Project Care

Discussion Materials

January 27, 2013

PRELIMINARY DRAFT FOR DISCUSSION PURPOSES ONLY

Exhibit  (c)(5)

1

TABLE OF CONTENTS

I.

Offer and Process Update

2

II.

Update on Public Market Performance

5

III.

Historical and Projected Financial Performance

12

IV.

Valuation Analysis

18

Appendix A.

Selected Additional Financial Information

31

Appendix B.

Selected Additional Trading Information

33

Appendix C.

Selected Additional Valuation Information

36

Appendix D.

Overview

of

Initial

Weiss

Family

Proposal

–

12/5/12

43

2

I.

OFFER AND PROCESS UPDATE

3

OVERVIEW OF PROPOSALS

(a) Assumes

restricted

stock

and

performance

shares

as

of

October

1,

,

2012,

vest

in

change

of

control.

1/17/13 Offer

(Amounts in Millions, except per share data)

•

The Weiss Family submitted an updated proposal dated 1/17/13, increasing its proposed purchase price to $17.50 per share

–

Offer represents a $0.32 per share, or 1.9%, increase from 9/25/12, offer price of $17.18

–

Family stated that it does “not intend to further increase the price of its offer”

–

As stated in proposed contract, offer prohibits payment of dividends (currently $0.15/share) between signing and

closing;

2

quarters

of

missed

dividends

equal

to

~$0.30/share

of

value

•

The

Family

states

that

it

has

“commitments

for

over

$700

million

of

bank

financing”

and

the

remaining

financing

for

the

transaction

will

be

available in the near future; contract indicates financing package will include senior debt and mezzanine debt tranches

•

Weiss Family maintains position that it has “no intention to sell all or any significant portion of its shares”

9/25/12 Offer

Offer Price

$17.50

% Premium to Initial Bid of $17.18

1.9%

% Premium to Share Price ($14.34) on 9/25/12

22.0%

% Premium to 30 Day Prior ($14.30) to 9/25/12

22.4%

Shares Outstanding (a)

32.8

Implied Equity Value

$574.1

Add: Debt (11/23/12)

356.8

Less: Cash (11/23/12)

(63.3)

Net Debt

293.5

Implied Enterprise Value

$867.6

Implied Trailing Adjusted EBITDA Multiple

5.3 x

Implied FY2013E Adjusted EBITDA Multiple

4.4 x

LTM EBITDA For Period Ending 11/23/12

$164.1

FY13E EBITDA (current estimate)

195.6

Offer Price

$17.18

% Premium to Unaffected Share Price ($14.34) on 9/25/12

19.8%

% Premium to 30 Day Prior ($14.30) to 9/25/12

20.1%

Shares Outstanding (a)

32.8

Implied Equity Value

$563.5

Add: Debt (8/24/12)

280.2

Less: Cash (8/24/12)

(61.7)

Net Debt

218.4

Implied Enterprise Value

$781.9

Implied Trailing Adjusted EBITDA Multiple

4.2 x

Implied FY2013E Adjusted EBITDA Multiple

4.0 x

LTM EBITDA For Period Ending 8/24/12

$187.9

FY13E EBITDA as of 12/7/12 Board Meeting

196.1

4

Investor

Date

Shares Owned

Investor Commentary

TowerView

(private equity firm

specializing in LBOs of

middle-market companies in

partnership with company

management)

Letters received on

11/30/12 and 1/18/13

1.45M shares

•

5.0% of Class A

•

4.6% of total shares

•

Owner since March 2006

•

11/30/12:

TowerView

does

not

believe

that

it

is

in

the

shareholders’

best

interest

for

Weiss

Family

to

take

company

private

at

the

offer

price

of

$17.18

–

“The

Family

should

give

Special

Committee

the

right

to

commit

and

sell

their

ownership

in

Company

if

an

outside

party

is willing to pay at least 1 cent more for all shares than an agreed upon deal with the Family”

•

1/18/13:

“New

proposal

continues

to

grossly

undervalue

the

equity

of

American

Greetings”

–

Family is “using coercive tactics to the detriment of all other owners”

–

Special Committee should instead pursue leveraged recapitalization of the Company

Recapitalization would “effectively pay all shareholders $10 per share in cash and distribute a further $5

per share in market value of a new issue of preferred stock”

–

Special Committee should also “level the playing field for all shareholders by declaring a stock dividend of 0.4 shares

of

Class

B

Common

stock

for

all

shareholders”

reduce

voting

power

of

Weiss

Family

from

approximately

50%

to

nearly 20%

Carlson

Capital

(employs multi-strategy

approach including risk

arbitrage, convertible

arbitrage and relative value

arbitrage)

Letter received on

1/18/13 and various

calls with PJSC

396,000 shares

(a)

•

1.4% of Class A

•

1.3% of total shares

•

Ownership acquired during

quarter ended September

30, 2012

•

Carlson Capital believes company will have a greater chance of success in context of private ownership

•

Long term investments such as Cardstore.com and Clinton require trade-offs that seem ill-suited for public markets

•

Weiss Family’s voting control and its unwillingness to sell makes it difficult to extract higher premium

•

If

Weiss

Family

is

unwilling

to

improve

offer,

Carlson

Capital

would

unequivocally

prefer

existing

$17.50

per

share

offer

to

no

deal

at

all

•

Believe

it

is

now

time

to

conclude

negotiations

and

present

an

offer

to

public

shareholders

•

Would

prefer

Committee

put

the

offer

to

shareholder

vote

with

no

recommendation

than

to

decline

the

offer

Pentwater

Capital

Management

(employs merger arbitrage,

long/short and event-driven

strategies)

Called Sullivan &

Cromwell on 1/18/13

550,000 shares

(a)

•

1.9% of Class A

•

1.7% of total shares

•

Ownership acquired during

quarter ended September

30, 2012

•

If

it

is

best

and

final

offer,

Pentwater

wants

Special

Committee

to

either

recommend

deal

or

if

Special

Committee

cannot

endorse,

send

it

to

the

stockholders

and

let

stockholders

decide

for

themselves

•

In

light

of

long-term

issues

with

fundamentals

of

the

business,

particularly

in

the

U.K.,

Pentwater

views

$17.50

as

a

“reasonable

premium”

and

thinks

it

would

take

several

years

for

stock

price

to

get

up

to

that

level

absent

a

deal

•

Would

prefer

a

deal

sooner

rather

than

later

Alan

Doft

(President of Doft &

Company)

Called Steve Smith

on 1/23/13

N/A

•

Has close ties with the Weiss Family and Care (parents were early investors in the stock)

•

Surprised that neither the Special Committee nor the Board of Directors have issued a public statement

•

Interested in talking to the Weiss Family but not to any of the advisors or the Special Committee

•

Doft

wants

the

transaction

to

close;

thought

bid

represented

an

appropriate

offer

PineKnot

Capital

Management

Email sent to Care’s

Investor Relations on

10/16/12

N/A

•

Does

not

believe

it

is

in

the

shareholders’

interest

to

sell

their

ownership

rights

to

the

Weiss

Family

•

Instead,

the

Special

Committee

would

better

serve

shareholders

by:

–

“rejecting

the

offer

and

allowing

the

company

to

operate,

releasing

free

cash

flow

to

equity

in

excess

of

positive

NPV

projects’

funding needs”

–

“Soliciting

a

higher

bid

from

management

or

an

interested

third

party”

INVESTOR COMMENTARY ON OFFERS

(a) Share count as reported by investor. 

Recently received feedback from current shareholders representing ~7.6% of total shares outstanding

(~8.3% of unaffiliated shares)

5

II. UPDATE ON PUBLIC MARKET PERFORMANCE

6

(100%)

(50%)

0%

50%

100%

150%

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Jan-13

RELATIVE STOCK PRICE CHART OVER THE LAST TWO YEARS

Source: Capital IQ as of January 24, 2013, market cap weighted.

Note: Social Expression includes CSS Industries, Blyth, 1-800-Flowers.com and CafePress.  Directories include PagesJaunes Groupe, Eniro AB, DexOne Corporation and SuperMedia. Print

Media includes Scholastic, R.R. Donnelly and Quad/Graphics

Social Expression:

(10)%

Care:

(28)%

S&P SmallCap 600:

22%

Directories:

(69)%

Print Media:

(34%)

Relative Closing Stock Price Performance

Social

S&P

Print

Care

Expression

Directories

SmallCap 600

Media

1 Month

(4%)

3%

23%

7%

8%

Since 9/25/12

12%

(42%)

51%

8%

(0%)

3 Month

(7%)

(23%)

61%

11%

(1%)

6 Month

26%

(40%)

66%

17%

10%

1 Year

13%

(47%)

(25%)

15%

13%

2 Year

(28%)

(10%)

(69%)

22%

(34%)

7

Offer Price

$17.50

1/17/13: Weiss

Family announces

revised offer

STOCK PRICE –

SINCE TWO YEARS PRIOR TO OFFER

Source: Public sources. Stock price chart as of January 24, 2013.

12/22/11: Reported Q3

2012 earnings of $0.50 per

share, missing Street

expectations of $0.81 per

share

9/25/12: Weiss

Family announces

offer to take Care

private

$

15.99

$17.18

10/4/11:

Announcement of

Apple Cards app

1-Year Average

$21.82

2-Year  Average

$18.49

Offer Price

$17.18

1-Year Average

$15.08

6-Month Average

$14.44

3-Month Average

$14.15

Average

Between Two

Offers

$16.93

Closing Stock Price History

Pre-9/25/13 Offer

$17.50 Offer Price As

Unaffected Price

Premium / (Discount)

1 Day Prior

$14.34

22.0%

5 Day Average

14.88

17.6%

10 Day Average

15.40

13.6%

20 Day Average

15.12

15.7%

30 Day Average

14.80

18.3%

$17.50

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

$10.00

$15.00

$20.00

$25.00

$30.00

Sep-10

Jan-11

Apr-11

Aug-11

Nov-11

Mar-12

Jun-12

Oct-12

Jan-13

8

STOCK PRICE –

BETWEEN THE ORIGINAL AND REVISED OFFER

Stock price chart as of January 24, 2013. Low excludes pre-offer closing price on September 25, 2012. 

9/25/12

Offer Price

$17.18

1/17/13

Offer Price

$17.50

$

15.99

Low

(1/17/13):

$15.48

High

(12/11/12):

$17.38

Trading Data (9/26/12 - 1/17/13)

Stock Price

Volume

High

$17.38

2,690.2

Low

15.48

71.6

Mean

16.96

430.6

Median

17.01

333.3

$17.18

$17.50

0

500

1,000

1,500

2,000

2,500

3,000

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

9

JANUARY 17, 2013 –

TRADING VOLUME & PRICES

Source: Capital IQ.

Note: Share price represents price at the first minute of the time frame.

(a)

Intraday high of $16.41 occurred at 9:53AM and intraday low of

$15.06 occurred at 2:36PM.

The intra-day price change from low to high on 1/17/13 was 5.7 standard deviations away from the mean

change, and the trading volume on 1/17/13 was 65% higher than the average daily trading volume during

the period from the original offer date (9/25/12) to the revised

offer date (1/17/13)

Open

$16.30

High

(a)

16.41

Low

(a)

15.06

Close

15.48

81.6

23.9

94.5

66.8

155.4

166.2

69.8

$16.30

$16.06

$15.85

$15.70

$15.36

$15.53

$15.49

0

30

60

90

120

150

180

$14.80

$15.20

$15.60

$16.00

$16.40

9:30AM -

10:29AM

10:30AM -

11:29AM

11:30AM -

12:29PM

12:30PM -

1:29PM

1:30PM -

2:29PM

2:30PM -

3:29PM

3:30PM -

4:00PM

10

SHARES TRADED AT VARIOUS PRICES

2-Year

1-Year

Source: Capital IQ as of January 24, 2013.

