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Percentage of sales
COGS/Sales 67.2% 68.2% 74.0% 76.7% 78.1%
SG&A/Sales 22.1% 22.9% 23.7% 24.5% 25.4%
Oper. Profit/Sales 5.8% 3.9% 6.4% 5.4% 4.5%
Stockholder information
Earnings per share 2.91 1.88 3.25 2.74 2.23
Dividends per share 1.6 1.6 1.6 1.6 1.6
Book value per share 49.4 49.68 51.33 52.47 53.1
Market price 33-46 35-48 29-41 25-33 23-32
P/E ratio 11-16 10-26 9-13 9-12 10-14
Shares outstanding 584,000 584,000 584,000 584,000 584,000
Exhibit 5
2003 2004 2005 2006 2007
Net income 11.0 11.9 12.8 13.8 15.0
Shares outstanding 4.2 4.2 4.2 4.2 4.2
Earnings per share 2.61 2.83 3.04 3.28 3.56
Exhibit 2
Net plant & Equipment (Beginning) $ 19.0 $ 20.8 $ 21.9 $ 23.0 $ 24.2
CAPEX $ 4.0 $ 3.5 $ 3.6 $ 3.8 $ 2.9
Depreciation $ 2.2 $ 2.4 $ 2.5 $ 2.7 $ 2.8
Net plant & Equipment (End) $ 19.00 $ 20.8 $ 21.9 $ 23.0 $ 24.2 $ 24.3
FCFF
Depreciation 2.2 2.4 2.5 2.7 2.8
NWC 24.0 25.4 27.0 28.6 30.3 32.1
Change in NWC 1.4 1.5 1.6 1.7 1.8
Capital expenditures $ 4.0 $ 3.5 $ 3.6 $ 3.8 $ 2.9
Free cash flow $ (0.68) $ 0.76 $ 1.71 $ 2.25 $ 3.51
Terminal value at the end of 2007 55.80
Years 1 2 3 4 5
Total cash flow $ (0.68) $ 0.76 $ 1.71 $ 2.25 $ 59.31
Discounting Factor $ 0.92 $ 0.85 $ 0.78 $ 0.72 $ 0.67
Discounted cash flows $ (0.63) $ 0.65 $ 1.34 $ 1.63 $ 39.59
Enterprise value $42.58
Price/share $72.92
Scenarios WACC
$72.92 7.4% 7.9% 8.4% 8.9% 9.4%
1.0%
1.5%
Growth Rates 2.0%
2.5%
3.0%
Assumptions
Growth Rate 6.0% Case Data
Long Term Growth Rate 2.0%
Income tax rate = 40% Case Data
Net working capital/Sales = 43.4% from Exhibits 1 and 2
PP&E/Sales = 34.4% from Exhibits 1 and 2
Depreciation/PP&E ratio = 11.1% from Exhibits 1 and 2
WACC = 8.42% Calculated
Outstanding Shares(Divided by Million) 0.584