BUSINESS VALUATION AND FINANCIAL ADVISORY SERVICES
CRONKITE & KISSELL
November 15, 2001
Marilyn A. Schroeder
Chief Financial Officer
The Coeur d'Alenes Company
3900 East Broadway I
Spokane, WA 99202
Dear Ms. Schroeder:
At your request, we have appraised the fair market value of the common stock of
The Coeur d'Alenes Company ("Coeur d'Alenes" or the "Company") as of August 31,
2001.
It is our understanding that you are contemplating a reverse stock split that
would reduce outstanding shares and result in the buy-out of approximately 300
to 400 minority shareholders. Your objective is to effect the buy-out on the
basis of a fair market value assessment by an independent valuation firm.
The term "fair market value," as used herein, is defined as the price at which
an asset would change hands between a willing buyer and a willing seller when
the former is not under any compulsion to buy and the latter is not under any
compulsion to sell, and both parties are able, as well as willing, to trade and
are well-informed about the asset and the market for that asset.
It is the understanding of Cronkite & Kissell, upon which it is relying, that
the Company' s Board of Directors and any other recipient of the appraisal will
consult with and rely solely upon their own legal counsel with respect to said
definitions. No representation is made herein, or directly or directly by the
appraisal, as to any legal matter or as to the sufficiency of said definitions
for any purpose other than setting forth the scope of Cronkite & Kissell's
appraisal hereunder.
In connection with this appraisal, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. met with certain members of the senior management of the Company to
discuss the operations, financial condition, future prospects and projected
operations and performance of the Company;
2. reviewed the Company's internally-prepared financial statements for
the eleven months ended August 25, 2000 and 2001 and the audited financial
statements for the five fiscal years ended September 30, 2000;
3. reviewed publicly available financial data for certain companies that
we deem comparable to the Company; and
4. conducted such other studies, analyses and inquiries as we have
deemed appropriate.
We have relied upon and assumed, without independent verification, that there
has been no material change in the assets, financial condition, business or
prospects of the Company since the date of the most recent financial statements
made available to us.
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility with respect to it. We have not made any physical inspection or
independent appraisal of any of the properties or assets of the Company.
All valuation methodologies that estimate the worth of an enterprise as a
going-concern are predicated on numerous assumptions pertaining to prospective
economic and operating conditions. Our opinion is necessarily based on
business, economic, market and other conditions as they exist and can be
evaluated by us as of the valuation date. Unanticipated events and
circumstances may occur and actual results may vary from those assumed. The
variations may be material.
Based upon the investigation, premises, provisos, and analyses outlined above,
it is our opinion that, as of August 31, 2001, the fair market value of the
common stock of Coeur d'Alenes on an aggregate minority interest basis is
reasonably stated in the amount of FOUR HUNDRED FORTY FOUR THOUSAND DOLLARS
($444,000) or approximately $.08 per share based on 5,340,804 common shares
issued and outstanding.
The accompanying exhibits more fully present the premises, analyses and logic
upon which the opinion is founded. The abbreviated format of the appraisal may
not conform to specific guidelines set forth in the Uniform Standards of
Professional Appraisal Practice (U.S.P.A.P.) pertaining only to the narrative
content of reports. Nonetheless, our work files contain all necessary analyses
and documentation to prepare a conforming narrative report, if so requested,
and our work product is otherwise in compliance with applicable standards of U.
S.P.A.P. Before relying upon the appraisal, the accompanying documentation and
exhibits should be read and analyzed in their entirety.
CRONKITE & KISSELL Cronkite & Kissell
Attachments
www.ckvalue.com
Tel: 3I0.284.3131 Fax: 3I0.362.8886
1888 Century Park East, Suite 1900 Los Angeles, California 90067
LIMITING FACTORS AND OTHER ASSUMPTIONS
In accordance with recognized professional ethics, the professional fee for
this service is not contingent upon Cronkite & Kissell's conclusion of value,
and neither Cronkite & Kissell nor any of its employees has a present or
intended financial interest in the Company.
The opinion of value expressed herein is valid only for the stated purpose and
date of the letter.
The conclusions are based upon the assumption that present management would
continue to maintain the character and integrity of the enterprise through any
sale, reorganization, or diminution of the owners' participation.
This letter and the conclusions arrived at herein are for the exclusive use of
the Company. Furthermore, the letter and conclusions are not intended by the
author, and should not be construed by the reader, to be investment advice in
any manner whatsoever. The conclusions reached herein represent the considered
opinion of Cronkite & Kissell based upon information furnished to it by the
Company and other sources. The extent to which the conclusions and valuations
arrived at herein should be relied upon, should be governed and weighted
accordingly.
No opinion, counsel or interpretation is intended in matters that require legal
or other appropriate professional advice. It is assumed that such opinions,
counsel or interpretations have been or will be obtained from the appropriate
professional sources.
CERTIFICATION
The undersigned hereby certifies that we have no present or contemplated future
interest in the property that is the subject of this opinion and have no
personal interest or bias with respect to the parties involved; neither our
employment nor our compensation in connection with this with this opinion is in
any way contingent upon the conclusions reached or values estimated and
reflects our personal, unbiased professional judgment; this appraisal has been
prepared in conformance with the "Uniform Standards of Professional Appraisal
Practice" except as noted herein; no person or persons other than those
acknowledged below contributed significant professional assistance to the
undersigned.
Review Appraiser:
Dave Kissell, ASA
Contributing Appraiser:
Helena Nam Reich, ASA
The Coeur d'Alenes Company
Index of Exhibits
Exhibit Number Exhibit Name
Exhibit 1 Valuation Summary
Exhibit 2 Historical Income Statements
Exhibit 2 (cont.) Historical Balance Sheets
Exhibit 2 (cont.) Historical Ratio Analysis
Exhibit 2 (cont.) Representative Earnings Analysis
Exhibit 3 Description of Guideline Companies
Exhibit 4 Financial Statements for Guideline Companies
Exhibit 4 (cont.) Risk Analysis
Exhibit 4 (cont.) Ratio Analysis
Exhibit 5 Market Approach - Guideline Public Companies Method Summary
Exhibit 5 (cont.) Graphs
Exhibit 6 Income Approach - Capitalization ofDebt-Free Cash Flow Method
Exhibit 7 Cash Free Debt Free Working Capital
Exhibit 8 Weighted Average Cost of Capital
Exhibit 9 Premium for Control / Discount for Lack of Control
Exhibit 10 Discount for Lack of Marketability
The Coeur d'Alenes Company
Exhibit 1
Valuation Summary
Indicated Weight Weighted
Value Factor Value
Market Approach P
Guideline Public Companies Method (a) $ 740,000 50,0% $ 370,000
Income Approach
Capitalization of Debt-Free
Cash Flow Method (b) $ 790,000 50.0% $ 395,000
Indicated Value of Equity, Controlling
Interest Basis (rounded) $ 765,000
Shares Outstanding 5,340,804
Indicated Value of Equity, Per Share,
Controlling Interest Basis $0.14
Less: Minority Interest Discount @ 17% (c) (0.02)
Indicated Value of Equity, Per Share,
Minority Marketable Basis $ 0.12
Less: Lack of Marketability Discount @ 30% (d) (0.04)
Concluded Value of Equity, Per Share,
Minority Non-Marketable Basis (rounded) $ 0.08
Note:
(a) See Exhibit 5.
(b) See Exhibit 6.
(c) Per empirical studies quantifying the discount for lack of control (see
Exhibit 9).
(d) Per empirical studies quantifying the discount for lack of marketability
(see Exhibit 10).
The Coeur d'Alenes Company
Exhibit 2
Historical Financial Statements *
Income Statements Dollars rounded to nearest thousand
12MM FYE FYE FYE FYE FYE
25-Aug-01 30-Sep-00 25-Sep-99 26-Sep-98 27-Sep-97 28-Sep-96
Net Sales
$12,804 100% $12,700 100% $12,248 100% $14,368 l00% $12,859 100 $12,499 100%
Cost Of Sales
9,252 72% 9.046 71% 8.958 73% 10,721 75% 9,498 74% 8,982 72%
Gross Profit on Sales
3,552 28% 3,654 29% 3,290 27% 3,647 29% 3,361 26% 3,517 28%
SG & A
3,079 24% 2,990 24% 2,696 22% 2,827 20% 2,813 22% 2,905 23%
Operating Income
473 4% 664 5% 594 5% 820 6% 548 4% 612 5%
Other Income (Expenses)
51 6% 66 1% 87 1% 62 0% 133 1% 168 1%
EBITDA
524 4% 730 5% 680 6% 882 6% 681 5% 780 6%
Depreciation & Amortization
300 2% 247 2% 230 2% 219 2% 200 2% 148 1%
EBIT
225 2% 482 4% 450 4% 663 5% 482 4% 632 5%
Interest Expense
268 2% 253 2% 248 2% 302 2% 301 2% 209 2%
Earnings Before Taxes
(44) -0% 230 2% 202 2% 362 3% 181 1% 423 3%
Provision For Taxes
(26) -0% 75 1% 60 1% 110 1% 55 0% 133 1%
Net Income
($18) -0% $155 1% $142 1% $251 2% $126 1% $290 2%
Notes:
+ Source of Data: Management of Company
The Coeur d'Alenes Company
Exhibit 2 (Cent.)
Historical Financial Statements * All dollars given in thousands
Balance Sheet
Assets
Cash
($7) -0% $116 2% $32 1% $39 1% $89 1% $67 1%
Accounts Receivable
1,177 17% 1,227 16% 1,019 15% 1,417 19% 1,241 17% 1,182 16%
Inventories
1,956 29% 2.681 34% 2,464 35% 2,553 34% 2,343 33% 2.789 38%
Deferred Income Tax
65 1 65 1% 65 1% 56 1% 46 1% 70 1%
Other Current Assets
24 0% 0 O% 21 0% 0 0% 24 0% 0 0%
Total Current Assets
3,215 47% 4,088 52% 3,602 51% 4,066 54% 3,743 52% 4,109 57%
Gross Property, Plant 8t Equip.
5,719 84% 5,631 71% 5,056 72% 4,896 65% 4,736 66% 5,333 74%
Accumulated Depreciation
(2,170) -32% (1.909)-24% (1.715) -25% (1,539)-21% (1,400)-20% (2,235)-31%
Net Property, Plant Bt Equip.
3,549 52% 3,722 47% 3,3416 48% 3,357 45% 3,335 47% 3.098 43%
Other Assets
42 1% 82 1% 68 1% 72 1% 73 1% 51 1%
Total Assets
S6,806 1OO% $1,892 100% S7,011 100% S7,495 100% S7,152 100% $7,258 100%
Liabilities and Shareholders' Equity
Current Portion Of Long-Term Debt
$269 4% $830 11% S660 9% $978 13% $937 13% $939 13%
Accounts Payable
783 12% 866 11% 540 8% 586 8% 614 9% 1,046 14%
Accrued Liabilities
212 3% 328 4% 297 4% 401 5% 308 4% 486 7%
Other Current Liabilities
0 0% 0 0% 0 0% 0 0% 0 0% 0 0%
Total Current Liabilities
1,264 19% 2,023 26% 1,497 21% 1,964 26% 1,858 26% 2,472 34%
Long-Term Debt
2,242 33% 2,437 31% 2,266 32% 2,456 33% 2,522 35% 2,159 30%
Other Long-Term Liabilities
184 3% 184 2% 156 2% 120 2% 65 1% 44 1%
Total Liabilities
3,691 54% 4,645 59% 3,920 56% 4,540 61% 4,445 62% 4,676 64%
Shareholders'Equity
Preferred Stock
0 0% 0 0% 0 0% 0 0% 0 0% 0 0%
Common Stock
1,175 17% 1,186 15% 1,186 17% 1,186 16% 1,186 17% 1,186 16%
Additional Paid In Capital
0 0% 0 0% 0 0% 0 0% 0 0% 0 0%
Retained Earnings
1,940 29% 2,072 26% 1,917 27% 1,775 24% 1,524 21% 1,399 19%
Treasury Stock
0 0% 11 0% 9 0% 6 0% 4 0% 4 0%
Total Shareholders' Equity
3,115 46% 3,247 41% 3,094 44% 2,955 39% 2,707 38% 2,581 36%
Total Liab. & Shareholders' Equity
$6,806 100% $7,892 100% $7,014 100% $7,495 100% $7,152 100% $7,258 100%
Notes:
* Source of Data: Management of Company
The Coeur d'Alenes Company
Exhibit 2 (Cont.)
