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Exhibit (C)(2)
Copy: ___ of ___
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VALUATION OF
HAHN AUTOMOTIVE WHSE, INC.
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Presentation to the Special Committee of Independent Directors
Hahn Automotive Warehouse, Inc. by
Terence L. Griswold, ASA
March 14, 2001
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VALUATION OF
HAHN AUTOMOTIVE WHSE, INC.
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I. Preface, Introduction, Conclusions
and Summary of Empire's Qualifications
II. Valuation Terms, Methods, Level of Value and
Industry & Economic Factors
III. Capitalization of Debt-Free Income
IV. Guideline Company Analysis
V. Conclusions & Exhibits
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PREFACE
The accompanying document has been prepared for the internal information of the
Special Committee of the Independent Directors ("Special Committee") of Hahn
Automotive Warehouse, Inc. ("Hahn" or the "Company"). It contains certain
analyses and considerations that were used by Empire Valuation Consultants, Inc.
("Empire') to derive our opinion of "Value" in context with the Special
Committee need to evaluate a $1.00 per share going private proposal received on,
or about, January 18, 2001.
Empire has relied upon, without independent verification, various
representations and documents received from the management of Hahn and their
financial advisors, as well as from public sources generally regarded as
reliable. Empire assumes no responsibility for the accuracy and completeness of
the aforementioned. To the extent that the representations, documents, or other
information that Empire has relied upon is incomplete or inaccurate, the
analyses and conclusion drawn therefrom could require modification.
This document was prepared on March 8th in preparation for a March 14, 2001
Special Committee meeting, and is subject to ongoing modification, based on the
availability of new information, and the development of additional analyses by
Empire. Empire's opinions and this document are intended solely for the use of
the Special Committee. THIS DOCUMENT MAY NOT BE RELIED UPON BY ANY THIRD PARTY.
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INTRODUCTION
On, January 18 2001, the Company issued a press release announcing that it had
received a proposal from the Company's President and CEO and Executive Vice
President and affiliated parties ("Buyers") to take Hahn private by acquiring
all of Hahn's outstanding common shares (approximately 34% of 4,745,014 shares)
not already owned by the Buyers. The proposal contemplates, if approved, a
merger of Hahn into a newly formed acquisition corporation controlled by the
Buyers.
On January 17th 32,000 Hahn shares traded with a daily high of $0.6875, a low of
$0.5625, and a close of $0.625. The offer represented a 60% premium over the
closing prices for both January 17th and 18th.
Hahn's bid price for its common stock, traded NASDAQ Small Cap, has been below
$1.00 per share for an extended time period. Under NASDAQ rules, the stock faces
delisting unless the Company takes appropriate action to get the stock price
above the $1.00 figure. Accordingly, the Board has approved a 1 for 3 reverse
stock split, which will be considered at the company's upcoming annual
shareholders' meeting.
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CONCLUSION
Based upon the foregoing, and in reliance thereon, it is our opinion, that the
FAIR MARKET VALUE of Hahn's common stock on a minority interest basis as of the
current time is reasonably stated between 55 cents and 75 cents.
It is our opinion that the FAIR MARKET VALUE of Hahn's common stock on a
controlling interest basis as of the current time is reasonably stated between
90 cents and $1.00.
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OUR COMPANY
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3255 Brighton-Henrietta TownLine Rd. 350 Fifth Avenue, Suite 5513
Rochester, New York 14623 New York, New York 10118
Tel: (716)-475-9260 Tel: (212)-714-0122
Fax: (716)-475-9380 Fax: (212-714-0124
Empire in its regular course of business provides merger & acquisition and
valuation services to, and renders fairness opinions on behalf of, corporate
clients, corporate trustees, attorneys, accountants, investors, financial
institutions, the courts, and participants of employee benefits plans. Empire's
consultants have prepared or managed the preparation of over 5,000 appraisals
for a broad range of purposes, covering a broad range of industries, both
domestic and overseas, and for corporate clients of all sizes. Empire's five
principal and/or managing directors have cumulatively over 110 years of
experience in investment banking and valuation experience. Empire's consultants
have extensive experience in providing expert testimony; have and currently hold
national and regional office leadership positions with the American Society of
Appraisers; and have significant experience in the wholesale distribution
industry.
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QUALIFICATIONS & EXPERIENCE
Terence L. Griswold, ASA
Principal, Empire Valuation Consultants, Inc.
Mr. Griswold is:
1. Senior Member of the American Society of Appraisers ("ASA")
2. Vice Chairman - ASA Int'l Board of Examiners for Business Valuation
3. Elected Member of the ASA's National Valuation Committee
4. A non-practicing Certified Public Accountant
5. A Member Consultant of the National Center for Employee Ownership
6. A Member Consultant with the ESOP Association
7. Member National Valuation Committee - ESOP Association
He has over twenty-four years of accounting, corporate finance and business
valuation experience. He has prepared or managed over 2,000 valuations of a
widely diverse base of companies for estate and gift taxes, recapitalizations,
buy-sell agreements, equitable distributions, mergers & acquisitions, fairness
opinions, going public, employee stock ownership plans (ESOPs), and other
purposes. Mr. Griswold has also testified as an expert witness in the states of
New York, Nevada, Vermont, New Hampshire and before the NYS Public Service
Commission.
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VALUATION TERMS
FAIR MARKET VALUE is a generally accepted financial concept defined in federal
tax code, defined as follows:
The price at which stock would change hands between a willing buyer
and a willing seller, neither being under any compulsion to buy or
sell and both having reasonable knowledge of all relevant facts.
FAIR VALUE is primarily a legal concept that encompasses, yet transcends, the
financial aspects of a transaction. Fair Value is not statutorily defined in
NYS, incorporates the definition of fair market value, but is often stipulates
by courts not to include a minority interest discount, nor to assume synergistic
control premiums.
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VALUATION METHODS
GENERAL VALUATION METHODS
There are a number of generally accepted methods in use for valuing a business,
none of which is necessarily superior to the others. It is more a question as to
which of the methods or combination of methods is best suited to the business,
industry and economic circumstances of the particular company. Court cases tend
to favor the following methods or consideration: Market Value; Investment Value
(income approach) and Asset Value.
MARKET VALUE: Application of market-based valuation multiples to Company being
valued. For Hahn, we screened and selected five guideline companies. General
comparability was moderate. No comparable control transactions were found.
Primary consideration was given to this method.
INVESTMENT VALUE: A historical income approach was selected. Because of Hahn's
very high level of debt - a debt-free approach was necessitated. Primary
consider was given to this method.
ASSET VALUE: This method incorporates the adjustment of the Company's assets &
liabilities from its accounting based book value to an estimate of its market
values. Secondary consideration was given to this method.
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LEVELS OF VALUE
SYNERGISTIC PREMIUM
Obtain indirectly by reference to freely tradable values via control premiums
CONTROL PREMIUM
Obtain indirectly by reference to a control valuation via minority interest
discount
Obtain indirectly from control valuation by successive application of minority
interest discount and marketability discount
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Synergistic Value
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Control Value
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"As if Freely Tradable"
Minority Interest Value
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Non-Marketable Minority
Interest Value
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Obtain directly by reference to actual change of control transactions or other
control methodologies
MINORITY INTEREST DISCOUNT
Obtain directly by reference to "freely tradable" publicly traded comparable
companies or by "build up" methodologies which develop capitalization rates by
estimating required rates of return in relation to public markets
MARKETABILITY DISCOUNT
Obtain indirectly from "freely tradable" values via marketability discount
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INDUSTRY & ECONOMIC FACTORS
- - The passenger car and light truck products and parts aftermarket is highly
fragmented and highly competitive. Flat to declining revenue growth in the
industry for the past three years, as well as demand for rapid parts
availability have contributed to shrinking margins.
- - AWDA'S notes that the prime market segment (vehicles 6-to-10 years old) for
aftermarket parts sales has declined steadily, as a percent of total vehicles on
the road, from 35.7% in 1993 to 28.3% in 1999. However, the decline (brought on
the the 1992 recession) is expected to reverse in 2000, or 2001.
- - AWDA notes that after averaging 4.4% of annual growth for 1993 through 1997,
the U.S. aftermarket dollar sales declined in 1998 and 1999. This $150 billion
dollar market was projected to only increase between 1.8% and 2.2% for the next
three years.
- - S&P'S industry survey states that improved quality for original equipment
manufacturers in the 1990s has soften demand and weakened the profitability in
the aftermarket. S&P sees a continued negative impact on the aftermarket for the
foreseeable future.
- - The US economic growth has slowed significantly in the past six months and
consumer confidence and spending has been down. The uncertain short-term US
economic outlook is a negative for the Company and its industry.
- - With a weakening economy, the Fed have recently cut interest rates. The
outlook for 2001 is for further interest rate cuts. For Hahn, a highly leveraged
company, this is a positive factor.
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CAPITALIZATION OF DEBT-FREE INCOME
INTRODUCTION
Modern financial theory holds the value of any asset to be a function of several
interrelated factors:
- - The stream of benefits the owner of the assets expects to receive;
- - The timing of the receipt of these benefits; and
- - The risk borne by the owner.
Thus, appraisal methodologies rely on the premise that the value of a business
enterprise is equal to the present value of the income which it can expect to
generate going forward. From an investor's standpoint, these future income
streams represent the dividend-paying (i.e., distribution-paying) capacity of
the company or, in the case of a leveraged company, monies available for all
invested capital (i.e., interest-bearing debt plus shareholders' capital).