(Period

ending

September

25,

2012,

except

for

“Since

9/25

Offer

of

$17.18”

chart)

180-Days

90-Days

30-Days

Since 9/25 Offer of $17.18 (81 Days)

•

97% of shares traded below $17.50 revised offer price over the one-year prior to 9/25/12 offer

•

No shares have traded above $16.88 since the revised offer of $17.50

Avg. Daily Trading Vol. (000s)

409.3

Average Price:

$18.48

Avg. Daily Trading Vol. (000s)

535.8

Average Price:

$15.06

Avg. Daily Trading Vol. (000s)

474.3

Average Price:

$14.44

Avg. Daily Trading Vol. (000s)

361.5

Average Price:

$14.15

Avg. Daily Trading Vol. (000s)

328.0

Average Price:

$15.08

Avg. Daily Trading Vol. (000s)

430.0

Average Price:

$16.92

Total # of Shares Traded (mm)

34.8

% of Total Shares

102.7%

% of Public Float

114.5%

34%

35%

22%

9%

0%

0%

0

1

2

3

4

5

6

7

8

9

Below

$13.50

$13.50 -

$14.49

$14.50 -

$15.49

$15.50 -

$16.49

$16.50 -

$17.49

$17.50 and

Above

0%

28%

41%

30%

0%

0%

0

1

2

3

4

Below

$13.50

$13.50 -

$14.49

$14.50 -

$15.49

$15.50 -

$16.49

$16.50 -

$17.49

$17.50 and

Above

14%

25%

20%

19%

9%

13%

0%

0

1

2

3

4

5

6

7

8

9

10

Below

$16.70

$16.70-

$16.85

$16.86-

$17.00

$17.01-

$17.10

$17.11-

$17.17

$17.18-

$17.49

$17.50

and

Above

13%

29%

35%

23%

0%

0%

0

5

10

15

20

25

Below

$13.50

$13.50 -

$14.49

$14.50 -

$15.49

$15.50 -

$16.49

$16.50 -

$17.49

$17.50 and

Above

19%

17%

25%

21%

15%

3%

0

5

10

15

20

25

30

35

40

Below

$13.50

$13.50 -

$14.49

$14.50 -

$15.49

$15.50 -

$16.49

$16.50 -

$17.49

$17.50 and

Above

12%

11%

16%

14%

10%

36%

0

10

20

30

40

50

60

70

80

Below

$13.50

$13.50 -

$14.49

$14.50 -

$15.49

$15.50 -

$16.49

$16.50 -

$17.49

$17.50 and

Above

11

DAILY TRADING RANGE –

SINCE 9/25/12

Source: Capital IQ.

Date

Open

Close

High

Low

Volume (000s)

Date

Open

Close

High

Low

Volume (000s)

9/25/12

$14.85

$14.34

$15.00

$14.31

437

11/26/12

17.05

17.13

17.13

16.80

196

9/26/12

14.34

16.82

17.10

16.15

2,690

11/27/12

17.13

17.10

17.15

17.00

445

9/27/12

16.82

17.01

17.09

16.72

1,368

11/28/12

17.10

17.16

17.16

17.10

170

9/28/12

17.01

16.80

17.05

16.64

1,617

11/29/12

17.16

17.20

17.31

17.00

255

10/1/12

16.80

16.78

16.96

16.64

701

11/30/12

17.20

17.24

17.42

17.20

293

10/2/12

16.78

16.72

16.83

16.69

499

12/3/12

17.24

17.22

17.29

17.08

440

10/3/12

16.72

16.75

16.86

16.70

383

12/4/12

17.22

17.15

17.25

17.04

364

10/4/12

16.75

16.84

16.95

16.75

581

12/5/12

17.15

16.89

17.23

16.87

333

10/5/12

16.84

16.76

16.92

16.74

395

12/6/12

16.89

16.56

17.22

16.51

271

10/8/12

16.76

16.82

16.85

16.73

630

12/7/12

16.56

17.14

17.27

16.63

843

10/9/12

16.82

16.90

16.94

16.77

368

12/10/12

17.14

17.31

17.37

17.07

525

10/10/12

16.90

16.93

17.09

16.85

638

12/11/12

17.31

17.38

17.46

17.23

598

10/11/12

16.93

17.00

17.08

16.96

898

12/12/12

17.38

17.21

17.49

17.15

298

10/12/12

17.00

17.05

17.09

16.90

329

12/13/12

17.21

17.20

17.39

17.14

177

10/15/12

17.05

17.06

17.11

17.02

245

12/14/12

17.20

17.21

17.33

17.11

282

10/16/12

17.06

17.03

17.44

17.03

543

12/17/12

17.21

17.26

17.35

17.08

233

10/17/12

17.03

17.01

17.18

17.00

591

12/18/12

17.26

17.26

17.34

17.17

159

10/18/12

17.01

17.06

17.09

17.00

401

12/19/12

17.26

17.20

17.30

17.06

241

10/19/12

17.06

16.99

17.08

16.97

466

12/20/12

17.20

16.98

17.14

16.50

947

10/22/12

16.99

17.07

17.10

17.00

394

12/21/12

16.98

16.85

17.14

16.82

902

10/23/12

17.07

17.10

17.15

17.00

388

12/24/12

16.85

16.66

16.88

16.57

336

10/24/12

17.10

17.15

17.18

17.01

167

12/26/12

16.66

16.66

16.90

16.60

353

10/25/12

17.15

17.19

17.20

17.07

193

12/27/12

16.66

16.86

16.88

16.61

346

10/26/12

17.19

17.15

17.25

17.05

295

12/28/12

16.86

16.78

16.94

16.64

133

10/31/12

17.15

17.17

17.18

17.05

448

12/31/12

16.78

16.89

17.03

16.70

349

11/1/12

17.17

17.29

17.36

17.02

814

1/2/13

16.89

16.94

17.09

16.81

246

11/2/12

17.29

17.12

17.36

17.10

175

1/3/13

16.94

16.95

17.02

16.88

252

11/5/12

17.12

17.17

17.31

17.12

189

1/4/13

16.95

16.93

17.10

16.93

213

11/6/12

17.17

17.21

17.27

17.15

181

1/7/13

16.93

16.67

16.99

16.60

181

11/7/12

17.21

17.10

17.30

17.03

312

1/8/13

16.67

16.63

16.81

16.60

226

11/8/12

17.10

17.01

17.18

17.01

362

1/9/13

16.63

16.56

16.76

16.51

215

11/9/12

17.01

17.02

17.15

16.94

289

1/10/13

16.56

16.56

16.76

16.48

158

11/12/12

17.02

17.06

17.15

16.99

288

1/11/13

16.56

16.85

16.87

16.50

167

11/13/12

17.06

17.06

17.12

17.00

388

1/14/13

16.85

16.90

16.98

16.78

199

11/14/12

17.06

16.95

17.23

16.80

999

1/15/13

16.90

16.54

16.84

16.50

244

11/15/12

16.95

16.95

17.08

16.75

345

1/16/13

16.54

16.30

16.56

16.19

371

11/16/12

16.95

16.90

17.06

16.85

327

1/17/13

16.30

15.48

16.41

15.06

709

11/19/12

16.90

17.05

17.09

16.90

172

1/18/13

15.48

16.29

16.88

16.13

706

11/20/12

17.05

17.10

17.19

16.90

164

1/22/13

16.29

15.94

16.24

15.79

347

11/21/12

17.10

17.13

17.18

16.94

183

1/23/13

15.94

15.90

15.99

15.83

380

11/23/12

17.13

17.05

17.14

16.94

72

1/24/13

15.90

15.99

16.00

15.81

237

As of 1/24/13 closing price of $15.99, the implied annualized IRR between $15.99 and $17.50 equals ~44%

assuming a close in 3 months

12

III. HISTORICAL AND PROJECTED FINANCIAL PERFORMANCE

13

EVOLUTION OF SELECTED KEY METRICS

LTM

FY13E (As Presented At Special Committee

Meetings on Dates Below)

08/24/12

11/23/12

12/28/12

10/26/12

11/19/12

12/07/12

01/27/13

Revenue

$1,708.2

$1,750.0

NA

$1,830.2

$1,840.6

$1,840.6

$1,840.6

EBITDA

187.9

164.1

NA

182.8

183.5

196.1

195.6

Debt

280.2

356.8

$365.2

245.2

245.2

245.2

245.2

Cash

61.7

63.3

61.6

62.1

61.9

39.3

39.3

Net Debt

218.4

293.5

303.6

183.1

183.3

205.8

205.8

14

ADJUSTED EBITDA BRIDGE OVER TIME

Source: Care Treasury Model.

(a)

Adjustment to correct expenses in prior years; aggregate amount of adjustment captured in FY13.

Additional Adjustment Identified

Change in

Estimate

Change in Op.

Performance

Company

Revision to

G&A

Additional

Adjustment

Identified

Adjusted

EBIT

$153.9

$138.0

$150.6

Decrease

Increase

D&A

45.5

45.5

45.5

Reclassified

as Non-

Operating

Company

Revision

$150.1

45.5

$199.4

$3.1

$6.1

$3.3

$2.2

$3.2

$2.5

$10.0

$0.4

$0.1

$1.3

$3.2

$12.3

$4.8

$3.2

$2.1

$0.3

$183.5

$196.1

$195.6

$150

$160

$170

$180

$190

$200

Q2 Estimate

Adjusted

Operating

Income

Other Non

Operating

(Expense)

Income

Clinton Cards

Charges

Scan -BasedGain on Sale of

Trading

Party City

Investment

Voluntary

Compliance

Program(a)

Discontinuation

of Webshots

Weiss

Transaction

Costs

Management

Treasury Model

11.19.12

Operating

Income

Other Non

Operating

(Expense)

Income

Clinton CardsGain on Sale

Charges

of

Party City

Investment

Licensing

Termination

Expense

DiscontinuationManagement

of Webshots

Treasury Model

11.30.12

Voluntary

Compliance

Program(a)

Webshots

Revised

EBITDA

1.08.13

15

ADJUSTED EBITDA BRIDGE

Source: FY10 –

FY12 and LTM based on public filings; FY2013 based on Care Treasury Model.

(a)

Adjustment to correct expenses in prior years; aggregate amount of adjustment captured in FY13.

