EXHIBIT 5
PROJECT ROSSINI
====================================
Presentation to the Special Committee
of the
Board of Directors
April 14, 2003
CONFIDENTIAL
C.E. UNTERBERG, TOWBIN
TABLE OF CONTENTS
I. Introduction
II. Rossini Financial Summary
III. CEUT Analysis Process
IV. Comparable Company Analysis
V. Comparable Transaction Analysis
VI. Stock Trading Analysis
VII. Discounted Cash Flow Analysis
VIII. LBO Analysis
IX. Projected Income Statement
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 2
INTRODUCTION
Ohsea Holdings Limited ("Ohsea"), a company controlled by Lord Michael
Ashcroft ("Ashcroft"), has made a cash offer of $2.07 per ADS and $2.10 per
ordinary share of Rossini not owned or controlled by Ohsea, CS Services
Limited, the beneficial owners of Ohsea and CS Services or certain shares
owned or controlled by certain management of Rossini and their family
members and their trusts (the "Ohsea Parties").
Ohsea proposes to take Rossini private with the Ohsea Parties rolling over
their equity stake (combined roughly 29%) into Newco.
The offer is being made by way of Scheme of Arrangement to the independent
shareholders.
CEUT has been retained by the special committee to act as their advisor as
to the fairness, from a financial point of view, of the $2.07 per ADS to be
received by the ADS holders other than the Ohsea Parties.
Rossini actual and projected results per management of Rossini for the
fiscal year end March are summarized below:
. A conversion rate of $1.60 = (pound)1.00 was assumed throughout
Amounts in ($000s) 2002 A 2003 E 2004 P 2005 P 2006 P
------------- ------------- ------------ ------------- -------------
Revenue $ 185,762 $ 142,817 $ 141,707 $ 164,824 $ 187,293
YoY Growth Rate -20.8% -23.1% -0.8% 16.3% 13.6%
EBITDA (a) (317) 1,106 2,627 4,226 6,431
EBITA (a) (2,742) (718) 1,507 3,426 5,631
Gross Profit as a % of Sales 22.0% 22.9% 24.2% 23.4% 22.9%
SG&A as a % of Sales 22.2% 22.2% 22.3% 20.8% 19.5%
----------
(a) Excludes one time goodwill impairment charge of $14
million in 2002 and undetermined impairment charge in
2003
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 3
TRANSACTION SUMMARY
Transaction Value:
Shares outstanding at 12/31/02 8,778
In-the-money options at average exercise price of 41.5 p 50
--------------
8,828
==============
Purchase price at $2.07 per share $ 18,274
Less: Cash from option exercise (33)
--------------
Net cost of shares 18,241
Plus: Rossini debt (a) 2,736
Less: Rossini cash (a) (9,835)
--------------
Enterprise Value $ 11,142
==============
Uses of funds:
Net purchase price of equity $ 18,241
Retirement of debt and capital leases 2,736
Estimated transaction expenses 2,000
--------------
$ 22,977
==============
Sources of funds:
Rollover of 2,600 shares at transaction price $ 5,590
Drawdown of (pound)7,000 of (pound)10,000 GMAC loan 11,200
Use of existing cash 6,152
--------------
$ 22,977
==============
----------
(a) As of December 31, 2002. Cash at March 31, 2003 is projected to be
$10,715
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 4
SUMMARY TRANSACTION MULTIPLE ANALYSIS
Purchase Price Per Share $ 2.07
------------
Purchase Price: 8,828 shares 18,274
Less: Cash from option exercise (33)
Plus: Rossini Debt (a) 2,736
Less: Rossini Cash (a) (9,835)
--------------------------------------------------------------------------
Enterprise Value $ 11,142
--------------------------------------------------------------------------
OPERATING OPERATING
DATA (pound)000's (b) DATA $000's (b) MULTIPLE
--------------------- --------------- --------
ENTERPRISE VALUE / SALES
FY 2004 P (pound) 88,567 $ 141,707 0.08 x
CY 2003 P 84,169 134,389 0.08
FY 2003 E 89,260 142,817 0.08
LQA 89,360 142,978 0.08
LTM 94,009 150,411 0.07
FY 2002 A 116,101 185,762 0.06
ENTERPRISE VALUE / EBITDA
FY 2004 P (pound) 1,642 $ 2,627 4.2 x
CY 2003 P 740 1,183 9.4