Historical Ratio Analysis
25-Aug-01 30-Sep-00 25-Sep-99 26-Sep-98 27-Sep-97 28-Sep-96
Size:
Sales
$12,804,360 $12,699,921 $12,247,613 $14,368,061 $12,858,765 $12,498,993
EBITDA
$524,480 $729,519 $680,137 $882,368 $681,244 $779,689
EBIT
$224,782 $482,466 $450,136 $663,328 $481,505 $632,026
Total Assets
$6,805,628 $7,891,729 S7,010,980 $7,495,192 $7,151,955 $7,257,623
Liquidity
Debt-Free Current Ratio
3.23 3.42 4.30 4.12 4.06 2.68
Debt-Free Quick Ratio
1.18 1.12 1.26 1.48 1.44 0.82
Accounts Rec. Turnover (Days)
33.55 35.26 30.37 36.00 35.23 34.51
Accounts Payable Turnover (Days)
30.90 34.92 22.01 19.94 23.58 42.53
Inventory Turnover (Days)
77.17 108.16 100.41 86.93 90.03 113.32
Debt-Free Working Capital / Sales
17.3% 22.8% 22.6% 21.4% 21.9% 20.6%
Interest Coverage Ratio
0.84 1.91 1.82 2.20 1.60 3.02
Financial Leverage:
Total Liabilities / Total Assets
54.2% 58.9% 55.90% 60.6% 62.2% 64.4%
Asset Utilization:
Sales/ Receivables
10.88 10.35 12.02 10.14 10.36 10.58
Sales / Net Fixed Assets
3.61 3.41 3.67 4.28 3.86 4.04
Sales! Total Assets
1.88 1.61 1.75 1.92 1.80 1.72
Margins:
Gross Margin
27.7% 28.8% 26.9% 25.4% 26.1% 28.1%
EBITDA
4.1% 5.7% 5.6% 6.1% 5.3% 6.2%
EBTDA
2.0% 3.8% 3.5% 4.0% 3.0% 4.6%
EBIT
1.8% 3.8% 3.7% 4.6% 3.7% 5.1%
EBT
-0.3% 1.8% 1.7% 2.5% 1.4% 3.4%
Net Profit
-0.1% 1.2% 1.2% 1.7% 1.0% 2.3%
Return On Investment
EBITDA / (Book Equity + Debt)
9.3% 11.2% 11.3% 13.8% 11.0% 13.7%
EBIT / (Book Equity + Debt)
4.0% 7.4% 7.5% 10.4% 7.8% 11.1%
EBTDAI Book Equity
8.2% 14.7% 14.0% 19.6% 14.0% 22.1%
EBT / Book Equity
-1.4% 7.1% 6.5% 12.2% 6.7% 16.4%
EBITDAI Total Assets
7.7% 9.2% 9.7% 11.8% 9.5% 10.7%
EBITI Total Assets
3.3% 6.1% 6.4% 8.9% 6.7% 8.7%
Annual Growth:
Sales
0.8% 3.7% -14.8% 11.7% 2.9% NA
EBITDA
-28.1% 7.3% -22.9% 29.5% -12.6% NA
EBIT
-53.4% 7.2% -32.1% 37.8% -23.8% NA
The Coeur d'Alenes Company
Exhibit 2 (Cent.)
Representative Earnings Analysis
LTM Historical Fiscal Years Ended
25-Aug-01 30-Sep-00 25-Sep-99 26-Sep-98 27-Sep-97 28-Sep-96
Sales
$12,804,360 $12,699,921 $12,247,613 $14,368,061 $12,858,765 $12,498,993
EBITDA
524.480 729,519 680,137 882,368 681,244 779,689
Addback: Actual Officer's Compensation
Less: Market OfIicers's Compensation
Adjusted EBITDA
524.480 729,519 680,137 882,368 681,244 779,689
Adjusted EBITDA as a % of Sales
4.1% 5.7% 5.6% 6.1% 5.3% 6.2%
Less: Depreciation and Amortization Expense
(299,698) (247,053) (230,001) (219,040) (199,739) (147,663)
Adjusted EBIT
$224,782 1 $482,466 $450,136 $663,328 $481,505 $632,026
Adjusted EBIT as a % of Sales
1.8% 3.8% 3.7% 4.6% 3.7% 5.1%
Representative Adjusted EBIT Margin 4.0%
The Coeur d'Alenes Company
Exhibit 3
Description of Guideline Companies
A.M. Castle & Co.
A. M. Castle & Co. is a metals service center company. The company provides a
complete range of inventories as well as preprocessing services to a wide
variety of customers. The company's business activities fall into one
identifiable core business segment as approximately 91% of all revenues are
derived from the distribution of its specialty metals products. These products
are purchased, warehoused, processed and sold using essentially the same
systems, facilities, sales force and distribution network. Since 1998, sales
mix of the company's core business came from Carbon and Stainless and Non-
Ferrous Metals. These metals are inventoried in many forms, including round,
hexagon, square and flat bars; plates; tubing; shapes, and sheet and coil.
Friedman Industries. Incorporated
Friedman Industries, Incorporated, is in the steel processing and distribution
business. The company has two product groups: coil processing and tubular
products. For coil processing, the company purchases domestic and foreign hot-
rolled steel coils, processes the coils into steel sheet and plate and sells
these products on a wholesale, rapid-delivery basis in competition with steel
mills, importers and steel service centers. The company also processes
customer-owned coils on a fee basis. Through its Texas Tubular Products
operation in Lone Star, Texas, the company purchases, processes, manufactures
and markets tubular products.
Metals USG Inc.
Metals USA, Inc. is engaged in the value-added proceSsing and distribution of
steel, aluminum and specialty metals, as well as manufacturing metal
components. During 1998, the company organized into four product groups: Plates
and Shapes, Flat Rolled, Specialty Metals and Building Products. In early 2001,
the company announced a change in the organization to improve operational
efficiencies and reduce administrative costs, which resulted in a reduction in
the number of product groups to three. The Flat Rolled Group will expand to
include all flat rolled processing operations of specialty metals and carbon
steel in a single business unit. Similarly, the non-flat rolled operations of
the former Specialty Metals Group will be included in an expanded Plates and
Shapes Group.
Olympic Steel, Inc.
Olympic Steel, Inc. is a North American steel service center specializing in
processing and distribution of large volumes of carbon, coated carbon and
stainless steel, flat-rolled sheet, coil and plate, and tubular steel products
from 13 facilities in eight Midwestern and eastern states. The company also
participates in two joint ventures in Michigan. Olympic
The Coeur d'Alenes Company
Exhibit 3 (Cent.)
Steel operates as an intermediary between steel producers and manufacturers
that require processed steel for their operations. The company purchases flat-
rolled steel, typically from steel producers, and responds to its customers,
needs by processing steel to customer specifications and by providing critical
inventory and just-in-time delivery services. Services include both
traditional service center processes of cutting-to-length,
slitting, shearing and roll forming and higher value-added processes of
blanking, tempering, plate burning, laser welding and precision machining of
steel parts.
Reliance Steel & Aluminum Co
Reliance Steel C Aluminum Co is one of the largest metals service center
companies in the United States. The company has a network of 24 divisions and
15 subsidiaries operating metals service centers, with 80 processing and
distribution facilities in 23 states, France and Korea. The company provides
value added metals processing services and distributes a full line of more than
80,000 metal products, including alloy, aluminum, brass, copper, carbon,
stainless and specialty steel products to more than 70,000
customers in a broad range of industries. Some of these metals service centers
provide processing services for specialty metals only. In addition, one of the
company's subsidiaries has two international locations, with a subsidiary
operating a distribution center in Fuveau, France and a 66.5% ownership
interest in a joint venture company operating a manufacturing facility in
Seoul, Korea. The company also has a 50% ownership interest in American Steel
Ryerson Tull, Inc.
Ryerson Tull, Inc. is the sole stockholder of Joseph T. Ryerson & Son, Inc. and
J. M. Tull Metals Company, Inc. The company has a single business segment,
which is comprised primarily of Ryerson and Tull, leading steel service,
distribution and materials processing organizations. The company also owns
certain joint venture interests, which are not material, in certain foreign
operations. The company is a metals service center in the
United States based on sales revenue. It has a current U.S. market share of
approximately 11%. The company distributes and processes metals and other
materials throughout the continental United States, and is among the largest
purchasers of steel in the United States.
Steel Technolonies, Inc.
Steel Technologies, Inc. is an intermediate steel processor engaged in the
business of processing flat-rolled steel to specified close tolerances in
response to orders from industrial customers that require steel of precise
thickness, width, temper, finish and shape for their manufacturing purposes.
The processed steel is distributed from facilities located in Indiana,
Kentucky, Maryland, Michigan, Missouri, North Carolina, Ohio and South Carolina
in the United States and four facilities in Mexico. The company's principal
processed products are cold-rolled strip and sheet, cold-rolled one-pass strip,
high carbon and alloy strip and sheet, hot-rolled strip and sheet, high
strength low alloy strip and sheet, hot-rolled pickle and oil and coated strip
and sheet, pickling of hot-rolled black coils, blanking and cut-to-length
processing of coil steel, and fabrication and welding of steel sheets and
plates.
Worthington Industries. Inc.
Worthington Industries, Inc. is a diversified steel processor that focuses on
steel processing and metals-related businesses. For the fiscal year ended May
31, 2001, Worthington's operations were conducted through three business
segments: Processed Steel Products, Metal Framing and Pressure Cylinders. The
Processed Steel Products segment includes The Worthington Steel Company and The
Gerstenslager Company. The Metal Framing segment is made up of Dietrich
Industries, Inc. and the Pressure Cylinders segment consists of Worthington
Cylinder Corporation. In addition, the company holds an equity position in
eight joint ventures.
Cronkire & Kissell
Guideline Public Companies - Income Statement
CASTLE (A M)& CO cas
cas FISCAL YEAR END
INCOME STATEMENT 12MM ($ MILLIONS)
Jun0l % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Sales
$699.207 100 $744.509 100 $707.465 100 $792.846 100 $754.865 100 $672.617 100
Cost of Goods Sold
491.805 70 522.847 70 483.126 68 559.084 71 540.286 72 481.451 72
Gross Profit
207.402 30 221.662 30 224.339 32 233.762 30 214.579 28 191.166 28
SGBtA
190.03 27 195.478 26 189.132 26 185.109 23 164.659 22 140.144 21
Operating Income Before Depr. & Amort.