(Dollars in Millions)

Fiscal Year Ended February 28,

LTM

FYE 2/28,

2010

2011

2012

Nov-12

2013

Operating Income

$139.1

$174.7

$149.6

$48.7

$79.1

Depreciation & Amortization

45.2

41.0

39.2

42.3

45.5

Unadjusted EBITDA

$184.3

$215.8

$188.8

$91.0

$124.6

Charges Associated With Clinton Cards

--

--

--

35.2

36.5

Impairments, debt expense and fees

Party Goods Transaction

(18.4)

--

--

--

--

Gain on sale

Mexico Shutdown

18.2

--

--

--

--

Closing of Carlton Mexico

Retail Disposition

29.2

--

--

--

--

Sales of stores to Schurman

RPG Transaction Costs

--

10.3

--

--

--

Fees associated with purchase of RPG

Lawsuit

24.0

--

--

--

--

Settlement of a RPG lawsuit

Goodwill and Other Intangibles Impairment

--

0.3

27.2

27.2

--

Related to NAGCD, UK and Interactive

Gain from Sale of Intellectual Property

--

--

(4.5)

--

--

Sold certain minor character properties

Gain from Liquidation of Business in France

(3.3)

--

--

--

--

Currency translation adjustment from sale

Loss on Sale of WHQ

--

--

--

--

21.4

Estimated loss on sale of WHQ

Voluntary Compliance Program (a)

--

--

--

--

0.9

Related to prior years' underexpensing catch up

Webshots

(1.7)

(0.7)

2.4

(0.1)

(2.3)

Pro forma adjustment for sale of Webshots

Properties Licensing Termination Expense

--

--

--

2.1

2.1

Termination of Certain Agency Agreements

Proposed Going Private Transaction Costs

--

--

--

2.0

3.2

Current process costs

Scan-Based Trading

1.5

5.7

6.8

6.8

9.2

Impact of scan-based trading conversions

Total Adjustment

$49.5

$15.6

$31.9

$73.2

$71.0

Adjusted EBITDA

$233.8

$231.4

$220.7

$164.1

$195.6

Adjusted EBIT

188.6

190.3

181.4

121.8

150.1

Total Adjustments as % of Adjusted EBITDA

21.2%

6.7%

14.4%

44.6%

36.3%

16

CARE CONSOLIDATED FINANCIAL SNAPSHOT

Total Revenue

Adjusted EBIT and EBITDA

Source: Public filings and Care Management Treasury Model.

10.0%

5.1%

14.2%

14.5%

13.0%

10.7%

10.8%

11.4%

11.9%

Adj. EBITDA

Margin

(Dollars in Millions)

12.2%

12.5%

$129

$37

$189

$190

$181

$150

$151

$157

$163

Adjusted EBIT

$170

$176

(71%)

413%

1%

(5%)

(17%)

0%

4%

4%

% Growth

4%

4%

$1,776

$1,691

$1,641

$1,598

$1,695

$1,841

$1,935

$1,940

$1,945

$1,950

$1,955

$0

$500

$1,000

$1,500

$2,000

08A

09A

10A

11A

12A

13E

14E

15E

16E

17E

18E

7.3%

2.2%

11.5%

11.9%

10.7%

8.2%

7.8%

8.1%

8.4%

8.7%

9.0%

% Margin

$177

$87

$234

$231

$221

$196

$208

$221

$231

$238

$244

$0

$50

$100

$150

$200

$250

08A

09A

10A

11A

12A

13E

14E

15E

16E

17E

18E

17

CARE CONSOLIDATED FINANCIAL SNAPSHOT

Capital Expenditures (a)

Free Cash Flow (a) (b)

Source: Public filings and Care Management Treasury Model.

(a) Excludes benefits of anticipated tax incentives related to new WHQ.

(b) Defined as Cash Flow from Operations less Capital Expenditures.

3.2%

3.3%

1.6%

2.3%

4.2%

6.9%

8.7%

7.2%

2.4%

(Dollars in Millions)

2.4%

2.4%

% of  Revenue

$187

$17

$171

$143

$46

$16

($9)

$35

$137

$138

$142

-$50

$0

$50

$100

$150

$200

08A

09A

10A

11A

12A

13E

14E

15E

16E

17E

18E

$57

$56

$27

$36

$71

$128

$169

$139

$46

$46

$46

$0

$50

$100

$150

$200

08A

09A

10A

11A

12A

13E

14E

15E

16E

17E

18E

18

IV. VALUATION ANALYSIS

19

SUMMARY VALUATION ANALYSIS

3.0x –

4.0x Multiple based on $195.6mm

2013E EBITDA and net debt of $206mm

Assumptions

Unaffected price of $14.34 as of 9/25/12

3.0x –

4.0x terminal multiple and 10% -

12%

WACC

(1.25%) –

(5.00%) revenue growth and

0.00% –

(1.00%) incremental EBIT margin at

3.5x terminal multiple and 11.0% WACC

Targets 20%-25% IRR with 3.0x –

4.0x exit

multiple

3.0x –

4.0x multiple from FY14E –

FY18E,

discounted at 12.5% cost of equity

$17.18

20%-30% premium based on premiums paid

analysis

$14.34

Unaffected

Share Price

3.0x –

4.0x Multiple based on $164mm LTM

11/23/12  EBITDA and net debt of $294mm

FY14E-FY18E future share prices at 4.0x

EBITDA multiple, discounted at 12.5% cost

of equity

(1.25%) –

(5.00%) revenue growth and

0.00% –

(1.00%) at 3.0x leverage, 4.0x exit

and 20% IRR target

$17.50

20%-30% premium based on premiums paid

analysis

FY14E-FY18E future share prices at 3.0x

EBITDA multiple, discounted at 12.5% cost

of equity

$6.12

$11.66

$7.95

$15.16

$17.21

$10.73

$16.45

$16.93

$13.72

$10.10

$16.01

$15.83

$11.57

$11.12

$17.58

$13.34

$21.09

$18.64

$14.05

$17.99

$23.22

$18.90

$21.64

$20.30

$19.49

$22.77

$5.00

$10.00

$15.00

$20.00

$25.00

LTM EBITDA

2013E EBITDA

LTM EBITDA

2013E EBITDA

20%-30% Premium to

Unaffected Price

Present Value of Future

Share Price @ 3.0x

Present Value of Future

Share Price @ 4.0x

DCF

DCF Sensitivity

Sum of the Parts

3.0x Leverage

Sensitivity to LBO

$8.00/Share Levered

Recap

Comparable Companies

20% -

30% Premium to Comps

20

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

Sep-10

Jan-11

Apr-11

Aug-11

Nov-11

Mar-12

Jun-12

Oct-12

Jan-13

CARE HISTORICAL EV/ LTM EBITDA –

FROM TWO YEARS PRIOR TO OFFER

Source: Capital IQ. Capital IQ calculation of enterprise value does include restricted stock or performance shares and may have different adjustments for EBITDA than those used in other

analyses in this presentation. Data as of January 24, 2013.

(a) Statistics are only for pre-offer time period.

Offer Date

9/25/12

1-Year Average

3.9x

2-Year  Average

3.5x

3 and 12-Month

Average

3.1x

6-Month Average

3.0x

Post-Offer

Average

4.4x

Offer Date

1/17/13

LTM EBITDA

decreased 13% at 

Q3 earnings

announcement

5.3x

Mean (a)

Median (a)

30 Days

3.2 x

3.2 x

60 Days

3.1 x

3.1 x

90 Days

3.1 x

3.1 x

6 Months

3.0 x

3.0 x

12 Months

3.1 x

3.1 x

18 Months

3.4 x

3.3 x

24 Months

3.5 x

3.5 x

21

VALUATION MATRIX

(a) Unaffected closing share price on September 25, 2012.

(b) Closing share price on January 24, 2013.

(c) Original offer price on September 25, 2012.

(d) Offer price on January 17, 2013.

(e) Assumes restricted stock and performance shares vest in change of control.

(f) Net debt of $293.5mm represents total debt of $356.8mm less cash of $63.3mm as of November 23, 2012.

(g) Net debt of $205.8mm represents total debt of $245.2mm less cash of $39.3mm estimated as of February 28, 2013.

(Amounts in Millions, except per share data)

LTM (11/23/12) Net Debt of $293.5mm

2013E Net Debt of $205.8mm

EV / LTM

EV / LTM

EV / FY2013E

EV / FY2013

Share

Market

Enterprise

Total Revenue

Adj. EBITDA

Adj. EBITDA

Enterprise

Adj. EBITDA

Price

Cap (e)

Value (f)

$1,750

$164

$196

Value (g)

$196

$13.00

$425.2

$718.7

0.4 x

4.4 x

3.7 x

$631.0

3.2 x

14.34

(a

469.5

763.0

0.4 x

4.6 x

3.9 x

675.3

3.5 x

15.00

491.3

784.9

0.4 x

4.8 x

4.0 x

697.2

3.6 x

15.99

(b

524.1

817.6

0.5 x

5.0 x

4.2 x

729.9

3.7 x

16.00

524.4

818.0

0.5 x

5.0 x

4.2 x

730.3

3.7 x

17.18

(c)

563.5

857.0

0.5 x

5.2 x

4.4 x

769.3

3.9 x

17.50

(d

574.1

867.6

0.5 x

5.3 x

4.4 x

779.9

4.0 x

18.00

590.6

884.2

0.5 x

5.4 x

4.5 x

796.5

4.1 x

19.00

624.1

917.6

0.5 x

5.6 x

4.7 x

829.9

4.2 x

20.00

657.6

951.1

0.5 x

5.8 x

4.9 x

863.4

4.4 x

21.00

691.2

984.8

0.6 x

6.0 x

5.0 x

897.1

4.6 x

22.00

725.1

1,018.6

0.6 x

6.2 x

5.2 x

930.9

4.8 x

23.00

759.2

1,052.7

0.6 x

6.4 x

5.4 x

965.0

4.9 x

24.00

793.8

1,087.3

0.6 x

6.6 x

5.6 x

999.6

5.1 x

25.00

828.8

1,122.3

0.6 x

6.8 x

5.7 x

1,034.6

5.3 x

22

IMPLIED SHARE PRICES –

ILLUSTRATIVE EBITDA LEVELS AND TRADING MULTIPLES

(a) Net debt of $293.5mm represents total debt of $356.8mm less cash of $63.3mm as of November 23, 2012.

(b) Net debt of $205.8mm represents total debt of $245.2mm less cash of $39.3mm estimated as of February 28, 2013.

Note: Share count includes restricted stock and performance shares.

(Amounts in Millions, except per share data)

Based on Net Debt of $293.5mm at November 23, 2012 (a)

Based on Net Debt  of $205.8mm at February 28, 2013 (b)

Illustrative EBITDA

$14.90

$150

$175

$200

$225

$250

2.50 x

$2.51

$4.43

$6.35

$8.26

$10.16

2.75 x

3.66

5.77

7.88

9.97

12.05

3.00 x

4.81

7.12

9.40

11.68

13.95

3.25 x

5.96

8.45

10.92

13.38

15.83

3.50 x

7.12

9.78

12.43

15.08

17.72

3.75 x

8.26

11.11

13.95

16.78

19.59

4.00 x

9.40

12.43

15.46

18.47

21.45

4.25 x

10.54

13.76

16.97

20.15

23.28

4.50 x

11.68

15.08

18.47

21.82

25.07

4.75 x

12.81

16.40

19.97

23.46

26.79

5.00 x

13.95

17.72

21.45

25.07

28.48

Illustrative EBITDA

$14.62

$150

$175

$200

$225

$250

2.50 x

$5.20

$7.12

$9.03

$10.92

$12.82

2.75 x

6.36

8.46

10.55

12.63

14.71

3.00 x

7.51

9.79

12.06

14.33

16.60

3.25 x

8.65

11.11

13.57

16.03

18.48

3.50 x

9.79

12.44

15.08

17.73

20.35

3.75 x

10.92

13.76

16.60

19.41

22.19

4.00 x

12.06

15.08

18.11

21.08

24.01

4.25 x

13.20

16.41

19.60

22.75

25.77

4.50 x

14.33

17.73

21.08

24.37

27.47

4.75 x

15.46

19.04

22.56

25.94

29.17

5.00 x

16.60

20.35

24.01

27.47

30.87

23

IMPLIED SHARE PRICES AT VARIOUS PREMIA

Note: Historical stock prices represent market close values.