FY 2003 E 691 1,106 10.1
LQA 310 497 22.4
LTM (c) 26 41 269.1
FY 2002 A (c) (198) (317) NM
ENTERPRISE VALUE / EBIT
FY 2004 P (pound) 942 $ 1,507 7.4 x
CY 2003 P (71) (113) NM
FY 2003 E (449) (718) NM
LQA (833) (1,329) NM
LTM (c) (1,530) (2,451) NM
FY 2002 A (c) (2,924) (4,678) NM
TRANSACTION VALUE / TANGIBLE BOOK (pound) 14,179 $ 22,687 0.8 x
----------
(a) Cash & debt are actual for December 31, 2002
(b) Operating data from Company management and SEC filings
(c) Excludes $14 million goodwill impairment charge
LQA = Last quarter anualized; LTM = Last Twelve Months
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 5
ROSSINI FINANCIAL SUMMARY
FY 2001 FY 2002
FYE=March --------- ---------------------------------------------------------------
Amounts in ($000s) TOTAL JUN. '01 SEP. '01 DEC. '01 MAR. '02 TOTAL
Revenue $ 234,650 $ 56,331 $ 47,119 $ 43,877 $ 38,435 $ 185,762
Cost of Services 178,698 43,514 36,701 34,315 30,272 144,802
Gross Profit 55,952 12,817 10,418 9,562 8,163 40,960
Operating Expenses 50,053 13,107 10,563 9,922 10,110 43,702
Goodwill Impairment - - - - 14,000 14,000
Goodwill Amortization 1,834 484 484 484 483 1,935
--------- --------- --------- --------- --------- ---------
Operating (Loss) 4,066 (775) (629) (844) (16,430) (18,678)
Interest & Other Income /
(Expense) (1,083) (389) (271) (321) (240) (1,221)
Pretax Income / (Loss) 2,982 (1,164) (900) (1,164) (16,670) (19,899)
Provision for Income Taxes/
(Benefit) 1,782 72 118 (13) (997) (819)
Net Income / (Loss) $ 1,200 $ (1,236) $ (1,019) $ (1,152) $ (15,674) $ (19,080)
--------- --------- --------- --------- --------- ---------
SEQUENTIAL GROWTH RATES:
Revenue -14.2% -16.4% -6.9% -12.4%
Cost of Services -14.8% -15.7% -6.5% -11.8%
Gross Profit -12.4% -18.7% -8.2% -14.6%
Operating Expenses -9.4% -19.4% -6.1% 1.9%
YR/YR GROWTH RATES:
Revenue 21.8% 6.2% -16.0% -26.7% -41.5% -20.8%
Cost of Services 21.7% 9.2% -13.2% -24.6% -40.7% -19.0%
Gross Profit 22.0% -2.8% -24.5% -33.4% -44.2% -26.8%
Operating Expenses 38.8% 21.9% -8.6% -25.3% -30.1% -12.7%
MARGIN ANALYSIS (% OF SALES):
Cost of Services 76.2% 77.2% 77.9% 78.2% 78.8% 78.0%
Gross Profit 23.8% 22.8% 22.1% 21.8% 21.2% 22.0%
Operating Expenses 21.3% 23.3% 22.4% 22.6% 26.3% 23.5%
Operating (Loss) 1.7% -1.4% -1.3% -1.9% -42.7% -10.1%
FY 2003
FYE=March ---------------------------------------------------------------
Amounts in ($000s) JUN. '02 SEP. '02 DEC. '02 MAR. '03 TOTAL
Revenue $ 38,316 $ 37,916 $ 35,745 $ 30,841 $ 142,817
Cost of Services 28,999 29,113 28,118 23,843 110,073
---------
Gross Profit 9,316 8,803 7,627 6,998 32,744
31,638
Operating Expenses 9,333 8,474 7,959 7,697 33,464
Goodwill Impairment - - - - -
Goodwill Amortization - - - - -
--------- --------- --------- ---------
Operating (Loss) (17) 329 (332) (700) (720)
Interest & Other Income /
(Expense) 125 26 26 (1,741) (1,565)
---------
Pretax Income / (Loss) 108 354 (307) (2,441) (2,285)
Provision for Income Taxes /
(Benefit) 106 155 (21) (58) 182
---------
Net Income / (Loss) $ 2 $ 199 $ (286) $ (2,383) $ (2,468)
--------- --------- --------- --------- ---------
SEQUENTIAL GROWTH RATES:
Revenue -0.3% -1.0% -5.7% -13.7%
Cost of Services -4.2% 0.4% -3.4% -15.2%
Gross Profit 14.1% -5.5% -13.4% -8.2%
Operating Expenses -7.7% -9.2% -6.1% -3.3%
YR/YR GROWTH RATES:
Revenue -32.0% -19.5% -18.5% -19.8% -23.1%
Cost of Services -33.4% -20.7% -18.1% -21.2% -24.0%
Gross Profit -27.3% -15.5% -20.2% -14.3% -20.1%
Operating Expenses -28.8% -19.8% -19.8% -23.9% -23.4%
MARGIN ANALYSIS (% OF SALES):
Cost of Services 75.7% 76.8% 78.7% 77.3% 77.1%
Gross Profit 24.3% 23.2% 21.3% 22.7% 22.9%
Operating Expenses 24.4% 22.4% 22.3% 25.0% 23.4%
Operating (Loss) 0.0% 0.9% -0.9% -2.3% -0.5%
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 6
ROSSINI FINANCIAL SUMMARY
Balance Sheet
FYE = March 2001 2002 DEC. 31, 2002
Amounts in ($000s) --------- --------- -------------
