EX-16.(C)(6) 9 dex16c6.txt EXHIBIT 16.(C)(6) BCT International, Inc. Confidential -------------------------------------------------------------------------------- Exhibit 16C6 Draft Analysis As of February 20, 2003 This presentation and its analyses are only for the use of the Special Committee and the Board of Directors and are not intended to, nor should they be, relied upon by any other party, including stockholders of BCT International, Inc. 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, the Special Committee and the Board of Directors. 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 to Capitalink. 1 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Table of Contents 1 - Strategic Discussion Points 2 - Financial and Indicated Value Summary 3 - Key Discussion Points 4 - Capitalization Table 5 - Market Performance 6 - Financial Performance 7 - Notes Receivable Analysis 8 - Discounted Cash Flow Analysis 9 - Comparable Company Analysis 10 - Share Repurchase Analysis 2 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Strategic Discussion Points 3 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Strategic Discussions Points 1 - Business Plan - Status Quo vs Proposed. 2 - Status Quo. 3 - Negotiate with New Valley. 4 - Market Company - Strategic / Financial Buyers. 5 - Exercise all/part of Company's option to buy Wilkerson's shares. 6 - Buyback shares at market. 7 - Buyback using tender offer. 8 - Issue cash dividend. 9 - Employment Agreement / Options - Wilkerson 10 - Employment Agreement / Options - Others 11 - Timing Issues 4 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Financial and Indicated Value Summary 5 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Summary Financials ($ in thousands)
Actual/Estimated Projected ---------------------------------------------- ----------------------------------------------- FY ended FY ended February 28/29 February 28/29 ---------------------------------------------- ----------------------------------------------- 2000 2001 2002 2003 2004 2005 2006 2007 ---------------------------------------------- ----------------------------------------------- Revenues Base Case $ 19,302 $ 18,999 $ 17,599 $ 17,781 $ 17,569 $ 17,539 $ 17,539 $ 17,539 Company Stores - - - 528 3,708 6,563 7,387 7,854 Satellite Stores - - - - 371 1,299 2,215 3,386 ---------------------------------------------- ----------------------------------------------- Total Revenue $ 19,302 $ 18,999 $ 17,599 $ 18,309 $ 21,647 $ 25,400 $ 27,141 $ 28,779 ============================================== =============================================== EBITDA Base Case $ 2,061 $ 988 $ 781 $ 1,218 $ 1,486 $ 1,204 $ 934 $ 680 Company Stores - - - (200) 80 597 746 832 Satellite Stores - - - - 28 517 751 1,195 ---------------------------------------------- ----------------------------------------------- Total EBITDA $ 2,061 $ 988 $ 781 $ 1,018 $ 1,593 $ 2,318 $ 2,431 $ 2,707 ============================================== =============================================== Free Cash Flow Base Case (1) $ 1,085 $ 141 $ 3,098 $ 443 $ 1,067 $ 676 $ 508 $ 353 Company Stores - - - - (2,925) 102 351 433 Satellite Stores - - - - (248) (164) 593 931 ---------------------------------------------- ----------------------------------------------- Total Free Cash Flow $ 1,085 $ 141 $ 3,098 $ 443 $ (2,105) $ 615 $ 1,452 $ 1,717 ============================================== ===============================================
-------------------------------------------------------------------------------- (1) Base Case free cash flow for 2000 to 2002 is based on cash flow statements for Company. Sources of information: Company Financials, Projections and Management. 6 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Summary Indicated Value
($ in thousands) Scenarios (1) Scenarios (1) ------------------------------------------- --------------------------------------------- BC BC BC+CS BC BC BC+CS BC +CS + SS +SS BC +CS + SS +SS -------- -------- -------- -------- -------- -------- -------- --------- Indicated Values Enterprise Value $ 3,631 $ 3,189 $ 6,546 $ 6,103 ======== ======== ======== ======== Market Value $ 11,421 $ 10,979 $ 14,855 $ 14,412 ======== ======== ======== ======== Market Value Per Share $ 2.01 $ 1.93 $ 2.51 $ 2.44 ======== ======== ======== ======== Assumed Shares Outstanding 5,686 5,686 5,916 5,916 ======== ======== ======== ======== Wilkerson Buyback No Open Market Purchase Open Market Purchase of 500 Shares @ $1.00 ------------------------------------------- --------------------------------------------- 200 $ 2.05 $ 1.975 $ 2.5797 $ 2.49 $ 2.15 $ 2.075 $ 2.727 $ 2.632 500 $ 2.11 $ 2.021 $ 2.6502 $ 2.57 $ 2.23 $ 2.133 $ 2.823 $ 2.732 800 $ 2.15 $ 2.065 $ 2.7206 $ 2.64 $ 2.28 $ 2.188 $ 2.918 $ 2.811 1100 $ 2.19 $ 2.099 $ 2.8009 $ 2.71 $ 2.33 $ 2.233 $ 3.013 $ 2.901 1400 $ 2.22 $ 2.122 $ 2.8712 $ 2.77 $ 2.38 $ 2.268 $ 3.106 $ 2.990 Open Market Purchase of 750 Shares @ $1.20 Open Market Purchase of 1,250 Shares @ $1.40 ------------------------------------------- --------------------------------------------- 200 $ 2.18 $ 2.09 $ 2.77 $ 2.68 $ 2.24 $ 2.14 $ 2.89 $ 2.80 500 $ 2.26 $ 2.16 $ 2.89 $ 2.79 $ 2.34 $ 2.22 $ 3.03 $ 2.93 800 $ 2.32 $ 2.21 $ 2.98 $ 2.88 $ 2.40 $ 2.28 $ 3.15 $ 3.04 1100 $ 2.38 $ 2.27 $ 3.09 $ 2.98 $ 2.48 $ 2.35 $ 3.29 $ 3.16 1400 $ 2.44 $ 2.31 $ 3.20 $ 3.08 $ 2.56 $ 2.41 $ 3.43 $ 3.29
-------------------------------------------------------------------------------- (1) Base Case free cash flow for 2000 to 2002 is based on cash flow statements for Company. Sources of information: Company Financials, Projections and Management. 7 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Key Discussion Points 8 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Key Discussion Points Capitalization Table 1) Company is currently majority owned by Wilkerson who has 52.5% and 53.1% on a basic and ITM fully diluted level, respectively. 2) Issue of Hummingbird intentions given their shareholding of 9.8% on a basic level. 3) Less than 0.4% of total common shares oustanding (excluding holdings of Wilkerson/Phoenix) is traded on average each day. Stock Analysis 1) Share price performance of Company has been poor. For the past three years, the Company has traded below $2.00 and has remained below $1.00 for most of the last twelve months ("LTM"). 2) Average price was $0.85 over LTM and $1.72 since September 1997. 3) Trading volume of Company also low. Company did not trade for 41% over the available trading days over LTM. Average and median volume is 8,108 and 200 respectively. Company History, Analysis and Graphs 1) Financial performance of Company has been consistent with no signficant increases or falls in revenue and profitability over last three years. 2) Company has significant amount of cash available of $4.8 million and very little debt of $828,000 (relating to notes generated through acquisition of Company stores). 3) Tangible book value per share is $2.59, consisting primarily of cash and accounts and notes receivable owed by franchisees. Notes Analysis 1) Examined notes receivables which total $6.7 million and applied payment probability based on likelihood of being paid. Also present valued the note payments to derive NPV of notes using Company's base case WACC. 2) Of the $6.7 million notes, approximately $3.8 million are considered collectible for our analysis, which equates to a present value of approximately $2.8 million. 9 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Key Discussion Points Discounted Cash Flow Analysis 1) Conducted three sets of DCF's based on the Base Case Scenario (BC), Company Owned Franchises Scenario (CS) and Satellite Store scenario (SS). 2) For each scenario we used three different DCF methodologies (terminal revenue, EBITDA and perpetual growth), and three different WACC based on the differing risks of each scenario. 3) We used projections provided by the Company to calculate the indicated market value per share of persuing each scenario combination. 4) Based on the projections, it makes sense to continue with the satellite store iniatives. Question of whether the ownership of company owned stores is required to complete the SS plan. 5) CS scenario in itself results in a lower valuation for the Company due to the high price paid for the stores (0.6x revenue), and the extra training costs of area managers, etc. If satellite stores are predominantly owned by existing franchisees, then company owned stores are less important to this strategy. 6) Based on analysis, value range of Company is between $2.01 and $2.44 under a base case and under all three cases scenario, respectively (assuming no share buyback transaction). Comparable Company Analysis 1) No real comparables to the Company, so little reliance will be placed on this analysis. 2) Included comparable companies that were involved in commercial printing/and or paper-related distribution/resellers. 3) Company is trading well below this group on an enterprise value basis and towards the low end of the group on a total invested capital basis. 4) EBITDA multiple more reliable than revenue multiples for Company due to revenue mix of pelican paper sales and royalty revenue. 10 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Key Discussion Points Share Repurchase Analysis 1) Key is to balance the following issues: - What percentage ownership do you want Wilkerson to have post share repurchase program? Company can potentially repurchase up to 1.4 million shares from Wilkerson at an average price of $1.36 for all three tranches of $0.90, $1.50 and $1.75 shares. This could be limited by the inclusion of shares purchased using the $2.0 milion loan guaranteed by the Company. Wilkerson's shareholding can potentially fall from 52.5% to 34.7%. - Will it be cheaper to buy on the open market or a combination of both? If Company can repurchase shares on the open market at average prices less than what they can buy from Wilkerson, then it would have a greater positive impact on the share price. However, if purchase shares on open market, then the percentage of Wilkerson and Hummingbird's holdings will increase. - What impact will the share buyback have on liquidity of the stock? If the Company buybacks Wilkerson's shares, then there will be little impact on liquidity as his shares are not traded on market. However, an open market repurchase will impact the number of shares circulating on the market which although will increase the theorectical market value per share, may be impacted by further illiquidity issues. - How much cash do we have to complete a buyback? The Company currently has approximately $4.8 million in cash, of which they require $2.0 million in cash for the next fiscal year and approximately $1.0 million in reserves. This leaves approximately $1.8 million to use in a share buyback or alternatively cash dividend, etc. However, this does not include expected cash received from the exercise of ITM options and the receipt of note payments (expected to be approximately $692,000 in fiscal 2004). 11 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Key Discussion Points - What Impact will the share buyback have on the Company's share price? The Company's share price is likely to increase relative to the number of shares repurchased and the amount of cash used to buy back the shares. The more shares purchased at a lower share price, the higher the underlying value of the stock. - Should a cash dividend be given instead? Announcement of cash dividend may immediately increase share price by amount of dividend as the market is not giving full value to the cash balances held by the Company. However, once the share price becomes ex, the share price will fall by the amount of the dividend (but perhaps no less than the original price before the dividend was announced). Potential new tax laws favor cash dividends as under a buyback the shareholder is taxed in relation to their cost basis. Wilkerson's shareholding will remain the same if cash dividend is chosen. Cash dividend will decrease the value of the Company placed by New Valley. 12 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Capitalization Table 13 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Capitalization Table (1) ($ in thousands, except per share amounts)
% of Total Outstanding ------------------------ ITM Price Common ITM ITM Fully Other Fully Fully Fully Purchased (2) Stock Basic (3) Options (4) Diluted Options Diluted Basic Diluted Diluted -------------- ------ --------- ----------- ---------- ------- ------- ----- ------- ------- William A. Wilkerson (5) Prior Purchases 38,600 Capital Contribution 955,382 Other Purchases $ 0.90 454,036 $ 1.50 618,482 $ 1.75 623,782 --------- Total 2,690,282 2,690,282 327,500 3,017,782 - 3,017,782 52.5% 53.1% 50.2% ========= Other Officers & Directors Total 109,548 109,548 200,460 310,008 215,000 525,008 2.1% 5.5% 8.7% ========= Hummingbird Management, LLC (6) Prior Purchases na 385,912 Recent Purchases $ 0.70 5,000 $ 0.98 22,500 $ 1.05 89,655 --------- 503,067 503,067 - 503,067 503,067 9.8% 8.8% 8.4% ========= Other Shareholders/ Option holders 1,818,561 36,625 1,855,186 105,000 1,960,186 35.5% 32.6% 32.6% ---------- ------- --------- ------- --------- ------ ------ ------ Total Shares Outstanding 5,121,458 564,585 5,686,043 320,000 6,006,043 100.0% 100.0% 100.0% ======= ======= ====== ====== ====== Plus Treasury Stock 707,000 707,000 707,000 ---------- --------- --------- Total Shares Issued 5,828,458 6,393,04 6,713,043 ========== ========= =========
-------------------------------------------------------------------------------- (1) As of February 14th, 2003. (2) Where known, the purchase price paid per share is presented. (3) Based on total common shares outstanding, excluding in-the-money ("ITM") options and warrants. (4) ITM options include all warrants and options with exercise price less than or equal to $2.00 (5) Includes shares and options held by Wilkerson and Phoenix Group. (6) Based on SEC 13D Filing by Hummingbird Management, LLC, dated January 17, 2003. Sources of information: Company Financials, Management and SEC filings. DRAFT ANALYSIS - 2/20/2003 14 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Market Performance DRAFT ANALYSIS - 2/20/2003 15 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- BCT International Closing Price & Trading Volume History September 29, 1997 - February 20, 2003 [GRAPH]
Start End High Average Median Low Avg. Volume Median Volume ------------------ ------------------ ------------------ --------- --------- ------------------ ------------- -------------- 29-Sep-97 $ 2.6250 17-Feb-03 $ 0.9100 06-Apr-98 $ 3.6250 $ 1.7253 $ 1.6094 26-Oct-98 $ 0.2813 59,740 38,650
-------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc. DRAFT ANALYSIS - 2/20/2003 16 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- BCT International Closing Price & Trading Volume History February 20, 2002 - February 20, 2003 [GRAPH]
Start End High Average Median Low Avg. Volume Median Volume ------------------- ------------------- ------------------- --------- -------- ------------------ ----------- ------------- 20-Feb-02 $ 1.1010 20-Feb-03 $ 0.9100 01-Apr-02 $ 1.1100 $ 0.8529 $ 0.8100 26-Apr-02 $ 0.5600 8,108 200
-------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc. DRAFT ANALYSIS - 2/20/2003 17 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- BCT International vs Comparable Company Index (1) and Russell 3000 Index February 20, 2002 - February 20, 2003 [CHART] ----- BCT International Comparables ----- Russell 3000 -------------------------------------------------------------------------------- % Change BCT Internation: Comparables Russell 3000 First Half of Period -22.8% -4.8% -14.9% Second Half of Period 7.4% 22.8% -10.7% Full Period -17.3% 16.1% -23.4% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- (1) Reflects the market cap weighted prices of the comparable companies utilized in the Comparable Company Analysis. Sources of information: Commodity Systems, Inc. DRAFT ANALYSIS - 2/20/2003 18 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- BCT International Closing Price Ranges as Percentage of Total Trading February 20, 2003 - February 20, 2003 [CHART]
Price Range $0.000 - $0.600 $0.601 - $0.675 $0.676 - $0.750 $0.751 - $0.825 $0.826 - $0.900 ---------------------------------------------------------------------------------------------------------------- Days in Range 1 2 51 93 35 Percentage 0.4% 0.8% 20.2% 36.8% 13.8% Price Range $0.901 - $0.975 $0.976 - $1.050 $1.051 - $1.125 $1.126 + ------------------------------------------------------------------------------------ Days in Range 15 26 30 0 Percentage 5.9% 10.3% 11.9% 0.0% ---------------------------------------------------------------------------------------------------------------- Sources of information: Commodity Systems, Inc.
DRAFT ANALYSIS - 2/20/2003 19 CAPITALINK, L.C.
BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------ BCT International Trading Volume per Price Range as Percentage of Total February 20, 2002 - February 20, 2003 [CHART] Price Range $0.000 - $0.600 $0.601 - $0.675 $0.676 - $0.750 $0.751 - $0.825 $0.826 - $0.900 --------------------------------------------------------------------------------------------------- Volume 386,700 16,700 499,300 588,100 133,200 Percentage 18.9% 0.8% 24.3% 28.7% 6.5% $0.901 - $0.975 $0.976 - $1.050 $1.051 - $1.125 $1.126 + ------------------------------------------------------------------ Volume 53,900 282,500 91,000 0 Percentage 2.6% 13.8% 4.4% 0.0% ------------------------------------------------------------------------------------------------------ Sources of information: Commodity Systems, Inc.
DRAFT ANALYSIS - 2/20/2003 20 CAPITALINK, L.C.
BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ BCT International Trading Volume Ranges as a Percentage of Total February 20, 2002 - February 20, 2003 [CHART] greater less greater less greater less greater less greater less greater less less No than than than than than than than than than than than than than volume 0 0,250 0,251 1,000 1,001 2,500 2,501 5,000 5,001 10,000 10,001 25,000 25,001 ------------------------------------------------------------------------------------------------------------------- Days in Range 109 19 21 23 21 26 19 15 Percentage 43.1% 7.5% 8.3% 9.1% 8.3% 10.3% 7.5% 5.9% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Commodity Systems, Inc.
DRAFT ANALYSIS - 2/20/2003 21 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Financial Performance DRAFT ANALYSIS - 2/20/2003 22 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Normalized Comparative Summary Income Statements ($ in thousands except per share)
for years ended February 28, -------------------------------------------------------------------------- 1998 1999 2000 2001 2002 -------------------------------------------------------------------------- Revenue Royalties and Franchise Fees $ 4,921 $ 5,356 $ 5,394 $ 5,267 $ 5,117 Paper an Printing Sales 11,734 12,817 13,881 13,424 12,068 Sales of Franchises 44 87 27 46 99 Company-Owned Franchise Sales - - - - - Other Fees - - - 262 315 -------------------------------------------------------------------------- Total Revenue $ 16,699 $ 18,260 $ 19,302 $ 18,999 $ 17,599 Cost of Revenue Cost of Paper and Printing Sales 9,857 10,939 11,574 11,605 10,592 Cost of Company-Owned Franchise Sales - - - - - -------------------------------------------------------------------------- Cost of Revenue 9,857 10,939 11,574 11,605 10,592 -------------------------------------------------------------------------- Gross Profit 6,842 7,321 7,728 7,394 7,007 Selling, General & Admin 4,171 4,290 6,619 6,455 6,226 Other 199 186 189 232 226 -------------------------------------------------------------------------- Total Operating Expenses 4,370 4,476 6,808 6,687 6,452 -------------------------------------------------------------------------- Operating Income (Loss) 2,472 2,845 920 707 555 Interest Income (Expense) 321 340 336 381 408 Other Income (Expense) 2 6 952 49 - -------------------------------------------------------------------------- Pre-tax Income (Loss) 2,795 3,191 2,208 1,137 963 Income Tax (Benefit) 986 690 837 442 380 -------------------------------------------------------------------------- Normalized Net Income $ 1,809 $ 2,501 $ 1,371 $ 695 $ 584 ========================================================================== Normalized EBIT $ 2,474 $ 2,851 $ 1,872 $ 756 $ 555 Total Depreciation & Amortization $ 199 $ 186 $ 189 $ 232 $ 226 Normalized EBITDA $ 2,673 $ 3,037 $ 2,061 $ 988 $ 781 Capital Expenditures, net of Disposals (CAPEX, net) $ 88 $ 82 $ 262 $ 150 $ 162 Normalized EBITDA - CAPEX $ 2,585 $ 2,955 $ 1,799 $ 838 $ 619 Earnings per Share Basic Normalized EPS $ 0.35 $ 0.47 $ 0.26 $ 0.13 $ 0.11 Basic Reported EPS $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.10 Weighted Average Shares Outstanding (thousands) 5,230 5,323 5,257 5,214 5,123 Diluted Normalized EPS $ 0.33 $ 0.45 $ 0.25 $ 0.13 $ 0.11 Diluted Reported EPS $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.10 Weighted Average Shares Outstanding (thousands) 5,540 5,596 5,388 5,235 5,123 Normalizing Reconciliation Unusual (Expense) Gain Items $ - $ - $ - $ - $ (150) Income Tax Shelter (Charge) from Unusual Items - - - - 59 -------------------------------------------------------------------------- Unusual (Expense) Gain Items, net of Taxes - - - - (92) Discontinued Operations, net of Taxes (244) (327) (357) (31) - -------------------------------------------------------------------------- Total Reconciling Items, net of Taxes $ (244) $ (327) $ (357) $ (31) $ (92) ========================================================================== Reported Income Tax (Benefit) $ 986 $ 690 $ 837 $ 442 $ 321 Reported Net Income (Loss) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 492 Reported Comprehensive Net Income (Loss) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 492 for the 9 months ended LTM November 30, November 30, ------------------------------ --------------- 2001 2002 2002 ------------------------------ --------------- Revenue Royalties and Franchise Fees $ 3,844 $ 3,894 $ 5,167 Paper an Printing Sales 9,297 9,080 11,851 Sales of Franchises 89 3 13 Company-Owned Franchise Sales - 528 528 Other Fees 190 338 463 ------------------------------ --------------- Total Revenue $ 13,420 $ 13,843 $ 18,022 Cost of Revenue Cost of Paper and Printing Sales 8,073 7,822 10,341 Cost of Company-Owned Franchise Sales - 119 119 ------------------------------ --------------- Cost of Revenue 8,073 7,941 10,460 ------------------------------ --------------- Gross Profit 5,347 5,902 7,562 Selling, General & Admin 4,395 5,102 6,933 Other 170 177 233 ------------------------------ --------------- Total Operating Expenses 4,565 5,279 7,166 ------------------------------ --------------- Operating Income (Loss) 782 623 396 Interest Income (Expense) 303 254 359 Other Income (Expense) - - - ------------------------------ --------------- Pre-tax Income (Loss) 1,085 877 755 Income Tax (Benefit) 427 342 295 ------------------------------ --------------- Normalized Net Income $ 659 $ 535 $ 460 ============================== =============== Normalized EBIT $ 782 $ 623 $ 396 Total Depreciation & Amortization $ 170 $ 177 $ 233 Normalized EBITDA $ 952 $ 800 $ 629 Capital Expenditures, net of Disposals (CAPEX, net) $ 144 $ 124 $ 142 Normalized EBITDA - CAPEX $ 808 $ 676 $ 487 Earnings per Share Basic Normalized EPS $ 0.13 $ 0.10 $ 0.08 Basic Reported EPS $ 0.11 $ 0.10 $ 0.09 Weighted Average Shares Outstanding (thousands) 5,123 5,121 Diluted Normalized EPS $ 0.13 $ 0.10 $ 0.08 Diluted Reported EPS $ 0.11 $ 0.10 $ 0.09 Weighted Average Shares Outstanding (thousands) 5,123 5,121 Normalizing Reconciliation Unusual (Expense) Gain Items $ (150) $ - $ - Income Tax Shelter (Charge) from Unusual Items 59 - - ------------------------------ --------------- Unusual (Expense) Gain Items, net of Taxes (92) - - Discontinued Operations, net of Taxes - - - ------------------------------ --------------- Total Reconciling Items, net of Taxes $ (92) $ - $ - ============================== =============== Reported Income Tax (Benefit) $ 368 $ 342 $ 295 Reported Net Income (Loss) $ 567 $ 535 $ 460 Reported Comprehensive Net Income (Loss) $ 567 $ 535 $ 460
-------------------------------------------------------------------------------- Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 23 CAPITALINK, L.C.
BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Normalized Common Sized Summary Income Statements for the 9 months ended LTM for years ended February 28, November 30, November 30, --------------------------------------------------------------------------------------- 1998 1999 2000 2001 2002 2001 2002 2002 --------------------------------------------------------------------------------------- Revenue Royalties and Franchise Fees 29.5% 29.3% 27.9% 27.7% 29.1% 28.6% 28.1% 28.7% Paper an Printing Sales 70.3% 70.2% 71.9% 70.7% 68.6% 69.3% 65.6% 65.8% Sales of Franchises 0.3% 0.5% 0.1% 0.2% 0.6% 0.7% 0.0% 0.1% Company-Owned Franchise Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.8% 2.9% Other Fees 0.0% 0.0% 0.0% 1.4% 1.8% 1.4% 2.4% 2.6% ------------------------------------------------- --------------------- ---------- Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of Revenue Cost of Paper and Printing Sales 59.0% 59.9% 60.0% 61.1% 60.2% 60.2% 56.5% 57.4% Cost of Company-Owned Franchise Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.9% 0.7% ------------------------------------------------- -------------------- ---------- Cost of Revenue 59.0% 59.9% 60.0% 61.1% 60.2% 60.2% 57.4% 58.0% ------------------------------------------------- -------------------- ---------- Gross Profit 41.0% 40.1% 40.0% 38.9% 39.8% 39.8% 42.6% 42.0% Selling, General & Admin 25.0% 23.5% 34.3% 34.0% 35.4% 32.7% 36.9% 38.5% Other 1.2% 1.0% 1.0% 1.2% 1.3% 1.3% 1.3% 1.3% ------------------------------------------------- -------------------- ---------- Total Operating Expenses 26.2% 24.5% 35.3% 35.2% 36.7% 34.0% 38.1% 39.8% ------------------------------------------------- -------------------- ---------- Operating Income (Loss) 14.8% 15.6% 4.8% 3.7% 3.2% 5.8% 4.5% 2.2% Interest Income (Expense) 1.9% 1.9% 1.7% 2.0% 2.3% 2.3% 1.8% 2.0% Other Income (Expense) 0.0% 0.0% 4.9% 0.3% 0.0% 0.0% 0.0% 0.0% ------------------------------------------------- -------------------- ---------- Pre-tax Income (Loss) 16.7% 17.5% 11.4% 6.0% 5.5% 8.1% 6.3% 4.2% Income Tax (Benefit) 5.9% 3.8% 4.3% 2.3% 2.2% 3.2% 2.5% 1.6% ------------------------------------------------- -------------------- ---------- Normalized Net Income 10.8% 13.7% 7.1% 3.7% 3.3% 4.9% 3.9% 2.6% ================================================= ==================== ========== Normalized EBIT 14.8% 15.6% 9.7% 4.0% 3.2% 5.8% 4.5% 2.2% Total Depreciation & Amortization 1.2% 1.0% 1.0% 1.2% 1.3% 1.3% 1.3% 1.3% Normalized EBITDA 16.0% 16.6% 10.7% 5.2% 4.4% 7.1% 5.8% 3.5% Capital Expenditures, net of Disposals (CAPEX, net) 0.5% 0.4% 1.4% 0.8% 0.9% 1.1% 0.9% 0.8% Normalized EBITDA - CAPEX 15.5% 16.2% 9.3% 4.4% 3.5% 6.0% 4.9% 2.7% Normalizing Reconciliation Unusual (Expense) Gain Items 0.0% 0.0% 0.0% 0.0% -0.9% -1.1% 0.0% 0.0% Income Tax Shelter (Charge) from Unusual Items 0.0% 0.0% 0.0% 0.0% 0.3% 0.4% 0.0% 0.0% ------------------------------------------------- -------------------- ---------- Unusual (Expense) Gain Item 0.0% 0.0% 0.0% 0.0% -0.5% -0.7% 0.0% 0.0% Discontinued Operations, net of Taxes -1.5% -1.8% -1.8% -0.2% 0.0% 0.0% 0.0% 0.0% ------------------------------------------------- -------------------- ---------- Total Reconciling Items, net of -1.5% -1.8% -1.8% -0.2% -0.5% -0.7% 0.0% 0.0% Taxes ================================================= ==================== ========== Reported Income Tax (Benefit) 5.9% 3.8% 4.3% 2.3% 1.8% 2.7% 2.5% 1.6% Reported Net Income (Loss) 9.4% 11.9% 5.3% 3.5% 2.8% 4.2% 3.9% 2.6% Reported Comprehensive Net Income(Loss) 9.4% 11.9% 5.3% 3.5% 2.8% 4.2% 3.9% 2.6% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/2/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ----------------------------------------------------------------------------------------------------------------------------------- Comparative Summary Balance Sheets ($ in thousands, except per share) as of February 28, as of November 30, ------------------------------------------------------ --------------------- Assets 1998 1999 2000 2001 2002 2001 2002 ------------------------------------------------------ --------------------- Current Assets Cash & Equivalents $ 989 $ 1,143 $ 1,906 $ 1,799 $ 4,819 $ 4,328 $ 4,805 Accounts Receivable 2,418 3,252 3,293 3,568 2,889 1,800 2,386 Inventory 2,354 2,122 2,359 2,352 1,887 2,415 2,697 Deferred Income Taxes 919 476 482 321 419 321 419 Prepaid & Other 950 1,281 408 134 259 280 499 ------------------------------------------------------ --------------------- Total Current Assets 7,630 8,274 8,448 8,174 10,273 9,144 10,806 Property & Equipment 1,331 1,442 1,633 1,707 1,869 1,851 2,551 Less Accumulated Depreciation (794) (982) (1,104) (1,234) (1,434) (1,384) (1,588 ------------------------------------------------------ --------------------- Property & Equipment, net 537 460 529 473 435 467 963 Accounts and Notes Receivable, net 5,376 6,052 7,275 6,362 5,170 6,143 5,186 Deferred Income Taxes 214 246 722 925 970 809 1,001 Intangible Assets, net 311 284 258 232 206 212 186 Other Assets 89 90 89 24 24 24 43 ------------------------------------------------------ --------------------- $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,078 $ 16,799 $ 18,185 ====================================================== ===================== Liabilities & Stockholders' Equity Current Liabilities Accounts Payable $ 1,264 $ 844 $ 1,111 $ 597 $ 432 $ 658 $ 789 Accrued Expenses 777 753 1,349 403 871 699 938 Interest Bearing Debt 105 113 104 86 560 86 294 Interest Bearing Debt, Affiliates - - - - - - - Other 339 311 218 167 125 - 125 ------------------------------------------------------ --------------------- Total Current Liabilities 2,485 2,021 2,782 1,253 1,988 1,443 2,146 Long Term Interest Bearing Debt 539 433 330 236 - 172 534 Other Long Term - - 453 417 334 353 214 ------------------------------------------------------ --------------------- Total Liabilities 3,024 2,454 3,565 1,906 2,322 1,968 2,894 Stockholders' Equity Preferred Stock 60 60 - - - - - Common Stock 223 230 233 233 233 233 233 Paid in Capital 12,254 12,506 12,597 12,597 12,605 12,605 12,605 Accumulated Earnings (Deficit) (845) 1,322 2,334 2,998 3,490 3,565 4,025 Treasury Stock & Stock Receivable (559) (1,166) (1,408) (1,544) (1,572) (1,572) (1,572 ------------------------------------------------------ --------------------- Total Stockholders' Equity 11,133 12,952 13,756 14,284 14,756 14,831 15,291 ------------------------------------------------------ --------------------- $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,078 $ 16,799 $ 18,185 ====================================================== ===================== Net Working Capital $ 5,145 $ 6,253 $ 5,666 $ 6,921 $ 8,285 $ 7,701 $ 8,660 Common Shares Outstanding (thousands) 5,322 5,257 5,231 5,136 5,121 5,115 5,121 Book Value per Share $ 2.09 $ 2.46 $ 2.63 $ 2.78 $ 2.88 $ 2.90 $ 2.99 Tangible Book Value Per Share $ 2.03 $ 2.41 $ 2.58 $ 2.74 $ 2.84 $ 2.86 $ 2.95 ----------------------------------------------------------------------------------------------------------------------------------- Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ----------------------------------------------------------------------------------------------------------------------------------- Common Sized Summary Balance Sheet as of February 28, as of November 30, ---------------------------------------------------- ---------------------------- Assets 1998 1999 2000 2001 2002 2001 2002 ---------------------------------------------------- ---------------------------- Current Assets Cash & Equivalents 7.0% 7.4% 11.0% 11.1% 28.2% 25.8% 26.4% Accounts Receivable 17.1% 21.1% 19.0% 22.0% 16.9% 10.7% 13.1% Inventory 16.6% 13.8% 13.6% 14.5% 11.0% 14.4% 14.8% Deferred Income Taxes 6.5% 3.1% 2.8% 2.0% 2.5% 1.9% 2.3% Prepaid & Other 6.7% 8.3% 2.4% 0.8% 1.5% 1.7% 2.7% ---------------------------------------------------- ---------------------------- Total Current Assets 53.9% 53.7% 48.8% 50.5% 60.2% 54.4% 59.4% Property & Equipment 9.4% 9.4% 9.4% 10.5% 10.9% 11.0% 14.0% Less Accumulated Depreciation -5.6% -6.4% -6.4% -7.6% -8.4% -8.2% -8.7% ---------------------------------------------------- ---------------------------- Property & Equipment, net 3.8% 3.0% 3.1% 2.9% 2.5% 2.8% 5.3% Accounts and Notes Receivable, net 38.0% 39.3% 42.0% 39.3% 30.3% 36.6 28.5% Deferred Income Taxes 1.5% 1.6% 4.2% 5.7% 5.7% 4.8% 5.5% Intangible Assets, net 2.2% 1.8% 1.5% 1.4% 1.2% 1.3% 1.0% Other Assets 0.6% 0.6% 0.5% 0.1% 0.1% 0.1% 0.2% ---------------------------------------------------- ---------------------------- 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ==================================================== ============================ Liabilities & Stockholders' Equity Current Liabilities Accounts Payable 8.9% 5.5% 6.4% 3.7% 2.5% 3.9% 4.3% Accrued Expenses 5.5% 4.9% 7.8% 2.5% 5.1% 4.2% 5.2% Interest Bearing Debt 0.7% 0.7% 0.6% 0.5% 3.3% 0.5% 1.6% Interest Bearing Debt, Affiliates 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other 2.4% 2.0% 1.3% 1.0% 0.7% 0.0% 0.7% -------------------------------------------------- ---------------------------- Total Current Liabilities 17.6% 13.1% 16.1% 7.7% 11.6% 8.6% 11.8% Long Term Interest Bearing Debt 3.8% 2.8% 1.9% 1.5% 0.0% 1.0% 2.9% 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% 2.6% 2.6% 2.0% 2.1% 1.2% -------------------------------------------------- ---------------------------- Total Liabilities 21.4% 15.9% 20.6% 11.8% 13.6% 11.7% 15.9% Stockholders' Equity Preferred Stock 0.4% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% Common Stock 1.6% 1.5% 1.3% 1.4% 1.4% 1.4 1.3% Paid in Capital 86.6% 81.2% 72.7% 77.8% 73.8% 75.0% 69.3% Accumulated Earnings (Deficit) -6.0% 8.6% 13.5% 18.5% 20.4% 21.2% 22.1% Treasury Stock & Stock Receivable -3.9% -7.6% -8.1% -9.5% -9.2% -9.4% -8.6% -------------------------------------------------- ---------------------------- Total Stockholders' Equity 78.6% 84.1% 79.4% 88.2% 86.4% 88.3% 84.1% -------------------------------------------------- ---------------------------- 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ================================================== ============================ Net Working Capital 36.3% 40.6% 32.7% 42.7% 48.5% 45.8% 47.6% ----------------------------------------------------------------------------------------------------------------------------------- Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ---------------------------------------------------------------------------------------------------------------------------------- Comparative Financial Analysis ($ in thousands, except per share) as of & for years ended February 28, ------------------------------------------------------------------- 1998 1999 2000 2001 2002 ------------------------------------------------------------------- Financial Review Revenue $ 16,699 $ 18,260 $ 19,302 $ 18,999 $ 17,599 Gross Profit $ 6,842 $ 7,321 $ 7,728 $ 7,394 $ 7,007 Total Operating Expenses $ 4,370 $ 4,476 $ 6,808 $ 6,687 $ 6,452 Operating Income $ 2,472 $ 2,845 $ 920 $ 707 $ 555 Pre-tax Income (Loss) $ 2,795 $ 3,191 $ 2,208 $ 1,137 $ 963 Normalized Net Income (Loss) $ 1,809 $ 2,501 $ 1,371 $ 695 $ 584 Normalized EBIT $ 2,474 $ 2,851 $ 1,872 $ 756 $ 555 Normalized EBITDA $ 2,673 $ 3,037 $ 2,061 $ 988 $ 781 Normalized Basic EPS $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.10 Normalized Diluted EPS $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.10 Total Assets FALSE $ 15,406 $ 17,321 $ 16,190 $ 17,078 Net Worth $ 11,133 $ 12,952 $ 13,756 $ 14,284 $ 14,756 Tangible Net Worth $ 10,822 $ 12,668 $ 13,498 $ 14,052 $ 14,550 Total Interest Bearing Debt $ 644 $ 546 $ 434 $ 322 $ 560 Net Interest Bearing Debt $ (345) $ (597) $ (1,472) $ (1,477) $ (4,259) Total Capitalization $ 11,777 $ 13,498 $ 14,190 $ 14,606 $ 15,316 Financial Strength Quick Ratio 2.1 3.0 2.2 4.6 4.2 Current Ratio 3.1 4.1 3.0 6.5 5.2 Total Liabilities to Net Worth 27.2% 18.9% 25.9% 13.3% 15.7% Total Interest Bearing Debt to Net Worth 5.8% 4.2% 3.2% 2.3% 3.8% Total Interest Bearing Debt to Total Capitalization 5.5% 4.0% 3.1% 2.2% 3.7% Net Interest Bearing Debt to Total Capitalization -2.9% -4.4% -10.4% -10.1% -27.8% Interest Expense to Interest Bearing Debt na na na na na Total Interest Bearing Debt to Normalized EBITDA 0.2 0.2 0.2 0.3 0.7 Normalized EBITDA to Interest Expense na na na na na Normalized EBITDA-CAPEX, net to Interest Exp. na na na na na Effectiveness and Efficiency Accounts Receivable Turnover na 5.6 5.9 5.3 6.1 Inventory Turnover na 5.2 4.9 4.9 5.6 Asset Turnover na 1.2 1.1 1.2 1.0 Days Sales Outstanding na 65.0 62.3 68.5 59.9 Days Inventory Outstanding na 70.8 74.4 74.0 65.0 Days Payable Outstanding na 20.1 14.2 10.3 11.7 Normalized EBIT to Average Assets na 18.5% 10.8% 4.7% 3.2% Normalized EBIT to Net Worth na 22.0% 13.6% 5.3% 3.8% Normalized EBITDA to Average Assets na 19.7% 11.9% 6.1% 4.6% Normalized EBITDA to Net Worth na 23.4% 15.0% 6.9% 5.3% Normalized Net Income to Average Assets na 16.2% 7.9% 4.3% 3.4% Normalized Net Income to Net Worth na 19.3% 10.0% 4.9% 4.0% as of & for the 9 months ended as of & for LTM November 30, November 30, ---------------------------- -------------- 2001 2002 2002 ---------------------------- -------------- Financial Review Revenue $ 13,420 $ 13,843 $ 18,022 Gross Profit $ 5,347 $ 5,902 $ 7,562 Total Operating Expenses $ 4,565 $ 5,279 $ 7,166 Operating Income $ 782 $ 623 $ 396 Pre-tax Income (Loss) $ 1,085 $ 877 $ 755 Normalized Net Income (Loss) $ 659 $ 535 $ 460 Normalized EBIT $ 782 $ 623 $ 396 Normalized EBITDA $ 952 $ 800 $ 629 Normalized Basic EPS $ 0.11 $ 0.10 $ 0.09 Normalized Diluted EPS $ 0.11 $ 0.10 $ 0.09 Total Assets $ 16,799 $ 18,185 $ 18,185 Net Worth $ 14,831 $ 15,291 $ 15,291 Tangible Net Worth $ 14,619 $ 15,105 $ 15,105 Total Interest Bearing Debt $ 258 $ 828 $ 828 Net Interest Bearing Debt $ (4,070) $ (3,977) $ (3,977) Total Capitalization $ 15,089 $ 16,119 $ 16,119 Financial Strength Quick Ratio 4.7 3.8 3.8 Current Ratio 6.3 5.0 5.0 Total Liabilities to Net Worth 13.3% 18.9% 18.9% Total Interest Bearing Debt to Net Worth 1.7% 5.4% 5.4% Total Interest Bearing Debt to Total Capitalization 1.7% 5.1% 5.1% Net Interest Bearing Debt to Total Capitalization -27.0% -24.7% -24.7% Interest Expense to Interest Bearing Debt na na na Total Interest Bearing Debt to Normalized EBITDA 0.3 1.0 1.3 Normalized EBITDA to Interest Expense na na na Normalized EBITDA-CAPEX, net to Interest Exp. na na na Effectiveness and Efficiency Accounts Receivable Turnover 3.0 3.0 8.6 Inventory Turnover 3.4 3.5 4.1 Asset Turnover 0.9 0.8 1.0 Days Sales Outstanding 91.4 91.3 42.4 Days Inventory Outstanding 81.2 79.4 89.2 Days Payable Outstanding 13.7 12.7 15.0 Normalized EBIT to Average Assets na na 2.3% Normalized EBIT to Net Worth na na 2.6% Normalized EBITDA to Average Assets na na 3.6% Normalized EBITDA to Net Worth na na 4.2% Normalized Net Income to Average Assets na na 2.5% Normalized Net Income to Net Worth na na 3.0% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Comparative Financial Analysis Continued ($ in thousands, except per share) as of & for the 9 months ended as of & for LTM as of & for years ended February 28, November 30, November 30, --------------------------------------------- ------------------ --------------- 1998 1999 2000 2001 2002 2001 2002 2002 --------------------------------------------- ------------------ --------------- Profitability Ratios (as % of Revenue) Gross Profit Margin 41.0% 40.1% 40.0% 38.9% 39.8% 39.8% 42.6% 42.0% SG&A 25.0% 23.5% 34.3% 34.0% 35.4% 32.7% 36.9% 38.5% Total Operating Expenses 26.2% 24.5% 35.3% 35.2% 36.7% 34.0% 38.1% 39.8% Operating Income 14.8% 15.6% 4.8% 3.7% 3.2% 5.8% 4.5% 2.2% Pre-tax Income (Loss) 16.7% 17.5% 11.4% 6.0% 5.5% 8.1% 6.3% 4.2% Normalized Net Income (Loss) 10.8% 13.7% 7.1% 3.7% 3.3% 4.9% 3.9% 2.6% Normalized EBIT 14.8% 15.6% 9.7% 4.0% 3.2% 5.8% 4.5% 2.2% Normalized EBITDA 16.0% 16.6% 10.7% 5.2% 4.4% 7.1% 5.8% 3.5% Growth Rates Revenue na na 15.6% -1.6% -7.4% na 3.2% 2.4% Gross Profit na na 12.9% -4.3% -5.2% na 10.4% 7.9% Operating Income na na -62.8% -23.2% -21.5% na -20.3% -28.6% Pre-tax Income (Loss) na na -21.0% -48.5% -15.3% na -19.2% -21.6% Normalized Net Income (Loss) na na -24.2% -49.3% -16.0% na -18.8% -21.2% Normalized EBIT na na -24.3% -59.6% -26.6% na -20.3% -28.6% Normalized EBITDA na na -22.9% -52.1% -21.0% na -16.0% -19.5% Normalized Basic EPS na na -36.7% -31.6% -23.1% na -9.1% -10.0% Normalized Diluted EPS na na -32.1% -31.6% -23.1% na -9.1% -10.0% Total Assets na na na -6.5% 5.5% na 8.3% 6.5% Net Worth na na 23.6% 3.8% 3.3% na 3.1% 3.6% Tangible Net Worth na na 24.7% 4.1% 3.5% na 3.3% 3.8% CAPEX, net na na 197.7% -42.7% 8.0% na -13.9% -12.3% Cumulative Average Growth Rate (CAGR) Statistics Revenue na 9.3% 7.5% 4.4% 1.3% na na na Gross Profit na 7.0% 6.3% 2.6% 0.6% na na na Operating Income na 15.1% -39.0% -34.1% -31.2% na na na Pre-tax Income (Loss) na 14.2% -11.1% -25.9% -23.4% na na na Normalized Net Income (Loss) na 38.3% -12.9% -27.3% -24.6% na na na Normalized EBIT na 15.2% -13.0% -32.6% -31.2% na na na Normalized EBITDA na 13.6% -12.2% -28.2% -26.5% na na na Normalized Basic EPS na 36.7% -20.4% -24.3% -24.0% na na na Normalized Diluted EPS na 39.3% -17.6% -22.6% -22.7% na na na Total Assets na na na na na na na na Net Worth na 16.3% 11.2% 8.7% 7.3% na na na Tangible Net Worth na 17.1% 11.7% 9.1% 7.7% na na na CAPEX, net na -6.8% 72.5% 19.5% 16.5% na na na Depreciation & Capital Spending Depreciation to CAPEX, net 226.1% 226.8% 72.1% 154.7% 139.5% 118.1% 142.7% 164.1% CAPEX, net to Revenue 0.5% 0.4% 1.4% 0.8% 0.9% 1.1% 0.9% 0.8% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
28 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Selected Normalized Income Statement Graphs ($ in thousands, except per share) [BAR CHARTS APPEAR HERE WITH THE FOLLOWING INFORMATION:]
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 LTM 2002 ------- ------- ------- ------- ------- -------- Revenue $16,699 $18,260 $19,302 $18,999 $17,599 $18,022 Gross Profit $ 6,842 $ 7,321 $ 7,728 $ 7,394 $ 7,007 $ 7,562 Total Operating Expenses $ 4,370 $ 4,476 $ 6,808 $ 6,687 $ 6,452 $ 7,166 Operating Income $ 2,472 $ 2,845 $ 920 $ 707 $ 555 $ 396 Interest Income (Expense) $ 321 $ 340 $ 336 $ 381 $ 408 $ 359 Normalized EBIT $ 2,474 $ 2,851 $ 1,872 $ 756 $ 555 $ 396 Normalized EBITDA $ 2,673 $ 3,037 $ 2,061 $ 988 $ 781 $ 629 Normalized Net Income (Loss) $ 1,809 $ 2,501 $ 1,371 $ 695 $ 584 $ 460 Normalized Basic EPS $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.10 $ 0.09
-------------------------------------------------------------------------------- Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 29
BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Selected Normalized Profitability and Cost Ratio (as % of Revenue) Graphs RGraph Data Gross Profit Margin 41.0% 40.1% 40.0% 38.9% 39.8% 42.0% SG&A 25.0% 23.5% 34.3% 34.0% 35.4% 38.5% Operating Income 14.8% 15.6% 4.8% 3.7% 3.2% 2.2% Interest Income (Expense) 1.9% 1.9% 1.7% 2.0% 2.3% 2.0% Pre-tax Income (Loss) 16.7% 17.5% 11.4% 6.0% 5.5% 4.2% Normalized Net Income (Loss) 10.8% 13.7% 7.1% 3.7% 3.3% 2.6% Normalized EBIT 14.8% 15.6% 9.7% 4.0% 3.2% 2.2% Normalized EBITDA 16.0% 16.6% 10.7% 5.2% 4.4% 3.5% CAPEX, net to Revenue 0.5% 0.4% 1.4% 0.8% 0.9% 0.8% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Selected Normalized Financial Strength Graphs ($ in thousands) FGraph Data Net Working Capital $ 5,145 $ 6,253 $ 5,666 $ 6,921 $ 8,285 $ 8,660 Current Ratio 3.1 4.1 3.0 6.5 5.2 5.0 Quick Ratio 2.1 3.0 2.2 4.6 4.2 3.8 Total Liabilities to Net Worth 27.2% 18.9% 25.9% 13.3% 15.7% 18.9% Total Interest Bearing Debt to Net Worth 5.8% 4.2% 3.2% 2.3% 3.8% 5.4% Total Interest Bearing Debt to Total Capitalization 5.5% 4.0% 3.1% 2.2% 3.7% 5.1% Interest Expense to Interest Bearing Debt na na na na na na Total Interest Bearing Debt to EBITDA 0.2 0.2 0.2 0.3 0.7 1.3 EBITDA to Interest Expense na na na na na na ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
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BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Selected Normalized Efficiency Graphs EGraph Data Days Sales Outstanding na 65.0 62.3 68.5 59.9 42.4 Days Inventory Outstanding na 70.8 74.4 74.0 65.0 89.2 Days Payable Outstanding na 20.1 14.2 10.3 11.7 15.0 Normalized EBIT to Average Assets na 18.5% 10.8% 4.7% 3.2% 2.3% Normalized EBIT to Average Net Worth na 22.0% 13.6% 5.3% 3.8% 2.6% Normalized EBITDA to Average Assets na 19.7% 11.9% 6.1% 4.6% 3.6% Normalized EBITDA to Average Net Worth na 23.4% 15.0% 6.9% 5.3% 4.2% Net Income to Average Assets na 16.2% 7.9% 4.3% 3.4% 2.5% Net Income to Average Net Worth na 19.3% 10.0% 4.9% 4.0% 3.0% ------------------------------------------------------------------------------------------------------------------------------------ Sources of information: Company financial statements and management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
32 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Notes Receivable Analysis DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 33
BCT International, Inc. Confidential ---------------------------------------------------------------------------------------------------------------------------------- Notes Receivable Analysis - Indicated Present Value as of December 31, 2002 ($ in thousands) Payment Adjusted Value Interest Note Plant Location Name Notes Probability of Notes (1) Rate Expiry Date ----------------------------------- -------------------- -------- ------------- --------------- ------------ --------------- 1 Fort Lauderdale Roberts $ 160 100% $ 160 4.25% 02/15/2006 2 Port St. Lucie Schweisthai 333 50% 167 8.00% 03/01/2018 9 Tampa Barnes 544 0% - 10.00% 03/01/2012 10 Jacksonville Kish 17 75% 13 9.00% 05/01/2003 10 Jacksonville Kish 33 80% 26 10.00% 05/01/2006 12 Mobile Scott (3) 56 100% 56 na na 13 Jackson McCoy 325 100% 325 8.50% 01/15/2013 14 Metairie Harvey (4) 8 100% 8 na na 2033 Greensboro Howerton 295 0% - 9.00% 03/01/2012 2037 Richmond Seaton (4) 8 100% 8 na na 2038 Pittsburgh Smyrl 194 60% 116 9.75% 06/01/2006 2042 Columbia Schneider (4) 8 100% 8 na na 2043 Waterbury Redwanz 52 75% 39 8.00% 10/01/2004 2044 Philadelphia Rafat 77 75% 58 9.75% 08/01/2005 2046 Upper Saddle River Credendino 199 75% 149 9.50% 06/01/2007 2049 Louisville Petree 417 80% 334 5.00% 03/01/2012 2052 Norcross Judge (4) 8 100% 8 na na 2053 Marietta Fryman 573 75% 430 9.00% 08/01/2011 2054 New York Alpert 94 100% 94 9.00% 04/01/2005 3013 Costa Mesa Hopkins 167 50% 84 9.75% 07/01/2010 3028 Anaheim Shehab 85 75% 64 9.50% 06/01/2005 3040 San Marcos Cain 125 100% 125 0.00% 03/01/2011 3045 Hawaii Wilkerson/BCT 566 0% - 8.00% 03/01/2012 3048 Spokane Cleland 17 100% 17 0.00% 01/01/2005 3051 Gardena Damitz 222 50% 111 5.75% 07/01/2011 4001 Columbus Apple 23 100% 23 9.00% 01/01/2004 4001 Columbus Apple 100 80% 80 5.00% 01/01/2009 4022 Toledo Winzer 98 50% 49 9.75% 08/01/2010 4024 St. Louis Zimmerman 15 100% 15 8.00% 12/31/2005 4027 Waukegan Johnson 131 80% 105 9.75% 06/01/2010 4028 Detroit Tudek 80 50% 40 8.00% 06/01/2005 4033 Brookfield Franck 704 50% 352 10.25% 03/01/2012 4034 Kansas City Rhomberg 369 60% 221 9.75% 02/01/2011 4035 Akron Teague 22 100% 22 9.75% 07/01/2003 4036 Cleveland Begalke 177 90% 159 9.65% 07/01/2010 6012 Dallas Purtell 377 80% 302 9.50% 01/01/2008 7001 Mississauga Allison (4) 8 100% 8 na na 7008 Calgary Beaton/Allison (4) 8 100% 8 na na 7010 Vancouver Wilson 5 100% 5 na na -------- --------------- Totals $ 6,700 $ 3,788 ======== =============== Term Of Monthly Present Plant Location Note (Mths) Payment Value (2) ----------------------------------- ----------------- ------------- ------------ 1 Fort Lauderdale 38 $ 5 $ 135 2 Port St. Lucie 182 2 90 9 Tampa 110 - - 10 Jacksonville 4 3 16 10 Jacksonville 40 1 23 12 Mobile na na 56 13 Jackson 121 4 212 14 Metairie na na 8 2033 Greensboro 110 - - 2037 Richmond na na 8 2038 Pittsburgh 41 3 100 2042 Columbia na na 8 2043 Waterbury 21 2 36 2044 Philadelphia 31 2 51 2046 Upper Saddle River 53 3 123 2049 Louisville 110 4 206 2052 Norcross na na 8 2053 Marietta 103 6 300 2054 New York 27 4 87 3013 Costa Mesa 90 1 61 3028 Anaheim 29 2 57 3040 San Marcos 98 1 72 3045 Hawaii 110 - - 3048 Spokane 24 1 15 3051 Gardena 102 1 72 4001 Columbus 12 2 24 4001 Columbus 72 1 58 4022 Toledo 91 1 36 4024 St. Louis 36 0 13 4027 Waukegan 89 2 77 4028 Detroit 29 2 35 4033 Brookfield 110 5 248 4034 Kansas City 97 3 159 4035 Akron 6 4 21 4036 Cleveland 90 2 117 6012 Dallas 60 6 242 7001 Mississauga na na 8 7008 Calgary na na 8 7010 Vancouver na na 5 ------------ Totals $ 2,794 ============ ---------------------------------------------------------------------------------------------------------------------------------- (1) Adjustments determined in discussions with Company Management. (2) Note Payments are discounted using the Company's estimated Cost of Capital of 15.0% under the base case scenario. (3) Note paid in January 2003. (4) Represents equipment financing which is to be returned to manufacturer. Rebate to be given back to purchaser. Sources of Information: Company Financials and Management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
34 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Notes Receivable Analysis - Explanation of Discounts as of December 31, 2002 ($ in thousands)
Debt to 2001 2002 Sales Accounts Total Sales Payment Plant Location Name Sales Sales Growth Note Receivable Receivable Ratio Probability (1) ------------------------- ---- ------ ----- ------ ------ ---------- ---------- ------- --------------- 1 Fort Lauderdale Roberts $2,999 $3,249 8% $160 $16 $176 5% 100% -------------------------------------------------------------------------------------------------------------------------- 2 Port St. Lucie Schweisthai 307.9 398 29% 333 56 389 98% 50% -------------------------------------------------------------------------------------------------------------------------- 9 Tampa Barnes 1772.19 1,544 -13% 544 234 778 50% 0% -------------------------------------------------------------------------------------------------------------------------- 10 Jacksonville Kish 1440.7 1,486 3% 17 55 72 na 75% -------------------------------------------------------------------------------------------------------------------------- 10 Jacksonville Kish 33 33 7% 80% -------------------------------------------------------------------------------------------------------------------------- 12 Mobile Scott(3) 1993.1 2,002 0% 56 12 68 3% 100% -------------------------------------------------------------------------------------------------------------------------- 13 Jackson McCoy 616.5 654 6% 325 3 328 50% 100% -------------------------------------------------------------------------------------------------------------------------- 14 Metairie Harvey (4) 1126.6 1,150 2% 8 46 54 5% 100% ---------------------------------------------------------------------------------------------------------------------- 2033 Greensboro Howerton 81.4 - -100% 295 183 478 na 0% ---------------------------------------------------------------------------------------------------------------------- 2037 Richmond Seaton (4) 794.8 822 3% 8 48 56 7% 100% ---------------------------------------------------------------------------------------------------------------------- 2038 Pittsburgh Smyrl 914.5 869 -5% 194 181 375 43% 60% ---------------------------------------------------------------------------------------------------------------------- 2042 Columbia Schneider (4) 1290.7 1,262 -2% 8 10 18 1% 100% ---------------------------------------------------------------------------------------------------------------------- 2043 Waterbury Redwanz 825 864 5% 52 194 246 28% 75% ---------------------------------------------------------------------------------------------------------------------- 2044 Philadelphia Rafat 918.5 942 3% 77 83 160 17% 75% ---------------------------------------------------------------------------------------------------------------------- 2046 Upper Saddle River Credendino 1260.8 1,276 1% 199 12 211 17% 75% ---------------------------------------------------------------------------------------------------------------------- 2049 Louisville Petree 1121.9 1,137 1% 417 14 431 38% 80% ---------------------------------------------------------------------------------------------------------------------- 2052 Norcross Judge (4) 1978.3 1,936 -2% 8 18 26 1% 100% ---------------------------------------------------------------------------------------------------------------------- 2053 Marietta Fryman 1044.8 1,088 4% 573 30 603 55% 75% ---------------------------------------------------------------------------------------------------------------------- 2054 New York Alpert 1319.7 1,449 10% 94 21 115 8% 100% ---------------------------------------------------------------------------------------------------------------------- 3013 Costa Mesa Hopkins 688.4 669 -3% 167 67 234 35% 50% ---------------------------------------------------------------------------------------------------------------------- 3028 Anaheim Shehab 764.5 720 -6% 85 24 109 15% 75% ---------------------------------------------------------------------------------------------------------------------- 3040 San Marcos Cain 1060.9 1,028 -3% 125 58 183 18% 100% ---------------------------------------------------------------------------------------------------------------------- 3045 Hawaii Wilkerson/BCT 726.9 741 2% 566 45 611 82% 0% ----------------------------------------------------------------------------------------------------------------------
Plant Location Reasoning (1) ------------------------ --------------------- 1 Fort Lauderdale ------------------------------------------------------------------------------ 2 Port St. Lucie High debt balances, falling sales, small territory. ------------------------------------------------------------------------------ 9 Tampa Taken over plant Sept. 18th. ------------------------------------------------------------------------------ 10 Jacksonville High Debt Balances, Poor Track Record ------------------------------------------------------------------------------ 10 Jacksonville ------------------------------------------------------------------------------ 12 Mobile ------------------------------------------------------------------------------ 13 Jackson ------------------------------------------------------------------------------ 14 Metairie ------------------------------------------------------------------------------ 2033 Greensboro Operations closed by IRS and assets liquidated in February 2002. ------------------------------------------------------------------------------ 2037 Richmond ------------------------------------------------------------------------------ 2038 Pittsburgh High Debt Balances, Poor Cash Flow, Poor Track Record. ------------------------------------------------------------------------------ 2042 Columbia ------------------------------------------------------------------------------ 2043 Waterbury Underperformer, Poor Management, Cash flow at risk in supporting debt. ------------------------------------------------------------------------------ 2044 Philadelphia Poor performance record, cash flow can no longer support debt levels. ------------------------------------------------------------------------------ 2046 Upper Saddle River Currently paying no royalties, Poor Track record with AR building up. ------------------------------------------------------------------------------ 2049 Louisville High Debt Balances, 2 brothers bought from previous owner with BCT financing. ------------------------------------------------------------------------------ 2052 Norcross ------------------------------------------------------------------------------ 2053 Marietta High Debt Balances. Acquired via purchase of BCT Plant. ------------------------------------------------------------------------------ 2054 New York ------------------------------------------------------------------------------ 3013 Costa Mesa Small market, no growth, rising competition and high debt. ------------------------------------------------------------------------------ 3028 Anaheim Poor Management in a tough local market. ------------------------------------------------------------------------------ 3040 San Marcos ------------------------------------------------------------------------------ 3045 Hawaii Poor Performance in deteriorating market. Cannot support debt payments. ------------------------------------------------------------------------------
DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 35
BCT International, Inc. Confidential ---------------------------------------------------------------------------------------------------------------------------------- Notes Receivable Analysis - Explanation of Discounts as of December 31, 2002 ($ in thousands) Accounts Total Debt to 2001 2002 Sales Receiv- Receiv- Sales Payment Plant Location Name Sales Sales Growth Note able able Ratio Probability(1) Reasoning (1) ----- -------- ---- ----- ----- ------ ---- ---- ---- ----- -------------- ------------- 3048 Spokane Cleland 829.3 894 8% 17 3 20 2% 100% ---------------------------------------------------------------------------------------------------------------------------------- 3051 Gardena Damitz 1287.3 1,324 3% 222 205 427 32% 50% Sales falling and low profitability. Poor track record - Company has had to write-off previous debts in another transaction. ---------------------------------------------------------------------------------------------------------------------------------- 4001 Columbus Apple 2053.7 1,864 -9% 23 2 25 na 100% Agreed to reduce note to $100k & $23k notes due to revalued value of territory ---------------------------------------------------------------------------------------------------------------------------------- 4001 Columbus Apple 100 - 100 7% 80% ---------------------------------------------------------------------------------------------------------------------------------- 4022 Toledo Winzer 442.7 450 2% 98 42 140 31% 50% Small Market, Father/Son Owner, Poor Mgmt. Owner is also in poor health. ---------------------------------------------------------------------------------------------------------------------------------- 4024 St. Louis Zimmerman 1421.7 1,474 4% 15 101 116 8% 100% ---------------------------------------------------------------------------------------------------------------------------------- 4027 Waukegan Johnson 585.37 558 -5% 131 57 188 34% 80% Negative sales growth, cash flow falling. ---------------------------------------------------------------------------------------------------------------------------------- 4028 Detroit Tudek 992.4 1,010 2% 80 198 278 28% 50% Poor payment history, Shown dislike to Company, rising competition. ---------------------------------------------------------------------------------------------------------------------------------- 4033 Brookfield Franck 2059.5 2,688 31% 704 217 921 34% 50% Just purchased business from BCT, limited experience, high debt levels. ---------------------------------------------------------------------------------------------------------------------------------- 4034 Kansas City Rhomberg 750.7 819 9% 369 72 441 54% 60% Poor track record, father/son business, high debt levels. ---------------------------------------------------------------------------------------------------------------------------------- 4035 Akron Teague 1500.2 1,682 12% 22 3 25 1% 100% ---------------------------------------------------------------------------------------------------------------------------------- 4036 Cleveland Begalke 1274.3 1,217 -5% 177 69 246 20% 90% New Franchisee with no track record, however royalty and AR are starting to fall behind. ---------------------------------------------------------------------------------------------------------------------------------- 6012 Dallas Purtell 1955 1,934 -1% 377 43 420 22% 80% Poor mgmt performance, High debt levels. Franchise has indicated it is considering filing for bankruptcy protection. ---------------------------------------------------------------------------------------------------------------------------------- 7001 Mississauga Allison (4) 2009.3 2,141 7% 8 11 19 1% 100% ---------------------------------------------------------------------------------------------------------------------------------- 7008 Calgary Beaton/ Allison (4) 570.2 600 5% 8 2 10 2% 100% ---------------------------------------------------------------------------------------------------------------------------------- 7010 Vancouver Wilson 530.9 569 7% 5 7 12 2% 100% ---------------------------------------------------------------------------------------------------------------------------------- ------------ ---------- ------ -------- Totals (2) $ 44,509 $ 6,700 $ 2,442 $ 9,142 ============ ========== ====== ======== ---------------------------------------------------------------------------------------------------------------------------------- (1) Adjustments determined in discussions with Company Management. (2) Includes only receivables from franchisees that have positive note balances. Sources of Information: Company Financials and Management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
36 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Discounted Cash Flow Analysis DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 37 BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Discounted Cash Flow Analysis - Summary Indicated Value Range ($ in thousands, except per share amounts) Multiple Enterprise WACC Range Value Range of Values ----------- ------------- ------------ -------------------------------------------------- BC BC BC+CS Base Case Valuation (BC) 15.6% BC (1) +CS (1) + SS (2) +SS (2) ------------ ----------- ------------- ---------- Revenue 0.15x - 0.2x $ 3,901 EBITDA 3.5x - 3.75x $ 3,544 Perpetual Growth 2.75% - 3% $ 3,450 Average $ 3,631 $ 3,631 $ 3,631 $ 3,631 $ 3,631 Company Owned Franchises (CS) 22.5% Revenue 0.4x - 0.5x $ (367) EBITDA 4.5x - 4.75x $ (209) Perpetual Growth 4.5% - 4.75% $ (753) Average (443) - (443) - (443) Satellite Store Initiative (SS) 19.9% Revenue 0.8x - 0.9x $ 2,024 EBITDA 4.5x - 4.75x $ 3,415 Perpetual Growth 5.5% - 5.75% $ 3,306 Average 2,915 - - 2,915 2,915 ------------ ----------- ------------- ----------- Total Indicated Enterprise Value 3,631 3,189 6,546 6,103 less Net Debt (Net Cash) (7,790) (7,790) (8,309) (8,309) ------------ ----------- ------------- ----------- Total Indicated Market Value $ 11,421 $ 10,979 $ 14,855 $ 14,412 ============ =========== ============= =========== Shares Outstanding 5,686 5,686 5,916 5,916 Indicated Market Value Per Share $ 2.01 $ 1.93 $ 2.51 $ 2.44 ============ =========== ============= =========== ---------------------------------------------------------------------------------------------------------------------------------- (1) Net Debt and shares outstanding assumes approximately 564,585 in-the-money options with exercise prices less than $2.00 (2) Net Debt and shares outstanding assumed to be as in (1) plus an additional 320,000 in-the-money options with exercise prices less than $2.50. Sources of information: Company Financials, Projections and Management. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
38 BCT International, Inc. Confidential ----------------------------------------------------------------------------------------------------------- Financial Projections - Base Case ($ in thousands) Actual/Estimated Projected ----------------------- ------------------------------------------------ FY ended FY ending February 28/29 February 28/29 ----------------------- ------------------------------------------------ 2002 2003 2004 2005 2006 2007 ----------------------- ------------------------------------------------ Revenues Royalty Income $ 5,117 $ 5,209 $ 5,209 $ 5,209 $ 5,209 $ 5,209 Pelican Paper Sales 12,068 12,131 12,000 12,000 12,000 12,000 Franchise Sales 99 19 - - - - OPC Fees 306 422 360 330 330 330 Company Plant Sales - - - - - - ----------------------- ------------------------------------------------ Total $ 17,590 $ 17,781 $ 17,569 $ 17,539 $ 17,539 $ 17,539 Cost of Goods Sold Cost of Sales Paper 10,726 10,569 10,468 10,480 10,492 10,492 ----------------------- ------------------------------------------------ Gross Margin $ 6,864 $ 7,212 $ 7,101 $ 7,059 $ 7,047 $ 7,047 Less Operating Expenses Salaries & Employee Benefits 3219 2,862 3,074 3,258 3,454 3,661 Consultancy Costs 602 614 400 400 400 400 Occupancy Costs 200 207 220 234 249 249 Travel and Entertainment 147 206 218 226 234 242 Bad Debt 1300 1,400 900 900 900 900 Other G&A 739 705 803 837 876 915 ----------------------- ------------------------------------------------ Total 6,207 5,994 5,615 5,855 6,113 6,367 ----------------------- ------------------------------------------------ EBITDA $ 657 $ 1,218 $ 1,486 $ 1,204 $ 934 $ 680 ======================= ================================================
Actual/Estimated Projected ----------------------------------------------------------------------- FY ended FY ending February 28/29 February 28/29 ----------------------------------------------------------------------- 2002 2003 2004 2005 2006 2007 ------------------------ ---------------------------------------------- Growth Assumptions Royalty Income na 1.8% 0.0% 0.0% 0.0% 0.0% Pelican Paper Sales na 0.5% -1.1% 0.0% 0.0% 0.0% Franchise Sales na -80.8% -100.0% na na na OPC Fees na 37.9% -14.7% -8.3% 0.0% 0.0% Company Plant Sales na na na na na na ------------------------ ------------------------------------------------ Total na 1.1% -1.2% -0.2% 0.0% 0.0% Margin Assumptions Cost of Paper Sales Margin 11.1% 12.9% 12.8% 12.7% 12.6% 12.6% Gross Margin 39.0% 40.6% 40.4% 40.2% 40.2% 40.2% Growth Assumptions Salaries & Employee Benefits na -11.1% 7.4% 6.0% 6.0% 6.0% Consultancy Costs na 2.0% -34.9% 0.0% 0.0% 0.0% Occupancy Costs na 3.5% 6.3% 6.4% 6.4% 0.0% Travel and Entertainment na 40.1% 5.8% 3.7% 3.5% 3.4% Bad Debt na 7.7% -35.7% 0.0% 0.0% 0.0% Other G&A na -4.6% 13.9% 4.2% 4.7% 4.5% ------------------------ ------------------------------------------------- na -3.4% -6.3% 4.3% 4.4% 4.2% Margin Review EBITDA Margin % 3.7% 6.9% 8.5% 6.9% 5.3% 3.9% --------------------------------------------------------------------------------------------------------------- Sources of information: Company Financials, Projections and Management. DRAFT ANALYSIS -2/20/2003 CAPITALINK, L.C.