Illustrative

Share

Prices

Benchmarked

to

9/25/12

-

Date

of

First

Offer

30-Day Prior

1-Day Prior

30-Day Average

60-Day Average

90-Day Average

180-Day Average

1 Year Average

$14.30

$14.34

$14.80

$14.31

$14.15

$14.44

$15.08

10%

$15.73

$15.77

$16.28

$15.74

$15.57

$15.88

$16.59

20%

17.16

17.21

17.76

17.17

16.98

17.33

18.10

30%

18.59

18.64

19.24

18.60

18.40

18.77

19.60

40%

20.02

20.08

20.72

20.03

19.81

20.22

21.11

50%

21.45

21.51

22.20

21.47

21.23

21.66

22.62

24

SELECTED PUBLIC TRADING MULTIPLES

EV / CY2012E EBITDA Multiples

EV / LTM EBITDA Multiples

BTH: Blythe; CHKE: Cherokee; CKEC: Carmike; CNK: Cinemark; CSS: CSS Industries; DEXO: Dex One; ENRO: Eniro; FLWS: 1-800-Flowers.com; ICON: Iconix; MDP: Meredith; MSO: Martha Stewart Omnimedia; PAJ:

PagesJuanes Groupe; PRSS: CafePress; SCHL: Scholastic; SFLY: Shutterfly; QUAD: Quad/Graphics; RGC: Regal Entertainment; RRD: R.R. Donnelly; SPMD: SuperMedia. Data as of January 24, 2013.

Print Media

Social Expression

Directories

Licensing

Directories Median: 3.9x

Soc. Exp. Median: 4.2x

Print Media Median: 4.1x

Care

Care

Licensing Median: 9.5x

Core Business Comps

Other Related Business Segment

3.5 x

4.2 x

6.9 x

NM

2.9 x

NM

4.2 x

4.2 x

NM

5.2 x

4.3 x

NM

NM

NM

9.8 x

7.3 x

NM

--

4.0 x

8.0 x

Unaffected

Current

FLWS

CSS

PRSS

BTH

RRD

QUAD

SCHL

PAJ

ENRO

DEXO

SPMD

CHKE

ICON

MDP

MSO

Directories Median: 4.8x

Soc. Exp. Median: 4.9x

Print Media Median: 4.2x

Licensing Median: 8.6x

3.7 x

5.0 x

7.6 x

5.1 x

3.3 x

2.8 x

4.1 x

4.1 x

3.8 x

5.2 x

4.3 x

3.5 x

2.5 x

9.7 x

9.5 x

7.7 x

NM

--

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

Unaffected

Current

FLWS

CSS

PRSS

BTH

RRD

QUAD

SCHL

PAJ

ENRO

DEXO

SPMD

CHKE

ICON

MDP

MSO

Other Related Sector

Core Business Comps

Other Related Business Segment

Other Related Sector

25

FUTURE STOCK PRICE ANALYSIS

Note: Share count based on diluted shares outstanding from Treasury Model.

Future Value (Stock Price at End of FY)

Present Value (at 2/28/13)

Fiscal Year

2013E

2014E

2015E

2016E

2017E

2018E

Adjusted EBITDA

$195.6

$208.5

$221.4

$230.5

$238.0

$244.2

% Growth

(11.4%)

6.6%

6.2%

4.1%

3.2%

2.6%

Net Debt

205.8

234.4

219.2

101.8

(16.1)

(137.7)

(Amounts in Millions, Except Per Share Data)

$8.36

$21.76

$11.25

$25.31

$14.14

$28.86

$17.02

$32.42

$19.91

$35.97

$5.00

$15.00

$25.00

$35.00

$45.00

2013E

2014E

2015E

2016E

2017E

2018E

2.5x

3.0x

3.5x

4.0x

4.5x

$8.36

$12.08

$11.25

$14.05

$14.14

$16.02

$17.02

$17.99

$19.91

$19.96

$5.00

$10.00

$15.00

$20.00

$25.00

2013E

2014E

2015E

2016E

2017E

2018E

2.5x

3.0x

3.5x

4.0x

4.5x

26

DCF SUMMARY

Assumptions –

11/30/12 Management Treasury Model

•

Five year projection period

•

Discounted to February 28, 2013

•

Projected net debt of $205.8mm at February 28, 2013, consisting of total debt of $245.2mm less cash of $39.3mm

Share Price

Current Five-Year Treasury Model

(a) Assumes 11% discount rate and 3.5x terminal multiple.

(b) Versus baseline Adjusted EBIT margin.

Illustrative Sensitivity to DCF (a)

Wtd. Avg. Cost of Capital

$23.22

10.0%

11.0%

12.0%

2.5 x

$16.45

$15.62

$14.84

3.0 x

18.73

17.81

16.93

3.5 x

20.98

19.98

19.01

4.0 x

23.22

22.13

21.08

4.5 x

25.38

24.23

23.12

1.0%

97.2

18.14

20.27

21.41

22.59

23.81

25.07

27.64

Implied Share Price

5-Year

Incremental

Cumulative

EBIT

Implied

Total Revenue Growth in FY14 -

FY18

Margin

Cost Out (b)

(5.00%)

(2.50%)

(1.25%)

0.00%

1.25%

2.50%

5.00%

(1.0%)

($97.2)

$13.72

$15.44

$16.36

$17.33

$18.34

$19.39

$21.63

(0.5%)

(48.6)

14.83

16.66

17.64

18.66

19.73

20.84

23.19

--

--

15.93

17.87

18.90

19.98

21.10

22.27

24.73

0.5%

48.6

17.04

19.07

20.16

21.29

22.47

23.68

26.19

27

SUM OF THE PARTS ANALYSIS

(a)

Based

on

revised

forecast

as

of

January

21,

2013,

other

than

for

In-store

and

Properties

which

are

based

on

November

30,

2012

revised

forecast.

(b) Also includes effect of FX.

(c) Normalized.

(d) Does not equal current Treasury plan EBITDA forecasts, due to UK and other adjustments.

(e) All D&A allocated to NAGCD, except for In-store and Properties.

(f)

Assumes

full

year

net

EBIT

contribution

of

$10.0mm,

in

line

with

11/19/12

Treasury

Model

estimates

for

full-year

FY14

–

FY16

and

January

23,

2013

management

guidance.

(g) Includes restricted stock and performance shares.

(Dollars in Millions)

Revised Management Strategic Plan (a)

FY13E

Multiple Range

Enterprise Value Range

Segment

EBITDA (d)

Low

Mid

High

Low

Mid

High

NAGCD

$214.4

(e)

2.5 x

3.5 x

4.5 x

$536.0

$750.3

$964.7

Cardstore

(27.3)

2.5 x

3.5 x

4.5 x

(68.4)

(95.7)

(123.0)

Subtotal

187.0

467.6

654.7

841.7

International (b)

23.8

2.5 x

3.5 x

4.5 x

59.5

83.3

107.1

Retail Operations (Clinton)

~10.0

(f)

2.5 x

3.5 x

4.5 x

25.0

35.0

45.0

AG Interactive

11.8

6.0 x

7.0 x

8.0 x

70.8

82.6

94.4

In-Store

7.7

2.5 x

3.5 x

4.5 x

19.2

26.9

34.6

Subtotal

240.3

642.2

882.5

1,122.8

Properties (c)

4.5

7.0 x

8.5 x

10.0 x

31.5

38.3

45.0

Unallocated Overhead

(55.4)

2.5 x

3.5 x

4.5 x

(138.4)

(193.8)

(249.2)

Sum of the Parts Total Value

$535.2

$726.9

$918.6

FY2013 Net Debt

(205.8)

(205.8)

(205.8)

Implied Equity Value

329.4

521.1

712.8

Share Price (g)

$10.10

$15.97

$21.64

Premium to Unaffected Share Price ($14.34)

(29.6%)

11.4%

50.9%

Premium to 9/25/12 Offer ($17.18)

(41.2%)

(7.0%)

25.9%

Premium to 1/17/13 Offer ($17.50)

(42.3%)

(8.7%)

23.6%

28

SUMMARY FINANCIAL ANALYSIS OF ILLUSTRATIVE LBO

Interest Coverage and Leverage Ratios

(a)

Assumes

transaction

date

of

February

28,

2013,

exit

in

Year

5

and

$2.3mm

addback

to

EBITDA

for

public

company

expenses

for

FY14E

to

FY18E.

(b)

Does not factor in potential consent fees or changes to interest

rate.

Implied IRR Based on Purchase Price and Exit Multiple

Fiscal Year

2013PF

2014E

2015E

2016E

2017E

2018E

EBITDA (a)

$195.6

$210.8

$223.8

$232.8

$240.3

$246.6

Debt

586.8

627.1

602.9

473.8

339.4

225.2

Cash

39.3

60.0

60.0

60.0

60.0

88.7

EBITDA /

Total Interest, Gross

5.2 x

5.4 x

5.8 x

6.6 x

8.5 x

11.7 x

(EBITDA - Cap. Ex.) /

Total Interest, Gross

1.8 x

1.1 x

2.2 x

5.3 x

6.9 x

9.5 x

Total Debt / EBITDA

3.0 x

3.0 x

2.7 x

2.0 x

1.4 x

0.9 x

•

Assumes illustrative capital structure targeting ~30% equity contribution at 3.0x total pro forma leverage

•

Assumes no make-whole payment on existing 7.375% Senior Notes

(b)

Illustrative Sources at $17.50 per Share Purchase Price

Illustrative Uses at $17.50 per Share Purchase Price

Debt / FY13E

$

%

Rate

EBITDA

$

%

Current Senior Notes

$225.2

27.0%

7.38%

1.2 x

Cash Purchase Price of Equity

$574.1

68.8%

Term Loan B

361.6

43.3%

5.75%

1.8 x

Existing Debt

245.2

29.4%

Equity Contribution

247.4

29.7%

Estimated Fees and Expenses

14.9

1.8%

Total Sources

$834.2

100.0%

3.0 x

Total Uses

$834.2

100.0%

Purchase Price per Share

--

$17.50

$18.00

$19.00

$20.00

$21.00

2.50 x

14%

13%

10%

8%

6%

3.00 x

20%

18%

15%

13%

11%

3.50 x

24%

22%

20%

17%

15%

4.00 x

28%

26%

23%

21%

18%

4.50 x

32%

30%

27%

24%

22%

29

ILLUSTRATIVE LBO SENSITIVITY –

OPERATING PERFORMANCE

Assumptions

•

Illustrative view of potential LBO assuming 3.0x Total Debt / FY13 EBITDA leverage

•

Illustrative share prices assuming target IRR of 20%

•

Transaction date of February 28, 2013

•

4.0x exit multiple

•

$2.3mm addback to EBITDA for elimination of public company expenses

Five-Year LBO Sensitivity –

11/30/12

Current Five-Year Treasury Model

Total Revenue Growth

$20.30

(5.00%)

(2.50%)

(1.25%)

0.00%

1.25%

2.50%

5.00%

(1.0%)

$15.83

$17.14

$17.85

$18.59

$19.35

$20.16

$21.87

(0.5%)

16.54

17.93

18.67

19.45

20.26

21.10

22.89

0.0%

17.25

18.71

19.49

20.30

21.15

22.03

23.90

0.5%

17.96

19.48

20.30

21.15

22.04

22.96

24.90

1.0%

18.66

20.25

21.10

21.99

22.92

23.87

25.86

30

FUTURE STOCK PRICE ANALYSIS BASED ON ILLUSTRATIVE LEVERED RECAP

Note: Share count based on diluted shares outstanding from Treasury Model.