Current Assets:
Cash and Cash Equivalents $ 2,672 $ 8,971 $ 9,835
Short-Term Investments - - -
Accounts Receivable 39,950 17,232 18,681
Prepaid Expenses and Other 16,530 8,046 9,145
--------- --------- -------------
Total Current Assets $ 59,152 $ 34,250 $ 37,660
Plant, Property & Equipment, Net $ 7,269 $ 5,522 $ 4,191
Goodwill, Intangible Assets, Net 53,538 37,888 37,843
Other Long-Term Assets 5 5 5
--------- --------- -------------
Total Assets $ 119,963 $ 77,664 $ 79,699
========= ========= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 4,491 $ 2,501 $ 3,154
Short Term Portion of Capital Lease
Obligation - 72 275
Current Portion of LT Debt 16,560 - -
Other Current Liabilities 14,098 6,854 9,969
Other Provisions - 1,120 -
Payroll and Related Taxes 4,099 3,235 3,311
--------- --------- -------------
Total Current Liabilities 39,248 13,782 16,709
Long-Term Debt $ - $ 2,659 $ 2,461
Other Long-Term Liabilities 256 - -
--------- --------- -------------
Total Liabilities $ 39,504 $ 16,442 $ 19,169
Commitments & Contingencies $ 160 $ - $ -
--------- --------- -------------
Shareholders' Equity $ 80,299 $ 61,222 $ 60,530
--------- --------- -------------
Total Liab. and Stockholders' Equity $ 119,963 $ 77,664 $ 79,699
========= ========= =============
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 7
CEUT ANALYSIS PROCESS
CEUT has analyzed the following:
.. CEUT has compared Rossini against a peer group of U.S. and U.K. comparable
companies
. U.S. Staffing Companies
. CDI, KELYA, MAN, MPS, RHI, SFN, ALRC, BUTL, HIR, EDGW, JOB, HAKI,
KFRC, ASGN, PRGA, RCMT
. U.K. Staffing Companies
. CSV, GLO, HVN, LRG, PTY, RDX, RWA, SRG
.. CEUT has compared the proposed Rossini transaction to 50 other comparable
transactions
.. CEUT has compared Rossini's stock price and trading volume activity to that
of its peer group
.. CEUT has looked at a traditional discounted cash flow analysis using
management's projections
.. CEUT modeled an LBO scenario for the proposed transaction using
management's projections
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 8
COMPARABLE COMPANY ANALYSIS
CEUT has compared Rossini against a peer group of U.S. and U.K. comparable
companies:
.. CEUT considered revenue and levels of profitability for the proposed
transaction of Rossini
. Analyzed multiples for the last twelve months and for calendar year
2003 of:
. Enterprise Value to Revenue
. Enterprise Value to EBITDA
. Enterprise Value to EBIT
. Transaction Value to Tangible Book
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 9
COMPARABLE COMPANY ANALYSIS
ROSSINI COMPARABLE COMPANY MULTIPLES(c, d)
OPERATING TRANSACTION ----------------------------------
DATA $000's (a) MULTIPLES (b) HIGH MEDIAN LOW
--------------- ------------- --------- -------- -------
ENTERPRISE VALUE / SALES
CY 2003 E $ 134,389 0.08 x 1.10 x 0.25 x 0.08 x
LTM 150,411 0.07 1.05 0.21 0.08
ENTERPRISE VALUE / EBITDA
CY 2003 E $ 1,183 9.4 x 25.0 x 9.2 x 2.9 x
LTM (e) 41 269.1 36.2 10.6 2.3
ENTERPRISE VALUE / EBIT
CY 2003 E $ (113) NM x 95.5 x 16.9 x 4.7 x
LTM (e) (2,451) NM 53.0 15.8 2.6
Transaction Value / Tangible Book $ 22,687 0.8 x 47.3 x 1.2 x 0.3 x
----------
(a) Operating data from Company management and SEC filings
(b) Transaction multiples assume a purchase price per share of $2.07
(c) Comparable Company Multiples are LTM and CY end December 31, 2003
(d) U.K. multiples reflect U.K. GAAP
(e) Excludes one time goodwill impairment charge of $14 million in 2002 and
undetermined impairment charge in 2003
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 10
COMPARABLE COMPANY ANALYSIS
Enterprise Value (EV)/Revenue(a)(b) Enterprise Value (EV)/EBITDA
------------------------------- ----------------------------
LTM CY 03E LTM CY 03E
-------------- ------------- ------------ -----------
Rossini (d) 0.05 x 0.05 x 161.5 x 5.9 x
