1
EXHIBIT (c)(2)
CASCO INTERNATIONAL, INC.
ANALYTIC INFORMATION REGARDING
BUYOUT PROPOSAL
2
CASCO INTERNATIONAL, INC.
ANALYTIC INFORMATION REGARDING BUYOUT PROPOSAL
MAY 8, 2001
TABLE OF CONTENTS
Section
-------
Original and Revised Offer Letters to Board A
Press Releases Announcing Transaction
Resolution Establishing Special Committee
Fairness Opinion Letter B
Summary of Observations C
Market Trading Comparables Analysis D
DCF Valuation Analysis E
Mergers and Acquisitions Comparables Analysis F
Adjusted Balance Sheet Analysis G
Theoretical Leveraged Buyout Feasibility Analysis H
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SECTION A
4
December 11, 2000
Board of Directors
Casco International, Inc.
4205 East Dixon Boulevard
Shelby, North Carolina 28150
Re: Proposal for Cash Merger
Gentlemen:
Through newly created acquisition entities owned by us (the "Acquisition
Companies"), we propose that Casco International, Inc. (the "Company") enter
into a merger transaction with the Acquisition Companies that would, among other
things, provide that:
- Each share of the Company's common stock outstanding
immediately prior to the closing of the merger, other than
shares owned by us, would be converted into the right to
receive $1.87 per share in cash.
- The Company's options to purchase common stock outstanding
immediately prior to the closing of the merger, other than
options held by us, would receive cash equal to the difference
between $1.87 per share and the exercise price of each vested
option, and all such options, including the unvested portion,
and any options with an exercise price of more than $1.87 per
share, would be cancelled.
- We are currently considering the appropriate treatment of the
Company's unexercised warrants.
We anticipate that all of the Company's employees would be retained upon the
closing of the merger.
We understand that this proposal may require the appointment of a special
committee of the Board to consider and evaluate it and to take such other action
as the committee may deem appropriate and in the best interest of Company and
its stockholders. We will be happy to cooperate with the committee in this
regard.
As is customary for transactions of this type, we propose to provide the
committee and the Board with a merger agreement, and the consummation of the
merger would be subject to the negotiation and execution of that agreement which
would contain customary representations and warranties and conditions to
closing, including approval of the merger agreement and the merger transaction
by the Board and the Company's shareholders and the receipt of all necessary
third party and governmental consents.
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We are currently investigating the availability of financing to fund the merger
consideration and are confident that sufficient financing can be obtained.
We desire to consummate this transaction as soon as is reasonably practicable.
Yours very truly,
/s/ S. Robert Davis_
- ------------------------------
S. Robert Davis
/s/ Charles R. Davis
- ------------------------------
Charles R. Davis
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February 28, 2001
Mr. David J. Richards
5900 Cromdale Drive
Suite 300
Dublin, OH 43017
Dear Dave:
Per our conversation I understand that the Special Committee does not feel that
our original offer of $1.87 per share is fair based on the findings of the
Financial Advisor retained by the Special Committee. While we obviously disagree
with the opinion we are willing to amend our offer to $2.10 per share provided
the Special Committee confirms to us in writing by close of business tomorrow
that this price is acceptable to the Special Committee and its financial
advisors will render an opinion that it is fair from a financial standpoint.
I look forward to hearing from you.
Best regards,
/s/ Charles R. Davis
Charles R. Davis
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[CASCO INTERNATIONAL LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
Company:
Mr. Charles R. Davis Jeff Ross
President and Chief Executive Officer Chief Financial Officer
1-800-818-8985 ext. 4401 1-800-535-5690 ext. 259
CASCO INTERNATIONAL, INC.
ANNOUNCES PROPOSED BUYOUT
Charlotte, NC, December 11, 2000 - CASCO International, Inc. (NASDAQ:
CASC/CASCW), the leading provider of new generation recognition programs for
performance driven companies, announced today that it has received an offer from
S. Robert Davis, the Company's chairman and a director, and Charles R. Davis,
the Company's president, chief executive officer and a director, to acquire the
Company through a cash merger at $1.87 per share. The offer indicates that the
offeror is considering the appropriate treatment of the Company's unexercised
warrants outstanding on the closing of the merger. The Davis' currently own
beneficially approximately 21.88% (excluding options) of the outstanding shares
of the Company's stock and intend to retain all of their shares.
The offer to acquire the Company was presented during a regularly scheduled
meeting of the Company's Board of Directors. The Board appointed a special
committee of outside directors to consider the offer. The consummation of the
transaction is subject, among other things, to an evaluation of the transaction
by the special committee, the execution of a definitive merger agreement, the
availability of financing, any necessary regulatory approvals and approval by
the Company's stockholders.
The preceding contains a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995. The statements contained in this release that are
not historical facts are forward looking statements. Actual results may differ
from those projected in the forward-looking statements. These forward looking
statements involve risks and uncertainties, including the risks that the Company
might not have sufficient capital available to expand its fulfillment operations
and that the Company might encounter unanticipated difficulties associated with
rapid expansion. Investors are also directed to other risks discussed in
documents filed by the Company with the Securities and Exchange Commission. The
Company assumes no obligation to update the information included in this
presentation.
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[DOW JONES LOGO]
CASCO INTL GETS BUYOUT OFFER FROM CHMN, CEO
Updated: Monday, December 11, 2000 03:34 PM ET
CHARLOTTE, N.C. (Dow Jones)--Casco International Inc. (CASC, news, msgs)
Chairman S. Robert Davis and President and Chief Executive Charles R. Davis
offered to buy the company for $1.87 a share, or about $1.8 million based on
Friday's closing share price.
The two men beneficially own about 21.88% of the outstanding shares, excluding
options, and they plan to retain all their shares.
In a press release Monday, Casco said it has appointed a
committee of outside directors to consider the offer.
Shares of Casco halted for news dissemination on Nasdaq and
last traded at $1.56, up 56 cents or 56.3%.
Casco, which sells, employee recognition and safety awareness
programs, has about 1.8 million shares outstanding.
For fiscal 1999, Casco reported income of about $357,495, or 20 cents a share,
on sales of about $24.2 million.
- -Emily Park; Dow Jones Newswires; 201-938-5400
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[CASCO INTERNATIONAL LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
For Further Information Contact:
Mr. Charles R. Davis Mr. Jeffrey A. Ross
President and Chief Executive Officer Chief Financial Officer
1-800-535-5690 ext. 218 1-800-535-5690 ext. 259
CASCO INTERNATIONAL, INC. ANNOUNCES INCREASE IN CASH PRICE FOR
PROPOSED BUYOUT OF COMMON STOCK
Charlotte, North Carolina (March 5, 2001) - Casco International, Inc. (NASDAQ:
CASC), the leading provider of new generation recognition programs for
performance-driven companies, announced in December that it had received an
offer from S. Robert Davis, the Company's chairman and a director, and Charles
R. Davis, the Company's president, chief executive officer and a director, to
acquire the Company through a cash merger at $1.87 per share. The Board of
Directors appointed a special committee of outside directors to consider the
offer. Following negotiations with the special committee, the Davis' have agreed
to increase their offer to $2.10 per share for the common stock, and the special
committee has indicated that it is prepared to recommend that price to the full
Board of Directors for approval. As of this date, a Board meeting has not been
scheduled to approve the sale.
The consummation of the merger transaction is subject, among other things, to an
evaluation of the merger agreement by the special committee, the execution of a
definitive merger agreement, any necessary regulatory approvals and approval by
the Company's Board of Directors and stockholders. The Company currently
anticipates that a stockholder's meeting to consider the merger transaction will
be held in May or June.
10
[DOW JONES LOGO]
CASCO INTL EXECS BOOST OFFER TO BUY CO. TO $2.10/SHARE
Updated: Monday, March 5, 2001 04:59 PM ET
CHARLOTTE (Dow Jones)--Two Casco International Inc. (CASC, news, msgs)
executives boosted their buyout offer for the company to $2.10 a share from
$1.87 a share.
In a press release Monday, Casco said a special committee of outside directors -
formed to consider the original offer in December - has indicated it is prepared
to recommend the offer to the full board for approval.
The company's chairman, S. Robert Davis, and its president and chief executive
officer, Charles S. Davis, offered in December to buy the developer of employee
recognition programs in a cash merger for $1.87 a share.
At that time, the two executives held a 21.88% stake in the company, excluding
options.
President and Chief Executive Charles S. Davis is the son of the Chairman Robert
Davis.
Shares of Casco International closed Monday at $1.59, up 6 cents, or 4.1%, on
Nasdaq SmallCap volume of 9,400 shares. Average daily volume is 5,012 shares.
- -Michael Goodman; Dow Jones Newsires; 201-938-5400
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PROPOSED RESOLUTIONS FOR APPOINTMENT OF SPECIAL COMMITTEE
WHEREAS, the Board of Directors has received an offer from S. Robert
Davis and Charles R. Davis (the "Davis Group") pursuant to which the Davis
Group, through a newly-created entity ("Newco"), would engage in a merger
transaction with the Corporation whereby Newco would acquire all of the
outstanding shares of the common stock of the Corporation other than those owned
by the Davis Group for $1.87 per share and that the offeror is considering the
appropriate treatment of the Company's unexercised warrants outstanding on the
closing of the merger;
WHEREAS, in light of the foregoing, it is desirable to establish and
empower a special committee of the Board of Directors, consisting of Messrs.