17.399 3 26.184 4 35.207 5 48.653 6 49.920 7 51.022 8
Depreciation & Amortization
9.577 1 9.769 1 9.866 1 8.486 1 6.206 1 5.008 1
Interest Expense
10.666 2 10.378 1 10.743 2 9.538 1 4.383 1 3.178 1
Operating Pretax Income
(2.844) 0 6.037 1 14.598 2 30.629 4 39.331 5 42.836 6
Nonoperating Income/Expense
0.000 0 0.100 0 0.100 0 0.100 0 0.200 0 0.300 0
Special Items
(8.849) -1 (8.532) -1 0.000 0 0.000 0 0.000 0 0.000 0
Pretax Income
(11.693) -2 (2.395) 0 14.698 2 30.729 4 39.531 5 43.136 6
Income Taxes
(4.346) -1 (0.720) 0 5.984 1 12.207 2 15.686 2 17.032 3
Minority Interest
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Income Before Extra and Disc Op
(7.347) -1 (1.675) 0 8.714 1 18.522 2 23.845 3 26.104 4
Extraordinary ltems
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Discontinued Operations
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Net Income
($7.347) -l ($1.675) 0 $8.714 1 $18.522 2 $23.845 3 $26.104 4
MONTH END INFORMATION
Aug0l Dec00 Dec99 Dec98 Dec97 Dec96
Price Per Share
$11.59 $10.00 $11.75 $15.00 $22.88 $19.25
Common Shares Outstanding
14.16 14.16 14.05 14.04 14.04 14.01
Common Stock Capitalization
$164.126 $141.610 S165.064 $210.660 $321.188 $269.673
Outstanding Debt
$169.224 $164.560 $126.540 $176.078 $93.423 $43.416
Outstanding Preferred Stock
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000
Total Capitalization
$333.350 $306.170 $291.604 $386.738 $414.611 $313.089
Beta
0.22 0.40 0.62 0.43 0.54 0.40
Debt %
50.8% 53.7% 43.4% 45.5% 22.5% 13.9%
* All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Balance Sheet
CASTLE (A M) & CO cas FISCAL YEAR END
BALANCE SHEET * ($ MILLIONS)
Jun01 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Cash & Equivalents
$2.603 1 $2.079 1 $2.578 0.6 $2.954 0.6 $2.775 0.8 $1.805 0.7
Net Receivables
88.113 22 95.752 23 83.352 20.2 85.688 18.6 88.478 24.1 68.791 26.3
Inventories
158.451 39 163.206 40 169.618 41.0 217.152 47.2 152.028 41.5 93.315 35.7
Other Current Assets
1.843 1 1.426 0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0
Total Current Assets
251.010 62 262.463 63 255.548 61.8 305.794 66.5 243.281 66.4 163.911 62.7
Gross Plant Property t Equip
NA 0 180.754 43 187.809 45.4 177.780 38.7 153.640 41.9 128.857 49.3
Accumulated Depreciation
NA 0 89.646 21 90.732 22.0 83.158 18.1 76.230 20.8 66.140 25.3
Net Plant, Property & Equip
90.966 22 91.108 22 97.077 23.5 94.622 20.6 77.410 21.1 62.717 24.0
Other Assets
66.221 16 65.280 16 60.716 14.7 59.547 12.9 45.684 12.5 34.742 13.3
TOTAL ASSETS
408.197 100 418.851 100 413.341 100 459.963 100 366.375 100 261.370 100
Debt In Current Liabilities
$3.425 1 $3.425 1 $3.915 0.9 $3.765 0.8 $2.688 0.7 $2.482 0.9
Accounts Payable
72.678 18 84.734 20 102.976 24.9 98.835 21.5 98.813 27.0 63.860 24.4
Other Current Liabilities
18.682 5 18.984 5 22.106 5.3 21.981 4.8 22.010 6.0 17.560 6.7
Total Current Liabilities
94.785 23 107.143 26 128.997 31.2 124.581 27.1 123.511 33.7 83.902 32.1
Long Term Debt
165.799 41 161.135 39 122.625 29.7 172.313 37.5 90.735 24.8 40.934 15.7
Other Liabilities
21.891 5 21.332 5 19.908 4.8 19.057 4.1 15.420 4.2 14.608 5.6
TOTAL LIABILITIES
282.475 69 289.610 69 271.530 65.7 315.951 68.7 229.666 62.7 139.444 53.4
Preferred Stock
0.000 0 0.000 0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0
Common Stock
NA 0 27.625 7 27.625 6.7 27.465 6.0 27.293 7.4 26.681 10.2
Capital Surplus
NA 0 0.000 0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0
Retained Earnings
NA 0 105.775 25 119.720 29.0 121.948 26.5 114.794 31.3 100.381 38.4
Less: Treasury Stock
NA 0 4.159 1 5.534 1.3 5.401 1.2 5.378 1.5 5.136 2.0
TOTAL EQUITY
125.722 31 129.241 31 141.811 34.3 144.012 31.3 136.709 37.3 121.926 46.6
TOTAL LIABILITIES & EQUITY
408.197 100 418.851 100 413.341 100 459.963 100 366.375 100 261.370 100
+ All data obtained from Standard & Poor's Canpurtat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Income Statement FRIEDMAN INDUSTRIES
frd FISCAL YEAR END
INCOME STATEMENT * 12MM ($ MILLIONS)
Jun0l % Mar0l % Mar00 % Mar99 % Mar98 % Mar97 %
Sales
116.007 100 120.396 100 120.268 100 124.720 100 148.841 100 119.921 100
Cost of Goods Sold
106.177 91.5 109.808 91.2 110.560 91.9 113.692 91.2 135.315 90.9 109.156 91
Gross Profit
9.830 8.5 10.588 8.8 9.708 8.1 11.028 8.8 13.526 9.1 10.765 9
SG&A
4.519 3.9 4.686 3.9 4.479 3.7 4.695 3.8 5.193 3.5 4.196 4
Operating Income Before Depr. t Amort.
5.311 4.6 5.902 4.9 5.229 4.3 6.333 5.1 8.333 5.6 6.569 6
Depreciation & Amortization
1.011 0.9 1.048 0.9 1.043 0.9 0.672 0.5 0.666 0.4 0.646 1
Interest Expense
0.568 0.5 0.624 0.5 0.546 0.5 0.714 0.6 0.514 0.3 0.509 0
Operating Pretax Income
3.732 3.2 4.230 3.5 3.640 3.0 4.947 4.0 7.153 4.8 5.414 5
Non-operating Income/Expense
0.1S1 0.1 0.206 O.2 0.158 0.1 0.418 0.3 0.135 0.1 0.086 0
Special Items
0.000 0.0 0.000 0.0 0.000 0.0 0.000 O.0 O.000 0.0 0.000 0
Pretax Income
3.883 3.3 4.436 3.7 3.798 3.2 5.365 4.3 7.288 4.9 5.500 5
Income Taxes
1.321 1.1 1.508 1.3 1.291 1.1 1.824 1.5 2.478 1.7 1.870 2
Minority Interest
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0
Income Before Extra and Disc Op
2.562 2.2 2.928 2.4 2.507 2.1 3.541 2.8 4.810 3.Z 3.630 3
Extraordinary Items
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0
Discontinued Operations
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0
Net Income
$2.562 2.2 $2.928 2.4 $2.507 2.1 $3.541 2.8 $4.810 3.2 $3.630 3
MONTH END INFORMATION:
Aug01 MarOl MarOO Mar99 Mar98 Mar97
Price Per Share
$2.80 $2.76 $3.81 $3.51 $6.10 $4.73
Common Shares Outstanding
7.57 7.57 7.55 7.53 7.52 7.49
Common Stock Capitalization
$21.193 $20.890 $28.752 $26.458 $45.847 $35.431
outstanding Debt
$5.400 $5.600 $8.400 $7.200 $7.167 $5.400
outstanding Preferred Stock
$0.000 $0.000 $0.000 $0.000 $0.000 S0.00
Total Capitalization
$26.593 $26.490 $37.152 $33.658 $53.014 $40.831
Beta
0.98 1.00 0.98 1.07 0.57 0.52
Debt%
20.3% 21.1% 22.6% 21.4% 13.5% 13.2%
All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Balance Sheet
FRIEDMAN INDUSTRIES frd FISCAL YEAR END
BALANCE SHEET * ($ MILLIONS)
Jun0l Mar0l Mar00 Mar99 Mar98 Mar97
Cash & Equivalents
$0.321 0.7 $0.669 1.4 $0.444 1.0 $3.799 9.3 $1.362 3.0 $0.168 0
Net Receivables
9.820 22.7 10.585 22.0 13.533 30.0 8.710 21.2 13.205 28.7 11.903 31
Inventories
25.352 58.6 28.817 60.0 22.911 50.8 19.906 48.5 24.587 53.4 21.204 56
other Current Assets
0.220 0.5 0.160 0.3 0.057 0.1 0.119 0.3 0.194 0.4 0.082 0
Total Current Assets
35.713 82.5 40.231 83.8 36.945 81.9 32.534 79.3 39.348 85.5 33.357 88
Gross Plant, Property & Equip
20.041 46.3 20.028 41.7 19.644 43.5 19.418 47.3 17.080 37.1 14.618 38
Accumulated Depreciation
13.425 31.0 13.201 27.5 12.170 27.0 11.127 27.1 10.469 22.7 9.909 26
Net Plant, Property & Equip
6.616 15.3 6.821 14.2 7.474 16.6 8.291 20.2 6.611 14.4 4.709 12
other Assets
0.961 2.2 0.953 2.0 0,688 1.5 0.198 0.5 0.080 0.2 0.051 0
TOTAL ASSETS
$43.290 100. $48.011 100. $45.107 100. $41.023 100 $46.039 100 $38.117 100
Debt In Current Liabilities
$0.800 1.8 $0.800 1.7 $0.800 1.8 $0.800 2.0 $0.800 1.7 $0.800 2
Accounts Payable
5.956 13.8 10.445 21.8 6.447 14.3 4.839 11.0 10.925 23.7 8.112 21
other Current Liabilities
0.849 2.0 1.027 2.1 1.130 2.5 1.119 2.7 1.712 3.7 1.261 3
Total Current Liabilities
7.605 17.6 12.272 25.6 8.377 18.6 6.758 16.5 13.437 29.2 10.173 27
Long Term Debt
4.600 10.6 4.800 10.0 7.600 16.8 6.400 15.6 6.367 13.8 4.600 12
Other Liabilities
0,570 1.3 0.561 1.2 0.507 1.1 0.442 1.1 0.502 1.1 0.562 2
TOTAL LIABILITIES
$12.775 30 $17.633 36.7 $16.484 36.5 $13.600 33.2 $20.306 44.1 $15.335 40
Preferred Stock
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0
Common Stock
7.569 17.5 7.569 15.8 7.188 15.9 6.828 16.6 6.492 14.1 6.162 16
Capital Surplus
27.703 64.0 27.704 57.7 26.879 59.6 25.725 62.7 23.680 51.4 22.377 59
Retained Earnings
-4.757-11.0 -4.895-10.2 -5.444-12.1 -5.130-12.5 -4.439 -9.6 -5.757 -15
Less: Treasury Stock
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0
TOTAL EQUITY
$30.515 70.5 $30.378 63.3 $28.623 63.5 $27.423 66.8 $25.733 55.9 $22.782 60
TOTAL LIABILITIES 8r EQUITY
$43.290 100 $48.011 100 $45.107 100 $41.023 100 $46.039 100 $38.117 100
Al data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Income Statement
METALS USA INC mui
mui FISCAL YEAR END
INCOME STATEMENT * 12MM ($ MILLIONS)
Jun0 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Sales, net
1,800.400 100 2,021.600 100 1,745.400 100 1,498.800 100 507.800 100 NA NA
Cost of Goods Sold
1,754.300 97 1,924.400 95 1,608.200 92 1,383.000 92 476.600 94 NA NA
Gross Profit
46.100 2.6 97.200 4.8 137.200 7.9 115.800 7.7 31.200 6.1 NA NA
SG&A
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 NA NA
Operating Income Before Depr. & Amort.