39 BCT International, Inc. Confidiential -------------------------------------------------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Base Case Projections Terminal Value - Revenue Multiple ($ in thousands, except per share) Unlevered Free Cash Flows Actual/Estimated Projected ------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 ------------------------- --------------------------------------------------- Revenue $ 17,590 $ 17,781 $ 17,569 $ 17,539 $ 17,539 $ 17,539 Cost of Sales 10,726 10,569 10,468 10,480 10,492 10,492 ------------------------- --------------------------------------------------- Gross Margin 6,864 7,212 7,101 7,059 7,047 7,047 Operating Expenses 6,207 5,994 5,615 5,855 6,113 6,367 ------------------------- --------------------------------------------------- EBITDA 657 1,218 1,486 1,204 934 680 less: Deprec. & Amort. 226 224 200 200 200 200 ------------------------- --------------------------------------------------- EBIT 431 994 1,286 1,004 734 480 Income Taxes - - 502 392 286 187 ------------------------- --------------------------------------------------- Unlevered After-tax Income 431 994 784 612 448 293 Add: Deprec. & Amort. 226 224 200 200 200 200 Add: (Used) Sourced by Net Wkg Cap. 759 (255) 233 14 10 10 Less: Capital Expenditures 162 520 150 150 150 150 ------------------------- --------------------------------------------------- Unlevered Free Cash Flows $ 1,254 $ 443 $ 1,067 $ 676 $ 508 $ 353 ========================= =================================================== Estimated Range of Enterprise Values Discount Terminal Revenue Multiple ---------------------------------------------------------------------------- Rate 0.05x 0.10x 0.15x 0.20x 0.25x 0.30x --------------------------------------------------------------------------------------------- 10.0% $ 2,885 $ 3,513 $ 4,142 $ 4,770 $ 5,398 $ 6,026 12.5% $ 2,766 $ 3,347 $ 3,927 $ 4,508 $ 5,089 $ 5,669 -------------------------- 15.0% $ 2,656 $ 3,194 $ 3,731 $ 4,269 $ 4,807 $ 5,344 17.5% $ 2,554 $ 3,053 $ 3,552 $ 4,051 $ 4,549 $ 5,048 -------------------------- 20.0% $ 2,461 $ 2,924 $ 3,387 $ 3,850 $ 4,314 $ 4,777 22.5% $ 2,373 $ 2,805 $ 3,236 $ 3,667 $ 4,098 $ 4,529 ------------- Average of Box $ 3,901 -------------
Terminal Values Terminal Revenue Multiple ----------------------------------------------------------------------------- 0.05x 0.10x 0.15x 0.20x 0.25x 0.30x ----------------------------------------------------------------------------- Revenue Terminal Value $ 877 $ 1,754 $ 2,631 $ 3,508 $ 4,385 $ 5,262 ============================================================================= Discounted Terminal Values as Percentage of Enterprise Values Discount Terminal Revenue Multiple -------------------------------------------------------------------------- Rate 0.05x 0.10x 0.15x 0.20x 0.25x 0.30x ------------------------------------------------------------------------------------------- 10.0% 21.8% 35.8% 45.5% 52.7% 58.2% 62.5% 12.5% 21.0% 34.7% 44.4% 51.5% 57.1% 61.5% -------------------------- 15.0% 20.2% 33.7% 43.2% 50.4% 55.9% 60.4% 17.5% 19.5% 32.7% 42.1% 49.2% 54.8% 59.3% -------------------------- 20.0% 18.8% 31.7% 41.0% 48.1% 53.7% 58.2% 22.5% 18.2% 30.7% 40.0% 47.0% 52.6% 57.1% ------------- Average of Box 46.2% ------------- ---------------------------------------------------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Source of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
40
BCT International, Inc. Confidential ------------------------------------------------------------------------------------------------------------------------------------ Discounted Cash Flow Analysis - Base Case Projections Terminal Value - EBITDA Multiple ($ in thousands, except per share) Unlevered Free Cash Flows Actual/Estimated Projected ------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 ------------------------- --------------------------------------------------- Revenue $ 17,590 $ 17,781 $ 17,569 $ 17,539 $ 17,539 $ 17,539 Cost of Sales 10,726 10,569 10,468 10,480 10,492 10,492 ------------------------- --------------------------------------------------- Gross Margin 6,864 7,212 7,101 7,059 7,047 7,047 Operating Expenses 6,207 5,994 5,615 5,855 6,113 6,367 ------------------------- --------------------------------------------------- EBITDA 657 1,218 1,486 1,204 934 680 less: Deprec. & Amort. 226 224 200 200 200 200 ------------------------- --------------------------------------------------- EBIT 431 994 1,286 1,004 734 480 Income Taxes - - 502 392 286 187 ------------------------- --------------------------------------------------- Unlevered After-tax Income 431 994 784 612 448 293 Add: Deprec. & Amort. 226 224 200 200 200 200 Add: (Used) Sourced by Net Wkg Cap. 759 (255) 233 14 10 10 Less: Capital Expenditures 162 520 150 150 150 150 ------------------------- --------------------------------------------------- Unlevered Free Cash Flows $ 1,254 $ 443 $ 1,067 $ 676 $ 508 $ 353 ========================= ===================================================
Terminal Values
Terminal EBITDA Multiple ---------------------------------------------------------------------------- 2.50x 3.00x 3.50x 3.75x 4.25x 4.75x ---------------------------------------------------------------------------- EBITDA Terminal Value $ 1,700 $ 2,040 $ 2,380 $ 2,550 $ 2,890 $ 3,230 ============================================================================
Estimated Range of Enterprise Values
Terminal EBITDA Multiple ----------------------------------------------------------------------------- Discount Rate 2.50x 3.00x 3.50x 3.75x 4.25x 4.75x --------------------------------------------------------------------------------------------- 10.0% $ 3,475 $ 3,718 $ 3,962 $ 4,084 $ 4,327 $ 4,571 12.5% $ 3,311 $ 3,536 $ 3,761 $ 3,874 $ 4,099 $ 4,324 -------------------------- 15.0% $ 3,161 $ 3,369 $ 3,578 $ 3,682 $ 3,890 $ 4,099 17.5% $ 3,023 $ 3,216 $ 3,409 $ 3,506 $ 3,699 $ 3,893 -------------------------- 20.0% $ 2,895 $ 3,075 $ 3,255 $ 3,344 $ 3,524 $ 3,704 22.5% $ 2,778 $ 2,945 $ 3,112 $ 3,196 $ 3,363 $ 3,530 ------------- Average of Box $ 3,544 -------------
Discounted Terminal Values as Percentage of Enterprise Values
Terminal EBITDA Multiple ---------------------------------------------------------------------------- Discount Rate 2.50x 3.00x 3.50x 3.75x 4.25x 4.75x -------------------------------------------------------------------------------------------- 10.0% 48.9% 39.3% 43.0% 44.7% 47.8% 50.6% 12.5% 34.0% 38.2% 41.9% 43.6% 46.7% 49.5% -------------------------- 15.0% 33.0% 37.1% 40.8% 42.5% 45.5% 48.3% 17.5% 32.0% 36.1% 39.7% 41.4% 44.4% 47.2% -------------------------- 20.0% 31.0% 35.0% 38.6% 40.3% 43.3% 46.1% 22.5% 30.1% 34.0% 37.6% 39.2% 42.2% 45.0% ------------- Average of Box 41.1% ------------- ------------------------------------------------------------------------------------------------------------------------------------ All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
41
BCT International, Inc. Confidential -------------------------------------------------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Base Case Projections Terminal Value - Perpetual Growth ($ in thousands, except per share) Unlevered Free Cash Flows Actual/Estimated Projected ------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 ------------------------- --------------------------------------------------- Revenue $ 17,590 $ 17,781 $ 17,569 $ 17,539 $ 17,539 $ 17,539 Cost of Sales 10,726 10,569 10,468 10,480 10,492 10,492 ------------------------- --------------------------------------------------- Gross Margin 6,864 7,212 7,101 7,059 7,047 7,047 Operating Expenses 6,207 5,994 5,615 5,855 6,113 6,367 ------------------------- --------------------------------------------------- EBITDA 657 1,218 1,486 1,204 934 680 less: Deprec. & Amort. 226 224 200 200 200 200 ------------------------- --------------------------------------------------- EBIT 431 994 1,286 1,004 734 480 Income Taxes - - 502 392 286 187 ------------------------- --------------------------------------------------- Unlevered After-tax Income 431 994 784 612 448 293 Add: Deprec. & Amort. 226 224 200 200 200 200 Add: (Used) Sourced by Net Wkg Cap. 759 (255) 233 14 10 10 Less: Capital Expenditures 162 520 150 150 150 150 ------------------------- --------------------------------------------------- Unlevered Free Cash Flows $ 1,254 $ 443 $ 1,067 $ 676 $ 508 $ 353 ========================= =================================================== Estimated Range of Enterprise Values Terminal Perpetual Growth Rates Discount --------------------------------------------------------------------------- Rate 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% ---------------------------------------------------------------------------------------------- 10.0% $ 5,050 $ 5,153 $ 5,263 $ 5,381 $ 5,507 $ 5,644 12.5% $ 4,137 $ 4,193 $ 4,251 $ 4,313 $ 4,378 $ 4,446 ------------------------- 15.0% $ 3,571 $ 3,605 $ 3,641 $ 3,678 $ 3,716 $ 3,757 17.5% $ 3,182 $ 3,205 $ 3,229 $ 3,253 $ 3,278 $ 3,304 ------------------------- 20.0% $ 2,897 $ 2,912 $ 2,929 $ 2,946 $ 2,963 $ 2,981 22.5% $ 2,676 $ 2,688 $ 2,700 $ 2,712 $ 2,724 $ 2,737 ------------- Average of Box $ 3,450 ------------- ------------------------------------------------------------------------------------------------------------------------------ Terminal Values Terminal Perpetual Growth Rates ------------------------------------------------------------------------------ 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% ------------------------------------------------------------------------------ EBITDA $ 695 $ 697 $ 699 $ 700 $ 702 $ 704 less: Deprec. & Amort. 200 200 200 200 200 200 ------------------------------------------------------------------------------ EBIT 495 497 499 500 502 504 Income Taxes 193 194 194 195 196 196 ------------------------------------------------------------------------------ After-tax Income before Int. 302 303 304 305 306 307 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 $ 302 $ 303 $ 304 $ 305 $ 306 $ 307 ============================================================================== Discount Rate Perpetual Growth Terminal Values -------------------------------------------------------------------------------------------------- 10.0% $ 3,898 $ 4,042 $ 4,196 $ 4,361 $ 4,537 $ 4,728 12.5% $ 2,948 $ 3,032 $ 3,120 $ 3,213 $ 3,311 $ 3,415 15.0% $ 2,370 $ 2,425 $ 2,483 $ 2,544 $ 2,607 $ 2,672 17.5% $ 1,981 $ 2,021 $ 2,062 $ 2,105 $ 2,149 $ 2,195 20.0% $ 1,702 $ 1,732 $ 1,764 $ 1,796 $ 1,829 $ 1,863 22.5% $ 1,492 $ 1,516 $ 1,540 $ 1,565 $ 1,591 $ 1,617 Discounted Terminal Values as Percentage of Enterprise Values Terminal Perpetual Growth Rates Discount --------------------------------------------------------------------------- Rate 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% -------------------------------------------------------------------------------------------------- 10.0% 55.3% 56.2% 57.1% 58.1% 59.0% 60.0% 12.5% 47.2% 47.9% 48.6% 49.3% 50.1% 50.9% -------------------------- 15.0% 40.7% 41.2% 41.8% 42.4% 43.0% 43.6% 17.5% 35.4% 35.9% 36.3% 36.8% 37.3% 37.8% -------------------------- 20.0% 31.0% 31.4% 31.8% 32.2% 32.6% 33.0% 22.5% 27.4% 27.7% 28.0% 28.4% 28.7% 29.0% ------------ Average of Box 39.3% ------------ ----------------------------------------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
42
BCT International, Inc. Confidential --------------------------------------------------------------------------------------------------------------------------- Operating and Working Capital Assumptions - Base Case Projections ($ in thousands) Actual/Estimated Projected ------------------------ ------------------------------------------------------------ FY ended Feb 28, FY ending Feb 28/29, ------------------------ ------------------------------------------------ Terminal 2002 2003 2004 2005 2006 2007 Period ------------------------ ------------------------------------------------------------ Growth Statistics and Assumptions Revenue na 1.1% -1.2% -0.2% 0.0% 0.0% Cost of Sales na -1.5% -1.0% 0.1% 0.1% 0.0% Operating Expenses na -3.4% -6.3% 4.3% 4.4% 8.7% EBITDA na 85.4% 22.0% -19.0% -22.4% -43.5% EBIT na 130.6% 29.4% -21.9% -26.9% -52.2% After-tax Income before Interest na 130.6% -21.1% -21.9% -26.9% -52.2% Profitability Gross Margin 39.0% 40.6% 40.4% 40.2% 40.2% 40.2% EBITDA 3.7% 6.9% 8.5% 6.9% 5.3% 3.9% EBIT 2.5% 5.6% 7.3% 5.7% 4.2% 2.7% After-tax Income before Interest 2.5% 5.6% 4.5% 3.5% 2.6% 1.7% Income Tax Expense and Assumptions Statutory Tax Rate 39.0% 39.0% 39.0% 39.0% Effective Tax Rate 0.0% 0.0% 39.0% 39.0% 39.0% 39.0% 39.0% Current Period Tax $ - $ - $ 502 $ 392 $ 286 $ 187 NOL Usage - - - - - - ------------------------ ------------------------------------------------ Income Tax Expense $ - $ - $ 502 $ 392 $ 286 $ 187 ======================== ================================================ Ending NOL Balance $ - $ - $ - $ - $ - ============ ================================================ Actual/Estimated Projected ------------------------------------ ------------------------------------------------------------ FY ended Feb 28, FY ending Feb 28/29, ------------------------------------ ------------------------------------------------ Terminal 2001 2002 2003 2004 2005 2006 2007 Period ------------------------------------ ------------------------------------------------------------ Non-Cash Working Capital Assumptions Accounts Receivable (AR) AR Days Outstanding 60 65 60 60 60 60 % of Sales 16.4% 17.7% 16.4% 16.4% 16.4% 16.4% Inventory Days Inventory Outs. 64 91 90 90 90 90 % Cost of Sales 17.6% 25.0% 24.7% 24.7% 24.7% 24.7% Prepayments % of Direct and Op Costs 4.0% 4.1% 4.0% 4.0% 4.0% 4.0% Accounts Payable (AP) AP Days Outstanding 9 10 10 10 10 10 % of Direct and Op Costs 2.6% 2.6% 2.7% 2.7% 2.7% 2.7% Accrued Expenses % of Direct and Op Costs 5.1% 5.3% 5.0% 5.0% 5.0% 5.0% Changes in Non-Cash Net Working Capital Accounts Receivables $ 3,568 $ 2,889 $ 3,143 $ 2,888 $ 2,883 $ 2,883 $ 2,883 Inventory 2,352 1,887 2,637 2,581 2,584 2,587 2,587 Prepayments 455 678 679 643 653 664 674 Accounts Payables 597 432 432 441 448 455 462 Accrued Expenses 403 871 871 804 817 830 843 ------------------------------------ ------------------------------------------------ Non-Cash Net WC $ 3,023 $ 2,264 $ 2,519 $ 2,286 $ 2,272 $ 2,262 $ 2,252 ==================================== ================================================ % of EBITDA 344.6% 206.8% 153.8% 188.7% 242.2% 331.2% ======================== ================================================ Cash Flow (Used) Sourced by Non-Cash Net Wrkg Capital $ 759 $ (255) $ 233 $ 14 $ 10 $ 10 $ - ======================== ============================================================ --------------------------------------------------------------------------------------------------------------------------------- Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C.
