.0 119.54 95.3 9-Jan-01 84.0 119.21 94.0 8-Jan-01 84.0 116.42 93.6 5-Jan-01 86.0 110.92 93.9 4-Jan-01 84.0 110.58 96.6 3-Jan-01 88.0 108.54 97.9 2-Jan-01 88.0 110.17 93.0 29-Dec-00 84.0 99.55 96.2 28-Dec-00 84.0 94.32 97.4 27-Dec-00 88.0 93.80 96.7 26-Dec-00 88.0 94.48 95.5 22-Dec-00 88.0 96.06 94.9 21-Dec-00 88.0 96.28 92.2 20-Dec-00 88.0 95.57 91.7 19-Dec-00 92.0 94.54 94.9 18-Dec-00 96.0 95.11 96.3 15-Dec-00 88.0 97.50 95.5 14-Dec-00 88.0 98.26 97.4 13-Dec-00 88.0 97.90 99.1 12-Dec-00 84.0 101.92 100.1 11-Dec-00 80.0 95.02 101.0 8-Dec-00 76.0 96.39 100.0 7-Dec-00 86.0 99.11 97.5 6-Dec-00 84.0 98.66 97.9 5-Dec-00 84.0 95.21 99.7 4-Dec-00 84.0 96.62 95.5 1-Dec-00 92.0 96.44 95.1 30-Nov-00 97.0 97.25 94.7 29-Nov-00 97.0 97.60 96.7 28-Nov-00 95.0 97.38 96.4 27-Nov-00 100.0 97.03 97.8 24-Nov-00 98.0 95.90 97.4 22-Nov-00 98.0 97.47 95.6 21-Nov-00 98.0 97.05 97.5 20-Nov-00 100.0 98.70 97.4 17-Nov-00 104.0 100.12 99.6 16-Nov-00 100.0 100.00 100.0 -------------------------------------------------------------------------------- (1) Reflects the market cap weighted prices of the comparable companies utilized in the Comparable Company Analysis. Sources of information: Commodity Systems, Inc. Page 28 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW BCT Closing Price Ranges as Percentage of Total Trading Days November 16, 2000 - November 16, 2001 [GRAPH APPEARS HERE]
Price Range S0.000 - S0.750 S0.751 S0.875 S0.876 S1.000 S1.001 - S1.125 S1.126 - S1.250 S1.251 - S1.375 --------------------------------------------------------------------------------------------------------------------- Days in Range 45 24 23 29 38 66 Percentage 18.1% 9.6% 9.2% 11.6% 15.3% 26.5% Price Range S1.376 - S1.500 S1.501 - S1.625 S1.626+ -------------------------------------------------------------------------------- Days in Range 12 12 0 Percentage 4.8% 4.8% 0.0%
-------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc. Page 29 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW BCT Trading Volume per Price Range as Percentage of Total Volume November 16, 2000 - November 16, 2001 [GRAPH APPEARS HERE]
Price Range S0.000 - S0.750 S0.751 - S0.875 S0.876 - S1.000 S1.001 - S1.125 S1.126 - S1.250 S1.251 - S1.375 --------------------------------------------------------------------------------------------------------------------- Volume 311,800 161,200 135,900 148,700 145,100 498,400 Percentage 19.7% 10.2% 8.6% 9.4% 9.2% 31.5% Price Range S1.376 - S1.500 S1.501 - S1.625 S1.626+ -------------------------------------------------------------------------------- Volume 86,400 93,600 0 Percentage 5.5% 5.9% 0.0%
-------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc. Page 30 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- OVERVIEW OF COMPANY STOCK REVIEW BCT Trading Volume Ranges as a Percentage of Total Volume November 16, 2000 - November 16, 2001 [GRAPH APPEARS HERE] No volume *0**1,000 *1,001**2,500 *2,501**5,000 *5,001**10,000 *10,001**25,000 *25,001**50,000 *50,001 ------------------------------------------------------------------------------------------------------------------ Days in Range 58 45 34 30 35 33 11 3 Percentage 23.3% 18.1% 13.7% 12.0% 14.1% 13.3% 4.4% 1.2%
-------------------------------------------------------------------------------- Sources of information Commodity Systems, Inc. * means more than ** means less than Page 31 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS Page 32 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS METHODOLOGIES . Based upon a review of the Company's historical financial data, projections, and certain other qualitative data, Capitalink utilized several methodologies to determine a range of value of the Company's outstanding common stock that is not beneficially owned by the Phoenix Group. . Capitalink did not form a conclusion as to whether any individual analysis, considered in isolation, supported or failed to support an opinion as to the fairness, from a financial point of view, of the Proposed Transaction to the BCT shareholders other than the Phoenix Group. . Capitalink did not place any particular reliance or weight on any individual analysis, but instead concluded that the analyses, taken as a whole, supported its determination. Accordingly, the analyses must be considered as a whole and selecting portions of analyses or the factors considered, without considering all analyses and factors collectively, could create an incomplete and incorrect view of the process underlying the analyses in connection with the preparation of the opinion. . The methodologies utilized by Capitalink included: . A review of the historical and projected financial information of the Company as filed publicly (with respect to the historical data) and prepared by Company management. . A review and comparison of trading multiples for comparable publicly-traded companies. . Performing a discounted cash flow analysis of the Company with sensitivity analyses based on a range of assumptions. . A review of the acquisition premiums paid relative to recent public market trading prices (i) for acquisitions where the enterprise value of the transaction was less than $25 million, and (ii) for acquisitions of minority interests where the enterprise value of the transaction was less than $25 million. . A review of the premium of the consideration in the Proposed Transaction as compared to the closing prices of the Company's common stock over varying time frames. . A review of the Company's balance sheet to determine an approximate adjusted net book value. Page 33 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS METHODOLOGIES . It is noted that Capitalink undertook an extensive search for transactions that might be deemed comparable to the Proposed Transaction in order to undertake an analysis of the applicable multiples in such transactions. However, there were no such transactions identified. Page 34 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SUMMARY REVIEW Valuation Summary $ in thousands, except per share)
Company Implied Price Per Share (1) --------------------------------------------- Methodology Statistic (1) High Mean Median Low ------------------------------------------------------------ ------------- --------------------------------------------- Comparable Company Analysis LTM Earnings $ 98 $ 0.26 $ 0.22 $ 0.24 $ 0.16 Estimated Current Fiscal Year Earnings $ 519 $ 1.03 $ 1.03 $ 1.03 $ 1.03 Estimated Next Fiscal Year Earnings $ 371 $ 0.67 $ 0.67 $ 0.67 $ 0.67 Common Equity $ 14,540 $ 2.37 $ 1.86 $ 1.91 $ 1.12 Discounted Cash Flow Analysis Management Case - EBITDA Multiple na $ 1.24 $ 1.22 na $ 1.21 Management Case - Perpetual Growth na $ 1.09 $ 1.09 na $ 1.08 Revised Case - EBITDA Multiple na $ 1.47 $ 1.44 na $ 1.42 Revised Case - Perpetual Growth na $ 1.23 $ 1.21 na $ 1.20 Acquisitions Premiums Analysis Control Acquisitions - Stock Price One Day Prior na $ 2.59 $ 1.20 $ 1.05 $ 0.72 Control Acquisitions - Stock Price Five Days Prior na $ 3.33 $ 1.09 $ 0.96 $ 0.48 Minority Interest Acquisitions - Stock Price One Day Prior na $ 2.67 $ 1.01 $ 0.88 $ 0.69 Minority Interest Acquisitions - Stock Price Five Days Prior na $ 2.58 $ 0.91 $ 0.81 $ 0.60 Minority Interest Acquisitions - Stock Price Thirty Days Prior na $ 2.38 $ 1.01 $ 0.90 $ 0.72 Adjusted Book Value Analysis Liquidation Premise $ 5,213 na $ 1.02 na na Premiums Paid Analysis As of November 16, 2001 63.8% One Day Prior 61.4% Average 5 Days Prior 84.0% Average 10 Days Prior 89.3% Average 20 Days Prior 83.3% Average 30 Days Prior 73.8% Average 60 Days Prior 65.1% Average 90 Days Prior 47.2% Average Six Months Prior 30.4% Average One Year Prior 4.0%
-------------------------------------------------------------------------------- (1) Please reference the appropriate Analysis for further discussion and sources of information. Page 35 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS . The selected comparable company analysis provides a range of value, at a given point in time, based on the market's perception (as reflected in stock prices) of publicly traded companies deemed similar to BCT. . The Company's distinct niche as a franchisor of wholesale printers eliminates the possibility of locating directly comparable public companies. Capitalink focused on the printing industry, locating six companies (the "Comparable Companies"). . Only one of the Comparable Companies, IPI Inc., is a franchisor. . Based on its market value of approximately $3.5 million, BCT is smaller than all but one of the Comparable Companies. . Capitalink focused on the Comparable Companies' respective market values relative to (a) last twelve months ("LTM") earnings per share ("EPS"), (b) estimated current fiscal year ("CFY") EPS, (c) estimated next fiscal year ("NFY") EPS, and (d) common equity. . While earnings is the most relevant characteristic to be compared, only three of the Comparable Companies had a positive LTM EPS, and only one, Consolidated Graphics, Inc. had estimated CFY and NFY EPS. It is noted that Consolidated Graphics is considerably larger than the other Comparable Companies, both in terms of market value and revenue. Page 36 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS . It is noted that the consideration in the Proposed Transaction falls in the lower end of the implied market values derived from the Comparable Companies' common equity multiple. . Based both on the lack of publicly traded companies that are deemed directly comparable to BCT and on the lack of earnings characteristics for the Comparable Companies, Capitalink has not placed significant weight on the selected comparable company analysis. . An analysis of publicly-traded comparable companies is not mathematical; rather it involves complex consideration and judgments concerning differences in financial and operating characteristics of the Comparable Companies and other factors that could affect the public trading of the Comparable Companies. Page 37 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS Comparable Company Analysis - Implied Value ($ in thousands, except per share)
Earnings ----------------------------------- LTM Est CFY (1) Est NFY (1) Common Equity --------- ----------- ---------- --------------- BCT International $ 98 $ 519 $ 371 $ 14,540 --------------------------------------------------------------------------------------------------- Comparable Companies Multiples High 13.4x 10.2x 9.2x 0.8x Mean 11.4 10.2 9.2 0.7 Median 12.5 10.2 9.2 0.7 Low 8.4 10.2 9.2 0.4 Implied Range of Enterprise Value High na na na na Mean na na na na Median na na na na Low na na na na Implied Range of Market Value (2) High $ 1,310 $ 5,269 $ 3,420 $ 12,154 Mean 1,121 5,269 3,420 9,531 Median 1,225 5,269 3,420 9,819 Low 828 5,269 3,420 5,759 Implied Range of Market Value Per Share (3) High $ 0.26 $ 1.03 $ 0.67 $ 2.37 Mean 0.22 1.03 0.67 1.86 Median 0.24 1.03 0.67 1.91 Low 0.16 1.03 0.67 1.12 ---------------------------------------------------------------------------------------------------
_______________________________________________________________________________ (1) Estimates have been derived from Company Projections and Management. (2) Assumes Net Debt of ($5,136). See DCF Analysis for calculation. (3) Assumes 5,136 shares outstanding. See DCF Analysis for calculation. Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP, Commodity Systems, Inc., and/or Hoovers, Inc. Page 38 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS Comparable Company Analysis - Valuation Multiples ($ in thousands, except per share data)
% Below/Above Market Value as a Multiple of ---------------------------------------------- Stock Price 52-week Market Enterprise EPS Common Net Tang. ---------------------------- Company 16-Nov-01 High-Low Value Value (1) LTM Est CFY(2) Est NFY(2) Equity Common Eq -------------------- --------- -------------- -------- ----------- ------ ---------- ---------- ------- --------- Consolidated Graphics, Inc $ 16.040 27.4% - 63.5% $209,643 $445,461 13.4x 10.2x 9.2x 0.7x 2.1x Geographics, Inc. 0.090 79.5% - 63.6% 3,437 13,819 na na na 0.7 1.6 IPI Inc 4.100 25.5% - 98.8% 18,778 (7,402) na na na 0.7 0.7 Impreso, Inc 2.250 33.2% - 50.0% 11,880 35,595 12.5 na na 0.8 0.8 iPrint Technologies 0.200 89.2% - 25.0% 6,048 6,062 na na na 0.4 0.4 Paris Corporation 3.040 17.8% - 73.7% 9,941 2,768 8.4 na na 0.6 0.6 -------------------------------------------------------------- High 13.4x 10.2x 9.2x 0.8x 2.1x Mean 11.4 10.2 9.2 0.7 1.1 Median 12.5 10.2 9.2 0.7 0.8 Low 8.4 10.2 9.2 0.4 0.4 ------------------------------------------------------------- BCT International $ 0.690 57.5% - 38.0% $ 3,533 $ 643 69.0x 6.9x 9.6x 0.2x 0.2x Enterprise Value as a Multiple of 5 Year --------------------------------------------- Revenue LTM LTM EPS Growth ------------------------- Company LTM Est CFY(2) Est NFY(2) EBIT EBITDA Assets Proj.(2) --- ---------- ---------- ---- ------ ------ --------- Consolidated Graphics, Inc 0.7x 0.7x 0.6x 9.7x 5.1x 0.7x 15.0% Graphics, Inc 0.4 na na na na 0.5 na IPI Inc na na na na na na na Impreso, Inc 0.4 na na 11.3 9.0 0.6 na iPrint Technologies 0.5 0.6 0.4 na na 0.3 na Paris Corporation 0.1 na na 1.3 1.0 0.1 na ------------------------------------------------------- 0.7x 0.7x 0.6x 11.3x 9.0x 0.7x 15.0% 0.4 0.6 0.5 7.4 5.0 0.5 15.0% 0.4 0.6 0.5 9.7 5.1 0.5 15.0% 0.1 0.6 0.4 1.3 1.0 0.1 15.0% ------------------------------------------------------- BCT International 0.0x 0.0x 0.0x na na 0.0x na
-------------------------------------------------------------------------------- (1) Enterprise Value equals Market Value plus total debt, preferred stock, and minority interests, less cash. (2) Sources of estimates: Multex Research and other various securities analysts' estimates and reports. Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP, Commodity Systems, Inc., and/or Hoovers, Inc. Page 39 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS Comparable Company Analysis - Margin and Other Analyses ($ in thousands)
LTM (1) ---------------------------------------------------------------------------- as Percentage of Revenue Return on ---------------------------------------------------------------------------- Gross Operating Net Average Average Company Ticker Revenue Margin SG & A Margin EBITDA EBIT Income Assets Common Eq ------------------ -------- --------- ------ ------ -------- ------ ---- ------ ------- --------- Consolidated Graphics, Inc CGX $661,999 26.6% 18.7% 6.9% 13.2% 6.9% 2.3% 2.3% 5.3% Geographics, Inc. GGIT 35,922 12.3% 25.8% 13.4% 7.7% 13.5% 16.7% 22.6% 110.9% IPI Inc IDH 8,069 81.2% 80.1% -12.8% 7.0% -12.8% -10.5% 2.9% 3.7% Impreso, Inc ZCOM 87,820 11.8% 8.4% 3.4% 4.5% 3.6% 1.1% 1.9% 6.7% iPrint Technologies IPRT 11,806 35.0% 147.0% 177.4% -130.1% 164.1% -164.1% 71.4% -87.9% Paris Corporation PBFI 43,232 12.7% 9.8% 2.9% 6.6% 5.1% 2.7% 5.8% 7.8% -------------------------------------------------------------------------------- High $661,999 81.2% 147.0% 6.9% 13.2% 6.9% 2.7% 5.8% 7.8% Mean 141,475 29.9% 48.3% -31.7% -20.1% -29.1% -30.9% -14.5% - 30.4% Median 39,577 19.7% 22.3% -4.9% -1.3% -4.6% -4.7% -0.5% 0.8% Low 8,069 11.8% 8.4% -177.4% -130.1% -164.1% -164.1% -71.4% -110.9% -------------------------------------------------------------------------------- BCT International BCTI $ 18,332 38.6% 39.0% -1.7% -0.1% -1.4% 0.5% 0.6% 0.7% as of Latest Available Filing ----------------------------------------------------------------------------------------------------- Accts Days Total Debt Total Debt Latest FY Receivable Inventory Sales Current to Total to Revenue Company Turnover Turnover Outstanding Ratio Capitalization EBITDA Growth -------------------- -------------------------------------------------------------------------------- Consolidated Graphics, Inc 5.8x 15.52x 63.2 2.1 44.8% 2.8x 9.4% Geographics, Inc. 5.6 4.53x 65.0 0.7 67.4% na 34.3% IPI Inc 6.6 7.09x 55.6 5.1 0.2% na -9.6% Impreso, Inc 8.9 2.68x 41.0 1.3 62.7% 6.0x 20.5% iPrint Technologies 5.9 na 62.3 3.0 0.1% na 424.2% Paris Corporation 8.0 9.80x 45.7 3.5 8.2% 0.5x 21.4% ----------------------------------------------------------------------------- High 8.9x 15.5x 65.0 5.1 67.4% 6.0x 424.2% Mean 6.8 7.9 55.5 2.6 30.6% 3.1 83.4% Median 6.2 7.1 59.0 2.6 26.5% 2.8 20.9% Low 5.6 2.7 41.0 0.7 0.1% 0.5 -9.6% ----------------------------------------------------------------------------- BCT International 6.5x 4.76x 55.9 7.4 1.9% na -1.6%
________________________________________________________________________________ (1) May exclude special items, such as extraordinary and non-recurring expenses. See individual company overviews for details of exclusions, if any. Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP, Commodity Systems, Inc., and/or Hoovers, Inc. Page 40 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS Comparable Company Analysis - Income Statement Overview ($ in thousands, except per share data)
Revenue EBITDA (1) EBIT (1) Net Income (1) EPS (1) -------------------- ------------------- ------------------- ------------------- ---------------- Latest Latest Latest Latest Latest Company LTM 10-K LTM 10-K LTM 10-K LTM 10-K LTM 10-K --------------------------- ---------- --------- --------- -------- --------- -------- --------- -------- -------- ------ Consolidated Graphics, Inc $661,999 $683,396 $ 87,129 $ 97,063 $ 45,985 $ 58,280 $ 15,541 $ 22,111 $ 1.20 $ 1.68 Geographics, Inc. 35,922 36,602 (2,783) (2,064) (4,862) (3,863) (6,002) (5,007) (0.17) (0.14) IPI Inc 8,069 9,294 (567) 330 (1,030) (204) (851) (192) (0.17) (0.04) Impreso, Inc 87,820 74,118 3,962 3,481 3,156 2,792 934 931 0.18 0.18 iPrint Technologies 11,806 17,069 (15,365) (32,017) (19,369) (35,975) (19,369) (35,975) (0.62) (1.39) Paris Corporation 43,232 43,011 2,847 1,991 2,191 1,263 1,166 663 0.36 0.21 --------------------------------------------------------------------------------------------------------------- High $661,999 $683,396 $ 87,129 $ 97,063 $ 45,985 $ 58,280 $ 15,541 $ 22,111 $ 1.20 $ 1.68 Mean 141,475 143,915 12,537 11,464 4,345 3,716 (1,430) (2,912) 0.13 0.08 Median 39,577 39,807 1,140 1,161 581 530 42 235 0.00 0.07 Low 8,069 9,294 (15,365) (32,017) (19,369) (35,975) (19,369) (35,975) (0.62) (1.39) --------------------------------------------------------------------------------------------------------------- BCT International $ 18,332 $ 18,999 $ (16) $ 988 $ (261) $ 756 $ 98 $ 695 $ 0.01 $ 0.13 Latest Latest Available Available Company 10-Q 10-K --------------------------- --------- --------- Consolidated Graphics, Inc 30-Sep-01 31-Mar-01 Geographics, Inc. 30-Jun-01 31-Mar-01 IPI Inc 31-Aug-01 30-Nov-00 Impreso, Inc 31-May-01 31-Aug-00 iPrint Technologies 30-Sep-01 31-Dec-00 Paris Corporation 30-Jun-01 30-Sep-00 BCT International 31-Aug-01 28-Feb-01