46.100 2.6 97.200 4.8 137.200 7.9 115.800 7.7 31.200 6.1 NA NA
Depreciation & Amortization
27.100 1.5 25.800 1.3 21.200 1.2 16.400 1.1 5.100 1.0 NA NA
Interest Expense
53.800 3.0 0.500 2.5 40.000 2.3 30.900 2.1 5.000 1.0 NA NA
Operating Pretax Income
-34.800 -1.9 20.900 1.0 76.000 4.4 68.500 4.6 21.100 4.2 NA NA
Non-operating Income (Expense)
0.400 0.0 1.600 0.1 0.700 0.0 1.600 0.1 0.100 0.0 NA NA
Special Items
0.000 0.0 0.000 0.0 -9.400 -0.5 -2.600 -0.2 -6.000 -1.2 NA NA
Pretax Income
-34.400 -1.9 22.500 1.1 67.300 3.9 67.500 4.5 15.200 3.0 NA NA
Income Taxes
-10.200 -0.6 10.800 0.5 27.500 1.6 27.500 1.8 9.200 1.8 NA NA
Minority Interest
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 NA NA
Income Before Extra and DisC OP
-24.200 -1.3 11.700 0.6 39.800 2.3 40.000 2.7 6.000 1.2 NA NA
Extraordinary Items
-1.800 -0.1 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 NA NA
Discontinued Operations
0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 0.000 0.0 NA NA
Net income
-$26.000 -1.4 $11.700 0.6 $39.800 2.3 $40.000 2.7 $6.000 1.2 NA NA
MONTH END INFORMATION:
Aug0l Dec00 Dec99 Dec98 Dec97 Dec96
Price Per Share
$2.O5 $2.81 $8.50 $9.75 $15.25 NA
Common Shares Outstanding
36.51 36.51 38.06 38.16 31.46 3.77
Common Stock Capitalization
$74.845 $102.684 $323.468 $372.021 $479.795 NA
Outstanding Debt
$556.400 $493.000 5440.800 $506.600 $173.000 NA
Outstanding Preferred Stock
$0.000 $0.000 $0.000 0.000 $0.000 NA
Total Capitalization
$631.245 $595.684 $764.268 $878.621 $652.796 NA
Beta
0.97 0.88 0.77 NA NA NA
Debt %
88.1% 82.8% 57.7% 57.7% 26.5% NA
All data obtained from Standard dr Poor's Compustat database unless othenaise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Balance Sheet
METALS USA INC mui FISCAL YEAR END
BALANCE SHEET ($ MILLIONS)
Jun0l % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Cash & Equivalents
$11.300 1.0 $3.800 0.3 $4.700 0.4 $9.300 0.9 $7.300 1.6 $0.005 6
Net Receivables
225.400 19.7 120.800 10.9 128.900 12.3 189.800 18.6 91.400 19.6 0.000 0
Inventories
328.400 28.7 402.200 36.4 350.500 33.4 343.700 33.7 153.800 32.9 0.000 0
Other Current Assets
22.300 1.9 20.600 1.9 21.800 2.1 16.200 1.6 5.400 l.2 0.000 0
Total Current Assets
587.400 51.4 547.400 49.5 505.900 48.2 559.000 54.8 257.900 55.2 0.005 6
Gross Plant, Property & Equip
NA 0.0 306.800 27.8 265,500 25.3 204.200 20.0 102.100 21.9 0.000 0
less: Accumulated Depreciation
NA 0.0 57.500 5.2 42.500 4.1 31.000 3.0 19.600 4.2 0.000 0
Net Plant, Property L Equip
247.700 21.7 249.300 22.6 223.000 21.3 173.200 17.0 82.500 17.7 0.000 0
Other Assets
308.500 27.0 308.100 27.9 320.400 30.5 287.300 28.2 126.600 27.1 0.083 94
TOTAL ASSETS
1.143.60 100 1,104.80 100 $1.049.30 100 1,019.50 100 467.00 100 0.088 100
Debt In Current Liabilities
$3.000 0.3 $3.100 0.3 $6.100 0.6 $4.000 0.4 $5.900 1.3 $0.000 0
Accounts Payable
156.000 13.6 157.900 14.3 145.500 13.9 107.500 10.5 50.900 10.9 0.000 0
Other Current Liabilities
35.800 3.1 41.600 3.8 48.900 4.7 40.100 3.9 14.500 3.1 0.000 0
Total Current Liabilities
194.800 17.0 202.600 18.3 200.500 19.1 151.600 14.9 71.300 15.3 0.000 0
Long Term Debt
553.400 48.4 489.900 44.3 434.700 41.4 502.600 49.3 167.100 35.8 0.000 0
Other Liabilities
39.100 3.4 37.200 3.4 34.700 3.3 23.700 2.3 11.500 2.5 0.049 56
TOTAL LIABILITIES
787.300 68.8 729.700 66.0 669.900 63.8 677.900 66.5 249.900 53.5 0.049 56
Preferred Stock
0.000 0.0 0.000 0.0 0.000 0.0 0.000 O.O 0.000 0.0 0.000 0
Common Stock
0.400 0.0 0.400 0.0 0.400 O.O 0.400 0.0 0.300 0.1 0.038 43
Additional Paid-In Capital
247.700 21.7 247.700 22.4 263.700 25.1 261.200 25.6 181.700 38.9 3.637 4133
Retained Earnings
108.200 9.5 127.000 11.5 119.800 11.4 80.000 7.8 35.100 7.5 -3.636-4132
less: Treasury Stock
0.000 0.0 0.000 0.0 4.500 0.4 0.000 0.0 0.000 0.0 0.000 0
TOTAL EQUITY
356.300 31.2 375.100 34.0 379.400 36.2 341.600 33.5 217.100 46.5 0.039 44
TOTAL LIABILITIES & EQUITY
1,143.60 100 1,104.80 100 11,049.30 100 1,019.50 100 467.00 100 0.088 100
All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company Exhibit 4
Guideline Public Companies - Income Statement
OLYMPIC STEEL INC FISCAL YEAR END
INCOME STATEMENT* 12MM ($ MILLIONS)
Jun01 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Sales, net
$462.537 100 $520.359 100 $524.794 100 $576.189 100 $608.076 100 $560.062 100
Cost of Goods Sold
364.424 79 411.624 79 401.028 76 455.544 79 483.071 79 436.553 78
Gross Profit
98.113 21 108.735 20 123.766 24 120.645 21 125.005 21 123.509 22
SG&A
95.016 21 99.847 19 102.312 20 98.723 17 96.895 15 88.799 16
Operating Income Before Depr. & Amort
3.097 1 8.888 2 21.454 4 21.922 4 28.110 5 34.710 6
Depreciation & Amortization
9.316 2 9.222 2 7.852 2 6.973 1 6.003 1 4.328 1
Interest Expense
5.196 1 6.258 1 4.464 1 4.938 1 4.328 1 4.393 1
Operating Pretax Income
(11.415) -3 (6.592) -1 9.138 2 10.011 2 17.779 3 25.989 5
Nonoperating Income (Expense)
(4.250) -1 (5.149) -1 (4.002) 1 (3.013) 1 (3.624) 1 (3.301) -1
Special Items
(1.178) -0 (1.178) -0 0.000 0 (19.488) 3 0.000 0 0.000 0
Pretax Income
(16.843) 4 (12.919) -3 5.136 1 (12.490) -2 14.155 2 22.688 4
Income Taxes
(5.695) -1 (4.198) -1 1.977 0 (4.059) -1 5.308 1 8.569 2
Minority Interest
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Income Before Extra and Disc Op
(11.148) -2 (8.721) -2 3.159 1 (8.431) -2 8.847 2 14.119 3
Extraordinary Items
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Discontinued Operations
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Net Income
($11.148) -2 ($8.721) -2 $3.159 1 ($8.431) -2 $8.847 2 $14.119 3
MONTH END INFORMATION:
Aug01 Dec00 Dec99 Dec98 Dec97 Dec96
Price Per Share
$3.98 $1.97 $4.75 $5.00 $15.56 $25.38
Common Shares Outstanding
9.63 9.33 10.09 10.69 10.69 10.69
Common Stock Capitalization
$38.331 $18.370 $47.932 $53.460 $166.389 $271.310
Outstanding Debt
$107.539 $68.009 $93.426 $76.520 $79.924 $64.582
Outstanding Preferred Stock
$0.0000 $0.000 $0.000 $0.000 $0.000 $0.000
Total Capitalization
$145.870 $86.379 $141.358 $129.980 $246.313 $335.892
Beta
0.24 0.30 0.51 0.75 0.08 0.71
Debt %
73.7% 78.7% 66.1% 58.9% 32.4% 19.2%
* All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company Exhibit 4
Guideline Public Companies - Balance Sheet
OLYMPIC STEEL INC FISCAL YEAR END
Balance SHEET * ($ MILLIONS)
Jun01 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Cash & Equivalents
$2.616 1 $1.449 1 $1.433 1 $1.825 1 $1.748 1 $2.018 1
Net Receivables
51.689 19 5.260 2 9.802 4 3.096 1 6.417 2 9.483 4
Inventories
80.869 30 89.404 40 119.585 45 121.407 47 132.230 50 138.238 57
Other Current Assets
8.658 3 7.724 3 6.693 3 5.752 2 1.780 1 2.516 1
Total Current Assets
143.832 54 103.837 46 137.513 51 132.080 52 142.175 53 152.255 63
Gross Plant,Property & Equip
160.553 60 158.843 70 156.849 59 144.762 57 124.292 47 93.954 39
less: Accumulated Depreciation
45.773 17 41.270 18 32.645 12 25.450 10 20.301 8 14.954 6
Net Plant,Property & Equip
114.780 43 117.573 52 124.204 47 119.312 47 103.991 39 79.000 33
Other Assets
7.310 3 3.519 2 5.290 2 4.716 2 19.368 7 9.875 4
TOTAL ASSETS
$265.922 100 $224.929 100 $267.007 100 $256.108 100 $265.534 100 $241.130 100
Debt In Current Liabilities
$3.765 1 $6.061 2 $6.061 2 $4.888 2 $3.722 1 $1.869 1
Accounts Payable
20.014 7 18.398 8 20.671 8 28.911 11 24.266 9 25.267 11
Other Current Liabilities
8.584 3 8.213 4 9.516 4 9.426 4 9.138 3 9.131 4
Total Current Liabilities
32.363 12 32.672 14 36.248 14 43.225 17 37.126 14 36.267 15
Long Term Debt
103.774 39 61.948 28 87.365 33 71.632 28 76.202 29 62.713 26
Other Liabilities
5.652 2 5.389 2 6.532 2 3.508 1 6.032 2 4.823 2
TOTAL LIABILITIES
$141.789 53 $100.009 44 $170.145 49 $118.365 46 $119.360 45 $103.803 43
Preferred Stock
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Common Stock
99.733 37 99.058 44 102.237 38 106.319 41 106.319 40 106.319 44
Additional Paid-In Capital
0.000 0 0.000 0 0.000 0. 0.000 0 0.000 0 0.000 0
Retained Earnings
24.400 9 25.862 11 34.583 13 31.424 12 39.855 150 31.008 12
Less: Treasury Stock
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
TOTAL EQUITY
$124.133 46 $124.920 56 $136.820 51 $137.743 53 %146.174 55 137.327 57
TOTAL LIABILITIES & EQUITY
$ 265.922 100 $224.929 100 $266.965 100 $256.108 100 $265.534 100 $241.130 100
* All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company Exhibit 4
Guideline Public Companies - Income Statement
RELIANCE STEEL & ALUMINUM CO FISCAL YEAR END
INCOME STATEMENT* 12MM
(% MILLIONS)
Jun0l % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Sales,net
1,699.807 100 1,726.665 100 1,511.065 100 1,352.807 100 961.518 100 653.975 100
Cost of Goods Sold
1,231.154 72 1,256.997 73 1,097.437 73 1,024.214 76 737.500 77 492.199 75
Gross Profit
468.654 28 469.668 27 413.628 27 328.593 24 224.018 23 161.776 25
SG&A
326.436 19 318.638 19 278.552 18 220.205 16 151.415 16 109.625 17
Operating Income Before Depr. & Amort.
142.218 8 151.030 9 135.076 9 108.388 8 72.603 85 52.151 8
Depreciation & Amortization
29.713 2 28.092 2 25.598 2 19.446 1 13.165 1 8.464 1
Interest Expense
29.283 2 26.068 2 23.299 2 17.585 1 10.861 1 3.940 6
Operating Pretax Income
83.222 5 96.870 6 86.179 6 71.357 5 48.577 5 39.747 6
Nonoperating Income (Expense)
4.277 0 5.717 0 7.890 1 8.915 1 8.401 1 8.285 1
Special Items
0.000 0 0.000 0 2.341 0 0.000 0 1.008 0 1.519 0
Pretax Income
87.499 5 102.587 6 96.410 6 80.272 6 57.986 6 49.551 8
IncomeTaxes
33.837 2 40.268 2 38.800 3 32.597 2 23.810 3 19.761 3
Minority Interest
0.000 O 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Income Before Extra and Disc Op
53.662 3 62.319 4 57.610 4 47.675 4 34.176 4 29.790 5
Extraordinary Items
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Discontinued Operations
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Net Income
$53.662 3 $62.319 4 $57.610 4 $47.675 4 $34.176 4 $29.790 5
MONTH END INFORMATION:
Aug0l Dec00 Dec99 Dec98 Dec97 Dec96
Price Per Share
$27.00 $24.75 $23.44 $18.42 $19.83 $15.56
Common Shares Outstanding
25.23 25.13 27.80 27.68 28.25 23.23
Common Stock Capitalization
$681.183 $622.017 $651.516 $509.681 $560.222 $361.410
Outstanding Debt
$460.450 $421.975 $318.200 $343.350 $143.450 $109.905
Outstanding Preferred Stock
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000
Total Capitalization
1,141.633 1,043.992 $969.716 $853.031 $703.672 $ 471.315
Beta
0.63 0.51 0.48 0.40 0.39 1.12
Debt %
40.3% 40.4% 32.8% 40.3% 20.4% 23.3%
All data obtained from Standard Be Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company Exhibit 4
Guideline Public Companies - Balance Sheet RELIANCE STEEL & ALUMINUM CO
FISCAL YEAR END BALANCE SHEET
($ MILLIONS)
Jun01 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Cash & Equivalents
$12.585 1 $3.107 0 99.862 1 $6.496 1 934.047 6 $0.815 0
Net Receivables
197.630 19 193.106 19 167.674 19 156.150 19 117.733 20 73.092 19
Inventories
288.819 28 271.549 27 232.911 26 240.697 29 158.736 27 122.778 31
Other Current Assets
21.196 2 23.634 2 18.471 2 16.970 2 11.558 2 14.215 4
Total Current Assets
520.230 50 491.396 49 428.918 48 420.313 50 322.074 55 210.900 54
Gross Plant Property & Equip
380.616 36 357.867 36 323.138 36 294.094 35 225.836 39 190.292 49
less: Accumulated Depreciation
127.868 12 112.516 11 95.756 11 81.013 10 64.872 11 56.678 15
Net Plant, Property & Equipment
252.748 24 245.351 25 227.382 25 213.081 25 160.964 27 133.614 34
Other Assets
278.759 27 260.496 26 243.705 27 208.001 25 100.828 17 46.662 12
TOTAL ASSETS
1,051.737 100 997.243 100 900.005 100 841.395 100 583.866 100 391.176 100
Debt In Current Liabilities
$10.250 1 $0.150 0 $0.150 0 $0.100 0 $0.100 0 $2.455 1
Accounts Payable
82.371 8 82.616 8 103.968 11 91.615 11 82.947 14 50.274 13
Other Current Liabilities
55.146 5 60.971 6 51.760 6 37.428 4 25.775 4 21.406 6
Total Current Liabilities
147.767 14 143.737 14 155.878 17 129.143 15 108.822 19 74.135 19
Long Term Debt
450.200 428 421.825 42 318.050 35 343.250 41 143.350 25 107.450 28
Other Liabilities
28.642 2 28.642 3 25.749 3 23.200 3 18.530 3 16.949 4
TOTAL LIABILITIES
$626.609 60 $594.204 60 $499.677 56 $495.593 59 $270.702 46 $198.534 50
Preferred Stock
0.000 0 0.000 0 0.000 0 0.000 O 0.000 0 0.000 0
Common Stock
140.783 13 139.231 14 153.120 17 151.903 18 154.761 26 61.131 15
Additional Paid-In Capital
0.000 0 0.000 O 0.000 0 0.000 0 0.000 O 0.000 0
Retained Earnings
284.345 27 263.808 26 247.208 27 193.899 23 158.403 27 131.511 34
less: Treasury Stock
0.000 0 0.000 0 0.000 0 0.000 O 0.000 0 0.000 0
TOTAL EQUITY
$425.128 40 $403.039 40 $400.328 44 $345.802 41 $313.164 53 $192.642 49
TOTAL LIABILITIES & EQUITY
1,051.737 100 997.243 100 900.005 100 841.395 100 583.866 100 391.176 100
All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company Exhibit 4
Guideline Public Compananies - Income Statement
RYERSON TULL INC FISCAL YEAR END
INCOME STATEMENT* 12MM
($MILLIONS)
JunO1 % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Sales, net
2,535.998 100 2,862.400 100 2,763.5 100 2,782.7 100 5,046.8 100 4,584.1 100
Cost of Goods Sold
2,026.650 80 2,292.700 80 2,131.6 77 2,156.9 78 4,401.8 87 4,036.8 88
Gross Profit
509.348 20 569.700 20 631.9 23 625.8 23 645.0 13 547.3 12
SG&A
474.429 18 502.400 17 500.9 18 502.5 18 233.7 5 212.5 5
Operating Income Before Depr. & Amort.