To value Hahn income, it is necessary to determine both the income base and the
yield which an investor would require in order to purchase an interest in its
future distributions. Thereafter, it is simply a matter of dividing the income
base by the yield. As noted, this process is referred to as capitalizing.
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COMPUTATION OF OPERATING CASH FLOW DEBT-FREE
HISTORY HISTORY HISTORY PROJECTED
1998 1999 2000 2001
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Pretax Income 1,300 244 1,113 1,084
Gain on Sale of Securities (196)
Negative Goodwill (192) (63)
Autoworks. LTD start-up loss add back 220 27
Goodwill Amortization 119 180 126 126
Non-Compete & Other 2 34 96 96
Deferred Loan Cost Amortization 0 201 204 204
Interest Expense 3,771 3,650 3,796 4,300
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Adjusted Pretax Debt-Free Income 5,220 4,273 5,139 5,810
Weighting 1 1 1 1
Average Adjusted Pretax Income (1998 - 2001) $ 5,110 GROWTH
Average Adjusted Pretax Income (1998 - 2000) $ 4,877 4.78%
Selected Earning Power $ 5,000
Less: Corporate Taxes 39.0% (1,950)
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Adjusted Debt-Free Net Income 3,050
Three Year Average Depreciation Expense 1,526
Normalized Cap-X (819)
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Adjusted Operating Cash Flow - Debt Free 3,757
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COMPUTATION OF WEIGHTED AVERAGE COST OF CAPITAL
COST OF EQUITY BUILD-UP
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20 Year Treasuries as of 3/7/2001 5.55%
Generic Stock Premium 7.10%
Small Stock Premium 5.10%
Industry/Company Specific Risk 10.00%
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Equity Discount Rate 27.75%
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WEIGHTED AVERAGE COST OF CAPITAL (WACC) Weighting
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Debt 5.34% 73.50% 3.92%
Equity (Discount Rate) 27.75% 26.50% 7.35%
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WACC (Discount Rate) 11.28%
Less: Long Term Growth Rate 3.00%
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Debt-free Capitalization Rate 8.28%
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COST OF DEBT
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Company's Cost of Debt 8.750%
Tax Rate 39.0%
After-Tax Cost of Debt 5.34%
*Gordon Growth Model [Base Net Income x (1+growth rate) / (capitalization rate)]
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COMPUTATION OF VALUE
VALUE OF HAHN'S TOTAL INVESTED CAPITAL: In order to derive the value of Hahn's
total invested capital, its adjusted operating cash flows were capitalized
(i.e., divided) using the Gordon Growth Model, which can be expressed by the
following formula:
Vo = Cf * (1 + g)
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(r - g)
Where:
Vo = Value of total invested capital
Cf = Adjusted debt-free cash flows
g = Expected growth rate
r = Required rate of return (discount rate)
Inserting into this formula the various rates and adjusted cash flows from
operations results in the following:
$3,757,000 X (1 + .03)
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(.1128 - .03)
Value of Total Invested Capital $46,754,000
Total Debt $44,998,000
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EQUITY - MINORITY INTEREST BASIS $ 1,756,000
Control Premium - 30% $ 527,000
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Operating Value before NOL $ 2,282,000
NPV of NOL $ 2,399,000
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CONTROL VALUE $ 4,682,000
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SENSITIVITY ANALYSIS - INCOME METHOD
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
SENSITIVITY ANALYSIS FOR DEBT-FREE CAPITALIZATION OF INCOME
COMPANY LONG AGGREGATE AGGREGATE
Assumptions DEBT/EQTITY INDUSTRY COST OF TERM CONTROL MINORITY INT. CONTROL MINORITY
WEIGHTING RISK DEBT GROWTH VALUE- $000 VALUE- $000 PER SHARE PER SHARE
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Base Case 73.50% 10.00% 8.75% 3.00% 4,682 3,555 0.987 0.749
CHANGE IN 74.00% 10.00% 8.75% 3.00% 5,516 4,197 1.162 0.885
DEBT / EQUITY 73.00% 10.00% 8.75% 3.00% 3,870 2,931 0.816 0.618
WEIGHTING 74.50% 10.00% 8.75% 3.00% 6,373 4,856 1.343 1.023
72.50% 10.00% 8.75% 3.00% 3,079 2,322 0.649 0.489
CHANGE IN 73.50% 9.00% 8.75% 3.00% 6,692 5,102 1.410 1.075
COMPANY RISK 73.50% 11.00% 8.75% 3.00% 2,796 2,105 0.589 0.444
LEVEL 73.50% 8.00% 8.75% 3.00% 8,840 6,754 1.863 1.423
73.50% 12.00% 8.75% 3.00% 1,341 741 0.283 0.156
CHANGE IN 73.50% 10.00% 9.00% 3.00% 3,869 2,930 0.815 0.617
COST OF 73.50% 10.00% 9.25% 3.00% 3,079 2,322 0.649 0.489
DEBT 73.50% 10.00% 9.50% 3.00% 2,330 1,730 0.491 0.365
73.50% 10.00% 8.50% 3.00% 5,516 4,197 1.162 0.885
CHANGE IN 73.50% 10.00% 8.75% 2.75% 2,756 2,074 0.581 0.437
HORIZON RISK 73.50% 10.00% 8.75% 3.25% 6,727 5,128 1.418 1.081
LEVEL 73.50% 10.00% 8.75% 2.50% 1,277 678 0.269 0.143
73.50% 10.00% 8.75% 3.50% 8,903 6,803 1.876 1.434
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INTRODUCTION
The objective of the guideline company valuation technique is to identify
business entities that have publicly traded securities and business and
financial risks which are comparable to those of the entity being valued. The
pricing multiples of the selected public companies are then used to derive a
market value for the owners' capital of the company under analysis.
Since equity markets are specifically interested in the future residual profits
accruing to shareholders, our objective in conducting this search was to find
public companies, which could be used to establish valuation guidelines for the
company under study. Companies whose markets, customer bases, operations and
financial condition were sufficiently similar to those of Hahn were examined in
order to derive a reasonable estimate of the shadow market price for Hahn.
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SELECTION CRITERIA
Using Disclosure Incorporated's Compact D SEC database of public companies, a
search was conducted for public companies classified under SIC 5013 - Motor
Vehicle Supplies & New Parts. Further refinement of the selection criteria was
as follows:
- The company's common equity had to be actively traded on a public
market as of the Valuation Date;
- The company's markets, operations, and types of products had to be
similar to those of Hahn;
- The company's primary products, services, and sales were not tied to a
specific niche or single customer. Companies with significant
manufacturing operations were excluded. Companies which were
significantly tied to tire & wheel distribution or heavy truck part
distribution were excluded companies;
- Normal SIZE criteria was relaxed;
- Sufficient information was publicly available with which to perform a
thorough analysis;
- The company's adjusted results were positive for at least three years
prior to the Valuation Date (R&B, Inc. loss in 1999 was due to
nonrecurring write-off); and
- The company was incorporated in the U.S.
From this search, five publicly traded companies were identified and are
discussed in the following page of this report.
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GENUINE PARTS COMPANY
Genuine Parts Company ("Genuine") was engaged in the distribution of automotive
replacement parts, industrial replacement parts, office products and
electrical/electronic materials. Operations were conducted throughout most of
the U.S., as well as in Canada and Mexico. As a percentage of sales, these
divisions comprised 51.2%, 27%, 15.3%, and 6.5%, respectively, in fiscal year
1999. The company trades its stock on the New York Stock Exchange ("NYSE") under
the ticker symbol, GPC. For the trailing 12 month period ended, September 30,
2000, net income was $388.4 million on revenues of $8.3 billion. Total assets
were roughly $4 billion.
Genuine was the largest member of the National Automotive Parts Association
("NAPA"), a voluntary trade association formed in 1925 to provide nationwide
distribution of automotive parts. In addition to over 225,000 available part
numbers, the company, in conjunction with NAPA, offered complete inventory,
accounting, cataloging, marketing, training and other programs in the automotive
aftermarket segment. Genuine was working on developing additional channels of
distribution through two separate, but coordinated, e-commerce initiatives in
the business-to-consumer and business-to-business markets.
In 1999, the company operated 62 domestic NAPA automotive parts distribution
centers located in 38 states and approximately 750 domestic company-owned NAPA
Auto Parts stores located in 43 states. The company's distribution centers also
served approximately 5,000 independently owned NAPA Auto Parts stores.
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KEYSTONE AUTOMOTIVE
Keystone Automotive Industries, Inc. ("Keystone") was the nation's leading
distributor of aftermarket collision replacement parts produced by independent
manufacturers for automobiles and light trucks. The company distributed products
primarily to collision repair shops throughout most of the United States. For
the trailing 12 month period ended, December 29, 2000, net income was $2.3
million on revenues of $347.3 million. Total Assets were $188.8 million. The
company trades its stock on the NASDAQ quotation system under the ticker symbol,
KEYS.
