WEDGESTONE FINANCIAL
Fairness Opinion Presentation to the
Special Committee of the
Board of Directors
January 14, 1998
COMMONWEALTH ASSOCIATES
830 THIRD AVENUE
NEW YORK, NY 10022
OUTLINE OF PRESENTATION
TAB
---
Executive Summary I
Background and Chronology of Events II
Summary Results of Valuation Methodologies III
Trading and Transaction Comparables IV
5-Year Business Plan, Management and Operating Assumptions V
(i)
OUTLINE OF PRESENTATION
EXHIBITS PAGE
- -------- ----
Three Year Weekly Stock Price History 6
Analysis of Offer Premium to the Co.'s Historical Average Trading Prices 8
Valuation Results 11
Discounted Net Income Analysis 12
Derivation of Weighted Average Cost of Capital 13
(Assuming Maintenance of NOL)
Discounted Cash Flow: Stand Alone 14
(Assuming Maintenance of NOL)
Derivation of Weighted Average Cost of Capital 15
(Assuming Full Loss of NOL)
Discounted Cash Flow: Stand Alone 16
(Assuming Full Loss of NOL)
Empirical EBIT Multiples Analysis 17
Historical P/E Ratios Applied to 1997 Estimated EPS 18
Management's Projected Financials 21-25
(ii)
-------------------
EXECUTIVE SUMMARY
-------------------
EXECUTIVE SUMMARY
Commonwealth Associates has been requested by the Special Committee to
the Board of Directors of Wedgestone Financial ("Wedgestone") to
render an opinion as to the fairness, from a financial point of view,
to the shareholders of Common Stock of Wedgestone of the proposed
tender offer ("The Offer") by Wedgestone to purchase shares of Common
Stock of Wedgestone at $.65 per share, net to the seller in cash.
Wedgestone, with a current market capitalization of approximately $7.2
million and $5.9 of net debt, is a manufacturer of Specialty
Automotive Parts including bumpers and tubing products. The Company
maintains manufacturing facilities in St. James, Minnesota and
Irwindale, California, as well as a plating plant in Industry City,
California.
The Company's "fair value" has been particularly difficult to
determine due to the lack of publicly traded comparables and the
Company's decision not to solicit third party offers. However, based
on various discounted cash flow analyses, rudimentary purchase
discussions with financial buyers, and other financial analyses, we
have determined that the purchase price of $.65 is fair.
(2)
ADDITIONAL DISCLOSURE
Within the past 12 months Commonwealth has conducted work for, and
received fees from, two companies for which one of Wedgestone's
surviving shareholders currently serves as a director.
(3)
- --------------------------------------------------------------------------------
BACKGROUND AND CHRONOLOGY
OF EVENTS
- --------------------------------------------------------------------------------
CHRONOLOGY:
October 29, 1997 Initial Meeting with Jay Shaw, Chairman of Wedgestone
November 3, 1997 Initial Submission of Commonwealth Engagement Proposal
November 14, 1997 Resubmission of Commonwealth Engagement Proposal
December 8, 1997 Commonwealth notified that it had been selected by the
Special Committee to the Board of Directors to deliver
to the Committee an opinion as to fairness of the Offer
December 11, 1997 Commonwealth Due Diligence Trip to
St. James, MN Factory
December 12, 1997 Commonwealth Due Diligence Trip to
Irwindale, CA Facility
(5)
THREE YEAR WEEKLY STOCK PRICE HISTORY
Over the last three years Wedgestone's highest weekly closing trading
price of $.78125 occurred on January 9, 1995. Wedgestone's lowest
closing trading price of $.20 occurred on May 9, 1997.
[GRAPH]
(6)
MARKET PRICE FOR COMMON STOCK
We have reviewed the trading history of the Common Stock and
determined that the Offer represents a significant premium over the
historic average market prices for the Company's Common Stock. In
arriving at this conclusion, we examined the average daily closing
market price for various periods from April 8, 1994 to January 12,
1998. We have concluded that (i) while the single highest closing
price per share of Common Stock since April 8, 1994 was $0.875 on
November 7, 1994; the Company's average weekly closing price over this
period has been approximately $.33. Since September 14, 1996, the
closing market price has not been above $0.65 per share; and (iii) the
Offer represents an approximate 95% premium over the average weekly
closing prices for the Common Stock since April 8, 1994. Additionally,
the Offer represents a 49%, 75% and 110% premium to the average daily
closing prices in calendar year 1995, 1996, and 1997 respectively.