43 BTC International, Inc. Confidential -------------------------------------------------------------------------------- Financial Projections - Company Owned Stores ($ in thousands)
Actual/Estimated Projected ---------------------- ---------------------------------------------- FY ended FY ending February 28/29 February 28/29 ---------------------- ---------------------------------------------- 2002 2003 2004 2005 2006 2007 ---------------------- ---------------------------------------------- Revenues San Francisco $ - $ - $ 688 $ 791 $ 869 $ 913 Tampa - - 1,620 1,782 1,960 2,156 Mid-South - - 700 1,470 1,544 1,621 Mid-West - - 700 1,470 1,544 1,621 Northeast - - - 1,050 1,470 1,543 ---------------------- ---------------------------------------------- Total $ - $ - $ 3,708 $ 6,563 $ 7,387 $ 7,854 Cost of Goods Sold Cost of Sales Paper - - 846 1,502 1,690 1,797 ---------------------- ---------------------------------------------- Gross Margin $ - $ - $ 2,862 $ 5,061 $ 5,697 $ 6,057 Less Operating Expenses Salaries & Employee Benefits - - 1,746 2,870 3,155 3,354 Occupancy Costs - - 177 318 352 368 Equipment Leases - - 81 89 76 76 Advertising - - 72 114 120 120 Delivery Expense - - 348 525 591 628 Training Costs - - 100 150 238 250 Other - - 258 398 419 429 ---------------------- ---------------------------------------------- Total - - 2,782 4,464 4,951 5,225 ---------------------- ---------------------------------------------- EBITDA $ - $ - $ 80 $ 597 $ 746 $ 832 ====================== ==============================================
Actual/Estimated Projected --------------------------------------------------------------------- FY ended FY ending February 28/29 February 28/29 --------------------------------------------------------------------- 2002 2003 2004 2005 2006 2007 ----------------------- --------------------------------------------- Growth Assumptions San Francisco na na na 15.0% 9.9% 5.1% Tampa na na na 10.0% 10.0% 10.0% Mid-South na na na 110.0% 5.0% 5.0% Mid-West na na na 110.0% 5.0% 5.0% Northeast na na na na 40.0% 5.0% ----------------------- --------------------------------------------- Total na na na 77.0% 12.6% 6.3% Margin Assumptions Gross Margin na na 77.2% 77.1% 77.1% 77.1% Growth Assumptions Salaries & Employee Benefits na na na 64.3% 9.9% 6.3% Occupancy Costs na na na 79.8% 10.7% 4.5% Equipment Leases na na na 9.5% -14.6% 0.0% Advertising na na na 58.3% 5.3% 0.0% Delivery Expense na na na 51.1% 12.6% 6.3% Training Costs na na na 50.0% 58.7% 5.0% Other na na na 54.3% 5.3% 2.4% ----------------------- --------------------------------------------- na na na 60.5% 10.9% 5.5% Margin Review EBITDA Margin % na na 2.1% 9.1% 10.1% 10.6%
-------------------------------------------------------------------------------- Sources of information: Company Financials, Projections and Management. DRAFT ANALYSIS - 2/20/2003 44 CAPITALINK, L.C. BCT International, Inc. Confidential ================================================================================ Discounted Cash Flow Analysis - Terminal Value - Revenue Multiple Company Owned Store Projections --------------------------------- ($ in thousands, except per share) Unlevered Free Cash Flows
Actual/Estimated Projected -------------------------- ------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, -------------------------- ------------------------------------------------- 2002 2003 2004 2005 2006 2007 -------------------------- ------------------------------------------------- Revenue $ - $ - $ 3,708 $ 6,563 $ 7,387 $ 7,854 Cost of Sales - - 846 1,502 1,690 1,797 -------------------------- ------------------------------------------------- Gross Margin - - 2,862 5,061 5,697 6,057 Operating Expenses - - 2,782 4,464 4,951 5,225 -------------------------- ------------------------------------------------- EBITDA - - 80 597 746 832 less: Deprec. & Amort. - - 100 100 100 100 -------------------------- ------------------------------------------------- EBIT - - (20) 497 646 732 Income Taxes - - - 186 252 285 -------------------------- ------------------------------------------------- Unlevered After-tax Income - - (20) 311 394 447 Add: Deprec. & Amort. - - 100 100 100 100 Add: (Used) Sourced by Net Wkg Cap. - - (305) (234) (68) (39) Less: Capital Expenditures - - 2,700 75 75 75 -------------------------- ------------------------------------------------- Unlevered Free Cash Flows $ - $ - $(2,925) $ 102 $ 351 $ 433 ========================== =================================================
Estimated Range of Enterprise Values
Discount Terminal Revenue Multiple ---------------------------------------------------------------------------- Rate 0.20x 0.30x 0.40x 0.50x 0.60x 0.70x ------------------------------------------------------------------------------------------- 15.5% $ (1,185) $ (711) $ (236) $ 238 $ 712 $ 1,186 18.0% $ (1,259) $ (819) $ (379) $ 61 $ 501 $ 942 ------------------------ 20.5% $ (1,324) $ (915) $ (507) $ (98) $ 311 $ 720 23.0% $ (1,383) $ (1,002) $ (622) $ (241) $ 139 $ 520 ------------------------ 25.5% $ (1,435) $ (1,080) $ (726) $ (371) $ (16) $ 338 28.0% $ (1,481) $ (1,150) $ (819) $ (488) $ (157) $ 174 --------- Average of Box $ (367) ---------
Terminal Values
Terminal Revenue Multiple ---------------------------------------------------------------------------- 0.20x 0.30x 0.40x 0.50x 0.60x 0.70x ---------------------------------------------------------------------------- Revenue Terminal Value $ 1,571 $ 2,356 $ 3,142 $ 3,927 $ 4,712 $ 5,498 ============================================================================
Discounted Terminal Values as Percentage of Enterprise Values
Discount Terminal Revenue Multiple ---------------------------------------------------------------------------- Rate 0.20x 0.30x 0.40x 0.50x 0.60x 0.70x ------------------------------------------------------------------------------------------ 15.5% -80.0% -200.2% -802.5% 996.9% 399.6% 279.8% 18.0% -69.9% -161.2% -464.9% 3583.5% 526.5% 327.2% -------------------------- 20.5% -61.8% -134.0% -322.9% -2093.7% 788.2% 397.5% 23.0% -55.0% -113.9% -244.8% -788.9% 1638.5% 512.4% -------------------------- 25.5% -49.4% -98.5% -195.5% -478.1% -13091.8% 733.6% 28.0% -44.7% -86.3% -161.6% -338.9% -1262.6% 1333.9% --------- Average of Box -862.6% ---------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 45 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Company Owned Store Projections ($ in thousands, except per share) Terminal Value - EBITDA Multiple Unlevered Free Cash Flows
Actual/Estimated Projected -------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, -------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 -------------------------- --------------------------------------------------- Revenue $ - $ - $ 3,708 $ 6,563 $ 7,387 $ 7,854 Cost of Sales - - 846 1,502 1,690 1,797 -------------------------- --------------------------------------------------- Gross Margin - - 2,862 5,061 5,697 6,057 Operating Expenses - - 2,782 4,464 4,951 5,225 -------------------------- --------------------------------------------------- EBITDA - - 80 597 746 832 less: Deprec. & Amort. - - 100 100 100 100 -------------------------- --------------------------------------------------- EBIT - - (20) 497 646 732 Income Taxes - - - 186 252 285 -------------------------- --------------------------------------------------- Unlevered After-tax Income - - (20) 311 394 447 Add: Deprec. & Amort. - - 100 100 100 100 Add: (Used) Sourced by Net Wkg Cap. - - (305) (234) (68) (39) Less: Capital Expenditures - - 2,700 75 75 75 -------------------------- --------------------------------------------------- Unlevered Free Cash Flows $ - $ - $ (2,925) $ 102 $ 351 $ 433 ========================== ===================================================
Terminal Values
Terminal EBITDA Multiple ------------------------------------------------------------------------------ 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x ------------------------------------------------------------------------------ EBITDA Terminal Value $ 2,912 $ 3,328 $ 3,744 $ 3,952 $ 4,368 $ 4,784 ==============================================================================
Estimated Range of Enterprise Values
Terminal EBITDA Multiple Discount ------------------------------------------------------------------------------ Rate 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x --------------------------------------------------------------------------------------------- 15.5% $ (375) $ (124) $ 127 $ 253 $ 504 $ 755 18.0% $ (507) $ (274) $ (41) $ 75 $ 308 $ 542 -------------------------- 20.5% $ (626) $ (410) $ (193) $ (85) $ 132 $ 349 23.0% $ (733) $ (531) $ (330) $ (229) $ (28) $ 174 -------------------------- 25.5% $ (829) $ (641) $ (454) $ (360) $ (172) $ 16 28.0% $ (916) $ (741) $ (565) $ (478) $ (302) $ (127) ------------- Average of Box $ (209) -------------
Discounted Terminal Values as Percentage of Enterprise Values
Terminal EBITDA Multiple Discount ------------------------------------------------------------------------------ Rate 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x ------------------------------------------------------------------------------------------- 15.5% -776.4% -1622.7% 1775.1% 943.4% 523.2% 382.4% 18.0% -321.6% -680.0% -5099.8% 2936.4% 793.3% 494.9% --------------------------- 20.5% -242.2% -423.1% -1010.4% -2431.1% 1723.5% 714.6% 23.0% -192.5% -303.4% -549.9% -835.9% -7690.9% 1331.8% --------------------------- 25.5% -158.6% -234.3% -372.8% -496.2% -1148.3% 13436.3% 28.0% -134.0% -189.3% -279.1% -348.6% -608.7% -1586.0% ------------- Average of Box -1206.8% -------------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 46 CAPITALINK, L.C. BCT International, Inc. Confidential ================================================================================ Discounted Cash Flow Analysis - Terminal Value - Revenue Multiple Company Owned Store Projections --------------------------------- ($ in thousands, except per share) Unlevered Free Cash Flows
Actual/Estimated Projected ------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 ------------------------- --------------------------------------------------- Revenue $ - $ - $ 3,708 $ 6,563 $ 7,387 $ 7,854 Cost of Sales - - 846 1,502 1,690 1,797 ------------------------- --------------------------------------------------- Gross Margin - - 2,862 5,061 5,697 6,057 Operating Expenses - - 2,782 4,464 4,951 5,225 ------------------------- --------------------------------------------------- EBITDA - - 80 597 746 832 less: Deprec. & Amort. - - 100 100 100 100 ------------------------- --------------------------------------------------- EBIT - - (20) 497 646 732 Income Taxes - - - 186 252 285 ------------------------- --------------------------------------------------- Unlevered After-tax Income - - (20) 311 394 447 Add: Deprec. & Amort. - - 100 100 100 100 Add: (Used) Sourced by Net Wkg Cap. - - (305) (234) (68) (39) Less: Capital Expenditures - - 2,700 75 75 75 ------------------------- --------------------------------------------------- Unlevered Free Cash Flows $ - $ - $(2,925) $ 102 $ 351 $ 433 ========================= ===================================================
Estimated Range of Enterprise Values
Discount Terminal Perpetual Growth Rates ------------------------------------------------------------------------------ Rate 4.00% 4.25% 4.50% 4.75% 5.00% 5.25% --------------------------------------------------------------------------------------------- 15.5% $ 318 $ 379 $ 443 $ 510 $ 580 $ 654 18.0% $ (271) $ (231) $ (191) $ (149) $ (105) $ (60) ------------------------ 20.5% $ (669) $ (642) $ (615) $ (586) $ (557) $ (527) 23.0% $ (954) $ (934) $ (915) $ (894) $ (874) $ (852) ------------------------ 25.5% $ (1,164) $ (1,150) $ (1,135) $ (1,120) $ (1,105) $ (1,089) 28.0% $ (1,324) $ (1,313) $ (1,302) $ (1,290) $ (1,279) $ (1,267) ----------- Average of Box $ (753) -----------
Terminal Values
Terminal Perpetual Growth Rates ----------------------------------------------------------------------------- 4.00% 4.25% 4.50% 4.75% 5.00% 5.25% ----------------------------------------------------------------------------- EBITDA $ 865 $ 867 $ 869 $ 872 $ 874 $ 876 less: Deprec. & Amort. 100 100 100 100 100 100 ----------------------------------------------------------------------------- EBIT 765 767 769 772 774 776 Income Taxes 298 299 300 301 302 303 ----------------------------------------------------------------------------- After-tax Income before Int. 467 468 469 471 472 473 Add: Deprec. & Amort. 100 100 100 100 100 100 Add: (Used) from by Net WC - - - - - - Less: Capital Expenditures 100 100 100 100 100 100 ------------------------------------------------------------------------------------------------------------------------- Free Cash Flows $ 467 $ 468 $ 469 $ 471 $ 472 $ 473 =============================================================================
Discount Rate Perpetual Growth Terminal Values ------------------------------------------------------------------------------------------------ 15.5% $ 4,059 $ 4,161 $ 4,267 $ 4,378 $ 4,494 $ 4,616 18.0% $ 3,334 $ 3,404 $ 3,477 $ 3,552 $ 3,630 $ 3,711 20.5% $ 2,829 $ 2,881 $ 2,933 $ 2,988 $ 3,044 $ 3,103 23.0% $ 2,457 $ 2,496 $ 2,537 $ 2,579 $ 2,622 $ 2,666 25.5% $ 2,171 $ 2,203 $ 2,235 $ 2,268 $ 2,302 $ 2,337 28.0% $ 1,945 $ 1,971 $ 1,997 $ 2,024 $ 2,052 $ 2,080
Discounted Terminal Values as Percentage of Enterprise Values
Discount Terminal Perpetual Growth Rates ------------------------------------------------------------------------------------ Rate 4.00% 4.25% 4.50% 4.75% 5.00% 5.25% ------------------------------------------------------------------------------------------------ 15.5% 771.4% 662.9% 581.5% 518.2% 467.6% 426.2% 18.0% -690.4% -824.0% -1020.5% -1337.8% -1936.5% -3490.6% ----------------------- 20.5% -220.1% -233.4% -248.4% -265.3% -284.5% -306.6% 23.0% -124.9% -129.5% -134.4% -139.7% -145.4% -151.5% ----------------------- 25.5% -84.3% -86.5% -88.9% -91.4% -94.1% -96.9% 28.0% -61.9% -63.3% -64.7% -66.1% -67.6% -69.2% ----------- Average of Box -196.9% -----------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 47 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Operating and Working Capital Assumptions - Company Owned Store Projections ($ in thousands)
Actual/Estimated Projected ----------------------- ----------------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ----------------------- ----------------------------------------------- Terminal 2002 2003 2004 2005 2006 2007 Period ----------------------- ----------------------------------------------------------- Growth Statistics and Assumptions Revenue na na na 77.0% 12.6% 6.3% Cost of Sales na na na 77.5% 12.6% 6.3% Operating Expenses na na na 60.5% 10.9% 17.0% EBITDA na na na 649.7% 24.9% 39.3% EBIT na na na -2542.8% 30.0% 47.3% After-tax Income before Interest na na na -1629.1% 26.6% 43.5% Profitability Gross Margin na na 77.2% 77.1% 77.1% 77.1% EBITDA na na 2.1% 9.1% 10.1% 10.6% EBIT na na -0.5% 7.6% 8.7% 9.3% After-tax Income before Interest na na -0.5% 4.7% 5.3% 5.7% Income Tax Expense and Assumptions Statutory Tax Rate 39.0% 39.0% 39.0% 39.0% Effective Tax Rate na na 0.0% 37.4% 39.0% 39.0% 39.0% Current Period Tax $ - $ - $ (8) $ 194 $ 252 $ 285 NOL Usage - - 8 (8) - - ----------------------- ----------------------------------------------- Income Tax Expense $ - $ - $ - $ 186 $ 252 $ 285 ======================= =============================================== Ending NOL Balance $ - $ 8 $ - $ - $ - =========== ===============================================
Actual/Estimated Projected ----------------------------------- ----------------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ----------------------------------- ----------------------------------------------- Terminal 2001 2002 2003 2004 2005 2006 2007 Period ----------------------------------- ----------------------------------------------------------- Non-Cash Working Capital Assumptions Accounts Receivable (AR) AR Days Outstanding na na 30 30 30 30 % of Sales na na 8.2% 8.2% 8.2% 8.2% Inventory Days Inventory Outs. - - - - - - % Cost of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Prepayments % of Direct and Op Costs na na 0.0% 0.0% 0.0% 0.0% Accounts Payable (AP) AP Days Outstanding na na - - - - % of Direct and Op Costs na na 0.0% 0.0% 0.0% 0.0% Accrued Expenses % of Direct and Op Costs na na 0.0% 0.0% 0.0% 0.0% Changes in Non-Cash Net Working Capital Accounts Receivables $ - $ - $ - $ 305 $ 539 $ 607 $ 646 Inventory - - - - Prepayments - - - - Accounts Payables - - - - Accrued Expenses - - - - ----------------------------------- ----------------------------------------------- Non-Cash Net WC $ - $ - $ - $ 305 $ 539 $ 607 $ 646 =================================== =============================================== % of EBITDA na na 382.9% 90.3% 81.4% 77.6% ======================= =============================================== Cash Flow (Used) Sourced by Non-Cash Net Wrkg Capital $ - $ - $ (305) $ (234) $ (68) $ (39) $ - ======================= ===========================================================
-------------------------------------------------------------------------------- Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 48 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Financial Projections - Satellite Stores ($ in thousands)
Actual/Estimated Projected ---------------------- ------------------------------------------- FY ended FY ended February 28/29 February 28/29 ---------------------- ------------------------------------------- 2002 2003 2004 2005 2006 2007 ---------------------- ------------------------------------------- Revenues Royalty Income $ - $ - $ 31 $ 233 $ 723 $ 1,125 Pelican Paper Sales - - 60 436 1,422 2,260 Franchise Sales - - 280 630 70 - OPC Fees - - - - - - Company Plant Sales - - - - - - ------------------ ---------------------------------------------- Total $ - $ - $371 $1,299 $ 2,215 $ 3,386 Cost of Goods Sold Cost of Sales Paper - - 52 380 1,237 1,967 ------------------ ---------------------------------------------- Gross Margin $ - $ - $319 $ 919 $ 978 $ 1,419 Less Operating Expenses Salaries & Employee Benefits 0 - 126 219 165 158 Advertising 0 - 100 75 - - Admin 0 - 5 8 12 16 Other 0 - 60 100 50 50 ------------------ ---------------------------------------------- Total - - 291 402 227 224 ------------------ ---------------------------------------------- EBITDA $ - $ - $ 28 $ 517 $ 751 $ 1,195 ================== ============================================== Number of Stores 8 26 26 26 Total Satellite System Sales $515 $3,878 $12,048 $18,758 Average Sales Per Store $ 64 $ 149 $ 463 $ 721 Actual/Estimated Projected ------------------------------------------------------------------ FY ended FY ended February 28/29 February 28/29 ------------------------------------------------------------------ 2002 2003 2004 2005 2006 2007 ----------------------- ------------------------------------------ Growth Assumptions Royalty Income na na na 652.9% 210.7% 55.7% Pelican Paper Sales na na na 631.5% 226.0% 59.0% Franchise Sales na na na 125.0% -88.9% -100.0% OPC Fees na na na na na na Company Plant Sales na na na na na na ----------------------- ------------------------------------------ Total na na na 250.5% 70.5% 52.9% Margin Assumptions Cost of Paper Sales Margin na na 13.0% 13.0% 13.0% 13.0% Gross Margin na na 86.0% 70.8% 44.1% 41.9% Growth Assumptions Salaries & Employee Benefits na na na 73.8% -24.7% -4.2% Advertising na na na -25.0% -100.0% na Admin na na na 60.0% 50.0% 33.3% Other na na na 66.7% -50.0% 0.0% ------------------------------------------------------------------ na na na 38.1% -43.5% -1.3% Margin Review EBITDA Margin % na na 7.5% 39.8% 33.9% 35.3%
-------------------------------------------------------------------------------- Sources of information: Company Financial, Projections and Management. DRAFT ANALYSIS - 2/20/2003 49 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Satellite Stores Terminal Value - Revenue Multiple ($ in thousands, except per share) Unlevered Free Cash Flows
Actual/Estimated Projected -------------------------- --------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, -------------------------- --------------------------------------------------- 2002 2003 2004 2005 2006 2007 -------------------------- --------------------------------------------------- Revenue $ - $ - $ 371 $ 1,299 $ 2,215 $ 3,386 Cost of Sales - - 52 380 1,237 1,967 ----------------------------------------------------------------------------- Gross Margin - - 319 919 978 1,419 Operating Expenses - - 291 402 227 224 ----------------------------------------------------------------------------- EBITDA - - 28 517 751 1,195 less: Deprec. & Amort. - - - - - - ----------------------------------------------------------------------------- EBIT - - 28 517 751 1,195 Income Taxes - - 11 202 293 466 ----------------------------------------------------------------------------- Unlevered After-tax Income - - 17 316 458 729 Add: Deprec. & Amort. - - - - - - Add: (Used) Sourced by Net Wkg Cap. - - (264) (480) 135 202 Less: Capital Expenditures - - - - - - ----------------------------------------------------------------------------- Unlevered Free Cash Flows $ - $ - $ (248) $ (164) $ 593 $ 931 ============================================================================= Estimated Range of Enterprise Values Terminal Revenue Multiple Discount ----------------------------------------------------------------------------- Rate 0.60x 0.70x 0.80x 0.90x 1.00x 1.10x -------------------------------------------------------------------------------------------- 14.0% $ 1,934 $ 2,148 $ 2,362 $ 2,576 $ 2,790 $ 3,004 16.5% $ 1,781 $ 1,980 $ 2,178 $ 2,376 $ 2,575 $ 2,773 ------------------------ 19.0% $ 1,642 $ 1,827 $ 2,011 $ 2,195 $ 2,379 $ 2,563 21.5% $ 1,516 $ 1,687 $ 1,859 $ 2,030 $ 2,201 $ 2,372 ------------------------ 24.0% $ 1,401 $ 1,560 $ 1,720 $ 1,879 $ 2,039 $ 2,198 26.5% $ 1,296 $ 1,444 $ 1,593 $ 1,742 $ 1,890 $ 2,039 ----------- Average of Box $ 2,024 ----------- Terminal Values Terminal Revenue Multiple ----------------------------------------------------------------------------- 0.60x 0.70x 0.80x 0.90x 1.00x 1.10x ----------------------------------------------------------------------------- Revenue Terminal Value $ 2,032 $ 2,370 $ 2,709 $ 3,047 $ 3,386 $ 3,724 ============================================================================= Discounted Terminal Values as Percentage of Enterprise Values Terminal Revenue Multiple Discount ----------------------------------------------------------------------------- Rate 0.60x 0.70x 0.80x 0.90x 1.00x 1.10x -------------------------------------------------------------------------------------------- 14.0% 66.4% 69.8% 72.5% 74.8% 76.7% 78.4% 16.5% 66.8% 70.2% 72.9% 75.1% 77.1% 78.7% ------------------------ 19.0% 67.3% 70.6% 73.3% 75.5% 77.4% 79.0% 21.5% 67.8% 71.0% 73.7% 75.9% 77.8% 79.4% ------------------------ 24.0% 68.3% 71.5% 74.2% 76.4% 78.2% 79.8% 26.5% 68.9% 72.1% 74.7% 76.8% 78.7% 80.2% ----------- Average of Box 74.6% -----------
------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. 50 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Discounted Cash Flow Analysis - Satellite Stores Terminal Value - EBITDA Multiple ---------------------------------- ($ in thousands, except per share)
Unlevered Free Cash Flows Actual/Estimated Projected -------------------------- -------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, -------------------------- -------------------------------------------------- 2002 2003 2004 2005 2006 2007 -------------------------- -------------------------------------------------- Revenue $ - $ - $ 371 $ 1,299 $ 2,215 $ 3,386 Cost of Sales - - 52 380 1,237 1,967 -------------------------- -------------------------------------------------- Gross Margin - - 319 919 978 1,419 Operating Expenses - - 291 402 227 224 -------------------------- -------------------------------------------------- EBITDA - - 28 517 751 1,195 less: Deprec. & Amort. - - - - - - -------------------------- -------------------------------------------------- EBIT - - 28 517 751 1,195 Income Taxes - - 11 202 293 466 -------------------------- -------------------------------------------------- Unlevered After-tax Income - - 17 316 458 729 Add: Deprec. & Amort. - - - - - - Add: (Used) Sourced by Net Wkg Cap. - - (264) (480) 135 202 Less: Capital Expenditures - - - - - - -------------------------- -------------------------------------------------- Unlevered Free Cash Flows $ - $ - $ (248) $ (164) $ 593 $ 931 ========================== ================================================== Estimated Range of Enterprise Values Terminal EBITDA Multiple Discount ----------------------------------------------------------------------------- Rate 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x -------------------------------------------------------------------------------------------- 14.0% $ 3,294 $ 3,672 $ 4,050 $ 4,239 $ 4,617 $ 4,995 16.5% $ 3,042 $ 3,392 $ 3,743 $ 3,918 $ 4,268 $ 4,618 ------------------------- 19.0% $ 2,813 $ 3,138 $ 3,463 $ 3,626 $ 3,951 $ 4,276 21.5% $ 2,605 $ 2,907 $ 3,209 $ 3,360 $ 3,663 $ 3,965 ------------------------- 24.0% $ 2,414 $ 2,696 $ 2,977 $ 3,118 $ 3,400 $ 3,681 26.5% $ 2,241 $ 2,503 $ 2,766 $ 2,897 $ 3,160 $ 3,422 ------------- Average of Box $ 3,415 ------------- Terminal Values Terminal EBITDA Multiple ----------------------------------------------------------------------------- 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x ----------------------------------------------------------------------------- EBITDA Terminal Value $ 4,184 $ 4,781 $ 5,379 $ 5,678 $ 6,275 $ 6,873 ============================================================================= Discounted Terminal Values as Percentage of Enterprise Values Terminal EBITDA Multiple Discount ----------------------------------------------------------------------------- Rate 3.50x 4.00x 4.50x 4.75x 5.25x 5.75x -------------------------------------------------------------------------------------------- 14.0% 127.0% 82.3% 84.0% 84.7% 85.9% 87.0% 16.5% 80.6% 82.6% 84.2% 84.9% 86.2% 87.2% -------------------------- 19.0% 80.9% 82.9% 84.5% 85.2% 86.4% 87.4% 21.5% 81.2% 83.2% 84.8% 85.5% 86.7% 87.7% -------------------------- 24.0% 81.6% 83.5% 85.1% 85.8% 86.9% 87.9% 26.5% 82.0% 83.9% 85.4% 86.1% 87.2% 88.2% ------------ Average of Box 85.0% ------------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. 51 BCT International, Inc. Confidential ================================================================================ Discounted Cash Flow Analysis - Terminal Value - Revenue Multiple Satellite Stores ($ in thousands, except per share) Unlevered Free Cash Flows
Actual/Estimated Projected ----------------------- -------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ----------------------- -------------------------------------------------- 2002 2003 2004 2005 2006 2007 ----------------------- -------------------------------------------------- Revenue $ - $ - $ 371 $ 1,299 $ 2,215 $ 3,386 Cost of Sales - - 52 380 1,237 1,967 ----------------------- -------------------------------------------------- Gross Margin - - 319 919 978 1,419 Operating Expenses - - 291 402 227 224 ----------------------- -------------------------------------------------- EBITDA - - 28 517 751 1,195 less: Deprec. & Amort. - - - - - - ----------------------- -------------------------------------------------- EBIT - - 28 517 751 1,195 Income Taxes - - 11 202 293 466 ----------------------- -------------------------------------------------- Unlevered After-tax Income - - 17 316 458 729 Add: Deprec. & Amort. - - - - - - Add: (Used) Sourced by Net Wkg Cap. - - (264) (480) 135 202 Less: Capital Expenditures - - - - - - ----------------------- -------------------------------------------------- Unlevered Free Cash Flows $ - $ - $ (248) $ (164) $ 593 $ 931 ======================= ==================================================
Estimated Range of Enterprise Values
Discount Terminal Perpetual Growth Rates -------------------------------------------------------------------------- Rate 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% -------------------------------------------------------------------------------------------- 14.0% $ 6,027 $ 6,194 $ 6,371 $ 6,558 $ 6,757 $ 6,969 16.5% $ 4,492 $ 4,588 $ 4,688 $ 4,794 $ 4,904 $ 5,019 ----------------------- 19.0% $ 3,512 $ 3,573 $ 3,637 $ 3,703 $ 3,771 $ 3,843 21.5% $ 2,835 $ 2,877 $ 2,920 $ 2,965 $ 3,011 $ 3,058 ----------------------- 24.0% $ 2,342 $ 2,372 $ 2,402 $ 2,434 $ 2,466 $ 2,500 26.5% $ 1,967 $ 1,989 $ 2,012 $ 2,035 $ 2,059 $ 2,084 ---------- Average of Box $ 3,306 ----------
Terminal Values
Terminal Perpetual Growth Rates -------------------------------------------------------------------------- 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% -------------------------------------------------------------------------- EBITDA $ 1,255 $ 1,258 $ 1,261 $ 1,264 $ 1,267 $ 1,270 less: Deprec. & Amort. - - - - - - -------------------------------------------------------------------------- EBIT 1,255 1,258 1,261 1,264 1,267 1,270 Income Taxes 489 491 492 493 494 495 -------------------------------------------------------------------------- After-tax Income before Int. 766 767 769 771 773 775 Add: Deprec. & Amort. - - - - - - Add: (Used) from by Net WC - - - - - - Less: Capital Expenditures - - - - - - ----------------------------------- -------------------------------------- Free Cash Flows $ 766 $ 767 $ 769 $ 771 $ 773 $ 775 ==========================================================================
Discount Rate Perpetual Growth Terminal Values ----------------------------------------------------------------------------------------------- 14.0% $ 8,507 $ 8,771 $ 9,050 $ 9,346 $ 9,661 $ 9,996 16.5% $ 6,657 $ 6,822 $ 6,993 $ 7,173 $ 7,361 $ 7,558 19.0% $ 5,469 $ 5,581 $ 5,698 $ 5,819 $ 5,945 $ 6,076 21.5% $ 4,640 $ 4,723 $ 4,808 $ 4,896 $ 4,986 $ 5,080 24.0% $ 4,029 $ 4,093 $ 4,158 $ 4,225 $ 4,294 $ 4,365 26.5% $ 3,561 $ 3,611 $ 3,663 $ 3,716 $ 3,770 $ 3,826
Discounted Terminal Values as Percentage of Enterprise Values
Discount Terminal Perpetual Growth Rates -------------------------------------------------------------------------- Rate 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% ----------------------------------------------------------------------------------------------- 14.0% 89.2% 89.5% 89.8% 90.1% 90.4% 90.7% 16.5% 86.8% 87.1% 87.4% 87.7% 88.0% 88.2% ----------------------- 19.0% 84.7% 85.0% 85.2% 85.5% 85.8% 86.0% 21.5% 82.8% 83.0% 83.3% 83.5% 83.8% 84.0% ----------------------- 24.0% 81.0% 81.3% 81.5% 81.8% 82.0% 82.2% 26.5% 79.5% 79.7% 80.0% 80.2% 80.4% 80.6% ---------- Average of Box 84.4% ----------
-------------------------------------------------------------------------------- All Discounted amounts have been calculated utilizing a mid-year convention. Sources of information: Company financials, projections and management. DRAFT ANALYSIS - 2/20/2003 52 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Operating and Working Capital Assumptions - Satellite Stores ($ in thousands)
Actual/Estimated Projected --------------------- ------------------------------------------------ FY ended Feb 28, FY ending Feb 28/29, --------------------- --------------------------------------- Terminal 2002 2003 2004 2005 2006 2007 Period --------------------- ------------------------------------------------ Growth Statistics and Assumptions Revenue na na na 250.5% 70.5% 52.9% Cost of Sales na na na 631.7% 225.0% 59.0% Operating Expenses na na na 38.1% -43.5% -44.3% EBITDA na na na 1770.4% 45.1% 131.0% EBIT na na na 1770.4% 45.1% 131.0% After-tax Income before Interest na na na 1770.4% 45.1% 131.0% Profitability Gross Margin na na 86.0% 70.8% 44.1% 41.9% EBITDA na na 7.5% 39.8% 33.9% 35.3% EBIT na na 7.5% 39.8% 33.9% 35.3% After-tax Income before Interest na na 4.6% 24.3% 20.7% 21.5% Income Tax Expense and Assumptions Statutory Tax Rate 39.0% 39.0% 39.0% 39.0% Effective Tax Rate na na 39.0% 39.0% 39.0% 39.0% 39.0% Current Period Tax $ - $ - $ 11 $ 202 $ 293 $ 466 NOL Usage - - - - - - --------------------- --------------------------------------- Income Tax Expense $ - $ - $ 11 $ 202 $ 293 $ 466 ===================== ======================================= Ending NOL Balance $ - $ - $ - $ - $ - =========== ======================================= Actual/Estimated Projected ------------------------------ ------------------------------------------------- FY ended Feb 28, FY ending Feb 28/29, ------------------------------ --------------------------------------- Terminal 2001 2002 2003 2004 2005 2006 2007 Period ------------------------------ ------------------------------------------------- Non-Cash Working Capital Assumptions Accounts Receivable (AR) AR Days Outstanding na na 30 30 30 30 % of Sales na na 8.2% 8.2% 8.2% 8.2% Franchise Fee Receivable Franchise fee earned $ 280 $ 910 $ 980 $ 980 Less Franchise fee received (23) (221) (547) (852) --------------------------------------- Ending Franchise fee receivable 257 689 433 128 --------------------------------------- Changes in Non-Cash Net Working Capital Accounts Receivable $ - $ - $ - $ 7 $ 55 $ 176 $ 278 Franchise Fee Receivable 257 689 433 128 ------------------------------ --------------------------------------- Non-Cash Net WC $ - $ - $ - $ 264 $ 744 $ 609 $ 407 ============================== ======================================= % of EBITDA na na 956.0% 143.8% 81.1% 34.0% ==================== ======================================= Cash Flow (Used) Sourced by Non-Cash Net Wrkg Capital $ - $ - $ (264) $ (480) $ 135 $ 202 $ - ==================== =================================================