Keystone distributed more than 19,000 stock keeping units of aftermarket
collision parts and repair materials for most popular models of domestic and
foreign automobiles and light trucks. The product lines consisted of automotive
body parts, bumpers, autoglass and remanufactured alloy wheels, as well as paint
and other materials used in repairing a damaged vehicle. Founded in Southern
California in 1947, the Keystone operated a "hub and spoke" distribution system
consisting of 118 service centers, 23 of which serve as regional hubs and 20
depots, located in 35 states throughout the United States, as well as in Canada
and Mexico. The company also operated nine wheel-remanufacturing facilities and
36 plastic and steel bumper-recycling facilities.
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O'REILLY AUTOMOTIVE
O'Reilly Automotive, Inc. ("O'Reilly") was one of the largest specialty
retailers of automotive aftermarket parts, tools, supplies, equipment and
accessories in the United States, selling their products to both do-it-yourself
("DIY") customers and professional installers. The company is traded on the
NASDAQ quotation system under the ticker symbol, ORLY. For the trailing 12 month
period ended, September 30, 2000, net income was $54.4 million on revenues of
856.7 million. Total assets were $722 million.
At December 31, 1999 O'Reilly operated 571 Hi/Low auto parts stores in Texas,
Missouri, Oklahoma, Kansas, Iowa, Arkansas, Louisiana, Nebraska and Illinois. In
addition, the company was selling automotive parts through their own website.
Each store offered a wide selection of brand name products for domestic and
imported automobiles, vans and trucks. A wide variety of high-quality private
label products were also available. Inventories were purchased from
approximately 400 vendors, the five largest of which accounted for approximately
24% of our total purchases in 1999.
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R&B INC.
R&B Inc. ("R&B") was a leading supplier of "hard -to-find" parts, fasteners and
service line products primarily for the automotive aftermarket. The company
trades its stock on the NASDAQ quotation system under the ticker symbol, RBIN.
For the trailing twelve months ended, September 30, 2000, net sales were $205.4
million and total assets were $165.8 million.
The company designed, packaged and marketed over 60,000 different automotive
replacement parts, fasteners and service line products manufactured to its
specifications, with approximately half consisting of "hard-to-find" parts and
fasteners. "Hard-to-find" parts are those which are traditionally available to
consumers only from original equipment manufacturers or junk yards and include,
among other parts, window handles, headlamp aiming screws, power steering filler
caps, pedal pads and carburetor pre-heater hoses. Fasteners include such items
as oil drain plugs and wheel lug nuts.
R&B's products were sold primarily in the United States through automotive
aftermarket retailers, national, regional and local warehouse distributors, and
specialty markets including parts manufacturers for resale under their own
private labels, automotive dealers and salvage yards. The company was also
increasing their international distribution of automotive replacement parts,
with sales into Europe, the Middle East and the Far East. Additional revenue
was generated by the sale of parts packaged by the company, or others, for sale
in bulk or under the private labels of parts manufacturers and automobile
manufacturers or their dealers.
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CLARCOR INC.
CLARCOR Inc. ("CLARCOR") conducted business in three principal industry
segments: (1) Engine/Mobile Filtration, (2) Industrial/Environmental Filtration
and (3) Packaging. The company trades its stock on the New York Stock Exchange
("NYSE") under the ticker symbol, CLC. For the fiscal year ended, November 30,
2000, net income was $388.4 million on revenues of $40.3 million. Total assets
were roughly $501.9 million.
Engine/Mobile Filtration includes filters for oil, air, fuel, coolants and
hydraulic fluids for trucks, automobiles, construction and industrial equipment,
locomotives, marine and agricultural equipment. Industrial/Environmental
Filtration products are used primarily for commercial, residential and
industrial applications. The segment's industrial and environmental products
include air and antimicrobial treated filters and high efficiency electronic air
cleaners for commercial buildings, factories, residential buildings, paint spray
booths, gas turbine systems, medical facilities, motor vehicle cabins, clean
rooms, compressors and dust collector systems. Packaging products include a wide
variety of custom styled containers and packaging items used primarily by the
food, confectionary, spice, drug, toiletries and chemical specialties
industries.
The Engine/Mobile filtration segment distributed its products primarily in the
replacement market for trucks, automobiles, locomotives, marine, industrial and
agricultural equipment. These products were sold worldwide through a combination
of independent distributors and dealers for original equipment manufacturers.
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MARKET COMPARISON
RELATIVE PRICE CHANGES OF PUBLICLY-TRADED DISTRIBUTORS
VS.
THE NASDAQ COMPOSITE INDEX
[LINE GRAPH]
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CAPITAL STRUCTURE
A COMPARISON OF CAPITAL STRUCTURES FOR PUBLICLY-TRADED DISTRIBUTORS
AS OF THE LATEST BALANCE SHEET AND PRICED ON JANUARY 17, 2001
In Thousands ($000)
MARKET VALUE MARKET VALUE % DEBT TO % EQUITY TO
COMPANY NAME OF DEBT OF EQUITY TIC TIC TIC
- -------------------------------------------------------------------------------------------------------
Genuine Parts Co. 835,088 4,510,812 5,345,900 15.62% 84.38%
Keystone Automotive 20,139 113,977 134,116 15.02% 84.98%
O'Reilly Automotive Inc. 156,160 1,307,263 1,463,423 10.67% 89.33%
R&B Inc. 71,376 21,932 93,308 76.49% 23.51%
CLARCOR Inc. 146,968 516,779 663,747 22.14% 77.86%
HAHN AUTOMOTIVE 40,847 2,966 43,813 93.23% 6.77%
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COMPOUND GROWTH RATES
FOUR YEAR GROWTH RATES FOR PUBLICLY-TRADED DISTRIBUTORS
THROUGH THE END OF 2000
COMPANY NAME REVENUE EBITDA EBIT EARNINGS
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Genuine Parts Co. 10.98% 7.67% 6.44% 4.94%
Keystone Automotive 24.10% 17.94% 25.46% 30.04%
O' Reilly Automotive Inc. 39.09% 36.74% 35.07% 33.05%
R&B Inc. 20.08% 9.61% 5.66% -3.06%
CLARCOR Inc. 9.69% 10.85% 10.13% 10.78%
HAHN AUTOMOTIVE -2.40% -11.17% -14.06% -29.75%
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COMPARATIVE PRICE MULTIPLES
COMPARATIVE PRICING MULTIPLES
FOR THE TRAILING TWELVE MONTHS CLOSEST TO DECEMBER 31, 2000
PRICE PRICE PRICE PRICE
COMPANY NAME TO EARNINGS TO CASH FLOWS TO IBES* TO BOOK VALUE
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Genuine Parts Co. 7.24 6.34 11.77 2.44
Keystone Automotive 13.75 7.12 20.27 0.94
O' Reilly Automotive Inc. 10.60 8.84 14.96 2.10
R&B Inc. 5.20 1.70 2.90 0.50
CLARCOR Inc. 9.97 7.45 14.35 4.42
HAHN AUTOMOTIVE 4.59 1.09 N/A 0.20
* Yearly earnings forecasts for FY 2001 were obtained from Thompson Financial
I/B/E/S.
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COMPARATIVE DEBT-FREE MULTIPLES
FOR THE TRAILING TWELVE MONTHS CLOSEST TO DECEMBER 31, 2000
TIC TIC TIC TIC
COMPANY NAME TO REVENUE TO EBIT EBITDA TO BOOK VALUE
- ------------------------------------------------------------------------------------------
Genuine Parts Co. 0.66 7.93 7.00 2.00
Keystone Automotive 0.37 13.60 7.65 0.95
O' Reilly Automotive Inc. 1.29 11.54 9.72 1.82
R&B Inc. 0.44 8.94 5.05 0.82
CLARCOR Inc. 1.18 10.40 8.09 2.67
HAHN AUTOMOTIVE 0.39 9.85 7.24 0.89
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SUMMARY OF COMPARATIVE FACTORS
- Hahn is smallest company in group
- Hahn is much more highly leverage than the group. The only company
even close is R&B, Inc.
- From pre-announcement date in January, the stock prices of the group
have generally declined slightly, in-line with NASDAQ.
- Investors value growth expectations. The comps have had superior
growth performance in revenue and earnings. Again, closest comp
company is R&B, Inc. High leverage, low growth expectations -
depresses value!
- Hahn's valuation multiples have generally been below those of the
comps - where they should be base upon quantitative comparisons.
- Hahn's liquidity ratios, operating cycle & profitability ratios are
below those of the comp group.
[EMPIRE VALUATION CONSULTANTS LOGO]
27
30
CONCLUSION
Based upon the foregoing, and in reliance thereon, it is our opinion, that the
FAIR MARKET VALUE of Hahn's common stock on a marketable minority interest basis
as of the current time is reasonably stated between 55 cents and 75 cents.
It is our opinion that the FAIR MARKET VALUE of Hahn's common stock on a
controlling interest basis as of the current time is reasonably stated between
90 cents and $1.00.