While acknowledging the existence of higher and lower "take-over"
premiums, we consider the Common Stock's recent trading history as
favorable to our opinion as to the fairness of the consideration to be
received by the Public Shareholders pursuant to the terms of the
Offer.
(7)
Analysis of Offer Premium to the Company's Historical Average Trading Prices
$0.65
Proposed Offer Price Per Share Premium
of $.65
Offer Over
Average Average
Trading Price Per
Trading Period Price* Share
- ---------------------------------------------------------------------- ------- ---------
Last reported trading price on January 12, 1998 $0.31 110%
December 12, 1997 to January 12, 1998 (last month) $0.32 104%
October 12, 1997 to January 12, 1998 (last three months) $0.36 80%
July 16, 1997 to January 12, 1998 (last six months) $0.31 110%
January 14, 1997 to January 12, 1998 (last twelve months) $0.31 111%
Average Daily Closing Price in Calendar Year 1997 $0.31 110%
Average Daily Closing Price in Calendar Year 1996 $0.37 75%
Average Daily Closing Price in Calendar Year 1995 $0.44 49%
April 8, 1994 to December 30, 1994 $0.18 265%
Average Weekly Closing Trade Price: April 8, 1994 to January 9, 1998 $0.33 95%
*Data represents the average daily closing trade prices as reported by Bloomberg
Financial, LLP.
N.B. -- as indicated on previous charts, the Company's stock price has closed
at prices above $.65. The last time this occurred was on September 13,1996
when the closing trade price was $68.
(8)
--------------------------
SUMMARY RESULTS OF
VALUATION METHODOLOGIES
---------------------------
VALUATION PROCESS
We have estimated Wedgestone's potential value using the following
financial methodologies:
- Stand Alone Discounted Net Income
- Stand Alone Discounted Cash Flow (assuming maintenance of NOL)
- Stand Alone Discounted Cash Flow (assuming full loss of NOL)
- Empirical EBIT Multiples Analysis
- Historical P/E Ratios Applied to 1997 Estimated EPS
(10)
VALUATION RESULTS
Based on our analysis, the following range of values per Wedgestone
share was obtained:
INDICATED RANGE
VALUATION METHODOLOGY OF VALUE PER SHARE
--------------------- ------------------
Stand Alone Discounted Net Income $.26 - $.31
Stand Alone Discounted Cash Flow $.38 - $.60
(assuming maintenance of NOL)
Stand Alone Discounted Cash Flow $.31 - $.53
(assuming full loss of NOL)
Empirical EBIT Multiples Analysis $.39 - $.67
Historical P/E Ratios Applied to 1997 Estimated EPS $.26 -$1.01
(11)
DISCOUNTED NET INCOME ANALYSIS (1)
(In thousands, except per share amounts)
Actual Forecast
------ -----------------------------------------------------------------
1996 1997 1998* 1999 2000 2001
------ ----- ----- ----- ----- -----
Net Income 1,373 2,752 2,010 1,537 1,047 543
Total Equity Value
------------------
Terminal Net Income Multiple
--------------------------------------------------
6x 7x 8x 9x
--------------------------------------------------
DISCOUNT RATE* 12.36% 5,788 6,128 6,469 6,809
Total Equity Value (2)
-------------------
Terminal Net Income Multiple
--------------------------------------------------
6x 7x 8x 9x
--------------------------------------------------
Discount Rate* 12.36% $0.26 $0.28 $0.29 $0.31
- ------------------------
(1) Valuation calculations performed using 1998-2001 projections
(2) Shares outstanding are fully diluted, including 995,000 options,
exercisable at $.25, accounted for using Treasury Methodology.
* Using the Compound Annual Return for Small Company Stocks, 1926-1990, as
published STOCKS, BONDS, BILLS, AND INFLATION 1994
Yearbook, published by Ibbotson Associates
(12)
DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL: ASSUMING MAINTENANCE OF NOL
Assumptions: Wedgestone
- ------------------------------------- ----------
Pre-tax cost of debt (1) 13.59%
Rf (Risk Free Rate) (2) 5.75%
Rm (Market Return) - Rf (3) 12.25%
T (Effective Tax Rate) (4) 10.00%
Beta (Equity) (5) 0.58
Cost of Equity = Rf + Beta * (Rm - Rf)
COST OF EQUITY 12.86%
Debt/Capitalization 51.16%
Equity/Capitalization 48.84%
WACC (6) 12.53%
- ------------------------------------- ----------
- ---------------------------------------------------------
(1) Represents current pre-tax cost of debt (LTM Interest Expense/Average
Total Debt).