U.S. STAFFING COMPANIES
Alternative Resources 0.20 x NA x 19.2 x NA x
Butler International. Inc. 0.27 NA NM NA
CDI Corporation 0.30 0.28 11.4 NA
Diversified Corporate Resources. Inc. 0.14 NA NM NA
Edgewater Technology, Inc. NM NM NM NM
General Employment Ent. NM NM NM NA
Hall, Kinion & Associates (e) 0.21 0.16 NM NA
Kelly Services, Inc. 0.17 0.16 9.5 9.4
Kforce Inc. 0.21 0.21 NM 9.2
Manpower Inc. 0.29 0.26 9.8 9.1
MPS Group, Inc. 0.43 0.43 9.5 7.9
On Assignment, Inc. 0.34 0.34 3.5 7.0
Personnel Group of America 0.36 NA 13.2 NA
RCM Technologies, Inc. 0.17 NA 2.3 NA
Robert Half International Inc. 1.05 1.10 30.7 25.0
Spherion Corporation 0.14 0.14 23.7 7.6
- -----------------------------------------------------------------------------------------------------------
Median: 0.24 x 0.26 x 10.6 x 9.1 x
- -----------------------------------------------------------------------------------------------------------
U.K. STAFFING COMPANIES (e)
Corporate Services Group 0.24 x 0.24 x NM x NM x
Glotel 0.14 NA NM NA
Harvey Nash Group 0.27 0.28 36.2 15.8
Lorien Plc 0.08 NA 3.3 NA
Parity Group 0.29 0.28 NM 13.4
Reed Executive Plc 0.12 0.12 5.3 NA
Robert Walters 0.09 0.08 18.9 2.9
Spring Group 0.18 NA NM NA
- -----------------------------------------------------------------------------------------------------------
Median: 0.16 x 0.24 x 12.1 x 13.4 x
- -----------------------------------------------------------------------------------------------------------
Page Median excl Rossini: 0.21 x 0.25 x 10.6 x 9.2 x
- -----------------------------------------------------------------------------------------------------------
Mkt. Value
EV/EBIT ------------ Price/Earnings Per Share
------------------------------- Tang. -----------------------------
LTM CY 03E Bk Val. LTM CY 03E
-------------- ------------- ------------ -------------- -----------
Rossini (d) NM x NM x 0.6 x NM x NM x
U.S. STAFFING COMPANIES
Alternative Resources NM x NA x NM x NM x NA x
Butler International. Inc. NM NA NM NM NA
CDI Corporation 53.0 NA 1.9 105.9 18.2
Diversified Corporate Resources. Inc. NM NA NM NM NA
Edgewater Technology, Inc. NM NM 0.7 NM NA
General Employment Ent. NM NA 0.3 NM NA
Hall, Kinion & Associates (e) NM NA 0.9 NM NM
Kelly Services, Inc. 23.7 25.7 1.5 43.2 36.6
Kforce Inc. NM NA 3.6 NM 45.7
Manpower Inc. 12.9 11.1 5.5 22.0 17.7
MPS Group, Inc. 15.8 12.0 2.4 34.3 22.4
On Assignment, Inc. 4.5 16.9 0.6 9.5 23.9
Personnel Group of America 23.4 NA NM NM NA
RCM Technologies, Inc. 2.6 NA 1.2 3.4 NA
Robert Half International Inc. NM 95.5 3.1 1,118.3 113.6
Spherion Corporation 24.4 74.6 0.7 61.2 NM
- -----------------------------------------------------------------------------------------------------------------------------
Median: 19.6 x 21.3 x 1.3 x 38.7 x 23.9 x
- -----------------------------------------------------------------------------------------------------------------------------
U.K. STAFFING COMPANIES (e)
Corporate Services Group NM x NM x NM x NM x NA x
Glotel NM NA 1.0 NM NA
Harvey Nash Group NM NM 47.3 NM NM
Lorien Plc 3.3 NA 1.1 5.0 NA
Parity Group NM NM 10.1 NM 30.0
Reed Executive Plc 5.3 NA 0.5 12.2 NA
Robert Walters 18.9 4.7 1.4 168.3 13.2
Spring Group NM NA 1.0 NM 30.9
- -----------------------------------------------------------------------------------------------------------------------------
Median: 5.3 x 4.7 x 1.1 x 12.2 x 30.0 x
- -----------------------------------------------------------------------------------------------------------------------------
Page Median excl Rossini: 15.8 x 16.9 x 1.2 x 34.3 x 27.0 x
- -----------------------------------------------------------------------------------------------------------------------------
- ----------
(a) Values based on closing prices as of 4/11/03. Enterprise Value is defined
as market value of equity, plus total debt and preferred stock, less cash
and cash equivalents.