Richards and Taylor, each such person being a director having no employment
relationship with the Corporation and no direct or indirect interest in the
Davis Group, to review and consider whether the Proposed Transaction, is in the
best interests of the Corporation and its other stockholders;
NOW, THEREFORE, BE IT RESOLVED, that there is hereby established a
Special Committee of the Board of Directors (the "Committee") consisting of
Messrs. Richards and Taylor, which Committee shall be, and hereby is, authorized
to review, evaluate and recommend to the Board of Directors what actions, if
any, should be taken with respect to the Proposed Transaction;
RESOLVED FURTHER, that Mr. Richards shall act as Chairman of the
Committee;
RESOLVED FURTHER, that all communications from representatives of the
Davis Group and its advisors regarding the Proposed Transaction shall be
directed to Mr. Richards as Chairman of the Special Committee;
RESOLVED FURTHER, that the Committee is hereby authorized and empowered
to retain, at the Corporation's expense and on terms satisfactory to the
Committee, counsel to the Committee and a financial advisor to advise the
Committee in connection with the discharge of its duties and responsibilities
and to provide such opinions to the Committee and the Board of Directors as the
Committee may deem necessary or appropriate in furtherance of its duties and
responsibilities;
RESOLVED FURTHER, that the Committee and its advisors are hereby
authorized to consult with management of the Corporation respecting any and all
aspects of the Corporation's business, financial condition, results of
operations and prospects, including the review and consideration with management
of any business plans, budgets or projections prepared by management;
RESOLVED FURTHER, that the Committee shall make its own independent
determination whether any Proposed Transaction is in the best interests of the
Corporation and its other stockholders and make recommendations to the Board of
Directors with respect thereto,
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including its recommendation as to whether the Proposed Transaction should be
approved by the Board of Directors and recommended to the stockholders for their
approval; and
RESOLVED FURTHER, that as compensation for the additional services that
may be rendered by the members of the Committee pursuant to these resolutions,
the members of the Committee shall receive compensation of $15,000 for the
Chairman and $10,000 per member, and shall be entitled to be reimbursed for
their out-of-pocket travel and associated costs in connection with their service
on the Committee; and
RESOLVED FURTHER, that the Committee is authorized and empowered to
take such further action and to obtain such additional information as the
Committee may deem necessary or appropriate in its judgments to carry out the
duties and responsibilities of the Committee contemplated by these resolutions.
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SECTION B
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SECTION B
AMBIENT ADVISORS, LLC
100 North Crescent Drive
Suite 305
Beverly Hills, CA 90210
Tel (310) 772-2852
Fax (310) 772-2854
May 8, 2001
Board of Directors
CASCO INTERNATIONAL, INC.
13900 Conlan Circle, Suite 150
Charlotte, North Carolina 28277
Gentlemen:
We understand that Casco International, Inc. (the "Company") has received an
offer (the "Offer") from S. Robert Davis, the Company's Chairman and a Director
of the Company, and Charles R. Davis, the Company's President, Chief Executive
Officer, and a Director of the Company, to acquire the Company through a cash
merger at $1.87 per share. Such transaction and all related transactions are
referred to collectively herein as the "Transaction." The price per share Offer
to complete the Transaction was increased to $2.10 per share on February 28,
2001.
It is our understanding that the Company has formed a special committee (the
"Committee") to consider certain matters relating to the Transaction. The Davis"
currently own 21.88% (excluding options) of the outstanding shares of the
Company's common stock. The remainder of the fully diluted shares of the Company
is owned by institutional stockholders (less than 2%) and general public
stockholders (both, collectively, "Public Stockholders").
The Committee has requested our opinion (the "Opinion") as to the fairness, from
a financial point of view, to the Public Stockholders of the Company of the
consideration to be received by them in connection with the Transaction. This
Opinion does not address the Company's underlying business decision to effect
the Transaction.
In connection with the Opinion, we have made such reviews, analyses and
inquiries, as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
a. Reviewed the Company's annual reports to stockholders and on
Form 10-K for the past two fiscal years and quarterly reports
on Form 10-Q since the date of the latest annual report and
10-K.
b. Reviewed the final proxy statement dated April 24, 2000.
c. Reviewed copies of Board minutes and various presentations to
the Board during the past 12 months.
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AMBIENT ADVISORS, LLC
d. Reviewed recent press releases of the Company.
e. Reviewed the Offer letter of December 11, 2000 and the revised
Offer letter of February 28, 2001.
f. Met with certain members of the Company's senior management to
discuss the current condition and future prospects of the
Company.
g. Visited the Company's main offices and facilities in
Charlotte, North Carolina and Shelby, North Carolina.
h. Reviewed product information and brochures prepared by the
Company.
i. Reviewed forecasts and projections prepared by the Company's
management.
j. Reviewed certain historical market prices and trading volume
for the Company's publicly traded securities.
k. Reviewed certain other publicly available financial data for
certain companies that we deem comparable to the Company
including historical market prices and trading volumes of
these companies.
l. Reviewed prices paid in other transactions that we considered
similar to the Transaction.
m. Conducted such other studies, analyses and inquiries, as we
have deemed appropriate.
In preparing our Opinion, we have relied upon and assumed, without independent
verification, that the financial forecasts and projections provided to us have
been reasonably prepared and reflect the best currently available estimates of
the future financial results and condition of the Company. We have not been
requested to, and did not solicit, third party indications of interest in
acquiring all or any part of the Company. Furthermore, we have not negotiated
the transaction nor have we advised you with respect to alternatives to it.
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 any such information. We have not made any
physical inspections or independent appraisals of any of the properties or
assets of the Company. Our Opinion is necessarily based on business, economic,
market and other conditions as they exist and can be evaluated by us as of the
date of this letter.
Based on the foregoing, and in reliance thereon, it is our opinion that the
consideration to be received by the public stockholders of the Company in
connection with the Transaction is fair to them from a financial point of view.
This Opinion may be included in its entirety in any filing made by the Company
in respect of the Transaction with the Securities and exchange Commission, so
long as this Opinion is reproduced in full in such filing, and any description
of, or reference to, us or a summary of this Opinion and/or the related analysis
in such filing is in a form acceptable to us and/or our legal counsel.
AMBIENT ADVISORS, LLC
/S/AMBIENT ADVISORS, LLC
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SECTION C
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CASCO INTERNATIONAL, INC.
ANALYTIC INFORMATION REGARDING BUYOUT PROPOSAL
SUMMARY OF OBSERVATIONS
Regarding Overall Company Outlook
- Flat to down market likely for next 12-18 months.
- Total market size approximately $600 million annually.
- Market is concentrated for larger customers, but highly
fragmented overall.
- No real public competitors.
- Company revenue somewhat dependent on current President for
sales and account maintenance.
- Loss of key account could turn Casco to loss position.
Regarding Market Trading Comparables Analysis
- No real comparables in same business.
- Market comparables selected from well over one hundred
"management services" and "business services" companies.
- All comparables provide services to other businesses and range
widely in type of service, however, as a group they reflect
similar investment opportunities for investors.
- All comparable companies' stock prices down drastically from
52-week highs, Internet related companies suffered the
greatest declines, well over 75% as a group.
- Casco stock performance over past year similar to comparables
as a group and tracks drastic NASDAQ decline since the spring
of last year. Casco by no means the worst performer.
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- The "management services" group sells now for about tangible
book value, while the somewhat less comparable "business
services" (Internet) companies now sell for significant
discounts to book value, and even discounts to cash values in
some cases. At their 52-week highs, all companies sold for
solid multiples of book value.
- All comparables with exposure to Internet losing money, few
comparables very profitable at this time.
- Many of the comparables do not have the same asset
levels/sales as Casco due to more "services" nature of the
businesses.
Discounted Cash Flow Analysis
- At modest profit levels, Casco generates solid cash flow,
especially as a percent of market value.
- Casco management believes that 5% revenue growth with stable
margins is realistic for projections.
- However, no revenue growth could be also realistic for the
next several years depending on state of the overall economy
and expected layoffs.
- Normal discount rates applied to cash flows and terminal
values yields indicate valuation for Casco of over $2.00 and
perhaps as high as $3.00, assuming the company maintains year
2000 performance
Mergers and Acquisitions Comparables Analysis
- No real direct comparables and no great conclusions to be
gleaned from reviewing smaller comparable transactions.
- All comparable sales at multiples of book value and multiples
of significant multiples of cash flow and assets.
- Searches for additional comparables possible, but unlikely to
yield significant new insights.
- Most acquisition comparables likely have smaller asset bases,
Casco more unusual because it inventories and ships a range of
products as the basis for its service.
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Adjusted Book Value Analysis
- Most Casco assets and liabilities are fairly stated on the
balance sheet.
- Adjustments made include eliminating goodwill and adding back
depreciation on the Casco main facility in Shelby, NC.
- Main Shelby facility and its land on the balance sheet at
gross value of $2.8 million, was appraised a couple of years
ago at $3.0 million. However, current market appears soft, so
current market value of land and building probably less than
$2.5 million as a custom use facility.
- Adjusted tangible net worth at December 31, 2000 indicated at
$2.41 per share if real estate depreciation not restored and
$2.81 if real estate depreciation is restored.
Theoretical Leveraged Buyout Feasibility Analysis
- Casco is a good leveraged buyout candidate if results of last
year can be maintained: strong cash flows, strong interest
rate coverage and ability to amortize debt. (25% equity
rollover, 8.5% prime rate, $3.0 million loan which is $2.24
borrowed per purchased share of stock, five year amortization
of principal)
- If Casco financial results of 2000 are maintained, acquisition
debt (to acquire 75% of equity) can be paid off in five years.