34.919 1 67.300 2 131.0 5 123.3 4 411.3 8 334.8 7
Depreciation & Amonization
31.298 1 31.800 1 32.1 1 33.2 1 157.9 3 147.0 3
Interest Expense
29.078 1 29.700 1 24.2 1 33.6 1 64.3 1 79.6 2
Operating Pretax Income
(25.457) -1 5.800 0 74.7 3 56.5 2 189.1 4 108.2 2
Nonoperating Income (Expense)
(0.914) 0 0.300 0 2.8 0 26.5 1 10.6 0 2.5 0
Special Items
(17.204) -1 (39.600) -1 (3.6) 0 0.0 0 8.3 0 5.1 0
Pretax Income
(43.575) -2 (33.500) -1 73.9 3 83.0 3 208.0 4 115.8 3
Income Taxes
(17.478) -1 (8.400) 0 34.8 1 30.6 1 80.3 2 43.8 1
Minority Interest
0.000 0 0.000 0 0.7 0 4.7 0 8.4 0 3.0 0
Income Before Extra and Disc Op
(26.097) -1 (25.100) 0 38.4 1 47.7 2 119.3 2 69.0 2
Extraordinary Items
0.000 0 0.000 0 0.0 0 (21.4) 0 0.0 0 (23.3) 0
Discontinued Operations
(4.800) 0 (4.800) 0 17.3 1 524.6 19 0.0 0 0.0 0
Net Income
($30.897) -1 ($29.900) 1 $55.7 2 $550.9 20 $119.3 2 $45.7 1
MONIH END INFORMATION:
Aug01 Dec00 Dec99 Dec98 Dec97 Dec96
Price Per Share
$12.73 $8.25 $19.44 $16.88 $17.13 $20.00
Common Shares Outstanding
24.78 24.77 24.77 21.76 49.00 48.91
Common Stock Capitalization
$315.500 $204.386 $481.545 $367.149 $839.108 $978.160
Outstanding Debt
$242.900 $340.200 $258.800 $257.000 $767.600 $792.800
outstanding Preferred Stock
$ 0.100 $0.100 $0.100 $0.100 $3.100 $3.200
Total Capitalization
$558.500 $544.685 $740.445 $624.249 $1,609.808 $1,774.160
Beta
0.79 1.00 0.75 1.11 0.85 0.87
Debt %
43.50% 62.5% 35.00% 41.2% 47.7% 44.7%
* All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Balance Sheet RYERSON TULL INC
rt FISCAL YEAR END
BALANCE SHEET ($ MILLIONS)
Jun0l % Dec00 % Dec99 % Dec98 % Dec97 % Dec96 %
Cash & Equivalents
$176.200 14 $23.800 2 $39.500 3 $52.500 4 $97.000 3 $238.000 7
Net Receivables
96.800 8 285.400 21 307.900 22 284.500 21 523.300 14 464.700 13
Inventories
496.300 40 567.800 41 542.700 39 500.400 37 624.100 17 494.600 14
Other Current Assets
0.600 0 0.000 0 0.000 0 5.600 0 30.700 1 30.500 1
Total Current Assets
769.900 61 877.000 64 890.100 64 843.000 63 1,275.100 35 1,227.800 35
Gross Plant, Property a Equip
589.900 47 596.700 44 NA 0 583.800 43 4,549.000 125 4,435.400 125
less: Accumulated Depreciation
325.100 26 322.000 24 NA 0 290.200 22 2,907.200 80 2,798.400 79
Net Plant Property & Equip
264.800 21 274.700 20 273.200 20 293.600 22 1,641.800 45 1,637.000 46
Other Assets
218.300 17 220.400 16 223.900 16 207.300 15 729.600 2O 676.800 19
TOTAL ASSETS
1,253.0 100 1,372.1 100 1,387.2 100 1,343.9 100 3,646.500 100 3,541.600 100
Debt In Current Liabilities
$142.200 11 239.500 18 0.000 0 30.000 0 62.700 2 19.600 1
Accounts Payable
142.000 11 137.600 10 201.200 15 152.500 11 354.900 10 321.400 9
Other Current Liabilities
62.900 5 81.600 6 78.400 6 118.500 9 197.300 5 195.800 6
Total Current Liabilities
347.100 28 458.700 33 279.600 20 271.000 20 614.900 17 536.800 15
Long Term Debt
100.700 8 100.700 7 258.800 19 257.000 19 704.900 19 773.200 22
Other Liabilities
150.100 12 151.000 11 151.000 11 252.300 19 1,398.500 38 1,410.500 40
TOTAL LIABILITIES
$597.900 48 710.400 52 $689.400 50 $780.300 58 2,718.300 75 62,720.500 77
Preferred Stock
0.100 0 0.100 0 0.100 0 0.100 0 3.100 0 3.200 0
Common Stock
50.600 4 50.600 4 50.600 4 50.600 4 50.000 1 50.600 1
Additional Paid-in Capital
862.600 69 862.800 63 863.300 62 897.200 67 963.900 26 960.800 27
Retained Earnings
495.600 40 502.300 37 538.500 39 461.000 34 (48.900)-1 (149.300) -4
less: Treasury Stock
753.800 60 754.100 55 754.700 54 845.300 63 40.500 1 44.200 1
TOTAL EQUITY
$655.100 52 661.700 48 697.800 50 $563.000 42 $928.200 26 $821.100 23
TOTAL LIABILITIES & EQUITY
1,253.0 100 31,372.1 100 1,387.20 100 31,343.0 100 3,646.5 100 93,541.6 100
+ All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Income Statement
STEEL TECHNOLOGIES sttx
FISCAL YEAR END
INCOME STATEMENT 12MM ($ MILLIONS)
Jun0l % Sep00 % Sep99 % Sep98 % Sep97 % Sep96 %
Sales, net
438.080 100 461.297 100 411.389 100 383.907 100 345.624 100 294.161 100
Cost of Goods Sold
376.094 86 396.795 86 340.930 83 327.951 85 297.948 86 244.361 83
Gross Profit
61.986 14 64.502 14 70.459 17 55.956 15 47.676 14 49.800 17
SG&A
28.598 65 28.251 6 26.108 63 22.144 6 19.989 6 18.811 6
Operating Income Before Depr. & Amort.
33.388 8 36.251 8 44.351 11 33.812 9 27.687 8 30.989 11
Depreciation & Amortization
15.101 3 13.929 30 12.852 3 11.860 3 10.500 3 9.484 3
Interest Expense
7.146 2 7.524 16 7.523 2 6.407 2 5.875 2 5.130 2
Operating Pretax Income
11.141 3 14.798 32 23.976 6 15.545 4 11.312 3 16.315 6
Non operating Income (Expense)
0.348 O 1.379 0 1.257 0 0.865 0 1.811 0 1.794 0
Special Items
(7.456) -2 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Pretax Income
4.033 1 16.177 4 25.233 6 16.410 4 13.123 4 18.169 63
Income Taxes
4.321 1 5.965 1 9.661 2 6.607 2 4.621 1 6.483 2
Minority Interest
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Income Before Extra and Disc Op
(0.288) -0 10.212 2 15.572 4 9.803 3 8.502 3 11.686 40
Extraordinary Items
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Discontinued Operations
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Net Income
($0.288) 0 $10.212 2 $15.572 4 $9.803 3 $8.502 3 $11.686 4
MONTH END INFORMATION:
Aug0l Sep00 Sep99 Sep98 Sep97 Sep96
Price Per Share
$7.80 $6.31 $11.63 $7.25 $12.44 $12.50
Common Shares Outstanding
10.23 8.89 10.26 11.16 11.99 11.96
Common Stock Capitalization
$79.755 $56.118 $119.238 $80.917 $149.182 $149.525
Outstanding Debt
$101.474 $121.642 $96.900 $97.402 $99.385 $67.645
Outstanding Preferred Stock
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000
Total Capitalization
$181.229 $177.760 $216.138 $178.319 $248.567 $217.170
Beta
0.30 0.60 0.47 0.52 0.26 0.30
Debt %
56.0% 68.4% 44.8% 54.6% 40.0% 31.1%
+ All data obtained from Standard L Pool's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Guideline Public Companies - Balance Sheet
STEEL TECHNOLOGIES sttx
sttx FISCAL YEAR END
BALANCE SHEET ($ MILLIONS)
JunOl % SepOO % Sep99 % Sep98 % Sep97 % Sep96 %
Cash & Equivalents
$1.534 1 $4.469 1 $12.578 4 $4.778 2 $3.467 1 94.218 2
Net Receivable
65.802 23 67.039 21 54.389 19 47.907 18 43.110 17 39.732 18
Inventories
71.331 25 79.925 25 80.625 28 76.523 29 81.086 32 59.374 27
Other Current Assets
3.749 1 3.622 1 2.900 1 2.369 1 2.610 1 2.000 1
Total Current Assets
142.416 49 155.055 49 150.492 52 131.577 49 130.273 51 105.324 49
Gross Plant Property & Equip
NA 0 200.441 64 179.948 62 168.006 63 153.200 60 137.973 64
Less: Accumulated Depreciation
NA 0 82.227 26 71.995 25 61.375 23 49.404 19 37.956 18
Net Plant Property & Equip
114.646 39 118.214 38 107.953 37 106.631 40 103.796 40 100.017 46
Other Assets
34.263 12 42.120 13 30.660 11 28.273 11 23.441 9 11.800 5
TOTAL ASSETS
$291.325 100 $315.389 100 $289.105 100 $266.481 100 $257.510 100 $217.141 100
Debt In Current Liabilities
$95.402 33 $6.248 2 $6.691 2 $9.102 3 $2.195 1 $0.385 0
Accounts Payable
41.390 14 44.645 14 44.649 15 35.925 14 32.605 13 34.528 16
Other Current Liabilities
10.147 4 6.734 2 9.734 3 6.231 2 5.156 2 5.146 2
Total Current Liabilities
146.939 50 57.627 18 61.074 21 51.258 19 39.956 16 40.059 18
Long Term Debt
6.072 2 115.394 37 90.209 31 88.300 33 97.190 38 67.260 31
Other Liabilities
14.677 5 15.336 5 13.383 5 13.247 5 11.535 5 8.461 4
TOTAL LIABILITIES
$167.688 58 $188.357 60 $164.666 57 $152.805 57 $148.681 58 115.780 5
Preferred Stock
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Common Stock
17.332 6 17.287 6 17.140 6 16.928 6 16.893 7 16.662 8
Additional Paid-In Capital
4.909 2 4.909 2 4.909 2 4.909 2 4.909 2 4.909 2
Retained Earnings
116.537 40 118.647 38 109.513 38 95.631 36 87.027 34 79.790 37
less: Treasury Stock
15.141 5 13.811 4 7.123 3 3.792 1 0.000 0 0.000 0
TOTAL EQUITY
$123.637 42 $127.032 40 $124.439 43 $113.676 42 $108.829 42 $101.361 46
TOTAL LIABILITIES & EQUITY
$291.325 100 $315.389 100 $289.305 100 $266.481 100 $257.510 100 $217.141 100
All data obtained from Standard & Poor's Compustat database unless othenuise
noted.