(b) Revenue estimates from Wall Street research reports and Bloomberg. Earnings
estimates from First Call Consensus and Bloomberg.
(c) EPS as per First Call and Bloomberg, unless otherwise noted.
(d) Ratios reflect current market value of Rossini based on a closing price of
$1.60
(e) U.K. multiples reflect U.K. GAAP
NM = Not meaningful. NA = Not available
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 11
COMPARABLE TRANSACTION ANALYSIS
CEUT has compared the proposed Rossini transaction to other comparable
transactions:
.. CEUT looked at 50 transactions in the services industry from 1999 to the
present date. Mergers, acquisitions and LBO transactions of both private
and public companies were analyzed. Of the 50 transactions CEUT looked at,
percentage of shares acquired varied.
. Analyzed multiples paid or proposed to be paid of:
. Enterprise Value to Last Twelve Months Revenue (49 transactions
with multiples)
. Enterprise Value to Last Twelve Months EBITDA (13 transactions
with multiples)
. Enterprise Value to Last Twelve Months EBIT (17 transactions
with multiples)
. Transaction Value to Tangible Book (16 transactions with
multiples)
Project Rossini
Page 12 -Confidential- C.E. UNTERBERG, TOWBIN
COMPARABLE TRANSACTION ANALYSIS
ROSSINI SELECTED COMPARABLE COMPANY TRANSACTIONS IN 2002 (c)
OPERATING TRANSACTION --------------------------------------------------------------
DATA $000'S (a) MULTIPLES (b) HIGH MEDIAN LOW NO. OF TRANS.(d)
--------------- ------------- ------------ ------------ ------------ ----------------
ENTERPRISE VALUE /
LTM Sales $ 150,411 0.07 x 1.30 x 0.31 x 0.10 x 10
LTM EBITDA 41 269.1 8.8 5.0 5.0 3
LTM EBIT (2,451) NM 17.7 9.9 2.4 5
TRANSACTION VALUE /
Tangible Book (e) $ 22,687 0.8 x 2.2 x 2.0 x 1.3 x 3
SELECTED COMPARABLE COMPANY TRANSACTIONS IN 2001 (c)
----------------------------------------------------------------
HIGH MEDIAN LOW NO. OF TRANS.(d)
--------------- ------------- ------------ ----------------
ENTERPRISE VALUE /
LTM Sales 4.18 x 0.48 x 0.15 x 20
LTM EBITDA 9.4 8.5 8.0 3
LTM EBIT 16.9 10.0 5.6 6
TRANSACTION VALUE /
Tangible Book (e) 21.2 x 5.2 x 0.01 x 6
ROSSINI SELECTED COMPARABLE COMPANY TRANSACTIONS IN 2000 (c)
OPERATING TRANSACTION ------------------------------------------------------------
DATA $000'S (a) MULTIPLES (b) HIGH MEDIAN LOW NO. OF TRANS.(d)
--------------- ------------- ------------ ------------ ------------ ----------------
ENTERPRISE VALUE /
LTM Sales $ 150,411 0.07 x 1.54 x 0.61 x 0.32 x 13
LTM EBITDA 41 269.1 13.1 9.7 6.3 2
LTM EBIT (2,451) NM 22.6 11.3 8.5 3
TRANSACTION VALUE /
Tangible Book (e) $ 22,687 0.8 x 3.9 x 2.7 x 1.6 x 2
SELECTED COMPARABLE COMPANY TRANSACTIONS IN 1999 (c)
----------------------------------------------------------------
HIGH MEDIAN LOW NO. OF TRANS.(d)
--------------- ------------- ------------ ----------------
ENTERPRISE VALUE /
LTM Sales 1.69 x 0.58 x 0.41 x 6
LTM EBITDA 19.7 12.3 6.6 5
LTM EBIT 21.2 14.8 10.1 3
TRANSACTION VALUE /
Tangible Book (e) 10.6 x 5.9 x 1.5 x 5
ROSSINI SELECTED COMPARABLE COMPANY TRANSACTIONS FROM 1999 TO 2002(c)