No increased performance is required.
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SECTION D
21
ANALYSIS OF COMPARABLE COMPANIES
(Dollars in millions)
MARKET CLOSING
VALUE LTM LTM PRICE 52 WEEK HI/LOW LTM
COMPANY LTM OF EQUITY LTD SALES EPS 16-FEB-01 STOCK P/E RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
Ablest Oct-00 $ 13.15 $ -- $ 98.10 (1.63) $ 4.65 $4.13 - $ 8.88 NE
Barrett Business Services Sep-00 $ 29.38 $ 2.40 $321.00 0.29 $ 3.94 $2.50 - $ 7.63 13.6
On Site Sourcing Sep-00 $ 7.43 $ 1.50 $ 33.90 0.43 $ 1.50 $1.25 - $ 6.38 3.5
American Physicians Group Sep-00 $ 6.86 $ 4.80 $ 20.80 0.66 $ 2.50 $1.00 - $ 4.00 3.8
Headway Corp. Resources Sep-00 $ 26.30 $76.20 $370.40 0.40 $ 2.30 $1.06 - $ 5.75 5.8
PFS Web Sep-00 $ 18.42 $ 2.30 $ 51.80 (0.47) $ 1.03 $0.53 - $40.38 NE
Stonepth Group Sep-00 $ 12.46 $ -- $ 0.10 (2.89) $ 0.67 $0.31 - $ 4.75 NE
Ascendent Solutions Sep-00 $ 5.31 $ 0.40 $ 9.50 (1.56) $ 0.25 $0.22 - $ 9.06 NE
Allin Corp Sep-00 $ 10.69 $ 1.00 $ 23.60 (0.50) $ 1.56 $1.25 - $ 5.00 NE
Towne Services Sep-00 $ 11.66 $ 0.80 $ 26.90 (2.05) $ 2.13 $1.00 - $11.41 NE
- ------------------------------------------------------------------------------------------------------------------------------------
CASCO Sep-00 $ 2.68 $ 2.10 $ 23.30 0.08 $ 1.50 $0.88 - $ 5.84 18.8
- ------------------------------------------------------------------------------------------------------------------------------------
PRICE / ENTERPRISE
TANGIBLE BOOK TANGIBLE VALUE /
COMPANY VALUE / SHARE BOOK RATIO EBITDA EBITDA
- ---------------------------------------------------------------------------------------------------------------
Ablest $5.14 0.91 $ 3.00 4.38
Barrett Business Services $2.26 1.74 $ 7.80 3.77
On Site Sourcing $1.47 1.02 $ 4.90 1.52
American Physicians Group $2.77 0.90 $ 2.50 2.75
Headway Corp. Resources NM NM $ 23.30 1.13
PFS Web $2.29 0.45 $(11.01) (1.67)
Stonepth Group $1.68 0.40 $ (2.00) (6.23)
Ascendent Solutions $1.18 0.21 $(19.20) (0.28)
Allin Corp NM NM $ (0.10) (106.86)
Towne Services $5.81 0.37 $ (7.20) (1.62)
- --------------------------------------------------------------------------------------------------------------
CASCO $2.81 0.53 $ 1.50 1.78
- --------------------------------------------------------------------------------------------------------------
MANAGEMENT SERVICES COMPARABLES
Note: Tangible Net Worth excludes investments in affiliates. Number 4 4 5
Median 4.8 1.0 2.7
Mean 6.7 1.1 2.7
Standard Deviation 4.7 0.4 1.4
High 13.6 1.7 4.4
Low 3.5 0.9 1.1
OTHER BUSINESS SERVICE COMPARABLES
Number 0 4 0
Median 0.4
Mean 0.4
Standard Deviation 0.1
High 0.5
Low 0.2
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ANALYSIS OF COMPARABLE COMPANIES - CONTINUED
(Dollars in millions)
MARKET VALUE LTM LTM CLOSING PRICE 52 WEEK HI/LOW
COMPANY OF EQUITY SALES EPS 16-FEB-01 STOCK
- -------------------------------------------------------------------------------------------------------------------------------
Ablest Corp $ 13.15 $ 98.10 (1.63) $ 4.65 $4.13 - $ 8.88
Barrett Business Services $ 29.38 $ 321.00 0.29 $ 3.94 $2.50 - $ 7.63
On Site Sourcing $ 7.43 $ 33.90 0.43 $ 1.50 $1.25 - $ 6.38
American Physicians Group $ 6.86 $ 20.80 0.66 $ 2.50 $1.00 - $ 4.00
Headway Corp. Resources $ 26.30 $ 370.40 0.40 $ 2.30 $1.06 - $ 5.75
PFS Web $ 18.42 $ 51.80 (0.47) $ 1.03 $0.53 - $40.38
Stonepth Group $ 12.46 $ 0.10 (2.89) $ 0.67 $0.31 - $ 4.75
Ascendent Solutions $ 5.31 $ 9.50 (1.56) $ 0.25 $0.22 - $ 9.06
Allin Corp $ 10.69 $ 23.60 (0.50) $ 1.56 $1.25 - $ 5.00
Towne Services $ 11.66 $ 26.90 (2.05) $ 2.13 $1.00 - $11.41
- -------------------------------------------------------------------------------------------------------------------------------
CASCO $ 2.68 $ 23.30 0.08 $ 1.50 $0.88 - $ 5.84
- -------------------------------------------------------------------------------------------------------------------------------
CLOSING PRICE CLOSING PRICE LOW PRICE / HIGH PRICE /
AS A % AS A % TANGIBLE BOOK PRICE / TANGIBLE TANGIBLE TANGIBLE
COMPANY OF LOW PRICE OF HIGH PRICE VALUE / SHARE BOOK RATIO BOOK RATIO BOOK RATIO
- ----------------------------------------------------------------------------------------------------------------------------------
Ablest Corp 113% 52% $ 5.14 0.91 0.80 1.73
Barrett Business Services 158% 52% $ 2.26 1.74 1.11 3.37
On Site Sourcing 120% 24% $ 1.47 1.02 0.85 4.35
American Physicians Group 250% 63% $ 2.77 0.90 0.36 1.44
Headway Corp. Resources 217% 40% NM NM NM NM
PFS Web 194% 3% $ 2.29 0.45 0.23 17.63
Stonepth Group 216% 14% $ 1.68 0.40 0.18 2.83
Ascendent Solutions 114% 3% $ 1.18 0.21 0.19 7.68
Allin Corp 125% 31% NM NM NM NM
Towne Services 213% 19% $ 5.81 0.37 0.17 1.96
- ----------------------------------------------------------------------------------------------------------------------------------
CASCO 170% 26% $ 2.81 0.53 0.31 2.08
- ----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT SERVICES COMPARABLES
Number 4 4 4
Median 1.0 0.8 2.6
Mean 1.1 0.8 2.7
Standard Deviation 0.4 0.3 1.4
High 1.6 1.1 4.4
Low 1.2 0.4 1.4
OTHER BUSINESS SERVICE COMPARABLES
Number 4 4 4
Median 0.4 0.2 5.3
Mean 0.4 0.2 7.5
Standard Deviation 0.1 0.0 7.2
High 0.5 0.2 17.6
Low 0.2 0.2 2.0
23
ANALYSIS OF COMPARABLE COMPANIES (UPDATED 5/1/01)
(Dollars in millions)
MARKET VALUE LTM LTM
COMPANY LTM OF EQUITY LTD SALES EPS
- ----------------------------------------------------------------------------------------------------------------------
Ablest Oct-00 $ 13.15 $ -- $ 98.10 (1.63)
Barrett Business Services Sep-00 $ 29.38 $ 2.40 $ 321.00 0.29
On Site Sourcing Sep-00 $ 7.43 $ 1.50 $ 33.90 0.43
American Physicians Group Sep-00 $ 6.86 $ 4.80 $ 20.80 0.66
Headway Corp. Resources Sep-00 $ 26.30 $ 76.20 $ 370.40 0.40
PFS Web Sep-00 $ 18.42 $ 2.30 $ 51.80 (0.47)
Stonepth Group Sep-00 $ 12.46 $ -- $ 0.10 (2.89)
Ascendent Solutions Sep-00 $ 5.31 $ 0.40 $ 9.50 (1.56)
Allin Corp Sep-00 $ 10.69 $ 1.00 $ 23.60 (0.50)
Towne Services Sep-00 $ 11.66 $ 0.80 $ 26.90 (2.05)
- ----------------------------------------------------------------------------------------------------------------------
CASCO SEP-00 $ 2.68 $ 2.10 $ 23.30 0.08
- ----------------------------------------------------------------------------------------------------------------------
52 WEEK PRICE / ENTERPRISE
CLOSING PRICE HI/LOW LTM TANGIBLE BOOK TANGIBLE VALUE /
COMPANY 1-MAY-01 STOCK P/E RATIO VALUE / SHARE BOOK RATIO EBITDA EBITDA
- -----------------------------------------------------------------------------------------------------------------------------------
Ablest $ 4.80 $4.12 - $ 6.62 NE $ 5.14 0.93 $ 3.00 4.38
Barrett Business Services $ 3.71 $2.50 - $ 7.50 13.6 $ 2.26 1.64 $ 7.80 3.77
On Site Sourcing $ 1.31 $1.05 - $ 5.25 3.5 $ 1.47 0.89 $ 4.90 1.52
American Physicians Group $ 2.35 $1.00 - $ 4.00 3.8 $ 2.77 0.85 $ 2.50 2.75
Headway Corp. Resources $ 1.60 $1.06 - $ 4.00 5.8 NM NM $ 23.30 1.13
PFS Web $ 1.38 $0.53 - $17.12 NE $ 2.29 0.60 $ (11.01) (1.67)