[EMPIRE VALUATION CONSULTANTS LOGO]
28
31
EXHIBIT A-1
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
COMPARATIVE INCOME STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,
(In Thousands $000) HISTORY HISTORY HISTORY HISTORY HISTORY PROJECTED 3 MONTHS
1996 1997 1998 1999 2000 2001 12/31/00
--------------------------------------------------------------------- ---------
NET SALES 138,395 142,242 133,503 130,998 125,575 126,229 28,823
Cost of Goods Sold 86,077 86,967 82,778 82,002 77,071 77,155 17,342
LIFO to FIFO Adjustment (300) (404) (187) (113) 0 0
--------------------------------------------------------------------- ----------
GROSS PROFIT 52,318 54,975 50,321 48,809 48,391 49,073 11,481
Selling, General & Administrative 41,657 46,717 44,059 43,512 42,587 42,310 10,067
Depreciation & Amortization 1,756 2,005 1,602 1,775 1,789 1,722 440
--------------------------------------------------------------------- ----------
TOTAL OPERATING EXPENSES 43,413 48,722 45,661 45,287 44,376 44,032 10,507
--------------------------------------------------------------------- ----------
NET OPERATING INCOME 8,905 6,253 4,660 3,522 4,015 5,042 974
Interest Expense (4,402) (4,670) (3,771) (3,650) (3,796) (4,300) (1,034)
Miscellaneous 600 719 411 372 894 342 139
--------------------------------------------------------------------- ----------
TOTAL OTHER INCOME (EXPENSE) (3,802) (3,951) (3,360) (3,278) (2,902) (3,957) (895)
--------------------------------------------------------------------- ----------
INCOME BEFORE TAXES 5,103 2,302 1,300 244 1,113 1,084 79
Provision (Benefit) for Taxes 1,950 1,011 665 151 450 423 30
Tax On LIFO to FIFO Adjustment (117) (158) (73) (44) 0 0
--------------------------------------------------------------------- ----------
ADJUSTED CORP TAXES 1,950 894 507 78 406 423 30
--------------------------------------------------------------------- ----------
INCOME FROM CONTINUING OPERATIONS 3,153 1,408 793 166 707 661 49
Write-down of Investment in Subsidiaries, Net -- 18,789 -- -- -- -- --
Loss from Discontinued Operations, Net 1,295 3,937 -- -- -- -- --
--------------------------------------------------------------------- ----------
NET INCOME (FIFO) 1,858 (21,318) 793 166 707 661 49
===================================================================== ==========
32
EXHIBIT A-2
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
COMMON-SIZED INCOME STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,
HISTORY HISTORY HISTORY HISTORY HISTORY PROJECTED
1996 1997 1998 1999 2000 2001
-------------------------------------------------------------------------------
NET SALES 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods Sold 62.2% 61.1% 62.0% 62.6% 61.4% 61.1%
LIFO to FIFO Adjustment 0.0% -0.2% -0.3% -0.1% -0.1%
-------------------------------------------------------------------------------
GROSS PROFIT 37.8% 38.6% 37.7% 37.3% 38.5% 38.9%
Selling, General & Administrative 30.1% 32.8% 33.0% 33.2% 33.9% 33.5%
Depreciation & Amortization 1.3% 1.4% 1.2% 1.4% 1.4% 1.4%
-------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 31.4% 34.3% 34.2% 34.6% 35.3% 34.9%
-------------------------------------------------------------------------------
NET OPERATING INCOME 6.4% 4.4% 3.5% 2.7% 3.2% 4.0%
Interest Expense -3.2% -3.3% -2.8% -2.8% -3.0% -3.4%
Miscellaneous 0.4% 0.5% 0.3% 0.3% 0.7% 0.3%
-------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSE) -2.7% -2.8% -2.5% -2.5% -2.3% -3.1%
-------------------------------------------------------------------------------
INCOME BEFORE TAXES 3.7% 1.6% 1.0% 0.2% 0.9% 0.9%
Provision (Benefit) for Taxes 1.4% 0.7% 0.5% 0.1% 0.4% 0.3%
Tax On LIFO to FIFO Adjustment 0.0% -0.1% -0.1% -0.1% 0.0% 0.0%
-------------------------------------------------------------------------------
ADJUSTED CORP TAXES 1.4% 0.6% 0.4% 0.1% 0.3% 0.3%
-------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 2.3% 1.0% 0.6% 0.1% 0.6% 0.5%
Write-down of Investment in
Subsidiaries, Net 0.0% 13.2% 0.0% 0.0% 0.0% 0.0%
Loss from Discontinued Operations, Net 0.9% 2.8% 0.0% 0.0% 0.0% 0.0%
-------------------------------------------------------------------------------
NET INCOME (FIFO) 1.3% -15.0% 0.6% 0.1% 0.6% 0.5%
===============================================================================
33
EXHIBIT A-3
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
INCOME STATEMENT TREND ANALYSIS
FOR THE YEARS ENDED SEPTEMBER 30,
HISTORY HISTORY HISTORY HISTORY PROJECTED
1997 1998 1999 2000 2001
----------------------------------------------------------------------------
NET SALES 2.8% -6.1% -1.9% -4.1% 0.5%
Cost of Goods Sold 1.0% -4.8% -0.9% -6.0% 0.1%
LIFO to FIFO Adjustment N/A -34.7% 53.7% 39.6% 100.0%
----------------------------------------------------------------------------
GROSS PROFIT 5.1% -8.5% -3.0% -0.9% 1.4%
Selling, General & Administrative 12.1% -5.7% -1.2% -2.1% -0.7%
Depreciation & Amortization 14.2% -20.1% 10.8% 0.8% -3.7%
----------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 12.2% -6.3% -0.8% -2.0% -0.8%
----------------------------------------------------------------------------
NET OPERATING INCOME -29.8% -25.5% -24.4% 14.0% 25.6%
Interest Expense -6.1% 19.3% 3.2% -4.0% -13.3%
Miscellaneous 19.8% -42.8% -9.5% 140.3% -61.7%
----------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSE) -3.9% 15.0% 2.4% 11.5% -36.4%
----------------------------------------------------------------------------
INCOME BEFORE TAXES -54.9% -43.5% -81.2% 356.1% -2.6%
Provision (Benefit) for Taxes -48.2% -34.2% -77.3% 198.0% -6.0%
Tax On LIFO to FIFO Adjustment N/A -34.7% 53.7% 39.6% 100.0%
----------------------------------------------------------------------------
ADJUSTED CORP TAXES -54.2% -43.2% -84.6% 420.0% 4.2%
----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS -55.3% -43.7% -79.1% 326.1% -6.5%
Write-down of Investment in
Subsidiaries, Net N/A -100.0% N/A N/A N/A
Loss from Discontinued
Operations, Net 204.0% -100.0% N/A N/A N/A
----------------------------------------------------------------------------
NET INCOME (FIFO) -1247.4% 103.7% -79.1% 326.1% -6.5%
============================================================================
34
EXHIBIT B-1
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
COMPARATIVE BALANCE SHEETS
FOR THE YEARS ENDED SEPTEMBER 30,
(In Thousands $000) HISTORY HISTORY HISTORY HISTORY HISTORY PROJECTED HISTORY
1996 1997 1998 1999 2000 2001 12/31/00
----------------------------------------------------------------------- --------
ASSETS
- ------
Cash 79 632 329 81 80 80 80
Marketable Securities 0 550 789 685 0 0 0
Trade Receivables, Net 17,052 16,995 15,595 17,577 16,062 16,875 15,225
Inventory LIFO 41,636 42,516 44,037 44,501 46,192 43,493 44,816
LIFO Reserve 3,883 3,583 3,179 2,992 2,879 2,879 2,879
----------------------------------------------------------------------- --------
FIFO Inventory 45,519 46,099 47,216 47,493 49,071 46,372 47,695
----------------------------------------------------------------------- --------
Assets From Discontinued
Operations 29,267 0 0 0 0 0 0
Prepaid Expenses (897) 659 1,073 350 1,000 450
Deferred Tax Benefit - S/T 1,885 1,908 1,468 1,449 1,903 1,449
Other Current Assets 845 3,324 0 0 0 0
----------------------------------------------------------------------- --------
TOTAL CURRENT ASSETS 92,762 68,588 66,496 68,377 67,012 66,230 64,899
----------------------------------------------------------------------- --------
Land & Buildings 1,055 905 905 905 912 932
Buildings Under Capital Leases 3,136 3,136 4,422 4,422 4,422 4,422
Leasehold Improvements 2,509 2,163 2,227 2,251 2,175 2,241
Computer Equipment 2,016 2,177 2,103 2,484 2,489 2,628
Furniture & Fixtures 3,384 4,466 4,343 4,314 3,980 4,023
Vehicles 3,642 3,337 3,084 2,996 2,632 2,592
----------------------------------------------------------------------- --------
TOTAL FIXED ASSETS 15,742 16,184 17,084 17,372 16,610 16,838
Less: Accumulated Depreciation (10,134) (11,122) (9,471) (10,480) (10,594) (10,896)
