Operating Results:
Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Selling, General & Administrative
EBITDA
Less: Depreciation
EBIT
Less: Interest Expense
EBT
Less: Taxes
Net Income
Revenue Growth
Gross Margin
Selling, General & Administrative/Revenue
EBITDA Margin
EBIT Margin
Net Income Margin
Effective Tax Rate
Income Statement
2003
$503.4
405.2
98.2
37.8
60.4
6.8
53.6
5.5
48.1
19.2
$28.9
2004
$543.7
432.3
111.4
44.6
66.8
6.2
60.6
5.8
54.8
22.0
$32.8
2005
$587.2
496.2
91.0
45.8
45.2
6.0
39.2
5.9
33.3
13.3
$20.0
2006
$636.1
513.4
122.7
51.5
71.2
5.9
65.3
5.3
60.0
24.0
$36.0
2007
$680.7
558.2
122.5
49.0
73.5
6.1
67.4
3.3
64.1
25.6
$38.5
Margins:
NA
19.5%
7.5%
12.0%
10.6%
5.7%
39.9%
8.0%
20.5%
8.2%
12.3%
11.1%
6.0%
40.1%
8.0%
15.5%
7.8%
7.7%
6.7%
3.4%
39.9%
8.3%
19.3%
8.1%
11.2%
10.3%
5.7%
40.0%
7.0%
18.0%
7.2%
10.8%
9.9%
5.7%
39.9%
Assets:
Cash & Cash Equivalents
Accounts Receivable
Inventory
Total Current Assets
Balance Sheet
2003
$4.3
62.1
57.7
124.1
2004
$5.1
70.1
58.0
133.2
2005
$4.8
78.8
61.2
144.8
2006
$7.8
87.1
61.9
156.8
2007
$5.0
93.3
67.3
165.6
201.4
12.3
$337.8
202.9
12.1
$348.2
203.1
11.8
$359.7
202.3
12.5
$371.6
204.4
10.8
$380.8
$42.2
$45.0
$51.6
$53.4
$58.1
91.6
82.8
73.8
65.8
54.8
204.0
$337.8
220.4
$348.2
234.3
$359.7
252.4
$371.6
267.9
$380.8
62.1
57.7
42.2
77.6
70.1
58.0
45.0
83.1
78.8
61.2
51.6
88.4
87.1
61.9
53.4
95.6
93.3
67.3
58.1
102.5
15.4%
15.3%
15.1%
15.0%
15.1%
44.4x
41.3x
34.3x
51.4x
46.4x
38.4x
34.0x
50.8x
48.3x
37.5x
34.3x
51.6x
49.3x
35.0x
34.0x
50.3x
49.3x
35.6x
34.4x
50.5x
Cash Flow
2003
$28.9
6.8
3.1
0.5
0.3
$32.4
2004
$32.8
6.2
8.0
0.3
2.8
$33.5
2005
$20.0
6.0
8.7
3.2
6.6
$20.7
2006
$36.0
5.9
8.3
0.7
1.8
$34.7
2007
$38.5
6.1
6.2
5.4
4.7
$37.7
$7.3
0.5
$7.8
$7.7
(0.2)
$7.5
$6.2
(0.3)
$5.9
$5.1
0.7
$5.8
$8.2
(1.7)
$6.5
$8.0
14.4
$22.4
$8.8
16.4
$25.2
$9.0
6.1
$15.1
$8.0
17.9
$25.9
$11.0
23.0
$34.0
$2.2
$0.8
($0.3)
$3.0
($2.8)
HANSSON
PRIVATE LABEL
ho
Market
Company:
Value
Cathleen Sinclair
298.9
General Health & Beau
319.3
Women's Care Compan
498.6
Skin Care Enterprises
1,204.2
Company:
Cathleen Sinclair
General Health & Beauty
Women's Care Company
Skin Care Enterprises
Average
Comparable Companies
Net Enterprise
Debt
Value
1,329.6
1,628.5
63.1
382.4
55.3
553.9
371.9
1,576.1
EBITDA
19.0%
13.9%
13.3%
12.5%
14.6%
Equity
Beta Revenue EBITDA
2.22
1,346.8
255.3
1.95
446.1
61.9
1.14
397.3
52.7
1.35
1,247.6
155.8
EBIT
163.4
51.9
49.3
125.4
Net
Income
21.5
23.8
77.0
65.3
Book
Value
(1,112.8)
204.2
43.7
316.2
EBIT
10.0x
7.4x
11.2x
12.6x
10.3x
P/E
13.9x
13.4x
6.5x
18.4x
13.1x
P/B
NM
1.6x
11.4x
3.8x
5.6x
Company:
Cathleen Sinclair
General Health & Beauty
Women's Care Company
Skin Care Enterprises
Average
Debt/
Value