Stonepth Group $ 0.78 $0.31 - $ 4.75 NE $ 1.68 0.47 $ (2.00) (6.23)
Ascendent Solutions $ 0.27 $0.06 - $ 4.62 NE $ 1.18 0.23 $ (19.20) (0.28)
Allin Corp $ 0.93 $0.50 - $ 3.56 NE NM NM $ (0.10) (106.86)
Towne Services $ 1.75 $1.00 - $10.00 NE $ 5.81 0.30 $ (7.20) (1.62)
- -----------------------------------------------------------------------------------------------------------------------------------
CASCO $ 1.51 $0.87 - $4.50 18.8 $ 2.81 0.54 $ 1.50 1.78
- -----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT SERVICES COMPARABLES
Note: Tangible Net Worth excludes Number 4 4 5
investments in affiliates. Median 4.8 0.9 2.7
Mean 6.7 1.1 2.7
Standard Deviation 4.7 0.4 1.4
High 13.6 1.6 4.4
Low 3.5 0.8 1.1
OTHER BUSINESS SERVICE COMPARABLES
Number 0 4 0
Median 0.4
Mean 0.4
Standard Deviation 0.2
High 0.5
Low 0.2
24
ANALYSIS OF COMPARABLE COMPANIES - CONTINUED (UPDATED 5/1/01)
(Dollars in millions)
MARKET VALUE LTM LTM CLOSING PRICE 52 WEEK HI/LOW
COMPANY OF EQUITY SALES EPS 1-MAY-01 STOCK
- ---------------------------------------------------------------------------------------------------------------------------
Ablest Corp $ 13.15 $ 98.10 (1.63) $ 4.80 $4.12 - $ 6.62
Barrett Business Services $ 29.38 $ 321.00 0.29 $ 3.71 $2.50 - $ 7.50
On Site Sourcing $ 7.43 $ 33.90 0.43 $ 1.31 $1.05 - $ 5.25
American Physicians Group $ 6.86 $ 20.80 0.66 $ 2.35 $1.00 - $ 4.00
Headway Corp. Resources $ 26.30 $ 370.40 0.40 $ 1.60 $1.06 - $ 4.00
PFS Web $ 18.42 $ 51.80 (0.47) $ 1.38 $0.53 - $17.12
Stonepth Group $ 12.46 $ 0.10 (2.89) $ 0.78 $0.31 - $ 4.75
Ascendent Solutions $ 5.31 $ 9.50 (1.56) $ 0.27 $0.06 - $ 4.62
Allin Corp $ 10.69 $ 23.60 (0.50) $ 0.93 $0.50 - $ 3.56
Towne Services $ 11.66 $ 26.90 (2.05) $ 1.75 $1.00 - $10.00
- ---------------------------------------------------------------------------------------------------------------------------
CASCO $ 2.68 $ 23.30 0.08 $ 1.51 $0.87 - $ 4.50
- ---------------------------------------------------------------------------------------------------------------------------
CLOSING PRICE CLOSING PRICE PRICE / LOW PRICE / HIGH PRICE /
AS A % AS A % TANGIBLE BOOK TANGIBLE TANGIBLE TANGIBLE
COMPANY OF LOW PRICE OF HIGH PRICE VALUE / SHARE BOOK RATIO BOOK RATIO BOOK RATIO
- ---------------------------------------------------------------------------------------------------------------------------------
Ablest Corp 117% 73% $ 5.14 0.93 0.80 1.29
Barrett Business Services 148% 49% $ 2.26 1.64 1.11 3.32
On Site Sourcing 125% 25% $ 1.47 0.89 0.71 3.58
American Physicians Group 235% 59% $ 2.77 0.85 0.36 1.44
Headway Corp. Resources 151% 40% NM NM NM NM
PFS Web 260% 8% $ 2.29 0.60 0.23 7.48
Stonepth Group 252% 16% $ 1.68 0.47 0.18 2.83
Ascendent Solutions 450% 6% $ 1.18 0.23 0.05 3.92
Allin Corp 186% 26% NM NM NM NM
Towne Services 175% 18% $ 5.81 0.30 0.17 1.72
- ---------------------------------------------------------------------------------------------------------------------------------
CASCO 174% 34% $ 2.81 0.54 0.31 1.60
- ---------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT SERVICES COMPARABLES
Number 4 4 4
Median 0.9 0.8 2.4
Mean 1.1 0.7 2.4
Standard Deviation 0.4 0.3 1.2
High 1.5 1.1 4.4
Low 1.2 0.4 1.4
OTHER BUSINESS SERVICE COMPARABLES
Number 4 4 4
Median 0.4 0.2 3.4
Mean 0.4 0.2 4.0
Standard Deviation 0.2 0.1 2.5
High 0.5 0.2 17.6
Low 0.2 0.1 2.0
25
PRICE UPDATES OF COMPARABLE COMPANIES (UPDATED 5/1/01)
PRICE / TANGIBLE PRICE / TANGIBLE
CLOSING PRICE CLOSING PRICE PERCENT PRICE BOOK RATIO BOOK RATIO
COMPANY 16-FEB-01 1-MAY-01 CHANGE 16-FEB-01 1-MAY-01
- -------------------------------------------------------------------------------------------------------------------------------
Ablest $ 4.65 $ 4.80 3.2% 0.91 0.93
Barrett Business Services $ 3.94 $ 3.71 -5.8% 1.74 1.64
On Site Sourcing $ 1.50 $ 1.31 -12.7% 1.02 0.89
American Physicians Group $ 2.50 $ 2.35 -6.0% 0.90 0.85
Headway Corp. Resources $ 2.30 $ 1.60 -30.4% NM NM
PFS Web $ 1.03 $ 1.38 34.0% 0.45 0.60
Stonepth Group $ 0.67 $ 0.78 16.4% 0.40 0.47
Ascendent Solutions $ 0.25 $ 0.27 8.0% 0.21 0.23
Allin Corp $ 1.56 $ 0.93 -40.4% NM NM
Towne Services $ 2.13 $ 1.75 -17.8% 0.37 0.30
- -------------------------------------------------------------------------------------------------------------------------------
CASCO $ 1.50 $ 1.51 0.7% 0.53 0.54
- -------------------------------------------------------------------------------------------------------------------------------
Nasdaq $ 2,490.36 $ 2,168.24 -12.9%
26
CASCO COMPARABLE COMPANY DESCRIPTIONS
MANAGEMENT SERVICE COMPARABLES
1. Ablest Corp (AMEX: AIH) - Provides temporary and contract staffing
solutions to businesses in the clerical, light industrial and
technology professional sectors.
2. Barrett Business Services (NASD: BBSI) - A leading human resource
management company that provides comprehensive outsourced solutions
addressing a broad array of employment-related issues for businesses of
all sizes.
3. On Site Sourcing (NASD: ONSS) - Provides digital imaging, document
management, litigation reprographics services and facilities management
to law firms, corporations, non-profit organizations, accounting firms,
financial institutions and other organizations throughout the East
Coast.
4. American Physicians Group (NASD: AMPH) - Through its subsidiaries, it
provides services that include management of malpractice insurance
companies, and brokerage and investment services. Also the company
provides environmental consulting and engineering services.
5. Headway Corporate Resources (AMEX: HEA) - Leader in human resource
management and advisory services. Offers a wide range of services,
including temporary, permanent, contract and technology staffing, as
well as executive search and management and strategic consulting.
Offices in U.S., U.K. & Asia.
OTHER BUSINESS SERVICES COMPARABLES
6. PFS Web (NASD: PFSW) - An eBusiness enabler providing advanced
Internet, data, and voice connectivity, technical support and
application hosting services to the mid-size business market.
7. Stonepath Group (AMEX: STG) - Actively engages in building a network of
technology-driven businesses that leverage the Internet to increase
operational efficiencies. The Group offers strategic consulting,
finance, marketing and public relations, operations, recruiting and
technology.
8. Ascendent Solutions (NASD: ASDS) - Offers software and service
solutions that enable Internet retailers and direct marketing
businesses to outsource their order management and fulfillment
operations.
9. Allin Corp (NASD: ALLN) - A provider of technology consulting and
systems integration services oriented around practices meeting customer
needs for infrastructure, business operations, and electronic business
services.
10. Towne Services (NASD: TWNE) - A provider of services and products that
process sales and payment information and related financing
transactions for small businesses and banks in the United States.