-------------------------------------------------------------------------------- Sources of information: Company financials, projections and management. 53 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Cost of Capital Calculation & Net Debt ($ in thousands, except per share)
Cost of Common Stock Company Owned Base Case Franchises Satellite Stores --------------- --------------- ---------------- Riskless (1) 30 year treasury coupon (Rf) 4.9% 4.9% 4.9% Risk (2) Equity risk premium (EP) 7.8% 7.8% 7.8% Industry risk premium (IP) 2.3% 2.3% 2.3% Size Premium (SP) 8.4% 8.4% 8.4% Company Specific Stable Revenues -6.0% -6.0% -6.0% Operational Risk 0.0% 3.0% 0.0% New Strategy Risk 0.0% 5.0% 5.0% --------------- --------------- ---------------- Cost of Equity 17.4% 25.4% 22.4% =============== =============== ================ Weighted Average Cost of Capital After Tax Cost of Debt 4.9% 4.9% 4.9% =============== =============== ================ Weighted Average Cost of Capital 15.6% 22.5% 19.9% =============== =============== ================ Equity Value Net Debt Assumptions Estimated as of 28 Feb 2003 ------------------------------------------------- Company Owned Base Case Franchises Satellite Stores --------------- --------------- ---------------- Debt & Other Obligations Interest Bearing Debt $ 828 $ 828 $ 828 Minority Interests - - - Preferred Stock - - - --------------- --------------- ---------------- 828 828 828 --------------- --------------- ---------------- Less Cash Cash on Hand 4,805 4,805 4,805 Assumed cash from exercise of options 1,019 1,019 1,538 Assumed cash from Notes Receivable (3) 2,794 2,794 2,794 --------------- --------------- ---------------- 8,618 8,618 9,137 --------------- --------------- ---------------- Net Debt $ (7,790) $ (7,790) $ (8,309) =============== =============== ================ Cost of Debt Nominal % of Weighted Type of Debt Rate Amount of Debt Cost of Debt --------------------------------------------------------------------------------- Notes Payable 8.00% $ 828 100.0% 8.0% ------------------------------------------------ $ 828 100.0% 8.0% ================================================ Shares Outs. Stock Price Market % of Type (in thousands) 05-Feb-03 Value Total Capital --------------------------------------------------------------------------------- Debt $ 828 14.2% Common Stock 5,121 $ 0.9800 5,019 85.8% -------------------------------- $ 5,847 100.0% ================================ Estimated as of 28 Feb 2003 ------------------------------------------------ Company Owned Base Case Franchises Satellite Stores --------------- --------------- ---------------- Common Stock Equivalents (in thousands) Common Stock Outstanding 5,121 5,121 5,121 Stock issued re Other - - - --------------- --------------- ---------------- 5,121 5,121 5,121 --------------- --------------- ---------------- Avg Exercise $ Options in the money: Options less than $2.00 $ 1.80 565 565 565 Options less than $2.50 $ 2.26 - - 230 --------------- --------------- ---------------- 565 565 795 --------------- --------------- ---------------- Total Common Stock Equivalents 5,686 5,686 5,916 =============== =============== ================
-------------------------------------------------------------------------------- (1) As reported by the Federal Reserve Board on a weekly-average basis for the week ended February 20, 2003. (2) Sourced from the Ibbotson SBBI Valuation Edition 2002 Yearbook. Sources of information: Company financials, projections & management, Ibbotson 2002 SBBI and Federal Reserve Board. 54 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Comparable Company Analysis 55 BCT International, Inc. Confidential ------------------------------------------------------------------------------- Comparable Company Analysis - Valuation Multiples ($ in thousands, except per share data)
Market Value as a Multiple of ------------------------------------ % Below/Above Total EPS Stock Price 52-week Market Invested Enterprise ------------------ Common Net Tang. Company 20-Feb-03 High-Low Value Capital(1) Value(2) LTM Est CFY(3) Equity Common Eq -------------------------- ------------ ------------ ---------- ----------- ----------- ------- ----------- --------- ----------- Consolidated Graphics, Inc. $ 24.770 0.5% - 72.6% $ 330,135 $ 506,469 $ 499,419 na 15.5x 1.3x 2.4x Mail-Well, Inc. 2.150 69.0% - 126.3% 103,740 1,020,528 880,690 na 6.5 0.7 na Impreso, Inc. 1.960 44.6% - 14.0% 10,347 44,544 44,338 8.5 na 0.6 0.6 Moore Corporation 11.150 22.8% - 42.0% 1,242,210 1,487,394 1,373,342 na 13.4 3.6 5.3 Wallace Computer Services 25.400 5.5% - 60.8% 1,061,720 1,270,702 1,233,337 19.2 na 2.3 3.9 ----------------------------------------------------------------------------------------- High $1,242,210 $1,487,394 $1,373,342 19.2x 15.5x 3.6x 5.3x Mean 549,630 865,927 806,225 13.9 11.8 1.7 3.1 Median 330,135 1,020,528 880,690 13.9 13.4 1.3 3.2 Low 10,347 44,544 44,338 8.5 6.5 0.6 0.6 ----------------------------------------------------------------------------------------- BCT International $ 0.910 18.0% - 97.8% $ 4,660 $ 5,488 $ 683 11.4x 7.0x 0.3x 0.3x
Total Invested Capitals(TIC)as a Multiple of Enterprise Value (EV) as a Multiple of -------------------------------------------- ------------------------------------------ Revenue Revenue 5 Year ------- LTM LTM Total -------- LTM LTM Total EPS Growth Company LTM EBIT EBITDA Assets LTM EBIT EBITDA Assets Proj.3) -------------------------- -------- -------- -------- --------- -------- -------- ------- ------- ----------- Consolidated Graphics, Inc. 0.7x 12.9x 6.5x 0.9x 0.7x 12.7x 6.4x 0.9x 10.0% Mail-Well, Inc. 0.7 18.4 9.9 0.7 0.6 15.9 8.6 0.6 5.0% Impreso, Inc. 0.3 11.7 8.7 0.6 0.3 11.7 8.6 0.6 na Moore Corporation 0.7 na 8.5 1.0 0.7 na 7.8 1.0 15.0% Wallace Computer Services 0.8 11.9 7.4 1.4 0.8 11.5 7.2 1.3 na --------------------------------------------------------------------------------------------------------- High 0.8x 18.4x 9.9x 1.4x 0.8x 15.9x 8.6x 1.3x 15.0% Mean 0.7 13.7 8.2 0.9 0.6 12.9 7.7 0.9 10.0% Median 0.7 12.4 8.5 0.9 0.7 12.2 7.8 0.9 10.0% Low 0.3 11.7 6.5 0.6 0.3 11.5 6.4 0.6 5.0% --------------------------------------------------------------------------------------------------------- BCT International 0.3x 7.3x 5.6x 0.3x 0.0x 0.9x 0.7x 0.0x na
-------------------------------------------------------------------------------- (1) Total Invested Capital equals Market Value plus total debt, preferred stock, and minority interests. (2) Enterprise Value equals Market Value plus total debt, preferred stock, and minority interests, less cash. (3) Sources of estimates: Multex Estimates and other various securities analysts' estimates and reports. Sources of information: SEC Edgar filings, Multex, CapitalIQ, Commodity Systems, Hoovers & BCT International financial statements and management. 56 BCT International, Inc. Confidential -------------------------------------------------------------------------------- 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 S G & A Margin EBITDA EBIT Income Assets Common Eq --------------------------- ------- ---------- ------ --------- --------- -------- ------ -------- -------- --------- Consolidated Graphics, Inc. CGX $ 709,780 24.5% 19.0% 5.5% 11.0% 5.5% -1.6% -1.9% -4.2% Mail-Well, Inc. MWL 1,521,018 18.8% 15.0% 3.8% 6.8% 3.6% -0.6% -0.6% -4.6% Impreso, Inc. ZCOM 129,506 10.2% 7.4% 2.8% 4.0% 2.9% 0.9% 1.8% 7.3% Moore Corporation MCL 2,053,308 31.3% 29.7% 1.6% 8.5% 1.8% -1.2% -1.9% -7.6% Wallace Computer Services WCS 1,522,126 27.1% 20.1% 7.0% 11.3% 7.0% 3.6% 5.9% 12.2% ------------------------------------------------------------------------------------------------------- High $ 2,053,308 31.3% 29.7% 7.0% 11.3% 7.0% 3.6% 5.9% 12.2% Mean 1,187,148 22.4% 18.2% 4.2% 8.3% 4.2% 0.2% 0.7% 0.6% Median 1,521,018 24.5% 19.0% 3.8% 8.5% 3.6% -0.6% -0.6% -4.2% Low 129,506 10.2% 7.4% 1.6% 4.0% 1.8% -1.6% -1.9% -7.6% ------------------------------------------------------------------------------------------------------- BCT International BCTI $ 18,381 43.1% 39.0% 4.1% 5.4% 4.1% 2.5% 2.6% 3.1%
LTM (1) as of Latest Available Filing --------------------------------------------- --------------------------------------------------------- Accts Days Total Debt Total Debt Latest FY Receivable Inventory Sales Current to Total Total Debt to Revenue Company Turnover Turnover Outstanding Ratio Capitalization to TIC EBITDA Growth ------------------------- ---------- --------- ----------- ------- -------------- ---------- ---------- --------- Consolidated Graphics, Inc 6.0x 16.55x 60.4 1.7 41.4% 34.8% 2.3x -5.8% Mail-Well, Inc. 7.0 11.7 52.3 1.3 85.6% 89.8% 8.9x -9.3% Impreso, Inc. 8.9 3.2 41.0 1.3 67.2% 76.8% 6.7x 27.9% Moore Corporation 6.1 10.8 59.6 1.1 41.3% 16.5% 1.4x -4.6% Wallace Computer Services 6.1 12.3 59.9 2.4 31.5% 16.4% 1.2x -8.5% -------------------------------------------------------------------------------------------------------- High 8.9x 16.5x 60.4 2.4 85.6% 89.8% 8.9x 27.9% Mean 6.8 10.9 54.6 1.6 53.4% 46.9% 4.1 -0.1% Median 6.1 11.7 59.6 1.3 41.4% 34.8% 2.3 -5.8% Low 6.0 3.2 41.0 1.1 31.5% 16.4% 1.2 -9.3% -------------------------------------------------------------------------------------------------------- BCT International BCTI 7.0x 4.56x 52.4 5.0 5.1% 15.1% 0.8x -7.3%
-------------------------------------------------------------------------------- (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, CapitalIQ, Commodity Systems, Hoovers & BCT International financial statements and management. 57 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Comparable Company Analysis - Income Statement Overview ($ in thousands, except per share data)
Revenue EBITDA (1) EBIT (1) --------------------------------- ------------------------ ------------------------ Latest Latest Latest Company LTM 10-K LTM 10-K LTM 10-K --------------------------------- ---------------- --------------- ----------- ------------ ----------- ----------- Consolidated Graphics, Inc. $ 709,780 $ 643,948 $ 77,984 $ 84,256 $ 39,343 $ 42,944 Mail-Well, Inc. 1,521,018 1,653,471 102,805 136,451 55,485 76,816 Impreso, Inc. 129,506 123,065 5,135 4,730 3,800 3,468 Moore Corporation 2,053,308 2,154,574 175,224 17,380 36,507 (221,692) Wallace Computer Services 1,522,126 1,545,629 171,409 176,292 107,202 109,885 Net Income (1) EPS (1) ------------------------- ------------------------ Latest Latest Latest Latest Available Available Company LTM 10-K LTM 10-K 10-Q 10-K --------------------------------- ------------ ------------ ----------- ------------ ------------- ------------ Consolidated Graphics, Inc. $ (11,550) $ 16,680 $(0.88) $ 1.27 31-Dec-02 31-Mar-02 Mail-Well, Inc. (9,041) 14,281 (0.19) 0.30 30-Sep-02 31-Dec-01 Impreso, Inc. 1,215 1,063 0.23 0.20 30-Nov-02 31-Aug-02 Moore Corporation (25,536) (287,937) (0.41) (3.25) 30-Sep-02 31-Dec-01 Wallace Computer Services 55,155 55,826 1.32 1.35 31-Oct-02 31-Jul-02
------------------------------------------------------------------------------------- High $ 2,053,308 $ 2,154,574 $ 175,224 $ 176,292 $ 107,202 Mean 1,187,148 1,224,137 106,511 83,822 48,467 Median 1,521,018 1,545,629 102,805 84,256 39,343 Low 129,506 123,065 5,135 4,730 3,800 ------------------------------------------------------------------------------------- ----------------------------------------------------------------------------- High $ 109,885 $ 55,155 $ 55,826 $ 1.32 $ 1.35 Mean 2,284 2,049 (40,018) 0.01 (0.03) Median 42,944 (9,041) 14,281 (0.19) 0.30 Low (221,692) (25,536) (287,937) (0.88) (3.25) -----------------------------------------------------------------------------
Revenue EBITDA (1) EBIT (1) --------------------------------- ------------------------ ------------------------ Latest Latest Latest Company LTM 10-K LTM 10-K LTM 10-K --------------------------------- ---------------- --------------- ----------- ------------ ----------- ----------- BCT International $ 18,381 $ 18,007 $ 988 $ 1,189 $ 755 $ 963 Net Income (1) EPS (1) ------------------------- ------------------------ Latest Latest Latest Latest Available Available Company LTM 10-K LTM 10-K 10-Q 10-K --------------------------------- ------------ ------------ ----------- ------------ ------------- ------------ BCT International $ 460 $ 584 $ 0.08 $ 0.11 30-Nov-02 28-Feb-02
-------------------------------------------------------------------------------- (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, CapitalIQ, Commodity Systems, Hoovers & BCT International financial statements and management. 58 BCT International, Inc. -------------------------------------------------------------------------------- Comparable Company Analysis - Balance Sheet Overview ($ in thousands)
As of Latest Available Filing ----------------------------------------------------------------------------------------------------- Cash, Equivalents Accounts Total Current Intangibles, Total Company & Mrkt Sec Receivables Inventory Assets PPE, net net Assets ------------------------------ -------------- ------------- ------------- -------------- ------------- ------------- ------------- Consolidated Graphics, Inc. $ 7,050 $ 113,018 $ 31,991 $ 162,276 $ 281,661 $ 110,556 $ 562,466 Mail-Well, Inc. 139,838 228,014 106,137 541,342 387,936 412,037 1,379,758 Impreso, Inc. 206 13,249 39,606 53,767 15,737 - 69,615 Moore Corporation 114,052 334,137 131,644 610,312 264,596 112,873 1,417,462 Wallace Computer Services 37,365 254,577 95,328 423,245 313,028 185,647 941,186 ---------------------------------------------------------------------------------------------------------------- High $ 139,838 $ 334,137 $ 131,644 $ 610,312 $ 387,936 $ 412,037 $1,417,462 Mean 59,702 188,599 80,941 358,188 252,592 164,223 874,097 Median 37,365 228,014 95,328 423,245 281,661 112,873 941,186 Low 206 13,249 31,991 53,767 15,737 - 69,615 ---------------------------------------------------------------------------------------------------------------- BCT International $ 4,805 $ 2,386 $ 2,697 $ 10,806 $ 963 $ 186 $ 18,185 As of Latest Available Filing ----------------------------------------------------------- Latest Total Current Total Total Net Tangible Available Company Liabilities Debt Common Eq Common Eq Filing ------------------------------ --------------- -------------- ------------- -------------- ------------- Consolidated Graphics, Inc. $ 97,442 $ 176,334 $ 249,809 $ 139,253 31-Dec-02 Mail-Well, Inc. 412,854 916,788 154,194 (257,843) 30-Sep-02 Impreso, Inc. 41,497 34,197 16,728 16,728 30-Nov-02 Moore Corporation 547,148 245,184 348,593 235,720 30-Sep-02 Wallace Computer Services 175,689 208,982 454,813 269,166 31-Oct-02 ----------------------------------------------------------------------- High $ 547,148 $ 916,788 $ 454,813 $ 269,166 Mean 254,926 316,297 244,827 80,605 Median 175,689 208,982 249,809 139,253 Low 41,497 34,197 16,728 (257,843) ----------------------------------------------------------------------- BCT International $ 2,146 $ 828 $ 15,291 $ 15,105 30-Nov-02
-------------------------------------------------------------------------------- Sources of information: SEC Edgar filings, Multex, CapitalIQ, Commodity Systems, Hoovers & BCT International financial statements and management. 59
------------------------------------------------------------------------------------------------------------------------------------ Consolidated Graphics, Inc. Overview ------------------------------------------------------------------------------------------------------------------------------------ Name Consolidated Graphic Address 5858 Westheimer Joe Davis, Chmn & CEO A national provider of commercial Latest Fiscal YE l31-Mar-02 Telephone 713-787-0977 printing services. Sales are Latest Rprt Per P31-Dec-02 Website consolidatedgraphics.com mainly derived from commercial printing services, which include electronic prepress, printing, finishing storage and delivery of high quality, custom-designed products. Examples of such products ------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------ Income and Cashflow Statement Data ------------------------------------------------------------------------------------------ ($ in thousands, except per share) LTM Nine Months Ended Fiscal Years Ended ------------------- ------------------- Dec-02 Dec-02 Dec-01 Mar-02 Mar-01 ------------ ------------------- ------------------- Revenue $ 709,780 $544,174 $478,342 $643,948 $683,396 COGS 535,750 411,860 353,257 477,147 494,158 ------------ ------------------- ------------------- Gross Profit 174,030 132,314 125,085 166,801 189,238 Selling, General & Administrative 134,687 98,188 87,358 123,857 124,665 Research & Development - - - - - Other Operating - - - - - ------------ ------------------- ------------------- Operating Income 39,343 34,126 37,727 42,944 64,573 Interest Income / (Expense), net (11,053) (8,020) (12,111) (15,144) (20,858) Other Income / (Expense), net - - - - - ------------ ------------------- ------------------- Pre-tax Income 28,290 26,106 25,616 27,800 43,715 Taxes 39,840 38,927 10,207 11,120 17,676 ------------ ------------------- ------------------- After-tax Income (11,550) (12,821) 15,409 16,680 26,039 Minority Interest - - - - - Equity in Affiliates - - - - - ------------ ------------------- ------------------- Normalized Net Income (11,550) (12,821) 15,409 16,680 26,039 Preferred Dividends - - - - - ------------ ------------------- ------------------- Normalized Net Income to Common $ (11,550) $(12,821) $ 15,409 $ 16,680 $ 26,039 ============ =================== =================== EBIT $ 39,343 $ 34,126 $ 37,727 $ 42,944 $ 64,573 Depreciation & Amortization $ 38,641 $ 27,658 $ 30,329 $ 41,312 $ 38,783 EBITDA $ 77,984 $ 61,784 $ 68,056 $ 84,256 $103,356 CAPEX $ 14,838 $ 9,507 $ 10,939 $ 16,270 $ 26,434 EBITDA - CAPEX $ 63,146 $ 52,277 $ 57,117 $ 67,986 $ 76,922 GAAP Operating Cash Flow $ 86,415 $ 72,566 $ 55,907 $ 69,756 $ 68,118 Basic Reported Weighted Avg Shares Out (000's) 13,212 13,054 13,107 13,142 Basic Normalized EPS $ (0.88) $ (0.97) $ 1.18 $ 1.27 $ 1.98 Basic Reported EPS $ (4.12) $ (4.40) $ 0.99 $ 1.27 $ 1.68 Diluted Reported Weighted Avg Shares Out (000's) 13,528 13,334 13,380 13,186 Diluted Normalized EPS $ (0.86) $ (0.95) $ 1.16 $ 1.25 $ 1.97 Diluted Reported EPS $ (4.02) $ (4.30) $ 0.97 $ 1.25 $ 1.68 --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- Normalized Reconciliation --------------------------------------------------------------------------------------------- Restructuring/Goodwill Impairment $ (70,351) $(74,376) $ (4,025) $ - $ - Other Unusual (Expense) Gain Items - - - - (6,440) Tax Shelter (Charge) on Unusual Items 27,437 29,007 1,570 - 2,512 ------------ ------------------ ------------------- Unusual (Exp) Gain Items, net of Taxes (42,914) (45,369) (2,455) - (3,928) Accounting Changes, net of Taxes - - - - - Discontinued Operations, net of Taxes - - - - - Extraordinary Items, net of Taxes - - - - - ------------ ------------------ ------------------ Total Reconciling Items, net of Taxes $ (42,914) $(45,369) $ (2,455) $ - $ (3,928) ============ ================== =================== Reported Income Tax (Benefit) $ 12,403 $ 9,920 $ 8,637 $ 11,120 $ 15,164 Reported Net Income (Loss) $ (54,464) $(58,190) $ 12,954 $ 16,680 $ 22,111 --------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- Profitability & Cost Ratios (as % of Revenue) --------------------------------------------------------------------------------------------- Gross Profit 24.5% 24.3% 26.1% 25.9% 27.7% S,G & A 19.0% 18.0% 18.3% 19.2% 18.2% Operating Income 5.5% 6.3% 7.9% 6.7% 9.4% Pre-Tax 4.0% 4.8% 5.4% 4.3% 6.4% EBIT 5.5% 6.3% 7.9% 6.7% 9.4% EBITDA 11.0% 11.4% 14.2% 13.1% 15.1% Normalized Net Income to Common -1.6% -2.4% 3.2% 2.6% 3.8% Reported Net Income -7.7% -10.7% 2.7% 2.6% 3.2% CAPEX 2.1% 1.7% 2.3% 2.5% 3.9% ------------------------------------------------------------------------------------------ ------------------------------------------------------------------ Balance Sheet Data ------------------------------------------------------------------ ($ in thousands, except per share) As of As of ------------------ 31-Dec-02 Mar-02 Mar-01 --------- ------------------ Cash & Equivalents $ 7,050 $ 8,955 $ 8,667 Marketable Securities - - - --------- ------------------ Total Cash & Mkt Securities 7,050 8,955 8,667 Accounts Receivable 113,018 121,981 116,095 Inventory 31,991 32,771 31,536 Other Current Assets 10,217 11,267 8,628 --------- ------------------ Total Current Assets 162,276 174,974 164,926 PPE, net 281,661 293,831 299,871 Intangibles, net 110,556 199,331 203,030 Investments - - - Other Assets 7,973 8,597 6,840 --------- ------------------ Total Assets $562,466 $676,733 $674,667 ========= ================== Accounts Payable $ 32,759 $ 32,068 $ 33,865 Accrued Expenses 43,435 37,382 32,609 Short Term Debt 21,198 19,877 18,711 Short Term Capital Leases - - - Other Current Liabilities 50 611 253 --------- ------------------ Total Current Liabilities 97,442 89,938 85,438 Other LT Liabilities 60,079 66,337 54,966 Long Term Debt 155,136 213,860 246,729 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - --------- ------------------ Total Liabilities & Pref Stock 312,657 370,135 387,133 --------- ------------------ Common Equity 249,809 306,598 287,534 --------- ------------------ Total Liabilities & Equity $562,466 $676,733 $674,667 ========= ================== Common Shares Outstanding (000's) 13,314 13,206 13,019 Cash Value per share $ 0.53 $ 0.68 $ 0.67 Book Value per share $ 8.76 $ 23.22 $ 22.09 Tangible Book Value per share $ 10.46 $ 8.12 $ 6.49 ------------------------------------------------------------------ ------------------------------------------------------------------ Effectiveness and Efficiency ------------------------------------------------------------------ A/R Turnover 6.04x 5.41x 5.89x Inventory Turnover 16.55x 14.84x 15.67x Asset Turnover 1.15x 0.95x 1.01x Days Sales Outstanding 60.4 67.5 62.0 Days Inventory Outstanding 22.1 24.6 23.3 Days Payable Outstanding 17.6 20.0 20.0 Return on Avg Assets -1.9% 2.5% na Return on Avg Common Equity -4.2% 5.6% na ------------------------------------------------------------------ ------------------------------------------------------------------ Financial Strength ------------------------------------------------------------------ Current Ratio 1.67 1.95 1.93 Quick Ratio 1.34 1.58 1.56 Total Debt $ 176,334 $ 233,737 $ 265,440 Net Debt $ 169,284 $ 224,782 $ 256,773 Total Capitalization $ 426,143 $ 540,335 $ 552,974 Total Debt/Total Capitalization 41.4% 43.3% 48.0% Net Debt/Total Capitalization 39.7% 41.6% 46.4% Total Debt/TIC 34.8% 46.2% 52.4% Total Debt/EBITDA 2.26x 2.77x 2.57x Total Debt/EBITDA-CAPEX 2.79x 3.44x 3.45x EBITDA/Interest Expense 7.06x 5.56x 4.96x EBITDA-CAPEX/Interest Expense 5.71x 4.49x 3.69x ------------------------------------------------------------------ --------------------------------------------------- Market Information --------------------------------------------------- As of Date 20-Feb-03 Exchange NYSE Stock Price $ 24.77 52 Week High $ 24.90 52 Week Low $ 14.35 Avg. Daily Volume (000's) 49 Beta 0.63 Shares Outstanding (000's) 13,328 Total Outstanding Warrants & Options (000's) - Float (000's) 11,000 Market Cap $ 330,135 Total Invested Capital (TIC) $ 506,469 Enterprise Value (EV) $ 499,419 Ownership Insiders % Owned 17.00% Institutional % Owned 56.00% Number of Institutions 212 --------------------------------------------------- --------------------------------------------------- Valuation Ratios --------------------------------------------------- Multiple of -------------------------------- Market Cap TIC EV -------------------------------- Latest Twelve Months Revenue 0.47x 0.71x 0.70x EBIT 8.39x 12.87x 12.69x EBITDA 4.23x 6.49x 6.40x Normalized Net Income na na na Basic Normalized EPS na na na Projected Mar-03 Mean Revenue 0.46x 0.71x 0.70x Mar-04 Mean Revenue 0.44x 0.67x 0.66x Mar-03 Mean EPS 15.48x na na Mar-04 Mean EPS 13.39x na na Most Recent Filing Assets 0.59x 0.90x 0.89x Common Equity 1.32x na na Tangible Common Equity 2.37x na na --------------------------------------------------- --------------------------------------------------- Mean Consensus Estimates --------------------------------------------------- Year Ending # Ests Revenue EPS --------------------------------------------------- March-03 1 $ 713,600 $ 1.60 March-04 1 $752,500 $ 1.85 LT Growth 1 10.00% --------------------------------------------------- --------------------------------------------------- Period Growth Rates --------------------------------------------------- Nine Months Ended Fiscal Years Ended Dec-02 Mar-02 ----------------- ------------------ Revenue 13.8% -5.8% EBIT -9.5% -33.5% EBITDA -9.2% -18.5% ---------------------------------------------------
--------------------------------------------------- Notes --------------------------------------------------- Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. 60 -------------------------------------------------------------------------------- Mail-Well, Inc. Overview -------------------------------------------------------------------------------- Name Mail-Well, Inc. Address 8310 S. Valley Hwy Officers Paul Reilly, Symbol MWL City, State Englewood, CO 80112 Pres & CEO Latest Fiscal31-Dec-01 Telephone (303) 790-8023 Latest Rprt P30-Sep-02 Website imagex.com Operates 103 printing and manufacturing facilities throughout North America and three in the United Kingdom.The Company provides high-impact color printing, and general commercial printing. The Company also has an envelope business that provides customi
------------------------------------------------------------------------------------------------------ Income and Cashflow Statement Data ------------------------------------------------------------------------------------------------------ ($ in thousands, except per share) LTM Nine Months Ended Fiscal Years Ended ---------------------- ---------------------- Sep-02 Sep-02 Sep-01 Dec-01 Dec-00 ----------- ---------------------- ---------------------- Revenue $ 1,521,018 $ 1,293,16 $1,425,622 $1,653,471 $1,823,583 COGS 1,235,255 1,041,064 1,129,900 1,324,091 1,438,435 ----------- -------------------- ---------------------- Gross Profit 285,763 252,105 295,722 329,380 385,148 Selling, General & Administra 227,929 200,051 222,896 250,774 261,465 Research & Development - - - - - Other Operating - - - - - ----------- ---------------------- ---------------------- Operating Income 57,834 52,054 72,826 78,606 123,683 Interest Income / (Expense), (55,954) (52,553) (49,350) (52,751) (62,127) Other Income / (Expense), net (2,349) (2,061) (1,502) (1,790) (974) ----------- ---------------------- ---------------------- Pre-tax Income (469) (2,560) 21,974 24,065 60,582 Taxes 8,572 10,824 12,035 9,784 22,615 ----------- ---------------------- ---------------------- After-tax Income (9,041) (13,384) 9,939 14,281 37,967 Minority Interest - - - - - Equity in Affiliates - - - - - ----------- ---------------------- ---------------------- Normalized Net Income (9,041) (13,384) 9,939 14,281 37,967 Preferred Dividends - - - - - ----------- ---------------------- ---------------------- Normalized Net Income to Common $ (9,041) $ (13,384) $ 9,939 $ 14,281 $ 37,967 =========== ====================== ====================== EBIT $ 55,485 $ 49,993 $ 71,324 $ 76,816 $ 122,709 Depreciation & $ 47,320 $ 40,439 $ 52,754 $ 59,635 $ 60,222 EBITDA $ 102,805 $ 90,432 $ 124,078 $ 136,451 $ 182,931 CAPEX $ 29,621 $ 26,943 $ 24,121 $ 26,799 $ 57,772 EBITDA - CAPEX $ 73,184 $ 63,489 $ 99,957 $ 109,652 $ 125,159 GAAP Operating $ 23,010 $ 7,745 $ 136,718 $ 151,983 $ 131,400 Basic Reported Weighted Avg Shares Out 47,665 47,526 47,562 48,789 Basic Normalized EPS $ (0.19) $ (0.28) $ 0.21 $ 0.30 $ 0.78 Basic Reported EPS $ (2.80) $ (1.84) $ (1.90) $ (2.86) $ 0.57 Diluted Reported Weighted Avg Shares Out 47,665 47,526 47,562 56,678 Diluted Normalizd EPS $ (0.19) $ (0.28) $ 0.21 $ 0.30 $ 0.67 Diluted Reported EPS $ (2.80) $ (1.84) $ (1.90) $ (2.86) $ 0.49 ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ Normalized Reconciliation ------------------------------------------------------------------------------------------------------ Restructuring/Goodwill Impa $ (92,898) $ (82,486) $ (34,378) $ (44,790) $ (6,160) Other Unusual (Expense) Gain Items - - - - - Tax Shelter (Charge) on Unusual 36,230 32,170 13,407 17,468 2,402 ----------- -------------------- -------------------- Unusual (Exp) Gain Items, net (56,668) (50,316) (20,971) (27,322) (3,758) Accounting Changes, net of Taxes - - - - - Discontinued Operations, net (57,700) (13,958) (79,434) (123,176) (8,038) Extraordinary Items, net of Taxes (10,125) (10,125) - - 1,447 ----------- -------------------- -------------------- Total Reconciling Items, n $ (124,493) $ (74,399) $ (100,405) $ (150,498 $ (10,349) =========== ==================== ==================== Reported Income $ (27,658) $ (21,346) $ (1,372) $ (7,684) $ 20,213 Reported Net $ (133,534) $ (87,783) $ (90,466) $ (136,217) $ 27,618 ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ Profitability & Cost Ratios (as % of Revenue) ------------------------------------------------------------------------------------------------------ Gross Profit 18.8% 19.5% 20.7% 19.9% 21.1% S,G & A 15.0% 15.5% 15.6% 15.2% 14.3% Operating Income 3.8% 4.0% 5.1% 4.8% 6.8% Pre-Tax 0.0% -0.2% 1.5% 1.5% 3.3% EBIT 3.6% 3.9% 5.0% 4.6% 6.7% EBITDA 6.8% 7.0% 8.7% 8.3% 10.0% Normalized Net Income to Common -0.6% -1.0% 0.7% 0.9% 2.1% Reported Net Income -8.8% -6.8% -6.3% -8.2% 1.5% CAPEX 1.9% 2.1% 1.7% 1.6% 3.2% ------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------- Balance Sheet Data -------------------------------------------------------------------- ($ in thousands, except per share) As of As of ---------------------- 30-Sep-02 Dec-01 Dec-00 ---------- --------------------- Cash & Equivalents $ 139,838 $ 809 $ 94 Marketable Securities - - - ---------- --------------------- Total Cash & Mkt Securi 139,838 809 94 Accounts Receivable 228,014 207,750 203,968 Inventory 106,137 104,544 131,417 Other Current Assets 67,353 367,451 452,241 ---------- ---------------------- Total Current 541,342 680,554 787,720 PPE, net 387,936 375,415 431,025 Intangibles, net 412,037 347,061 389,148 Investments - - - Other Assets 38,443 46,094 45,064 ---------- ---------------------- Total Assets $1,379,758 $ 1,449,1 $1,652,957 ========== ====================== Accounts Payable $ 155,773 $ 142,521 $ 127,912 Accrued Expenses 48,843 44,310 48,444 Short Term Debt 142,845 302,822 40,040 Short Term Capital Leases - - - Other Current Liabilitie 65,393 57,245 57,978 ---------- ---------------------- Total Current 412,854 546,898 274,374 Other LT Liabilities 38,767 110,172 112,977 Long Term Debt 773,943 550,177 879,753 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - ---------- ---------------------- Total Liabilities 1,225,564 1,207,247 1,267,104 ---------- ---------------------- Common Equity 154,194 241,877 385,853 ---------- ---------------------- Total Liabilities $1,379,758 $ 1,449,1 $1,652,957 ========== ====================== Common Share 48,225 48,326 47,455 Cash Value p $ 2.90 $ 0.02 $ 0.00 Book Value p $ 3.20 $ 5.01 $ 8.13 Tangible Bo $ (5.35) $ (2.18) $ (0.07) -------------------------------------------------------------------- -------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------- A/R Turnover 6.98x 8.03x 8.94x Inventory Turnover 11.73x 11.22x 10.95x Asset Turnover 1.08x 1.07x 1.10x Days Sales Outstanding 52.3 45.4 40.8 Days Inventory Outstanding 31.1 32.5 33.3 Days Payable Outstanding 37.2 31.3 27.5 Return on Avg Assets -0.6% 0.9% na Return on Avg Common Equi -4.6% 4.6% na -------------------------------------------------------------------- -------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------- Current Ratio 1.31 1.24 2.87 Quick Ratio 1.05 1.05 2.39 Total Debt $ 916,788 $ 852,999 $ 919,793 Net Debt $ 776,950 $ 852,190 $ 919,699 Total Capitalization $1,070,982 $1,094,87 $1,305,646 Total Debt/Total Capitali 85.6% 77.9% 70.4% Net Debt/Total Capitaliza 72.5% 77.8% 70.4% Total Debt/TIC 89.8% 83.6% 90.1% Total Debt/EBITDA 8.92x 6.25x 5.03x Total Debt/EBITDA-CAPEX 12.53x 7.78x 7.35x EBITDA/Interest Expense 1.84x 2.59x 2.94x EBITDA-CAPEX/Interest Ex 1.31x 2.08x 2.01x --------------------------------------------------------------------