Guideline Public Companies - Income Statement
WORTHINGTON INDUSTRIES
wor
wor FISCAL YEAR END
INCOME STATEMENT' 12MM ($ MILLIONS)
MayOl % May00 % May99 % May98 % May97 % May96
%
Sales, net
1,826.099 100 1,962.606 100 1,763.072 100 1,624.449 100 1,911.72 100 1,478 100
Cost of Goods Sold
1.510.595 83 1.558.458 79 1,390.396 78 1,310.382 81 1,582.803 83 1,217 82
Gross Profit
315.504 17 404.148 21 372,676 21 314.067 19 328.917 17 260.486 18
SG&A
173.264 9 163.662 8 147.990 8 117.101 7 123.283 6 95.123 6
Operating Income Before Depr. 8r Amort.
142.240 7 240.486 12 224.686 12 196.966 12 205.634 10 165.36 11
Depreciation & Amortization
70.582 4 70.997 4 78.490 5 61.459 4 51.388 3 39.22 3
Interest Expense(l)
33.449 0 40.529 2 47.098 3 36.883 2 24.986 1 10.444 1
Operating Pretax Income
38.209 4 128.960 7 99.098 6 98.624 6 129.260 6 115.706 8
Non-operating Income (Expense)
24.273 1 30.235 2 33.653 2 32.018 2 21.272 1 32.097 2
Special Items
-6.474-0.4 -8.553-0.4 0.000 0 0.000 0 0.000 0 0.000 0
Pretax Income
56.008 3 150.642 8 132.751 8 130.642 8 150.532 8 147.8 10
Income Taxes
20.443 1 56.491 3 49.118 3 48.338 3 57.214 3 56.461 4
Minority Interest
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Income Before Extra and Disc Op
35.565 3 94.151 5 83.633 4 82.304 5 93.318 5 91.342 6
Extraordinary Items
0.000 0 0.000 0 -7.836 -0.4 18.771 1 0.000 0 0.000 0
Discontinued Operations
0.000 0 0.000 O -20.885 -l.2 17.337 1 0.000 0 0.000 0
Net Income
$35.565 2 $94.151 5 $54.912 3 $118.412 7 $93.318 5 $91.342 6
MONTH END INFORMATION:
Aug01 May00 May99 May98 May97 May96
Price Per Share
$14.00 $12.13 $12.81 $17.63 $318.50 $20.13
Common Shares Outstanding
85.38 85.75 89.95 96.66 96.71 90.83
Common Stock Capitalization
1,195.250 1,039.779 1,152.472 1,703.580 1,789.153 1,827.954
Outstanding Debt
$324.750 $525.072 $545.810 $577.695 $506.377 $300.217
Outstanding Preferred Stock
$0.000 $0.000 $0.000 $0.000 $0.000 $0.000
Total Capitalization
1,520.000 $1,564.851 $1,698.282 $2,281.275 $2,295.530 $2,128.171
Beta
0.56 0.66 0.74 0.75 0.84 NA
Debt %
21.4% 33.6% 32.1% 25.3% 22.1% 14.1%
All data obtained from Standard & Poor's Compustat database unless otherwise
noted. (1) FYE 5/31/01 Interest Expense was obtained from Form 10-K provided by
Hoover's Online.
Exhibit 4
Guideline Public Companies - Balance Sheet
WORTHINGTON INDUSTRIES
wor
wor FISCAL YEAR END
BALANCE SHEET * ($ MILLIONS)
May0l % May00 % May99 % May98 % May9 % May96 %
Cash & Equivalents
$0.194 0 $0.538 0 $60.138 4 $3.788 O.2 $7.212 0.5 $19.029 2
Net Receivables
169.330 12 301.175 18 281.706 17 315.584 17 266.836 17 224.956 18
Inventories
227.506 15 291.204 17 257.010 15 288.911 15 296.888 19 208.025 17
Other Current Assets
52.689 4 31.312 2 15.401 2 34.712 2 23.192 2 24.031 2
Total Current Assets
449.719 31 624.229 37 624.255 37 642.995 35 594.128 38 476.041 39
Gross Plant, Property & Equip
NA 0 1,180.622 71 1,131.761 67 1,315.668 71 1,036.621 64 793.274 65
less. Accumulated Depreciation
NA 0 318.110 19 260.414 15 382.510 21 345.594 22 280.938 23
Net Plant, Property & Equip
836.749 57 862.512 52 871.347 52 933.158 51 691.027 44 512.336 42
Other Assets
189.394 13 187.132 11 191.349 11 266.189 14 276.031 18 231.748 19
TOTAL ASSETS
1,475.862 100 1,673.873 100 1,686.951 100 1,842.342 100 1,561.186 100 1,220 100
Debt In Current Liabilities
$15.542 1 $162.882 10 $180.008 11 $138.080 8 $55.984 4 $1.475 0.1
Accounts Payable
207.568 14 157.998 9 161.264 9 176.752 9 117.910 8 82.178 7
other Current Liabilities
83.509 6 112.390 7 86.453 5 95.199 5 72.900 5 67.616 6
Total Current Liabilities
306.619 21 433.270 26 427.725 25 410.031 22 246.794 16 151.269 12
Long Term Debt
309.208 2 362.190 22 365.802 22 439.615 24 450.393 29 298.742 25
Other Liabilities
210.370 14 205.059 12 203.775 12 212.423 12 148.481 10 130.574 11
TOTALLIABILITIES
$826.197 56 $1,000.519 60 $997.302 59 $1,062.069 57 $845.668 54 $580.585 48
Preferred Stock
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
Common Stock
NA 0 0.000 0 0.000 0 0.968 0 0.968 0 0.908 0
Additional Paid-In Capital
NA 0 109.776 7 111.474 7 116.696 6 114.052 7 105.869 9
Retained Earnings
NA 0 563.578 34 578.175 34 662.609 36 600.498 38 532.763 44
less: Treasury Stock
0.000 0 0.000 0 0.000 0 0.000 0 0.000 0 0.000 0
TOTAL EQUITY
$649.665 44 $673.354 40 $689.649 41 $780.273 42 $715.518 46 $639.540 52
TOTAL LIABILITIES & EQUITY
1.475.862 100 1.673.873 100 1.686.951 100 1,842.342 100 1,561.186 100 1,220 100
All data obtained from Standard & Poor's Compustat database unless otherwise
noted.
The Coeur d'Alenes Company
Exhibit 4
Risk Analysis Ranking
Size Size Liquidity
(Assets) (Sales) (Debt Free Current ratio)
Coeur d'Alenes Co 56.806 Coeur d'Alenes Co 312.804 WORTHINGTON IND 1.55
FRIEDMAN IND 43.290 FRIEDMAN IND 116.007 CASTLE(AM)&CO 2.75
OLYMPIC STEEL INC 265,922 STEEL TECHN 438.080 STEEL TECHN 2.76
STEEL TECHN 291,325 OLYMPIC STEEL 462.537 METALS USA INC 3.06
CASTLE(AM)&CO 408.197 CASTLE(AM)&CO 699.207 Coeur d'Alenes Co 3.23
RELIANCE S&ALUM 1,051.737 RELIANC S&ALUM 1,699.807 RYERSON TULL INC 3.76
METALS USA INC 1,143.600 METALS USA INC 1,800.400 RELIANCE S&ALUM 3.78
RYERSON TULL INC 1,253.000 WORTHINGTON TND 1,826.099 OLYMPIC STEEL INC 5.03
WORTHINGTON IND 1,475.862 RYERSON TULL IN 2535.998 FRIEDMAN IND 5.25
Comments: Smaller Comments: Smaller Com: Similar Liquidity
Liquiditv Activitv Activity
(Debt-Free WCI Revenue) (Inventory Turnover) (Average Collection Period)
WORTHINGTON IND O.09 WORTHINGTON IND 54.97 RYERSON TULL INC 13.93
Coeur d'Alenes Co 0.17 METALS USA INC 68.33 FRIEDMAN IND 30.90
STEEL TECHN 0.21 STEEL TECHN 69.23 Coeur d'Alenes Co 33.55
METALS USA INC 0.22 Coeur d'Alenes Co 77.17 WORTHINGTON IND 33.85
RYERSON TULL INC 0.22 OLYMPIC STEEL INC 81.00 OLYMPIC STEEL INC 40.79
RELIANCE S&ALUM 0.23 RELIANCE S&ALUM 85.63 RELIANCE S&ALUM 42.44
CASTLE(AM)&CO 0.23 FRIEDMAN IND 87.15 METALS USA INC 45.70
OLYMPIC STEEL INC 0.25 RYERSON TULL INC 89.38 CASTLE(AM)&CO 46.00
FRIEDMAN IND 0.25 CASTLE(AM)&CO 117.60 STEEL TECHN 54.82
Comments: Less Liquid Com: Similar Turnover Com: Similar Collection
Profitabilitv Profitabilitv Profitability
(EBITDA/Sales) (EBIT/Sales) (Gross Profit Margin)
OLYMPIC STEEL INC -0.2% OLYMPIC STEEL INC -2.3% METALS USA INC 2.6%
RYERSON TULL INC 1.3% RYERSON TULL INC 0.1% FRIEDMAN IND 8.5%
CASTLE(AM)&CO 2.5% METALS USA INC 1.1% STEEL TECHN 14.1%
METALS USA INC 2.6% CASTLE(AM)&CO 1.1% WORTHINGTON IND 17.3%
Coeur d'Alenes Co 4.1% Coeur d'Alenes Co 1.8%/RYERSON TULL INC 20.1%
FRIEDMAN IND 4.7% FIEEDMAN IND 3.8% OLYMPIC STEEL INC 21.2%
STEEL TECHN 7.7% STEEL TECHN 4.3% RELIANCE S&ALUM 27.6%
RELIANCE S&ALUM 8.6% WORTHINGTON IND 5.3% Coeur d'Alenes Co 27.7%
WORTHINGTON IND 9.1% RELIANCE S&ALUM 6.9% CASTLE(AM)&CO 29.7%
Com: Similar Profitability Com: Similar Profitability Com: More Profitable
Leverage Growth Growth
(Liabilities/Assets) (Annual Revenue) (Annual EBITDA)
FRIEDMAN IND 0.30 RYERSON TULL INC -11.1% OLYMPIC STEEL INC -41.3%
RYERSON TULL INC 0.48 OLYMPIC STEEL INC -1.8% RYERSON TULL INC -33.1%
OLYMPIC STEEL INC 0.53 FRIEDMAN IND 0.1% CASTLE(AM)&CO -15.4%
Coeur d'Alenes Co 0.54 Coeur d'Alenes Co 0.4% FRIEDMAN IND -2.1%
WORTHINGTON IND 0.56 CASTLE(AM)&CO 2.6% Coeur d'Alenes Co -1.6%
STEEL TECHN 0.58 WORTHINGTON IND 7.3% STEEL TECHN 3.5%
RELIANCE S&ALUM 0.60 STEEL TECHN 11.9% WORTHINGTON IND 8.2%
METALS USA INC 0.69 RELIANCE S&ALUM 27.5% RELIANCE S&ALUM 26.9%
CASTLE(AM)&CO 0.69 METALS USA INC 58.4% METALS USA INC 46.6%
Com: Similar Growth Com: Similar Growth Com: Similar Growth
The Coeur d'Alenes Company
Exhibit 4 (Cont.)