(a)Assumes $271mm of incremental leverage using Term Loan B at L + 450bps with 125bps floor (2.6x Total Debt / FY13 EBITDA).

(b)Does

not

factor

in

potential

consent

fees

or

changes

to

interest

rate.

•

Assumes a $8.00 dividend is paid on February 28, 2013

(a)

•

Assumes no make-whole payment on existing 7.375% Senior Notes

(b)

(Amounts in Millions, Except Per Share Data)

Management Treasury Model - 11.30.12

Fiscal Year

2013E

2014E

2015E

2016E

2017E

2018E

Adjusted EBITDA

$195.6

$208.5

$221.4

$230.5

$238.0

$244.2

% Growth

(11.4%)

6.6%

6.2%

4.1%

3.2%

2.6%

Net Debt

476.6

495.3

470.1

339.8

204.3

61.5

Adj. EBITDA

Stock Price at End of Fiscal Year

Multiple

2013E

2014E

2015E

2016E

2017E

2018E

Projected Stock Price at Illustrative EV/Adjusted EBITDA Multiples:

2.5

x

$0.36

$0.80

$2.54

$7.08

$11.53

$15.97

3.0

3.25

4.02

5.91

10.53

15.04

19.52

3.5

6.14

7.24

9.27

13.98

18.55

23.07

4.0

9.03

10.46

12.64

17.44

22.06

26.62

4.5

11.92

13.67

16.01

20.89

25.57

30.17

Present Value at February 28, 2013

Present Value of Stock Price Assuming 12.5% Cost of Equity:

2.5

x

$0.36

$0.71

$2.01

$4.97

$7.20

$8.86

  Plus: Present Value of Ongoing Annual Dividend

3.0

3.25

3.57

4.67

7.40

9.39

10.83

3.5

6.14

6.43

7.33

9.82

11.58

12.80

4.0

9.03

9.29

9.99

12.25

13.77

14.77

4.5

11.92

12.16

12.65

14.67

15.96

16.74

Present Value at February 28, 2013

Present Value Stock Price Including $8.00 Dividend:

2.5

x

$8.36

$8.71

$10.00

$12.97

$15.19

$16.86

  Plus: Present Value of Ongoing Annual Dividend

3.0

11.25

11.57

12.66

15.39

17.38

18.83

3.5

14.14

14.43

15.32

17.82

19.58

20.80

4.0

17.02

17.29

17.98

20.24

21.77

22.77

4.5

19.91

20.15

20.64

22.67

23.96

24.74

31

APPENDIX A. SELECTED ADDITIONAL FINANCIAL INFORMATION

32

SUMMARY HISTORICAL AND PROJECTED FINANCIAL PERFORMANCE

Source: FY10 –

FY12 and LTM based on public filings; FY2013 –

FY2016 based on Care Treasury Model.

(a) FY13-FY16 adjusted for updated FY13 income statement. Revised balance

sheet and cash flow statement not yet available.

(b) Excludes benefits of anticipated tax incentives related to new WHQ.

(c) Defined as Cash Flow from Operations less Capital Expenditures.

(d) Assumes tax rate of 31.3% consistent with previous Treasury Model (current model not updated by Care tax department).

(Dollars in Millions, except per share data)

Fiscal Year Ended February 28,

LTM

Projected Fiscal Year Ended February 28,

2010A

2011A

2012A

Nov-12

2013E (d)

2014E

2015E

2016E

Total Revenue

$1,640.9

$1,597.9

$1,695.1

$1,750.0

$1,840.6

$1,935.1

$1,939.9

$1,944.8

Cost of Goods Sold

691.4

682.4

741.6

775.6

811.7

851.4

851.6

851.8

Gross Profit

949.5

915.5

953.5

974.4

1,028.9

1,083.6

1,088.3

1,093.0

SG&A and Other Expense

760.8

725.2

772.1

852.6

883.5

932.9

931.3

929.7

Adjusted EBITDA including SBT Expense

232.3

225.6

213.8

157.3

186.4

208.5

221.4

230.5

Adjusted EBITDA

233.8

231.4

220.7

164.1

195.6

208.5

221.4

230.5

Adjusted EBIT including SBT Expense

187.1

184.6

174.6

115.0

140.9

150.8

157.0

163.3

Adjusted EBIT

188.6

190.3

181.4

121.8

150.1

150.8

157.0

163.3

Net Income as Reported

81.6

87.0

57.2

(7.9)

37.3

83.4

87.8

91.4

Diluted Earnings Per Share as Reported

$2.03

$2.11

$1.42

($0.23)

$1.10

$2.58

$2.67

$2.74

Margins

Gross Profit

57.9

%

57.3

%

56.2

%

55.7

%

55.9

%

56.0

%

56.1

%

56.2

%

SG&A

46.6

46.0

46.1

49.2

50.7

48.3

48.1

47.9

Adjusted EBITDA

14.2

14.5

13.0

9.4

10.6

10.8

11.4

11.9

Adjusted EBIT including SBT Expense

11.4

11.6

10.3

6.6

7.7

7.8

8.1

8.4

Adjusted EBIT

11.5

11.9

10.7

7.0

8.2

7.8

8.1

8.4

Net Income as Reported

5.0

5.4

3.4

(0.5)

2.0

4.3

4.5

4.7

Growth Rates

Net Sales

(3.0)

%

(2.6)

%

6.1

%

(16.6)

%

8.6

%

5.1

%

0.3

%

0.3

%

Adjusted EBITDA

169.4

(1.0)

(4.6)

(40.6)

(11.4)

6.6

6.2

4.1

Adjusted EBIT including SBT Expense

406.2

(1.4)

(5.4)

(46.5)

(19.3)

7.0

4.2

4.0

Adjusted EBIT

412.9

0.9

(4.7)

(45.3)

(17.3)

0.5

4.2

4.0

Diluted Earnings Per Share

NM

3.9

(32.7)

(108.2)

(22.4)

133.9

3.6

2.6

Summary Balance Sheet and Cash Flow Data (a)

Cash

$137.9

$215.8

$132.4

$63.3

$39.3

$53.7

$82.0

$243.4

Total Debt

329.7

232.7

225.2

356.8

245.2

288.2

301.2

345.2

Depreciation and Amortization

45.2

41.0

39.2

42.3

45.5

57.7

64.4

67.2

Capital Expenditures (b)

(26.6)

(36.3)

(70.9)

(109.4)

(127.8)

(169.2)

(139.1)

(46.0)

Free Cash Flow (b) (c)

170.9

143.5

45.6

65.8

16.4

(9.5)

34.7

137.1

33

APPENDIX B. SELECTED ADDITIONAL TRADING INFORMATION

34

CURRENT CARE SHAREHOLDERS

(a)

Includes

only

RSUs

and

exercisable

options

held

by

directors

and

executive

officers.

(b) Includes all Weiss individuals listed plus Irving Stone LLC and related foundations.

(c) Source: Company's Proxy Statement dated June 15, 2012.

(d) Source: Bloomberg, Capital IQ.

(e) Dawson Investments filed a 13D on October 23, 2012, declaring beneficial ownership of 5.0% of common shares.

(f) Towerview filed a 13D on October 3, 2012, declaring beneficial ownership of 5.0% of common shares.

(g) Marathon Asset Management filed a 13G on January 24, 2013 that stated a new share count of 1,329,507.

(h) Shares outstanding as of December 27, 2012. Source: Company's Form 10-Q for the period ended November 23, 2012.

(Amounts in Thousands)

Common Shares

% of

Exercisable

Beneficial Ownership

% of Total

Class A

Class B

Total

Options (a)

Economic

Voting

Economic

Voting

Zev Weiss

--

49.1

0.2

%

502.4

551.5

5,515.0

1.6

%

8.1

%

Morry Weiss

--

213.4

0.7

145.3

358.7

3,413.4

1.1

5.0

Jeffrey Weiss

4.3

35.2

0.1

318.1

357.5

3,536.7

1.1

5.2

Irving Stone LLC

--

1,818.2

5.7

--

1,818.2

18,181.8

Irving I. Stone Foundation

--

204.0

0.6

--

204.0

2,039.6

Irving I. Stone Support Foundation

--

200.0

0.6

--

200.0

2,000.0

Irving Stone LLC & related foundations

--

2,222.1

7.0

--

2,222.1

22,221.5

6.6

32.6

Total Weiss Family & Foundations (b)

4.3

2,519.8

8.0

965.8

3,489.9

34,686.6

10.3

50.9

Other Inside Owners (c)

Zev Weiss

--

49.1

0.2

%

502.4

551.5

5,515.0

1.6

%

8.1

%

Morry Weiss

--

213.4

0.7

145.3

358.7

3,413.4

1.1

5.0

Jeffrey Weiss

4.3

35.2

0.1

318.1

357.5

3,536.7

1.1

5.2

Charles A. Ratner

15.1

16.2

0.1

66.9

98.3

244.2

0.3

0.4

Jerry Sue Thornton

--

13.8

0.0

66.9

80.7

204.9

0.2

0.3

Jeffrey D. Dunn

--

--

--

45.9

45.9

45.9

0.1

0.1

William E. MacDonald, III

1.0

--

0.0

45.9

46.9

46.9

0.1

0.1

Michael J. Merriman, Jr.

--

--

--

52.9

52.9

52.9

0.2

0.1

Stephen J. Smith

12.0

--

0.0

96.1

108.2

108.2

0.3

0.2

John W. Beeder

--

--

--

30.1

30.1

30.1

0.1

0.0

Michael L. Goulder

16.1

--

0.1

265.6

281.7

281.7

0.8

0.4

Scott S. Cowen

0.8

2.0

0.0

66.9

69.7

87.6

0.2

0.1

Other Insiders

136.2

(0.0)

0.4

556.9

693.1

693.1

2.0

1.0

Total Other Insiders

181.3

32.0

0.7

%

1,294.2

1,507.5

1,795.6

4.4

%

2.6

%

Top 10 Institutions (d)

Dimensional Fund Advisors

3,045.8

--

9.6

%

--

3,045.8

3,045.8

9.0

%

4.5

%

BlackRock

2,729.6

--

8.6

--

2,729.6

2,729.6

8.1

4.0

LSV Asset Management

2,232.1

--

7.1

--

2,232.1

2,232.1

6.6

3.3

River Road Asset Management

2,045.9

--

6.5

--

2,045.9

2,045.9

6.0

3.0

The Vanguard Group

2,034.6

--

6.4

--

2,034.6

2,034.6

6.0

3.0

Intrepid Capital Management Inc.

