329804515.

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Valuation Analysis for Robertson Tool

All figures in $ Millions
Change the Red numbers only.
Key assumptions in Robertson valuation:
Annual Growth Rate of Sales
Income Tax Rate
Net Working Capital/Sales Ratio
PP&E/Sales Ratio
Margin Improvements Realized
Costs of Goods Sold / Sales
Selling, General & Admin. / Sales

5.0%
40.0%
34.5%
34.4%

Actual
2002
69.0%
22.0%

Other Assets/Sales Ratio

Depreciation/PP&E Ratio
Discount Rate (cost of capital)

Pro Forma
2003
67.6%
21.0%

0.0%
11.1%
10.0%

2004
67.0%
21.0%

2005
67.0%
21.0%

2006
66.0%
20.0%

2007
65.0%
20.0%

Valuation Analysis for Robertson Tool ($ Millions)

Sales (5%/Year in Perpetuity)

Cost of Goods Sold
SG&A
Depreciation
Other
EBIT
Taxes @ 40%
EBIAT
Depreciation
Cash Flows from Operations

Actual

Pro Forma

2002
55.3
37.9
12.3
2.1
0.0
3.0
1.2
1.8
2.1
3.9

2003
58.1
39.3
12.2
2.2
0.0
4.4
1.8
2.6
2.2
4.9

2004
61.0
40.8
12.8
2.3
0.0
5.0
2.0
3.0
2.3
5.3

2005
64.0
42.9
13.4
2.4
0.0
5.2
2.1
3.1
2.4
5.6

2006
67.2
44.4
13.4
2.6
0.0
6.8
2.7
4.1
2.6
6.7

2007
70.6
45.9
14.1
2.7
0.0
7.9
3.2
4.7
2.7
7.4

(4.0)
3.2
0.0
5.7

1.0
3.3
0.0
1.0

1.1
3.5
0.0
1.0

1.1
3.7
0.0
1.9

1.2
3.8
0.0
2.4

0.9

0.8

0.8

0.7

50.9
0.6

5.1

0.8

0.8

1.3

Deduct Change in NWC

Deduct Capital Expenditures
Deduct Change in Other Assets
Cash Flow to Capital
Terminal Value of Cash Flows to
Capital
P.V. Factor @ 10 %
Annual Present Value of Cash Flows to
Capital

Total Present Value of Cash Flows to Capital

Debt Outstanding at Acquisition Date
Present Value of Common Stock
Present Value of Robertson Common Stock per Share
Resulting Year End Capital Investment

29.2 /.584

33.1
41.2
12.0
29.2
$50

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per share

Pro Forma

Net PP&E
Net Working Capital
Other Assets
Total Net Assets

Actual
2002
19.0
24.0
0.0
43.0

2003
20.0
20.0
0.0
40.0

2004
20.9
21.0
0.0
42.0

Date 09/15/2016 20:06:43

2005
22.0
22.1
0.0
44.1

2006
23.1
23.2
0.0
46.3

2007
24.2
24.3
0.0
48.6

Page 1

Valuation Analysis for Robertson Tool

All figures in $ Millions
Change the Red numbers only.
Key assumptions in Robertson valuation:
Annual Growth Rate of Sales
Income Tax Rate
Net Working Capital/Sales Ratio
PP&E/Sales Ratio
Margin Improvements Realized
Costs of Goods Sold / Sales
Selling, General & Admin. / Sales

5.0%
40.0%
34.5%
34.4%
Actual
2002
69.0%
22.0%

Other Assets/Sales Ratio

Depreciation/PP&E Ratio
Discount Rate (cost of capi

Pro Forma
2003
2004
67.6%
67.0%
21.0%
21.0%

Valuation Analysis for Robertson Tool ($ Millions)

Sales (5%/Year in Perpetuity)
Cost of Goods Sold
SG&A
Depreciation
Other
EBIT
Taxes @ 40%
EBIAT
Depreciation
Cash Flows from Operations

Actual
2002
55.3
37.9
12.3
2.1
0.0
3.0
1.2
1.8
2.1
3.9

Deduct Change in NWC

Deduct Capital Expenditures
Deduct Change in Other Assets
Cash Flow to Capital
Terminal Value of Cash Flows to
Capital
P.V. Factor @ 10 %
Annual Present Value of Cash Flows to
Capital

Pro Forma
2003
2004
58.1
61.0
39.3
40.8
12.2
12.8
2.2
2.3
0.0
0.0
4.4
5.0
1.8
2.0
2.6
3.0
2.2
2.3
4.9
5.3

(4.0)
3.2
0.0
5.7

1.0
3.3
0.0
1.0

0.9

0.8

5.1

0.8

Total Present Value of Cash Flows to Capital

Debt Outstanding at Acquisition Date
Present Value of Common Stock
Present Value of Robertson Common Stock per Share
Resulting Year End Capital Investment
Pro Forma

Net PP&E
Net Working Capital
Other Assets
Total Net Assets

Actual
2002
19.0
24.0
0.0
43.0

2003
20.0
20.0
0.0
40.0

2004
20.9
21.0
0.0
42.0

Note: Any reduction in inventory levels triggers additional tax obligations (due to L
which, for purposes of simplicity, are not included in this valuation model.
End of Model

Other Assets/Sales Ratio

Depreciation/PP&E Ratio
Discount Rate (cost of capital

0.0%
11.1%
10.0%

2005
67.0%
21.0%

2006
66.0%
20.0%

2007
65.0%
20.0%

2005
64.0
42.9
13.4
2.4
0.0
5.2
2.1
3.1
2.4
5.6

2006
67.2
44.4
13.4
2.6
0.0
6.8
2.7
4.1
2.6
6.7

2007
70.6
45.9
14.1
2.7
0.0
7.9
3.2
4.7
2.7
7.4

1.1
3.5
0.0
1.0

1.1
3.7
0.0
1.9

1.2
3.8
0.0
2.4

0.8

0.7

50.9
0.6

0.8

1.3

33.1

29.2 /.584

41.2
(12.0)
29.2
$50

Pro Forma
2005
22.0
22.1
0.0
44.1

2006
23.1
23.2
0.0
46.3

2007
24.2
24.3
0.0
48.6

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per share

ax obligations (due to LIFO)

is valuation model.

Valuation Based on Market Multiples

Latest Quote
Sales
Cash Operating Margin
Cash Operating Income
Depreciation
EBIT
Tax
EBIAT
EBIAT Multiple
Enterprise Value
Interest-bearing Debt
Value of Equity (Mil)
Shares Outstanding
Value Per Share

55.3
9.2%
5.1
2.1
3
1.2
1.8
12.85
23.13
12.0
11.1
0.584
19

Prospective
55.3
15%
8.3
2.2
6.1
2.4
4
12.85
46.99245
12.0
35.0
0.584
60