---------------------------------------------------------------------------- Market Information ---------------------------------------------------------------------------- As of Date 20-Feb-03 Exchange NYSE Stock Price $ 2.15 52 Week High $ 6.94 52 Week Low $ 0.95 Avg. Daily Volume (000's) 87 Beta 1.36 Shares Outstanding (000's) 48,251 Total Outstanding Warrants & Options (000's) - Float (000's) 26,300 Market Cap $ 103,740 Total Invested Capital (TIC) $ 1,020,528 Enterprise Value (EV) $ 880,690 Ownership Insiders % Owned 45.00% Institutional % Owned 54.00% Number of Institutions 126 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Valuation Ratios ---------------------------------------------------------------------------- Multiple of ------------------------------------- Market Cap TIC EV ------------------------------------- Latest Twelve Months Revenue 0.07x 0.67x 0.58x EBIT 1.87x 18.39x 15.87x EBITDA 1.01x 9.93x 8.57x Normalized Net Income na na na Basic Normalized EPS na na na Projected Dec-02 Mean Revenu 0.06x 0.60x 0.52x Dec-03 Mean Revenu 0.06x 0.59x 0.51x Dec-02 Mean EPS 6.52x na na Dec-03 Mean EPS 5.12x na na Most Recent Filing Assets 0.08x 0.74x 0.64x Common Equity 0.67x na na Tangible Common Equit na na na ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Mean Consensus Estimates ---------------------------------------------------------------------------- Year Ending # Ests Revenue EPS ---------------------------------------------------------------------------- December-02 1 $ 1,693,150 $ 0.33 December-03 1 $ 1,722,970 $ 0.42 LT Growth - 5.00% ----------------------------------------------------------------------------
--------------------------------------------------------- Period Growth Rates --------------------------------------------------------- Nine Months Ended Fiscal Years Ended Sep-02 Dec-01 ----------------- ------------------ Revenue -9.3% -9.3% EBIT -29.9% -37.4% EBITDA -27.1% -25.4% --------------------------------------------------------- -------------------------------------------------------------------------- Notes Add backs include restructuring expenses and asset impairment charges. Discontinued operations represent sale of label & printed office product segments. Extraordinary items include gain from settlement of debt. -------------------------------------------------------------------------- Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. 61 Impreso, Inc. Overview Name Impreso, Inc. Address 652 Southwestern Blvd. Symbol ZCOM City, State Zip Coppell, TX 75019 Latest Fiscal YE 31-Aug-02 Telephone 972-462-0100 Latest Rprt Per 30-Nov-02 Website tstimpreso.com Officers Marshall Sorokwasz, CEO Impreso, Inc. is the holding company of TST/Impreso, Inc. (TST), a manufacturer and distributor to dealers and other resellers of various paper and film products for commercial and home use in domestic and international markets, and Hotsheet.com, Inc., th Income and cashflow Statement Data ($ in thousands, except per share)
Three Months Ended Fiscal Years Ended LTM ---------------------- ------------------------ Nov-02 Nov-02 Nov-01 Aug-02 Aug-01 ---------- --------- --------- --------- -------- Revenue $129,506 $31,842 $25,401 $123,065 $96,208 COGS 116,243 28,598 22,803 110,448 84,752 ---------- --------- --------- --------- -------- Gross Profit 13,263 3,244 2,598 12,617 11,456 Selling, General & Administrative 9,603 2,370 2,099 9,332 7,872 Research & Development - - - - - Other Operating - - - - - ---------- --------- --------- --------- -------- Operating Income 3,660 874 499 3,285 3,584 Interest Income / (Expense), net (1,774) (483) (453) (1,744) (1,633) Other Income / (Expense), net 140 107 150 183 72 ---------- --------- --------- --------- -------- Pre-tax Income 2,026 498 196 1,724 2,023 Taxes 811 193 43 661 776 ---------- --------- --------- --------- -------- After-tax Income 1,215 305 153 1,063 1,247 Minority Interest - - - - - Equity in Affiliates - - - - - ---------- --------- --------- --------- -------- Normalized Net Income 1,215 305 153 1,063 1,247 Preferred Dividends - - - - - ---------- --------- --------- --------- -------- Normalized Net Income to Common $ 1,215 $ 305 $ 153 $ 1,063 $ 1,247 ========== ========= ========== ========== ======== EBIT $ 3,800 $ 981 $ 649 $ 3,468 $ 3,656 Depreciation & Amortization $ 1,335 $ 366 $ 293 $ 1,262 $ 874 EBITDA $ 5,135 $ 1,347 $ 942 $ 4,730 $ 4,530 CAPEX $ 1,644 $ 163 $ 59 $ 1,540 $ 1,200 EBITDA - CAPEX $ 3,491 $ 1,184 $ 883 $ 3,190 $ 3,330 GAAP Operating Cash Flow $ (120) $(4,435) $ 1,126 $ 5,441 $ 4,946 Basic Reported Weighted Avg Shares Out (000's) 5,279 5,279 5,279 5,281 Basic Normalized EPS $ 0.23 $ 0.06 $ 0.03 $ 0.20 $ 0.24 Basic Reported EPS $ 0.23 $ 0.06 $ 0.15 $ 0.32 $ 0.24 Diluted Reported Weighted Avg Shares Out (000's) 5,279 5,279 5,279 5,281 Diluted Normalized EPS $ 0.23 $ 0.06 $ 0.03 $ 0.20 $ 0.24 Diluted Reported EPS $ 0.23 $ 0.06 $ 0.15 $ 0.32 $ 0.24
Normalized Reconciliation Restructuring/Goodwill Impairment $ - $ - $ - $ - $ - Other Unusual (Expense) Gain Items - - 1,005 1,005 - Tax Shelter (Charge) on Unusual Items - - (392) (392) - ------- --------------------- --------------------- Unusual (Exp) Gain Items, net of Taxes - - 613 613 - Accounting Changes, net of Taxes - - - - - Discontinued Operations, net of Taxes - - - - - Extraordinary Items, net of Taxes - - - - - ------- --------------------- --------------------- Total Reconciling Items, net of Taxes $ - $ - $ 613 $ 613 $ - ======= ===================== ===================== Reported Income Tax (Benefit) $ 811 $193 $ 435 $1,053 $ 776 Reported Net Income(Loss) $ 1,215 $305 $ 766 $1,676 $1,247
Profitability & Cost Ratios (as % of Revenue) Gross Profit 10.2% 10.2% 10.2% 10.3% 11.9% S,G & A 7.4% 7.4% 8.3% 7.6% 8.2% Operating Income 2.8% 2.7% 2.0% 2.7% 3.7% Pre-Tax 1.6% 1.6% 0.8% 1.4% 2.1% EBIT 2.9% 3.1% 2.6% 2.8% 3.8% EBITDA 4.0% 4.2% 3.7% 3.8% 4.7% Normalized Net Income to Common 0.9% 1.0% 0.6% 0.9% 1.3% Reported Net Income 0.9% 1.0% 3.0% 1.4% 1.3% CAPEX 1.3% 0.5% 0.2% 1.3% 1.2%
------------------------------------------------------------------------------------------- Balance Sheet Data ------------------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ------------------------- 30-Nov-02 Aug-02 Aug-01 ------------ ------------ ------------ Cash & Equivslents $ 206 $ 203 $ 11 Marketable Securities - - - ------------ ------------ ------------ Total Cash & Mkt Securities 206 203 211 Accounts Receivable 13,249 15,864 11,748 Inventory 39,606 34,111 38,460 Other Current Assets 706 740 351 ------------ ------------ ------------ Total Current Assets 53,767 50,918 50,770 PPE, net 15,737 15,939 11,213 Intangibles, net - - - Investments - - - Other Assets 111 115 219 ------------ ------------ ------------ Total Assets $ 69,615 $ 66,972 $ 62,202 ============ ============ ============ Accounts Payable $ 15,097 $ 16,302 $ 18,572 Accrued Expenses 2,630 3,703 1,942 Short Term Debt 23,770 18,992 19,720 Short Term Capital Leases - - - Other Current Liabilities - - - ------------ ------------ ------------ Total Current Liabilities 41,497 38,997 40,234 Other LT Liabilities 963 949 927 Long Term Debt 10,427 10,609 6,328 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - ------------ ------------ ------------ Total Liabilities & Pref Stock 52,887 50,555 47,489 ------------ ------------ ------------ Common Equity 16,728 16,417 14,713 ------------ ------------ ------------ Total Liabilities & Equity $ 69,615 $ 66,972 $ 62,202 ============ ============ ============ Common Shares Outstanding (000's) 5,279 5,279 5,265 Cash Value per share $ 0.04 $ 0.04 $ 0.04 Book Value per share $ 3.17 $ 3.11 $ 2.79 Tangible Book Value per share $ 3.17 $ 3.11 $ 2.79
-------------------------------------------------------------------------------- Effectiveness and Efficiency -------------------------------------------------------------------------------- A/R Turnover 8.90 x 8.91 x 8.19 x Inventory Turnover 3.15 x 3.04 x 2.20 x Asset Turnover 1.90 x 1.91 x 1.55 x Days Sales Outstanding 41.0 40.9 44.6 Days Inventory Outstanding 115.7 119.9 165.6 Days Payable Outstanding 45.5 53.1 73.2 Return on Avg Assets 1.8% 1.6% na Return on Avg Common Equity 7.3% 6.8% na -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial Strength -------------------------------------------------------------------------------- Current Ratio 1.30 1.31 1.26 Quick Ratio 0.34 0.43 0.31 Total Debt $34,197 $29,601 $26,048 Net Debt $33,991 $29,398 $25,837 Total Capitalization $50,925 $46,018 $40,761 Total Debt/Total Capitalization 67.2% 64.3% 63.9% Net Debt/Total Capitalization 66.7% 63.9% 63.4% Total Debt/TIC 76.8% 66.5% 58.5% Total Debt/EBITDA 6.66x 6.26x 5.75x Total Debt/EBITDA-CAPEX 9.80x 9.28x 7.82x EBITDA/Interest Expense 2.89x 2.71x 2.77x EBITDA-CAPEX/Interest Expense 1.97x 1.83x 2.04x -------------------------------------------------------------------------------- --------------------------------------------------------------- Market Information --------------------------------------------------------------- As of Date 20-Feb-03 Exchange NASDAQ Stock Price $ 1.96 52 Week High $ 3.54 52 Week Low $ 1.72 Avg. Daily Volume (000's) 3 Beta 0.81 Shares Outstanding (000's) 5,279 Total Outstanding Warrants & Options (000's) - Float (000's) 1,700 Market Cap $10,347 Total Invested Capital (TIC) %44,544 Enterprise Value (EV) $44,338 Ownership Insiders % Owned 68.00% Institutional % Owned 3.00% Number of Institutions 10 --------------------------------------------------------------- --------------------------------------------------------------- Valuation Ratios --------------------------------------------------------------- Multiple of ------------------------------------ Market Cap TIC EV ----------- ----------- ------------ Latest Twelve Months Revenue 0.08x 0.34x 0.34x EBIT 2.72x 11.72x 11.67x EBITDA 2.01x 8.67x 8.63x Normalized Net Income 8.52x 36.66x 36.49x Basic Normalized EPS 8.52x na na Projected Dec-02 Mean Revenue na na na Dec-03 Mean Revenue na na na Dec-02 Mean EPS na na na Dec-03 Mean EPS na na na Most Recent Filing Assets 0.15x 0.64x 0.64x Common Equity 0.62x na na Tangible Common Equity 0.62x na na --------------------------------------------------------------- --------------------------------------------------------------- Mean Consensus Estimates --------------------------------------------------------------- Year # Ests Revenue EPS Ending --------------------------------------------------------------- December-02 na na na December-03 na na na LT Growth na na na --------------------------------------------------------------- --------------------------------------------------------------- Period Growth Rates --------------------------------------------------------------- Three Months Ended Fiscal Years Ended Nov-02 Aug-02 ----------- ------------ Revenue 25.4% 27.9% EBIT 51.2% -5.1% EBITDA 43.0% 4.4% --------------------------------------------------------------- ----------- -------------- ----------- ----------- ------------ Notes Unusual expense relates to litigation settlement Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. -------------------------------------------------------------------------------- Moore Corporation Overview
--------------------------------------------------------------------------------------------------------------------------- Name Moore Corporation Address 6100 Vipond Drive Officers Alfred Eckert, III, Chair Symbol MCL City, State Zip Mississauga, ON L5T 2, Canada Latest Fiscal YE 31-Dec-01 Telephone (905) 362-3100 Latest Rprt Per 30-Sep-02 Website http://www.moore.com/ ---------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Moore operates in three complementary business segments: Forms and Labels, Outsourcing and Commercial. The Forms and Labels business designs, manufactures and sells paper based and electronic business forms and labels, and provides electronic print manage --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------- Income and Cashflow Statement Data ------------------------------------------------------------------------------------------------------------------------- ($ in thousands, except per share) Nine Months Ended Fiscal Years Ended LTM ------------------------- ------------------------------ Sep-02 Sep-02 Sep-01 Dec-01 Dec-00 ------------ ------------------------- ------------------------------ Revenue $ 2,053,308 $ 1,516,059 $ 1,617,325 $ 2,154,574 $2,258,418 COGS 1,409,680 1,036,672 1,179,553 1,552,561 1,598,525 ------------ ------------------------- ------------------------------ Gross Profit 643,628 479,387 437,772 602,013 659,893 Selling, General & Administrative 610,487 406,295 610,466 814,658 730,160 Research & Development - - - - - Other Operating - - - - - ------------ ------------------------- ------------------------------ Operating Income 33,141 73,092 (172,694) (212,645) (70,267) Interest Income / (Expense), net (17,338) (8,965) (18,280) (26,653) (25,561) Other Income / (Expense), net 3,366 4,936 (7,477) (9,047) (9,797) ------------ ------------------------- ------------------------------ Pre-tax Income 19,169 69,063 (198,451) (248,345) (105,625) Taxes 28,346 13,034 7,125 22,437 (26,750) ------------ ------------------------- ------------------------------ After-tax Income (9,177) 56,029 (205,576) (270,782) (78,875) Minority Interest (1,014) (577) (1,373) (1,810) (2,157) Equity in Affiliates - - - - - ------------ ------------------------- ------------------------------ Normalized Net Income (10,191) 55,452 (206,949) (272,592) (81,032) Preferred Dividends 15,345 - - 15,345 - ------------ ------------------------- ------------------------------ Normalized Net Income to Common $ (25,536) $ 55,452 $ (206,949) $ (287,937) $ (81,032) ============ ========================= ============================== EBIT $ 36,507 $ 78,028 $ (180,171) $ (221,692) $ (80,064) Depreciation & Amortization $ 138,717 $ 65,578 $ 165,933 $ 239,072 $ 152,546 EBITDA $ 175,224 $ 143,606 $ (14,238) $ 17,380 $ 72,482 CAPEX $ 25,122 $ 3,423 $ 14,581 $ 36,280 $ 36,913 EBITDA - CAPEX $ 150,102 $ 140,183 $ (28,819) $ (18,900) $ 35,569 GAAP Operating Cash Flow $ 131,333 $ 90,160 $ 95,156 $ 136,329 $ 34,690 Basic Reported Weighted Avg Shares Out (000's) 111,568 88,457 88,648 88,457 Basic Normalized EPS $ (0.41) $ 0.50 $ (2.34) $ (3.25) $ (0.92) Basic Reported EPS $ (0.70) $ 0.41 $ (3.10) $ (4.21) $ (0.75) Diluted Reported Weighted Avg Shares Out (000's) 113,885 88,457 88,648 88,457 Diluted Normalized EPS $ (0.42) $ 0.49 $ (2.34) $ (3.25) $ (0.92) Diluted Reported EPS $ (0.71) $ 0.40 $ (3.10) $ (4.21) $ (0.75) ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- Normalized Reconciliation ------------------------------------------------------------------------------------------------------------------------- Restructuring/Goodwill Impairment $ (19,765) $ - $ (109,914) $ (129,679) $ 24,033 Other Unusual (Expense) Gain Items (27,142) (16,746) - (10,396) - Tax Shelter (Charge) on Unusual Items 18,294 6,531 42,866 54,629 (9,373) ------------ ------------------------- ------------------------------ Unusual (Exp) Gain Items, net of Taxes (28,613) (10,215) (67,048) (85,446) 14,660 Accounting Changes, net of Taxes - - - - - Discontinued Operations, net of Taxes - - - - - Extraordinary Items, net of Taxes - - - - - ------------ ------------------------- ------------------------------ Total Reconciling Items, net of Taxes $ (28,613) $ (10,215) $ (67,048) $ (85,446) $ 14,660 ============ ========================= ============================== Reported Income Tax (Benefit) $ 10,052 $ 6,503 $ (35,741) $ (32,192) $ (17,377) Reported Net Income (Loss) $ (54,149) $ 45,237 $ (273,997) $ (373,383) $ (66,372) ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- Profitability & Cost Ratios (as % of Revenue) ------------------------------------------------------------------------------------------------------------------------- Gross Profit 31.3% 31.6% 27.1% 27.9% 29.2% S,G & A 29.7% 26.8% 37.7% 37.8% 32.3% Operating Income 1.6% 4.8% -10.7% -9.9% -3.1% Pre-Tax 0.9% 4.6% -12.3% -11.5% -4.7% EBIT 1.8% 5.1% -11.1% -10.3% -3.5% EBITDA 8.5% 9.5% -0.9% 0.8% 3.2% Normalized Net Income to Common -1.2% 3.7% -12.8% -13.4% -3.6% Reported Net Income -2.6% 3.0% -16.9% -17.3% -2.9% CAPEX 1.2% 0.2% 0.9% 1.7% 1.6% -------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------- Balance Sheet Data ---------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of ----------------------- 30-Sep-02 Dec-01 Dec-00 ----------- ----------------------- Cash & Equivalents $ 114,052 $ 84,855 $ 36,538 Marketable Securities - - - ----------- ----------------------- Total Cash & Mkt Securities 114,052 84,855 36,538 Accounts Receivable 334,137 336,153 407,304 Inventory 131,644 128,421 154,484 Other Current Assets 30,479 27,110 92,562 ----------- ----------------------- Total Current Assets 610,312 576,539 690,888 PPE, net 264,596 307,640 409,099 Intangibles, net 112,873 42,294 130,530 Investments 33,473 32,204 33,650 Other Assets 396,208 378,309 479,420 ----------- ----------------------- Total Assets $ 1,417,462 $1,336,986 $1,743,587 =========== ======================= Accounts Payable $ 459,467 $ 486,626 $ 400,057 Accrued Expenses - - - Short Term Debt 30,291 74,215 32,137 Short Term Capital Leases - - - Other Current Liabilities 57,390 28,001 36,053 ----------- ----------------------- Total Current Liabilities 547,148 588,842 468,247 Other LT Liabilities 306,828 304,632 366,945 Long Term Debt 208,192 111,062 272,465 Long Term Capital Leases - - - Minority Interests 6,701 11,200 11,245 Pref Stock (Liq Value) - - - ----------- ----------------------- Total Liabilities & Pref Stock 1,068,869 1,015,736 1,118,902 ----------- ----------------------- Common Equity 348,593 321,250 624,685 ----------- ----------------------- Total Liabilities & Equity $ 1,417,462 $1,336,986 $1,743,587 =========== ======================= Common Shares Outstanding (000's) 111,401 111,804 88,457 Cash Value per share $ 1.02 $ 0.76 $ 0.41 Book Value per share $ 3.13 $ 2.87 $ 7.06 Tangible Book Value per share $ 2.12 $ 2.50 $ 5.59 ---------------------------------------------------------------------------------- ---------------------------------------------------------------------------------- Effectiveness and Efficiency ---------------------------------------------------------------------------------- A/R Turnover 6.13 x 5.80 x 5.54 x Inventory Turnover 10.84 x 10.98 x 10.35 x Asset Turnover 1.49 x 1.40 x 1.30 x Days Sales Outstanding 59.6 63.0 65.8 Days Inventory Outstanding 33.7 33.3 35.3 Days Payable Outstanding 85.5 68.4 62.7 Return on Avg Assets -1.9% -18.7% na Return on Avg Common Equity -7.6% -60.9% na ---------------------------------------------------------------------------------- ---------------------------------------------------------------------------------- Financial Strength ---------------------------------------------------------------------------------- Current Ratio 1.12 0.98 1.48 Quick Ratio 0.87 0.76 1.15 Total Debt $ 245,184 $ 196,477 $ 315,847 Net Debt $ 131,132 $ 111,622 $ 279,309 Total Capitalization $ 593,777 $ 517,727 $ 940,532 Total Debt/Total Capitalization 41.3% 37.9% 33.6% Net Debt/Total Capitalization 22.1% 21.6% 29.7% Total Debt/TIC 16.5% 13.2% 21.2% Total Debt/EBITDA 1.40 x 11.30 x 4.36 x Total Debt/EBITDA-CAPEX 1.63 x na 8.88 x EBITDA/Interest Expense 10.11 x 0.65 x 2.84 x EBITDA-CAPEX/Interest Expense 8.66 x na 1.39 x ----------------------------------------------------------------------------------
------------------------------------------------------------------------------------------- Market Information ------------------------------------------------------------------------------------------- As of Date 20-Feb-03 Exchange NYSE Stock Price $ 11.15 52 Week High $ 14.45 52 Week Low $ 7.85 Avg. Daily Volume (000's) 1,013 Beta 0.68 Shares Outstanding (000's) 111,409 Total Outstanding Warrants & Options (000's) - Float (000's) 109,200 Market Cap $ 1,242,210 Total Invested Capital (TIC) $ 1,487,394 Enterprise Value (EV) $ 1,373,342 Ownership Insiders % Owned 2.00% Institutional % Owned 57.00% Number of Institutions 223 ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Valuation Ratios ------------------------------------------------------------------------------------------- Multiple of --------------------------------------------- Market Cap TIC EV --------------------------------------------- Latest Twelve Months Revenue 0.60x 0.72x 0.67x EBIT 34.03x 40.74x 37.62x EBITDA 7.09x 8.49x 7.84x Normalized Net Income na na na Basic Normalized EPS na na na Projected Dec-03 Mean Revenue 0.49x 0.58x 0.54x Dec-04 Mean Revenue 0.43x 0.51x 0.48x Dec-03 Mean EPS 13.43x na na Dec-04 Mean EPS 10.14x na na Most Recent Filing Assets 0.88x 1.05x 0.97x Common Equity 3.56x na na Tangible Common Equity 5.27x na na ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Mean Consensus Estimates ------------------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS ------------------------------------------------------------------------------------------- December-03 2 $2,558,750 $ 0.83 December-04 2 $2,890,000 $ 1.10 LT Growth 1 na 15.00% ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Period Growth Rates ------------------------------------------------------------------------------------------- Nine Months Ended Fiscal Years Ended Sep-02 Dec-01 ----------------- ---------------- Revenue -6.3% -4.6% EBIT -143.3% 176.9% EBITDA -1108.6% -76.0% -------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Notes Add backs include restructuring cost provisioning, and debt settlement expenses. -------------------------------------------------------------------------------- Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. 63
---------------------------------------------------------------------------------------------------------------------------------- Wallace Computer Services Overview ---------------------------------------------------------------------------------------------------------------------------------- Name Wallace Computer Services Address 2275 Cabot Drive Officers M.David Jones, CEO Symbol WCS City, State Zip Lisle, IL 60532 Latest Fiscal YE 31-Jul-02 Telephone (630) 588-5000 Latest Rprt Per 31-Oct-02 Website http://www.wallace.com/ A provider of printed products and print management services to Fortune 1000 customers. The Company operates in two business segments: the forms and labels segment and the integrated graphics segment. The principal products and services supplied by the fo ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- Income and Cashflow Statement Data ---------------------------------------------------------------------------------------------------------------------------------- ($ in thousands, except per share) Three Months Ended Fiscal Years Ended LTM ------------------------ ---------------------------- Oct-02 Oct-02 Oct-01 Jul-02 Jul-01 ----------- ------------------------ ---------------------------- Revenue $ 1,522,126 $ 384,930 $ 408,433 $ 1,545,629 $ 1,689,534 COGS 1,109,724 278,688 303,358 1,134,394 1,236,589 ----------- ------------------------ ---------------------------- Gross Profit 412,402 106,242 105,075 411,235 452,945 Selling, General & Administrative 305,200 81,369 77,519 301,350 334,452 Research & Development - - - - - Other Operating - - - - - ----------- ------------------------ ---------------------------- Operating Income 107,202 24,873 27,556 109,885 118,493 Interest Income / (Expense), net (19,334) (4,349) (5,858) (20,843) (28,273) Other Income / (Expense), net - - - - - ----------- ------------------------ ---------------------------- Pre-tax Income 87,868 20,524 21,698 89,042 90,220 Taxes 32,713 7,806 8,309 33,216 36,711 ----------- ------------------------ ---------------------------- After-tax Income 55,155 12,718 13,389 55,826 53,509 Minority Interest - - - - - Equity in Affiliates - - - - - ----------- ------------------------ ---------------------------- Normalized Net Income 55,155 12,718 13,389 55,826 53,509 Preferred Dividends - - - - - ----------- ------------------------ ---------------------------- Normalized Net Income to Common $ 55,155 $ 12,718 $ 13,389 $ 55,826 $ 53,509 =========== ======================== ============================ EBIT $ 107,202 $ 24,873 $ 27,556 $ 109,885 $ 118,493 Depreciation & Amortization $ 64,207 $ 15,575 $ 17,775 $ 66,407 $ 78,848 EBITDA $ 171,409 $ 40,448 $ 45,331 $ 176,292 $ 197,341 CAPEX $ 24,556 $ 7,487 $ 6,182 $ 23,251 $ 41,310 EBITDA - CAPEX $ 146,853 $ 32,961 $ 39,149 $ 153,041 $ 156,031 GAAP Operating Cash Flow $ 127,056 $ 22,522 $ 37,019 $ 141,553 $ 175,703 Basic Reported Weighted Avg Shares Out (000's) 41,828 41,109 41,326 40,699 Basic Normalized EPS $ 1.32 $ 0.30 $ 0.33 $ 1.35 $ 1.31 Basic Reported EPS $ 0.74 $ 0.29 $ (3.22) $ (2.77) $ 1.31 Diluted Reported Weighted Avg Shares Out (000's) 42,135 41,408 41,699 40,951 Diluted Normalized EPS $ 1.32 $ 0.30 $ 0.32 $ 1.34 $ 1.31 Diluted Reported EPS $ 0.73 $ 0.29 $ (3.19) $ (2.75) $ 1.30 ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- Normalized Reconciliation ---------------------------------------------------------------------------------------------------------------------------------- Restructuring/Goodwill Impairment $ (41,368) $ (643) $ (2,560) $ (43,285) $ (513) Other Unusual (Expense) Gain Items - - - - - Tax Shelter (Charge) on Unusual Items 16,134 251 998 16,881 200 ----------- ------------------------ ---------------------------- Unusual (Exp) Gain Items, net of Taxes (25,234) (392) (1,562) (26,404) (313) Accounting Changes, net of Taxes - - (144,078) (144,078) - Discontinued Operations, net of Taxes - - - - - Extraordinary Items, net of Taxes - - - - - ----------- ------------------------ ---------------------------- Total Reconciling Items, net of Taxes $ (25,234) $ (392) $(145,640) $ (170,482) $ (313) =========== ======================== ============================ Reported Income Tax (Benefit) $ 16,579 $ 7,555 $ 7,311 $ 16,335 $ 36,511 Reported Net Income (Loss) $ 29,921 $ 12,326 $(132,251) $ (114,656) $ 53,196 ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- Profitability & Cost Ratios (as % of Revenue) ---------------------------------------------------------------------------------------------------------------------------------- Gross Profit 27.1% 27.6% 25.7% 26.6% 26.8% S,G & A 20.1% 21.1% 19.0% 19.5% 19.8% Operating Income 7.0% 6.5% 6.7% 7.1% 7.0% Pre-Tax 5.8% 5.3% 5.3% 5.8% 5.3% EBIT 7.0% 6.5% 6.7% 7.1% 7.0% EBITDA 11.3% 10.5% 11.1% 11.4% 11.7% Normalized Net Income to Common 3.6% 3.3% 3.3% 3.6% 3.2% Reported Net Income 2.0% 3.2% -32.4% -7.4% 3.1% CAPEX 1.6% 1.9% 1.5% 1.5% 2.4% ---------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------ Balance Sheet Data ------------------------------------------------------------------------------------------------ ($ in thousands, except per share) As of As of ------------------------- 31-Oct-02 Jul-02 Jul-01 ----------- ------------------------- Cash & Equivalents $ 37,365 $ 25,178 $ - Marketable Securities - - - ----------- ------------------------- Total Cash & Mkt Securities 37,365 25,178 - Accounts Receivable 254,577 245,141 280,456 Inventory 95,328 85,437 100,922 Other Current Assets 35,975 49,159 33,661 ----------- ------------------------- Total Current Assets 423,245 404,915 415,039 PPE, net 313,028 318,338 391,166 Intangibles, net 185,647 188,101 340,180 Investments - - - Other Assets 19,266 18,640 18,037 ----------- ------------------------- Total Assets $ 941,186 $ 929,994 $1,164,422 =========== ========================= Accounts Payable $ 76,138 $ 78,403 $ 74,087 Accrued Expenses 98,431 76,467 91,284 Short Term Debt 1,120 1,233 4,000 Short Term Capital Leases - - - Other Current Liabilities - 13,373 20,231 ----------- ------------------------- Total Current Liabilities 175,689 169,476 189,602 Other LT Liabilities 102,822 102,086 110,116 Long Term Debt 207,862 209,303 284,087 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - ----------- ------------------------- Total Liabilities & Pref Stock 486,373 480,865 583,805 ----------- ------------------------- Common Equity 454,813 449,129 580,617 ----------- ------------------------- Total Liabilities & Equity $ 941,186 $ 929,994 $1,164,422 =========== ========================= Common Shares Outstanding (000's) 41,646 41,556 40,889 Cash Value per share $ 0.90 $ 0.61 $ - Book Value per share $ 10.92 $ 10.81 $ 14.20 Tangible Book Value per share $ 6.46 $ 6.28 $ 5.88 ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Effectiveness and Efficiency ------------------------------------------------------------------------------------------------ A/R Turnover 6.09x 5.88x 6.02x Inventory Turnover 12.28x 12.17x 12.25x Asset Turnover 1.63x 1.48x 1.45x Days Sales Outstanding 59.9 62.1 60.6 Days Inventory Outstanding 29.7 30.0 29.8 Days Payable Outstanding 19.9 19.4 17.2 Return on Avg Assets 5.9% 5.3% na Return on Avg Common Equity 12.2% 10.8% na ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Financial Strength ------------------------------------------------------------------------------------------------ Current Ratio 2.41 2.39 2.19 Quick Ratio 1.87 1.89 1.66 Total Debt $ 208,982 $ 210,536 $ 288,087 Net Debt $ 171,617 $ 185,358 $ 288,087 Total Capitalization $ 663,795 $ 659,665 $ 868,704 Total Debt/Total Capitalization 31.5% 31.9% 33.2% Net Debt/Total Capitalization 25.9% 28.1% 33.2% Total Debt/TIC 16.4% 16.6% 22.7% Total Debt/EBITDA 1.22x 1.19x 1.46x Total Debt/EBITDA-CAPEX 1.42x 1.38x 1.85x EBITDA/Interest Expense 8.87x 8.46x 6.98x EBITDA-CAPEX/Interest Expense 7.60x 7.34x 5.52x ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Market Information ------------------------------------------------------------------------------------------------ As of Date 20-Feb-03 Exchange NYSE Stock Price $ 25.40 52 Week High $ 26.89 52 Week Low $ 15.80 Avg. Daily Volume (000's) 605 Beta 0.75 Shares Outstanding (000's) 41,800 Total Outstanding Warrants & Options (000's) - Float (000's) 40,600 Market Cap $1,061,720 Total Invested Capital (TIC) $1,270,702 Enterprise Value (EV) $1,233,337 Ownership Insiders % Owned 3.00% Institutional % Owned 80.00% Number of Institutions 324 ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Valuation Ratios ------------------------------------------------------------------------------------------------ Multiple of ------------------------------------------- Market Cap TIC EV ------------------------------------------- Latest Twelve Months Revenue 0.70x 0.83x 0.81x EBIT 9.90x 11.85x 11.50x EBITDA 6.19x 7.41x 7.20x Normalized Net Income 19.25x 23.04x 22.36x Basic Normalized EPS 19.24x na na Projected Dec-02 Mean Revenue na na na Dec-03 Mean Revenue na na na Dec-02 Mean EPS na na na Dec-03 Mean EPS na na na Most Recent Filing Assets 1.13x 1.35x 1.31x Common Equity 2.33x na na Tangible Common Equity 3.94x na na ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- Mean Consensus Estimates ------------------------------------------------------------------------------------------------------- Year Ending # Ests Revenue EPS ------------------------------------------------------------------------------------------------------- December-02 na na na December-03 na na na LT Growth na na na ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- Period Growth Rates ------------------------------------------------------------------------------------------------------- Three Months Ended Fiscal Years Ended Oct-02 Jul-02 ------------------ ------------------ Revenue -5.8% -8.5% EBIT -9.7% -7.3% EBITDA -10.8% -10.7% -------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- Notes Add backs reflect restructuring charges and change in accounting principle in accordance with SFAS No. 142 (Goodwill impairment). -------------------------------------------------------------------------------- Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. DRAFT ANALYSIS - 2/20/2003 64 CAPITALINK, L.C.