27
CASCO INTERNATIONAL
Fundamental Data & Ratios:
- ----------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12 MOS(3) 1999 1998 1997 1996 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 23.3 24.2 21.7 19.3 22 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 0.8 0.7 0.5 0.4 0.3 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 0.7 1.1 0.1 -0.3 0.1 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) 0.2 0.4 -0.2 -0.4 -0.4 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
EPS ($) 0.08 0.2 -0.13 -0.34 -0.39 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12 MOS(3) 1999 1998 1997 1996 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 8.7 10.8 12 10.6 12.6 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 4.2 6 7.4 3.4 7.5 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 2.1 2.2 2.4 4.9 0 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 1783 1783 1783 1783 1003 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 6 6.2 5.9 5.2 3.3 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS: 12 MOS(3) 1999 1998 1997 1996 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio 2 2.8 0 NC NC NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) 0.9 1.7 -0.9 -2.1 -1.8 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) 3.3 6.5 NE NE NE NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) 1.3 2.3 -1.1 -2.5 -2.2 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.35 0.35 0.41 0.94 0 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
P/E Ratio 18.8 10.3 NE NE NA NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.11 0.15 0.13 0.25 NA NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Price/Book 0.45 0.59 0.48 0.92 NA NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Book Value ($) 3.37 3.48 3.31 2.92 3.29 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 NA NA
- ----------------------------------------------------------------------------------------------------------------------------
28
Stock Price Performance Comparison For
Casco (CASC)
(GRAPH)
29
ABLEST INCORPORATED
FUNDAMENTAL DATA & RATIOS:
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12MOS(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 98.1 98.1 135.6 119.5 106.5 102.7 102.6
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 1.4 1.4 5.3 5.4 4.8 4.5 4.4
- -----------------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 1.6 1.6 2.4 2.8 2.2 3.5 1.3
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) -4.7 -4.7 1.3 0.9 0.7 1.6 0.3
- -----------------------------------------------------------------------------------------------------------------------------------
EPS ($) -1.63 -1.63 0.45 0.31 0.24 0.56 0.11
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET 12MOS(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 17.5 15.6 25.9 23.5 21.3 21.5 21.2
- -----------------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 5.8 8.7 8.8 7 6.8 5.8 6.8
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 0 16 16.1 8.8 6.5 7 5.1
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 2827 2882 2878 2877 2875 2873 2870
- -----------------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 19.2 18.6 28.1 27.5 27.1 26.4 24.5
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS: 12MOS(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NA NC 3.3 3.9 3.5 6.8 3.5
- -----------------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) -5 -4.8 1 0.8 0.7 1.6 0.3
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE 4.6 3.3 2.6 6.1 1.2
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) -18.5 -10.7 2.4 2 1.7 4.1 0.8
- -----------------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0 0.86 0.57 0.32 0.24 0.27 0.21
- -----------------------------------------------------------------------------------------------------------------------------------
P/E Ratio NE NE 14.4 22.6 32.8 12.5 64.8
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.13 0.17 0.14 0.17 0.21 0.2 0.2
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Book 0.68 0.89 0.67 0.73 0.84 0.76 0.83
- -----------------------------------------------------------------------------------------------------------------------------------
Book Value ($) 6.79 6.45 9.76 9.56 9.43 9.19 8.54
- -----------------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
30
STOCK PRICE PERFORMANCE COMPARISON FOR
ALBEST CORP (AIH)
(GRAPH)
31
BARRETT BUSINESS SERVICE
FUNDAMENTAL DATA & RATIOS:
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12MOS(4)* 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 321 347.9 303 281 215.8 179.8 140.6
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 3.2 2.5 1.8 1.7 1.1 0.8 0.6
- -----------------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 4.6 9 7.2 5.9 7.4 6.2 5.5
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) 2 5.1 3.8 3.8 5 4.1 3.5
- -----------------------------------------------------------------------------------------------------------------------------------
EPS ($) 0.29 0.68 0.5 0.56 0.73 0.62 0.53
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET 12MOS(4)* 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 30.1 33.6 28.9 25.8 23.5 17.8 13.4
- -----------------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 23 26 15.6 15.1 11.9 9.4 8.5
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 2.4 4.2 0.5 0.5 1.4 0.9 0.9
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 7461 7461 7676 6743 6625 6551 6367
- -----------------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 37.3 37.3 33.7 30.1 28.4 20 14.5
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS: 12MOS(4)* 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NA 15.7 34.5 31.5 79 67 57
- -----------------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) 0.6 1.5 1.3 1.4 2.3 2.3 2.5
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) 5.4 13.7 11.3 12.6 17.6 20.5 24.1
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) 3 7.2 7.2 7.9 11.7 13.1 14.2
- -----------------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.06 0.11 0.01 0.02 0.05 0.05 0.06
- -----------------------------------------------------------------------------------------------------------------------------------
P/E Ratio 13.6 9.8 17 21 20.9 23.8 26.4
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.09 0.14 0.22 0.28 0.47 0.54 0.63
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Book 0.79 1.33 1.94 2.63 3.55 4.84 6.14
- -----------------------------------------------------------------------------------------------------------------------------------
Book Value ($) 5 5 4.39 4.46 4.29 3.05 2.28
- -----------------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
32
STOCK PRICE PERFORMANCE COMPARISON FOR
BARRETT BUSINESS SERVICES (BBSI)
(GRAPH)
33
ON-SITE SOURCING INC
FUNDAMENTAL DATA & RATIOS:
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12MOS(3) 1999 1998 1997 1996 1995 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 33.9 26.7 26 21.1 9.5 4.9 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 1.3 1.1 1 0.8 0.3 0.1 NA
- -----------------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 3.6 0.9 -1.4 1.2 0.3 0.1 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) 2.1 0.8 -1 0.7 0.2 0.1 NA
- -----------------------------------------------------------------------------------------------------------------------------------
EPS ($) 0.43 0.16 -0.21 0.15 0.07 0.03 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 0 NA
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET 12MOS(3) 1999 1998 1997 1996 1995 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 10.7 7.2 6.5 8 4.9 0.9 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 8.5 3.7 3.3 3.5 1.1 1 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 1.5 0.5 1.2 1.1 1 0.1 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 4955 4852 4802 4802 4794 2187 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 8.3 6.9 6.1 7.1 6.4 0.3 NA
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS: 12MOS(3) 1999 1998 1997 1996 1995 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio 12 6 NC 14 4 2 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) 6.2 3 -3.8 3.3 2.1 2 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) 25.3 11.6 NE 9.9 3.1 33.3 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) 11.2 6.9 -9.1 5.7 2.4 6.7 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.18 0.07 0.2 0.15 0.16 0.33 NA
- -----------------------------------------------------------------------------------------------------------------------------------
P/E Ratio 3.5 8.6 NE 18.7 32.1 NA NA
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.22 0.25 0.28 0.64 1.14 NA NA
- -----------------------------------------------------------------------------------------------------------------------------------
Price/Book 0.9 0.97 1.2 1.9 1.68 NA NA
- -----------------------------------------------------------------------------------------------------------------------------------
Book Value ($) 1.68 1.42 1.27 1.48 1.34 0.14 NA
- -----------------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 0 NA
- -----------------------------------------------------------------------------------------------------------------------------------
34
STOCK PRICE PERFORMANCE COMPARISON FOR
ON SITE SOURCING (ONSS)
(GRAPH)
35
AMERICAN PHYSICIANS SERVICES GROUP
Fundamental Data & Ratios:
- ------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3) 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 20.8 19.1 16.4 13.1 11.2 20.5 17.4
- ------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 1 0.7 0.6 0.4 0.3 0.4 0.3
- ------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 1.5 -0.1 0.8 2.1 1.1 2.2 0.8
- ------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) 1.7 1.4 1.5 2.6 1.9 2 1.3
- ------------------------------------------------------------------------------------------------------------------------
EPS ($) 0.66 0.44 0.31 0.59 0.46 0.53 0.36
- ------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3) 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 6.1 7.2 7.6 8.7 11.6 13 10.1
- ------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 3.4 5.6 5.8 5.3 3.3 5.6 4
- ------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 4.8 3.3 0 0 0 0.6 0.9
- ------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 2745 2745 4160 4161 4049 3664 3472
- ------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 21.7 21.2 24.6 23.1 20.4 17.6 15
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3) 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio 8 6.7 22 NC 30 36 11
- ------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) 8.2 7.3 9.1 19.8 17 9.8 7.5
- ------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) 7.8 6.6 6.1 11.3 9.3 11.4 8.7
- ------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) 5.1 4.3 4.6 8.8 7.8 8.4 6.5
- ------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.22 0.16 0 0 0 0.03 0.06
- ------------------------------------------------------------------------------------------------------------------------
P/E Ratio 3.8 10.5 18.8 8.8 14.1 17.8 6.6
- ------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.33 0.53 1.14 2.26 2.35 1.72 0.48
- ------------------------------------------------------------------------------------------------------------------------
Price/Book 0.32 0.48 0.76 1.28 1.29 2.01 0.55