-------------------------------------------------------------------------------- (1) May exclude special items, such as extraordinary and non-recurring expenses. See individual company overviews for details of exclusions, if any. Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP, Commodity Systems, Inc., and/or Hoovers, Inc. Page 41 BCT International, Inc. CONFIDENTIAL ------------------------------------------------------------------------------ VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS Comparable Company Analysis - Balance Sheet Overview ($ in thousands)
As of Latest Available Filing -------------------------------------------------------------------------------------------------------- Cash, Total Total Equivalents Accounts Current Intangibles, Total Current Company & Mrkt Sec Receivables Inventory Assets PPE, net net Assets Liabilities ---------------------- ----------- ---------- ----------- ---------- ----------- ---------- --------- ---------- Consolidated $ 6,850 $ 113,255 $ 31,045 $ 161,768 $ 287,603 $ 200,904 $ 657,829 $ 77,532 Graphics, Inc Geographics, Inc. 177 5,453 7,268 13,463 9,141 2,907 25,753 18,013 IPI Inc 26,229 1,089 187 29,705 660 2,624 33,594 5,863 Impreso, Inc 198 10,800 36,667 48,138 10,562 - 58,940 37,382 iPrint Technologies 7,446 2,156 - 14,719 2,657 - 20,137 4,860 Paris Corporation 8,537 5,401 3,842 18,750 1,598 - 20,921 5,358 High $ 26,229 $ 113,255 $ 36,667 $ 161,768 $ 287,603 $ 200,904 $ 657,829 $ 77,532 Mean 8,240 23,026 13,168 47,757 52,037 34,406 136,196 24,835 Median 7,148 5,427 5,555 24,228 5,899 1,312 29,674 11,938 Low 177 1,089 - 13,463 660 - 20,137 4,860 BCT International $ 3,170 $ 2,043 $ 2,375 $ 8,170 $ 423 $ 219 $ 16,156 $ 1,102 ---------------------------------------------------- Net Latest Total Total Tangible Available Company Debt Common Eq Common Eq Filing ---------------------- ----------- ---------- ----------- --------- Consolidated $ 242,668 $ 298,423 $ 97,519 30-Sep-01 Graphics, Inc Geographics, Inc. 10,559 5,113 2,206 30-Jun-01 IPI Inc 49 27,682 25,058 31-Aug-01 Impreso, Inc 23,913 14,212 14,212 31-May-01 iPrint Technologies 14 15,269 15,269 30-Sep-01 Paris Corporation 1,364 15,338 15,338 30-Jun-01 High $ 242,668 $ 298,423 $ 97,519 Mean 46,428 62,673 28,267 Median 5,962 15,304 15,304 Low 14 5,113 2,206 BCT International $ 280 $ 14,540 $ 14,321 31-Aug-01
-------------------------------------------------------------------------------- Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP, Commodity Systems, Inc., and/or Hoovers, Inc. Page 42 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- Consolidated Graphics, Inc Overview -------------------------------------------------------------------------------- Name Consolidated Graphic Address 5858 Westheimer Officers Joe Davis Attorneys Symbol CGX City, State Zip Houston, TX 77057 Charles White Auditors Arthur Andersen Latest Fiscal YE 31-Mar-01 Telephone 713-787-0977 Wayne Rose Transfer Agent American Stock Latest Rprt Per 30-Sep-01 Fax 713-787-5013 Transfer & Trust
Consolidated Graphics has bought more than 60 medium-sized printing firms since 1985. CGX, which is one of the nation's largest commercial printers, generates most of its sales by printing items such as brochures, catalogs, and direct mail fliers. The company also provides electronic services (online digital asset management, online purchasing) and fulfillment services. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income and Cashflow Statement Data -------------------------------------------------------------------------------- ($ in thousands, except per share)
LTM Six Months Ended Fiscal Years Ended ------------------------ ------------------------ Sep-01 Sep-01 Sep-00 Mar-01 Mar-00 -------- ------------------------ ------------------------ Revenue $661,999 $ 324,59 $345,989 $683,396 $624,895 COGS 485,738 238,882 247,302 494,158 437,345 -------- ------------------------ ------------------------ Gross Profit 176,261 85,710 98,687 189,238 187,550 Selling, General & 123,983 61,312 61,994 124,665 109,944 Administrative Research & Development - - - - - Other Operating 6,440 - - 6,440 - -------- ------------------------ ------------------------ Operating Income 45,838 24,398 36,693 58,133 77,606 Interest Expense, net 19,660 8,764 10,109 21,005 13,584 Other, net 147 - - 147 108 -------- ------------------------ ------------------------ Pre-tax Income 26,325 15,634 26,584 37,275 64,130 Taxes 10,784 6,254 10,634 15,164 25,651 -------- ------------------------ ------------------------ After-tax Income 15,541 9,380 15,950 22,111 38,479 Minority Interest - - - - - Equity in Affiliates - - - - - Normalized Net Income 15,541 9,380 15,950 22,111 38,479 Preferred Dividends - - - - - -------- ------------------------ ------------------------ Normalized Net Income to Common $ 15,541 $ 9,380 $ 15,950 $ 22,111 $ 38,479 ======== ======================== ======================== EBIT $ 45,985 $ 24,398 $ 36,693 $ 58,280 $ 77,714 Depreciation & Amortization $ 41,144 $ 20,832 $ 18,471 $ 38,783 $ 32,881 EBITDA $ 87,129 $ 45,230 $ 55,164 $ 97,063 $110,595 CAPEX $ 21,852 $ 7,485 $ 12,067 $ 26,434 $ 25,172 EBITDA - CAPEX $ 65,277 $ 37,745 $ 43,097 $ 70,629 $ 85,423 GAAP Operating Cash Flow $ 61,951 $ 28,304 $ 34,471 $ 68,118 $ 68,319
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ - $ - $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued $ - $ - $ - $ - $ - Operations Extraordinary Items $ - $ - $ - $ - $ - Total $ - $ - $ - $ - $ - Total After-tax Special Items $ - $ - $ - $ - $ - Tax Provision on Special Items $ - $ - $ - $ - $ - Reported Taxes $ 10,784 $ 6,254 $ 10,634 $ 15,164 $25,651 Reported Net Income $ 15,541 $ 9,380 $ 15,950 $ 22,111 $38,479 --------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 13,054 13,318 13,142 15,155 Basic Normalized EPS $ 1.20 $ 0.72 $ 1.20 $ 1.68 $ 2.54 Basic Reported EPS $ 1.20 $ 0.72 $ 1.20 $ 1.68 $ 2.54 Diluted Reported Weighted Avg Shares Out (000's) 13,334 13,329 13,186 15,336 Diluted Normalized EPS $ 1.18 $ 0.70 $ 1.20 $ 1.68 $ 2.51 Diluted Reported EPS $ 1.18 $ 0.70 $ 1.20 $ 1.68 $ 2.51 --------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) -------------------------------------------------------------------------------- Core Gross Profit 26.6% 26.4% 28.5% 27.7% 30.0% S,G & A 18.7% 18.9% 17.9% 18.2% 17.6% Operating Income 6.9% 7.5% 10.6% 8.5% 12.4% Pre-Tax 4.0% 4.8% 7.7% 5.5% 10.3% EBIT 6.9% 7.5% 10.6% 8.5% 12.4% EBITDA 13.2% 13.9% 15.9% 14.2% 17.7% Normalized Net Income 2.3% 2.9% 4.6% 3.2% 6.2% Reported Net Income 2.3% 2.9% 4.6% 3.2% 6.2% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Balance Sheet Data --------------------------------------------------------------------------------
($ in thousands, except per share) As of As of --------------------- 30-Sep-01 Mar-01 Mar-00 --------- --------------------- Cash & Equivalents $ 6,850 $ 8,667 $ 8,197 Marketable Securities - - - --------- --------------------- Total Cash & Mkt Securities 6,850 8,667 8,197 Accounts Receivable 113,255 116,095 115,646 Inventory 31,045 31,536 32,670 Other Current Assets 10,618 8,628 8,518 --------- --------------------- Total Current Assets 161,768 164,926 165,031 PPE, net 287,603 299,871 310,344 Intangibles, net 200,904 203,030 198,588 Investments - - - Other Assets 7,554 6,840 6,885 --------- --------------------- Total Assets $ 657,829 $ 674,667 $ 680,848 ========= ===================== Accounts Payable $ 23,994 $ 33,865 $ 55,780 Accrued Expenses 32,425 32,609 35,260 Short Term Debt 16,443 18,711 5,083 Short Term Capital Leases - - - Other Current Liabilities 4,670 253 3,607 --------- --------------------- Total Current Liabilities 77,532 85,438 99,730 Other LT Liabilities 55,649 54,966 47,180 Long Term Debt 226,225 246,729 261,407 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - --------- --------------------- Total Liabilities & Pref Stock 359,406 387,133 408,317 --------- --------------------- Common Equity 298,423 287,534 272,531 --------- --------------------- Total Liabilities & Equity $ 657,829 $ 674,667 $ 680,848 ========= ===================== Common Shares Outstanding (000's) 13,134 13,019 13,708 Cash Value per share $ 0.52 $ 0.67 $ 0.60 Book Value per share $ 22.72 $ 22.09 $ 19.88 Tangible Book Value per share $ 7.42 $ 6.49 $ 5.39
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 5.77 x 5.90 x 5.40 x Inventory Turnover 15.52 x 15.39 x 13.39 x Asset Turnover 0.99 x 1.01 x 0.92 x Days Sales Outstanding 63.2 61.9 67.5 Days Inventory Outstanding 23.5 23.7 27.3 Days Payable Outstanding 17.1 26.2 37.2 Return on Avg Assets 2.3% 3.3% na Return on Avg Common Equity 5.3% 7.9% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 2.09 1.93 1.65 Quick Ratio 1.69 1.56 1.33 Total Debt $ 242,668 $ 265,440 $ 266,490 Net Debt $ 235,818 $ 256,773 $ 258,293 Total Capitalization $ 541,091 $ 552,974 $ 539,021 Total Debt/Total Capitalization 44.8% 48.0% 49.4% Net Debt/Total Capitalization 43.6% 46.4% 47.9% Total Debt/EBITDA 2.79 x 2.73 x 2.41 x EBITDA/Interest Expense 4.43 x 4.62 x 8.14 x EBITDA-CAPEX/Interest Expense 3.32 x 3.36 x 6.29 x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market Information -------------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange NYSE Stock Price $ 16.04 52 Week High $ 22.10 52 Week Low $ 9.81 Avg. Daily Volume (000's) 35 Beta 0.72 Shares Outstanding (000's) 13,070 Total Outstanding Warrants & Options (000's) - Float (000's) 8,800 Market Cap $ 209,642.8 Enterprise Value (EV) $ 445,460.8 Institutional % Owned 40.00% Number of Institutions 157 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Valuation Ratios -------------------------------------------------------------------------------- Multiple of --------------------- Market Cap EV --------------------- Latest Twelve Months Revenue 0.32x 0.67x EBIT 4.56x 9.69x EBITDA 2.41x 5.11x Normalized Net Income 13.49x 28.66x Basic Normalized EPS 13.37x Projected Mar-02 Mean Revenue 0.31x 0.67x Mar-02 Mean Revenue 0.30x 0.65x Mar-02 Mean EPS 10.15x na Mar-03 Mean EPS 9.22x na Most Recent Filing Assets 0.32x 0.68x Common Equity 0.70x 1.49x Tangible Common Equity 2.15x 4.57x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mean Consensus Estimates -------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS -------------------------------------------------------------------------------- March-02 2 $668,700 $ 1.58 March-03 2 $688,760 $ 1.74 LT Growth 1 na 15.00% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Period Growth Rates -------------------------------------------------------------------------------- Six Months Ended Fiscal Years Ended Sep-01 Mar-01 ---------------- ------------------ Revenue -6.2% 9.4% EBIT -33.5% -25.0% EBITDA -18.0% -12.2% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Notes -------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 43 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- Geographics, Inc. Overview -------------------------------------------------------------------------------- Name Geographics, Inc. Symbol GGIT Latest Fiscal YE 31-Mar-01 Latest Rprt Per 30-Jun-01 Address 1555 Odell Road City, State Zip Blaine, WA 98231 Telephone 360-332-6711 Fax 360-332-6352 Officers James Dorman William Graham John Rossmiller William Paquin Attorneys Auditors KPMG Transfer Agent Montreal Trust Centre -------------------------------------------------------------------------------- Geographics is primarily engaged in the development, manufacture, marketing and distribution of specialty paper products, generally made using pre-printed designs, including stationery, business cards, brochures, memo pads, and poster boards. Geographics is also engaged in the development, marketing and distribution of plastic ready-to-assemble filing and storage cabinets. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income and Cashflow Statement Data -------------------------------------------------------------------------------- ($ in thousands, except per share)
LTM Three Months Ended Fiscal Years Ended ---------------------- -------------------- Jun-01 Jun-01 Jun-00 Mar-01 Mar-00 --------- ---------------------- -------------------- Revenue $ 35,922 $ 8,524 $ 9,204 $ 36,602 $27,255 COGS 31,486 7,039 6,499 30,946 18,999 --------- ---------------------- -------------------- Gross Profit 4,436 1,485 2,705 5,656 8,256 Selling, General & Administrative 9,267 1,915 2,135 9,487 7,576 Research & Development - - - - - Other Operating - - - - - --------- ---------------------- -------------------- Operating Income (4,831) (430) 570 (3,831) 680 Interest Expense, net 1,140 218 222 1,144 927 Other, net (31) (13) (14) (32) 483 --------- ---------------------- -------------------- Pre-tax Income (6,002) (661) 334 (5,007) 236 Taxes - - - - - --------- ---------------------- -------------------- After-tax Income (6,002) (661) 334 (5,007) 236 Minority Interest - - - - - Equity in Affiliates - - - - - --------- ---------------------- -------------------- Normalized Net Income (6,002) (661) 334 (5,007) 236 Preferred Dividends - - - - - --------- ---------------------- -------------------- Normalized Net Income to Common $ (6,002) $ (661) $ 334 $ 5,007) $ 236 ========= ====================== ==================== EBIT $ (4,862) $ (443) $ 556 $ (3,863) $ 1,163 Depreciation & Amortization $ 2,079 $ 687 $ 407 $ 1,799 $ 1,330 EBITDA $ (2,783) $ 244 $ 963 $ (2,064) $ 2,493 CAPEX $ 1,534 $ 507 $ 77 $ 1,104 $ 444 EBITDA - CAPEX $ (4,317) $ (263) $ 886 $ (3,168) $ 2,049 GAAP Operating Cash Flow $ (242) $ 386 $ 274 $ (354) $(2,621) ------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ - $ - $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued $ - $ - $ - $ - $ - Operations Extraordinary $ - $ - $ - $ - $ - Items Total $ - $ - $ - $ - $ - Total After-tax Special $ - $ - $ - $ - $ - Items Tax Provision on Special $ - $ - $ - $ - $ - Items Reported Taxes $ - $ - $ - $ - $ - Reported Net Income $ (6,002) $ (661) $ 334 $ (5,007) $ 236 -------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 35,284 35,832 35,284 19,442 Basic Normalized EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01 Basic Reported EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01 Diluted Reported Weighted Avg Shares Out (000's) 35,284 36,711 35,284 20,599 Diluted Normalized EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01 Diluted Reported EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01 ----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) -------------------------------------------------------------------------------- Core Gross Profit 12.3% 17.4% 29.4% 15.5% 30.3% S,G & A 25.8% 22.5% 23.2% 25.9% 27.8% Operating Income 13.4% 5.0% 6.2% -10.5% 2.5% Pre-Tax -16.7% -7.8% 3.6% -13.7% 0.9% EBIT 13.5% -5.2% 6.0% 10.6% 4.3% EBITDA -7.7% 2.9% 10.5% -5.6% 9.1% Normalized Net Income 16.7% 7.8% 3.6% 13.7% 0.9% Reported Net Income -16.7% -7.8% 3.6% -13.7% 0.9% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Balance Sheet Data -------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ---------------------------- 30-Jun-01 Mar-01 Mar-00 ----------- ---------------------------- Cash & Equivalents $ 177 $ 421 $ 361 Marketable Securities - - - ----------- ---------------------------- Total Cash & Mkt 177 421 361 Securities Accounts Receivable 5,453 7,344 6,079 Inventory 7,268 6,634 5,301 Other Current Assets 565 604 562 ----------- ---------------------------- Total Current Assets 13,463 15,003 12,303 PPE, net 9,141 9,007 9,305 Intangibles, net 2,907 3,127 317 Investments - - Other Assets 242 198 442 ----------- ---------------------------- Total Assets $ 25,753 $ 27,335 $ 22,367 =========== ============================ Accounts Payable $ 5,919 $ 5,401 $ 3,699 Accrued Expenses 2,881 4,237 2,084 Short Term Debt 7,932 8,407 5,765 Short Term Capital Leases - - - Other Current Liabilities 1,281 1,950 1,628 ----------- ---------------------------- Total Current Liabilities 18,013 19,995 13,176 Other LT Liabilities - - - Long Term Debt 2,627 1,629 3,539 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - ----------- ---------------------------- Total Liabilities & Pref Stock 20,640 21,624 16,715 ----------- ---------------------------- Common Equity 5,113 5,711 5,652 ----------- ---------------------------- Total Liabilities & Equity $ 25,753 $ 27,335 $ 22,367 =========== ============================ Common Shares Outstanding (000's) 38,192 38,193 26,966 Cash Value per share $ 0.00 $ 0.01 $ 0.01 Book Value per share $ 0.13 $ 0.15 $ 0.21 Tangible Book Value per share $ 0.06 $ 0.07 $ 0.20 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 5.61 x 5.45 x 4.48 x Inventory Turnover 4.53 x 5.19 x 3.58 x Asset Turnover 1.35 x 1.47 x 1.22 x Days Sales Outstanding 65.0 66.9 81.4 Days Inventory Outstanding 80.6 70.4 101.8 Days Payable Outstanding 50.7 41.1 50.8 Return on Avg Assets -22.6% -20.1% na Return on Avg Common Equity -110.9% -88.1% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 0.75 0.75 0.93 Quick Ratio 0.34 0.42 0.53 Total Debt $ 10,559 $ 10,036 $ 9,304 Net Debt $ 10,382 $ 9,615 $ 8,943 Total Capitalization $ 15,672 $ 15,747 $ 14,956 Total Debt/Total Capitalization 67.4% 63.7% 62.2% Net Debt/Total Capitalization 66.2% 61.1% 59.8% Total Debt/EBITDA na na 3.73 x EBITDA/Interest Expense na na 2.69 x EBITDA-CAPEX/Interest Expense na na 2.21 x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market Information -------------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange OTC BB Stock Price $ 0.09 52 Week High $ 0.44 52 Week Low $ 0.06 Avg. Daily Volume (000's) 18 Beta (0.28) Shares Outstanding (000's) 38,190 Total Outstanding Warrants & Options (000's) - Float (000's) 26,000 Market Cap $ 3,437.1 Enterprise Value (EV) $ 13,819.1 Institutional % Owned 0.00% Number of Institutions - -------------------------------------------------------------------------------- Valuation Ratios -------------------------------------------------------------------------------- Multiple of -------------------------------- Market Cap EV -------------------------------- Latest Twelve Months Revenue 0.10x 0.38x EBIT na na EBITDA na na Normalized Net Income na na Basic Normalized EPS na Projected Dec-01 Mean Revenue na na Dec-01 Mean Revenue na na Dec-01 Mean EPS na na Dec-02 Mean EPS na na Most Recent Filing Assets 0.13x 0.54x Common Equity 0.67x 2.70x Tangible Common Equity 1.56x 6.26x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mean Consensus Estimates -------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS -------------------------------------------------------------------------------- December-01 - $ - $ - December-02 - $ - $ - LT Growth - na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Period Growth Rates -------------------------------------------------------------------------------- Three Months Ended Fiscal Years Ended Jun-01 Mar-01 ---------------- ---------------- Revenue -7.4% 34.3% EBIT -179.7% -432.2% EBITDA -74.7% -182.8% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Notes -------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 44 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- IPI Inc Overview -------------------------------------------------------------------------------- Name IPI Inc Symbol IDH Latest Fiscal YE 30-Nov-00 Latest Rprt Per 31-Aug-01 Address 8091 Wallace Road City, State Zip Eden Prairie, MN 55344 Telephone 952-975-6200 Fax 952-975-6262 Officers Robert Sutter David Engel David Oswald Margo Barnhart Attorneys Auditors Arthur Andersen Transfer Agent Norwest Bank Minnesota IPI has about 220 franchised Insty-Printslocations which provide graphic design, typesetting, binding, and other commercial printing services to companies for products such as stationery, business cards, forms, brochures, and overhead transparencies. Subsidiary Change of Mind Learning Systems franchises Dreamcatcher Learning Centers, which provide supplemental education in reading, writing, math, G.E.D. & college prep studies. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income and Cashflow Statement Data -------------------------------------------------------------------------------- ($ in thousands, except per share) LTM Nine Months Ended Fiscal Years Ended ----------------- ------------------- Aug-01 Aug-01 Aug-00 Nov-00 Nov-99 -------- ----------------- ------------------- Revenue $ 8,069 $ 5,851 $ 7,076 $ 9,294 $ 10,278 COGS 1,521 4,999 5,944 2,466 3,026 -------- ----------------- ------------------- Gross Profit 6,548 852 1,132 6,828 7,252 Selling, General & Administrative 6,466 1,059 513 5,920 4,853 Research & Development - - - - - Other Operating 1,112 - - 1,112 240 -------- ----------------- ------------------- Operating Income (1,030) (207) 619 (204) 2,159 Interest Expense, net 388 (89) (360) 117 - Other, net - - - - - -------- ----------------- ------------------- Pre-tax Income (1,418) (118) 979 (321) 2,159 Taxes (567) (47) 391 (129) 864 -------- ----------------- ------------------- After-tax Income (851) (71) 588 (192) 1,295 Minority Interest - - - - - Equity in Affiliates - - - - - -------- ----------------- ------------------- Normalized Net Income (851) (71) 588 (192) 1,295 Preferred Dividends - - - - - -------- ----------------- ------------------- Normalized Net Income to Common $ (851) $ (71) $ 588 $ (192) $ 1,295 ======== ================= =================== EBIT $ (1,030) $ (207) $ 619 $ (204) $ 2,159 Depreciation & Amortization $ 463 $ 328 $ 399 $ 534 $ 440 EBITDA $ (567) $ 121 $ 1,018 $ 330 $ 2,599 CAPEX $ 185 $ 101 $ 125 $ 209 $ 371 EBITDA - CAPEX $ (752) $ 20 $ 893 $ 121 $ 2,228 GAAP Operating Cash Flow $ (2,153) $(1,592) $ 1,292 $ 731 $ 2,214 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ 16,578 $16,148 $ 474 $ 904 $ 811 Accounting Changes $ - $ - $ - $ - $ - Discontinued $ - $ - $ - $ - $ - Operations Extraordinary $ - $ - $ - $ - $ - Items Total $ 16,578 $16,148 $ 474 $ 904 $ 811 Total After-tax Special Items $ 9,947 $ 9,689 $ 284 $ 542 $ 487 Tax Provision on Special Items $ 6,631 $ 6,459 $ 190 $ 362 $ 324 Reported Taxes $ 6,064 $ 6,412 $ 581 $ 233 $ 1,188 Reported Net Income $ 9,096 $ 9,618 $ 872 $ 350 $ 1,782 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 4,859 4,843 4,847 4,734 Basic Normalized EPS $ (0.17) $ (0.01) $ 0.12 $ (0.04) $ 0.27 Basic Reported EPS $ 1.87 $ 1.98 $ 0.18 $ 0.07 $ 0.38 Diluted Reported Weighted Avg Shares Out (000's) 4,859 4,843 4,847 4,734 Diluted Normalized EPS $ (0.17) $ (0.01) $ 0.12 $ (0.04) $ 0.27 Diluted Reported EPS $ 1.87 $ 1.98 $ 0.18 $ 0.07 $ 0.38 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) -------------------------------------------------------------------------------- Core Gross Profit 81.2% 14.6% 16.0% 73.5% 70.6% S,G & A 80.1% 18.1% 7.2% 63.7% 47.2% Operating Income -12.8% 3.5% 8.7% -2.2% 21.0% Pre-Tax 17.6% -2.0% 13.8% -3.5% 21.0% EBIT -12.8% 3.5% 8.7% -2.2% 21.0% EBITDA 7.0% 2.1% 14.4% 3.6% 25.3% Normalized Net Income -10.5% 1.2% 8.3% 2.1% 12.6% Reported Net Income 112.7% 164.4% 12.3% 3.8% 17.3% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Balance Sheet Data -------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ------------------ 31-Aug-01 Nov-00 Nov-99 --------- ------------------ Cash & Equivalents $ 8,370 $ 643 $ 2,022 Marketable Securities 17,859 15,638 6,504 --------- ------------------ Total Cash & Mkt Securities 26,229 16,281 8,526 Accounts Receivable 1,089 1,370 1,371 Inventory 187 242 271 Other Current Assets 2,200 2,103 4,591 --------- ------------------ Total Current Assets 29,705 19,996 14,759 PPE, net 660 776 1,246 Intangibles, net 2,624 3,393 3,151 Investments - - - Other Assets 605 753 860 --------- ------------------ Total Assets $ 33,594 $ 24,918 $ 20,016 ========= ================== Accounts Payable $ 281 $ 676 $ 485 Accrued Expenses 861 1,023 878 Short Term Debt - 4,438 - Short Term Capital Leases - - - Other Current Liabilities 4,721 200 390 --------- ------------------ Total Current Liabilities 5,863 6,337 1,753 Other LT Liabilities - - - Long Term Debt - - - Long Term Capital Leases 49 105 319 Minority Interests - - - Pref Stock (Liq Value) - - - --------- ------------------ Total Liabilities & Pref Stock 5,912 6,442 2,072 --------- ------------------ Common Equity 27,682 18,476 17,944 --------- ------------------ Total Liabilities & Equity $ 33,594 $ 24,918 $ 20,016 ========= ================== Common Shares Outstanding (000's) 4,859 4,859 4,734 Cash Value per share $ 5.40 $ 3.35 $ 1.80 Book Value per share $ 5.70 $ 3.80 $ 3.79 Tangible Book Value per share $ 5.16 $ 3.10 $ 3.12 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 6.56x 6.78x 7.50x Inventory Turnover 7.09x 9.61x 11.17x Asset Turnover 0.28x 0.41x 0.51x Days Sales Outstanding 55.6 53.8 48.7 Days Inventory Outstanding 51.5 38.0 32.7 Days Payable Outstanding 19.2 22.3 21.8 Return on Avg Assets -2.9% -0.9% na Return on Avg Common Equity -3.7% -1.1% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 5.07 3.16 8.42 Quick Ratio 5.03 3.12 8.26 Total Debt $ 49 $ 4,543 $ 319 Net Debt $ (26,180)$(11,738) $ (8,207) Total Capitalization $ 27,731 $ 23,019 $ 18,263 Total Debt/Total Capitalization 0.2% 19.7% 1.7% Net Debt/Total Capitalization -94.4% -51.0% -44.9% Total Debt/EBITDA na 13.77x 0.12x EBITDA/Interest Expense na 2.82x na EBITDA-CAPEX/Interest Expense na 1.03x na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market Information As of Date 16-Nov-01 Exchange AMEX Stock Price $ 4.10 52 Week High $ 5.50 52 Week Low $ 2.06 Avg. Daily Volume (000's) 9 Beta 0.15 Shares Outstanding (000's) 4,580 Total Outstanding Warrants & Options (000's) - Float (000's) 1,500 Market Cap $18,778.0 Enterprise Value (EV) $(7,402.0) Institutional % Owned 8.00% Number of Institutions 5 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Valuation Ratios -------------------------------------------------------------------------------- Multiple of ---------------- Market Cap EV ---------------- Latest Twelve Months Revenue 2.33x na EBIT na na EBITDA na na Normalized Net Income na na Basic Normalized EPS na Projected Dec-01 Mean Revenue na na Dec-01 Mean Revenue na na Dec-01 Mean EPS na na Dec-02 Mean EPS na na Most Recent Filing Assets 0.56x na Common Equity 0.68x na Tangible Common Equity 0.75x na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mean Consensus Estimates -------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS -------------------------------------------------------------------------------- December-01 - $ - $ - December-02 - $ - $ - LT Growth - na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Period Growth Rates -------------------------------------------------------------------------------- Nine Months Ended Fiscal Years Ended Aug-01 Nov-00 --------- -------- Revenue -17.3% -9.6% EBIT -133.4% -109.4% EBITDA -88.1% -87.3% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Notes Unusual Items comprise investment income. -------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 45 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS
------------------------------------------------------------------------------------------------------------------------------------ Impreso, Inc Overview ------------------------------------------------------------------------------------------------------------------------------------ Name Impreso, Inc Address 652 Southwestern Officers Marshall Sorokwasz Attorneys Symbol ZCOM City, State Zip Coppell, TX 75019 Richard Bloom Auditors Arthur Andersen Latest Fiscal YE 31-Aug-00 Telephone 972-462-0100 Donald Jett Transfer Agent American Stock Latest Rprt Per 31-May-01 Fax 972-462-7764 Susan Atkins Transfer & Trust ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Income and Cashflow Statement Data ------------------------------------------------------------------------------------------------------------------------------------ ($ in thousands, except per share) LTM Nine Months Ended Fiscal Years Ended --------------------- ---------------------- May-01 May-01 May-00 Aug-00 Aug-99 --------- --------------------- ---------------------- Revenue $ 87,820 $65,660 $ 51,958 $ 74,118 $61,506 COGS 77,481 57,863 45,007 64,625 53,845 --------- --------------------- ---------------------- Gross Profit 10,339 7,797 6,951 9,493 7,661 Selling, General & Administrative 7,397 5,582 5,023 6,838 5,606 Research & Development - - - - - Other Operating - - - - - --------- --------------------- ---------------------- Operating Income 2,942 2,215 1,928 2,655 2,055 Interest Expense, net 1,547 1,140 897 1,304 833 Other, net 214 159 82 137 42 --------- --------------------- ---------------------- Pre-tax Income 1,609 1,234 1,113 1,488 1,264 Taxes 675 488 370 557 490 --------- --------------------- ---------------------- After-tax Income 934 746 743 931 774 Minority Interest - - - - - Equity in Affiliates - - - - - --------- --------------------- ---------------------- Normalized Net Income 934 746 743 931 774 Preferred Dividends - - - - - --------- --------------------- ---------------------- Normalized Net Income to Common $ 934 $ 746 $ 743 $ 931 $ 774 ========= ===================== ====================== EBIT $ 3,156 $ 2,374 $ 2,010 $ 2,792 $ 2,097 Depreciation & Amortization $ 806 $ 619 $ 502 $ 689 $ 545 EBITDA $ 3,962 $ 2,993 $ 2,512 $ 3,481 $ 2,642 CAPEX $ 1,482 $ 220 $ 1,035 $ 2,297 $ 658 EBITDA - CAPEX $ 2,480 $ 2,773 $ 1,477 $ 1,184 $ 1,984 GAAP Operating Cash Flow $ 3,675 $(5,098 $ (3,676) $ (5,099) $ (91) ---------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ - $ - $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued Operations $ - $ - $ - $ - $ - Extraordinary Items $ - $ - $ - $ - $ - Total $ - $ - $ - $ - $ - Total After-tax Special Items $ - $ - $ - $ - $ - Tax Provision on Special Items $ - $ - $ - $ - $ - Reported Taxes $ 675 $ 488 $ 370 $ 557 $ 490 Reported Net Income $ 934 $ 746 $ 743 $ 931 $ 774 --------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- Basic Reported Weighted Avg 5,283 5,293 5,293 5,293 Shares Out (000's) Basic Normalized EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15 Basic Reported EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15 Diluted Reported Weighted Avg 5,283 5,293 5,293 5,293 Shares Out (000's) Diluted Normalized EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15 Diluted Reported EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15 --------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) --------------------------------------------------------------------------------------------------------- Core Gross Profit 11.8% 11.9% 13.4% 12.8% 12.5% S,G & A 8.4% 8.5% 9.7% 9.2% 9.1% Operating Income 3.4% 3.4% 3.7% 3.6% 3.3% Pre-Tax 1.8% 1.9% 2.1% 2.0% 2.1% EBIT 3.6% 3.6% 3.9% 3.8% 3.4% EBITDA 4.5% 4.6% 4.8% 4.7% 4.3% Normalized Net Income 1.1% 1.1% 1.4% 1.3% 1.3% Reported Net Income 1.1% 1.1% 1.4% 1.3% 1.3% ---------------------------------------------------------------------------------------------------------
Under the IBM brand, IMPRESO brand and private label, Impreso makes continuous-feed stock business forms, thermal and plain fax paper, paper for copy machines and printers, and special surface papers. They have three manufacturing plants and distributes in North America through over 45 warehouses. ------------------------------------------------------------------------------- Balance Sheet Data ------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ------------------------- 31-May-01 Aug-00 Aug-99 ------------ ------------------------- Cash & Equivalents $ 187 $ 150 $ 23 Marketable Securities 11 11 11 --------- ------- -------- Total Cash & Mkt Securities 198 161 34 Accounts Receivable 10,800 8,914 6,296 Inventory 36,667 21,233 18,801 Other Current Assets 473 280 724 --------- ------- -------- Total Current Assets 48,138 30,588 25,855 PPE, net 10,562 8,769 7,210 Intangibles, net - - - Investments - - - Other Assets 240 27 19 --------- ------- -------- Total Assets $ 58,940 $39,384 $ 33,084 ========= ======= ======== Accounts Payable $ 16,176 $ 6,624 $ 9,054 Accrued Expenses 3,157 1,985 1,679 Short Term Debt 17,425 12,469 6,358 Short Term Capital Leases - - - Other Current Liabilities 624 255 63 --------- ------- -------- Total Current Liabilities 37,382 21,333 17,154 Other LT Liabilities 858 764 728 Long Term Debt 6,488 3,782 2,629 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - --------- ------- -------- Total Liabilities & Pref Stock 44,728 25,879 20,511 --------- ------- -------- Common Equity 14,212 13,505 12,573 --------- ------- -------- Total Liabilities & Equity $ 58,940 $39,384 $ 33,084 ========= ======= ======== Common Shares Outstanding (000's) 5,293 5,293 5,293 Cash Value per share $ 0.04 $ 0.03 $ 0.01 Book Value per share $ 2.69 $ 2.55 $ 2.38 Tangible Book Value per share $ 2.69 $ 2.55 $ 2.38 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Effectiveness and Efficiency ------------------------------------------------------------------------------- A/R Turnover 8.91 x 9.75 x 9.77 x Inventory Turnover 2.68 x 3.23 x 2.86 x Asset Turnover 1.79 x 2.05 x 1.86 x Days Sales 41.0 37.5 37.4 Outstanding Days Inventory 136.4 113.1 127.4 Outstanding Days Payable 49.0 40.0 55.6 Outstanding Return on Avg Assets 1.9% 2.6% na Return on Avg 6.7% 7.1% na Common Equity ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Financial Strength ------------------------------------------------------------------------------- Current Ratio 1.29 1.43 1.51 Quick Ratio 0.31 0.44 0.41 Total Debt $ 23,913 $ 16,251 $ 8,987 Net Debt $ 23,715 $ 16,090 $ 8,953 Total Capitalization $ 38,125 $ 29,756 $ 21,560 Total Debt/Total 62.7% 54.6% 41.7% Capitalization Net Debt/Total 62.2% 54.1% 41.5% Capitalization Total Debt/EBITDA 6.04x 4.67x 3.40x EBITDA/Interest Expense 2.56x 2.67x 3.17x EBITDA-CAPEX/Interest Expense 1.60x 0.91x 2.38x ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Market Information ------------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange NasdaqSC Stock Price $ 2.25 52 Week High $ 3.37 52 Week Low $ 1.50 Avg. Daily Volume (000's) 1 Beta 1.19 Shares Outstanding (000's) 5,280 Total Outstanding Warrants & Options (000's) - Float (000's) 1,500 Market Cap $ 11,880.0 Enterprise Value (EV) $ 35,595.0 Institutional % Owned 1.00% Number of Institutions 10 ------------------------------------------------------------------------------- Valuation Ratios ------------------------------------------------------------------------------- Multiple of --------------------------------- Market Cap EV --------------------------------- Latest Twelve Months Revenue 0.14x 0.41x EBIT 3.76x 11.28x EBITDA 3.00x 8.98x Normalized Net Income 12.72x 38.11x Basic Normalized EPS 12.50x Projected Dec-01 Mean Revenue na na Dec-01 Mean Revenue na na Dec-01 Mean EPS na na Dec-02 Mean EPS na na Most Recent Filing Assets 0.20x 0.60x Common Equity 0.84x 2.50x Tangible Common Equity 0.84x 2.50x ------------------------------------------------------------------------------- Mean Consensus Estimates ------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS ------------------------------------------------------------------------------- December-01 - $ - $ - December-02 - $ - $ - LT Growth - na na ------------------------------------------------------------------------------- Period Growth Rates ------------------------------------------------------------------------------- Nine Months Ended Fiscal Years Ended May-01 Aug-00 -------------------- -------------------- Revenue 26.4% 20.5% EBIT 18.1% 33.1% EBITDA 19.1% 31.8% ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Notes ------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 46 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- iPrint Technologies Overview -------------------------------------------------------------------------------- Name iPrint Technologies Symbol IPRT Latest Fiscal YE 31-Dec-00 Latest Rprt Per 30-Sep-01 Address 255 Constitution City, State Zip Menlo Park, CA 94025 Telephone 650-298-8500 Fax 650-364-7742 Officers Royal Farros Robyn Cerutti Gregory Korjeff Nickoletta Swank Attorneys Auditors Arthur Andersen Transfer Agent American Stock Transfer & Trust iPrint Technologies allows customers to design, proof, and order some 3,500 customized print products -- including cards, stationery, label, mugs, and T-shirts -- through its retail Web site. The company, which outsources the printing work, also offers specialized printing and photocopying services; operates co-branded printing Web sites with 3M, OfficeMax, and other firms; and develops sites for third parties.