OPERATING TRANSACTION --------------------------------------------------------------
DATA $000'S (a) MULTIPLES (b) HIGH MEDIAN LOW NO. OF TRANS.(d)
--------------- ------------- ------------ ------------ ------------ ------------------
ENTERPRISE VALUE /
LTM Sales $ 150,411 0.07 x 4.18 x 0.48 x 0.10 x 49
LTM EBITDA 41 269.1 19.7 8.5 5.0 13
LTM EBIT (2,451) NM 22.6 10.4 2.4 17
TRANSACTION VALUE /
Tangible Book (e) $ 22,687 0.8 x 21.2 x 4.2 x 0.01 x 16
- ----------
(a) Operating data from Company management and SEC filings
(b) Transaction multiples assume a purchase price per share of $2.07
(c) Comparable Company Transaction Multiples are all LTM multiples
(d) Indicates the number of transaction where multiples were available
(e) Rossini Tangible book value is actual as of December 31, 2002
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 13
COMPARABLE TRANSACTION PREMIUM ANALYSIS
The table below presents premiums paid in acquisitions in 20 transactions in the
services industry from 1999 to present date based on market prices 1 day, 1 week
and 4 weeks prior to the date of announcement:
Price Premium to
----------------------------
1 Day 1 Week 4 Weeks
----- ------ -------
Rossini (a) 29.4% (b) 25.5% 22.5%
High 166.1% 185.7% 175.9%
Median 30.7% 30.0% 42.9%
Low -8.5% -11.4% -9.7%
----------
(a) Based on offer price of $2.07
(b) Based on April, 11, 2003 closing price of $1.60
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 14
SELECTED COMPARABLE TRANSACTIONS
ACQUIROR NAME ENTERPRISE VALUE / (a) TRANSACTION VALUE /
DATE TARGET NAME TRANSACTION ENTERPRISE ----------------------- --------------------------
ANNOUNCED TARGET BUSINESS DESCRIPTION VALUE ($MM) VALUE ($MM) SALES EBITDA EBIT NET INCOME TANG. BK VAL.
--------- ---------------------------------- ----------- ----------- ----- ------ ------ ---------- -------------
12/05/02 Metroyard Ltd
MBA Michael Bailey Associates $ 11.3 $ 17.2 0.2 x 5.0 x 5.4 x 5.4 x 2.2 x
Employment agency
07/16/02 Ego Pty Ltd
Technisource Inc $ 42.8 $ 30.0 0.2 x 8.8 x 17.6 x NM 1.3 x
Provide technical support svcs
05/20/02 Spring Group PLC
Triage Consulting Ltd $ 11.6 NA 0.3 x NA 9.9 x NA NA
Employment agency
04/26/02 Reed Health Group PLC
Locum Group Ltd $ 49.1 NA 0.9 x NA 17.7 x NA NA
Employment agency
03/25/02 UK Based Private Equity Group
Provisional Employ Soln-Ind $ 2.4 NA 0.1 x NA 2.4 x 2.4 x NA
Employment agency
12/17/01 Staffing Ventures Plc
Eagle Group of Cos $ 2.1 NA 0.2 x NA 5.9 x NA NA
Employment agency
08/28/01 e-MedSoft.com
Tender Loving Care Health Svcs $ 13.8 $ 96.1 0.4 x 9.4 x 16.9 x NM NM
Provide temporary help svcs
06/18/01 Shareholders
Reed Health Group PLC $ 73.0 NA 0.9 x NA 10.4 x NA NA
Employment agency
03/01/01 Vedior NV
BIS SA(Vedior International) $ 21.6 $ 914.2 0.4 x 8.5 x 14.2 x 0.4 x 0.0 x
Employment agency
02/23/01 Aon Corp
ASI Solutions Inc $ 111.3 $ 110.5 1.3 x 8.0 x 9.5 x 18.2 x 13.6 x
Pvd employment svcs
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 15
SELECTED COMPARABLE TRANSACTIONS
ACQUIROR NAME ENTERPRISE VALUE/(a)
DATE TARGET NAME TRANSACTION ENTERPRISE --------------------------