----------------------------------------------------------------------------------------------------------- BCT International Overview ----------------------------------------------------------------------------------------------------------- Name BCT International Address 3000 NE 30th Place Officers Bill Wilkerson, CEO Symbol BCTI City, State Ft. Lauderdale, FL 33306 Latest Fiscal YE 28-Feb-02 Telephone 954-563-1224 Latest Rprt Per 30-Nov-02 Website
BCT International, Inc. operates the Business Cards Tomorrow franchise system. Founded in 1975, the system has grown to include 82 Business Cards Tomorrow Franchises specializing in thermography products, labels, rubber stamps and business announcements f -------------------------------------------------------------------------------- Income and Cashflow Statement Data -------------------------------------------------------------------------------- ($ in thousands, except per share)
Nine Months Ended Fiscal Years Ended LTM ------------------ ------------------- Nov-02 Nov-02 Nov-01 Feb-02 Feb-01 ------- ------------------ ------------------- Revenue $18,381 $14,097 $13,723 $18,007 $19,429 COGS 10,460 7,941 8,073 10,592 11,605 ------- ------------------ ------------------- Gross Profit 7,921 6,156 5,650 7,415 7,824 Selling, General & Administrative 7,166 5,279 4,565 6,452 6,687 Research & Development - - - - - Other Operating - - - - - ------- ------------------ ------------------- Operating Income 755 877 1,085 963 1,137 Interest Income / (Expense), net - - - - - Other Income / (Expense), net - - - - - ------- ------------------ ------------------- Pre-tax Income 755 877 1,085 963 1,137 Taxes 295 342 427 380 442 ------- ------------------ ------------------- After-tax Income 460 535 659 584 695 Minority Interest - - - - - Equity in Affiliates - - - - - ------- ------------------ ------------------- Normalized Net Income 460 535 659 584 695 Preferred Dividends - - - - - ------- ------------------ ------------------- Normalized Net Income to Common $ 460 $ 535 $ 659 $ 584 $ 695 ======= ================== =================== EBIT $ 755 $ 877 $ 1,085 $ 963 $ 1,137 Depreciation & Amortization $ 233 $ 177 $ 170 $ 226 $ 232 EBITDA $ 988 $ 1,054 $ 1,255 $ 1,189 $ 1,369 CAPEX $ 142 $ 124 $ 144 $ 162 $ 150 EBITDA - CAPEX $ 846 $ 930 $ 1,111 $ 1,027 $ 1,219 GAAP Operating Cash Flow $ 981 $ 450 $ 2,729 $ 3,260 $ 316 Basic Reported Weighted Avg Shares Out (000's) 5,121 5,121 5,123 5,214 Basic Normalized EPS $ 0.08 $ 0.10 $ 0.13 $ 0.11 $ 0.13 Basic Reported EPS $ 0.09 $ 0.10 $ 0.11 $ 0.10 $ 0.13 Diluted Reported Weighted Avg Shares Out (000's) 5,121 5,121 5,123 5,235 Diluted Normalized EPS $ 0.08 $ 0.10 $ 0.13 $ 0.11 $ 0.13 Diluted Reported EPS $ 0.09 $ 0.10 $ 0.11 $ 0.10 $ 0.13 -------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------- Normalized Reconciliation -------------------------------------------------------------------------------------------------------------- Restructuring/Goodwill Impairment $ - $ - $ (150) $ (150) $ - Other Unusual (Expense) Gain Items - - - - - Tax Shelter (Charge) on Unusual Items - - 59 59 - ------- ------------------ ------------------- Unusual (Exp) Gain Items, net of Taxes - - (92) (92) - Accounting Changes, net of Taxes - - - - - Discontinued Operations, net of Taxes - - - - (31) Extraordinary Items, net of Taxes - - - - - ------- ------------------ ------------------- Total Reconciling Items, net of Taxes $ - $ - $ (92) $ (92) $ (31) ======= ================== =================== Reported Income Tax (Benefit) $ 295 $ 342 $ 368 $ 321 $ 442 Reported Net Income (Loss) $ 460 $ 535 $ 567 $ 492 $ 664 -------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------- Profitability & Cost Ratios (as % of Revenue) -------------------------------------------------------------------------------------------------------------- Gross Profit 43.1% 43.7% 41.2% 41.2% 40.3% S,G & A 39.0% 37.4% 33.3% 35.8% 34.4% Operating Income 4.1% 6.2% 7.9% 5.3% 5.9% Pre-Tax 4.1% 6.2% 7.9% 5.3% 5.9% EBIT 4.1% 6.2% 7.9% 5.3% 5.9% EBITDA 5.4% 7.5% 9.1% 6.6% 7.0% Normalized Net Income to Common 2.5% 3.8% 4.8% 3.2% 3.6% Reported Net Income 2.5% 3.8% 4.1% 2.7% 3.4% CAPEX 0.8% 0.9% 1.0% 0.9% 0.8% --------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------- Balance Sheet Data ----------------------------------------------------------------------------------- ($ in thousands, except per share) As of As of --------------------- 30-Nov-02 Feb-02 Feb-01 ---------- ---------------------- Cash & Equivalents $ 4,805 $ 4,819 $ 1,799 Marketable Securities - - - ------- -------------------- Total Cash & Mkt Securities 4,805 4,819 1,799 Accounts Receivable 2,386 2,889 3,568 Inventory 2,697 1,887 2,352 Other Current Assets 918 678 455 ------- -------------------- Total Current Assets 10,806 10,273 8,174 PPE, net 963 435 473 Intangibles, net 186 206 232 Investments 43 24 24 Other Assets 6,187 6,140 7,287 ------- -------------------- Total Assets $18,185 $ 17,078 $ 16,190 ======= ==================== Accounts Payable $ 789 $ 432 $ 597 Accrued Expenses 938 791 403 Short Term Debt 294 640 86 Short Term Capital Leases - - - Other Current Liabilities 125 125 167 ------- -------------------- Total Current Liabilities 2,146 1,988 1,253 Other LT Liabilities 214 334 417 Long Term Debt 534 - 236 Long Term Capital Leases - - - Minority Interests - - - Pref Stock (Liq Value) - - - ------- -------------------- Total Liabilities & Pref Stock 2,894 2,322 1,906 ------- -------------------- Common Equity 15,291 14,756 14,284 ------- -------------------- Total Liabilities & Equity $18,185 $ 17,078 $ 16,190 ======= ==================== Common Shares Outstanding (000's) 5,121 5,121 5,136 Cash Value per share $ 0.94 $ 0.94 $ 0.35 Book Value per share $ 2.99 $ 2.88 $ 2.78 Tangible Book Value per share $ 2.95 $ 2.84 $ 2.74 ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- Effectiveness and Efficiency ----------------------------------------------------------------------------------- A/R Turnover 6.97x 5.58x 5.45x Inventory Turnover 4.56x 5.00x 4.93x Asset Turnover 1.04x 1.08x 1.20x Days Sales Outstanding 52.4 65.4 67.0 Days Inventory Outstanding 80.0 73.0 74.0 Days Payable Outstanding 12.6 11.0 11.9 Return on Avg Assets 2.6% 3.5% na Return on Avg Common Equity 3.1% 4.0% na ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- Financial Strength ----------------------------------------------------------------------------------- Current Ratio 5.04 5.17 6.52 Quick Ratio 3.78 4.22 4.65 Total Debt $ 828 $ 640 $ 322 Net Debt $ (3,977) $ (4,179) $ (1,477) Total Capitalization $ 16,119 $ 15,396 $ 14,606 Total Debt/Total Capitalization 5.1% 4.2% 2.2% Net Debt/Total Capitalization -24.7% -27.1% -10.1% Total Debt/TIC 15.1% 11.7% 5.9% Total Debt/EBITDA 0.84 x 0.54 x 0.24 x Total Debt/EBITDA-CAPEX 0.98 x 0.62 x 0.26 x EBITDA/Interest Expense na na na EBITDA-CAPEX/Interest Expense na na na ----------------------------------------------------------------------------------- ---------------------------------------------------------------- Market Information ---------------------------------------------------------------- As of Date 20-Feb-03 Exchange OTC BB Stock Price $ 0.91 52 Week High $ 1.11 52 Week Low $ 0.46 Avg. Daily Volume (000's) 6 Beta 0.88 Shares Outstanding (000's) 5,121 Total Outstanding Warrants & Options (000's) - Float (000's) 2,800 Market Cap $ 4,660 Total Invested Capital (TIC) $ 5,488 Enterprise Value (EV) $ 683 Ownership Insiders % Owned 52.00% Institutional % Owned 2.00% Number of Institutions 4 ---------------------------------------------------------------- ---------------------------------------------------------------- Valuation Ratios ---------------------------------------------------------------- Multiple of -------------------------------------- Market Cap TIC EV -------------------------------------- Latest Twelve Months Revenue 0.25x 0.30x 0.04x EBIT 6.17x 7.27x 0.90x EBITDA 4.72x 5.55x 0.69x Normalized Net Income 10.13x 11.93x 1.49x Basic Normalized EPS 11.38x na na Projected Dec-02 Mean Revenue 0.26x 0.31x 0.04x Dec-03 Mean Revenue 0.27x 0.31x 0.04x Dec-02 Mean EPS 7.00x na na Dec-03 Mean EPS 5.94x na na Most Recent Filing Assets 0.26x 0.30x 0.04x Common Equity 0.30x na na Tangible Common Equity 0.31x na na ---------------------------------------------------------------- ---------------------------------------------------------------- Mean Consensus Estimates ---------------------------------------------------------------- Year Ending # Ests Revenue EPS ---------------------------------------------------------------- December-02 na 17,781 $ 0.13 December-03 na 17,539 $ 0.15 LT Growth na na na ---------------------------------------------------------------- ---------------------------------------------------------------- Period Growth Rates ---------------------------------------------------------------- Nine Months Ended Fiscal Years Ended Nov-02 Feb-02 ----------------- ------------------ Revenue 2.7% -7.3% EBIT -19.2% -15.3% EBITDA -16.0% -13.1% ----------------------------------------------------------------
---------------------------------------------------------------- Notes ---------------------------------------------------------------- Sources: SEC Edgar, Multex, CapitalIQ, Commodity Systems, and/or Hoovers. DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 65 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Share Repurchase Analysis DRAFT ANALYSIS - 2/20/2003 66 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Share Repurchase Analysis ($ in thousands, except per share amounts) ------------------------------------------------------------------- Open Market Repurchase(2) ----------- ------------------------------------------------------------------- Wilkerson - 250 500 750 1,000 1,250 1,500 ------------------------------------------------------------------- BuyBack (1) Wilkerson Shareholding %, Basic (3) ----------- ------------------------------------------------------------------- - 52.5% 55.2% 58.2% 61.5% 65.3% 69.5% 74.3% 100 51.6% 54.3% 57.3% 60.6% 64.4% 68.7% 73.6% 200 50.6% 53.3% 56.3% 59.7% 63.5% 67.8% 72.8% 300 49.6% 52.3% 55.3% 58.7% 62.5% 66.9% 72.0% 400 48.5% 51.2% 54.3% 57.7% 61.5% 66.0% 71.1% 500 47.4% 50.1% 53.1% 56.6% 60.5% 65.0% 70.2% 600 46.2% 48.9% 52.0% 55.4% 59.4% 63.9% 69.2% 700 45.0% 47.7% 50.8% 54.2% 58.2% 62.8% 68.1% 800 43.7% 46.4% 49.5% 52.9% 56.9% 61.5% 67.0% 900 42.4% 45.1% 48.1% 51.6% 55.6% 60.2% 65.8% 1,000 41.0% 43.7% 46.7% 50.1% 54.2% 58.9% 64.5% 1,100 39.5% 42.2% 45.2% 48.6% 52.6% 57.4% 63.1% 1,200 38.0% 40.6% 43.6% 47.0% 51.0% 55.8% 61.5% 1,300 36.4% 38.9% 41.9% 45.3% 49.3% 54.1% 59.9% 1,400 34.7% 37.2% 40.1% 43.4% 47.4% 52.2% 58.1% ----------- Avg Price Average Cost of Open Market Repurchase(2) ----------- ------------------------------------------------------------------- $ 0.90 $ - $ 225 $ 450 $ 675 $ 900 $ 1,125 $ 1,350 $ 1.00 $ - $ 250 $ 500 $ 750 $1,000 $ 1,250 $ 1,500 $ 1.10 $ - $ 275 $ 550 $ 825 $1,100 $ 1,375 $ 1,650 $ 1.20 $ - $ 300 $ 600 $ 900 $1,200 $ 1,500 $ 1,800 $ 1.30 $ - $ 325 $ 650 $ 975 $1,300 $ 1,625 $ 1,950 $ 1.40 $ - $ 350 $ 700 $ 1,050 $1,400 $ 1,750 $ 2,100 $ 1.50 $ - $ 375 $ 750 $ 1,125 $1,500 $ 1,875 $ 2,250 $ 1.60 $ - $ 400 $ 800 $ 1,200 $1,600 $ 2,000 $ 2,400 ---------------------------------------------------------- Average Cost of Wilkerson BuyBack(1) ---------------------------------------------------------- Shares Repurchased ------------------------------------ Total Average $ 0.90 $ 1.50 $ 1.75 Total Cost Cost ------------------------------------ ------------------ - - $ - $ - 100 100 $ 90 $ 0.90 100 200 $ 90 $ 0.90 100 300 $ 90 $ 0.90 100 400 $ 90 $ 0.90 54 46 500 $ 118 $ 0.96 100 600 $ 150 $ 1.05 100 700 $ 150 $ 1.11 100 800 $ 150 $ 1.16 100 900 $ 150 $ 1.20 100 1,000 $ 150 $ 1.23 73 27 1,100 $ 157 $ 1.26 100 1,200 $ 175 $ 1.30 100 1,300 $ 175 $ 1.33 100 1,400 $ 175 $ 1.36 --------------------------- ------- 454 619 327 $ 1,909 =========================== ======= -------------------------------------------------------------------------------- (1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on basic shareholdings of Wilkerson/Phoenix combined, see proforma capitalization table. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 67 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Implied Market Value Per Share with Share Repurchase ($ in thousands, except per share amounts) Implied Market Value Per Share, Assuming $1.00 Average Price Paid On Open Market Repurchase ------------------------------------------------------- Open Market Repurchase @ Average Price $1.00 (2) ------------------------------------------------------- - 250 500 750 1,000 1,250 1,500 ------------------------------------------------------- ------------ Wilkerson BuyBack(1) Base Case ------------------------------------------------------- - $ 2.01 $ 2.06 $ 2.11 $ 2.16 $ 2.22 $ 2.29 $ 2.37 100 $ 2.03 $ 2.08 $ 2.13 $ 2.19 $ 2.25 $ 2.33 $ 2.41 200 $ 2.05 $ 2.10 $ 2.15 $ 2.22 $ 2.28 $ 2.36 $ 2.44 300 $ 2.07 $ 2.12 $ 2.18 $ 2.24 $ 2.31 $ 2.39 $ 2.48 400 $ 2.09 $ 2.15 $ 2.21 $ 2.27 $ 2.35 $ 2.43 $ 2.53 $ 1.00 500 $ 2.11 $ 2.17 $ 2.23 $ 2.30 $ 2.38 $ 2.46 $ 2.56 ---------------------------------------------------------------------------- 600 $ 2.12 $ 2.18 $ 2.24 $ 2.32 $ 2.40 $ 2.49 $ 2.59 700 $ 2.13 $ 2.19 $ 2.26 $ 2.34 $ 2.42 $ 2.51 $ 2.62 800 $ 2.15 $ 2.21 $ 2.28 $ 2.36 $ 2.44 $ 2.54 $ 2.66 $ 1.20 900 $ 2.16 $ 2.23 $ 2.30 $ 2.38 $ 2.47 $ 2.57 $ 2.69 ---------------------------------------------------------------------------- 1,000 $ 2.18 $ 2.24 $ 2.32 $ 2.40 $ 2.49 $ 2.60 $ 2.73 1,100 $ 2.19 $ 2.26 $ 2.33 $ 2.42 $ 2.52 $ 2.63 $ 2.77 1,200 $ 2.20 $ 2.27 $ 2.35 $ 2.44 $ 2.54 $ 2.66 $ 2.80 1,300 $ 2.21 $ 2.28 $ 2.36 $ 2.46 $ 2.57 $ 2.69 $ 2.84 1,400 $ 2.22 $ 2.29 $ 2.38 $ 2.48 $ 2.59 $ 2.72 $ 2.88 Base Case + Satellite Stores ------------------------------------------------------- - $ 2.51 $ 2.58 $ 2.65 $ 2.73 $ 2.82 $ 2.92 $ 3.02 100 $ 2.54 $ 2.61 $ 2.68 $ 2.77 $ 2.86 $ 2.96 $ 3.07 200 $ 2.57 $ 2.64 $ 2.72 $ 2.80 $ 2.90 $ 3.01 $ 3.13 300 $ 2.60 $ 2.67 $ 2.75 $ 2.84 $ 2.94 $ 3.05 $ 3.18 400 $ 2.63 $ 2.71 $ 2.79 $ 2.88 $ 2.99 $ 3.11 $ 3.24 $ 1.00 500 $ 2.65 $ 2.73 $ 2.82 $ 2.92 $ 3.03 $ 3.15 $ 3.29 ---------------------------------------------------------------------------- 600 $ 2.68 $ 2.76 $ 2.85 $ 2.95 $ 3.07 $ 3.19 $ 3.34 700 $ 2.70 $ 2.78 $ 2.88 $ 2.98 $ 3.10 $ 3.23 $ 3.39 800 $ 2.72 $ 2.81 $ 2.91 $ 3.02 $ 3.14 $ 3.28 $ 3.44 $ 1.20 900 $ 2.75 $ 2.84 $ 2.94 $ 3.05 $ 3.18 $ 3.33 $ 3.49 ---------------------------------------------------------------------------- 1,000 $ 2.77 $ 2.87 $ 2.97 $ 3.09 $ 3.22 $ 3.38 $ 3.55 1,100 $ 2.80 $ 2.90 $ 3.01 $ 3.13 $ 3.27 $ 3.43 $ 3.61 1,200 $ 2.82 $ 2.92 $ 3.04 $ 3.16 $ 3.31 $ 3.48 $ 3.67 1,300 $ 2.84 $ 2.95 $ 3.07 $ 3.20 $ 3.35 $ 3.53 $ 3.73 1,400 $ 2.87 $ 2.98 $ 3.10 $ 3.24 $ 3.40 $ 3.58 $ 3.80 Base Case + Company Stores ------------------------------------------------------- - $ 1.93 $ 1.97 $ 2.02 $ 2.07 $ 2.13 $ 2.19 $ 2.26 100 $ 1.95 $ 1.99 $ 2.04 $ 2.10 $ 2.16 $ 2.22 $ 2.30 200 $ 1.97 $ 2.01 $ 2.07 $ 2.12 $ 2.18 $ 2.25 $ 2.33 300 $ 1.99 $ 2.04 $ 2.09 $ 2.15 $ 2.21 $ 2.29 $ 2.37 400 $ 2.01 $ 2.06 $ 2.11 $ 2.18 $ 2.24 $ 2.32 $ 2.41 $ 1.00 500 $ 2.02 $ 2.08 $ 2.13 $ 2.20 $ 2.27 $ 2.35 $ 2.44 ---------------------------------------------------------------------------- 600 $ 2.04 $ 2.09 $ 2.15 $ 2.21 $ 2.29 $ 2.37 $ 2.47 700 $ 2.05 $ 2.10 $ 2.16 $ 2.23 $ 2.31 $ 2.40 $ 2.50 800 $ 2.06 $ 2.11 $ 2.18 $ 2.25 $ 2.33 $ 2.42 $ 2.53 $ 1.20 900 $ 2.07 $ 2.13 $ 2.19 $ 2.27 $ 2.35 $ 2.45 $ 2.56 ---------------------------------------------------------------------------- 1,000 $ 2.08 $ 2.14 $ 2.21 $ 2.29 $ 2.37 $ 2.47 $ 2.59 1,100 $ 2.09 $ 2.16 $ 2.23 $ 2.31 $ 2.40 $ 2.50 $ 2.62 1,200 $ 2.10 $ 2.16 $ 2.24 $ 2.32 $ 2.42 $ 2.52 $ 2.65 1,300 $ 2.11 $ 2.17 $ 2.25 $ 2.34 $ 2.43 $ 2.55 $ 2.68 1,400 $ 2.12 $ 2.19 $ 2.26 $ 2.35 $ 2.46 $ 2.58 $ 2.72 Base Case + Company Stores + Satellite Stores ------------------------------------------------------ - $ 2.44 $ 2.50 $ 2.57 $ 2.64 $ 2.73 $ 2.82 $ 2.92 100 $ 2.46 $ 2.53 $ 2.60 $ 2.68 $ 2.77 $ 2.86 $ 2.97 200 $ 2.49 $ 2.56 $ 2.63 $ 2.72 $ 2.81 $ 2.91 $ 3.02 300 $ 2.52 $ 2.59 $ 2.67 $ 2.75 $ 2.85 $ 2.95 $ 3.07 400 $ 2.55 $ 2.62 $ 2.70 $ 2.79 $ 2.89 $ 3.00 $ 3.13 $ 1.00 500 $ 2.57 $ 2.65 $ 2.73 $ 2.83 $ 2.93 $ 3.05 $ 3.18 ---------------------------------------------------------------------------- 600 $ 2.59 $ 2.67 $ 2.76 $ 2.86 $ 2.96 $ 3.08 $ 3.22 700 $ 2.61 $ 2.70 $ 2.79 $ 2.89 $ 3.00 $ 3.12 $ 3.27 800 $ 2.64 $ 2.72 $ 2.81 $ 2.92 $ 3.03 $ 3.17 $ 3.31 $ 1.20 900 $ 2.66 $ 2.75 $ 2.84 $ 2.95 $ 3.07 $ 3.21 $ 3.37 ---------------------------------------------------------------------------- 1,000 $ 2.68 $ 2.77 $ 2.87 $ 2.99 $ 3.11 $ 3.26 $ 3.42 1,100 $ 2.71 $ 2.80 $ 2.90 $ 3.02 $ 3.15 $ 3.30 $ 3.48 1,200 $ 2.73 $ 2.82 $ 2.93 $ 3.05 $ 3.19 $ 3.35 $ 3.53 1,300 $ 2.75 $ 2.85 $ 2.96 $ 3.09 $ 3.23 $ 3.40 $ 3.59 1,400 $ 2.77 $ 2.87 $ 2.99 $ 3.12 $ 3.27 $ 3.45 $ 3.65 ------------ -------------------------------------------------------------------------------- (1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on base case scenario. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 68 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Implied Market Value Per Share with Share Repurchase ($ in thousands, except per share amounts) Implied Market Value Per Share, Assuming $1.20 Average Price Paid On Open Market Repurchase ------------------------------------------------------ Open Market Repurchase @ Average Price $1.20 (2) ------------------------------------------------------ - 250 500 750 1,000 1,250 1,500 ------------------------------------------------------ ---------- Wilkerson BuyBack(1) Base Case ------------------------------------------------------ - $ 2.01 $ 2.05 $ 2.09 $ 2.13 $ 2.18 $ 2.24 $ 2.30 100 $ 2.03 $ 2.07 $ 2.11 $ 2.16 $ 2.21 $ 2.27 $ 2.33 200 $ 2.05 $ 2.09 $ 2.13 $ 2.18 $ 2.24 $ 2.30 $ 2.37 300 $ 2.07 $ 2.11 $ 2.16 $ 2.21 $ 2.27 $ 2.33 $ 2.41 400 $ 2.09 $ 2.14 $ 2.19 $ 2.24 $ 2.30 $ 2.37 $ 2.45 $1.00 500 $ 2.11 $ 2.16 $ 2.21 $ 2.26 $ 2.33 $ 2.40 $ 2.48 --------------------------------------------------------------------------- 600 $ 2.12 $ 2.17 $ 2.22 $ 2.28 $ 2.35 $ 2.42 $ 2.51 700 $ 2.13 $ 2.18 $ 2.24 $ 2.30 $ 2.37 $ 2.45 $ 2.54 800 $ 2.15 $ 2.20 $ 2.26 $ 2.32 $ 2.39 $ 2.47 $ 2.57 $1.20 900 $ 2.16 $ 2.21 $ 2.27 $ 2.34 $ 2.42 $ 2.50 $ 2.60 --------------------------------------------------------------------------- 1,000 $ 2.18 $ 2.23 $ 2.29 $ 2.36 $ 2.44 $ 2.53 $ 2.63 1,100 $ 2.19 $ 2.25 $ 2.31 $ 2.38 $ 2.46 $ 2.56 $ 2.67 1,200 $ 2.20 $ 2.26 $ 2.32 $ 2.40 $ 2.48 $ 2.58 $ 2.70 1,300 $ 2.21 $ 2.27 $ 2.34 $ 2.42 $ 2.51 $ 2.61 $ 2.73 1,400 $ 2.22 $ 2.28 $ 2.35 $ 2.44 $ 2.53 $ 2.64 $ 2.77 Base Case + Satellite Stores ------------------------------------------------------ - $ 2.51 $ 2.57 $ 2.63 $ 2.70 $ 2.78 $ 2.86 $ 2.96 100 $ 2.54 $ 2.60 $ 2.66 $ 2.74 $ 2.82 $ 2.91 $ 3.00 200 $ 2.57 $ 2.63 $ 2.70 $ 2.77 $ 2.86 $ 2.95 $ 3.05 300 $ 2.60 $ 2.66 $ 2.73 $ 2.81 $ 2.90 $ 3.00 $ 3.11 400 $ 2.63 $ 2.70 $ 2.77 $ 2.85 $ 2.94 $ 3.05 $ 3.16 $1.00 500 $ 2.65 $ 2.73 $ 2.80 $ 2.89 $ 2.98 $ 3.09 $ 3.21 --------------------------------------------------------------------------- 600 $ 2.68 $ 2.75 $ 2.83 $ 2.92 $ 3.02 $ 3.13 $ 3.26 700 $ 2.70 $ 2.77 $ 2.86 $ 2.95 $ 3.05 $ 3.17 $ 3.30 800 $ 2.72 $ 2.80 $ 2.89 $ 2.98 $ 3.09 $ 3.21 $ 3.35 $1.20 900 $ 2.75 $ 2.83 $ 2.92 $ 3.02 $ 3.13 $ 3.26 $ 3.41 --------------------------------------------------------------------------- 1,000 $ 2.77 $ 2.86 $ 2.95 $ 3.06 $ 3.17 $ 3.31 $ 3.46 1,100 $ 2.80 $ 2.88 $ 2.98 $ 3.09 $ 3.22 $ 3.36 $ 3.52 1,200 $ 2.82 $ 2.91 $ 3.01 $ 3.13 $ 3.26 $ 3.40 $ 3.58 1,300 $ 2.84 $ 2.94 $ 3.04 $ 3.16 $ 3.30 $ 3.45 $ 3.63 1,400 $ 2.87 $ 2.96 $ 3.07 $ 3.20 $ 3.34 $ 3.51 $ 3.70 Base Case + Company Stores ------------------------------------------------------- - $ 1.93 $ 1.96 $ 2.00 $ 2.04 $ 2.09 $ 2.14 $ 2.19 100 $ 1.95 $ 1.98 $ 2.02 $ 2.07 $ 2.11 $ 2.17 $ 2.22 200 $ 1.97 $ 2.01 $ 2.05 $ 2.09 $ 2.14 $ 2.20 $ 2.26 300 $ 1.99 $ 2.03 $ 2.07 $ 2.12 $ 2.17 $ 2.23 $ 2.29 400 $ 2.01 $ 2.05 $ 2.09 $ 2.14 $ 2.20 $ 2.26 $ 2.33 $1.00 500 $ 2.02 $ 2.07 $ 2.11 $ 2.16 $ 2.22 $ 2.29 $ 2.36 ---------------------------------------------------------------------------- 600 $ 2.04 $ 2.08 $ 2.13 $ 2.18 $ 2.24 $ 2.31 $ 2.38 700 $ 2.05 $ 2.09 $ 2.14 $ 2.20 $ 2.26 $ 2.33 $ 2.41 800 $ 2.06 $ 2.10 $ 2.15 $ 2.21 $ 2.28 $ 2.35 $ 2.44 $1.20 900 $ 2.07 $ 2.12 $ 2.17 $ 2.23 $ 2.30 $ 2.38 $ 2.47 ---------------------------------------------------------------------------- 1,000 $ 2.08 $ 2.13 $ 2.19 $ 2.25 $ 2.32 $ 2.40 $ 2.50 1,100 $ 2.09 $ 2.14 $ 2.20 $ 2.27 $ 2.34 $ 2.43 $ 2.53 1,200 $ 2.10 $ 2.15 $ 2.21 $ 2.28 $ 2.36 $ 2.45 $ 2.55 1,300 $ 2.11 $ 2.16 $ 2.22 $ 2.29 $ 2.38 $ 2.47 $ 2.58 1,400 $ 2.12 $ 2.17 $ 2.24 $ 2.31 $ 2.39 $ 2.49 $ 2.61 Base Case + Company Stores + Satellite Stores ------------------------------------------------------- - $ 2.44 $ 2.49 $ 2.55 $ 2.62 $ 2.69 $ 2.77 $ 2.86 100 $ 2.46 $ 2.52 $ 2.58 $ 2.65 $ 2.72 $ 2.81 $ 2.90 200 $ 2.49 $ 2.55 $ 2.61 $ 2.68 $ 2.76 $ 2.85 $ 2.95 300 $ 2.52 $ 2.58 $ 2.65 $ 2.72 $ 2.80 $ 2.90 $ 3.00 400 $ 2.55 $ 2.61 $ 2.68 $ 2.76 $ 2.85 $ 2.94 $ 3.05 $1.00 500 $ 2.57 $ 2.64 $ 2.71 $ 2.79 $ 2.88 $ 2.99 $ 3.10 ---------------------------------------------------------------------------- 600 $ 2.59 $ 2.66 $ 2.74 $ 2.82 $ 2.92 $ 3.02 $ 3.14 700 $ 2.61 $ 2.69 $ 2.76 $ 2.85 $ 2.95 $ 3.06 $ 3.19 800 $ 2.64 $ 2.71 $ 2.79 $ 2.88 $ 2.98 $ 3.10 $ 3.23 $1.20 900 $ 2.66 $ 2.74 $ 2.82 $ 2.92 $ 3.02 $ 3.14 $ 3.28 ---------------------------------------------------------------------------- 1,000 $ 2.68 $ 2.76 $ 2.85 $ 2.95 $ 3.06 $ 3.19 $ 3.33 1,100 $ 2.71 $ 2.79 $ 2.88 $ 2.98 $ 3.10 $ 3.23 $ 3.39 1,200 $ 2.73 $ 2.81 $ 2.91 $ 3.01 $ 3.14 $ 3.28 $ 3.44 1,300 $ 2.75 $ 2.84 $ 2.93 $ 3.05 $ 3.17 $ 3.32 $ 3.49 1,400 $ 2.77 $ 2.86 $ 2.96 $ 3.08 $ 3.22 $ 3.37 $ 3.55 ---------- -------------------------------------------------------------------------------- (1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on base case scenario. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 69 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Implied Market Value Per Share with Share Repurchase ($ in thousands, except per share amounts) Implied Market Value Per Share, Assuming $1.40 Average Price Paid On Open Market Repurchase