----------------------------------------------------------------------- --------
NET FIXED ASSETS 5,608 5,062 7,613 6,892 6,016 5,317 5,942
----------------------------------------------------------------------- --------
Other Assets 3,332 (788) 2,093 881
Security Deposits 767 286 111 607 200 742
Deferred Tax Benefit 5,518 2,703 3,099 2,998 2,633 2,998
Deferred Tax On LIFO Reserve (1,514) (1,397) (1,240) (1,167) (1,123) (1,123) (1,123)
Goodwill 2,228 2,299 2,282 2,155 2,029 2,124
Investment in Autoworks, LTD,
iAutosport, Inc., etc 1,073 2,032 752 2,007
CSVLI 432 429 429
Capitalized Closing Cost & Other 578 284 504
----------------------------------------------------------------------- --------
TOTAL OTHER ASSETS 1,818 6,328 6,141 6,279 7,679 5,204 7,681
----------------------------------------------------------------------- --------
TOTAL ASSETS 100,188 79,978 80,250 81,548 80,707 76,751 78,522
======================================================================= ========
LIABILITIES & EQUITY
- --------------------
Current Portion of LTD and
Capital Leases 3,376 1,330 2,096 1,541 1,253 1,239 2,170
Accounts Payable 12,980 12,062 10,718 12,377 13,266 10,997 9,342
Compensation Related Liabilities 1,664 1,880 1,758 1,673 1,613 1,387 1,215
Discontinued Operations 0 5,066 1,142 604 392 0 375
Other Accrued Expenses 2,847 3,215 4,391 4,271 3,925 5,000 4,158
----------------------------------------------------------------------- --------
TOTAL CURRENT LIABILITIES 20,867 23,553 20,105 20,466 20,449 18,623 17,260
----------------------------------------------------------------------- --------
Obligations Under Credit Facility 36,000 37,455 35,190 36,611 35,739 34,542 37,788
Note Payable - Officer and
Affiliates 2,560 2,704 1,843 1,445 1,445 1,445 1,445
Capital Lease Obligations 450 275 3,564 3,196 2,787 2,378 2,706
Other Long-term Debt 4,443 1,440 1,810 1,995 1,896 1,809 889
Other Liabilities 0 0 2,238 2,237 2,176 1,540 2,170
----------------------------------------------------------------------- --------
TOTAL OTHER LIABILITIES 43,453 41,874 44,645 45,484 44,043 41,714 44,998
----------------------------------------------------------------------- --------
TOTAL LIABILITIES 64,320 65,427 64,750 65,950 64,492 60,337 62,258
----------------------------------------------------------------------- --------
Capital Stock 46 47 47 47 47 47 47
Paid-in Capital 24,607 25,975 25,975 25,975 25,975 25,975 25,975
Retained Earnings 8,846 (13,657) (12,619) (12,339) (11,563) (11,364) (11,514)
Balance Sheet Adjustments 2,369 2,186 1,939 1,825 1,756 1,756 1,756
Unrealized Gain on Marketable
Securities 0 0 158 90 0 0 0
----------------------------------------------------------------------- --------
TOTAL STOCKHOLDERS' EQUITY 35,868 14,551 15,500 15,598 16,215 16,414 16,264
----------------------------------------------------------------------- --------
TOTAL LIABILITIES & EQUITY 100,188 79,978 80,250 81,548 80,707 76,751 78,522
======================================================================= ========
MEMO:
BOOK VALUE OF LEASEHOLD IMPROVEMENTS 3,393
OTHER CAPITALIZED INTANGIBLE ASSETS 5,952
========
TANGIBLE STOCKHOLDERS' EQUITY 1.458 6,919
========
35
EXHIBIT B-2
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
COMMON-SIZED BALANCE SHEETS
FOR THE YEARS ENDED SEPTEMBER 30,
HISTORY HISTORY HISTORY HISTORY HISTORY PROJECTED
1996 1997 1998 1999 2000 2001
----------------------------------------------------------------------------
ASSETS
- ------
Cash 0.1% 0.8% 0.4% 0.1% 0.1% 0.1%
Marketable Securities 0.0% 0.7% 1.0% 0.8%
Trade Receivables, Net 17.0% 21.2% 19.4% 21.6% 19.9% 22.0%
Inventory LIFO 41.6% 53.2% 54.9% 54.6% 57.2% 56.7%
LIFO Reserve 3.9% 4.5% 4.0% 3.7% 3.6% 3.8%
--------------------------------------------------------------------------
FIFO Inventory 45.4% 57.6% 58.8% 58.2% 60.8% 60.4%
--------------------------------------------------------------------------
Assets From Discontinued
Operations 29.2%
Prepaid Expenses 0.0% -1.1% 0.8% 1.3% 0.4% 1.3%
Deferred Tax Benefit - S/T 0.0% 2.4% 2.4% 1.8% 1.8% 2.5%
Other Current Assets 0.8% 4.2%
--------------------------------------------------------------------------
TOTAL CURRENT ASSETS 92.6% 85.8% 82.9% 83.8% 83.0% 86.3%
--------------------------------------------------------------------------
Land & Buildings 1.1% 1.1% 1.1% 1.1% 1.1%
Buildings Under Capital
Leases 3.1% 3.9% 5.5% 5.4% 5.5%
Leasehold Improvements 2.5% 2.7% 2.8% 2.8% 2.7%
Computer Equipment 2.0% 2.7% 2.6% 3.0% 3.1%
Furniture & Fixtures 3.4% 5.6% 5.4% 5.3% 4.9%
Vehicles 3.6% 4.2% 3.8% 3.7% 3.3%
--------------------------------------------------------------------------
TOTAL FIXED ASSETS 15.7% 20.2% 21.3% 21.3% 20.6%
Less: Accumulated
Depreciation -10.1% -13.9% -11.8% -12.9% -13.1%
--------------------------------------------------------------------------
NET FIXED ASSETS 5.6% 6.3% 9.5% 8.5% 7.5% 6.9%
--------------------------------------------------------------------------
Other Assets 3.3% -1.0% 2.6% 1.1% 0.0% 0.0%
Security Deposits 1.0% 0.4% 0.1% 0.8% 0.3%
Deferred Tax Benefit 6.9% 3.4% 3.8% 3.7% 3.4%
Deferred Tax On LIFO
Reserve -1.5% -1.7% -1.5% -1.4% -1.4% -1.5%
Goodwill 2.8% 2.9% 2.8% 2.7% 2.6%
Investment in Autoworks,
LTD, iAutosport, Inc.,
etc 1.3% 2.5% 1.0%
CSVLI 0.5% 0.6%
Capitalized Closing Cost
& Other 0.7% 0.4%
--------------------------------------------------------------------------
TOTAL OTHER ASSETS 1.8% 7.9% 7.7% 7.7% 9.5% 6.8%
--------------------------------------------------------------------------
TOTAL ASSETS 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
==========================================================================
LIABILITIES & EQUITY
- --------------------
Current Portion of LTD
and Capital Leases 3.4% 1.7% 2.6% 1.9% 1.6% 1.6%
Accounts Payable 13.0% 15.1% 13.4% 15.2% 16.4% 14.3%
Compensation Related 1.7% 2.4% 2.2% 2.1% 2.0% 1.8%
Liabilities
Discontinued Operations 0.0% 6.3% 1.4% 0.7% 0.5% 0.0%
Other Accrued Expenses 2.8% 4.0% 5.5% 5.2% 4.9% 6.5%
--------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 20.8% 29.4% 25.1% 25.1% 25.3% 24.3%
--------------------------------------------------------------------------
Obligations Under Credit 35.9% 46.8% 43.9% 44.9% 44.3% 45.0%
Facility
Note Payable - Officer
and Affiliates 2.6% 3.4% 2.3% 1.8% 1.8% 1.9%
Capital Lease Obligations 0.4% 0.3% 4.4% 3.9% 3.5% 3.1%
Other Long-term Debt 4.4% 1.8% 2.3% 2.4%
Other Liabilities 0.0% 0.0% 2.8% 2.7% 2.7% 2.0%
--------------------------------------------------------------------------
TOTAL OTHER LIABILITIES 43.4% 52.4% 55.6% 55.8% 54.6% 54.3%
--------------------------------------------------------------------------
TOTAL LIABILITIES 64.2% 81.8% 80.7% 80.9% 79.9% 78.6%
--------------------------------------------------------------------------
Capital Stock 0.0% 0.1% 0.1% 0.1% 0.1% 0.1%
Paid-in Capital 24.6% 32.5% 32.4% 31.9% 32.2% 33.8%
Retained Earnings 8.8% -17.1% -15.7% -15.1% -14.3% -14.8%
Balance Sheet Adjustments
Unrealized Gain on
Marketable Securities 0.0% 0.0% 0.2% 0.1%
--------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 35.8% 18.2% 19.3% 19.1% 20.1% 21.4%
--------------------------------------------------------------------------
TOTAL LIABILITIES & EQUITY 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
==========================================================================
36
EXHIBIT C
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
COMPARATIVE CASH FLOW STATEMENT
FOR THE YEARS ENDED SEPTEMBER 30,
(In Thousands $000) HISTORY HISTORY HISTORY HISTORY PROJECTED
1997 1998 1999 2000 2001
--------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
Net Income 1,408 793 166 707 661
Adjustments to reconcile Net Income to Net Cash
Provided from Operating Activities
Depreciation & Amortization 2,005 1,602 1,775 1,789 1,722
Provision for Doubtful Accounts 1,176 453 142 447 0
Loss from Discontinued Operations, Before Non-Cash
Items (3,103) 0 0 0 0
Net LIFO to FIFO Adj 183 246 114 69 0
(Inc.) Dec. in Trade Receivables, Net (1,119) 947 (2,124) 1,068 (813)