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Debt/
Equity
0.0%
5.3%
11.1%
17.6%
25.0%
33.3%
Debt/
Value
81.6%
16.5%
10.0%
23.6%
32.9%
Debt/
Equity
444.9%
19.8%
11.1%
30.9%
49.1%
Equity
Beta
2.22
1.95
1.14
1.35
1.67
Debt
Beta
0.25
0.00
0.00
0.00
0.06
Asset
Beta
0.79
1.74
1.07
1.14
1.18
Asset
Beta
1.18
1.18
1.18
1.18
1.18
1.18
Equity
Beta
1.18
1.22
1.26
1.31
1.36
1.42
Cost of
Equity
9.67%
9.86%
10.07%
10.30%
10.56%
10.86%
Cost of
Debt
7.75%
7.75%
7.75%
7.75%
7.75%
7.75%
WACC
9.67%
9.60%
9.53%
9.45%
9.38%
9.31%
Assumptions:
10-Year Treasury
Market Risk Premium
3.75%
5.00%
Tax Rate
40.0%
7.0x
514.5
49.8
57.9
107.7
Existing D/V
Estimated New D/V
9.7%
20.9%
0.00
7.75%
Operating Assumptions
Operating Assumptions
Revenue Projection:
Total Capacity (000's)
Capacity Utilization
Unit Volume
Selling Price Per Unit - Growing at
Revenue
2009
80,000
60.0%
48,000
1.77
84,960
2010
80,000
65.0%
52,000
1.81
93,881
2011
80,000
70.0%
56,000
1.84
103,124
2012
80,000
75.0%
60,000
1.88
112,700
2013
80,000
80.0%
64,000
1.92
122,618
2014
80,000
85.0%
68,000
1.95
132,887
2015
80,000
85.0%
68,000
1.99
135,545
2016
80,000
85.0%
68,000
2.03
138,256
2017
80,000
85.0%
68,000
2.07
141,021
2018
80,000
85.0%
68,000
2.12
143,841
1.0%
3.0%
3.0%
0.94
3,600
2,250
0.95
3,708
2,318
0.96
3,819
2,387
0.97
3,934
2,459
0.98
4,052
2,532
0.99
4,173
2,608
1.00
4,299
2,687
1.01
4,428
2,767
1.02
4,560
2,850
1.03
4,697
2,936
3.5%
4
160.0
640.0
4
165.6
662.4
6
171.4
1,028.4
6
177.4
1,064.4
6
183.6
1,101.6
6
190.0
1,140.2
6
196.7
1,180.1
6
203.6
1,221.4
6
210.7
1,264.1
6
218.1
1,308.4
20.00
2,000
40,000
450
18,000.0
20.70
2,000
41,400
473
19,570.9
21.42
2,000
42,849
509
21,814.0
22.17
2,000
44,349
545
24,190.2
22.95
2,000
45,901
582
26,706.0
23.75
2,000
47,507
618
29,368.2
24.59
2,000
49,170
618
30,396.1
25.45
2,000
50,891
618
31,460.0
26.34
2,000
52,672
618
32,561.1
27.26
2,000
54,516
618
33,700.7
18,640.0
20,233.3
22,842.4
25,254.6
27,807.6
30,508.4
31,576.2
32,681.4
33,825.2
35,009.1
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
47.6x
37.6x
34.2x
0.38
0.38
0.39
0.40
0.42
0.43
0.45
0.46
0.48
0.50
3.15%
0.05
0.06
0.06
0.06
0.06
0.06
0.06
0.06
0.06
0.06
0.34%
Production Costs:
Raw Materials Per Unit Growing at
Manufacturing Overhead Growing at
Maintenance Expense Growing at
Salaried Labor Cost:
Managers
Average Annual Fully Loaded Cost
Total Salaried Labor Cost
Hourly Labor Cost:
Average Fully Loaded Hourly Cost
Hours Per Year
Cost Per Hourly Employee
Number of Hourly Workers
Total Hourly Labor Cost (000's)
Total Labor Cost
2.0%
3.5%
Cost Components:
Facility Expansion
Manufacturing Equipment
Packaging Equipment
Working Capital (1)
Total Investment
Amount
$10,000
20,000
15,000
12,868
57,868
Investment
Est. Life
20yrs.