- ------------------------------------------------------------------------------------------------------------------------
Book Value ($) 7.91 7.72 5.91 5.55 5.04 4.8 4.32
- ------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
36
Stock Price Performance Comparison For
American Physicians Group (AMPH)
[GRAPH]
37
HEADWAY CORPORATE RESOURCES
Fundamental Data & Ratios:
- -------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3) 1999 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 370.4 360.7 291.3 142.8 57.2 15.5 19.6
- -------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 5.7 4.8 3.4 2.3 1.1 0.3 0.5
- -------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) 17.6 18.6 14.7 7.3 2.9 1.5 1.8
- -------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) 5.8 5.8 6.6 2.8 1.2 -1.1 0.9
- -------------------------------------------------------------------------------------------------------------------------
EPS ($) 0.4 0.4 0.47 0.28 -0.11 -0.16 0.16
- -------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3) 1999 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 64.8 56.4 53.3 30.8 14.4 5 9.8
- -------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 34 25.8 21.2 30.4 12.7 3.5 9.5
- -------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 76.2 73.3 61.8 19.4 7.4 2.1 0.8
- -------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 11433 10702 10362 8907 6301 4597 4597
- -------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 31.4 28 22.6 16.1 8.3 2.2 3.3
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3) 1999 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio 2.4 2.6 3.5 4.7 2.6 16 6.3
- -------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) 1.6 1.6 2.3 2 2.1 -7.1 4.6
- -------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) 18.5 20.7 29.2 17.4 14.5 NE 27.3
- -------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) 3.6 3.9 5.2 4.2 3.5 -9.1 6.2
- -------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 2.43 2.62 2.73 1.2 0.89 0.95 0.24
- -------------------------------------------------------------------------------------------------------------------------
P/E Ratio 5.8 11 13 7.5 NE 17.8 NA
- -------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.07 0.13 0.22 0.27 0.51 0.69 NA
- -------------------------------------------------------------------------------------------------------------------------
Price/Book 0.84 1.67 2.81 2.4 3.51 4.81 NA
- -------------------------------------------------------------------------------------------------------------------------
Book Value ($) 2.75 2.62 2.18 1.81 1.32 0.48 0.72
- -------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------
38
Stock Price Performance Comparison For
Headway Corporate Resources (HEA)
[GRAPH]
39
PFS WEB INC
Fundamental Data & Ratios:
- ---------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3)* 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 51.8 86.6 101.2 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 0 2.4 0.3 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) -11.0 -7.3 0.7 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) -8.9 -5.9 0.3 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
EPS ($) -0.47 -0.38 0.02 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3)* 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 35.7 42.8 54.1 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 12.3 14.8 39.4 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 2.3 2.4 29 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Shares Out (000) 17870 17870 14305 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 40.9 47.7 0.6 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3)* 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NA NC 2.3 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Profit Margin (%) -17.2 -6.8 0.3 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE 50 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Return on Asset (%) -15.8 -9.1 0.4 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.06 0.05 48.33 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
P/E Ratio NE NE NA NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Price/Sales 0.36 3.3 NA NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Price/Book 0.45 5.99 NA NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Book Value ($) 2.29 2.67 0.04 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------------------------
40
Stock Price Performance Comparison For
PFS WEB (PFSW)
[GRAPH]
41
STONEPATH GROUP INC
Fundamental Data & Ratios:
- -----------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 0.1 0.1 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 8.9 8.9 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) -10.9 -10.9 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) -23.9 -23.9 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
EPS ($) -2.89 -2.89 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 33.8 3.6 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 1.8 7.8 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 0 0.1 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Shares Out (000) 18589 16560 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 51.2 1.7 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NA NC NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Profit Margin (%) NC NC NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Return on Asset (%) -45 -170.7 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0 0.06 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
P/E Ratio NE NA NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Price/Sales 124.55 NA NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Price/Book 0.24 NA NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Book Value ($) 2.75 0.1 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
42
Stock Price Performance Comparison For
Stonepath Group (STG)
[GRAPH]
43
ASCENDENT SOLUTIONS
Fundamental Data & Ratios:
- -----------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 9.5 12.3 8 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 2.1 1.5 1.1 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) -21.3 -8.9 -2.4 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) -19 -8.8 -2.6 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
EPS ($) -1.56 -1.39 -0.43 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 22.7 39.7 1.3 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 3.7 2.7 3.9 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 0.4 0.7 1 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Shares Out (000) 21231 21097 6000 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 25 41.1 -1.7 NA NA NA NA
- ------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3) 1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NA NC NC NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Profit Margin (%) NC -71.5 -32.5 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE NE NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Return on Asset (%) -65.1 -19.8 -78.8 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.02 0.02 NS NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
P/E Ratio NE NE NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Price/Sales 0.56 30.6 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Price/Book 0.21 9.1 NA NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Book Value ($) 1.18 1.95 -0.28 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 NA NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
44
Stock Price Performance Comparison For
Ascendent Solutions (ASDS)
[GRAPH]
45
ALLIN CORP
Fundamental Data & Ratios:
- ---------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12mos(3) 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
Revenues ($Mil) 23.6 25 15.3 13.2 1.3 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 2 2.5 3.5 4.1 1.4 NA NA
- ---------------------------------------------------------------------------------------------------------------------
EBIT ($Mil) -2.1 -2.4 -7.3 -11.1 -7.5 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Net Income ($Mil) -2.6 -2.7 -5.7 -10.7 -8.3 NA NA
- ---------------------------------------------------------------------------------------------------------------------
EPS ($) -0.5 -0.56 -1.06 -2.12 -2.98 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 0 NA NA
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12mos(3) 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 6 7.2 6.5 9.8 17.9 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 5.2 5 3.9 3.1 3.9 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 1 1 4 0 0 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Shares Out (000) 6953 6011 5994 5184 5184 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 9.7 10.4 13.6 15.5 26.3 NA NA
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS: 12mos(3) 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio -25 NC NC NC NC NA NA
- ---------------------------------------------------------------------------------------------------------------------
Profit Margin (%) -11 -10.8 -37.3 -81.1 NC NA NA
- ---------------------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE NE NE NE NA NA
- ---------------------------------------------------------------------------------------------------------------------
Return on Asset (%) -12 -11.3 -21.7 -49.3 -25.4 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.1 0.1 0.29 0 0 NA NA
- ---------------------------------------------------------------------------------------------------------------------
P/E Ratio NE NE NE NE NE NA NA
- ---------------------------------------------------------------------------------------------------------------------
Price/Sales 0.46 1.2 1.52 1.52 78 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Price/Book 1.12 2.89 1.71 1.3 3.85 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Book Value ($) 1.4 1.73 2.27 2.99 5.07 NA NA
- ---------------------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 0 NA NA
- ---------------------------------------------------------------------------------------------------------------------
46
Stock Price Performance Comparison For
Allin Corp (ALLN)
(GRAPH)
47
TOWNE SERVICES GROUP
Fundamental Data & Ratios:
- --------------------------------------------------------------------------------------------------------
INCOME STATEMENT: 12 MOS(3) 1999 1998 1997 NA NA NA
- --------------------------------------------------------------------------------------------------------
Revenues ($Mil) 26.9 29.8 6.4 0.7 NA NA NA
- --------------------------------------------------------------------------------------------------------
Depreciation ($Mil) 4.5 3.2 0.4 0.1 NA NA NA
- --------------------------------------------------------------------------------------------------------
EBIT ($Mil) -11.7 -10.6 -6.1 -2.4 NA NA NA
- --------------------------------------------------------------------------------------------------------
Net Income ($Mil) -11.1 -12.4 -14.7 -2.5 NA NA NA
- --------------------------------------------------------------------------------------------------------
EPS ($) -2.05 -2.55 -6.6 -1.3 NA NA NA
- --------------------------------------------------------------------------------------------------------
Dividends ($) 0 0 0 0 NA NA NA