(Inc.) Dec. in Inventory LIFO 1,020 (1,521) (464) (1,691) 2,699
(Inc.) Dec. in Other Assets (3,901) 1,983 (260) (950) 1,371
Inc. (Dec.) in Accounts Payable & Other Accruals 232 (2,058) 951 210 (1,812)
Inc. (Dec.) in Nat Assets of Discontinued Operations 9,243 0 0 0 0
Inc. (Dec.) in Other Liabilities 0 0 0 0 (636)
--------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 7,144 2,445 300 1,649 3,193
--------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
Capital Expenditures (1,067) (279) (833) (577) (1,023)
Marketable Securities 0 0 0 595 0
--------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,067) (279) (833) 18 (1,023)
--------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Long-term Debt & Capital Leases (3,854) (762) (1,531) (1,316) (510)
Obligations Under Credit Facility (1,433) (996) 1,965 (275) (1,197)
Note Payable - Officer and Affiliates (237) (711) (149) (77) 0
Adjustment to Reconcile Retained Earnings to
Projections 0 0 0 0 (462)
--------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,524) (2,469) 285 (1,668) (2,169)
--------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 553 (303) (248) (1) 0
Beginning Cash 79 632 329 81 80
--------------------------------------------------------------
Ending Cash 632 329 81 80 80
==============================================================
37
EXHIBIT D
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS
FOR THE YEARS ENDED SEPTEMBER 30,
HISTORY HISTORY HISTORY HISTORY HISTORY PROJECTED
1996 1997 1998 1999 2000 2001
--------------------------------------------------------------------------------
LIQUIDITY RATIOS
Current Ratio 4.4 2.9 3.3 3.3 3.3 3.6
Quick Ratio 0.8 0.7 0.8 0.9 0.8 0.9
Days' Receivable 45 44 43 49 47 49
Days' Inventory 177 178 194 198 219 206
--------------------------------------------------------------------------------
Operating Cycle 222 222 237 247 265 255
Days' Payable 55 51 47 55 63 52
Working Capital 71,895 45,035 46,391 47,911 46,563 47,607
Sales/Working Capital 1.9 3.2 2.9 2.7 2.7 2.7
COVERAGE RATIOS
EBIT/Interest 2.2 1.5 1.3 1.1 1.3 1.3
EBDT/Current Portion LTD 2.0 3.2 1.4 1.3 2.3 2.3
LEVERAGE RATIOS
Net Fixed Assets/Tangible Net Worth 0.2 0.3 0.5 0.4 0.4 0.3
Total Liabilities(Debt)/Tangible Net Worth 1.8 4.5 4.2 4.2 4.0 3.7
PROFITABILITY RATIOS
% Profit Before Taxes/Tangible Net Worth 14.2% 15.8% 8.4% 1.6% 6.9% 6.6%
% Profit Before Taxes/Total Assets 5.1% 2.9% 1.6% 0.3% 1.4% 1.4%
OTHER RATIOS
Sales/Net Fixed Assets 24.7 28.1 17.5 19.0 20.9 23.7
Sales/Total Assets 1.4 1.8 1.7 1.6 1.6 1.6
%Depreciation & Amortization/Sales 1.3% 1.4% 1.2% 1.4% 1.4% 1.4%
Current Portion of LTD and Capital Leases 3,376 1,330 2,096 1,541 1,253 1,239
Obligations Under Credit Facility 36,000 37,455 35,190 36,611 35,739 34,542
Note Payable - Officer and Affiliates 2,560 2,704 1,843 1,445 1,445 1,445
Capital Lease Obligations 450 275 3,564 3,196 2,787 2,378
Other Long-term Debt 4,443 1,440 1,810 1,995 1,896 1,809
Total Year End Debt 46,829 43,204 44,503 44,788 43,120 41,413
Avg Debt 45,017 43,854 44,646 43,954 42,267
Interest Expense 4,402 4,670 3,771 3,650 3,796 4,300
Interest Percentage on Yr end Debt 9.400% 10.809% 8.474% 8.150% 8.803% 10.382%
Interest Percentage on Avg. Debt 10.374% 8.599% 8.176% 8.636% 10.173%
38
EXHIBIT E
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
CAPITALIZATION OF ADJUSTED DEBT-FREE EARNINGS
FOR THE YEARS ENDED SEPTEMBER 30,
HISTORY HISTORY HISTORY PROJECTED
1998 1999 2000 2001
--------------------------------------------------------
Pretax Income 1,300 244 1,113 1,084
Gain on Sale of Securities (196)
Negative Goodwill (192) (63)
Autoworks. LTD start-up loss add back 220 27
Goodwill Amortization 119 180 126 126
Non-Compete & Other 2 34 96 96
Deferred Loan Cost Amortization 0 201 204 204
Interest Expense 3,771 3,650 3,796 4,300
--------------------------------------------------------
Adjusted Pretax Debt-Free Income 5,220 4,273 5,139 5,810
Weighting 1 1 1 1
Average Adjusted Pretax Income (1998 - 2001) $ 5,110 GROWTH
Average Adjusted Pretax Income (1998 - 2000) $ 4,877 4.78%
Selected Earning Power $ 5,000
Less: Corporate Taxes 39.0% (1,950)
--------
Adjusted Debt-Free Net Income 3,050
Three Year Average Depreciation Expense 1,526
Normalized Cap-X (819)
--------
Adjusted Operating Cash Flow - Debt Free 3,757
--------
Capitalization Rate 8.3% MINORITY
VALUE
TAX SHIELD PER SHARE
Aggregate Total Invested Capital (Gordon Growth Model)* $46,754 ---------- ---------
Less: Interest-Bearing Debt on Valuation Date ($44,998)
Aggregate Marketable Minority Interest Equity Value $ 1,756 1,799 0.749
-------------------------
Shares outstanding 4,745,014
Add: Premium for Control 10.0% $ 176
--------
Aggregate Marketable Controlling Interest Equity Value $ 1,931
FMV of NOL $ 2,399
--------
$ 4,330
Marketable Controlling Interest Value per Share $0.91
Less: Discount for Lack of Marketability 0.0% 0
--------
Non-Marketable Controlling Interest Equity Value 4,330
Non-Marketable Controlling Interest Equity Value, Rounded $ 4,330
Non-Marketable Controlling Interest Value per Share $0.91
- --------------------------------------------------------------------
Non-Marketable Controlling Interest Value per Share $ 0.913
- --------------------------------------------------------------------
COST OF EQUITY BUILD-UP
-----------------------
20 Year Treasuries as of 3/7/2001 5.55%
Generic Stock Premium 7.10%
Small Stock Premium 5.10%
Industry/Company Specific Risk 10.00%
---------
Equity Discount Rate 27.75%
---------
WEIGHTED AVERAGE COST OF CAPITAL (WACC) Weighting
- ---------------------------------------
Debt 5.34% 73.50% 3.92%
Equity (Discount Rate) 27.75% 26.50% 7.35%
------
WACC (Discount Rate) 11.28%
Less: Long Term Growth Rate 3.00%
----
Debt-free Capitalization Rate 8.28%
====
COST OF DEBT
- ------------
Company's Cost of Debt 8.750%
Tax Rate 39.0%
After-Tax Cost of Debt 5.34%
*Gordon Growth Model [Base Net Income x (1+growth rate) / (capitalization rate)]
39
EXHIBIT F
HAHN AUTOMOTIVE WAREHOUSE INC. AND SUBSIDIARIES
SENSITIVITY ANALYSIS FOR DEBT-FREE CAPITALIZATION OF INCOME
COMPANY LONG AGGREGATE AGGREGATE
Assumptions DEBT/EQTITY INDUSTRY COST OF TERM CONTROL MINORITY INT. CONTROL MINORITY
WEIGHTING RISK DEBT GROWTH VALUE-$000 VALUE-$000 PER SHARE PER SHARE
---------------------------------------------------------------------------------------------
Base Case 73.50% 10.00% 8.75% 3.00% 4,682 3,555 0.987 0.749
CHANGE IN 74.00% 10.00% 8.75% 3.00% 5,516 4,197 1.162 0.885
DEBT / EQUITY 73.00% 10.00% 8.75% 3.00% 3,870 2,931 0.816 0.618
WEIGHTING 74.50% 10.00% 8.75% 3.00% 6,373 4,856 1.343 1.023
72.50% 10.00% 8.75% 3.00% 3,079 2,322 0.649 0.489
CHANGE IN 73.50% 9.00% 8.75% 3.00% 6,692 5,102 1.410 1.075
COMPANY RISK 73.50% 11.00% 8.75% 3.00% 2,796 2,105 0.589 0.444
LEVEL 73.50% 8.00% 8.75% 3.00% 8,840 6,754 1.863 1.423
73.50% 12.00% 8.75% 3.00% 1,341 741 0.283 0.156
CHANGE IN 73.50% 10.00% 9.00% 3.00% 3,869 2,930 0.815 0.617
COST OF 73.50% 10.00% 9.25% 3.00% 3,079 2,322 0.649 0.489
DEBT 73.50% 10.00% 9.50% 3.00% 2,330 1,730 0.491 0.365
73.50% 10.00% 8.50% 3.00% 5,516 4,197 1.162 0.885
CHANGE IN 73.50% 10.00% 8.75% 2.75% 2,756 2,074 0.581 0.437
HORIZON RISK 73.50% 10.00% 8.75% 3.25% 6,727 5,128 1.418 1.081
LEVEL 73.50% 10.00% 8.75% 2.50% 1,277 678 0.269 0.143
73.50% 10.00% 8.75% 3.50% 8,903 6,803 1.876 1.434
40
EXHIBIT G
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
REVENUE & ASSET SIZE
UNADJUSTED
REVENUES SIZE OF REVENUES ASSETS SIZE OF ASSETS MARKET VALUE OF
LATEST YEAR RELATIVE TO LATEST YEAR RELATIVE TO COMMON EQUITY
2000 HAHN AUTOMOTIVE 2000 HAHN AUTOMOTIVE 03/07/2001
----------- ---------------- ----------- --------------- ---------------
COMPANY ($000) (TIMES) ($000) (TIMES) ($000)
- -------
Genuine Parts Co. 7,981,687 63.6 4,070,713 49.7 4,702,495
Keystone Automotive 372,466 3.0 183,817 2.2 107,695
O' Reilly Automotive Inc. 754,122 6.0 607,595 7.4 950,737
R&B Inc. 236,689 1.9 188,004 2.3 19,843
CLARCOR Inc. 477,869 3.8 474,596 5.8 621,358
Median 477,869 3.8 474,596 5.8
Hahn Automotive 125,575 81,943 3,559
41
EXHIBIT H