10yrs.
10yrs.
Percent
Cost of
Depr' Maintenance Maintenance
500
5.0%
500
2,000
5.0%
1,000
1,500
5.0%
750
0
0.0%
0
4,000
2,250
2004
2005
2006
2007
Profitability Ratios
Profit Margin
Return on Assets (ROA)
Return on Equity (ROE)
Return on Invested Capital (ROI
Gross Margin
5.7%
8.6%
14.2%
10.9%
19.5%
6.0%
9.4%
14.9%
12.0%
20.5%
3.4%
5.6%
8.5%
7.6%
15.5%
5.7%
9.7%
14.3%
12.3%
19.3%
5.7%
10.1%
14.4%
12.5%
18.0%
8.11
7.02
4.06
2.50
1.49
7.76
7.45
4.08
2.68
1.56
7.45
8.11
4.06
2.89
1.63
7.30
8.29
4.06
3.14
1.71
7.30
8.29
4.11
3.33
1.79
2.94
1.57
0.10
0.40
0.66
1.7x
9.75
10.98
0.67
2.96
1.67
0.11
0.37
0.58
1.6x
10.45
11.52
0.64
2.81
1.62
0.09
0.35
0.54
1.5x
6.64
7.66
0.61
2.94
1.78
0.15
0.32
0.47
1.5x
12.32
13.43
0.58
2.85
1.69
0.09
0.30
0.42
1.4x
20.42
22.27
0.56
Year: 2007
Company:
Market Value
Cathleen Sinclair
298.9
General Health & Beauty
319.3
Women's Care Company
498.6
Skin Care Enterprises
1,204.2
Average (Excluding Cathleen Si
674.0
Median (Excluding Cathleen Sin
498.6
Max (Excluding Cathleen Sincla 1,204.2
Min (Excluding Cathleen Sincla
319.3
Hansson Private Label
406.8
Company:
EBITDA/Revenue
EBIT/Renevue
Earnings/Revenue
EV/RevenueEV/EBITDAEV/EBIT P/E
Cathleen Sinclair
19.0%
12.1%
1.6%
1.2x
6.4x
10.0x 13.9x
General Health & Beauty
13.9%
11.6%
5.3%
0.9x
6.2x
7.4x 13.4x
Women's Care Company
13.3%
12.4%
19.4%
1.4x
10.5x
11.2x 6.5x
Skin Care Enterprises
12.5%
10.1%
5.2%
1.3x
10.1x
12.6x 18.4x
Average (Exluding Cathleen Sin
13.2%
11.4%
10.0%
1.2x
8.9x
10.4x 12.8x
Median (Excluding Cathleen Sin
13.3%
11.6%
5.3%
1.3x
10.1x
11.2x 13.4x
Max (Excluding Cathleen Sincla
13.9%
12.4%
19.4%
1.4x
10.5x
12.6x 18.4x
Min (Excluding Cathleen Sincla
12.5%
10.1%
5.2%
0.9x
6.2x
7.4x
6.5x
Hansson Private Label
10.8%
9.9%
5.7%
0.8x
7.0x
7.6x 10.6x
P/B
NM
1.6x
11.4x
3.8x
5.6x
3.8x
11.4x
1.6x
1.5x
Book Value
Time Period
2008
2009
2010
2011
2012
2013
2014
2015
2016
Operating Results:
Revenue
84,960
Less: Raw Material Costs
45,120
Less: Labor Expense
18,640
Less: Manufacturing Overhead
3,600
Less: Maintenance Expense
2,250
Less: Selling, General & Administrative Expense 6,627
EBITDA
8,723
Less: Depreciation
4,000
EBIT
4,723
Less: Taxes
1,889
NOPAT
2,834
93,881
49,369
20,233
3,708
2,318
7,323
10,930
4,000
6,930
2,772
4,158
103,124
53,698
22,842
3,819
2,387
8,044
12,334
4,000
8,334
3,334
5,000
112,700
58,109
25,255
3,934
2,459
8,791
14,154
4,000
10,154
4,061