(2) Based on 10 year treasury @ 12/19/97.
(3) Reflective of a required Mezzanine Financing return of 18%.
(4) Accounting for NOL carryforwards.
(5) Long term Beta vs. the S&P 500 as per Bloomberg @ 12/19/97
(6) WACC = (Debt/Capitalization) * After Tax Cost of Debt +
(Equity/Capitalization) * Cost of Equity.
(13)
DISCOUNTED CASH FLOW ANALYSIS: ASSUMING MAINTENANCE OF NOL (1)
(In thousands, except per share amounts)
Actual Forecast
------ ------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
------ ------ ------ ------ ------ ------
Net Income 1,373 2,752 2,010 1,537 1,047 543
Plus: Interest 1,126 849 847 1,262 1,118 971
Less: Other Expense (Income) (116) 374 (124) (151) (107) (107)
Plus: Deferred Income Taxes (82) (429) 916 685 438 205
Plus: Depreciation & Amortization 771 911 695 1,522 1,797 2,072
Less: Increase/(Decrease) (2,638) (1,151) 864 160 643 612
in Working Capital
Less: Capital Expenditures (933) (1,032) (2,150) (1,600) (1,650) (1,650)
Free Cash Flow 4,787 3,132 3,058 3,415 3,286 2,848
Total Equity Value*
------------------
Terminal Cash Flow Multiple
----------------------------------------------------
4x 5x 6x 7x
----------------------------------------------------
DISCOUNT RATE 12.53% 8,423 10,073 11,723 13,373
(WACC)
Total Equity Value(2)
------------------
Terminal Cash Flow Multiple
----------------------------------------------------
4x 5x 6x 7x
----------------------------------------------------
DISCOUNT RATE 12.53% $0.38 $0.45 $0.52 $0.60
(WACC)
- -----------------------
(1) Valuation calculations performed using Wedgestone management's
1998-2001 projections
(2) Shares outstanding are fully diluted, including 995,000 options,
exercisable at $.25, accounted for using Treasury Methodology.
* After subtracting net debt of $5.897m from the implied total
enterprise value
(14)
DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL: ASSUMING FULL LOSS OF NOL
Assumptions: Wedgestone
- ------------------------------------- ----------
Pre-tax cost of debt (1) 13.59%
Rf (Risk Free Rate) (2) 5.75%
Rm (Market Return) - Rf (3) 12.25%
T (Effective Tax Rate) (4) 40.00%
Beta (Equity) (5) 0.58
Cost of Equity = Rf + Beta * (Rm - Rf)
COST OF EQUITY 12.86%
Debt/Capitalization 51.16%
Equity/Capitalization 48.84%
- ------------------------------------- ----------
WACC (6) 10.45%
- ---------------------------------------------------------
(1) Represents current pre-tax cost of debt (LTM Interest Expense/Average
Total Debt).
(2) Based on 10 year treasury @ 12/19/97.
(3) Reflective of a required Mezzanine Financing return of 18%.
(4) Accounting for the loss of NOL carryforwards.
(5) Long term Beta vs. the S&P 500 as per Bloomberg @ 12/19/97
(6) WACC = (Debt/Capitalization) * After Tax Cost of Debt +
(Equity/Capitalization) * Cost of Equity.
(15)
DISCOUNTED CASH FLOW ANALYSIS: Assuming Full Loss of NOL (1)
(In thousands except per share amounts)
Actual Forecast
------ ------------------------------------------------------------------
1996 1997 1998* 1999 2000 2001
------ ------ ------ ------ ------ ------
Net Income 1,373 2,752 2,010 1,537 1,047 543
Plus: Interest 1,126 849 847 1,262 1,118 971
Less: Other Expense (116) 374 (124) (151) (107) (107)
Plus: Deferred Income Taxes (82) (429) ----
Plus: Depreciation & Amortization 771 911 695 1,522 1,797 2,072
Less: Increase/(Decrease) in (2,638) (1,151) 864 160 643 612
Working Capital
Less: Capital Expenditures (933) (1,032) (2,150) (1,600) (1,650) (1,650)
Free Cash Flow (499) 3,132 2,142 2,730 2,848 2,441
Total Equity Value*
------------------
Terminal Cash Flow Multiple
----------------------------------------------------
4x 5x 6x 7x
----------------------------------------------------
DISCOUNT RATE 10.45% 6,954 8,594 10,235 11,875
(WACC)
Total Equity Value(2)
------------------
Terminal Cash Flow Multiple
----------------------------------------------------
4x 5x 6x 7x
----------------------------------------------------
DISCOUNT RATE 10.45% $0.31 $0.39 $0.46 $0.53
(WACC)
- ---------------------
(1) Valuation calculations performed using Wedgestone management's 1998-2001
projections
(2) Shares outstanding are fully diluted, including 995,000 options,
exercisable at $.25, accounted for using Treasury Methodology.