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
LIQUIDITY RATIOS & CAPITAL STRUCTURE RATIOS
FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO
30-SEP 30-SEP 30-SEP
-------------------------------- --------------------------------- ------------------------------------
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
-------------------------------- --------------------------------- ------------------------------------
(TIMES) (TIMES) (TIMES)
COMPANY CURRENT RATIO (a) QUICK RATIO (b) TIMES INTEREST EARNED (c)
- ------- -------------------------------- --------------------------------- ------------------------------------
Genuine Parts Co. 3.6 3.3 3.7 3.2 3.1 1.2 1.1 1.2 1.1 1.1 154.0 66.4 43.9 30.5 16.3
Keystone Automotive 1.5 1.8 4.4 5.0 3.7 0.6 0.6 1.6 1.8 1.0 5.8 10.4 46.4 629.4 22.5
O' Reilly Automotive Inc. 4.9 3.8 3.3 3.0 3.2 1.6 0.5 0.4 0.3 0.3 75.5 743.0 272.5 6.3 14.1
R&B Inc. 5.7 4.6 3.7 4.3 4.0 2.2 2.0 1.8 1.9 1.6 2.9 3.1 3.5 3.5 1.9
CLARCOR Inc. 2.8 2.7 3.0 2.7 2.3 1.6 1.5 1.7 1.6 1.2 11.7 11.9 16.9 22.8 15.8
-------------------------------- --------------------------------- ------------------------------------
Median 3.6 3.3 3.7 3.2 3.2 1.6 1.1 1.6 1.6 1.1 11.7 11.9 43.9 22.8 15.8
-------------------------------- --------------------------------- ------------------------------------
Hahn Automotive 4.1 2.7 3.1 3.2 3.1 0.8 0.7 0.8 0.8 0.7 2.0 1.5 1.4 1.1 1.3
-------------------------------- --------------------------------- ------------------------------------
FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO
30-SEP 30-SEP
--------------------------------- ----------------------------------
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
--------------------------------- ----------------------------------
(TIMES) (TIMES)
COMPANY TOTAL LIABILITIES TO TANGIBLE EQUITY(d) CURRENT LIAB. TO TANGIBLE EQUITY(e)
- ------- --------------------------------------- -----------------------------------
Genuine Parts Co. 0.4 0.5 0.5 0.9 1.0 0.3 0.3 0.3 0.5 0.5
Keystone Automotive 2.0 1.0 0.3 0.2 0.3 1.7 0.9 0.2 0.2 0.3
O' Reilly Automotive Inc. 0.2 0.2 0.4 1.3 0.5 0.2 0.2 0.2 0.5 0.3
R&B Inc. 2.9 3.2 2.2 3.0 3.4 0.5 0.8 0.7 0.8 0.9
CLARCOR Inc. 0.8 0.8 0.7 0.7 2.2 0.4 0.4 0.4 0.4 0.8
--------------------------------- ----------------------------------
Median 0.8 0.8 0.5 0.9 1.0 0.4 0.4 0.3 0.5 0.5
--------------------------------- ----------------------------------
Hahn Automotive 1.9 13.6 7.7 7.7 7.2 0.6 5.1 2.5 2.5 2.4
--------------------------------- ----------------------------------
Notes
- -----
(a) Current Assets divided by Current Liabilities. Indicates the extent Current
Assets cover Current Liabilities. Attention should be paid to Hahn
Automotive's vs. comparables' median.
(b) Cash + Receivables divided by Current Liabilities. A more conservative view
of creditors protection. Attention should be paid to Hahn Automotive's vs.
comparables' median.
(c) (Income before tax + Non-Recurring Expenses + Interest Expense) divided by
Interest Expense. Measures ability to cover interest payments.
(d) Total Liabilities divided by Total Tangible Equity. Indicates relation of
owners' Tangible Equity and creditors position. Ratio should be viewed in
light of industry average.
(e) Current Liabilities divided by Total Tangible Equity. Indicates the
proportion of all Debt to Tangible Equity that is current.
42
EXHIBIT I
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
EFFICIENCY RATIOS
FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO
30-SEP 30-SEP
----------------------------------- --------------------------------------
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
----------------------------------- --------------------------------------
COMPANY DAYS' RECEIVABLE (a) DAYS' INVENTORY (b)
- ------- ----------------------------------- --------------------------------------
Genuine Parts Co. 39.2 39.7 41.7 50.1 46.0 124.4 124.2 127.2 142.2 125.1
Keystone Automotive 37.0 35.2 32.5 33.3 27.1 117.3 125.4 133.6 141.7 138.1
O' Reilly Automotive Inc. 17.1 15.9 14.4 16.3 12.8 214.6 216.6 239.4 246.2 245.9
R&B Inc. 73.7 87.3 89.5 113.8 77.1 183.0 167.3 150.1 231.4 158.6
CLARCOR Inc. 55.3 57.6 57.8 57.8 79.4 71.2 82.9 81.0 75.8 101.2
----------------------------------- --------------------------------------
Median 39.2 39.7 41.7 50.1 46.0 124.4 125.4 133.6 142.2 138.1
----------------------------------- --------------------------------------
Hahn Automotive 45.0 43.6 42.6 49.0 46.7 191.9 192.8 207.2 210.9 232.9
----------------------------------- --------------------------------------
FISCAL YEAR ENDED CLOSEST TO
30-SEP
--------------------------------------
1996 1997 1998 1999 2000
--------------------------------------
COMPANY OPERATING CYCLE (c)
- ------- --------------------------------------
Genuine Parts Co. 163.7 163.9 168.9 192.2 171.1
Keystone Automotive 154.3 160.5 166.1 175.0 165.2
O' Reilly Automotive Inc. 231.8 232.5 253.8 262.5 258.7
R&B Inc. 256.7 254.5 239.6 345.2 235.7
CLARCOR Inc. 126.5 140.5 138.7 133.6 180.7
--------------------------------------
Median 163.7 163.9 168.9 192.2 180.7
--------------------------------------
Hahn Automotive 236.9 236.4 249.8 259.9 279.6
--------------------------------------
Notes
- -----
(a) Indicates the number of days to collect receivables.
(b) Indicates the number of days to convert inventory into sales.
(c) Indicates length of time to convert inventory into cash.
43
EXHIBIT J
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
PROFITABILITY RATIOS
(EBITDA BASIS)
FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO
30-SEP 30-SEP
----------------------------------- ----------------------------------
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
----------------------------------- ----------------------------------
(PERCENT) (PERCENT)
COMPANY EBITDA TOTAL RETURN ON TOTAL TANG. INVESTED CAP. EBITDA TOTAL RETURN ON ASSETS (b)
- ------- ------------------------------------------------ ---------------------------------
Genuine Parts Co. 31.2 31.3 29.5 26.9 28.8 23.9 23.2 22.4 18.2 18.8
Keystone Automotive 32.4 39.9 30.0 29.5 22.8 22.9 28.4 23.0 19.5 15.6
O' Reilly Automotive Inc. 19.0 20.5 22.1 15.7 18.2 16.3 17.6 18.1 12.8 15.3
R&B Inc. 20.4 20.6 23.1 18.8 15.6 13.4 13.7 14.8 12.4 10.9
CLARCOR Inc. 30.8 29.2 29.7 32.3 27.3 21.8 20.8 20.4 21.3 15.7
----------------------------------- ----------------------------------
Median 30.8 29.2 29.5 26.9 22.8 21.8 20.8 20.4 18.2 15.6
----------------------------------- ----------------------------------
Hahn Automotive 13.2 18.7 13.0 10.7 12.9 10.6 11.0 8.5 6.9 8.2
----------------------------------- ----------------------------------
FISCAL YEAR ENDED CLOSEST TO FISCAL YEAR ENDED CLOSEST TO
30-SEP 30-SEP
----------------------------------- ----------------------------------
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
----------------------------------- ----------------------------------
(PERCENT) (PERCENT)
COMPANY EBITDA MARGIN (c) GROSS MARGIN (d)
- ------- ----------------- ----------------
Genuine Parts Co. 10.8 10.7 10.7 10.3 9.6 30.8 30.2 30.5 30.3 30.1
Keystone Automotive 9.5 11.5 10.4 11.4 7.7 39.4 40.8 43.2 43.9 43.1
O' Reilly Automotive Inc. 13.2 13.0 14.6 10.3 12.3 42.0 40.8 42.6 40.7 42.7
R&B Inc. 12.5 12.0 12.4 12.8 8.7 38.8 38.1 39.2 39.5 31.7
CLARCOR Inc. 14.9 15.1 14.7 15.4 15.5 29.0 29.3 30.5 31.6 31.0
----------------------------------- ----------------------------------
Median 12.5 12.0 12.4 11.4 9.6 38.8 38.1 39.2 39.5 31.7
----------------------------------- ----------------------------------
Hahn Automotive 7.8 6.3 5.2 4.4 5.3 37.5 38.6 37.7 37.3 38.6
----------------------------------- ----------------------------------
Notes
- -----
EBITDA = Earnings Before Interest, Taxes, Depreciation & Amortization
(a) EBITDA + non-recurring expenses, divided by B.V. of total tangible invested
capital
(b) EBITDA + non-recurring expenses, divided by total assets
(c) EBITDA + non-recurring expenses, divided by net sales
(d) Gross Profit divided by Net Sales.