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
BALANCE SHEET: 12MOS(3) 1999 1998 1997 NA NA NA
- --------------------------------------------------------------------------------------------------------
Current Assets ($Mil) 18.1 28.7 17 2.8 NA NA NA
- --------------------------------------------------------------------------------------------------------
Current Liabilities ($Mil) 4.1 7 7.1 0.8 NA NA NA
- --------------------------------------------------------------------------------------------------------
Long Term Debt ($Mil) 0.8 1 0 1.3 NA NA NA
- --------------------------------------------------------------------------------------------------------
Shares Out (000) 5487 4313 3930 2341 NA NA NA
- --------------------------------------------------------------------------------------------------------
Common Equity ($Mil) 39.1 47.9 28.3 1.3 NA NA NA
- --------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
RATIOS: 12MOS(3) 1999 1998 1997 NA NA NA
- ---------------------------------------------------------------------------------------------------------
Interest Coverage Ratio NC NC NC NC NA NA NA
- ---------------------------------------------------------------------------------------------------------
Profit Margin (%) -41.3 -41.6 NC NC NA NA NA
- ---------------------------------------------------------------------------------------------------------
Return on Equity (%) NE NE NE NE NA NA NA
- ---------------------------------------------------------------------------------------------------------
Return on Asset (%) -24.2 -21.5 -41.5 -69.4 NA NA NA
- ---------------------------------------------------------------------------------------------------------
Debt/Equity Ratio 0.02 0.02 0 1 NA NA NA
- ---------------------------------------------------------------------------------------------------------
P/E Ratio NE NE NE NA NA NA NA
- ---------------------------------------------------------------------------------------------------------
Price/Sales 0.43 2.89 21.47 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------
Price/Book 0.3 1.8 4.86 NA NA NA NA
- ---------------------------------------------------------------------------------------------------------
Book Value ($) 7.31 11.11 7.2 0.56 NA NA NA
- ---------------------------------------------------------------------------------------------------------
Dividend Payout (%) 0 0 0 0 NA NA NA
- ---------------------------------------------------------------------------------------------------------
48
Stock Price Performance Comparison For
Towne Services (TWNE)
(GRAPH)
49
SECTION E
50
CASCO VALUATION MATRIX
5% Revenue Growth
SCENARIO: 5% Revenue Growth
Actual Estimated -->
2000 2001 2002 2003
--------------------------------------------------------------------
REVENUES $24,500,000 $25,725,000 $27,011,250 $28,361,813
OPERATING COSTS
COGS 13,291,250 13,955,813 14,653,603 15,386,283
SG&A 9,432,000 9,903,600 10,398,780 10,918,719
--------------------------------------------------------------------
Total Operating Costs 22,723,250 23,859,413 25,052,383 26,305,002
--------------------------------------------------------------------
EBITDA 1,776,750 1,865,588 1,958,867 2,056,810
Depreciation and Amortization 761,500 800,000 850,000 875,000
--------------------------------------------------------------------
OPERATING INCOME (LOSS) 1,015,250 1,065,588 1,108,867 1,181,810
Other Expenses
Interest Expense Term Loan
Interest Expense 305,000 305,000 305,000 305,000
--------------------------------------------------------------------
Total Other Expenses 305,000 305,000 305,000 305,000
EBIT as Adjusted 710,250 760,588 803,867 876,810
Provision for Income Taxes (at 40%) 284,100 304,235 321,547 350,724
--------------------------------------------------------------------
NET INCOME $ 426,150 $ 456,353 $ 482,320 $ 526,086
Add: Depreciation & Amortization 761,500 800,000 850,000 875,000
Less: Capital Expenditures 300,000 300,000 300,000 300,000
Less: Increase in Working Capital 100,000 100,000 100,000 100,000
Less: Principal Payments on Debt 50,000 50,000 50,000 50,000
====================================================================
FREE CASH FLOW $ 737,650 $ 806,353 $ 882,320 $ 951,086
51
CASCO VALUATION MATRIX
5% Revenue Growth
Discounted Value of 2000-2003 FCF Discounted EBITDA Terminal Value
- --------------------------------- ------------------------------------------------------------------------------------------
Discount Rate Discount Value Disc. Rate 3x 4x 5x 6x
- --------------------------------- ------------------------------------------------------------------------------------------
16% $ 1,960,160 16% $2,937,822 $3,917,096 $4,896,371 $5,875,645
17% $ 1,927,567 17% $2,814,402 $3,752,536 $4,690,670 $5,628,804
18% $ 1,895,879 18% $2,697,152 $3,596,203 $4,495,254 $5,394,304
19% $ 1,865,060 19% $2,585,715 $3,447,620 $4,309,525 $5,171,430
20% $ 1,835,080 20% $2,479,758 $3,306,344 $4,132,929 $4,959,515
21% $ 1,805,907 21% $2,378,968 $3,171,958 $3,964,947 $4,757,936
22% $ 1,777,512 22% $2,283,055 $3,044,073 $3,805,091 $4,566,109
Equity Value
Terminal Value of ------------------------------------------------------------------------------------------
2003 EBITDA Disc. Rate 3x 4x 5x 6x
- --------------------------------- ------------------------------------------------------------------------------------------
3x $ 6,170,431 16% $4,897,982 $5,877,256 $6,856,530 $7,835,804
4x $ 8,227,241 17% $4,741,969 $5,680,103 $6,618,238 $7,556,372
5x $ 10,284,051 18% $4,593,031 $5,492,081 $6,391,132 $7,290,183
6x $ 12,340,861 19% $4,450,775 $5,312,680 $6,174,585 $7,036,490
20% $4,314,837 $5,141,423 $5,968,009 $6,794,595
21% $4,184,875 $4,977,864 $5,770,854 $6,563,843
22% $4,060,567 $4,821,585 $5,582,603 $6,343,622
Equity Value / Share
------------------------------------------------------------------------------------------
Disc. Rate 3x 4x 5x 6x
------------------------------------------------------------------------------------------
16% $2.75 $3.30 $3.85 $4.39
17% $2.66 $3.19 $3.71 $4.24
18% $2.58 $3.08 $3.58 $4.09
19% $2.50 $2.98 $3.46 $3.95
20% $2.42 $2.88 $3.35 $3.81
21% $2.35 $2.79 $3.24 $3.68
22% $2.28 $2.70 $3.13 $3.56
52
CASCO VALUATION MATRIX
No Revenue Growth
SCENARIO: Stable - no growth
Actual Estimated -->
2000 2001 2002 2003
--------------------------------------------------------------------
REVENUES $24,500,000 $24,500,000 $24,500,000 $24,500,000
OPERATING COSTS
COGS 13,291,250 13,291,250 13,291,250 13,291,250
SG&A 9,432,000 9,432,000 9,432,000 9,432,000
--------------------------------------------------------------------
Total Operating Costs 22,723,250 22,723,250 22,723,250 22,723,250
--------------------------------------------------------------------
EBITDA 1,776,750 1,776,750 1,776,750 1,776,750
--------------------------------------------------------------------
Depreciation and Amortization 761,500 800,000 850,000 875,000
--------------------------------------------------------------------
OPERATING INCOME (LOSS) 1,015,250 976,750 926,750 901,750
Other Expenses
Interest Expense Term Loan
Interest Expense 305,000 305,000 305,000 305,000
--------------------------------------------------------------------
Total Other Expenses 305,000 305,000 305,000 305,000
EBIT as Adjusted 710,250 671,750 621,750 596,750
Provision for Income Taxes (at 40%) 284,100 268,700 248,700 238,700
--------------------------------------------------------------------
NET INCOME $ 426,150 $ 403,050 $ 373,050 $ 358,050
Add: Depreciation & Amortization 761,500 800,000 850,000 875,000
Less: Capital Expenditures 300,000 300,000 300,000 300,000
Less: Increase in Working Capital 100,000 100,000 100,000 100,000
Less: Principal Payments on Debt 50,000 50,000 50,000 50,000
====================================================================
FREE CASH FLOW $ 737,650 $ 753,050 $ 773,050 $ 783,050
53
CASCO VALUATION MATRIX
No Revenue Growth
Discounted Value of 2000-2003 FCF Discounted EBITDA Terminal Value
- --------------------------------- ----------------------------------------------------------------------------------------
Discount Rate Discount Value Disc. Rate 3x 4x 5x 6x
- --------------------------------- ----------------------------------------------------------------------------------------
16% $1,725,350 16% $2,537,801 $3,383,735 $4,229,669 $5,075,603
17% $1,697,269 17% $2,431,186 $3,241,582 $4,051,977 $4,862,373
18% $1,669,959 18% $2,329,901 $3,106,535 $3,883,169 $4,659,803
19% $1,643,390 19% $2,233,638 $2,978,184 $3,722,730 $4,467,276
20% $1,617,536 20% $2,142,108 $2,856,144 $3,570,180 $4,284,216
21% $1,592,370 21% $2,055,042 $2,740,056 $3,425,070 $4,110,084
22% $1,567,868 22% $1,972,189 $2,629,585 $3,286,981 $3,944,377
Terminal Value of Equity Value
2003 EBITDA ----------------------------------------------------------------------------------------
- ---------------------------------- Disc. Rate 3x 4x 5x 6x
----------------------------------------------------------------------------------------
3x $ 5,330,250 16% $4,263,152 $5,109,085 $5,955,019 $6,800,953
4x $ 7,107,000 17% $4,128,456 $4,938,851 $5,749,247 $6,559,642
5x $ 8,883,750 18% $3,999,860 $4,776,494 $5,553,128 $6,329,762
6x $ 10,660,500 19% $3,877,028 $4,621,574 $5,366,120 $6,110,666
20% $3,759,644 $4,473,680 $5,187,716 $5,901,752
21% $3,647,412 $4,332,426 $5,017,440 $5,702,454
22% $3,540,057 $4,197,453 $4,854,849 $5,512,245
Equity Value / Share
----------------------------------------------------------------------------------------
Disc. Rate 3x 4x 5x 6x
----------------------------------------------------------------------------------------
16% $2.39 $2.87 $3.34 $3.81
17% $2.32 $2.77 $3.22 $3.68
18% $2.24 $2.68 $3.11 $3.55
19% $2.17 $2.59 $3.01 $3.43
20% $2.11 $2.51 $2.91 $3.31
21% $2.05 $2.43 $2.81 $3.20
22% $1.99 $2.35 $2.72 $3.09
54
SECTION F
55
SELECTED MERGERS AND ACQUISITIONS
Management Services Companies
ACQUIREE Transaction Price Paid To:
Acquirer Type/ Payment Book
Business Description Date Approach Price Type Assets Value Sales Earnings Cash Flow
- --------------------------------------------------------------------------------------------------------------------------------
AMERICARE EMPLOYERS GROUP 1/15/98 Private $ 16 M Cash & 1.60 12.31 0.09 NA NA
NovaCare Employee Services Inc Stock Stock
Provides a Comprehensive Management System to small to medium sized businesse
M-R GROUP 6/30/99 Public $153.8 M Stock 2.47 4.98 1.97 18.53 11.47
Lason, Inc Stock
Document and Data Management Company
ISERNHAGEN & ASSOCIATES INC 2/7/97 Private $ 1.75 M Cash, Debt 4.17 5.29 1.25 4.87 4.59
Health Fitness Physical Inc & Stock
A Consulting Company dedicated to the prevention and management of work injuries
THE CONTINUOUS LEARNING GROUP 3/31/98 Private $5 1.9 M Cash & 13.31 17.30 2.25 7.52 7.01
Century Business Services Stock Stock
Provides management training to large corporation, production and administrative support services
BITTERMAN & ASSOCIATES 12/23/96 Private $ 2.5 M Cash & 0.64 1.67 0.28 NA NA
Ambassadors International, Inc Stock
A corporate inventive/performance improvement company that designs programs for corporations aimed at increasing the performance
of their personnel
MANAGEMENT SERVICES COMPARABLES
Number 5 5 5 3 3
Median 2.5 5.3 1.3 7.5 7.0
Mean 4.4 8.3 1.2 10.3 7.7
Standard Deviation 5.1 6.4 1.0 7.2 3.5
High 13.3 17.3 2.0 18.5 11.5
Low 0.6 1.7 0.1 4.9 4.6
56
SECTION G
57
CASCO INTERNATIONAL, INC.