----------------------------------------------------- Open Market Repurchase @ Average Price $1.40 (2) ----------------------------------------------------- - 250 500 750 1,000 1,250 1,500 ----------------------------------------------------- Wilkerson BuyBack (1) Base Case ----------------------------------------------------- - $2.01 $2.04 $2.07 $2.10 $2.14 $2.18 $2.23 100 $2.03 $2.06 $2.09 $2.13 $2.17 $2.21 $2.26 200 $2.05 $2.08 $2.11 $2.15 $2.19 $2.24 $2.29 300 $2.07 $2.10 $2.14 $2.18 $2.22 $2.27 $2.33 400 $2.09 $2.13 $2.16 $2.21 $2.25 $2.31 $2.37 $ 1.00 500 $2.11 $2.15 $2.19 $2.23 $2.28 $2.34 $2.40 --------------------------------------------------------------------------- 600 $2.12 $2.16 $2.20 $2.25 $2.30 $2.36 $2.42 700 $2.13 $2.17 $2.22 $2.26 $2.32 $2.38 $2.45 800 $2.15 $2.19 $2.23 $2.28 $2.34 $2.40 $2.48 $ 1.20 900 $2.16 $2.20 $2.25 $2.30 $2.36 $2.43 $2.51 --------------------------------------------------------------------------- 1,000 $2.18 $2.22 $2.27 $2.32 $2.39 $2.46 $2.54 1,100 $2.19 $2.23 $2.29 $2.34 $2.41 $2.48 $2.57 1,200 $2.20 $2.25 $2.30 $2.36 $2.43 $2.51 $2.60 1,300 $2.21 $2.26 $2.31 $2.38 $2.45 $2.53 $2.63 1,400 $2.22 $2.27 $2.33 $2.39 $2.47 $2.56 $2.66 Base Case + Satellite Stores ----------------------------------------------------- - $2.51 $2.56 $2.61 $2.67 $2.74 $2.81 $2.89 100 $2.54 $2.59 $2.65 $2.71 $2.78 $2.85 $2.93 200 $2.57 $2.62 $2.68 $2.74 $2.82 $2.89 $2.98 300 $2.60 $2.65 $2.71 $2.78 $2.86 $2.94 $3.03 400 $2.63 $2.69 $2.75 $2.82 $2.90 $2.99 $3.09 $ 1.00 500 $2.65 $2.72 $2.78 $2.86 $2.94 $3.03 $3.14 --------------------------------------------------------------------------- 600 $2.68 $2.74 $2.81 $2.89 $2.97 $3.07 $3.18 700 $2.70 $2.76 $2.84 $2.92 $3.01 $3.11 $3.22 800 $2.72 $2.79 $2.87 $2.95 $3.04 $3.15 $3.27 $ 1.20 900 $2.75 $2.82 $2.90 $2.98 $3.08 $3.19 $3.32 --------------------------------------------------------------------------- 1,000 $2.77 $2.85 $2.93 $3.02 $3.12 $3.24 $3.38 1,100 $2.80 $2.87 $2.96 $3.06 $3.16 $3.29 $3.43 1,200 $2.82 $2.90 $2.99 $3.09 $3.20 $3.33 $3.48 1,300 $2.84 $2.93 $3.02 $3.12 $3.24 $3.38 $3.54 1,400 $2.87 $2.95 $3.05 $3.16 $3.28 $3.43 $3.60
----------------------------------------------------- Open Market Repurchase @ Average Price $1.40 (2) ----------------------------------------------------- - 250 500 750 1,000 1,250 1,500 ----------------------------------------------------- Wilkerson BuyBack (1) Base Case + Company Stores ----------------------------------------------------- - $1.93 $1.96 $1.98 $2.01 $2.04 $2.08 $2.12 100 $1.95 $1.97 $2.00 $2.03 $2.07 $2.11 $2.15 200 $1.97 $2.00 $2.03 $2.06 $2.10 $2.14 $2.18 300 $1.99 $2.02 $2.05 $2.08 $2.12 $2.17 $2.22 400 $2.01 $2.04 $2.07 $2.11 $2.15 $2.20 $2.25 $ 1.00 500 $2.02 $2.06 $2.09 $2.13 $2.17 $2.22 $2.28 ---------------------------------------------------------------------------- 600 $2.04 $2.07 $2.10 $2.15 $2.19 $2.24 $2.30 700 $2.05 $2.08 $2.12 $2.16 $2.21 $2.26 $2.32 800 $2.06 $2.09 $2.13 $2.18 $2.23 $2.28 $2.35 $ 1.20 900 $2.07 $2.11 $2.15 $2.19 $2.25 $2.31 $2.37 --------------------------------------------------------------------------- 1,000 $2.08 $2.12 $2.16 $2.21 $2.27 $2.33 $2.40 1,100 $2.09 $2.13 $2.18 $2.23 $2.29 $2.35 $2.43 1,200 $2.10 $2.14 $2.19 $2.24 $2.30 $2.37 $2.45 1,300 $2.11 $2.15 $2.20 $2.25 $2.32 $2.39 $2.48 1,400 $2.12 $2.16 $2.21 $2.27 $2.33 $2.41 $2.50 Base Case + Company Stores + Satellite Stores ----------------------------------------------------- - $2.44 $2.48 $2.53 $2.59 $2.65 $2.71 $2.79 100 $2.46 $2.51 $2.56 $2.62 $2.68 $2.75 $2.83 200 $2.49 $2.54 $2.59 $2.65 $2.72 $2.80 $2.88 300 $2.52 $2.57 $2.63 $2.69 $2.76 $2.84 $2.93 400 $2.55 $2.60 $2.66 $2.73 $2.80 $2.88 $2.98 $ 1.00 500 $2.57 $2.63 $2.69 $2.76 $2.84 $2.93 $3.02 ---------------------------------------------------------------------------- 600 $2.59 $2.65 $2.72 $2.79 $2.87 $2.96 $3.06 700 $2.61 $2.68 $2.74 $2.82 $2.90 $3.00 $3.10 800 $2.64 $2.70 $2.77 $2.85 $2.94 $3.04 $3.15 $ 1.20 900 $2.66 $2.72 $2.80 $2.88 $2.97 $3.08 $3.20 ---------------------------------------------------------------------------- 1,000 $2.68 $2.75 $2.83 $2.91 $3.01 $3.12 $3.25 1,100 $2.71 $2.78 $2.86 $2.95 $3.05 $3.16 $3.30 1,200 $2.73 $2.80 $2.88 $2.98 $3.08 $3.20 $3.34 1,300 $2.75 $2.82 $2.91 $3.01 $3.12 $3.25 $3.40 1,400 $2.77 $2.85 $2.94 $3.04 $3.16 $3.29 $3.45 ---------------------------------------------------------------------------
(1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on base case scenario. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 70 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Cash Requirements of Share Repurchase ($ in thousands, except per share amounts) ----------- -------------------------------------------------------------------- Open Market Repurchase @ $1.00(2) Wilkerson -------------------------------------------------------------------- BuyBack(1) - 250 500 750 1,000 1,250 1,500 ----------- -------------------------------------------------------------------- Cash Required For Share Repurchase(3) -------------------------------------------------------------------- - $ - $ 250 $ 500 $ 750 $1,000 $1,250 $ 1,500 100 $ 90 $ 340 $ 590 $ 840 $1,090 $1,340 $ 1,590 200 $ 180 $ 430 $ 680 $ 930 $1,180 $1,430 $ 1,680 300 $ 270 $ 520 $ 770 $1,020 $1,270 $1,520 $ 1,770 400 $ 360 $ 610 $ 860 $1,110 $1,360 $1,610 $ 1,860 500 $ 478 $ 728 $ 978 $1,228 $1,478 $1,728 $ 1,978 600 $ 628 $ 878 $1,128 $1,378 $1,628 $1,878 $ 2,128 700 $ 778 $1,028 $1,278 $1,528 $1,778 $2,028 $ 2,278 800 $ 928 $1,178 $1,428 $1,678 $1,928 $2,178 $ 2,428 900 $1,078 $1,328 $1,578 $1,828 $2,078 $2,328 $ 2,578 1,000 $1,228 $1,478 $1,728 $1,978 $2,228 $2,478 $ 2,728 1,100 $1,384 $1,634 $1,884 $2,134 $2,384 $2,634 $ 2,884 1,200 $1,559 $1,809 $2,059 $2,309 $2,559 $2,809 $ 3,059 1,300 $1,734 $1,984 $2,234 $2,484 $2,734 $2,984 $ 3,234 1,400 $1,909 $2,159 $2,409 $2,659 $2,909 $3,159 $ 3,409 ----------- -------------------------------------------------------------------- Open Market Repurchase @ $1.20(2) Wilkerson -------------------------------------------------------------------- BuyBack(1) - 250 500 750 1,000 1,250 1,500 ----------- -------------------------------------------------------------------- Cash Required For Share Repurchase(3) -------------------------------------------------------------------- - $ - $ 300 $ 600 $ 900 $1,200 $1,500 $ 1,800 100 $ 90 $ 390 $ 690 $ 990 $1,290 $1,590 $ 1,890 200 $ 180 $ 480 $ 780 $1,080 $1,380 $1,680 $ 1,980 300 $ 270 $ 570 $ 870 $1,170 $1,470 $1,770 $ 2,070 400 $ 360 $ 660 $ 960 $1,260 $1,560 $1,860 $ 2,160 500 $ 478 $ 778 $1,078 $1,378 $1,678 $1,978 $ 2,278 600 $ 628 $ 928 $1,228 $1,528 $1,828 $2,128 $ 2,428 700 $ 778 $1,078 $1,378 $1,678 $1,978 $2,278 $ 2,578 800 $ 928 $1,228 $1,528 $1,828 $2,128 $2,428 $ 2,728 900 $1,078 $1,378 $1,678 $1,978 $2,278 $2,578 $ 2,878 1,000 $1,228 $1,528 $1,828 $2,128 $2,428 $2,728 $ 3,028 1,100 $1,384 $1,684 $1,984 $2,284 $2,584 $2,884 $ 3,184 1,200 $1,559 $1,859 $2,159 $2,459 $2,759 $3,059 $ 3,359 1,300 $1,734 $2,034 $2,334 $2,634 $2,934 $3,234 $ 3,534 1,400 $1,909 $2,209 $2,509 $2,809 $3,109 $3,409 $ 3,709 ----------- -------------------------------------------------------------------- Open Market Repurchase @ $1.40(2) Wilkerson -------------------------------------------------------------------- BuyBack(1) - 250 500 750 1,000 1,250 1,500 ----------- -------------------------------------------------------------------- Cash Required For Share Repurchase(3) -------------------------------------------------------------------- - $ - $ 350 $ 700 $1,050 $1,400 $1,750 $ 2,100 100 $ 90 $ 440 $ 790 $1,140 $1,490 $1,840 $ 2,190 200 $ 180 $ 530 $ 880 $1,230 $1,580 $1,930 $ 2,280 300 $ 270 $ 620 $ 970 $1,320 $1,670 $2,020 $ 2,370 400 $ 360 $ 710 $1,060 $1,410 $1,760 $2,110 $ 2,460 500 $ 478 $ 828 $1,178 $1,528 $1,878 $2,228 $ 2,578 600 $ 628 $ 978 $1,328 $1,678 $2,028 $2,378 $ 2,728 700 $ 778 $1,128 $1,478 $1,828 $2,178 $2,528 $ 2,878 800 $ 928 $1,278 $1,628 $1,978 $2,328 $2,678 $ 3,028 900 $1,078 $1,428 $1,778 $2,128 $2,478 $2,828 $ 3,178 1,000 $1,228 $1,578 $1,928 $2,278 $2,628 $2,978 $ 3,328 1,100 $1,384 $1,734 $2,084 $2,434 $2,784 $3,134 $ 3,484 1,200 $1,559 $1,909 $2,259 $2,609 $2,959 $3,309 $ 3,659 1,300 $1,734 $2,084 $2,434 $2,784 $3,134 $3,484 $ 3,834 1,400 $1,909 $2,259 $2,609 $2,959 $3,309 $3,659 $ 4,009 Cash Balance after Share Repurchase(4) -------------------------------------------------------------------- - $2,805 $2,555 $2,305 $2,055 $1,805 $1,555 $ 1,305 100 $2,715 $2,465 $2,215 $1,965 $1,715 $1,465 $ 1,215 200 $2,625 $2,375 $2,125 $1,875 $1,625 $1,375 $ 1,125 300 $2,535 $2,285 $2,035 $1,785 $1,535 $1,285 $ 1,035 400 $2,445 $2,195 $1,945 $1,695 $1,445 $1,195 $ 945 500 $2,327 $2,077 $1,827 $1,577 $1,327 $1,077 $ 827 600 $2,177 $1,927 $1,677 $1,427 $1,177 $ 927 $ 677 700 $2,027 $1,777 $1,527 $1,277 $1,027 $ 777 $ 527 800 $1,877 $1,627 $1,377 $1,127 $ 877 $ 627 $ 377 900 $1,727 $1,477 $1,227 $ 977 $ 727 $ 477 $ 227 1,000 $1,577 $1,327 $1,077 $ 827 $ 577 $ 327 $ 77 1,100 $1,421 $1,171 $ 921 $ 671 $ 421 $ 171 $ (79) 1,200 $1,246 $ 996 $ 746 $ 496 $ 246 $ (4) $ (254) 1,300 $1,071 $ 821 $ 571 $ 321 $ 71 $ (179) $ (429) 1,400 $ 896 $ 646 $ 396 $ 146 $ (104) $ (354) $ (604) Cash Balance after Share Repurchase(4) -------------------------------------------------------------------- - $2,805 $2,505 $2,205 $1,905 $1,605 $1,305 $ 1,005 100 $2,715 $2,415 $2,115 $1,815 $1,515 $1,215 $ 915 200 $2,625 $2,325 $2,025 $1,725 $1,425 $1,125 $ 825 300 $2,535 $2,235 $1,935 $1,635 $1,335 $1,035 $ 735 400 $2,445 $2,145 $1,845 $1,545 $1,245 $ 945 $ 645 500 $2,327 $2,027 $1,727 $1,427 $1,127 $ 827 $ 527 600 $2,177 $1,877 $1,577 $1,277 $ 977 $ 677 $ 377 700 $2,027 $1,727 $1,427 $1,127 $ 827 $ 527 $ 227 800 $1,877 $1,577 $1,277 $ 977 $ 677 $ 377 $ 77 900 $1,727 $1,427 $1,127 $ 827 $ 527 $ 227 $ (73) 1,000 $1,577 $1,277 $ 977 $ 677 $ 377 $ 77 $ (223) 1,100 $1,421 $1,121 $ 821 $ 521 $ 221 $ (79) $ (379) 1,200 $1,246 $ 946 $ 646 $ 346 $ 46 $ (254) $ (554) 1,300 $1,071 $ 771 $ 471 $ 171 $ (129) $ (429) $ (729) 1,400 $ 896 $ 596 $ 296 $ (4) $ (304) $ (604) $ (904) Cash Balance after Share Repurchase(4) -------------------------------------------------------------------- - $2,805 $2,455 $2,105 $1,755 $1,405 $1,055 $ 705 100 $2,715 $2,365 $2,015 $1,665 $1,315 $ 965 $ 615 200 $2,625 $2,275 $1,925 $1,575 $1,225 $ 875 $ 525 300 $2,535 $2,185 $1,835 $1,485 $1,135 $ 785 $ 435 400 $2,445 $2,095 $1,745 $1,395 $1,045 $ 695 $ 345 500 $2,327 $1,977 $1,627 $1,277 $ 927 $ 577 $ 227 600 $2,177 $1,827 $1,477 $1,127 $ 777 $ 427 $ 77 700 $2,027 $1,677 $1,327 $ 977 $ 627 $ 277 $ (73) 800 $1,877 $1,527 $1,177 $ 827 $ 477 $ 127 $ (223) 900 $1,727 $1,377 $1,027 $ 677 $ 327 $ (23) $ (373) 1,000 $1,577 $1,227 $ 877 $ 527 $ 177 $ (173) $ (523) 1,100 $1,421 $1,071 $ 721 $ 371 $ 21 $ (329) $ (679) 1,200 $1,246 $ 896 $ 546 $ 196 $ (154) $ (504) $ (854) 1,300 $1,071 $ 721 $ 371 $ 21 $ (329) $ (679) $(1,029) 1,400 $ 896 $ 546 $ 196 $ (154) $ (504) $ (854) $(1,204) -------------------------------------------------------------------------------- (1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Estimated cash cost of combined option buyback in (1) and open market repurchase in (2) (4) Cash balances only include cash bank balances immediately available for use and excludes cash proceeds from ITM options and notes. Adjusted for approximately $2.0 million in cash required for next fiscal year. Sources of information: Company management DRAFT ANALYSIS-2/20/2003 71 CAPITALINK, L.C. BCT International, Inc. Confidential -------------------------------------------------------------------------------- Share Buyback - Impact on Stock ($ in thousands, except per share amounts) Shares Outstanding Post - Share Repurchase
--------------------------------------------------------- ------------------------------------------------ Open Market Repurchase(2) Open Market Repurchase(2) --------------- --------------------------------------------------------- ------------------------------------------------ Wilkerson - 250 500 750 1,000 1,250 1,500 - 250 500 750 1,000 1,250 1,500 --------------------------------------------------------- ------------------------------------------------ BuyBack(1) Total Basic Shares Oustanding(3) Shares Trading on Public Market(3)(4) ------------------------------------------------ - 5,828 5,578 5,328 5,078 4,828 4,578 4,328 2,767 2,498 2,227 1,953 1,677 1,397 1,113 100 5,728 5,478 5,228 4,978 4,728 4,478 4,228 2,773 2,504 2,233 1,959 1,683 1,403 1,118 200 5,628 5,378 5,128 4,878 4,628 4,378 4,128 2,780 2,511 2,240 1,966 1,689 1,409 1,124 300 5,528 5,278 5,028 4,778 4,528 4,278 4,028 2,788 2,519 2,247 1,973 1,696 1,415 1,129 400 5,428 5,178 4,928 4,678 4,428 4,178 3,928 2,795 2,526 2,255 1,980 1,703 1,422 1,136 500 5,328 5,078 4,828 4,578 4,328 4,078 3,828 2,803 2,534 2,262 1,988 1,711 1,429 1,142 600 5,228 4,978 4,728 4,478 4,228 3,978 3,728 2,811 2,542 2,271 1,996 1,719 1,436 1,149 700 5,128 4,878 4,628 4,378 4,128 3,878 3,628 2,820 2,551 2,279 2,005 1,727 1,444 1,157 800 5,028 4,778 4,528 4,278 4,028 3,778 3,528 2,829 2,560 2,288 2,014 1,736 1,453 1,165 900 4,928 4,678 4,428 4,178 3,928 3,678 3,428 2,838 2,569 2,298 2,024 1,745 1,462 1,173 1,000 4,828 4,578 4,328 4,078 3,828 3,578 3,328 2,848 2,579 2,308 2,034 1,755 1,472 1,182 1,100 4,728 4,478 4,228 3,978 3,728 3,478 3,228 2,859 2,590 2,319 2,044 1,766 1,482 1,192 1,200 4,628 4,378 4,128 3,878 3,628 3,378 3,128 2,869 2,601 2,330 2,056 1,778 1,494 1,203 1,300 4,528 4,278 4,028 3,778 3,528 3,278 3,028 2,881 2,613 2,342 2,068 1,790 1,506 1,215 1,400 4,428 4,178 3,928 3,678 3,428 3,178 2,928 2,893 2,625 2,355 2,081 1,803 1,519 1,228 ---------------- --------------------------------------------------------- ------------------------------------------------ Number of Weeks Required to Buyback Shares on Open Market --------------------------------------------------------- ------------------------------------------------ No Weeks Required @ 5,000 Daily Volume No Weeks Required @ 8,000 Daily Volume --------------------------------------------------------- ------------------------------------------------ --------------- % Vol Used --------------- 25% - 28 57 85 114 142 171 - 18 36 53 71 89 107 35% - 20 41 61 81 102 122 - 13 25 38 51 64 76 40% - 18 36 53 71 89 107 - 11 22 33 45 56 67 50% - 14 28 43 57 71 85 - 9 18 27 36 45 53 --------------- --------------------------------------------------------- ------------------------------------------------ --------------------------------------------------------- ------------------------------------------------ No Weeks Required @ 10,000 Daily Volume No Weeks Required @ 20,000 Daily Volume --------------------------------------------------------- ------------------------------------------------ --------------- % Vol Used --------------- 25% - 14 28 43 57 71 85 - 7 14 21 28 36 43 35% - 10 20 31 41 51 61 - 5 10 15 20 25 31 40% - 9 18 27 36 45 53 - 4 9 13 18 22 27 50% - 7 14 21 28 36 43 - 4 7 11 14 18 21 --------------- --------------------------------------------------------- ------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------
(1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on basic common shares oustanding, see proforma capitalization table. (4) Includes all common shares outstanding, excluding shares held by Wilkerson/Phoenix. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 CAPITALINK, L.C. 72 BCT International, Inc. Confidential -------------------------------------------------------------------------------- Cash Available for Cash Dividend ($ in thousands, except per share amounts) Shares Outstanding Post - Share Repurchase
------------------------------------------------------ ----------------------------------------------------- Open Market Repurchase (2) Open Market Repurchase @ $1.00 (2) ----------- ------------------------------------------------------ ----------------------------------------------------- Wilkerson - 250 500 750 1,000 1,250 1,500 - 250 500 750 1,000 1,250 1,500 BuyBack (1) ------------------------------------------------------ ----------------------------------------------------- ------------------------------------------------------ ----------------------------------------------------- Total Basic Shares Oustanding (3) Maximum Cash Dividend Payable (4) ------------------------------------------------------ ----------------------------------------------------- - 5,828 5,578 5,328 5,078 4,828 4,578 4,328 $0.31 $0.28 $0.24 $0.21 $0.17 $0.12 $0.07 100 5,728 5,478 5,228 4,978 4,728 4,478 4,228 $0.30 $0.27 $0.23 $0.19 $0.15 $0.10 $0.05 200 5,628 5,378 5,128 4,878 4,628 4,378 4,128 $0.29 $0.26 $0.22 $0.18 $0.14 $0.09 $0.03 300 5,528 5,278 5,028 4,778 4,528 4,278 4,028 $0.28 $0.24 $0.21 $0.16 $0.12 $0.07 $0.01 400 5,428 5,178 4,928 4,678 4,428 4,178 3,928 $0.27 $0.23 $0.19 $0.15 $0.10 $0.05 $ - 500 5,328 5,078 4,828 4,578 4,328 4,078 3,828 $0.25 $0.21 $0.17 $0.13 $0.08 $0.02 $ - 600 5,228 4,978 4,728 4,478 4,228 3,978 3,728 $0.23 $0.19 $0.14 $0.10 $0.04 $ - $ - 700 5,128 4,878 4,628 4,378 4,128 3,878 3,628 $0.20 $0.16 $0.11 $0.06 $0.01 $ - $ - 800 5,028 4,778 4,528 4,278 4,028 3,778 3,528 $0.17 $0.13 $0.08 $0.03 $ - $ - $ - 900 4,928 4,678 4,428 4,178 3,928 3,678 3,428 $0.15 $0.10 $0.05 $ - $ - $ - $ - 1,000 4,828 4,578 4,328 4,078 3,828 3,578 3,328 $0.12 $0.07 $0.02 $ - $ - $ - $ - 1,100 4,728 4,478 4,228 3,978 3,728 3,478 3,228 $0.09 $0.04 $ - $ - $ - $ - $ - 1,200 4,628 4,378 4,128 3,878 3,628 3,378 3,128 $0.05 $ - $ - $ - $ - $ - $ - 1,300 4,528 4,278 4,028 3,778 3,528 3,278 3,028 $0.02 $ - $ - $ - $ - $ - $ - 1,400 4,428 4,178 3,928 3,678 3,428 3,178 2,928 $ - $ - $ - $ - $ - $ - $ - ----------- ------------------------------------------------------ ----------------------------------------------------- ------------------------------------------------------ ----------------------------------------------------- Open Market Repurchase @ $1.20 (2) Open Market Repurchase @ $1.40 (2) ----------- ------------------------------------------------------ ----------------------------------------------------- Wilkerson - 250 500 750 1,000 1,250 1,500 - 250 500 750 1,000 1,250 1,500 BuyBack (1) ------------------------------------------------------ ----------------------------------------------------- ------------------------------------------------------ ----------------------------------------------------- Maximum Cash Dividend Payable (4) Maximum Cash Dividend Payable (4) ------------------------------------------------------ ----------------------------------------------------- - $0.31 $0.27 $0.23 $0.18 $0.13 $0.07 $0.00 $0.31 $0.26 $0.21 $0.15 $0.08 $0.01 $ - 100 $0.30 $0.26 $0.21 $0.16 $0.11 $0.05 $ - $0.30 $0.25 $0.19 $0.13 $0.07 $ - $ - 200 $0.29 $0.25 $0.20 $0.15 $0.09 $0.03 $ - $0.29 $0.24 $0.18 $0.12 $0.05 $ - $ - 300 $0.28 $0.23 $0.19 $0.13 $0.07 $0.01 $ - $0.28 $0.22 $0.17 $0.10 $0.03 $ - $ - 400 $0.27 $0.22 $0.17 $0.12 $0.06 $ - $ - $0.27 $0.21 $0.15 $0.08 $0.01 $ - $ - 500 $0.25 $0.20 $0.15 $0.09 $0.03 $ - $ - $0.25 $0.19 $0.13 $0.06 $ - $ - $ - 600 $0.23 $0.18 $0.12 $0.06 $ - $ - $ - $0.23 $0.17 $0.10 $0.03 $ - $ - $ - 700 $0.20 $0.15 $0.09 $0.03 $ - $ - $ - $0.20 $0.14 $0.07 $ - $ - $ - $ - 800 $0.17 $0.12 $0.06 $ - $ - $ - $ - $0.17 $0.11 $0.04 $ - $ - $ - $ - 900 $0.15 $0.09 $0.03 $ - $ - $ - $ - $0.15 $0.08 $0.01 $ - $ - $ - $ - 1,000 $0.12 $0.06 $ - $ - $ - $ - $ - $0.12 $0.05 $ - $ - $ - $ - $ - 1,100 $0.09 $0.03 $ - $ - $ - $ - $ - $0.09 $0.02 $ - $ - $ - $ - $ - 1,200 $0.05 $ - $ - $ - $ - $ - $ - $0.05 $ - $ - $ - $ - $ - $ - 1,300 $0.02 $ - $ - $ - $ - $ - $ - $0.02 $ - $ - $ - $ - $ - $ - 1,400 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - ----------- ------------------------------------------------------ -----------------------------------------------------
-------------------------------------------------------------------------------- (1) Represents the buyback of shares previously purchased by Wilkerson/Phoenix, assuming all $0.90, $1.50 shares and 327,000 of the $1.75 shares were purchased using $2.0 million loan guaranteed by the Company. (2) Represents an open market repurchase of shares. (3) Based on basic common shares oustanding, see proforma capitalization table. (4) Calculated by dividing cash available after share buyback, with the number of common shares outstanding. Sources of information: Company management DRAFT ANALYSIS - 2/20/2003 73 CAPITALINK, L.C.