ANNOUNCED TARGET BUSINESS DESCRIPTION VALUE ($MM) VALUE ($MM) SALES EBITDA EBIT
--------- ------------------------------- ----------- ----------- ------ ------- -------
01/08/01 Ingleby(1367) Ltd
Initial Personnel Services Ltd $ 35.3 NA 0.3 x NA 5.6 x
Employment agency
12/29/00 Protocol Associates NV
Spring Education, Spring Skills $ 110.9 NA 1.0 x NA 11.3 x
Pvd employment, training svcs
04/17/00 Vedior NV
ACSYS Inc $ 72.5 $ 112.9 0.7 x 13.1 x 22.6 x
Provide staffing services
02/24/00 Investor Group
Westaff Inc $ 159.2 $ 212.9 0.3 x 6.3 x 8.5 x
Pvd help supply svcs
11/24/99 TMP Worldwide Inc
HW Group Plc $ 57.3 $ 54.8 0.6 x 6.6 x NA
Pvd staffing svcs
09/01/99 Vedior NV
Select Appointments $ 1,789.2 NA 1.3 x 18.2 x NA
Pvd staffing svcs
08/18/99 Adecco SA
Olsten Corp. $ 1,460.0 $ 2,012.3 0.4 x 19.7 x 21.2 x
Pvd staffing svcs
06/24/99 CompuWare Corp
Data Processing Resources Corp $ 452.1 $ 511.6 1.7 x 12.3 x 14.8 x
Develop computer system
03/25/99 Interim Services Inc
Norrell Corp $ 517.3 $ 625.2 0.4 x 8.2 x 10.1 x
Pvd personnel, business svcs
ACQUIROR NAME TRANSACTION VALUE/
DATE TARGET NAME ---------------------------
ANNOUNCED TARGET BUSINESS DESCRIPTION NET INCOME TANG. BK VAL.
--------- ------------------------------- ----------- -------------
01/08/01 Ingleby(1367) Ltd
Initial Personnel Services Ltd NA NA
Employment agency
12/29/00 Protocol Associates NV
Spring Education, Spring Skills 42.7 x NA
Pvd employment, training svcs
04/17/00 Vedior NV
ACSYS Inc 253.5 x NM
Provide staffing services
02/24/00 Investor Group
Westaff Inc 11.6 x 3.9 x
Pvd help supply svcs
11/24/99 TMP Worldwide Inc
HW Group Plc 12.8 x 5.9 x
Pvd staffing svcs
09/01/99 Veditor NV
Select Appointments 33.7 x 5.8 x
Pvd staffing svcs
08/18/99 Adecco SA
Olsten Corp. NM 7.0 x
Pvd staffing svcs
06/24/99 CompuWare Corp
Data Processing Resources Corp 23.1 x NM
Develop computer system
03/25/99 Interim Services Inc
Norrell Corp 14.7 x 10.6 x
Pvd personnel, business svcs
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 16
STOCK TRADING ANALYSIS
CEUT reviewed the average daily trading volume for the last twelve months as a
percentage of the total number of shares outstanding and not owned by affiliates
or management of Rossini (which is sometimes referred to as the "public float")
to its peer group, as illustrated by the table below:
DAILY VOLUME / AVERAGE DAILY
FLOAT(a) FLOAT TRADING VOLUME
-------------- ----------- --------------
Rossini 0.06% 8,778,000 4,851
ALRC 0.28% 11,380,000 31,938
BUTL 0.20% 9,010,000 18,447
CDI 0.42% 12,020,000 50,386
HIR 0.38% 1,960,000 7,526
EDGW 0.20% 9,640,000 19,422
JOB 0.15% 3,710,000 5,539
HAKI 0.78% 9,590,000 74,386
KELYA 0.25% 30,900,000 77,974
KFRC 0.24% 23,390,000 57,071
MAN 0.84% 77,060,000 646,560
MPS 0.34% 96,370,000 328,491
ASGN 1.10% 24,930,000 273,859
PRGA 0.75% 25,210,000 189,197
RCMT 0.06% 10,470,000 6,011
RHI 0.54% 157,750,000 853,928
SFN 0.35% 56,090,000 198,530
----------
(a) Represents average daily trading volume for the last twelve months
Source: Bloomberg, Reuters
CEUT noted that Rossini average daily volume as a percentage of its public float
was 0.06%, the lowest among its peer group.
