Year 3

Year 2 Year 1
(estimated)
Income Statement
Net sales 20,297 20,092 19,889
Cost of goods sold 6,106 6,044 6,204
Gross profit 14,191 14,048 13,685
Selling, general, and administration expense 7,974 7,893 9,221
Depreciation and amortization expense 863 803 773
Interest expense (revenue) (279) (308) 292
Income before tax 5,634 5,660 3,399
Income tax expense 1,683 1,691 1,222
Net income 3,951 3,969 2,177
Outstanding shares 3,491 3,491 3,481

Ratios:
Sales growth 1.02% 1.02%
Gross profit margin 69.92% 69.92%
Selling, general, and aministrative exp/Sales 39.28% 39.28%
Depreciation expense/Prior-year PPE gross 12.14% 12.14%
Interest expense/Prior-year long-term debt -5.45% -5.45%
Income tax expense/Pretax income 29.88% 29.88%
 Year 3
Year 2 Year 1
(estimated)
Balance Sheet
Cash 769 1,934 1,892
Receivables 1,901 1,882 1,757
Inventories 1,066 1,055 1,066
Other current assets 2,300 2,300 1,905
Total current assets 6,036 7,171 6,620
Property, plant, and equipment 8,305 7,105 6,614
Accumulated depreciation 3,515 2,652 2,446
Net property, plant, and equipment 4,790 4,453 4,168
Other noncurrent assets 10,793 10,793 10,046
Total assets 21,619 22,417 20,834

Account payable and accrued liabilities 3,717 3,679 3,905

Short-term debt and current maturities of long-term debt 3,899 3,899 4,816
Income tax liabilities 847 851 600
Total current liabilities 8,463 8,429 9,321
Deferred income taxes and other liabilities 1,403 1,403 1,362
Long-term debt 1,219 1,219 835
Total noncurrent liabilities 2,622 2,622 2,197

Common stock 873 873 870

Capital surplus 3,520 3,520 3,196
Retained earnings 19,823 20,655 18,543
Treasury stock 13,682 13,682 13,293
Shareholders' equity 10,534 11,366 9,316
Total liabilities and equity 21,619 22,417 20,834

Ratios:
Accounts receivable turnover 10.68 10.68 11.32
Inventory turnover 5.73 5.73 5.82
Accounts payable turnover 1.64 1.64 1.59
Taxes payable/Tax expense 50.32% 50.32% 49.10%
Total assets/Stockholders' equity 2.05 1.97 2.24
Dividends per share 1.37 1.37
Capital expenditure/Sales 5.91% 5.91%
Capital expenditure 1,200 1,187
Statement of Cash Flows Est. Year 3
Net income 3,951
Adjusments:
Depreciation and amortization expense 863
Increase in Receivables (19)
Increase in Inventories (11)
Increase in Account Payable and accrued liabilities 38
Decrease in Income tax liabilities (4) 866
Net cash flow from operation activities 4,817

Capital expenditure (1,200)

Net cash flow used for investing activities (1,200)

Dividends (4,783)
Net cash flow used for financing activities (4,783)

Net change in cash (1,165)

Beginning cash 1,934
Ending cash 769
 Year 3
Year 2 Year 1
(estimated)
Income Statement
Net sales 18,800 15,326 12,494
Cost of goods sold 15,048 12,267 10,101
Gross profit 3,752 3,059 2,393
Selling, general, and administration expense 2,761 2,251 1,728
Depreciation and amortization expense 304 167 103
Income before tax 688 641 562
Income tax expense 263 245 215
Net income 425 396 347
Outstanding shares 208 208 200

Ratios:
Sales growth 22.67% 22.67%
Gross profit margin 19.96% 19.96%
Selling, general, and aministrative exp/Sales 14.69% 14.69%
Depreciation expense/Prior-year PPE gross 15.28% 15.28%
Income tax expense/Pretax income 38.22% 38.22%
 Year 3
Year 2 Year 1
(estimated)
Balance Sheet
Cash 197 746 751
Receivables 384 313 262
Inventories 2,168 1,767 1,184
Other current assets 102 102 41
Total current assets 2,851 2,928 2,238
Property, plant, and equipment 3,248 1,987 1,093
Accumulated depreciation 847 543 395
Net property, plant, and equipment 2,402 1,444 698
Other noncurrent assets 466 466 59
Total assets 5,719 4,838 2,995

Account payable and accrued liabilities 3,034 2,473 1,704

Short-term debt and current maturities of long-term debt 114 114 16
Income tax liabilities 136 127 65
Total current liabilities 3,284 2,714 1,785
Long-term liabilities 122 122 100
Long-term debt 67 181 15
Total long-term liabilities 189 303 115

Common stock 20 20 20
Capital surplus 576 576 247
Retained earnings 1,650 1,225 828
Shareholders' equity 2,246 1,821 1,095
Total liabilities and equity 5,719 4,838 2,995

Ratios:
Accounts receivable turnover 48.96 48.96 47.69
Inventory turnover 6.94 6.94 8.53
Accounts payable turnover 4.96 4.96 5.93
Taxes payable/Tax expense 51.84% 51.84% 30.26%
Total assets/Stockholders' equity 2.55 2.66 2.74
Dividends per share - -
Capital expenditure/Sales 6.71% 6.71%
Capital expenditure 1,261 1,028
Statement of Cash Flows Est. Year 3
Net income 425
Adjusments:
Depreciation and amortization expense 304
Increase in Receivables (71)
Increase in Inventories (401)
Increase in Account Payable and accrued liabilities 561
Increase in Income tax liabilities 9 402
Net cash flow from operation activities 827