1,826.6

--

5.8

--

1,826.6

1,826.6

5.4

2.7

Dawson Investments (e)

1,580.6

--

5.0

--

1,580.6

1,580.6

4.7

2.3

Towerview (f)

1,450.0

--

4.6

--

1,450.0

1,450.0

4.3

2.1

Marathon Asset Management (g)

1,329.5

--

4.2

--

1,329.5

1,329.5

3.9

2.0

Northern Trust Global Investments

1,293.4

--

4.1

--

1,293.4

1,293.4

3.8

1.9

Total Top 10 Institutions

19,568.0

--

61.8

%

--

19,568.0

19,568.0

57.7

%

28.7

%

Public and Other

9,027.5

305.0

29.5

%

--

9,332.5

12,077.7

27.5

%

17.7

%

Total Shares Outstanding (h)

28,781.0

2,856.8

92.0

%

2,260.0

33,897.8

68,127.8

100.0

%

100.0

%

35

OWNERSHIP MOMENTUM

Holder

Current

9/30/2012

6/30/2012

3/31/2012

12/31/2011

9/30/2011

6/30/2011

3/31/2011

12/31/2010

9/30/2010

6/30/2010

3/31/2010

Dimensional Fund Advisors

3,046

3,052

3,096

3,245

3,251

3,297

3,305

3,335

3,357

3,381

3,463

3,724

BlackRock

2,730

2,730

2,641

2,508

2,699

2,668

2,695

2,733

2,756

2,670

2,691

2,717

LSV Asset Management

2,232

2,232

2,168

2,022

1,991

2,042

2,069

2,164

2,177

2,242

2,247

2,302

River Road Asset Management

2,046

2,046

2,200

2,099

1,595

408

236

29

--

--

--

--

The Vanguard Group

1,951

1,951

2,035

1,870

1,888

2,013

1,768

1,754

1,672

1,625

1,601

1,544

Intrepid Capital Management

1,827

1,827

1,827

1,697

1,704

949

974

1,063

1,005

963

--

--

Dawson Investments

1,581

--

--

--

--

--

--

--

--

--

--

--

Towerview

1,450

1,416

1,230

1,208

1,208

1,070

1,070

1,115

1,115

1,105

1,105

1,320

Marathon Asset Management, LLP

1,330

3,635

5,304

5,560

5,204

4,435

4,439

4,462

4,424

4,162

4,150

3,937

Northern Trust Global Investments

1,293

1,293

1,278

1,328

1,253

1,235

1,213

1,214

1,152

1,162

1,191

1,226

American Greetings Corporation, Retirement P

1,167

1,167

1,167

923

923

923

923

--

--

--

--

1,543

WEDGE Capital Management L.L.P.

951

951

923

958

948

643

446

391

--

--

--

--

State Street Global Advisors

852

852

864

1,305

1,314

1,358

1,452

1,562

1,405

1,392

1,457

1,449

First Wilshire Securities Management

762

762

802

816

829

848

859

863

787

791

--

--

Wells Capital Management Incorporated

618

618

658

674

506

508

363

394

472

481

482

486

Columbia Management Investment Advisers,

616

616

750

739

734

623

621

598

570

585

473

40

Schroder Investment Management Limited

554

554

29

--

841

478

435

355

642

843

461

325

JPMorgan Asset Management Holdings Inc.

516

516

410

398

508

514

452

383

388

385

379

590

Nantahala Capital Management,

468

468

--

--

--

--

--

--

--

--

--

--

Buckhead Capital Management, LLC

433

433

483

605

674

1,816

2,040

2,259

2,289

2,151

1,894

1,885

26,422

27,119

27,864

27,954

28,071

25,826

25,360

24,672

24,210

23,938

21,593

23,089

Increase

Decrease

No Change

(Amounts in Thousands)

Source: CapitalIQ as of January 24, 2013.

36

APPENDIX C. SELECTED ADDITIONAL VALUATION INFORMATION

37

COMPARABLE COMPANIES

Note: CAGRs (Compound Annual Growth Rates) and Averages are for the last three completed fiscal years for each company. All operating data has been adjusted to exclude unusual and extraordinary items.

(a) Source of projected EPS, EBITDA and growth rate estimates: ThomsonReuter's median estimate of Wall Street analysts as of 1/18/13. For unaffected Care we have used research estimates as of 6/29/12.

(b) Enterprise value represents equity value plus book values of

total debt, including preferred stock and minority interest less cash. Care unaffected enterprise value assumes net debt of $218.4 as of 8/24/12.

(c) Excludes Care.

(Amounts in Millions, Except for Per Share Amounts)

MARKET DATA

Closing

Premium (Discount)

Enterprise Value as a Multiple of:

Price/Earnings Multiples

5 Year

CY2013

LTM

Total

Price on

to 52 Week

Equity

Enterprise

LTM

CY2012

CY2012

CY2013

Growth

PE/

EBITDA

Debt/

Selected Companies

1/24/13

High

Low

Value

Value (b)

Net Sales

EBITDA

EBITDA

EPS (a)

EPS (a)

Rate (a)

Growth

Margin

EBITDA

Care - Unaffected

$14.34

(29.6)

%

14.7

%

$469.2

$687.6

40.3

%

3.7

x

3.5

x

8.5

x

5.6

x

NM

%

NM

x

10.9

%

1.5

x

Care - Current

$15.99

(9.1)

27.9

523.8

817.4

46.7

5.0

4.2

20.0

6.8

NM

NM

9.4

2.2

Blyth, Inc.

15.15

(66.8)

2.9

258.4

300.6

25.0

2.8

NM

NM

NM

NM

NM

8.8

0.9

1-800-Flowers.com Inc.

3.77

(5.8)

74.5

244.6

301.3

41.9

7.6

6.9

18.0

13.5

NM

NM

5.5

1.6

CafePress Inc.

5.83

(69.6)

39.1

99.8

47.4

23.7

3.3

2.9

14.2

12.7

NM

NM

7.2

0.2

CSS Industries Inc.

22.41

(3.5)

24.1

214.6

204.7

53.2

5.1

NM

11.7

NM

NM

NM

10.4

--

Social Expression Median (c)

(36.3)

%

31.6

%

33.4

%

4.2

x

4.9

x

14.2

x

13.1

x

NM

%

NM

x

8.0

%

0.5

x

Social Expression Mean (c)

(36.4)

35.2

35.9

4.7

4.9

14.6

13.1

NM

NM

8.0

0.7

R.R. Donnelley & Sons Company

9.25

(38.9)

7.8

1,669.3

5,081.7

49.4

4.1

4.2

5.2

5.4

1.3

4.4

12.0

3.1

Scholastic Corporation

29.68

(20.9)

22.2

939.8

900.1

42.4

3.8

NM

9.9

15.3

NM

NM

11.1

0.7

Quad/Graphics, Inc.

22.20

2.8

88.9

1,055.2

2,385.4

57.1

4.1

4.2

11.7

11.9

0.8

14.9

13.8

2.3

Print Media Median (c)

(20.9)

%

22.2

%

49.4

%

4.1

x

4.2

x

9.9

x

11.9

x

1.0

%

9.6

x

12.0

%

2.3

x

Print Media Mean (c)

(19.0)

39.7

49.6

4.0

4.2

8.9

10.9

1.0

9.6

12.3

2.0

SuperMedia Inc.

4.28

(5.3)

183.4

67.1

1,491.1

104.6

2.5

NM

NM

NM

-

NM

41.2

2.5

Eniro AB

14.00

(17.2)

91.8

214.6

653.5

104.1

4.3

4.3

8.4

6.0

(1.3)

NM

24.1

3.2

Dex One Corporation

2.04

(8.5)

209.1

103.8

2,012.9

149.0

3.5

NM

NM

NM

-

NM

42.6

3.5

PagesJaunes Groupe

2.28

(38.5)

83.9

841.5

3,175.2

220.7

5.2

5.2

3.6

3.8

(3.1)

NM

42.3

5.0

Directories Median (c)

(12.8)

%

137.6

%

126.8

%

3.9

x

4.8

x

6.0

x

4.9

x

(0.7)

%

NM

x

41.7

%

3.3

x

Directories Mean (c)

(17.4)

142.0

144.6

3.9

4.8

6.0

4.9

(1.1)

NM

37.5

3.5

Meredith Corporation

35.42

(4.9)

31.5

1,576.5

1,954.0

139.3

7.7

7.3

12.9

13.9

15.0

0.9

18.1

1.6

Iconix Brand Group, Inc.

23.99

3.6

65.1

1,663.7

2,182.1

599.2

9.5

9.8

14.4

12.6

10.1

1.2

63.3

2.1

Martha Stewart Living Omnimedia Inc.

2.74

(42.6)

15.6

183.8

132.2

65.1

NM

NM

NM

18.3

NM

NM

NM

--

Cherokee Inc.

14.10

(7.0)

37.4

118.4

129.4

487.4

9.7

NM

16.4

13.8

NM

NM

50.3

1.0

Licensing Median (c)

(6.0)

%

34.5

%

313.3

%

9.5

x

8.6

x

14.4

x

13.9

x

12.6

%

1.1

x

50.3

%

1.3

x

Licensing Mean (c)

(12.7)

37.4

322.7

8.9

8.6

14.5

14.6

12.6

1.1

43.9

1.2

38

SCATTERPLOT OF SELECTED TRANSACTIONS

Source: Alacra.

Note: Excludes financial services, insurance, real estate and healthcare companies.  Mergers of equals are also excluded.

Unaffected Premium

% of

to One-Day Prior

# of Deals

Total

0-20%

45

36%

20-30%

25

20%

30%+

55

44%

Total

125

100%

56% of selected

transactions had

an unaffected

premium of less

than 30%

100% cash transactions over last 5 years with a deal value between $250M -

$1B

--

10%

20%

30%

40%

50%

60%

--

100

200

300

400

500

600

700

800

900

1,000

Deal Value ($)

39

PREMIA PAID IN SELECTED TRANSACTIONS

Source: Alacra.

(a)

Excludes

certain

industry

sectors

including

financial

services,

insurance,

real

estate

and

healthcare

companies.

Mergers

of

equals

are

also

excluded.

100% cash transactions over last 5 years with a deal value between $250M -

$1B (a)

Unaffacted Premium to /

Deal

Enterprise

One-Day

Five- Day

One-Month

Announced

Seller

Buyer

Value

Value

Prior

Prior

Prior

Nov-12

Teavana Holdings, Inc.

Starbucks Corp.

$598.2

$607.0

53%

48%

20%

Oct-12

Ceradyne, Inc.

3M Co.

860.6

916.5

43%

40%

44%

Aug-12

TPC Group, Inc.

First Reserve Corp. / SK Capital Management LLC

705.5

918.2

14%

12%

21%

Aug-12

Pure Energy Services Ltd.

FMC Technologies, Inc.

271.8

298.2

40%

49%

56%

Aug-12

SpringSoft, Inc.

Synopsys, Inc.

413.5

332.7

31%

36%

43%

Jul-12

AuthenTec, Inc.

Apple, Inc.

356.1

337.3

58%

60%

74%

Jul-12

Peet's Coffee & Tea, Inc.

Joh. A. Benckiser GmbH

967.7

935.3

29%

37%

22%

Jul-12

Wnrttembergische Metallwarenfabrik AG

KKR & Co. LP

282.7

466.8

24%

25%

23%

Jul-12

BrightPoint, Inc.

Ingram Micro, Inc.

622.5

787.4

66%

97%

78%

Jun-12

Invesco Asset Management Ltd. / Lansdowne Par

Upsher-Smith Laboratories, Inc.

423.5

429.0

17%

20%

64%

Jun-12

Miranda Technologies, Inc.

Belden, Inc.

357.5

322.3

64%

54%

31%

May-12

Interline Brands, Inc.

Interline Brands, Inc. /Private Group/

749.9

734.1

42%

41%

23%

May-12

Benihana, Inc.

JAMG LLC

292.2

285.6

23%

18%

27%

May-12

Cost Plus, Inc.

Bed Bath & Beyond, Inc.

494.8

631.0

22%

16%

23%

May-12

Charming Shoppes, Inc.

Ascena Retail Group, Inc.

859.1

783.7

25%

25%

27%

May-12

Standard Microsystems Corp.

Microchip Technology, Inc.

856.6

709.5

41%

41%

46%

Apr-12

Knology, Inc.

Avista Capital Holdings LP

763.7

1,428.9

9%

12%

10%

Apr-12

Umeco PLC

Cytec Industries, Inc.

425.4

411.7

46%

41%

55%

Apr-12

X-Rite, Inc.