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 17
DISCOUNTED CASH FLOW ANALYSIS
CEUT performed a DCF analysis of Rossini to estimate the present value of the
unlevered after-tax free cash flows that Rossini could generate. The analysis
was based on management's projections for the three years ending March 31, 2006
deducting an amount for certain estimated contingent liabilities. Ranges of
terminal values for the discounted cash flows were estimated using multiples of
terminal year 2006 EBITDA of 3.0x to 6.0x. CEUT then discounted to present value
the free cash flow streams and terminal values using discount rates of 15% to
30%. This analysis indicated the following per share equity reference ranges:
TERMINAL VALUE MULTIPLE OF FY 2006 EBITDA
DISCOUNT ---------------------------------------------
RATE 3.0 x 4.0 x 5.0 x 6.0 x
-------- ---------------------------------------------
15.0% $ 2.32 $ 2.80 $ 3.28 $ 3.76
20.0% 2.13 2.55 2.97 3.39
25.0% 1.97 2.34 2.71 3.08
30.0% 1.83 2.16 2.49 2.82
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 18
LBO ANALYSIS
CEUT modeled the proposed LBO transaction using management's projections. CEUT
analyzed different scenarios, including exit multiples, to see the impact of the
transaction to the Company and its effect on returns for equity. The following
table summarizes returns internal rate of returns to equity investors assuming
that their initial equity investment is valued at the $2.07 per share
transaction price:
IRR RETURNS
---------------------------------
2004 2005 2006
----- ---- ----
3.0 x EBITDA Exit Multiple -84.2% 5.1% 37.0%
4.0 x EBITDA Exit Multiple -39.1% 33.9% 52.8%
5.0 x EBITDA Exit Multiple 5.9% 57.5% 65.9%
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 19
PROJECTED INCOME STATEMENT
AS OF MARCH 31, PRO FORMA PROJECTED AS OF MARCH 31,
-------------------------------------- --------------------------------------
2001 2002 2003 E 2004 2005 2006
---------- ---------- ---------- ---------- ---------- ----------
Revenue $ 234,650 $ 185,762 $ 142,817 $ 141,707 $ 164,824 $ 187,293
Costs of Revenue 178,698 144,802 110,073 107,462 126,329 144,419
---------- ---------- ---------- ---------- ---------- ----------
Gross Profit 55,952 40,960 32,744 34,245 38,495 42,874
SG&A 47,952 41,227 31,638 31,618 34,269 36,443
Goodwill Impairment - 14,000 - - - -
---------- ---------- ---------- ---------- ---------- ----------
Operating Expenses 47,592 55,277 31,638 31,618 34,269 36,443
EBITDA 8,360 (14,317) 1,106 2,627 4,226 6,431
Depreciation 2,464 2,426 1,824 1,120 800 800
---------- ---------- ---------- ---------- ---------- ----------
EBITA 5,896 (16,742) (718) 1,507 3,426 5,631
Amortization of New Debt Issuance Costs - - - - - -
Amortization - Acq. Related - - - - - -
Goodwill Amortization 1,832 1,936 - - - -
---------- ---------- ---------- ---------- ---------- ----------
Operating Income 4,064 (18,678) (718) 1,507 3,426 5,631
Interest Inc./(Exp.) and Other, Net (1,082) (1,221) (1,563) - - -
Interest Income - - - 105 105 105
Line of Credit - - - - - -
Bank Debt - - - (644) (612) (550)
Subordinate Debt - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Pretax Income 2,982 (19,899) (2,281) 968 2,919 5,186
Provision for Income Taxes/(Benefit) 1,784 (819) 184 19 382 1,175
---------- ---------- ---------- ---------- ---------- ----------
Net Income Bef. Extraordinary Item 1,198 (19,080) (2,465) 949 2,537 4,011
One-time Charges (net of taxes) (a) - - - (1,000) - -
---------- ---------- ---------- ---------- ---------- ----------
Net Income After Extraordinary Item $ 1,198 $ (19,080) $ (2,465) $ (51) $ 2,537 $ 4,011
---------- ---------- ---------- ---------- ---------- ----------
YR/YR GROWTH RATES:
Net Revenue NM -20.8% -23.1% -0.8% 16.3% 13.6%
Gross Profit NM -26.8% -20.1% 4.6% 12.4% 11.4%
SG&A NM -13.3% -23.4% -0.1% 8.4% 6.3%
EBITDA NM NM NM 137.6% 60.9% 52.2%
MARGIN ANALYSIS (% OF SALES):
Cost of Revenue 76.2% 78.0% 77.1% 75.8% 76.6% 77.1%
Gross Profit 23.8% 22.0% 22.9% 24.2% 23.4% 22.9%
SG&A 20.3% 22.2% 22.2% 22.3% 20.8% 19.5%
EBITDA 3.6% -0.2% 0.8% 1.9% 2.6% 3.4%
Interest Expense -0.5% -0.7% -1.1% -0.5% -0.4% -0.3%
(a) Contingent Liability of $1 million
Project Rossini -Confidential- C.E. UNTERBERG, TOWBIN
Page 20