44
EXHIBIT K
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
FIVE YEAR EBITDA AND TOTAL INVESTED CAPITAL GROWTH RATES
AND
COMPARATIVE PRICE-TO-TOTAL INVESTED CAPITAL RATIOS
(EBITDA BASIS)
FISCAL YEAR ENDED CLOSEST TO
30-SEP TRAILING ANALYSTS'
-------------------------------------------------------- 12 MONTHS CONSENSUS
1996 1997 1998 1999 2000 CLOSEST TO FIVE-YEAR FIVE-YEAR
-------------------------------------------------------- 03/07/2001 COMPOUND GROWTH RATE
COMPANY AGGREGATE ADJUSTED EBITDA TO COMMON ($000) (a) ($000) GROWTH RATE PROJECTIONS
-------------------------------------------------------- ---------- ----------- -----------
Genuine Parts Co. 569,751 614,361 645,358 681,240 765,748 790,587 7.7% 8.2%
Keystone Automotive 14,844 22,345 27,536 37,840 28,719 16,705 17.9% n/a
O' Reilly Automotive
Inc. 26,610 33,595 46,156 63,336 93,032 113,841 36.7% 17.8%
R&B Inc. 14,261 17,666 19,042 22,815 20,584 18,059 9.6% n/a
CLARCOR Inc. 49,196 56,122 58,138 65,570 74,284 94,947 10.9% 12.0%
----------------------------------------------------------------------- ------ -----
Hahn Automotive 10,780 8,977 6,895 5,730 6,711 7,060 -11.2%
----------------------------------------------------------------------- ------
FISCAL YEAR ENDED CLOSEST TO
30-SEP TRAILING
-------------------------------------------------------------------- 12 MONTHS
1996 1997 1998 1999 2000 CLOSEST TO FIVE-YEAR
-------------------------------------------------------------------- 03/07/2001 COMPOUND
COMPANY TANGIBLE BOOK VALUE (TOTAL INVESTED COMMON & DEBT CAPITAL) ($000) (b) ($000) GROWTH RATE
- ------- --------------------------------------------------------------------- ---------- ------------
Genuine Parts Co. 1,826,851 1,965,280 2,185,534 2,535,792 2,658,726 2,707,138 9.8%
Keystone Automotive 45,868 55,956 91,937 128,330 126,029 134,468 28.7%
O' Reilly Automotive
Inc. 140,365 163,908 209,255 402,489 511,369 608,340 38.2%
R&B Inc. 69,898 85,633 82,362 121,067 132,215 111,282 17.3%
CLARCOR Inc. 159,616 192,050 195,727 203,276 271,967 287,460 14.3%
--------------------------------------------------------------------- --------- ------
Hahn Automotive 81,534 48,124 53,093 53,537 52,224 54,187 -10.5%
--------------------------------------------------------------------- --------- ------
INVESTED CAPITAL TANGIBLE BOOK VALUE MARKET VALUE
MARKET VALUE PER SHARE (c) DIVIDED BY
PER SHARE AT CLOSEST TO TANGIBLE
03/07/2001 03/07/2001 BOOK VALUE
---------- ---------- ----------
Genuine Parts Co. $31.99 $15.64 2.0
Keystone Automotive $8.90 $9.36 1.0
O' Reilly Automotive
Inc. $21.54 $11.84 1.8
R&B Inc. $10.92 $13.32 0.8
CLARCOR Inc. $31.41 $11.75 2.7
Hahn Automotive $11.42
Notes
- -----
(a) EBITDA + non-recurring expenses, less any preferred dividends.
(b) Tangible Book Value does not include preferred stock.
(c) Tangible Book Value per share is derived from Trailing 12-mo data.
45
EXHIBIT L
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
FIVE YEAR EBITDA PER SHARE GROWTH RATES
AND
COMPARATIVE PRICE TO EBITDA RATIOS
(EBITDA BASIS)
FISCAL YEAR ENDED CLOSEST TO
30-SEP
--------------------------------------------- 5-YEAR 3-YEAR
1996 1997 1998 1999 2000 FIVE YEAR WTD. AVG. WTD. AVG.
--------------------------------------------- COMPOUND EBITDA EBITDA
EBITDA PER COMMON SHARE (ACTUAL $) (a) GROWTH RATE PER SHARE($) PER SHARE($)
--------------------------------------------- ----------- ------------ ------------
Company
- -------
Genuine Parts Co. 3.29 3.55 3.73 3.94 4.42 7.7% 3.96 4.15
Shares out: 173,076,735
Keystone Automotive 1.03 1.56 1.92 2.64 2.00 17.9% 2.03 2.20
Shares out: 14,359,345
O' Reilly Automotive Inc. 0.52 0.65 0.90 1.23 1.81 36.7% 1.23 1.47
Shares out: 51,391,188
R&B Inc. 1.71 2.11 2.28 2.73 2.46 9.6% 2.40 2.52
Shares out: 8,355,116
CLARCOR Inc. 2.01 2.29 2.38 2.68 3.04 10.9% 2.64 2.81
Shares out: 24,462,933
HAHN AUTOMOTIVE 2.27 1.89 1.45 1.21 1.41 -11.2% 1.49 1.35
Shares out: 4,745,014
INVEST'D CAP'L INVEST'D CAP'L INVEST'D CAP'L
MARKET VALUE MARKET VALUE MARKET VALUE
ESTIMATED DIVIDED BY DIVIDED BY DIVIDED BY
12-MOS. INVEST'D CAP'L 5-YEAR 3-YEAR TRAILING
TRAILING MARKET VALUE WTD. AVG. WTD. AVG. 12-MOS.
EBITDA PER SHARE AT EBITDA EBITDA EBITDA
PER SHARE($) 03/07/2001 PER SHARE PER SHARE PER SHARE
------------ --------------- -------------- -------------- --------------
Company
- -------
Genuine Parts Co. 4.57 $ 31.99 8.07 7.72 7.00
Shares out: 173,076,735
Keystone Automotive 1.16 $ 8.90 4.39 4.05 7.65
Shares out: 14,359,345
O' Reilly Automotive Inc. 2.22 $ 21.54 17.46 14.70 9.72
Shares out: 51,391,188
R&B Inc. 2.16 $ 10.92 4.55 4.33 5.05
Shares out: 8,355,116
CLARCOR Inc. 3.88 $ 31.41 11.89 11.19 8.09
Shares out: 24,462,933
HAHN AUTOMOTIVE 1.49
Shares out: 4,745,014
Notes
- -----
(a) EBITDA plus non-recurring expenses, not tax-affected.
EBITDA = Earnings Before Depreciation, Interest & Taxes
46
EXHIBIT M
HAHN AUTOMOTIVE
VS. PUBLIC COMPANIES
GUIDELINE COMPANY VALUATION MEASURES
(EBITDA BASIS)
INVEST'D CAP'L INVEST'D CAP'L INVEST'D CAP'L
MARKET VALUE MARKET VALUE MARKET VALUE
ESTIMATED DIVIDED BY DIVIDED BY DIVIDED BY
INVEST'D CAP'L 5-YEAR 3-YEAR TRAILING
MARKET VALUE WTD. AVG. WTD. AVG. 12-MOS.
PER SHARE AT FACTOR EBITDA EBITDA EBITDA
03/07/2001 WEIGHTING PER SHARE PER SHARE PER SHARE
-------------- --------- --------- --------- ---------
COMPANY
- -------
Genuine Parts Co. $31.99 0% 8.07 7.72 7.00
Shares out: 173,076,735
Keystone Automotive $8.90 0% 4.39 4.05 7.65
Shares out: 14,359,345
O' Reilly Automotive Inc. $21.54 0% 17.46 14.70 9.72
Shares out: 51,391,188
R&B Inc. $10.92 0% 4.55 4.33 5.05
Shares out: 8,355,116
CLARCOR Inc. $31.41 0% 11.89 11.19 8.09
Shares out: 24,462,933
MEDIAN 100% 8.07 7.72 7.65
5-YEAR 3-YEAR TRAILING
WTD. AVG. WTD. AVG. 12-MOS.
EBITDA EBITDA EBITDA
PER SHARE($) PER SHARE($) PER SHARE($)
------------ ------------ ------------
HAHN AUTOMOTIVE 1.49 1.35 1.49
Shares out: 4,745,014
Slected Multiples 6.8 7.5 7.0
------- -------- --------
TOTAL INVESTED CAPITAL PER SHARE ($) 10.04 10.14 10.42
LESS: DEBT PER SHARE (9.48) (9.48) (9.48)
------- -------- --------
EQUITY VALUE PER SHARE ($) 0.56 0.66 0.93
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