----------------------------------------------------------------------------------------------------- Income and Cashflow Statement Data ----------------------------------------------------------------------------------------------------- ($ in thousands, except per share) LTM Nine Months Ended Fiscal Years Ended ----------------- ------------------ Sep-01 Sep-01 Sep-00 Dec-00 Dec-99 -------- --------- --------- ---------- ---------- Revenue $ 11,806 $ 7,273 $ 12,536 $ 17,069 $ 3,256 COGS 7,671 4,623 8,973 12,021 2,265 -------- --------- --------- ---------- ---------- Gross Profit 4,135 2,650 3,563 5,048 991 Selling, General & Administrative 17,349 11,659 29,074 34,764 10,534 Research & Development 5,877 4,120 4,895 6,652 3,544 Other Operating 1,849 - - 1,849 668 -------- --------- --------- ---------- ---------- Operating Income (20,940) (13,129) (30,406) (38,217) (13,755) Interest Expense, net - - - - - Other, net 1,571 968 1,639 2,242 323 -------- --------- --------- ---------- ---------- Pre-tax Income (19,369) (12,161) (28,767) (35,975) (13,432) Taxes - - - - - -------- --------- --------- ---------- ---------- After-tax Income (19,369) (12,161) (28,767) (35,975) (13,432) Minority Interest - - - - - Equity in Affiliates - - - - - -------- --------- --------- ---------- ---------- Normalized Net Income (19,369) (12,161) (28,767) (35,975) (13,432) Preferred Dividends - - - - - -------- --------- --------- ---------- ---------- Normalized Net Income to Common $(19,369) (12,161) $ (28,767) $ (35,975) $ (13,432) ======== ======= ========= ========== ========== EBIT $(19,369) (12,161) $ (28,767) $ (35,975) $ (13,432) Depreciation & Amortization $ 4,004 $ 1,550 $ 1,504 $ 3,958 $ 362 EBITDA $(15,365) $ (10,611) $ (27,263) $ (32,017) $ (13,070) CAPEX $ 505 $ 372 $ 3,589 $ 3,722 $ 1,851 EBITDA - CAPEX $(15,870) $ (10,983) $ (30,852) $ (35,739) $ (14,921) GAAP Operating Cash Flow $(16,469) $ (11,035) $ (26,566) $ (32,000) $ (10,845) ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ (1,379) $ (1,379) $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued Operations $ - $ - $ - $ - $ - Extraordinary Items $ - $ - $ - $ - $ - Total $ (1,379) $ (1,379) $ - $ - $ - Total After-tax Special Items $ (1,379) $ (1,379) $ - $ - $ - Tax Provision on Special Items $ - $ - $ - $ - $ - Reported Taxes $ - $ - $ - $ - $ - Reported Net Income $(20,748) $ (13,540) $ (28,767) $ (35,975) $ (13,432) ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 30,180 24,606 25,970 7,265 Basic Normalized EPS $ (0.62) $ (0.40) $ (1.17) $ (1.39) $ (1.85) Basic Reported EPS $ (0.67) $ (0.45) $ (1.17) $ (1.39) $ (1.85) Diluted Reported Weighted Avg Shares Out (000's) 30,180 24,606 25,970 7,265 Diluted Normalized EPS $ (0.62) $ (0.40) $ (1.17) $ (1.39) $ (1.85) Diluted Reported EPS $ (0.67) $ (0.45) $ (1.17) $ (1.39) $ (1.85) ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) ----------------------------------------------------------------------------------------------------- Core Gross Profit 35.0% 36.4% 28.4% 29.6% 30.4% S,G & A 147.0% 160.3% 231.9% 203.7% 323.5% Operating Income -177.4% -180.5% -242.5% -223.9% -422.5% Pre-Tax -164.1% -167.2% -229.5% -210.8% -412.5% EBIT -164.1% -167.2% -229.5% -210.8% -412.5% EBITDA -130.1% -145.9% -217.5% -187.6% -401.4% Normalized Net Income -164.1% -167.2% -229.5% -210.8% -412.5% Reported Net Income -175.7% -186.2% -229.5% -210.8% -412.5% ----------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Balance Sheet Data -------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ----------------------- 30-Sep-01 Dec-00 Dec-99 --------- --------- ---------- Cash & Equivalents $ 7,090 $ 19,283 $ 15,080 Marketable Securities 356 356 - --------- --------- ---------- Total Cash & Mkt Securities 7,446 19,639 15,080 Accounts Receivable 2,156 1,874 255 Inventory - - - Other Current Assets 5,117 8,300 892 --------- --------- ----------- Total Current Assets 14,719 29,813 16,227 PPE, net 2,657 4,070 2,136 Intangibles, net - - - Investments - - - Other Assets 2,761 205 - --------- --------- ---------- Total Assets $ 20,137 $ 34,088 $ 18,363 ========= ========= ========== Accounts Payable $ 1,934 $ 2,509 $ 935 Accrued Expenses 2,920 2,546 2,121 Short Term Debt 6 196 96 Short Term Capital Leases - - - Other Current Liabilities - - - --------- --------- ---------- Total Current Liabilities 4,860 5,251 3,152 Other LT Liabilities - - - Long Term Debt 8 12 119 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - 30,793 --------- --------- ---------- Total Liabilities & Pref Stock 4,868 5,263 34,064 --------- --------- ---------- Common Equity 15,269 28,825 (15,701) --------- --------- ---------- Total Liabilities & Equity $ 20,137 $ 34,088 $ 18,363 ========= ========= ========== Common Shares Outstanding (000's) 30,240 30,054 8,336 Cash Value per share $ 0.25 $ 0.65 $ 1.81 Book Value per share $ 0.50 $ 0.96 $ (1.88) Tangible Book Value per share $ 0.50 $ 0.96 $ (1.88) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 5.86 x 16.03 x 12.77 x Inventory Turnover na na na Asset Turnover 0.44 x 0.65 x 0.18 x Days Sales Outstanding 62.3 22.8 28.6 Days Inventory Outstanding na na na Days Payable Outstanding 24.8 11.4 20.1 Return on Avg Assets -71.4% -137.2% na Return on Avg Common Equity -87.9% -548.2% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 3.03 5.68 5.15 Quick Ratio 3.03 5.68 5.15 Total Debt $ 14 $ 208 $ 31,008 Net Debt (1) $ 14 $ 208 $ 31,008 Total Capitalization $ 15,283 $ 29,033 $ 15,307 Total Debt/Total Capitalization 0.1% 0.7% 202.6% Net Debt/Total Capitalization 0.1% 0.7% 202.6% Total Debt/EBITDA na na na EBITDA/Interest Expense na na na EBITDA-CAPEX/Interest Expense na na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market Information -------------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange NasdaqNM Stock Price $ 0.20 52 Week High $ 1.84 52 Week Low $ 0.16 Avg. Daily Volume (000's) 26 Beta - Shares Outstanding (000's) 30,240 Total Outstanding Warrants & Options (000's) - Float (000's) 11,000 Market Cap $ 6,048.0 Enterprise Value (EV) $ 6,062.0 Institutional % Owned 1.00% Number of Institutions 17 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Valuation Ratios -------------------------------------------------------------------------------- Multiple of ---------------- Market Cap EV ---------------- Latest Twelve Months Revenue 0.51x 0.51x EBIT na na EBITDA na na Normalized Net Income na na Basic Normalized EPS na Projected Dec-01 Mean Revenue 0.56x 0.56x Dec-01 Mean Revenue 0.39x 0.39x Dec-01 Mean EPS na na Dec-02 Mean EPS na na Most Recent Filing Assets 0.30x 0.30x Common Equity 0.40x 0.40x Tangible Common Equity 0.40x 0.40x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mean Consensus Estimates -------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS -------------------------------------------------------------------------------- December-01 4 $ 10,871 $ (0.57) December-02 1 $ 15,560 $ (0.05) LT Growth - na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Period Growth Rates -------------------------------------------------------------------------------- Nine Months Ended Fiscal Years Ended Sep-01 Dec-00 ------ ------ Revenue -42.0% 424.2% EBIT -57.7% 167.8% EBITDA -61.1% 145.0% --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Notes YTD 9/01 unusual items are restructuring expenses. (1) Cash is not included in the calcuation for Net Debt due to the large requirements of cash working capital in the business -------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 47 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- Paris Corporation Overview -------------------------------------------------------------------------------- Name Paris Corporation Symbol PBFI Latest Fiscal YE 30-Sep-00 Latest Rprt Per 30-Jun-01 Address 122 Kisel Road City, State Zip Burlington, NJ 08016 Telephone 609-387-7300 Fax 609-971-6658 Officers Dominic Toscani Gerard Toscani William Lomano Attorneys Auditors Goldenberg Rosenthal Transfer Agent Chase Mellon Shareholder Services Paris makes papers and other products for laser and inkjet printers, including its growing Burlington line, which has a marketing agreement with Microsoft's Picture It creative software products. Paris sells its products through office T products distributors and retailers in North America. It also owns 57% of Signature, which markets office products to supermarkets and drugstores.
------------------------------------------------------------------------------------- Income and Cashflow Statement Data ------------------------------------------------------------------------------------- ($ in thousands, except per share) LTM Nine Months Fiscal Years Ended -------------------------------------------- Ended Jun-01 Jun-01 Jun-00 Sep-00 Sep-99 -------- -------- -------- -------- -------- Revenue $ 43,232 $ 32,278 $ 32,057 $ 43,011 $ 35,433 COGS 37,743 27,887 28,665 38,521 31,358 -------- -------------------- -------------------- Gross Profit 5,489 4,391 3,392 4,490 4,075 Selling, General & 4,238 3,319 3,318 4,237 3,808 Administrative Research & Development - - - - - Other Operating - - - - - -------- -------------------- -------------------- Operating Income 5,489 4,391 3,392 4,490 4,075 Interest Expense, net 149 149 7 7 58 Other, net 940 602 672 1,010 1,250 -------- -------------------- -------------------- Pre-tax Income 2,042 1,525 739 1,256 1,459 Taxes 710 424 317 603 548 -------- -------------------- -------------------- After-tax Income 1,332 1,101 422 653 911 Minority Interest (166) (141) 35 10 50 Equity in Affiliates - - - - - Normalized Net 1,166 960 457 663 961 Income Preferred Dividends - - - - - -------- -------------------- -------------------- Normalized Net Income to $ 1,166 $ 960 $ 457 $ 663 $ 961 ======== ==================== ==================== Common EBIT $ 2,191 $ 1,674 $ 746 $ 1,263 $ 1,517 Depreciation & Amortization $ 656 $ 299 $ 371 $ 728 $ 556 EBITDA $ 2,847 $ 1,973 $ 1,117 $ 1,991 $ 2,073 CAPEX $ (368) $ (320) $ 248 $ 200 $ 912 EBITDA - CAPEX $ 3,215 $ 2,293 $ 869 $ 1,791 $ 1,161 GAAP Operating Cash Flow $ 2,354 $ 1,155 $ (840) $ 359 $ 628 --------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ - $ - $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued $ - $ - $ - $ - $ - Operations Extraordinary $ - $ - $ - $ - $ - Items Total $ - $ - $ - $ - $ - Total After-tax Special Items $ - $ - $ - $ - $ - Tax Provision on Special Items $ - $ - $ - $ - $ - Reported Taxes $ 710 $ 424 $ 317 $ 603 $ 548 Reported Net Income $ 1,166 $ 960 $ 457 $ 663 $ 961 --------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 3,310 3,264 3,234 3,526 Basic Normalized EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27 Basic Reported EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27 Diluted Reported Weighted Avg Shares Out (000's) 3,310 3,264 3,234 3,526 Diluted Normalized EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27 Diluted Reported EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27 --------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) --------------------------------------------------------------------------------------- Core Gross Profit 12.7% 13.6% 10.6% 10.4% 11.5% S,G & A 9.8% 10.3% 10.4% 9.9% 10.7% Operating Income 2.9% 3.3% 0.2% 0.6% 0.8% Pre-Tax 4.7% 4.7% 2.3% 2.9% 4.1% EBIT 5.1% 5.2% 2.3% 2.9% 4.3% EBITDA 6.6% 6.1% 3.5% 4.6% 5.9% Normalized Net Income 2.7% 3.0% 1.4% 1.5% 2.7% Reported Net Income 2.7% 3.0% 1.4% 1.5% 2.7% ---------------------------------------------------------------------------------------
--------------------------------------------------------------------------- Balance Sheet Data --------------------------------------------------------------------------- ($ in thousands, except per share) As of As of --------------------- 30-Jun-01 Sep-00 Sep-99 ---------- --------------------- Cash & Equivalents $ 4,475 $ 2,828 $ 3,880 Marketable Securities 4,062 3,686 3,567 --------- --------------------- Total Cash & Mkt Securities 8,537 6,514 7,447 Accounts Receivable 5,401 5,422 5,959 Inventory 3,842 3,862 4,167 Other Current Assets 970 1,096 645 --------- --------------------- Total Current Assets 18,750 16,894 18,218 PPE, net 1,598 1,590 1,942 Intangibles, net - - - Investments - 251 500 Other Assets 573 542 760 --------- --------------------- Total Assets $ 20,921 $ 19,277 $ 21,420 ========= ===================== Accounts Payable $ 3,564 $ 4,147 $ 5,197 Accrued Expenses 289 297 700 Short Term Debt 1,139 - - Short Term Capital - - - Leases Other Current 366 330 623 --------- --------------------- Liabilities Total Current Liabilities 5,358 4,774 6,520 Other LT Liabilities - - 219 Long Term Debt - - - Long Term Capital Leases - - - Minority Interests 225 84 94 Pref Stock (Liq Value) - - - --------- --------------------- Total Liabilities & Pref Stock $ 5,583 4,858 6,833 --------- --------------------- Common Equity 15,338 14,419 14,587 --------- --------------------- Total Liabilities & Equity $ 20,921 $ 19,277 $ 21,420 ========= ===================== Common Shares Outstanding (000's) 3,271 3,938 3,938 Cash Value per share $ 2.61 $ 1.65 $ 1.89 Book Value per share $ 4.69 $ 3.66 $ 3.70 Tangible Book Value per share $ 4.69 $ 3.66 $ 3.70 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Effectiveness and Efficiency --------------------------------------------------------------------------- A/R Turnover 7.99x 7.56x 5.95x Inventory Turnover 9.80x 9.60x 7.53x Asset Turnover 2.15x 2.11x 1.65x Days Sales Outstanding 45.7 48.3 61.4 Days Inventory Outstanding 37.3 38.0 48.5 Days Payable Outstanding 33.5 39.9 53.9 Return on Avg Assets 5.8% 3.3% na Return on Avg Commin Equity 7.8% 4.6% na --------------------------------------------------------------------------- --------------------------------------------------------------------------- Financial Strength --------------------------------------------------------------------------- Current Ratio 3.50 3.54 2.79 Quick Ratio 2.78 2.73 2.16 Total Debt $ 1,364 $ 84 $ 94 Net Debt $ (7,173) $ (6,430) $ (7,353) Total Capitalization $ 16,702 $ 14,503 $ 14,681 Total Debt/Total Capitalization 8.2% 0.6% 0.6% Net Debt/Total Capitalization -42.9% -44.3% -50.1% Total Debt/EBITDA 0.48x 0.04x 0.05x EBITDA/Interest Expense 19.11x 284.43x 35.74x EBITDA-CAPEX/Interest 21.58x 255.86x 20.02x Expense --------------------------------------------------------------------------- --------------------------------------------------------------------------- Market Information --------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange NasdaqSC Stock Price $ 3.04 52 Week High $ 3.70 52 Week Low $ 1.75 Avg. Daily Volume (000's) 1 Beta - Shares Outstanding (000's) 3,270 Total Outstanding Warrants & Options (000's) - Float (000's) 1,000 Market Cap $ 9,940.8 Enterprise Value (EV) $ 2,767.8 Institutional % Owned 1.00% Number of Institutions 5 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Valuation Ratios --------------------------------------------------------------------------- Multiple of ------------------------ Market Cap EV ------------------------ Latest Twelve Months Revenue 0.23x 0.06x EBIT 4.54x 1.26x EBITDA 3.49x 0.97x Normalized Net Income 8.53x 2.37x Basic Normalized EPS 8.44x Projected Dec-01 Mean Revenue na na Dec-01 Mean Revenue na na Dec-01 Mean EPS na na Dec-02 Mean EPS na na Most Recent Filing Assets 0.48x 0.13x Common Equity 0.65x 0.18x Tangible Common Equity 0.65x 0.18x --------------------------------------------------------------------------- ----------------------------------------------------------------------- Mean Consensus Estimates ----------------------------------------------------------------------- Year Ending # Ests Revenue EPS ----------------------------------------------------------------------- December-01 - $ - $ - December-02 - $ - $ - LT Growth - na na ----------------------------------------------------------------------- ----------------------------------------------------------------------- Period Growth Rates ----------------------------------------------------------------------- Nine Months Ended Fiscal Years Ended Jun-01 Sep-00 ----------------- ------------------ Revenue 0.7% 21.4% EBIT 124.4% -16.7% EBITDA 76.6% -4.0% ----------------------------------------------------------------------- Notes ----------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 48 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS SELECTED COMPARABLE COMPANY ANALYSIS -------------------------------------------------------------------------------- BCT International Overview -------------------------------------------------------------------------------- Name BCT International Symbol BCTI Latest Fiscal YE 28-Feb-01 Latest Rprt Per 31-Aug-01 Address 3000 N.E. 30th Pl City, State Zip Fort Lauderdale, FL 33306 Telephone 954-563-1224 Fax 954-565-0742 Officers William Wilkerson Michael Hull Henry Johnson Attorneys Auditors PriceWaterhouseCoopers Transfer Agent Registrar & Transfer Co BCT International is a wholesale printing chain with 84 franchises in the US, Canada, and Argentina. The franchises specialize in thermography and make items such as business cards, letterheads, and labels, which are sold to retail printers, mailing centers, and superstores. BCT's Pelican Paper Products division supplies paper and printing equipment to the franchisees. The company also operates Orderprinting.com. -------------------------------------------------------------------------------- Income and Cashflow Statement Data -------------------------------------------------------------------------------- ($ in thousands, except per share) Six Months Ended Fiscal Years Ended LTM ----------------- -------------------- Aug-01 Aug-01 Aug-00 Feb-01 Feb-00 -------- ------- ------- -------- -------- Revenue $ 18,332 $ 9,194 $ 9,861 $ 18,999 $ 19,302 COGS 