BALANCE SHEET - ADJUSTED
DECEMBER 31, 2000
2000 2000 2000 TOTAL
ASSETS TOTAL ADJUSTMENTS ADJUSTED
----------- ----------- -----------
Current Assets:
Cash $ 4,551 0 $ 4,551
Accounts receivable 4,955,595 0 4,955,595
Inventory 4,316,076 0 4,316,076
Prepaid expenses 959,623 0 959,623
Deferred Taxes 102,000 0 102,000
----------- ----------- -----------
Total current assets 10,337,845 0 10,337,845
Buildings and equipment:
Buildings 2,657,263 0 2,657,263
Equipment 3,537,335 0 3,537,335
----------- ----------- -----------
6,194,598 0 6,194,598
Less accumulated depreciation 3,137,550 -712,000 (1) 2,425,550
----------- ----------- -----------
3,057,048 -712,000 3,769,048
Land 111,468 0 111,468
----------- ----------- -----------
Total property and equipment, net 3,168,516 0 3,880,516
Other assets:
Cost in excess of net assets acquired, net of
accumulated amortization of $ and
$ respectively 2,270,598 -2,270,598 0
Investment In Sub 0 0 0
Other 767,167 0 767,167
----------- ----------- -----------
3,037,765 -2,270,598 767,167
----------- ----------- -----------
TOTAL ASSETS $16,544,126 -2,270,598 $14,985,528
=========== =========== ===========
(1) Reflects add back of depreciation of $712,000 for main building. This
property was appraised for $3.0 mm three years ago. Current
depreciated book value of building is $1,945,263. Include impact of
$500,000 in capital improvement which have been partly depreciated.
58
2000 2000 2000 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY TOTAL ADJUSTMENTS ADJUSTED
----------- ----------- -----------
Liabilities:
Accounts payable $ 488,726 0 $ 488,726
Line of credit 1,719,774 0 1,719,774
Current portion Long Term 138,711 0 138,711
Intercompany 0 0 0
Accrued liabilities 329,858 0 329,858
Taxes Payable 125,000 0 125,000
Advanced deposits-current 2,615,550 0 2,615,550
----------- ----------- -----------
Total current liabilities 5,417,619 0 5,417,619
----------- ----------- -----------
Long-term debt 1,994,729 0 1,994,729
Advanced deposits-noncurrent 1,966,003 0 1,966,003
Note Payable 59,507 0 59,507
Deferred tax liability 545,775 0 545,775
----------- ----------- -----------
4,566,014 0 4,566,014
TOTAL LIABILITIES $ 9,983,633 0 $ 9,983,633
----------- ----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred Shares: $.01 par value; authorized
300,000 shares; none issued and outstanding
Common Shares par value $.01, authorized
5,000,000, issued 1,783,200 17,832 0 17,832
Capital in excess of par value 6,399,558 -1,558,598(2) 4,840,960
Accumulated deficit 143,103 0 143,103
----------- ----------- -----------
Total Stockholders' Equity 6,560,493 -1,558,598 5,001,895
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $16,544,126 $14,985,528
Weighted average common shares outstanding 1,783,200 1,783,200
Adjusted Book Value per share 3.68 2.81
Adjusted Book Value per share - no real estate write up 2.41
(2) Reflects elimination of good will of $2,270,598 and write up of real
estate of $712,000 in accumulated depreciation
59
SECTION H
60
CASCO LEVERAGE BUYOUT ANALYSIS
5% SALES GROWTH
SCENARIO: 5% Revenue Growth
Actual Estimated -->
2000 2001 2002 2003 2004 2005
---------------------------------------------------------------------------------------
REVENUES $24,500,000 $25,725,000 $27,011,250 $28,361,813 $29,779,903 $ 31,268,898
OPERATING COSTS
COGS 13,291,250 13,955,813 14,653,603 15,386,283 16,155,597 16,963,377
SG&A 9,432,000 9,903,600 10,398,780 10,918,719 11,464,655 12,037,888
---------------------------------------------------------------------------------------
Total Operating Costs 22,723,250 23,859,413 25,052,383 26,305,002 27,620,252 29,001,265
---------------------------------------------------------------------------------------
EBITDA 1,776,750 1,865,588 1,958,867 2,056,810 2,159,651 2,267,633
Depreciation and Amortization 761,500 800,000 850,000 875,000 875,000 875,000
---------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) 1,015,250 1,065,588 1,108,867 1,181,810 1,284,651 1,392,633
Other Expenses
Interest Expense Term Loan 262,500 218,419 170,481 118,349 61,655
Interest Expense 305,000 305,000 305,000 305,000 305,000 305,000
---------------------------------------------------------------------------------------
Total Other Expenses 305,000 305,000 305,000 305,000 305,000 305,000
EBIT as Adjusted 710,250 760,588 803,867 876,810 979,651 1,087,633
Provision for Income Taxes (at 40%) 284,100 304,235 321,547 350,724 391,860 435,053
---------------------------------------------------------------------------------------
NET INCOME $ 426,150 $ 456,353 $ 482,320 $ 526,086 $ 587,790 $ 652,580
Add: Depreciation & Amortization 761,500 800,000 850,000 875,000 875,000 875,000
Less: Capital Expenditures 300,000 300,000 300,000 300,000 300,000 300,000
Less: Increase in Working Capital 100,000 100,000 100,000 100,000 100,000 100,000
Less: Principal Payments on Debt 50,000 50,000 50,000 50,000 50,000 50,000
=======================================================================================
FREE CASH FLOW $ 737,650 $ 806,353 $ 882,320 $ 951,086 $ 1,012,790 $ 1,077,580
PRINCIPLE DEBT (END OF YEAR) $ 3,000,000 $ 2,496,219 $ 1,948,358 $ 1,352,558 $ 704,626 $ (0)
As a Percent of Original Term Loan 100% 83% 65% 45% 23% 0%
Payment on Interest and Principle $ 766,281 $ 766,281 $ 766,281 $ 766,281 $ 766,281
FCF as a % of Interest 3.07 4.04 5.58 8.56 17.48
FCF as a % of Interest and Principle 0.78 0.90 1.02 1.14 1.30
Interest Rate (prime + 0.25) Prime 8.75%
-----
8.5%
-----
61
CASCO LEVERAGE BUYOUT ANALYSIS
NO REVENUE GROWTH
SCENARIO: Stable - no growth
Actual Estimated -->
2000 2001 2002 2003 2004 2005
---------------------------------------------------------------------------------------
REVENUES $24,500,000 $24,500,000 $24,500,000 $24,500,000 $24,500,000 $ 24,500,000
OPERATING COSTS
COGS 13,291,250 13,291,250 13,291,250 13,291,250 13,291,250 13,291,250
SG&A 9,432,000 9,432,000 9,432,000 9,432,000 9,432,000 9,432,000
---------------------------------------------------------------------------------------
Total Operating Costs 22,723,250 22,723,250 22,723,250 22,723,250 22,723,250 22,723,250
---------------------------------------------------------------------------------------
EBITDA 1,776,750 1,776,750 1,776,750 1,776,750 1,776,750 1,776,750
Depreciation and Amortization 761,500 800,000 850,000 875,000 875,000 875,000
---------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) 1,015,250 976,750 926,750 901,750 901,750 901,750
Other Expenses
Interest Expense Term Loan 262,500 218,419 170,481 118,349 61,655
Interest Expense 305,000 305,000 305,000 305,000 305,000 305,000
---------------------------------------------------------------------------------------
Total Other Expenses 305,000 305,000 305,000 305,000 305,000 305,000
EBIT as Adjusted 710,250 671,750 621,750 596,750 596,750 596,750
Provision for Income Taxes (at 40%) 284,100 268,700 248,700 238,700 238,700 238,700
---------------------------------------------------------------------------------------
NET INCOME $ 426,150 $ 403,050 $ 373,050 $ 358,050 $ 358,050 $ 358,050
Add: Depreciation & Amortization 761,500 800,000 850,000 875,000 875,000 875,000
Less: Capital Expenditures 300,000 300,000 300,000 300,000 300,000 300,000
Less: Increase in Working Capital 100,000 100,000 100,000 100,000 100,000 100,000
Less: Principal Payments on Debt 50,000 50,000 50,000 50,000 50,000 50,000
=======================================================================================
FREE CASH FLOW $ 737,650 $ 753,050 $ 773,050 $ 783,050 $ 783,050 $ 783,050
PRINCIPLE DEBT (END OF YEAR) $ 3,000,000 $ 2,496,219 $ 1,948,358 $ 1,352,558 $ 704,626 $ (0)
As a Percent of Original Term Loan 100% 83% 65% 45% 23% 0%
Payment on Interest and Principle $ 766,281 $ 766,281 $ 766,281 $ 766,281 $ 766,281
FCF as a % of Interest 2.87 3.54 4.59 6.62 12.70
FCF as a % of Interest
and Principle Payment 0.73 0.79 0.84 0.89 0.95
-----------
Interest Rate (prime + 0.25) Prime 8.75%
-----------
8.5%
----------