Danaher Corp.

477.9

617.4

39%

23%

21%

Apr-12

Viasystems North America, Inc.

Viasystems Group, Inc.

267.0

252.9

6%

7%

19%

Mar-12

Great Wolf Resorts, Inc.

Apollo Management LP

162.4

745.2

19%

19%

50%

Mar-12

Archipelago Learning, Inc.

PLATO Learning, Inc.

292.3

324.4

23%

17%

11%

Dec-11

WCA Waste Corp.

Macquarie Group Ltd.

154.1

526.9

30%

31%

36%

Dec-11

Winn-Dixie Stores, Inc.

Lone Star Management Co. Ltd.

537.3

429.7

75%

82%

51%

Dec-11

DemandTec, Inc.

International Business Machines Corp.

446.4

427.5

57%

73%

75%

Nov-11

Magma Design Automation, Inc.

Synopsys, Inc.

503.1

474.9

32%

32%

46%

Nov-11

Tekelec

Siris Capital

761.8

491.3

11%

12%

69%

Aug-11

Renaissance Learning, Inc.

Permira Advisers LLP

455.0

448.3

31%

18%

24%

Jul-11

SFN Group, Inc.

Randstad Holding NV

686.4

682.5

53%

44%

52%

Jul-11

Ameron International Corp.

National-Oilwell Varco, Inc.

770.9

633.6

28%

27%

31%

Jun-11

Central Vermont Public Service Corp.

Gaz MTtro LP

472.3

668.7

2%

3%

54%

Jun-11

MediaMind Technologies, Inc.

DG FastChannel, Inc.

429.6

413.1

38%

35%

57%

Jun-11

EMS Technologies, Inc.

Honeywell International, Inc.

513.2

481.2

33%

30%

31%

Jun-11

Ness Technologies, Inc.

Citigroup, Inc.

296.7

343.0

18%

30%

18%

May-11

California Pizza Kitchen, Inc.

Golden Gate Capital

454.8

437.8

11%

14%

16%

May-11

DEI Holdings, Inc.

Charlesbank Capital Partners LLC

114.6

332.6

187%

194%

164%

May-11

Volcom, Inc.

PPR SA

598.4

517.0

24%

32%

45%

Apr-11

SMART Modular Technologies (WWH), Inc.

Silver Lake Group LLC

603.1

523.7

13%

16%

40%

Apr-11

Bronco Drilling Co., Inc.

Chesapeake Energy Corp.

316.8

306.3

6%

6%

14%

Apr-11

LaBarge, Inc.

Ducommun, Inc.

304.7

326.3

10%

14%

20%

Apr-11

Epicor Software Corp.

Apax Partners LLP

801.9

945.3

11%

18%

20%

Mar-11

Rural/Metro Corp.

Warburg Pincus & Co.

437.8

674.1

37%

39%

10%

Mar-11

drugstore.com, Inc.

Walgreen Co.

406.1

400.2

112%

117%

103%

Mar-11

Global Defense Technology & Systems, Inc.

Ares Partners Management Co. LLC

224.2

303.2

51%

48%

39%

Feb-11

Conexant Systems, Inc.

Golden Gate Capital

197.3

302.5

27%

47%

71%

Feb-11

Silverleaf Resorts, Inc.

Cerberus Capital Management LP

102.6

507.4

72%

84%

145%

Jan-11

Pre-Paid Legal Services, Inc.

MidOcean Partners

651.0

601.3

10%

10%

6%

Dec-10

Applied Signal Technology, Inc.

Raytheon Co.

525.4

520.9

9%

9%

15%

Nov-10

Art Technology Group, Inc.

Oracle Corp.

948.7

889.8

46%

37%

54%

40

PREMIA PAID IN SELECTED TRANSACTIONS (CONT.)

Unaffacted Premium to /

Deal

Enterprise

One-Day

Five- Day

One-Month

Announced

Seller

Buyer

Value

Value

Prior

Prior

Prior

Oct-10

Hawk Corp.

Carlisle Cos., Inc.

$388.0

$396.2

2%

12%

38%

Oct-10

Thermadyne Holdings

Irving Place Capital

203.3

374.4

2%

5%

33%

Oct-10

Actel Corp.

Microsemi Corp.

551.9

516.3

30%

29%

50%

Oct-10

ITC DeltaCom, Inc.

EarthLink, Inc.

251.0

494.2

96%

94%

67%

Sep-10

Keithley Instruments, Inc.

Danaher Corp.

340.9

302.1

74%

81%

108%

Sep-10

Internet Brands, Inc.

Hellman & Friedman LLC

617.9

580.6

47%

38%

29%

Sep-10

Cellu Tissue Holdings, Inc.

Clearwater Paper Corp.

242.2

495.0

51%

51%

38%

Aug-10

Cogent, Inc.

3M Co.

930.5

912.5

18%

20%

17%

Aug-10

Unica Corp.

International Business Machines Corp.

451.8

408.7

120%

133%

124%

Aug-10

Superior Well Services, Inc.

Nabors Industries Ltd.

681.5

847.4

21%

14%

35%

Jul-10

ATC Technology Corp.

GENCO Supply Chain Solutions

503.9

409.0

43%

47%

42%

Jun-10

Argon ST, Inc.

The Boeing Co.

755.5

713.8

41%

34%

45%

Jun-10

SonicWALL, Inc.

Ontario Teachers' Pension Plan Board / Thoma Bravo

633.6

602.1

32%

29%

19%

Apr-10

Palm, Inc.

Hewlett-Packard Co.

961.9

976.6

23%

17%

6%

Apr-10

Protection One, Inc.

GTCR Golder Rauner LLC

394.2

802.1

13%

24%

48%

Mar-10

Bell Microproducts, Inc.

Avnet, Inc.

248.7

569.6

30%

33%

53%

Mar-10

BWAY Holding Co.

Madison Dearborn Partners LLC

448.3

829.9

15%

15%

25%

Mar-10

Techwell, Inc.

Intersil Corp.

400.7

394.3

49%

64%

70%

Mar-10

SouthWest Water Co.

SouthWest Water Co. /Private Group/

302.8

454.9

56%

62%

76%

Feb-10

Bowne & Co., Inc.

R.R. Donnelley & Sons Co.

461.0

453.2

65%

69%

57%

Jan-10

Lodgian, Inc.

Lone Star Investment Advisors LLC

54.1

344.1

40%

43%

82%

Jan-10

K-Tron International, Inc.

Hillenbrand, Inc.

426.3

371.6

32%

33%

51%

Dec-09

Airvana, Inc.

72 Mobile Holdings LLC

486.4

473.6

23%

22%

24%

Dec-09

FGX International Holdings Ltd.

Essilor International SA

437.0

530.4

10%

24%

40%

Nov-09

Semitool, Inc.

Applied Materials, Inc.

361.6

342.5

31%

51%

21%

Oct-09

iPCS, Inc.

Sprint Nextel Corp.

402.6

730.5

34%

35%

43%

Sep-09

GenTek, Inc.

American Securities LLC

386.7

538.9

41%

40%

41%

Sep-09

Parallel Petroleum Corp.

Apollo Global Management LLC

131.2

453.4

11%

51%

45%

Aug-09

Charlotte Russe Holding, Inc.

Advent International Corp.

368.3

308.3

27%

28%

44%

Jul-09

SPSS, Inc.

International Business Machines Corp.

922.5

744.7

42%

47%

48%

Jun-09

Axsys Technologies, Inc.

General Dynamics Corp.

627.8

601.6

8%

9%

30%

Jun-09

Wind River Systems, Inc.

Intel Corp.

884.3

809.7

44%

49%

65%

Jan-09

Interwoven, Inc.

Autonomy Corp. PLC

760.5

622.0

37%

25%

47%

Sep-08

Secure Computing Corp.

McAfee, Inc.

393.9

485.4

27%

53%

24%

Sep-08

Eagle Test Systems, Inc.

Teradyne, Inc.

360.6

319.6

10%

11%

42%

Aug-08

Greenfield Online, Inc.

Microsoft Corp.

460.9

429.5

32%

42%

61%

Aug-08

SI International, Inc.

Serco Group PLC

425.5

512.8

40%

43%

53%

Jul-08

EnergySouth, Inc.

Sempra Energy

498.9

747.8

23%

39%

19%

Jul-08

Excel Technology, Inc.

GSI Group, Inc.

347.5

321.7

41%

45%

26%

May-08

Anthony Crane Rental Holdings LP

Platinum Equity LLC

425.0

425.0

19%

19%

19%

Mar-08

BladeLogic, Inc.

BMC Software, Inc.

775.1

695.2

19%

26%

62%

Jan-08

NuCo2, Inc.

Aurora Capital Group LP

444.4

471.5

25%

20%

13%

Jan-08

ASV, Inc.

TEREX Corp.

481.2

447.2

46%

48%

54%

Dec-07

MTC Technologies, Inc.

BAE Systems PLC

364.1

444.9

41%

45%

38%

Dec-07

Claymont Steel Holdings, Inc.

Evraz Group SA

412.8

575.3

7%

3%

15%

Oct-07

Covad Communications Group, Inc.

Platinum Equity LLC

305.1

440.1

59%

59%

34%

Oct-07

Oglebay Norton Co.

L.V.I. Holding NV

520.3

647.3

5%

8%

20%

Oct-07

United Industrial Corp.

Textron, Inc.

801.9

933.7

7%

6%

19%

Source: Alacra.

(a)

Excludes

certain

industry

sectors

including

financial

services,

insurance,

real

estate

and

healthcare

companies.

Mergers

of

equals

are

also

excluded.

100% cash transactions over last 5 years with a deal value between $250M -

$1B (a)

41

PREMIA PAID IN SELECTED TRANSACTIONS (CONT.)

Unaffacted Premium to /

Deal

Enterprise

One-Day

Five- Day

One-Month

Announced

Seller

Buyer

Value

Value

Prior

Prior

Prior

Aug-07

Gateway, Inc.

Acer, Inc.

$709.4

$783.8

57%

45%

12%

Aug-07

Infocrossing, Inc.

Wipro Ltd.

416.2

530.1

5%

7%

11%

Jul-07

Keystone Automotive Industries, Inc.

LKQ Corp.

795.3

774.9

10%

14%

19%

Jul-07

Option Care, Inc. (Illinois)

Walgreen Co.

677.2

780.0

27%

28%

35%

Jun-07

Color Kinetics, Inc.

Royal Philips Electronics NV

732.3

687.7

14%

25%

58%

Jun-07

Friendly Ice Cream Corp.

Freeze Operations Holding Corp.

126.7

334.6

8%

14%

4%

Jun-07

1-800 Contacts, Inc.

Fenway Partners LLC

341.5

375.8

21%

29%

39%

May-07

CT Communications, Inc.

Windstream Corp.

639.2

664.3

46%

48%

21%

May-07

Stride Rite Corp.

Payless ShoeSource, Inc.

753.3

831.9

35%

39%

35%

May-07

Pioneer Cos., Inc.

Olin Corp.

414.4

405.3

19%

21%

22%

May-07

24/7 Real Media, Inc.

WPP Group PLC

603.6

556.0

4%

9%

39%

May-07

Agile Software Corp.

Oracle Corp.

463.6

367.5

12%

10%

18%

May-07

eCollege.com

Pearson PLC

503.8

495.7

7%

21%

25%

Apr-07

Inter-Tel (Delaware), Inc.

Mitel Networks Corp.

699.1

664.2

7%

8%

10%

Apr-07

webMethods, Inc.