Guideline Public Companies - Ratio Analysis
RELIANCE
STEEL &
CASTLE FRIEDMAN METALS USA OLYMPIC ALUMINUM RYERSON STEEL WORTHINGTON
CO INDUSTRIES INC STEEL INC CO TULL INC TECH INDUSTRIES
SIZE:
Sales
$699.207 $116.007 $1800.400 $462.537 $1699.807 $2535.998 $438.080 $1826.099
Cda Co Median/Actual /Adjusted
$1199.507 $12.804 $ 12.804
EBIIDA (1)
$17.399 $5.462 $46.500 ($1.153) $146.495 $34.005 $33.76 $166.513
Cda Co Median/Actual /Adjusted
$33.871 $0.524 $0.524
EBIT(1)
$7.822 $4.451 $19.400 ($10.469) $116.782 $2.707 $18.635$ 95.931
Cda Co Median/Actual /Adjusted
$ 13.228 $0.225 $0.225
Total Assets
$408.197 $43.290 $1143.600 $265.922 $1051.737 $1253.000 $291.325 $1475.862
Cda Co Median/Actual /Adjusted
$729.967 $6.806 $6.806
LIQUIDITY:
Debt-Free Current Ratio
2.75 5.25 3.06 5.03 3.78 3.76 2.76 1.55
Cda Co Median/Actual /Adjusted
3.41 3.23 3.23
Debt-Free Quick Ratio
0.99 1.49 1.23 1.90 1.53 1.33 1.31 0.58
Cda Co Median/Actual /Adjusted
1.32 1.18 1.18
Accounts Rec. Turnover (Days)
46.00 30.90 45.70 40.79 42.44 13.93 54.82 33.85
Cda Co Median/Actual /Adjusted
41.61 33.55 33.55
Accounts payable Turnover (Days)
53.94 20.47 32.46 20.O5 24.42 25.57 40.17 50.15
Cda Co Median/Actual /Adjusted
29.02 30.90 30.90
Inventory Turnover (Days)
117.60 87.15 68.33 81.00 85.63 89.38 69.23 54.97
Cda Co Median/Actual /Adjusted
83.31 77.17 77.17
Debt-Free Net Working Capital/Sales
22.8% 24.91% 22.0% 24.9% 22.5% 22.3% 20.7% 8.7%
Cda Co Median/Actual /Adjusted
22.4% 17.3% 17.3%
Interest Coverage Ratio (1)
0.73 7.57 0.35 -1.20 3.&1 0.12 2.56 2.14
Cda Co Median/Actual /Adjusted
1.44 0.84 0.84
FINANCIAL LEVERAGE:
Debt Market Value of Total Capital
50.8% 20.3% 88.1% 73.7% 40.3% 43.5% 56.0% 21.4%
Cda Co Median/Actual /Adjusted
47.1% NA NA
Total Liabilities/Total Assets
69.20% 29.5% 68.8% 53.3% 59.6% 47.7% 57.64% 56.0%
Cda Co Median/Actual /Adjusted
56.8% 54.2% 54.2%
ASSET UTILIZATION:
Sales/Receivables
7.94 11.81 7.99 8.95 8.60 26.20 6.66 10.78
Cda Co Median/Actual /Adjusted
8.77 10.88 10.88
Sales/Net Fixed Assets
7.69 17.53 7.27 4.03 6.73 9.58 3.82 2.18
Cda Co Median/Actual /Adjusted
7.00 3.61 3.61
Sales /Total Assets
1.71 2.68 1.57 1.74 1.62 2.02 1.50 1.24
Cda Co Median/Actual /Adjusted
1.66 1.88 1.88
MARGINS:
Gross Margin
29.7% 8.5% 2.6% 21.2% 27.6% 20.1% 14.1% 17.3%
Cda Co Median/Actual /Adjusted
18.7% 27.7% 27.7%
EBITDA (1)
2.50% 4.7% 2.6% -O.2% 8.6% 1.3% 7.7% 9.1%
Cda Co Median/Actual /Adjusted
3.6% 4.1% 4.1%
EBTDA (1)
1.0% 4.2% -0.4% -1.4% 6.9% 0.2% 6.1% 7.3%
Cda Co Median/Actual /Adjusted
2.6% 2.0% 2.0%
EBIT (1)
1.1% 3.8% -2.3% 6.9% 0.1% 4.3% 5.3% 2.5%
Cda Co Median/Actual /Adjusted
1.8% 1.8% 1.8%
REIURN ON INVESTMENT:
EBITA/Market Value of Total Capital (1)
5.2% 20.5% 7.4% -0.8% 12.8% 6.1% 18.6% 11.0%
Cda Co Median/Actual /Adjusted
9.2% NA NA
EBIT/Market Value of Total Capital (1)
2.3% 16.7% 3.1% -7.2% 10.2% 0.5% 10.3% 6.3%
Cda Co Median/Actual /Adjusted
4.7% NA NA
EBITDA (Book Equity + Debt) (1)
5.9% 15.2% 5.1% -0.5% 16.5% 3.8% 15.0% 17.1%
Cda Co Median/Actual /Adjusted
10.4% 9.3% 9.3%
EBIT (Book Equity + Debt) (1)
2.7% 12.4% 2.1% -4.5% 13.2% 0.3% 8.3% 9.8%
Cda Co Median/Actual /Adjusted
5.5% 4.0% 4.0%
EBITDA/TotalAssets
4.3% 12.6% 4.1% -0.4% 13.9% 2.7% 11.6% 11.3%
Cda Co Median/Actual /Adjusted
7.8% 7.7% 7.7%
EBIT Total Assets
1.9% 10.3% 1.7% -3.9% 11.1% 0.2% 6.4% 6.5%
Cda Co Median/Actual /Adjusted
4.2% 3.3% 3.3%
4 YEAR COMP(XMD ANNUAL GROWTH (2):
Sales
2.6% 0.1% 58.4% -1.8% 27.5% -11.1% 11.9% 7.3%
Cda Co Median/Actual /Adjusted
5.0% 0.4% 0.4%
EBITDA (1)
-15.4% -2.1% 46.6% -41.3% 26.9% -33.1% 3.5% 8.2%
Cda Co Median/Actual /Adjusted
0.7% -1.6% -1.6%
EBIT(I)
-22.7% 4.2% 40.7% NMF 25.4% -34.1% 0.4% 6.0%
Cda Co Median/Actual /Adjusted
0.4% 6.5% 6.5%
Notes:
EBITDA = Earnings before interest taxes, depreciation and amortization.
EBIT = Earnings before interest and taxes.
Market Value of Total Capital = Market value of equity plus debt, capitalized
lease obligations and preferred stock.
(I) Includes nonoperating income.
(2) 4-year compound annual growth or best available compound growth rates (e.g.
2-year or 3-year).
(3) Income margins have been adjusted (See Exhibit 2, Representative Earnings
Analysis).
The Coeur d'Alenes Company
Exhibit 5
Guideline Public Companies Method
CASTLE FRIEDMAN METALS USA OLYMPIC ALUMINUM RYERSON STEEL WORTHINGTON
CO INDUSTRIES INC STEEL INC CO TULL INC TECH INDUSTRIES
F.M.V. OF:
Total Capital I Revenues (1)
0.41 0.21 0.34 0.31 0.55 0.18 0.38 0.51
Mean/Median
0.36 0.36
Total Capital/EBITDA (1)(2)
NMF 4.48 13.25 NMF 6.40 11.64 4.90 5.54
Mean/Median
8.04 5.97
Total Capital (Book Equity + Debt) (1)
0.96 0.68 0.68 0.61 1.06 0.52 0.73 0.95
Mean/Median
0.77 0.71
Total Capital/Total Assets (1)
0.70 0.57 0.54 0.53 0.89 0.37 0.57 062
Mean/Median
0.60 0.57
INDICATED INDICATED
The Coeur d'Alenes VALUE OF VALUE
SELECTED Company TOTAL LESS OF
MULTIPLE STATISTIC (5) CAPITAL DEBT (5) EQUITY
F.UV. OF:
Total Capital/Revenues
0.25 (3) $12,804,360 $3,201,090 ($2,511,142) $689,948
Total Capital EBITDA
6.00 (4) 524,480 3,146,880 (2.511.142) 635,738
Total Capital (Book Equity + Debt)
0.55 (3) 5.626,223 3,094,423 (2,511,142) 583.281
Total Capital/Total Assets
0.45 (3) 6,805,628 3.062,533 (2,511,142) 551.391
Fair Market Value of Equity, Minority Interest Basis 615.089
Add: Premium For Control @ 20.0% (6) 123,018
Fair Market Value of Equity, Controlling Interest Basis
Rounded $740,000
Notes:
(1) The Coeur d'Alenes is considerably smaller and therefore considered a more
risky investment than the guideline companies. As such we have reduced the
market equity capitalization of the guideline companies as follows: Friedman
and Olympic Steel by 10% Metals USA and Steel Technologies by 20%;
Castle (A M), Reliance Steel & Aluminum and Ryerson Tull by 30%; and
Worthington by 50%.
(2) Includes nonoperating income.
(3) An appropriate multiple was derived by analyzing the relationship between
earnings and multiples. See accompanying graphs.
(4) Approximately the median multiple of the guideline companies.
(5) See Exhibit 2, Historical Financial Statements.
(6) per analysis of premiums paid on recent transactions (see Exhibit 9).
The Coeur d'Alenes Company
Exhibit 6
Capitalization Of Debt-Free Cash Flow Method
Projected Revenues (1) $12,672,397
Representative EBIT Margin @ 4.0% (2) 506,896
Less: Estimated Income Taxes @ 40.0% (3) (202,758)
Representative Debt-Free Earnings 304,138
Less: Increase in Working Capital Requirement @ 15.0% (4) (73,110)
Representative Debt-Free Cash Flows 231,028
Divided by Capitalization Rate @ 7.0% (5) 7.0%
Indicated Value of Total Capital 3,300,394
Less: Outstanding Debt (2) (2,511,142)
F.M.V. of Equity, Controlling Interest Basis 789,252
Rounded $790,000
Notes:
(1) FY 2002 budgeted revenue provided by management.
(2) Per Exhibit 2.
(3) Assumed combined federal and state effective tax rate (C corporations).
(4) Per Exhibit 7. Also depreciation expense is assumed equal to required
capital expenditures into perpetuity.
(5) Capitalization rate calculated as follows:
Weighted average cost of capital 11.0% (6)
Less: Projected inflation rate 2.5%
Less: Estimated real growth rate 1.5%
7.0%
Per Exhibit 8.
The Coeur d'Alenes Company
Exhibit 7
Debt-Free Working Capital Analysis
LTM Fiscal Years Ended
25-Aug-01 30-Sep-00 25-sep-99 26-Sep-98 27-Sep-97 28-Sep-96
Current Assets
$3,214,788 $4,087,919 $3,602,037 $4,066,139 $3,743,166 $410,9348
Less: Cash
7,149 (115,532) (32,422) (39,486) (89,495) (68,645)
Cash Free Current Assets
3,221,937 3,972,387 3,569,615 4,026,653 3,653,671 4,040,703
Current Liabilites
1,264,710 2,023,278 1,497,219 1,963,860 1,858,447 2,472,438
Less: Current Debt
(269,305) (829,623) (659,794) (977,540) (937,319) (939,298)
Debt-Free Current Liabilities
995,405 1,193,655 837,425 986,320 921,128 1,533,140
Cash Free Debt-Free Working Capital
$2,226,532 $2,778,732 $2,732,190 $3,040,333 $2,732,543 $2,507,563
Sales
$12,804,360 $12,699,921 $12,247,613 $14,368,061 $12,858,765 $12,498,993
Cash Free Debt-Free Working Capital as a % of Sales
17.39% 21.88% 22.31% 21.16% 21.25% 20.06%
Representative CFDF Working Capital as a % of Sales 15%
The Coeur d'Alenes Company
Exhibit 8
Weighted Average Cost of Capital *
$ in millions Book Market
Value of Value of
Debt to Equity to Effective Levered Unlevered
MVIC MVIC MVIC TaxRate Beta Beta
Guideline Companies
CASTLE(AM)&CO
$333.350 50.8% 49.2% 37.2% 0.22 0.14 **
FRIEDMAN INDUSIRIES
$26. 593 20.3% 79.7% 34.0% 0.98 0.84
METALS USA INC
$631.245 88.1% 11.9% 29.7% 0.97 0.16 **
OLYMPIC STEEL INC
$145,870 73.7% 26.3% 33.8% 0.24 0.08 **
RELIANCE STEEL & ALUMINUM CO
$1,141.633 40.3% 59.7% 38.7% 0.63 0.45
RYERSON TULL INC
$558.500 43.5% 56.5% 40.1% 0.79 0.54
STEEL TECHNOLOGIES
$181.229 56.0% 44.0% 107.1% 0.30 0.33
WORTHIGTON INDUSTRIES
$1,520.000 21.4% 78.6% 36.5% 0.56 0.48
Guideline Company Average
49.3% 50.7% 44.6% 0.59 0.53
Selected Data for Subject Company (a)
50.0% 50.0% 40.0% 0.53
COST OF EQUITY:
Relevered Beta Using Selected Data for Subject Company (a) 0.84
multiplied by: Equity Risk Premium (b) 7.76%
Company Equity Risk Premium 6.55%
add: Size Premium (c) 4.63%
add: Risk-Free Rate (Return on Long-Term Treasury Notes) (d) 5.47%
add: Specific Risk Factor (e) 1.00%
AFTER-TAX COST OF EQUITY (Rounded) 18.00%
COST OF DEBT:
PRETAX COST OF DEBT (Rounded) (f) 7.50%
AFTER-TAX COST OF DEBT (Rounded) 4.50%
WEIGHTED AVERAGE COST OF CAPITAL:
Type of After-Tax Weighted
Financing % of Total Cost Cost
Equity 50.0% 18.00% 9.0%
Debt 50.0% 4.50% 2.3%
100.O% -- 11.3%
AFTER-TAX WEIGHTED AVERAGE COST OF CAPITAL (Rounded) 11.0%
Notes:
* Source of data: Standard & Poor's Compustat PC Plus database, unless
otherwise noted.