11,255 5,527 5,877 11,605 11,574 -------- ------ ------- -------- -------- Gross Profit 7,077 3,667 3,984 7,394 7,728 Selling, General & Administrative 7,142 3,240 2,553 6,455 6,619 Research & Development - - - - - Other Operating 245 114 101 232 189 -------- ------ ------- -------- -------- Operating Income (310) 313 1,330 707 920 Interest Expense, net (420) (139) (100) (381) (336) Other, net 49 - - 49 11 -------- ------ ------- -------- -------- Pre-tax Income 159 452 1,430 1,137 1,267 Taxes 61 176 557 442 479 -------- ------ ------- -------- -------- After-tax Income $ 98 $ 276 $ 873 $ 695 $ 788 Minority Interest - - - - - Equity in Affiliates - - - - - -------- ------ ------- -------- -------- Normalized Net Income 98 276 873 695 788 Preferred Dividends - - - - - Normalized Net Income to -------- ------ ------- -------- -------- Common $ 98 $ 276 $ 873 $ 695 $ 788 ======== ====== ======= ======== ======== EBIT $ (261) $ 313 $ 1,330 $ 756 $ 931 Depreciation & Amortization $ 245 $ 114 $ 101 $ 232 $ 189 $ (16) $ 427 $ 1,431 $ 988 $ 1,120 EBITDA $ 69 $ 51 $ 132 $ 150 $ 262 CAPEX EBITDA - CAPEX $ (85) $ 376 $ 1,299 $ 838 $ 858 GAAP Operating Cash fLOW $ 2,171 $1,456 $ (399) $ 316 $ 1,437 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Special Item Reconciliation: Pre-tax Special Items Unusual Items $ - $ - $ - $ - $ - Accounting Changes $ - $ - $ - $ - $ - Discontinued Operations $ - $ - $ (31) $ (31) $ (357) Extraordinary Items $ - $ - $ - $ - $ 941 Total $ - $ - $ (31) $ (31) $ 584 Total After-tax Special Items $ - $ - $ (31) $ (31) $ 226 Tax Provision on Special Items $ - $ - $ - $ - $ 358 Reported Taxes $ 61 $ 176 $ 557 $ 442 $ 837 Reported Net Income $ 98 $ 276 $ 842 $ 664 $ 1,014 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Basic Reported Weighted Avg Shares Out (000's) 5,124 5,231 5,214 5,257 Basic Normalized EPS $ 0.01 $ 0.05 $ 0.17 $ 0.13 $ 0.15 Basic Reported EPS $ 0.02 $ 0.05 $ 0.16 $ 0.13 $ 0.19 Diluted Reported Weighted Avg Shares Out (000's) 5,124 5,246 5,235 5,388 Diluted Normalized EPS $ 0.01 $ 0.05 $ 0.17 $ 0.13 $ 0.15 Diluted Reported EPS $ 0.02 $ 0.05 $ 0.16 $ 0.13 $ 0.19 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profitability Ratios (as % of Revenue) -------------------------------------------------------------------------------- Core Gross Profit 38.6% 39.9% 40.4% 38.9% 40.0% S,G & A 39.0% 35.2% 25.9% 34.0% 34.3% Operating Income -1.7% 3.4% 13.5% 3.7% 4.8% Pre-Tax 0.9% 4.9% 14.5% 6.0% 6.6% EBIT -1.4% 3.4% 13.5% 4.0% 4.8% EBITDA -0.1% 4.6% 14.5% 5.2% 5.8% Normalized Net Income 0.5% 3.0% 8.9% 3.7% 4.1% Reported Net Income 0.5% 3.0% 8.5% 3.5% 5.3% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Balance Sheet Data -------------------------------------------------------------------------------- ($ in thousands, As of As of except per share) ------------------- 31-Aug-01 Feb-01 Feb-00 --------- ------- ---------- Cash & Equivalents $ 3,170 $ 1,799 $ 1,906 Marketable Securities - - - --------- ------- ---------- Total Cash & Mkt Securities 3,170 1,799 1,906 Accounts Receivable 2,043 3,568 3,293 Inventory 2,375 2,352 2,359 Other Current Assets 582 455 890 --------- ------- ---------- Total Current Assets 8,170 8,174 8,448 PPE, net 423 473 529 Intangibles, net 219 232 258 Investments - - - Other Assets 7,344 7,311 8,086 --------- ------- ---------- Total Assets $ 16,156 $16,190 $ 17,321 ========= ======= ========== Accounts Payable $ 286 $ 597 $ 1,111 Accrued Expenses 563 403 1,349 Short Term Debt 86 86 104 Short Term Capital Leases - - - Other Current Liabilities 167 167 218 --------- ------- ---------- Total Current Liabilities 1,102 1,253 2,782 Other LT Liabilities 320 417 453 Long Term Debt 194 236 330 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - --------- ------- ---------- Total Liabilities & Pref Stock 1,616 1,906 3,565 --------- ------- ---------- Common Equity 14,540 14,284 13,756 --------- ------- ---------- Total Liabilities & Equity $ 16,156 $16,190 $ 17,321 ========= ======= ========== Common Shares Outstanding (000's) 5,121 5,136 5,231 Cash Value per share $ 0.62 $ 0.35 $ 0.36 Book Value per share $ 2.84 $ 2.78 $ 2.63 Tangible Book Value $ 2.80 $ 2.74 $ 2.58 per share -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 6.53 x 5.54 x 5.86 x Inventory Turnover 4.76 x 4.93 x 4.91 x Asset Turnover 1.13 x 1.13 x 1.11 x Days Sales Outstanding 55.9 65.9 62.3 Days Inventory Outstanding 76.6 74.1 74.4 Days Payable Outstanding 8.6 17.0 22.1 Return on Avg Assets 0.6% 4.1% na Return on Avg Common Equity 0.7% 5.0% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 7.41 6.52 3.04 Quick Ratio 5.26 4.65 2.19 Total Debt $ 280 $ 322 $ 434 Net Debt $ (2,890) $ (1,477) $ (1,472) Total Capitalization $ 14,820 $ 14,606 $ 14,190 Total Debt/Total Capitalization 1.9% 2.2% 3.1% Net Debt/Total Capitalization -19.5% -10.1% -10.4% Total Debt/EBITDA na 0.33 x 0.39 x EBITDA/Interest Expense na na na EBITDA-CAPEX/Interest Expense na na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market Information -------------------------------------------------------------------------------- As of Date 16-Nov-01 Exchange OTC BB Stock Price $ 0.69 52 Week High $ 1.63 52 Week Low $ 0.50 Avg. Daily Volume (000's) 6 Beta 0.47 Shares Outstanding (000's) 5,121 Total Outstanding Warrants & Options (000's) - Float (000's) 2,700 Market Cap $ 3,533.5 Enterprise Value (EV) $ 643.5 Institutional % Owned 1.00% Number of Institutions 8 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Valuation Ratios -------------------------------------------------------------------------------- Multiple of ---------------------- Market Cap EV ---------------------- Latest Twelve Months Revenue 0.19x 0.04x EBIT na na EBITDA na na Normalized Net Income 36.06x 6.57x Basic Normalized EPS 69.00x Projected Dec-01 Mean Revenue 0.20x 0.04x Dec-01 Mean Revenue 0.21x 0.04x Dec-01 Mean EPS 6.93x na Dec-02 Mean EPS 9.56x na Most Recent Filing Assets 0.22x 0.04x Common Equity 0.24x 0.04x Tangible Common Equity 0.25x 0.04x -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Mean Consensus Estimates -------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS -------------------------------------------------------------------------------- December-01 - $ 17,726 $ 0.10 December-02 - $ 16,610 $ 0.07 LT Growth - na na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Period Growth Rates -------------------------------------------------------------------------------- Six Months Ended Fiscal Years Ended Aug-01 Feb-01 ------ ------ Revenue -6.8% -1.6% EBIT -76.5% -18.8% EBITDA -70.2% -11.8% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Notes FY00 & FY01 discontinued operation are losses from Company owned franchises. FY00 extraordinary item is legal settlement. -------------------------------------------------------------------------------- Sources: Multex, Yahoo Finance, and Hoovers Page 49 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS . The discounted cash flow analysis estimates value based on a company's projected future free cash flow discounted at a rate reflecting risks inherent in its business and capital structure. Free cash flow represents the amount of cash generated and available for principal, interest and dividend payments after providing for ongoing business operations. . While the discounted cash flow analysis is the most scientific of the methodologies, it is dependent on projections provided by the Company and is further dependent on numerous industry-specific and macroeconomic factors. . Capitalink utilized both the forecasts provided by Company management ("Management Case"), and the resulting forecasts based on certain modifications made by Capitalink to the Management Case ("Revised Case"). . Management Case assumed fiscal year ending February 2003 and 2004 growth rates for royalty income to be -5.4% and -1.0%, respectively, the Revised Case assumed 0% growth in each year. . Management Case assumed fiscal year ending February 2003 and 2004 growth rates for paper sales to be -6.7% for each year, the Revised Case assumed 0% growth in each year. Capitalink undertook two sets of discounted cash flow analyses, based on each of the Management Case and the Revised Case. . Under the Management Case, projected free cash flows in fiscal years 2003 and 2004 are $578,000 and $522,000, respectively. . Under the Revised Case, projected free cash flows in fiscal years 2003 and 2004 are $507,000 and $600,000, respectively. The lower free cash in year 2003 under the Revised Case results from the higher levels of working capital required by the greater revenue as compared to the Management Case. Page 50 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS . In order to arrive at a present value of the free cash flows, Capitalink utilized discount rates ranging from 25.0% to 37.5%. This range was based on a derived weighted average cost of capital equal to 31.4%: . Capital structure is 7.3% debt, 92.7% equity. . Cost of equity was determined to be 33.5% based on the riskless and risk-based rates. . Cost of debt was determined to be 8.0% based on outstanding acquisition notes payable. . The range of terminal values represents the residual value of the Company at the end of the forecast period. Capitalink presented a range of terminal values by applying a range of multiples to the Company's projected EBITDA. Capitalink noted that utilizing the EBITDA multiple; the terminal value on average represented 101.5% and 101.1% of the implied enterprise value for the Management Case and Revised Case, respectively. Thus, all of the value was derived from a terminal event and not the projected free cash flows. . In addition, Capitalink presented a perpetual growth scenario whereby ranges of growth rates were applied to the Company's 2004 free cash flows in order to determine a terminal value, rather than multiples. Capitalink noted that utilizing the perpetual growth scenario; the terminal value on average represented 104.2% and 102.4% of the implied enterprise value for the Management Case and Revised Case, respectively. Thus, all of the value was derived from a terminal event and not the projected free cash flows. . In each of the scenarios discussed, a range of enterprise values was derived. The enterprise values were reduced by net debt to arrive at an equity value. Because the "net debt" is actually a negative due to the Company's available cash and the calculated present value of the notes receivable (as Page 51 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS discussed later and assumed to be available excess working capital), such net debt is added to the enterprise value to arrive at a market value. . It was noted that utilizing either terminal value scenario under both Management and Revised Cases the net debt represented in excess of 70% of the respectively calculated equity values. . Capitalink calculated a range of equity values per share based on approximately 5,136,000 shares outstanding as of August 31, 2001. The shares outstanding are comprised of 5,121,000 shares of common stock, and 15,000 "in-the-money" options, at an exercise price is $1.12 or below. . Capitalink found that the midpoints of the ranges of equity values per share with respect to the EBITDA multiple were $1.22 under the Management Case, and $1.44 under the Revised Case. Under the perpetual growth scenario, the midpoints were $1.09 under the Management Case, and $1.21 under the Revised Case. Page 52 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Financial Projections - Management Case ($ in thousands)
Actual Projected ---------------------------------- ------------------------------------------ FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 ---------------------- -------------------------------- 2000 2001 2001 2002 2002 2003 2004 ---------------------------------- ------------------------------------------ Revenues Royalty Income $ 5,394 $ 5,267 $ 2,614 $ 2,543 $ 5,157 $ 4,877 $ 4,829 Pelican Paper Sales 13,881 13,424 6,385 6,144 12,529 11,693 10,913 Franchise Sales 27 46 22 18 40 40 40 Other 952 311 139 130 269 282 297 ---------------------------------- ------------------------------------------ Total $20,254 $19,048 $ 9,160 $ 8,835 $17,995 $16,893 $16,079 Cost of Goods Sold Cost of Sales Paper 11,574 11,605 5,527 5,394 10,921 10,193 9,513 ---------------------------------- ------------------------------------------ Gross Margin $ 8,680 $ 7,443 $ 3,633 $ 3,441 $ 7,074 $ 6,700 $ 6,566 Less Operating Expenses Salaries & Employee Benefits na 2,787 1,660 1,367 3,027 2,740 2,822 General and Administrative na 574 235 335 570 599 616 IT Programming Costs na 669 258 199 457 550 550 Occupancy Costs na 204 93 89 182 187 193 Travel and Entertainment na 375 177 193 370 389 396 Professional Fees na 236 251 328 579 200 206 Bad Debt na 1,452 450 450 900 900 900 Management Incentive na 125 100 100 200 250 250 Net Loss Company Plants na 31 16 68 84 120 75 ---------------------------------- ------------------------------------------ Total 6,619 6,453 3,240 3,129 6,369 5,934 6,009 ---------------------------------- ------------------------------------------ EBITDA $ 2,061 $ 990 $ 393 $ 312 $ 705 $ 766 $ 557 ================================== ==========================================
Actual Projected ----------------- -------------------------------------------- FY ended 6 Mths FY ended February 28/29 Sep - Feb February 28/29 ----------------- -------------------------------------------- 2000 2001 2002 2002 2003 2004 ----------------- -------------------------------------------- Growth Assumptions Royalty Income na -2.4% -2.7% -2.1% -5.4% -1.0% Pelican Paper Sales na -3.3% -3.8% -6.7% -6.7% -6.7% Franchise Sales na 70.4% -18.2% -13.0% 0.0% 0.0% Other na -67.3% -6.5% -13.5% 5.0% 5.0% ----------------- -------------------------------------------- Total na -6.0% -53.6% -5.5% -6.1% -4.8% Margin Assumptions Cost of Paper Sales Margin 16.6% 13.6% 12.2% 12.8% 12.8% 12.8% Gross Margin 42.9% 39.1% 38.9% 39.3% 39.7% 40.8% Growth Assumptions Salaries & Employee Benefits na na -17.7% 8.6% -9.5% 3.0% General and Administrative na na 42.6% -0.7% 5.0% 3.0% IT Programming Costs na na -22.9% -31.7% 20.4% 0.0% Occupancy Costs na na -4.3% -10.8% 3.0% 3.0% Travel and Entertainment na na 9.0% -1.3% 5.0% 2.0% Professional Fees na na 30.7% 145.3% -65.5% 3.0% Bad Debt na na 0.0% -38.0% 0.0% 0.0% Management Incentive na na 0.0% 60.0% 25.0% 0.0% ----------------- -------------------------------------------- Net Loss Company Plants na na 325.0% 171.0% 42.9% -37.5% na -2.5% -3.4% -1.3% -6.8% 1.3% Margin Review EBITDA Margin % 10.2% 5.2% 3.5% 3.9% 4.5% 3.5%
-------------------------------------------------------------------------------- Sources of information: Company Financials, Projections and Management. Page 53 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Discounted Cash Flow Analysis - Management Case ($ in thousands, except per share) Free Cash Flows
Actual Projected ---------------------------- ------------------------------ FY ended FY ended February 28/29 6 Mths 6 Mths February 28/29 ----------------- Mar - Aug Sep - Feb -------------- 2000 2001 2001 2002 2003 2004 ---------------------------- ------------------------------ Revenue $ 20,254 $ 19,048 $ 9,160 $ 8,835 $ 16,893 $ 16,079 Cost of Sales 11,574 11,605 5,527 5,394 10,193 9,513 ---------------------------- ------------------------------ Gross Margin 8,680 7,443 3,633 3,441 6,700 6,566 Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009 ---------------------------- ------------------------------ EBITDA 2,061 988 393 312 766 557 less: Deprec. & Amort. 189 232 114 137 220 220 ---------------------------- ------------------------------ EBIT 1,872 756 279 175 546 337 Income Taxes 837 442 176 69 216 133 ---------------------------- ------------------------------ After-tax Income before 1,035 314 103 106 330 204 Interest Add: Deprec. & Amort. 189 232 114 137 220 220 Add: (Used) Sourced by Net 1,365 (1,505) 1,374 (906) 278 248 Wkg Cap. Less: Capital Expenditures 262 150 51 99 250 150 ---------------------------- ------------------------------ Free Cash Flows $ 2,327 $(1,109)$ 1,540 $ (762) $ 578 $ 522 ============================ ==============================
Estimated Range of Enterprise Values Terminal EBITDA Multiple Discount ---------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x -------------------------------------------------------------------- 25.0% $ 960 $1,129 $1,297 $1,382 $1,550 $1,719 27.5% $ 899 $1,060 $1,221 $1,302 $1,463 $1,625 ----------------- 30.0% $ 841 $ 996 | $1,150 $1,227 | $1,382 $1,536 32.5% $ 787 $ 935 | $1,083 $1,157 | $1,305 $1,453 ----------------- 35.0% $ 736 $ 878 $1,020 $1,091 $1,232 $1,374 37.5% $ 688 $ 824 $ 960 $1,028 $1,164 $1,300 ---------- Average of Box | $ 1,154 | ---------- Estimated Range of Equity Values Terminal EBITDA Multiple Discount --------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x -------------------------------------------------------------------- 25.0% $6,097 $6,266 $6,434 $6,519 $6,687 $6,856 27.5% $6,036 $6,197 $6,358 $6,439 $6,600 $6,761 ----------------- 30.0% $5,978 $6,132 | $6,287 $6,364 | $6,518 $6,673 32.5% $5,924 $6,072 | $6,220 $6,294 | $6,442 $6,589 ----------------- 35.0% $5,873 $6,015 $6,156 $6,227 $6,369 $6,511 37.5% $5,825 $5,961 $6,097 $6,165 $6,301 $6,437 ---------- Average of Box | $ 6,291 | ---------- -------------------------------- Terminal Value - EBITDA Multiple -------------------------------- Terminal Values Terminal EBITDA Multiple --------------------------------------------------------- 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x --------------------------------------------------------- EBITDA Terminal Value $ 1,532 $ 1,811 $ 2,090 $ 2,229 $ 2,507 $ 2,786 ========================================================= Discounted Terminal Values as Percentage of Enterprise Values Terminal EBITDA Multiple Discount -------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x -------------------------------------------------------------------- 25.0% 159.6% 97.1% 97.5% 97.6% 97.9% 98.1% 27.5% 98.7% 98.9% 99.0% 99.1% 99.2% 99.3% ----------------- 30.0% 100.9% 100.8% | 100.7% 100.6% | 100.6% 100.5% 32.5% 103.4% 102.8% | 102.4% 102.3% | 102.0% 101.8% ----------------- 35.0% 106.0% 105.0% 104.3% 104.0% 103.6% 103.2% 37.5% 108.8% 107.3% 106.3% 105.9% 105.2% 104.7% --------- Average of Box | 101.5% | --------- Estimated Range of Equity Values per Share Terminal EBITDA Multiple Discount ------------------------------------------------------ Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ----------------------------------------------------------------- 25.0% $ 1.19 $ 1.22 $ 1.25 $ 1.27 $ 1.30 $ 1.33 27.5% $ 1.18 $ 1.21 $ 1.24 $ 1.25 $ 1.29 $ 1.32 ---------------- 30.0% $ 1.16 $ 1.19| $ 1.22 $ 1.24 |$ 1.27 $ 1.30 32.5% $ 1.15 $ 1.18| $ 1.21 $ 1.23 |$ 1.25 $ 1.28 ---------------- 35.0% $ 1.14 $ 1.17 $ 1.20 $ 1.21 $ 1.24 $ 1.27 37.5% $ 1.13 $ 1.16 $ 1.19 $ 1.20 $ 1.23 $ 1.25 -------- Average of Box | $ 1.22 | -------- -------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company Financials, Projections and Management. Page 54 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS
Discounted Cash Flow Analysis - Management Case ($ in thousands, except per share) Free Cash Flows Actual Projected ----------------------------------- --------------------------------- FY ended FY ended February 28/29 6 Mths 6 Mths February 28/29 ----------------------- Mar - Aug Sep - Feb -------------------- 2000 2001 2001 2002 2003 2004 ----------------------------------- --------------------------------- Revenue $ 20,254 $ 19,048 $ 9,160 $ 8,835 $ 16,893 $ 16,079 Cost of Sales 11,574 11,605 5,527 5,394 10,193 9,513 ----------------------------------- --------------------------------- Gross Margin 8,680 7,443 3,633 3,441 6,700 6,566 Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009 ----------------------------------- --------------------------------- EBITDA 2,061 988 393 312 766 557 less: Deprec. & Amort 189 232 114 137 220 220 ----------------------------------- --------------------------------- EBIT 1,872 756 279 175 546 337 Income Taxes 837 442 176 69 216 133 ----------------------------------- --------------------------------- After-tax Income before Interest 1,035 314 103 106 330 204 Add: Deprec. & Amort 189 232 114 137 220 220 Add: (Used) from by Net WC 1,365 (1,505) 1,374 (906) 278 248 Less: Capital Expenditures 262 150 51 99 250 150 ----------------------------------- --------------------------------- Free Cash Flows $ 2,327 $ (1,109) $ 1,540 $ (762) $ 578 $ 522 =================================== =================================
Estimated Range of Enterprise Values Terminal Perpetual Growth Rates Discount ---------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ---------------------------------------------------------- 25.0% $665 $674 $684 $694 $705 $716 27.5% $554 $561 $569 $577 $585 $594 ------------- 30.0% $462 $469 | $475 $481 | $488 $495 32.5% $386 $391 | $396 $401 | $407 $412 ------------- 35.0% $320 $324 $329 $333 $337 $342 37.5% $263 $267 $271 $274 $278 $282 ------- Average of Box | $ 438 | ------- Estimated Range of Equity Values Terminal Perpetual Growth Rates Discount ----------------------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ----------------------------------------------------------- 25.0% $5,801 $5,811 $5,821 $5,831 $5,842 $5,852 27.5% $5,691 $5,698 $5,706 $5,714 $5,722 $5,731 ----------------- 30.0% $5,599 $5,605 | $5,612 $5,618 | $5,625 $5,631 32.5% $5,522 $5,528 | $5,533 $5,538 | $5,543 $5,549 ----------------- 35.0% $5,457 $5,461 $5,465 $5,470 $5,474 $5,479 37.5% $5,400 $5,404 $5,407 $5,411 $5,415 $5,419 --------- Average of Box | $ 5,575 | --------- ----------------------------------- Terminal Value - Perpetual Growth ----------------------------------- Terminal Values Terminal Perpetual Growth Rates ------------------------------------------------- ------------------------------------------------- 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------- EBITDA $575 $577 $578 $579 $581 $582 less: Deprec. & Amort 200 200 200 200 200 200 ------------------------------------------------- EBIT 375 377 378 379 381 382 Income Taxes 148 149 149 150 150 151 ------------------------------------------------- After-tax Income before Int 227 228 229 230 230 231 Add: Deprec. & Amort 200 200 200 200 200 200 Add: (Used) from by Net WC -- -- -- -- -- -- Less: Capital Expenditures 200 200 200 200 200 200 ------------------------------------------------ Free Cash Flows $227 $228 $229 $230 $230 $231 ================================================ Disc Rate Perpetual Growth Terminal Values ------------------------------------------------------------------ 25.0% $1,044 $1,060 $1,076 $1,093 $1,111 $1,128 27.5% $ 936 $ 950 $ 963 $ 977 $ 991 $1,006 30.0% $ 849 $ 860 $ 871 $ 883 $ 895 $ 907 32.5% $ 776 $ 786 $ 796 $ 806 $ 816 $ 826 35.0% $ 715 $ 724 $ 732 $ 741 $ 749 $ 758 37.5% $ 663 $ 670 $ 678 $ 685 $ 693 $ 701 Discounted Terminal Values as Percentage of Enterprise Values Terminal Perpetual Growth Rates Discount ----------------------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% -------------------------------------------------------------------------- 25.0% 95.1% 95.2% 95.2% 95.3% 95.4% 95.4% 27.5% 97.9% 97.9% 97.9% 98.0% 98.0% 98.0% ----------------- 30.0% 101.7% 101.7% | 101.7% 101.7% | 101.6% 101.6% 32.5% 106.9% 106.8% | 106.7% 106.6% | 106.5% 106.4% ----------------- 35.0% 113.7% 113.6% 113.4% 113.2% 113.0% 112.9% 37.5% 123.0% 122.7% 122.4% 122.1% 121.8% 121.5% -------- Average of Box | 104.2% | -------- Estimated Range of Equity Values per Share Terminal Perpetual Growth Rates Discount ----------------------------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------------------------------------- 25.0% $ 1.13 $ 1.13 $ 1.13 $ 1.14 $ 1.14 $ 1.14 27.5% $ 1.11 $ 1.11 $ 1.11 $ 1.11 $ 1.11 $ 1.12 -------------------- 30.0% $ 1.09 $ 1.09 | $ 1.09 $ 1.09 | $ 1.10 $ 1.10 32.5% $ 1.08 $ 1.08 | $ 1.08 $ 1.08 | $ 1.08 $ 1.08 -------------------- 35.0% $ 1.06 $ 1.06 $ 1.06 $ 1.06 $ 1.07 $ 1.07 37.5% $ 1.05 $ 1.05 $ 1.05 $ 1.05 $ 1.05 $ 1.06 --------- Average of Box | $ 1.09 | --------- -------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company Financials, Projections and Management. Page 55 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Long Term and Equity Assumptions - Management Case ($ in thousands)
Actual Projected -------------------------- ---------------------------------------- FY ended FY ended February 28/29 6 Mths 6 Mths February 28/29 --------------- Mar - Aug Sep - Feb ----------------- Terminal 2000 2001 2001 2002 2003 2004 Period -------------------------- ---------------------------------------- Existing Fixed Assets Gross Assets $1,633 $1,707 $1,759 $1,759 $1,759 $1,759 Less Acc Deprec 1,104 1,234 1,335 1,439 1,563 1,657 -------------------------- ----------------------------- Net Book Value $ 529 $ 473 $ 424 $ 320 $ 196 $ 102 ========================== ============================= Deprec Expense $ 163 $ 206 $ 101 $ 104 $ 124 $ 94 $ 70 ========================== ======================================== New Fixed Assets Capex $ 99 $ 250 $ 150 $ 200 ======================================== Total Capex Years Deprec Expense 5 $ 20 $ 70 $ 100 $ 100 ======================================== Net Book Value Mach & Equip $ 99 $ 349 $ 499 Gross Assets $ 99 $ 349 $ 499 Less Acc Deprec 20 90 190 ----------------------------- Net Book Value $ 79 $ 259 $ 309 ============================= Total Assets Gross Assets $1,633 $1,707 $1,759 $1,858 $2,108 $2,258 Less Acc Deprec 1,104 1,234 1,335 1,459 1,653 1,847 -------------------------- ----------------------------- Net Book Value $ 529 $ 473 $ 424 $ 399 $ 455 $ 411 ========================== ============================= Deprec Expense $ 163 $ 206 $ 101 $ 124 $ 194 $ 194 $ 170 ========================== ======================================== Intangibles Gross Intangible $ 474 $ 474 $ 474 $ 474 $ 474 $ 474 Less Acc Amort 216 242 255 268 294 320 ========================== ======================================== Net Book Value $ 258 $ 232 $ 219 $ 206 $ 180 $ 154 ========================== ======================================== Amort Expense $ 26 $ 26 $ 13 $ 13 $ 26 $ 26 $ 30 ========================== ======================================== Deprec & Amort Expense $ 189 $ 232 $ 114 $ 137 $ 220 $ 220 $ 200 ========================== ========================================
Actual as of 8/31/2001 ---------- Equity Value Assumptions Debt & Other Obligations Interest Bearing Debt $ 280 Contingent Liabilities (1) 550 Other - ---------- 830 ---------- Less Cash Cash on Hand 3,170 Assumed cash from exercise of options 17 Assumed value of notes (2) 2,780 ----------- 5,967 ----------- Net Debt $ (5,137) =========== Common Stock Equivalents (in thousands) Common Stock Outstanding 5,121 Stock issued re Other - ----------- 5,121 ----------- Exercise $ Options in the money: Plan 1 $ 1.12 15 Plan 2 $ - - ----------- 15 ----------- Total Common Stock Equivalents 5,136 =========== -------------------------------------------------------------------------------- (1) Guarantee of a plant purchase obligation to a third party. (2) Based upon a collectibility and recovery analysis prepared in consultation with Company Management. See Note Receivable Summary Analysis. Sources of information: Company Financials, Projections and Management. Page 56 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Operating and Working Capital Assumptions - Management Case ($ in thousands)
Actual Projected ---------------------------- ----------------------------------------- FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal ------------------ ------------------ 2000 2001 2001 2002 2003 2004 Period ---------------------------- ----------------------------------------- Growth Statistics and Assumptions Revenue na -6.0% na -53.6% 91.2% -4.8% Cost of Sales na 0.3% na 53.5% 89.0% -6.7% Operating Expenses na 2.5% na -51.5% 89.7% 1.3% EBITDA na -52.1% na -68.4% 145.4% -27.2% EBIT na -59.6% na -76.9% 211.8% -38.2% After-tax Income Pre-Interest na -69.7% na -66.3% 211.8% -38.2% Profitability Gross Margin 42.9% 39.1% 39.7% 38.9% 39.7% 40.8% EBITDA 10.2% 5.2% 4.3% 3.5% 4.5% 3.5% EBIT 9.2% 4.0% 3.0% 2.0% 3.2% 2.1% After-tax Income Pre-Interest 5.1% 1.6% 1.1% 1.2% 2.0% 1.3% Income Tax Expense and Assumptions Statutory Tax Rate 39.5% 39.5% 39.5% Effective Tax Rate 44.7% 58.5% 63.1% 39.5% 39.5% 39.5% 39.5% Current Period Tax $ 837 $ 442 $ 176 $ 69 $ 216 $ 133 NOL Usage - - - - - ---------------------------- ------------------------------- Income Tax Expense $ 837 $ 442 $ 176 $ 69 $ 216 $ 133 ============================ =============================== Ending NOL Balance $ - $ - $ - $ - ========= =============================== Actual Projected ---------------------------- ----------------------------------------- FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal ------------------ ------------------ 2000 2001 2001 2002 2003 2004 Period ---------------------------- ----------------------------------------- Non-Cash Working Capital Assumptions Accounts Receivable (AR) AR Days Outstanding 59 68 na 65 65 65 % of Sales 16.3% 18.7% na 17.8% 17.8% 17.8% Inventory Days Inventory Outs. 74 74 na 74 74 74 % Cost of Sales 20.4% 20.3% na 20.3% 20.3% 20.3% Prepayments % of Direct and Op Costs 2.2% 0.7% na 0.7% 0.7% 0.7% Accounts Payable (AP) AP Days Outstanding 22 12 na 12 12 12 % of Direct and Op Costs 6.1% 3.3% na 3.3% 3.3% 3.3% Accrued Expenses & Other % of Direct and Op Costs 8.6% 3.2% na 3.2% 3.2% 3.2% Changes in Non-Cash Net Working Capital Accounts Receivables $ 3,293 $ 3,568 $ 2,043 $ 3,205 $ 3,008 $ 2,863 Inventory 2,359 2,352 2,375 2,214 2,066 1,929 Prepayments 408 134 111 121 113 109 Accounts Payables 1,111 597 286 568 530 510 Accrued Expenses & Other 1,567 570 730 553 516 497 --------------------------- ------------------------------- Non-Cash Net WC $ 3,382 $ 4,887 $ 3,513 $ 4,419 $ 4,141 $ 3,893 ============================ =============================== % of EBITDA 164.1% 494.6% 893.9% 1416.3% 540.8% 698.7% ============================ =============================== Cash Flow (Used) Sourced by Non-Cash Net Wrkg Cap $ 1,365 $(1,505) $ 1,374 $ (906) $ 278 $ 248 $ - ============================ =========================================
-------------------------------------------------------------------------------- Sources of information: Company Financials, Projections and Management. Page 57 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Cost of Capital Calculation ($ in thousands, except per share) Cost of Common Stock Riskless (1) 20 year treasury coupon (Rf) 5.0% Risk (2) Equity risk premium (EP) 7.8% Industry risk premium (IP) 2.3% Size Premium (SP) 8.4% Company Specific Risk 10.0% ----- 33.5% ===== Cost of Debt Nominal % of Weighted Type of Debt Rate Amount of Debt Cost of Debt ----------------------------------------------------------------------------- Acquisition Notes Payble 8.00% $ 280 100.0% 8.0% - 0.0% 0.0% - 0.0% 0.0% - 0.0% 0.0% - 0.0% 0.0% ----------------------------------- $ 280 100.0% 8.0% =================================== Note: Company has $2m unused line of credit at LIBOR + 2.35%. As of November 16, 2001 LIBOR was 2.10%. Weighted Average Cost of Capital
Shares Outs. Stock Price Market % of Nominal Effective Cost of Weighted Type (in thousands) 16-Nov-01 Value Total Capital Rate Tax Rate Capital Cost of Capital ------------------------------------------------------------------------------------------------------------ Debt $ 280 7.3% 8.0% 39.5% 4.8% 0.4% Common Stock 5,121 $ 0.6900 3,533 92.7% 33.5% 33.5% 31.0% ------- ------- ------ $ 3,813 100.0% 31.4% ======= ======= ======
-------------------------------------------------------------------------------- (1) As reported by the Federal Reserve Board on a weekly-average basis for the week ended November 9, 2001. (2) Sourced from the Ibbotson SBBI Valuation Edition 2001 Yearbook. Sources of information: Company Financials, Projections and Management. Page 58 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Financial Projections - Revised Case ($ in thousands)
Actual Projected (1) ----------------------------- ------------------------------------ FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 ------------------ ------------------------- 2000 2001 2001 2002 2002 2003 2004 ----------------------------- ------------------------------------ Revenues Royalty Income $ 5,394 $ 5,267 $ 2,614 $ 2,543 $ 5,157 $ 5,157 $ 5,157 Pelican Paper Sales 13,881 13,424 6,385 6,144 12,529 12,529 12,529 Franchise Sales 27 46 22 18 40 40 40 Other 952 311 139 130 269 282 297 ----------------------------- ------------------------------------ Total $20,254 $19,048 $ 9,160 $ 8,835 $17,995 $18,008 $18,023 Cost of Goods Sold Cost of Sales Paper 11,574 11,605 5,527 5,394 10,921 10,921 10,921 ----------------------------- ------------------------------------ Gross Margin $ 8,680 $ 7,443 $ 3,633 $ 3,441 $ 7,074 $ 7,087 $ 7,102 Less Operating Expenses Salaries & Employee Benefits na 2,787 1,660 1,367 3,027 2,740 2,822 General and Administrative na 574 235 335 570 599 616 IT Programming Costs na 669 258 199 457 550 550 Occupancy Costs na 204 93 89 182 187 193 Travel and Entertainment na 375 177 193 370 389 396 Professional Fees na 236 251 328 579 200 206 Bad Debt na 1,452 450 450 900 900 900 Management Incentive na 125 100 100 200 250 250 Net Loss Company Plants na 31 16 68 84 120 75 ----------------------------- ------------------------------------ Total 6,619 6,453 3,240 3,129 6,369 5,934 6,009 ----------------------------- ------------------------------------ EBITDA $ 2,061 $ 990 $ 393 $ 312 $ 705 $ 1,153 $ 1,093 ============================= ====================================
Actual Projected (1) --------------- ------------------------------------ FY ended 6 Mths FY ended February 28/29 Sep - Feb February 28/29 --------------- ------------------------ 2000 2001 2002 2002 2003 2004 --------------- ------------------------------------ Growth Assumptions Royalty Income na -2.4% -2.7% -2.1% 0.0% 0.0% Pelican Paper Sales na -3.3% -3.8% 6.7% 0.0% 0.0% Franchise Sales na 70.4% -18.2% -13.0% 0.0% 0.0% Other na -67.3% -6.5% -13.5% 5.0% 5.0% --------------- ------------------------------------ Total na -6.0% -53.6% -5.5% 0.1% 0.1% Margin Assumptions Cost of Paper Sales Margin 16.6% 13.6% 12.2% 12.8% 12.8% 12.8% Gross Margin 42.9% 39.1% 38.9% 39.3% 39.4% 39.4% Growth Assumptions Salaries & Employee Benefits na na -17.7% 8.6% -9.5% 3.0% General and Administrative na na 42.6% -0.7% 5.0% 3.0% IT Programming Costs na na -22.9% -31.7% 20.4% 0.0% Occupancy Costs na na -4.3% -10.8% 3.0% 3.0% Travel and Entertainment na na 9.0% -1.3% 5.0% 2.0% Professional Fees na na 30.7% 145.3% -65.5% 3.0% Bad Debt na na 0.0% -38.0% 0.0% 0.0% Management Incentive na na 0.0% 60.0% 25.0% 0.0% Net Loss Company Plants na na 325.0% 171.0% 42.9% -37.5% --------------- ------------------------------------ na -2.5% -3.4% -1.3% 89.7% 1.3% Margin Review EBITDA Margin % 10.2% 5.2% 3.5% 3.9% 6.4% 6.1%
------------------------------------------------------------------------------- (1) All assumptions remain the same as in Management Case except royalty income and paper sales stabilize after FY 2002. Sources of information: Company Financials, Projections and Management. Page 59 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Discounted Cash Flow Analysis - Revised Case Terminal Values-EBITDA-Multiple ($ in thousands, except per share) Free Cash Flows