Software AG

517.3

436.3

26%

27%

30%

Mar-07

Eschelon Telecom, Inc.

Integra Telecom, Inc.

542.6

667.8

17%

20%

30%

Mar-07

Stratos Global Corp.

Communications Investment Partners Ltd.

276.9

604.3

21%

22%

48%

Mar-07

MapInfo Corp.

Pitney Bowes, Inc.

437.1

396.6

53%

50%

48%

Mar-07

Sunterra Corp.

Diamond Resorts LLC

322.3

667.2

7%

36%

33%

Mar-07

The Topps Co., Inc.

Madison Dearborn Partners LLC / The Tornante Co. L

378.0

349.9

9%

8%

4%

Mar-07

SafeNet, Inc.

SafeNet, Inc. /Private Group/

605.8

520.4

2%

4%

21%

Feb-07

Steel Technologies, Inc.

Mitsui & Co. Ltd.

391.6

513.8

63%

59%

74%

Feb-07

SEMCO ENERGY, Inc.

Lindsay Goldberg & Co. LLC

288.7

847.1

36%

37%

36%

Feb-07

Central Parking Corp.

KCPC Holdings, Inc.

728.8

855.7

6%

11%

23%

Feb-07

Wild Oats Markets, Inc.

Whole Foods Market, Inc.

553.6

662.0

17%

20%

30%

Feb-07

Keane, Inc.

Citigroup Venture Capital International

845.5

888.4

19%

18%

18%

Jan-07

BMP Marketing, Inc.

The Carlyle Group LLC

439.3

727.3

29%

32%

31%

Jan-07

Altiris, Inc.

Symantec Corp.

985.5

839.0

22%

26%

28%

Mean

32%

35%

40%

Median

27%

29%

35%

Source: Alacra.

(a)

Excludes

certain

industry

sectors

including

financial

services,

insurance,

real

estate

and

healthcare

companies.

Mergers

of

equals

are

also

excluded.

100% cash transactions over last 5 years with a deal value between $250M -

$1B (a)

42

WEIGHTED AVERAGE COST OF CAPITAL

(a) Source: Bloomberg 5-year adjusted daily beta as reported on January 24, 2013.

(b) Assumes book value of debt approximates market value.

(c) Unlevered Beta = Levered Beta / {1+(Net Debt/Market Equity)*(1-Tax Rate)}.

(d) 10-year Treasury Note yield as of January 24, 2013.

(e) Source: Ibbotson 2012 Yearbook.

(f) Size premium of 2.51% for companies with market capitalizations between $423.0mm and $682.8mm.

(g) Marginal tax rate based on Management estimates.

(h) WACC = (Net Debt/Capital) * After-Tax Cost of Debt + (Equity/Capital) * Cost of Equity.

(i) Relevered Beta = Unlevered Beta * {1+(Net Debt/Equity)*(1-Tax Rate)}.

(j) Cost of Equity = Risk Free Rate + (Relevered Beta * Market Risk Premium) + Size Premium.

(k) Median Unlevered Beta of Comps.

Comparable Companies

Assumptions

Current

Net Debt/

Risk Free Rate of Return (d)

1.87%

Levered

Market

Unlevered

Market Risk Premium (e)

6.62%

Name

Beta (a)

Equity (b)

Beta (c)

Size Premium (e) (f)

2.51%

American Greetings Corp.

1.219

63.8%

0.864

Marginal Tax Rate (g)

35.60%

1-800-Flowers.com Inc.

1.298

23.2%

1.129

CSS Industries Inc.

1.133

--

1.133

CafePress Inc.

1.288

--

1.288

Blyth, Inc.

1.281

--

1.281

R.R. Donnelley & Sons Company

1.170

203.5%

0.506

Quad/Graphics, Inc.

1.322

126.8%

0.728

Scholastic Corporation

1.048

--

1.048

Mean (Excluding American Greetings Corp.)

1.220

50.5%

1.016

Median (Excluding American Greetings Corp.)

1.281

0.0%

1.129

American Greetings Corp. Observed Weighted Average Cost of Capital (h)

Capital Structure

Cost of Equity

Cost of Debt

Net Debt/

Net Debt/

Unlevered

Levered

Cost of

Before

After

Based on:

Capital

Equity

Beta

Beta (i)

Equity (j)

Tax

Tax

WACC

Company Beta and Company D/E

38.9%

63.8%

0.864

1.219

12.4%

7.38%

4.75%

9.5%

Median Beta of Comps and Company D/E

10.4%

11.6%

1.089

1.170

12.1%

6.94%

4.47%

11.3%

Median Beta of Comps and D/E of Comps

0.0%

0.0%

1.129

1.129

11.9%

6.71%

4.32%

11.9%

Sensitivity to Capital Structure and Rates

Cost of Equity

Weighted Average Cost of Capital

Net Debt/

Net Debt/

Unlevered

Levered

Cost of

Pre-Tax Cost of Debt

Capital

Equity

Beta (k)

Beta (i)

Equity (j)

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

0%

0.0%

1.129

1.129

11.9%

0%

11.9%

11.9%

11.9%

11.9%

11.9%

11.9%

11.9%

10%

11.1%

1.129

1.210

12.4%

10%

11.5%

11.6%

11.7%

11.7%

11.8%

11.9%

11.9%

20%

25.0%

1.129

1.311

13.1%

20%

11.2%

11.4%

11.5%

11.6%

11.7%

11.9%

12.0%

30%

42.9%

1.129

1.441

13.9%

30%

10.9%

11.1%

11.3%

11.5%

11.7%

11.9%

12.1%

40%

66.7%

1.129

1.614

15.1%

40%

10.6%

10.8%

11.1%

11.4%

11.6%

11.9%

12.1%

50%

100.0%

1.129

1.857

16.7%

50%

10.3%

10.6%

10.9%

11.2%

11.6%

11.9%

12.2%

60%

150.0%

1.129

2.221

19.1%

60%

10.0%

10.3%

10.7%

11.1%

11.5%

11.9%

12.3%

70%

233.3%

1.129

2.827

23.1%

70%

9.6%

10.1%

10.5%

11.0%

11.4%

11.9%

12.3%

43

APPENDIX D. OVERVIEW OF INITIAL WEISS FAMILY PROPOSAL –

12/5/12

44

PRELIMINARY FINANCING OVERVIEW

•

The

Weiss

Family

submitted

an

updated

proposal

dated

Dec.

5,

2012,

reaffirming

its

initial

proposed

purchase

price

of

$17.18

per

share

•

The

Family

states

it

has

made

meaningful

progress

in

obtaining

debt

financing

in

support

of

its

updated

offer

•

Bank of America, KeyBanc, Macquarie and PNC Bank are prepared to

collectively commit up to $542 million in Senior Secured Credit

Facilities

and

a

$200

million

Senior

Unsecured

Bridge

Facility

(a)

;

KeyBanc,

Merrill

Lynch,

Macquarie

and

PNC

will

serve

as

joint

lead

arrangers

and

joint

book

running

managers

on

the

Facilities

•

KeyBanc,

as

sole

lead

arranger,

sole

bookrunner

and

sole

syndication

agent,

has

provided

a

“highly

confident”

letter

on

the

syndication

of a Junior Holdco Facility of at least $150 million

–

Highly speculative security

–

According to KeyBanc, this Facility could range from being a mezzanine-like term loan to preferred equity

•

Additionally, $80 million of proceeds are targeted from a Real Estate Facility (for which no supporting information was provided), $59.7

million from the rollover of Weiss Family equity and $10.6 million from cash on the balance sheet

–

No contribution reflected from Weiss Family beyond rollover equity, according to Family advisors

•

Fee letter not provided (impacts sources and uses)

(a) May take the form of $200mm in Senior Bridge Facility at rates described on page 3.

(b) Source: Draft commitment letter.

(c) Term Loan and Revolving Credit Facilities priced at L + 450 bps, with a 125 bps LIBOR floor for Term Loan. 

(d) Bridge Facility priced at L + 925 bps –

1375 bps depending upon credit ratings and period outstanding. PJSC assumes bond deal is done at 9.0%.

(e) Rate not provided in offer. Analysis assumes 13.0% cash pay and 2.0% PIK.

(f) Rate not provided in offer. Analysis assumes 8.0% interest rate.

(g) FY2013 EBITDA of $196.1mm.

(h) Purchase of 32.8mm shares at $17.18 per share, including RSUs and performance shares.

(i)

Assumes

inclusion

of

any

OID

fees

associated

with

any

of

the

debt

securities.

Sources (b)

Uses (b)

Debt / FY13E

$

%

Rate

EBITDA (g)

$

%

Term Loan Facility (c)

$392.0

43.9%

5.75%

2.0 x

Cash Purchase Price of Equity (h)

$563.1

63.1%

Revolving Credit Facility (c)

--

--

5.75%

Existing Debt (incl. make-whole)

285.8

32.0%

Senior Notes or Bridge Facility (d)

200.0

22.4%

9.00%

1.0 x

Estimated Fees and Expenses (i)

43.4

4.9%

Junior Holdco Facility (e)

150.0

16.8%

15.00%

0.8 x

Real Estate Facility (f)

80.0

9.0%

8.00%

0.4 x

Equity Contribution (Rollover)

59.7

6.7%

--

Cash from Balance Sheet

10.6

1.2%

--

Total Sources

$892.3

100.0%

4.2 x

Total Uses

$892.3

100.0%

45

FACILITY SOURCES

•

Commercially reasonable senior leverage at 2.0x

•

Term loan contemplated as Term Loan B is sold to institutional investors rather than traditional banks

•

Key terms at current market rates:

–

L + 450 bps with 1.25% floor

–

Commitment fee: 0.50% per annum

–

TL: 6-year term; RC: 5-year term

–

1% amortization per annum on TL

–

50% Excess Cash Flow Sweep

–

101 “soft call”

–

Financial Covenants: Maximum Leverage Ratio and Minimum Fixed Charge Coverage Ratio, both to be defined

–

Leverage less than 3.25x Consolidated Total Debt / Consolidated EBITDA prior to close

–

No flex language provided

–

No OID or commitment fee provided for Senior Credit Facilities

•

Commitment letter expires on December 12, 2012 at 5:00pm if not executed and accepted loan commitments expire on April 5,

2013, although both dates likely are placeholders that the lenders will have flexibility on

$542 Million Senior

Credit Facilities

•

$392 million Term Loan

Facility

•

$150 million Revolving

Credit Facility

$200 Million Senior

Unsecured Bridge

Facility

Facility

Considerations

•

Bridge loan backstopping Senior Unsecured Notes offering

•

Notes will be marketed in high yield market to avoid bridge loan

“take down”

•

Pricing and related “step-ups”

on market

–

L + 925 bps if B2/B corporate ratings achieved; L + 1,000 bps if

not; 1.25% LIBOR floor

–

50 bps pricing increase each quarter

–

Total pricing cap of 13% (B2/B) or 13.75% (below B2/B)

–

1-year maturity

•

Customary Exchange Notes provisions (priced at total pricing cap

described above)

$150 Million Junior

Holdco Facility

•

Replaces traditional common or preferred equity as originally contemplated

•

Significantly increases total pro forma leverage to 4.2x

from

3.4x

•

Defies current market convention of minimum equity threshold of greater than or equal to 30% for go-private transactions

–

Pro forma 24% if Holdco Facility included as equity; 7%

if Holdco Facility excluded

•

May impact pricing of Senior Credit Facilities and Senior Unsecured Notes during syndication

•

May impact ability to increase offer

•

Speculative security with significant execution risk