Capital expenditure (1,261)

Net cash flow used for investing activities (1,261)

Long-term debt (114)

Net cash flow used for financing activities (114)

Net change in cash (549)

Beginning cash 746
Ending cash 197
Valuation of Syminex Common Stock
HISTORICAL
FORECAST HORIZON
FIGURES
2004 2005 2006 2007 2008
1 2 3
Sales growth 8.50% 8.70% 8.90% 9.10% 8%
Net profit margin (Net income/Sales) 9.05% 9.16% 9.20% 9.40% 9.40%
Net working capital turnover (Sales/Avg.NWC) 22.74 11.83 11.83 11.83 11.83
Fixed assets turnover (Sales/Avg. Fixed assets) 1.83 1.99 1.99 1.99 1.99
Total operating assets/Total equity 2.34 2.52 2.52 2.52 2.52
Cost of equity 12.50%

Sales 81,324 88,396 96,263 105,023 113,425

Net income 7,360 8,093 8,856 9,872 10,662
Net working capital 3,577 7,474 8,139 8,880 9,590
Fixed assets 44,340 44,469 48,427 52,834 57,060
Total operating assets 47,917 51,943 56,566 61,714 66,651
Long-term liabilities 27,406 31,319 34,106 37,210 40,187
Total stockholders' equity 20,511 20,624 22,460 24,503 26,464

Residual Income Computation

Net Income 8,856 9,872 10,662
Beginning equity 20,624 22,460 24,503
Required equity return 12.5% 12.5% 12.5%
Expected income 2,578 2,808 3,063
Residual income 6,278 7,065 7,599
Discount factor 0.8889 0.7901 0.7023

Present value of residual income 5,581 5,582 5,337

Cumulative present value of residual income 5,581 11,163 16,500
Terminal value of residual income
Beginning book value of equity
Value of equity
Common share outstanding (thousands)
Value of equity per share
 TERMINAL
CAST HORIZON
YEAR
2009 2010 2011
4 5
7% 6% 3.50%
9.40% 9.40% 9.40%
11.83 11.83 11.83
1.99 1.99 1.99
2.52 2.52 2.52

121,364 128,646 133,149

11,408 12,093 12,516
10,262 10,877 11,258
61,055 64,718 66,983
71,316 75,595 78,241
43,000 45,580 47,175
28,316 30,015 31,066

11,408 12,093 12,516

26,464 28,316 30,015
12.5% 12.5% 12.5%
3,308 3,540 3,752
8,100 8,553 8,764
0.6243 0.5549

5,057 4,746
21,557 26,303
54,038
20,624
100,965
1,737
58
 HISTORICAL
FORECAST HORIZON
FIGURES
Year 2 Year 3
Year 4 Year 5 Year 6
1 2 3
Sales growth 8.50% 10.65% 10.65% 10.65% 10.65%
Net profit margin (Net income/Sales) 6.71% 8.22% 8.22% 8.22% 8.22%
Net working capital turnover (Sales/Avg.NWC) 8.98 9.33 9.33 9.33 9.33
Fixed assets turnover (Sales/Avg. Fixed assets) 1.67 1.64 1.64 1.64 1.64
Total operating assets/Total equity 1.96 2.01 2.01 2.01 2.01
Cost of equity 12.50%

Sales 25,423 28,131 31,126 34,441 38,109

Net income 1,706 2,312 2,559 2,831 3,133
Net working capital 2,831 3,015 3,336 3,691 4,085
Fixed assets 15,223 17,153 18,980 21,001 23,237
Total operating assets 18,054 20,168 22,316 24,692 27,322
Long-term liabilities 8,843 10,134 11,213 12,408 13,729
Total stockholders' equity 9,211 10,034 11,102 12,285 13,593

Residual Income Computation

Net Income 2,559 2,831 3,133
Beginning equity 10,034 11,102 12,285
Required equity return 12.5% 12.5% 12.5%
Expected income 1,254 1,388 1,536
Residual income 1,304 1,443 1,597
Discount factor 0.8889 0.7901 0.7023

Present value of residual income 1,159 1,140 1,122

Cumulative present value of residual income 1,159 2,300 3,421
Terminal value of residual income
Beginning book value of equity
Value of equity
Common share outstanding (thousands)
Value of equity per share
 TERMINAL
CAST HORIZON
YEAR
Year 7 Year 8 Year 9
4 5
10.65% 10.65% 3.50%
8.22% 8.22% 8.22%
9.33 9.33 9.33
1.64 1.64 1.64
2.01 2.01 2.01

42,168 46,659 48,292

3,466 3,835 3,970
4,520 5,001 5,176
25,712 28,451 29,446
30,232 33,452 34,622
15,191 16,809 17,397
15,041 16,643 17,225

3,466 3,835 3,970

13,593 15,041 16,643
12.5% 12.5% 12.5%
1,699 1,880 2,080
1,767 1,955 1,889
0.6243 0.5549

1,103 1,085
4,525 5,610
11,649
10,034
27,293
1,737
15.71