6,092
122,618
62,603
27,808
4,052
2,532
9,564
16,059
4,000
12,059
4,824
7,235
132,887
67,181
30,508
4,173
2,608
10,365
18,051
4,000
14,051
5,620
8,431
135,545
67,852
31,576
4,299
2,687
10,573
18,559
4,000
14,559
5,823
8,735
138,256
68,531
32,681
4,428
2,767
10,784
19,065
4,000
15,065
6,026
9,039
2,834
4,000
12,865
4,158
4,000
1,473
5,000
4,000
1,443
6,092
4,000
1,529
7,235
4,000
1,586
8,431
4,000
1,644
8,735
4,000
425
9,039
4,000
432
45,000
###
(6,031)
6,685
7,558
8,563
9,649
10,787
12,310
12,607
9.38%
###
###
(5,514)
(50,514)
5,588
(44,926)
5,775
(39,151)
5,982
(33,168)
6,164
(27,005)
6,299
(20,705)
6,573
(14,133)
6,154
(7,979)
NPV
IRR
Payback Period (Break even point)
###
13%
9.15
11,234
8,874
7,243
12,865
12,413
9,805
7,880
14,338
13,635
10,771
8,625
15,781
14,901
11,771
9,362
17,310
16,213
12,807
10,123
18,896
17,571
13,879
10,909
20,541
17,922
14,157
11,114
20,965
18,280
14,440
11,323
21,397
Accounts Receivable
Plus: Inventory
Less: Accounts Payable
Net Working Capital
10
2017
2018
141,021
69,216
33,825
4,560
2,850
11,000
19,569
4,000
15,569
6,228
9,342
143,841
69,908
35,009
4,697
2,936
11,220
20,071
4,000
16,071
6,429
9,643
9,342
4,000
440
9,643
4,000
447
22,284
12,902
35,480
5,758
(2,221)
14,476
12,255
18,646
14,729
11,538
21,837
19,019
15,023
11,758
22,284
Revenue (Cashflow)
NPV
Variance/Sensitivity
(measured by standard
deviation)
20,776
12,255
3,734
8521
1st
15,548
12,255
8,996
3276
4th
Costs (Cashflow)
NPV
Variance/Sensitivity
(measured by standard
deviation)
10,840
12,255
13,646
1403
6th
11,339
12,255
13,167
914
7th
Working Capital
NPV
Variance/Sensitivity
(measured by standard
deviation)
11,493
12,255
13,018
763
8th
11,653
12,255
12,857
602
9th
12,734
12,255
11,777
479
10th
WACC (Risk)
Original Assumption 9.38%*1.1
Original Assumption 9.38%
Original Assumption- 9.38*0.9
Initial Investment
Original Assumption 10% increase 45000*1.1
Original Assumption Initial Investment of 45000
Original Assumption- 10% decrease 45000*0.9
Equity Beta
Original Assumption 10% increase: 1.36*1.1
Original Assumption Initial Equity Beta of 1.36
Original Assumption- 10% decrease: 1.36*0.9
NPV
8,723
12,255
15,695
NPV
7,755
12,255
16,755
NPV
10,304
12,255
14,360
Variance/Sensitivity
(measured by standard
deviation)
3486
3rd
Variance/Sensitivity
(measured by standard
deviation)
4500
2nd
Variance/Sensitivity
(measured by standard
deviation)
2029
5th