** Excluded fiom the calculation of beta.
MVIC = Market Value of Investsted Capital.
a) The selected capital structure is based on the guideline companies'
capital structures.
For valuation purposes, a relevered beta of.84 was selected assuming the
return on Company's common stock would be as risky as the industry.
b) Source: Ibbotson Associates, Stocks, Bonds Bills, and Inflation 2001
Yearbook - Table C-l, Page 244,
Long-horizon Expected Equity Risk Premium - S&P 500 Market Benchmark
c) Source: Ibbotson Associates, Stocks, Bonds, Bills, and Inflation 2001.
Yearbook - Table 6-5, Page 115,
Size Premium (Return in Excess of CAPM) Estimation for 10th Decile of the
NYSE/AMEX/NASDAQ.
d) Source: Federal Reserve Statistical Release. Represents the rate on long-
term treasury securities (20-year) as of August 31, 2001.
e) Represents the additional risk associated with an investment in a very small
company.
f) Source: Federal Reserve Statistical Release. Represents prime rate plus 100
basis points as of the valuation date.
The Coeur d'Alenes Company
Exhibit 9
Premium for Control /
Discount for Lack of Control
A control premium is defined as the additional consideration that an investor
would pay over a marketable minority equity value in order to own a controlling
interest in the common stock of a company. It is usually expressed as the
percentage of the marketable minority price per share. The owner of a
controlling block of stock will generally have the power to effect changes in
the business entity's legal agreements, control day-to-day operations, set
long-term strategy, establish executive compensation, determine dividend
distribution policy, or compel a sale or liquidation of the business entity.
The marketplace recognizes that: (i) minority positions trade at prices that
are discounted from their proportionate share Of the value of the underlying
business entity; and (ii) premiums are paid to gain control of a business
entity.
A measure of the difference in value between a controlling interest in a
company and a minority interest can be found in successful public tender
offers, where the Investor acquired a control position. We consulted Hodihan
Lokey Howard & Zukin's Mergerstat Review 2000, an annual publication that
provides comprehensive statistics on control premiums in over 50 industries.
The premiums were based on stock acquisitions in which a premium was paid over
the market price of the stockholder's equity. The premium calculations are
based on the seller's closing market prices five business days before the
initial announcement of transactions where a premium over market price was
offered. The size of a premium is dependent on Several variables, including
the buyer's desire or need to acquire the company in order to complement his
present operations or to expand into new areas of operations; the relative
attractiveness of the company from a financial and/or tax viewpoint; and the
size of the block of stock in relation to the total outstanding stock and the
relative dispersion of the stock to be acquired.
Mergerstat Review 2000 reports that out of 723 transactions in which a premium
was paid, the median premium paid over market price in 1999 was 34.6%. In
1998, 512 transactions were reported in which a premium was paid. The median
premium paid over market price in 1998 was 30.1 percent. In 1997, 487
transactions were reported with the median premium paid over market price
of27.5 percent. In 1996, 381 transactions were reported with the median
premium paid over market price of 27.3 percent. In 1995, 324 transactions
were reported with the median premium paid over market price of29.2%. In 1994,
the median premium was 35.0% based on 260 transactions.
The above data suggests a range of control premiums from 27.3 percent to 35
percent. However, most of these transactions involve "strategic buyers" who
pay higher premiums for particular businesses that offer benefits to the
acquirer in the form of "synergies" The definition of "fair market value", upon
which our conclusions are based, does not allow for the consideration of
particular parties to a transaction, such as strategic buyers. Accordingly,
the choice of an appropriate control premium for the Company must consider
only what a financial investor would pay, and ignore any benefits that might
accrue to an investor purely as a result of operational synergies.
Based upon our analysis of these data and consideration of relevant qualitative
factors, we determined that an appropriate control premium for the Company's
common stock should be at the lower end of the range of the control premiums.
We therefore concluded a control premium of 20 percent. In order to determine
the appropriate lack of control discount, we calculated the algebraic
complement of the control premium (calculated as [control premium / 1 plus
control premium]). Based on this calculation, the appropriate lack of control
discount was determined to be 17 percent.
Cronkite & Kissell
The Coeur d'Alenes Company
Exhibit 10
Discount for Lack of Marketability
Lack of marketability discounts can be quantified by examining: (i) studies of
transactions in the restricted stock of publicly traded companies; and (ii)
studies of private transactions in the stock of companies which subsequently
had initial public offerings.
Restricted Stock Shrdies
In its Revenue Ruling 77-287 ("77-287"), the Internal Revenue Service provides
guidelines for the valuation of securities restricted under federal securities
laws, focusing primarily on the issue of marketability discounts. The basis for
Revenue Ruling 77-287 is the Institutional Investor Study Report (hereinafter
referred to as the "SEC Study"), published by the Securities and Exchange
Commission in 1971. The SEC Study empirically examined discounts in
transactions involving securities that are restricted under Rule 144. Based
on more than 300 transactions, the SEC Study found the following relationships:
Average
Discount Range
By Sales (Dollars in Millions)
100+ 10.1 - 20 percent
10 - 100 10.1 - 20 percent
5 - 20 30.1 - 40 percent
1 - 5 30.1 - 40 percent
0 - 1 40.1 - 50 percent
By Earnings (Dollars in Millions)
10+ 10.1 - 20 percent
1 - 10 10.1 - 20 percent
0 - 1 20.1 - 30 percent
By Exchange
NYSE 10.1 - 20 percent
ASE 20.1 - 30 percent
OTC - Reporting 20.1 - 30 percent
OTC - Nonreporting 30.1 - 40 percent
Overall Mean Discount 25.8 percent
As can be seen from the above chart, the magnitude of discount is:
Negatively correlated with the absolute dollar level of the subject company's
revenues. Negatively correlated with the profit of the subject company.
The Coeur d'Alenes Company
Exhibit 10 (Cont.)
Numerous other empirical studies on marketability discounts for restricted
stock have been conducted during the past 30 years. The following chart
summarizes the results of the most commonly referenced studies.
Lack of Marketability Discount Studies
Number of Average
Year study Transactions Discount
1997 Columbia Financial Advisors 23 21%
1996 Management Planning, Inc. 53 27%
1995 Johnson 70 20%
1992 FMV Opinions, Inc. >100 23%
1988 Silber 69 34%
1983 Standard Research 28 45%
1973 Moroney 146 36%
1973 Maher 34 36%
1972 Trout 60 34%
1971 Institutional Investor (SEC) 398 26%
1970 Geiman 89 33%
As can be seen from the above chart, prior to 1990, the discounts clustered
around 35 percent. Since 1990, discounts for restricted stock have declined to
the 20 to 25 percent range. This decline is the result of the SEC loosening
its restrictions.
In 1990, the SEC eliminated the requirement that all restricted stock
transactions had to be registered with the SEC. They issued Rule 144A, which
allows qualified institutional investors to trade unregistered securities among
themselves without filing registration statements. This created a liquid
market for the unregistered securities and reduced the discounts observed in
restricted stock transactions.
In 1997, the SEC reduced the required holding for securities restricted
pursuant to Rule 144 from two years to one year. This also increases the
liquidity of restricted securities and reduces the discount that investors
require for holding restricted securities.
Pre - IPO Studies
A second source of evidence which quantifies lack of marketability discounts is
found in studies of initial public offerings ("IPO's"). These studies involve
transactions in the stock of companies that were private at the time of the
transaction, but subsequently had a successful offering of common stock.
In IPO studies, marketabitity discounts are determined as the difference
between the IPO price and the price at which the company's stock traded in
arm's length transactions prior to the IPO.
John Emery conducted a series of nine studies in which he examined closely-held
stock transactions in the five month period preceding the company's IPO. As
shown below, the Emery studies indicate that discounts for lack of
marketability approximate 45 percent.
Number of IPO Number of
Prospectuses Qualifying Discount Discount
Study Reviewed Transactions Mean Median
1997-00 92 53 54 percent 54 percent
1995-97 732 91 43 42
1994-95 318 46 45 45
1991-93 443 54 45 44
1990-92 266 35 42 40
1989-90 157 23 45 40
1987-89 98 27 45 45
1985-86 130 21 43 43
1980-81 97 13 60 66
173 47 percent 46 percent
SOURCE: John D. Emory, "The Value of Marketability as illustrated in Initial
Public Offerings of Common Stock," Business Valuation Review
Willamette Management Associates conducted a study covering the years 1975
through 1993. Arm's length transactions occurring within a three yea; period
prior to the IPO were examined. Adjustments were made for earnings levels and
market conditions. The indicated discounts for lack of marketability from
these studies were in the range of 40 percent to 50 percent.
The discounts from the above two studies may still understate true discounts
for lack of marketability for minority shares of most privately held companies,
because it is likely that the buyers and sellers in many cases anticipated the
possibility of future liquidity through a public offering.
Summary of Empirical Studies
The analyses outlined above collectively involved hundreds of individual
transactions, each with its own set of unique investment characteristics. The
usefulness of these transactions is not to be found by searching for one or two
"comparable transactions" to appropriate discount for the subject security, but
rather by examining all the transactions in the aggregate. The restricted
stock studies indicated an average discount for lack of marketability of 35
percent for those transactions before 1990 and discounts of20 to 25 percent
since 1990. This difference appears reasonable given the SEC'S 1oosening of
restrictions.
The IPO studies provided support for a higher discount of approximately 45
percent. This difference appears reasonable given that the securities in the
restricted stock studies will have access to the public market at the end of
the restriction period. Therefore, an appropriate discount for lack of
marketability for an investor in closely-held stock would be approximately 45
percent. We can use the 45 percent indication as a benchmark to determine an
appropriate discount for lack of marketability for a minority interest in the
Company.
Factors Affecting Marketability
By using the above studies as a benchmark, and then reviewing the factors which
affect the magnitude of the lack of marketability discount, we can determine
the appropriate discount to apply to Coeur d'Alenes. There are several factors
which affect the magnitude of the lack of marketability discount, including,
but not limited to the following:
a) Size of the company;
b) Restrictive agreements;
c) Payment of dividends;
d) Prospects of future public offering (holding period);
e) Size of interest and amount ofcontrol; and
f) Financial strength of the company.
The larger the company, the less risky an investor perceives it to be. Coeur
d'Alenes is similar in size to most of the companies in the above studies.
Therefore, no adjustment was made.
The ownership and transferability of minority interests in Coeur d'Alenes are
not restricted. This is similar to a minority holding in the companies from the
above marketability studies; therefore, no adjustment was made.
Coeur d'Alenes has a history of not paying dividends. Although several of the
companies in the above studies paid dividends, several did not. Therefore, no
adjustment was made.
Coeur d'Alenes is a publicly-traded company albeit one that provides
questionable liquidity to shareholders. The average discount indicated from the
above restricted stock studies is lower than that of the above IPO studies
indicating a reduction in discounts for those companies with nearer term
prospects for liquidity. Based on the above factors, a below-average
marketability discount was deemed appropriate.
All the minority interest holdings in the above marketability studies are small
and have little control over company operations. Therefore, no adjustment was
made.
Coeur d'Alenes is highly leveraged. This factor would indicate an above-
average marketability discount.
Summary
Factors Issue Discount
Size of the company Similar Similar
Restriction on Transfers Similar Similar
Payment of Dividends Similar Similar
Prospects of future public offering
(holding: period) Greater Lower
Size and interest of amount controlled Similar Similar
Financial strength of the company Lower Greater
We have increased ("+") or decreased ("-") the benchmark discount of 45 percent
for each of the above factors in order to determine an appropriate discount for
lack of marketability for a minority interest in the Company, as follows:
Discount
Benchmark Discount 45%
Adjustments:
Size of the company O%
Restrictive Agreements O%
Payment of Dividends O%
Prospects of future public offering (holding period) -20%
Size and interest of amount controlled O%
Financial strength of the company +5%
Indicated Discount for Lack of Marketability 30%
Concluded Discount for Lack of Marketability
Based on the above analysis, it is our opinion that a minority interest in
Coeur d'Alenes warrants of discount of 30 percent.
It should be noted that the lack of marketability discount derived from the
above studies does not contain elements of a discount for minority interest
(lack of control) because it has been measured against the current fair market
value of securities that are actively traded, which are typically minority
transactions. Therefore, this lack of marketability discount is applied to the
minority interest value of the equity.
Cronkire & Kissell