Actual Projected -------------------------------------------------------------------- FY ended FY ended February 28/29 6 Mths 6 Mths February 28/29 --------------------- Mar-Aug Sep-Feb ---------------------- 2000 2001 2001 2002 2003 2004 -------------------------------------------------------------------- Revenue $20,254 $19,048 $9,160 $8,835 $18,008 $18,023 Cost of Sales 11,574 11,605 5,527 5,394 10,921 10,921 Gross Margin 8,680 7,443 3,633 3,441 7,087 7,102 Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009 EBITDA 2,061 988 393 312 1,153 1,093 less: Deprec. & Amort 189 232 114 137 220 220 EBIT 1,872 756 279 175 933 873 Income Taxes 837 442 176 69 369 345 After-tax Income before 1,035 314 103 106 564 528 Interest Add: Deprec. & Amort 189 232 114 137 220 220 Add: (Used) Sourced by Net 1,365 (1,505) 1,374 (906) (27) 2 Wkg Cap Less: Capital Expenditures 262 150 51 99 250 150 Free Cash Flows $ 2,327 $(1,109) $1,540 $ (762) $ 507 $ 600 =================================================================
Estimated Range of Enterprise Values
Terminal EBITDA Multiple Discount ----------------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ------------------------------------------------------------------------------- 25.0% $1,845 $2,176 $2,506 $2,671 $3,002 $3,333 27.5% $1,744 $2,060 $2,376 $2,535 $2,851 $3,167 30.0% $1,649 $1,952 $2,255 $2,406 $2,709 $3,011 32.5% $1,560 $1,850 $2,140 $2,285 $2,575 $2,865 35.0% $1,476 $1,755 $2,033 $2,172 $2,450 $2,728 37.5% $1,398 $1,664 $1,931 $2,065 $2,332 $2,598 -------- Average of $ 2,272 --------
Estimated Range of Equity Values
Terminal EBITDA Multiple Discount ----------------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ------------------------------------------------------------------------------- 25.0% $6,982 $7,312 $7,643 $7,808 $8,139 $8,470 27.5% $6,881 $7,197 $7,513 $7,671 $7,988 $8,304 30.0% $6,786 $7,089 $7,391 $7,543 $7,846 $8,148 32.5% $6,697 $6,987 $7,277 $7,422 $7,712 $8,002 35.0% $6,613 $6,891 $7,169 $7,308 $7,587 $7,865 37.5% $6,534 $6,801 $7,068 $7,201 $7,468 $7,735 -------- Average of $ 7,408 --------
Terminal Values
Terminal EBITDA Multiple ----------------------------------------------------------------- 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ----------------------------------------------------------------- EBITDA Terminal Value $3,005 $3,551 $4,097 $4,370 $4,917 $5,463 =================================================================
Discounted Terminal Values as Percentage of Enterprise Values
Terminal EBITDA Multiple Discount ----------------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ------------------------------------------------------------------------------- 25.0% 162.9% 98.8% 99.0% 99.0% 99.1% 99.2% 27.5% 99.7% 99.8% 99.8% 99.8% 99.8% 99.9% 30.0% 101.0% 100.8% 100.7% 100.7% 100.6% 100.5% 32.5% 102.2% 101.9% 101.6% 101.5% 101.4% 101.2% 35.0% 103.6% 103.0% 102.6% 102.4% 102.2% 101.9% 37.5% 105.0% 104.2% 103.6% 103.4% 103.0% 102.7% ------ Average of 101.1% ------
Estimated Range of Equity Values per Share
Terminal EBITDA Multiple Discount ----------------------------------------------------------------- Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x ------------------------------------------------------------------------------- 25.0% $1.36 $1.42 $1.49 $1.52 $1.58 $1.65 27.5% $1.34 $1.40 $1.46 $1.49 $1.56 $1.62 30.0% $1.32 $1.38 $1.44 $1.47 $1.53 $1.59 32.5% $1.30 $1.36 $1.42 $1.45 $1.50 $1.56 35.0% $1.29 $1.34 $1.40 $1.42 $1.48 $1.53 37.5% $1.27 $1.32 $1.38 $1.40 $1.45 $1.51 -------- Average of $ 1.44 --------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company Financials, Projections and Management. Page 60 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Discounted Cash Flow Analysis - Revised Case ($ in thousands, except per share) Free Cash Flows Actual Projected ------------------------------------------------------ FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 ---------------- ----------------- 2000 2001 2001 2002 2003 2004 ------------------------------------------------------ Revenue $20,254 $19,048 $ 9,160 $ 8,835 $18,008 $18,023 Cost of Sales 11,574 11,605 5,527 5,394 10,921 10,921 ------------------------------------------------------ Gross Margin 8,680 7,443 3,633 3,441 7,087 7,102 Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009 ------------------------------------------------------ EBITDA 2,061 988 393 312 1,153 1,093 less: Deprec. & Amort. 189 232 114 137 220 220 ------------------------------------------------------ EBIT 1,872 756 279 175 933 873 Income Taxes 837 442 176 69 369 345 ------------------------------------------------------ After-tax Income before 1,035 314 103 106 564 528 Interest Add: Deprec. & Amort. 189 232 114 137 220 220 Add: (Used) from by 1,365 (1,505) 1,374 (906) (27) 2 Net WC Less: Capital Expenditures 262 150 51 99 250 150 ------------------------------------------------------ Free Cash Flows $2,327 $(1,109) $ 1,540 $ (762) $ 507 $ 600 ====================================================== Estimated Range of Enterprise Values Terminal Perpetual Growth Rates Discount ------------------------------------------------------ Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------------ 25.0% $ 1,589 $ 1,612 $ 1,635 $ 1,659 $ 1,683 $ 1,708 27.5% $ 1,345 $ 1,363 $ 1,381 $ 1,400 $ 1,419 $ 1,439 30.0% $ 1,147 $ 1,162 $ 1,177 $ 1,192 $ 1,207 $ 1,222 32.5% $ 984 $ 996 $ 1,008 $ 1,020 $ 1,033 $ 1,045 35.0% $ 847 $ 857 $ 867 $ 877 $ 887 $ 898 37.5% $ 731 $ 739 $ 747 $ 756 $ 765 $ 773 ------- Average of Box $ 1,099 ------- Estimated Range of Equity Values Terminal Perpetual Growth Rates Discount ------------------------------------------------------ Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------------ 25.0% $ 6,726 $ 6,748 $ 6,772 $ 6,796 $ 6,820 $ 6,845 27.5% $ 6,482 $ 6,500 $ 6,518 $ 6,537 $ 6,556 $ 6,575 30.0% $ 6,284 $ 6,299 $ 6,313 $ 6,328 $ 6,344 $ 6,359 32.5% $ 6,121 $ 6,133 $ 6,145 $ 6,157 $ 6,170 $ 6,182 35.0% $ 5,984 $ 5,994 $ 6,004 $ 6,014 $ 6,024 $ 6,035 37.5% $ 5,868 $ 5,876 $ 5,884 $ 5,893 $ 5,901 $ 5,910 ------- Average of Box $ 6,236 ------- --------------------------------- Terminal Value - Perpetual Growth --------------------------------- Terminal Values Terminal Perpetual Growth Rates ------------------------------------------------------ 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------------ EBITDA $1,128 $1,131 $1,134 $1,136 $1,139 $1,142 less: Deprec. & 200 200 200 200 200 200 ------------------------------------------------------ Amort. EBIT 928 931 934 936 939 942 Income Taxes 367 368 369 370 371 372 ------------------------------------------------------ After-tax Income before 561 563 565 566 568 570 Int. Add: Deprec. & Amort. 200 200 200 200 200 200 Add: (Used) from by - - - - - - Net WC Less: Capital Expenditures 200 200 200 200 200 200 ------------------------------------------------------ Free Cash Flows $ 561 $ 563 $ 565 $ 566 $ 568 $ 570 ====================================================== Disc Rate Perpetual Growth Terminal Values --------------------------------------------------- 25.0% $ 2,582 $ 2,619 $ 2,658 $ 2,697 $ 2,738 $ 2,779 27.5% $ 2,315 $ 2,346 $ 2,378 $ 2,410 $ 2,443 $ 2,477 30.0% $ 2,099 $ 2,125 $ 2,152 $ 2,179 $ 2,206 $ 2,234 32.5% $ 1,920 $ 1,942 $ 1,964 $ 1,988 $ 2,011 $ 2,035 35.0% $ 1,768 $ 1,788 $ 1,807 $ 1,827 $ 1,847 $ 1,868 37.5% $ 1,639 $ 1,656 $ 1,673 $ 1,691 $ 1,709 $ 1,727 Discounted Terminal Values as Percentage of Enterprise Values Terminal Perpetual Growth Rates Discount ------------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% ------------------------------------------------- 25.0% 98.3% 98.4% 98.4% 98.4% 98.4% 98.5% 27.5% 99.7% 99.7% 99.7% 99.7% 99.7% 99.7% 30.0% 101.4% 101.4% 101.3% 101.3% 101.3% 101.3% 32.5% 103.5% 103.5% 103.5% 103.4% 103.4% 103.3% 35.0% 106.2% 106.2% 106.1% 106.0% 106.0% 105.9% 37.5% 109.6% 109.5% 109.4% 109.3% 109.2% 109.0% ------ Average of Box 102.4% ------ Estimated Range of Equity Values per Share Terminal Perpetual Growth Rates Discount -------------------------------------------------- Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% -------------------------------------------------- 25.0% $ 1.31 $ 1.31 $ 1.32 $ 1.32 $ 1.33 $ 1.33 27.5% $ 1.26 $ 1.27 $ 1.27 $ 1.27 $ 1.28 $ 1.28 30.0% $ 1.22 $ 1.23 $ 1.23 $ 1.23 $ 1.24 $ 1.24 32.5% $ 1.19 $ 1.19 $ 1.20 $ 1.20 $ 1.20 $ 1.20 35.0% $ 1.17 $ 1.17 $ 1.17 $ 1.17 $ 1.17 $ 1.17 37.5% $ 1.14 $ 1.14 $ 1.15 $ 1.15 $ 1.15 $ 1.15 ------- Average of Box $ 1.21 ------- -------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company Financials, Projections and Management. Page 61 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Long Term and Equity Assumptions - Revised Case ($ in thousands)
Actual Projected ------------------------------ ------------------------------------- FY ended 6 Mths 6 Mths FY ended February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal ------------------ -------------------------- 2000 2001 2001 2002 2003 2004 Period ------------------------------ ------------------------------------- Existing Fixed Assets Gross Assets $ 1,633 $ 1,707 $ 1,759 $ 1,759 $ 1,759 $ 1,759 Less Acc Deprec 1,104 1,234 1,335 1,439 1,563 1,657 ------------------------------ -------------------------- Net Book Value $ 529 $ 473 $ 424 $ 320 $ 196 $ 102 ============================== ========================== Deprec Expense $ 163 $ 206 $ 101 $ 104 $ 124 $ 94 $ 70 ============================== ===================================== New Fixed Assets Capex $ 99 $ 250 $ 150 $ 200 ================================= Total Capex Years Deprec Expense 5 $ 20 $ 70 $ 100 $ 100 ================================= Net Book Value Mach & Equip $ 99 $ 349 $ 499 Gross Assets $ 99 $ 349 $ 499 Less Acc Deprec 20 90 190 -------------------------- Net Book Value $ 79 $ 259 $ 309 ========================== Total Assets Gross Assets $ 1,633 $ 1,707 $ 1,759 $ 1,858 $ 2,108 $ 2,258 Less Acc Deprec 1,104 1,234 1,335 1,459 1,653 1,847 ------------------------------ -------------------------- Net Book Value $ 529 $ 473 $ 424 $ 399 $ 455 $ 411 ============================== ========================== Deprec Expense $ 163 $ 206 $ 101 $ 124 $ 194 $ 194 $ 170 ============================== ===================================== Intangibles Gross Intangible $ 474 $ 474 $ 474 $ 474 $ 474 $ 474 Less Acc Amort 216 242 255 268 294 320 ------------------------------ -------------------------- Net Book Value $ 258 $ 232 $ 219 $ 206 $ 180 $ 154 ============================== ========================== Amort Expense $ 26 $ 26 $ 13 $ 13 $ 26 $ 26 $ 30 ============================== ===================================== Deprec & Amort Expense $ 189 $ 232 $ 114 $ 137 $ 220 $ 220 $ 200 ============================== =====================================
Actual as of 8/31/2001 ------------- Equity Value Assumptions Debt & Other Obligations Interest Bearing Debt $ 280 Contingent Liabilities (1) 550 Other - ------------- 830 ------------- Less Cash Cash on Hand 3,170 Assumed cash from exercise of options 17 Assumed value of notes (2) 2,780 ------------- 5,967 ------------- Net Debt $ (5,137) ============= Common Stock Equivalents (in thousands) Common Stock Outstanding 5,121 Stock issued re Other - ------------- 5,121 Exercise $ Options in the money: Plan 1 $ 1.12 15 Plan 2 $ - - ------------- 15 ------------- Total Common Stock Equivalents 5,136 =============
-------------------------------------------------------------------------------- (1) Guarantee of a plant purchase obligation to a third party. (2) Based upon a collectibility and recovery analysis prepared in consultation with Company Management. See Note Receivable Summary Analysis. Sources of information: Company Financials, Projections and Management. Page 62 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS DISCOUNTED CASH FLOW ANALYSIS Operating and Working Capital Assumptions - Revised Case ($ in thousands)
Actual Projected -------------------------------------------------------------- FY ended 6 Mths 6 Mths FY ended February 28/29 Mar-Aug Sep-Feb February 28/29 -------------- -------------- Terminal 2000 2001 2001 2002 2003 2004 Period -------------------------------------------------------------- Growth Statistics and Assumptions Revenue na -6.0% na -53.6% 103.8% 0.1% Cost of Sales na 0.3% na -53.5% 102.5% 0.0% Operating Expenses na -2.5% na -51.5% 89.7% 1.3% EBITDA na -52.1% na -68.4% 269.5% -5.2% EBIT na -59.6% na -76.9% 433.1% -6.5% After-tax Income before Inter na -69.7% na -66.3% 433.1% -6.5% Profitability Gross Margin 42.9% 39.1% 39.7% 38.9% 39.4% 39.4% EBITDA 10.2% 5.2% 4.3% 3.5% 6.4% 6.1% EBIT 9.2% 4.0% 3.0% 2.0% 5.2% 4.8% After-tax Income 5.1% 1.6% 1.1% 1.2% 3.1% 2.9% before Inter Income Tax Expense and Assumptions Statutory Tax Rate 39.5% 39.5% 39.5% Effective Tax Rate 44.7% 58.5% 63.1% 39.5% 39.5% 39.5% 39.5% Current Period Tax $ 837 $ 442 $ 176 $ 69 $ 369 $ 345 NOL Usage - - - - - -------------------------------------------------- Income Tax Expense $ 837 $ 442 $ 176 $ 69 $ 369 $ 345 ================================================== Ending NOL Balance $ - $ - $ - $ - ================================
Actual Projected ---------------------------------------------------------------- FY ended 6 Mths 6 Mths FY ended February 28/29 Mar-Aug Sep-Feb February 28/29 -------------- -------------- Terminal 2000 2001 2001 2002 2003 2004 Period ---------------------------------------------------------------- Non-Cash Working Capital Assumptions Accounts Receivable (AR) AR Days Outstanding 59 68 na 65 65 65 % of Sales 16.3% 18.7% na 17.8% 17.8% 17.8% Inventory Days Inventory Outstanding 74 74 na 74 74 74 % Cost of Sales 20.4% 20.3% na 20.3% 20.3% 20.3% Prepayments % of Direct and Op Costs 2.2% 0.7% na 0.7% 0.7% 0.7% Accounts Payable (AP) AP Days Outstanding 22 12 na 12 12 12 % of Direct and Op Costs 6.1% 3.3% na 3.3% 3.3% 3.3% Accrued Expenses & Other % of Direct and Op Costs 8.6% 3.2% na 3.2% 3.2% 3.2% Changes in Non-Cash Net Working Capital Accounts Receivables $3,293 $ 3,568 $2,043 $ 3,205 $3,207 $3,209 Inventory 2,359 2,352 2,375 2,214 2,214 2,214 Prepayments 408 134 111 121 118 119 Accounts Payables 1,111 597 286 568 554 557 Accrued Expenses & Other 1,567 570 730 553 539 542 ---------------------------------------------------- Non-Cash Net WC $3,382 $ 4,887 $3,513 $ 4,419 $4,446 $4,444 ==================================================== % of EBITDA 164.1% 494.6% 893.9% 1416.3% 385.6% 406.7% ==================================================== Cash Flow (Used) Sourced by Non-Cash Net Wrkg Cap $1,365 $(1,505) $1,374 $ (906) $ (27) $ 2 $ - ===============================================================
-------------------------------------------------------------------------------- Sources of information: Company Financials, Projections and Management. Page 63 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS PREMIUMS PAID ANALYSIS . The premiums paid analysis involves the comparison of the consideration in the Proposed Transaction to the average closing price of the Company's common stock over varying time periods prior to November 16, 2001. . The premium in the Proposed Transaction is based on the consideration per share of $1.13. . It is noted that the per share consideration of $1.13 in the Proposed Transaction has represented a premium to the trading price of the Company's since June 2001; however, prior to such time, it would have represented a discount to the stock price for most of November 2000 - May 2001. Page 64 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS PREMIUMS PAID ANALYSIS Premiums Paid Analysis Per Share Consideration $ 1.1300
Closing Price per Share Premium ------------- --------- As of November 16, 2001 $ 0.6900 63.8% Sensitivity Analysis: Prior Day Closing Price $ 0.7000 61.4% Prior 5 Trading Day Average Closing Price $ 0.6140 84.0% Prior 10 Trading Day Average Closing Price $ 0.5970 89.3% Prior 20 Trading Day Average Closing Price $ 0.6165 83.3% Prior 30 Trading Day Average Closing Price $ 0.6503 73.8% Prior 60 Trading Day Average Closing Price $ 0.6843 65.1% Prior 90 Trading Day Average Closing Price $ 0.7677 47.2% Prior Six Month Average Closing Price $ 0.8666 30.4% Prior Year Average Closing Price $ 1.0869 4.0%
-------------------------------------------------------------------------------- Sources of information: Draft Agreement. Share price data provided by Commodity Systems, Inc. Page 65 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS PREMIUMS PAID ANALYSIS BCT International - Daily Premiums Paid November 16, 2000 - November 16, 2001 Daily Exchange Premium/(Discount) Analysis Page 66 BCTI Offer Premium/ Date Close Price (Discount) ---------------------------------------- ----------- 16-Nov-01 0.69 $ 1.1300 63.8% 15-Nov-01 0.7 $ 1.1300 61.4% 14-Nov-01 0.56 $ 1.1300 101.8% 13-Nov-01 0.56 $ 1.1300 101.8% 12-Nov-01 0.56 $ 1.1300 101.8% 9-Nov-01 0.6 $ 1.1300 88.3% 8-Nov-01 0.6 $ 1.1300 88.3% 7-Nov-01 0.6 $ 1.1300 88.3% 6-Nov-01 0.6 $ 1.1300 88.3% 5-Nov-01 0.5 $ 1.1300 126.0% 2-Nov-01 0.66 $ 1.1300 71.2% 1-Nov-01 0.66 $ 1.1300 71.2% 31-Oct-01 0.66 $ 1.1300 71.2% 30-Oct-01 0.57 $ 1.1300 98.2% 29-Oct-01 0.55 $ 1.1300 105.5% 26-Oct-01 0.65 $ 1.1300 73.8% 25-Oct-01 0.65 $ 1.1300 73.8% 24-Oct-01 0.65 $ 1.1300 73.8% 23-Oct-01 0.65 $ 1.1300 73.8% 22-Oct-01 0.66 $ 1.1300 71.2% 19-Oct-01 0.66 $ 1.1300 71.2% 18-Oct-01 0.65 $ 1.1300 73.8% 17-Oct-01 0.75 $ 1.1300 50.7% 16-Oct-01 0.66 $ 1.1300 71.2% 15-Oct-01 0.75 $ 1.1300 50.7% 12-Oct-01 0.71 $ 1.1300 59.2% 11-Oct-01 0.71 $ 1.1300 59.2% 10-Oct-01 0.8 $ 1.1300 41.3% 9-Oct-01 0.78 $ 1.1300 44.9% 8-Oct-01 0.71 $ 1.1300 59.2% 5-Oct-01 0.71 $ 1.1300 59.2% 4-Oct-01 0.63 $ 1.1300 79.4% 3-Oct-01 0.63 $ 1.1300 79.4% 2-Oct-01 0.59 $ 1.1300 91.5% 1-Oct-01 0.58 $ 1.1300 94.8% 28-Sep-01 0.58 $ 1.1300 94.8% 27-Sep-01 0.58 $ 1.1300 94.8% 26-Sep-01 0.61 $ 1.1300 85.2% 25-Sep-01 0.75 $ 1.1300 50.7% 24-Sep-01 0.65 $ 1.1300 73.8% 21-Sep-01 0.65 $ 1.1300 73.8% 20-Sep-01 0.65 $ 1.1300 73.8% 19-Sep-01 0.63 $ 1.1300 79.4% 18-Sep-01 0.65 $ 1.1300 73.8% 17-Sep-01 0.57 $ 1.1300 98.2% 10-Sep-01 0.57 $ 1.1300 98.2% 7-Sep-01 0.76 $ 1.1300 48.7% 6-Sep-01 0.76 $ 1.1300 48.7% 5-Sep-01 0.8 $ 1.1300 41.3% 4-Sep-01 0.8 $ 1.1300 41.3% 31-Aug-01 0.8 $ 1.1300 41.3% 30-Aug-01 0.75 $ 1.1300 50.7% 29-Aug-01 0.9 $ 1.1300 25.6% 28-Aug-01 0.9 $ 1.1300 25.6% 27-Aug-01 0.84 $ 1.1300 34.5% 24-Aug-01 0.84 $ 1.1300 34.5% 23-Aug-01 0.84 $ 1.1300 34.5% 22-Aug-01 0.85 $ 1.1300 32.9% 21-Aug-01 0.85 $ 1.1300 32.9% 20-Aug-01 0.83 $ 1.1300 36.1% 17-Aug-01 0.85 $ 1.1300 32.9% 16-Aug-01 0.85 $ 1.1300 32.9% 15-Aug-01 0.85 $ 1.1300 32.9% 14-Aug-01 0.91 $ 1.1300 24.2% 13-Aug-01 0.86 $ 1.1300 31.4% 10-Aug-01 0.94 $ 1.1300 20.2% 9-Aug-01 0.94 $ 1.1300 20.2% 8-Aug-01 0.86 $ 1.1300 31.4% 7-Aug-01 0.87 $ 1.1300 29.9% 6-Aug-01 0.87 $ 1.1300 29.9% 3-Aug-01 0.87 $ 1.1300 29.9% 2-Aug-01 0.86 $ 1.1300 31.4% 1-Aug-01 0.9 $ 1.1300 25.6% 31-Jul-01 0.95 $ 1.1300 18.9% 30-Jul-01 0.9 $ 1.1300 25.6% 27-Jul-01 0.88 $ 1.1300 28.4% 26-Jul-01 0.85 $ 1.1300 32.9% 25-Jul-01 0.76 $ 1.1300 48.7% 24-Jul-01 1.01 $ 1.1300 11.9% 23-Jul-01 1.01 $ 1.1300 11.9% 20-Jul-01 1.01 $ 1.1300 11.9% 19-Jul-01 1.02 $ 1.1300 10.8% 18-Jul-01 1.03 $ 1.1300 9.7% 17-Jul-01 1.06 $ 1.1300 6.6% 16-Jul-01 1.04 $ 1.1300 8.7% 13-Jul-01 1.04 $ 1.1300 8.7% 12-Jul-01 1.04 $ 1.1300 8.7% 11-Jul-01 0.98 $ 1.1300 15.3% 10-Jul-01 1 $ 1.1300 13.0% 9-Jul-01 1.02 $ 1.1300 10.8% 6-Jul-01 1.03 $ 1.1300 9.7% 5-Jul-01 1.1 $ 1.1300 2.7% 3-Jul-01 1.08 $ 1.1300 4.6% 2-Jul-01 1.1 $ 1.1300 2.7% 29-Jun-01 1.03 $ 1.1300 9.7% 28-Jun-01 1.08 $ 1.1300 4.6% 27-Jun-01 0.95 $ 1.1300 18.9% 26-Jun-01 0.97 $ 1.1300 16.5% 25-Jun-01 0.97 $ 1.1300 16.5% 22-Jun-01 0.97 $ 1.1300 16.5% 21-Jun-01 0.96 $ 1.1300 17.7% 20-Jun-01 0.98 $ 1.1300 15.3% 19-Jun-01 1 $ 1.1300 13.0% 18-Jun-01 1.01 $ 1.1300 11.9% 15-Jun-01 1.05 $ 1.1300 7.6% 14-Jun-01 1.05 $ 1.1300 7.6% 13-Jun-01 1.05 $ 1.1300 7.6% 12-Jun-01 1 $ 1.1300 13.0% 11-Jun-01 0.91 $ 1.1300 24.2% 8-Jun-01 1.01 $ 1.1300 11.9% 7-Jun-01 1.02 $ 1.1300 10.8% 6-Jun-01 1.03 $ 1.1300 9.7% 5-Jun-01 1.16 $ 1.1300 -2.6% 4-Jun-01 1.27 $ 1.1300 -11.0% 1-Jun-01 1.26 $ 1.1300 -10.3% 31-May-01 1.26 $ 1.1300 -10.3% 30-May-01 1.15 $ 1.1300 -1.7% 29-May-01 1.12 $ 1.1300 0.9% 25-May-01 1.26 $ 1.1300 -10.3% 24-May-01 1.26 $ 1.1300 -10.3% 23-May-01 1.4 $ 1.1300 -19.3% 22-May-01 1.4 $ 1.1300 -19.3% 21-May-01 1.4 $ 1.1300 -19.3% 18-May-01 1.26 $ 1.1300 -10.3% 17-May-01 1.26 $ 1.1300 -10.3% 16-May-01 1.29 $ 1.1300 -12.4% 15-May-01 1.3 $ 1.1300 -13.1% 14-May-01 1.24 $ 1.1300 -8.9% 11-May-01 1.29 $ 1.1300 -12.4% 10-May-01 1.29 $ 1.1300 -12.4% 9-May-01 1.3 $ 1.1300 -13.1% 8-May-01 1.3 $ 1.1300 -13.1% 7-May-01 1.31 $ 1.1300 -13.7% 4-May-01 1.22 $ 1.1300 -7.4% 3-May-01 1.22 $ 1.1300 -7.4% 2-May-01 1.22 $ 1.1300 -7.4% 1-May-01 1.25 $ 1.1300 -9.6% 30-Apr-01 1.25 $ 1.1300 -9.6% 27-Apr-01 1.25 $ 1.1300 -9.6% 26-Apr-01 1.25 $ 1.1300 -9.6% 25-Apr-01 1.25 $ 1.1300 -9.6% 24-Apr-01 1.25 $ 1.1300 -9.6% 23-Apr-01 1.25 $ 1.1300 -9.6% 20-Apr-01 1.4 $ 1.1300 -19.3% 19-Apr-01 1.4 $ 1.1300 -19.3% 18-Apr-01 1.25 $ 1.1300 -9.6% 17-Apr-01 1.19 $ 1.1300 -5.0% 16-Apr-01 1.19 $ 1.1300 -5.0% 12-Apr-01 1.19 $ 1.1300 -5.0% 11-Apr-01 1.11 $ 1.1300 1.8% 10-Apr-01 1.11 $ 1.1300 1.8% 9-Apr-01 1.1 $ 1.1300 2.7% 6-Apr-01 0.9375 $ 1.1300 20.5% 5-Apr-01 1.0625 $ 1.1300 6.4% 4-Apr-01 1 $ 1.1300 13.0% 3-Apr-01 1 $ 1.1300 13.0% 2-Apr-01 1.0938 $ 1.1300 3.3% 30-Mar-01 1.1562 $ 1.1300 -2.3% 29-Mar-01 1.1562 $ 1.1300 -2.3% 28-Mar-01 1.1562 $ 1.1300 -2.3% 27-Mar-01 1.1875 $ 1.1300 -4.8% 26-Mar-01 1.1875 $ 1.1300 -4.8% 23-Mar-01 1.2188 $ 1.1300 -7.3% 22-Mar-01 1.2188 $ 1.1300 -7.3% 21-Mar-01 1.25 $ 1.1300 -9.6% 20-Mar-01 1.3125 $ 1.1300 -13.9% 19-Mar-01 1.3125 $ 1.1300 -13.9% 16-Mar-01 1.3125 $ 1.1300 -13.9% 15-Mar-01 1.375 $ 1.1300 -17.8% 14-Mar-01 1.375 $ 1.1300 -17.8% 13-Mar-01 1.375 $ 1.1300 -17.8% 12-Mar-01 1.375 $ 1.1300 -17.8% 9-Mar-01 1.375 $ 1.1300 -17.8% 8-Mar-01 1.375 $ 1.1300 -17.8% 7-Mar-01 1.375 $ 1.1300 -17.8% 6-Mar-01 1.375 $ 1.1300 -17.8% 5-Mar-01 1.5 $ 1.1300 -24.7% 2-Mar-01 1.5625 $ 1.1300 -27.7% 1-Mar-01 1.5625 $ 1.1300 -27.7% 28-Feb-01 1.5625 $ 1.1300 -27.7% 27-Feb-01 1.4375 $ 1.1300 -21.4% 26-Feb-01 1.4375 $ 1.1300 -21.4% 23-Feb-01 1.375 $ 1.1300 -17.8% 22-Feb-01 1.25 $ 1.1300 -9.6% 21-Feb-01 1.2188 $ 1.1300 -7.3% 20-Feb-01 1.25 $ 1.1300 -9.6% 16-Feb-01 1.25 $ 1.1300 -9.6% 15-Feb-01 1.1875 $ 1.1300 -4.8% 14-Feb-01 1.1875 $ 1.1300 -4.8% 13-Feb-01 1.2188 $ 1.1300 -7.3% 12-Feb-01 1.2188 $ 1.1300 -7.3% 9-Feb-01 1.25 $ 1.1300 -9.6% 8-Feb-01 1.375 $ 1.1300 -17.8% 7-Feb-01 1.375 $ 1.1300 -17.8% 6-Feb-01 1.25 $ 1.1300 -9.6% 5-Feb-01 1.2812 $ 1.1300 -11.8% 2-Feb-01 1.2812 $ 1.1300 -11.8% 1-Feb-01 1.375 $ 1.1300 -17.8% 31-Jan-01 1.375 $ 1.1300 -17.8% 30-Jan-01 1.375 $ 1.1300 -17.8% 29-Jan-01 1.2812 $ 1.1300 -11.8% 26-Jan-01 1.2812 $ 1.1300 -11.8% 25-Jan-01 1.2188 $ 1.1300 -7.3% 24-Jan-01 1.3125 $ 1.1300 -13.9% 23-Jan-01 1.2812 $ 1.1300 -11.8% 22-Jan-01 1.3125 $ 1.1300 -13.9% 19-Jan-01 1.3125 $ 1.1300 -13.9% 18-Jan-01 1.3125 $ 1.1300 -13.9% 17-Jan-01 1.3125 $ 1.1300 -13.9% 16-Jan-01 1.3125 $ 1.1300 -13.9% 12-Jan-01 1.3125 $ 1.1300 -13.9% 11-Jan-01 1.3125 $ 1.1300 -13.9% 10-Jan-01 1.3125 $ 1.1300 -13.9% 9-Jan-01 1.3125 $ 1.1300 -13.9% 8-Jan-01 1.3125 $ 1.1300 -13.9% 5-Jan-01 1.3438 $ 1.1300 -15.9% 4-Jan-01 1.3125 $ 1.1300 -13.9% 3-Jan-01 1.375 $ 1.1300 -17.8% 2-Jan-01 1.375 $ 1.1300 -17.8% 29-Dec-00 1.3125 $ 1.1300 -13.9% 28-Dec-00 1.3125 $ 1.1300 -13.9% 27-Dec-00 1.375 $ 1.1300 -17.8% 26-Dec-00 1.375 $ 1.1300 -17.8% 22-Dec-00 1.375 $ 1.1300 -17.8% 21-Dec-00 1.375 $ 1.1300 -17.8% 20-Dec-00 1.375 $ 1.1300 -17.8% 19-Dec-00 1.4375 $ 1.1300 -21.4% 18-Dec-00 1.5 $ 1.1300 -24.7% 15-Dec-00 1.375 $ 1.1300 -17.8% 14-Dec-00 1.375 $ 1.1300 -17.8% 13-Dec-00 1.375 $ 1.1300 -17.8% 12-Dec-00 1.3125 $ 1.1300 -13.9% 11-Dec-00 1.25 $ 1.1300 -9.6% 8-Dec-00 1.1875 $ 1.1300 -4.8% 7-Dec-00 1.3438 $ 1.1300 -15.9% 6-Dec-00 1.3125 $ 1.1300 -13.9% 5-Dec-00 1.3125 $ 1.1300 -13.9% 4-Dec-00 1.3125 $ 1.1300 -13.9% 1-Dec-00 1.4375 $ 1.1300 -21.4% 30-Nov-00 1.5156 $ 1.1300 -25.4% 29-Nov-00 1.5156 $ 1.1300 -25.4% 28-Nov-00 1.4844 $ 1.1300 -23.9% 27-Nov-00 1.5625 $ 1.1300 -27.7% 24-Nov-00 1.5312 $ 1.1300 -26.2% 22-Nov-00 1.5312 $ 1.1300 -26.2% 21-Nov-00 1.5312 $ 1.1300 -26.2% 20-Nov-00 1.5625 $ 1.1300 -27.7% 17-Nov-00 1.625 $ 1.1300 -30.5% 16-Nov-00 1.5625 Premiums Paid Analysis
Per Share Consideration $ 1.1300 Closing Price per Share Premium -------------- -------------- As of November 16, 2001 $ 0.6900 63.8% Sensitivity Analysis: Prior Day Closing Price $ 0.7000 61.4% Prior 5 Trading Day Average Closing Price $ 0.6140 84.0% Prior 10 Trading Day Average Closing Price $ 0.5970 89.3% Prior 20 Trading Day Average Closing Price $ 0.6165 83.3% Prior 30 Trading Day Average Closing Price $ 0.6503 73.8% Prior 60 Trading Day Average Closing Price $ 0.6843 65.1% Prior 90 Trading Day Average Closing Price $ 0.7677 47.2% Prior Six Month Average Closing Price $ 0.8666 30.4% Prior Year Average Closing Price $ 1.0869 4.0%
Page 66 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ACQUISITION PREMIUMS ANALYSIS . The acquisition premiums analysis involves the comparison of the premium in the Proposed Transaction to premiums in other transactions. Capitalink reviewed the premiums paid in two groups of acquisitions. It is noted that neither of the groups of acquisitions represent transactions comparable to the Proposed Transaction, as such comparable transactions could not be located: . Acquisitions since January 1, 2001 where the enterprise value of the acquired company was less than $25 million. . Acquisitions of minority interests since January 1999 with deal size less than $25 million. . Capitalink believes an examination of the premiums paid in the minority acquisitions are significant as, in the Proposed Transaction, the acquisition on its own does not convey control of the acquired company. The premium in such a scenario should not be as high as a situation where control is acquired. . Based on the premiums paid in the scenarios set forth above, Capitalink derived an implied range of per share market values in the Proposed Transaction (i.e., what the consideration in the Proposed Transaction would be if the premium was as noted in the low, mean, median, and high ranges of the selected acquisitions). The mean and medians of the implied value per share for the total market acquisitions ranged from $.96 - $1.20; and for the minority interest acquisitions, ranged from $.81 - $1.01. Page 67 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ACQUISITION PREMIUMS ANALYSIS Acquisition Premiums Analysis
Prior One Day Prior 5 Day Prior 30 Day ------------- ----------- ------------ Share Price $ 0.69 $ 0.60 $ 0.66 Transaction Premium (at $1.13 per Share Consideration) 63.8% 88.3% 71.2%
Using Recent Total Market Acquisition Premiums (1) -------------------------------------------------------------------------------- Acquisition Premium High 275.0% 455.6% Mean 73.5% 82.3% Median 51.7% 60.0% Low 3.8% -19.8% Implied Range of Market Value per Share High $ 2.59 $ 3.33 Mean 1.20 1.09 Median 1.05 0.96 Low 0.72 0.48 -------------------------------------------------------------------------------- Using Recent Total Market, Minority Interest Acquisition Premiums (2) -------------------------------------------------------------------------------- Acquisition Premium High 286.7% 329.4% 260.8% Mean 46.6% 51.2% 53.1% Median 27.6% 34.5% 36.1% Low 0.0% 0.0% 9.5% Implied Range of Market Value per Share High $ 2.67 $ 2.58 $ 2.38 Mean 1.01 0.91 1.01 Median 0.88 0.81 0.90 Low 0.69 0.60 0.72 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- (1) Includes all transactions since January 1, 2001 with enterprise value * $25 million. (2) Includes all minority interest transactions since January 1, 1999 with a deal value * $25 million. * represents less than sign Sources of information: Commodity Systems, Inc, Mergerstat, Inc. and Bloomberg, LP. Page 68 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ADJUSTED NET BOOK VALUE ANALYSIS . The adjusted net book value analysis is balance sheet-oriented methodology whereby a company's balance sheet is restated to fair market value. This involves the revaluation of the assets and liabilities recorded on the balance sheet, and the identification and valuation of otherwise unrecorded tangible and intangible assets and liabilities. . In the use of the adjusted net book value analysis, Capitalink assumed the value of the Company in an orderly liquidation. In such a liquidation scenario, Capitalink assumed that the assets are sold piecemeal, not as part of a mass assemblage. It is further assumed that the assets have been given adequate exposure in their normal secondary market, and there is an incurred liquidation cost. . Capitalink utilized the Company's balance sheet as of August 31, 2001, the latest available financial data prior to the date of the opinion. The balance sheet indicates a net book value, prior to any adjustment, of approximately $14.5 million. . Each of the adjustments are footnoted on the attached analysis; however, please note the following: . Both inventory and plant and equipment are discounted significantly based on their specialized natures and the existence of a limited marketplace. . The Company has an aggregate of $7,284,000 in notes receivable from 31 of its franchisees (the "Notes"). Based on discussions with Company management, Capitalink determined the payment probability for each of the Notes. Payment probability is based on a number of factors including, the franchisee's performance record, debt balances, management quality, and local market. In the aggregate, the payment probability was 52%, or receipt of $3,814,000 is expected, over the aggregate life of the Notes. . Additionally, based on discussions with Company management, it was determined that the Company would collect an aggregate $2,018,000 from the collateral and guarantees securing the Page 69 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ADJUSTED NET BOOK VALUE ANALYSIS Notes. Therefore, over the aggregate life of the Notes, approximately $5,832,000 is expected to be collected, or 80% of the value of the Notes. . Utilizing the Company's weighted average cost of capital (as discussed in the discounted cash flow analysis) and applying the varying time horizons for each of the Notes, Capitalink derived the net present value of the amount anticipated to be collected. The net present value of the amount to be collected was calculated to be approximately $2,780,000, which is the adjusted amount reflected in the adjusted net book value analysis. . It is important to note that Capitalink derived payment probabilities of the Notes in conjunction with and based on discussions with management. Capitalink does not assure that the amounts noted herein will be collected. . The adjusted net book value of $6,516,000 would be further reduced by the liquidation costs of 20%, resulting in a fair market value of $5,213,000, or $.1.02 per share. Page 70 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ADJUSTED NET BOOK VALUE ANALYSIS Adjusted Net Book Value Analysis as of August 31, 2001 ($ in thousands) |-----------------------------| | Liquidation Premise | | --------------------------- | Unadjusted | | Book Value | Adjs (1) Notes Adjusted | ------------ |---------- ------- ----------| Current Assets: | | Cash & Equivalents $ 2,823 | $ - $ 2,823 | Cash National Account 347 | (149) a 198 | Accounts Receivable, net 2,818 | (1,409) b 1,409 | Inventory 2,375 | (1,544) c 831 | Assets Held For Sale 150 | (150) d - | Prepaid Expenses 111 | (111) e - | ---------- | --------- -------- | Total Current Assets 8,624 | (3,363) 5,261 | | | Long Term Assets: | | Net Property, Plant & 423 | (275) f 148 | Equipment | | Notes Receivables, net 5,736 | (2,956) g 2,780 | Intangible Assets 219 | (219) h - | Security Deposits 24 | - I 24 | Deferred Tax Assets 1,155 | (1,155) j - | ---------- | --------- -------- | Total Long Term Assets 1,398 | (1,374) 24 | ---------- | --------- -------- | | | Total Assets $ 16,181 | $ (7,968) $ 8,213 | ========== | ========= ======== | |-----------------------------| |-----------------------------| | Liquidation Premise | | --------------------------- | Unadjusted | | Book Value | Adjs (1) Notes Adjusted | ------------ |---------- ------- ----------| | | Current Liabilities: | | Notes Payable, Current 86 | - 86 | Accounts Payable 286 | (149) k 137 | Accured Expenses 580 | - 580 | Deferred Revenue, Current - | - - | ---------- | --------- -------- | Total Current Liabilities 952 | (149) 803 | | | Long Term Liabilities | | Notes Payable 194 | - 194 | Deferred Revenue 487 | (487) l - | ---------- | --------- -------- | Total Long Term Liabilities 681 | - 194 | | | Contingent Liabilities | | Other - | 700 m 700 | ---------- | --------- -------- | Total Contingent Liabilities - | 700 700 | ---------- | --------- -------- | | | Total Liabilities 1,633 | - 1,697 | ---------- | --------- -------- | | | Net Book Value $ 14,548 | $ (7,968) $ 6,516 | ========== | ========= ======== | |-----------------------------| Adjusted Net Book Value 6,516 Less Liquidation Costs (2) 20% (1,303) -------- $ 5,213 ======== Fair Market Value Number Outstanding Shares as of August 31, 2001 5,121 Fair Market Value, Per Share $ 1.02 ======== Explanation of Notes: a Amounts due to franchises and to the national account. b Expect to collect 50% of total Accounts Receivable. c 65% reduction due to specialized inventory and limited market. d Includes BCT's share of BCT Hawaii. FMV is negative. e No value under liquidation scenario. f 65% reduction due to specialized assets and limited market. g Adjusted as per Notes analysis. h Consist of rights to franchise BCTs in Canada. No Liquidation value. I No value under liquidation scenario. j No value under liquidation scenario. k Corresponding liability removed as per adjustment in (a) l No value under liquidation scenario. m Contingent liabilities include note guarantee for BUT 3039 and remaining office leases. -------------------------------------------------------------------------------- (1) Adjustments determined in discussions with Company Management. (2) Liquidation costs include legal, accounting, and adminstrative expenses. Sources of Information: Company Financials and Management Page 71 BCT International, Inc. CONFIDENTIAL -------------------------------------------------------------------------------- VALUATION ANALYSIS ADJUSTED NET BOOK VALUE ANALYSIS Notes Receivable Summary Analysis as of August 31, 2001 ($ in thousands) Total Notes Receivable $ 7,284 Number of Notes Receivable 31 Largest Note Receivable $ 730 Average Note Receivable $ 235 Median Note Receivable $ 211 Smallest Note Receivable $ 6 Collections and Recoveries (1) Percent Percent Collected Net Present Collected Amount or Recovered Value (4) or Recovered ------- ------------ ----------- ------------ Estimated Collections (2) $ 3,814 52.4% $ 1,830 25.1% Estimated Recoveries (3) 2,018 27.7% 949 13.0% ------- ------------ ----------- ------------ $ 5,832 80.1% $ 2,780 38.2% ======= ============ =========== ============ -------------------------------------------------------------------------------- (1) The collectibility and recovery analysis was prepared in consultation with Company Management. (2) Represents estimated receipts during the term or any applicable default period. (3) Represents estimated recovery, net of collection costs, from collateral or guarantees. (4) Present value of receipts and recovery calculated at the Company's Weighted Average Cost of Capital (WACC). See DCF Analysis for WACC calculation. Sources of Information: Company Financials and Management Page 72