* After subtracting net debt of $5.897m from the implied total enterprise
value
(16)
EMPIRICAL EBIT MULTIPLES ANALYSIS:
FOR INDUSTRIAL BUSINESS WITH PROJECTED DECLINING SALES & PROFITABILITY
(In thousands, except per share amounts)
Actual Forecast
------ --------
1996 1997
------ --------
EBIT 2,771 4,181
Total Equity Value*
------------------
1997 EBIT Multiple
--------------------------------------------------
3.5x 4.0x 4.5x 5.0x
--------------------------------------------------
8,736 10,827 12,917 15,008
Implied Per Share Value(1)
--------------------------
1997 EBIT Multiple
--------------------------------------------------
3.5x 4.0x 4.5x 5.0x
--------------------------------------------------
$0.39 $0.48 $0.58 $0.67
(1) Shares outstanding are fully diluted, including 995,000 options,
exercisable at $.25, accounted for using Treasury Methodology.
* After subtracting net debt of $5.897m from the implied total
enterprise value
(17)
WEDGESTONE FINANCIAL: HISTORICAL P/E RATIOS APPLIED TO 1997 ESTIMATED EARNINGS
(In thousands, except per share amounts)
Mar-95 Jun-95 Sep-95 Dec-95 Mar-96 Jun-96
- -----------------------------------------------------------------------------------------------------
Price/Earnings Multiple 5.19x 5.58x 4.85x 2.48x 3.30x 7.75x
Price based on 1997 Estimated Earnings $0.68 $0.73 $0.63 $0.32 $0.43 $1.01
- -----------------------------------------------------------------------------------------------------
Sep-96 Dec-96 Mar-97 Jun-97 Sep-97 Dec-97
- -----------------------------------------------------------------------------------------------------
Price/Earnings Multiple 5.90x 5.58x 4.57x 2.69x 1.98x 2.15x
Price based on 1997 Estimated Earnings $0.77 $0.73 $0.59 $0.35 $0.26 $0.28
- -----------------------------------------------------------------------------------------------------
(18)
--------------------------
TRADING AND TRANSACTION
COMPARABLES
--------------------------
PUBLIC TRADING COMPARABLES
Commonwealth Associates has been unable to identify any public company that
could be considered a trading comparable for Wedgestone.
Among the factors considered in determining comparability have been the
Company's market value, management's characterization of the dynamics of
the markets in which the Company's products compete, and the specific
products manufactured and sold by the Company.
(20)
-----------------------------
5-YEAR BUSINESS PLAN
MANAGEMENT'S AND OPERATING
ASSUMPTIONS
-----------------------------
SALES AND COST OF SALES:
Values are the result of product line forecasts that reflect units, sales
and gross margin percents. Sales assumptions are as follows:
Bumpers (35%) decline in 1998: (20%) decline per year thereafter
Drop Centers (35%) decline in 1998: (20%) decline per year thereafter
Mount Kits (35%) decline in 1998: (20%) decline per year thereafter
Ford 25% of take rate estimate
GM 25% of take rate estimate
The heavy decline in bumper, drop centers and mount kits in 1998 and 1999
reflect the remainder of the dealers who are likely to cease buying bumpers
due to model year changeovers planned in 1998.
SELLING COSTS:
Since 1997 sales costs are mostly after-market related, they are used as a
base for 1998 thru 2001. Added to this selling cost base are variable sales
costs equal to 8% of incremental sales above 1997 levels. This variable
factor is lower than historical due to the lower sales and marketing costs
associated with OE sales.
ADMINISTRATIVE COSTS:
Administrative costs are based on 1997 levels. Added to this base, are
variable administrative costs with a growth component of 3% on incremental
sales above 1997 levels. Administrative costs have also been increased by a
one time $250,000 to account for salary and fringe benefit growth.
(22)
SUMMARY INCOME STATEMENT (1)(2)
- -------------------------------------------------------------------------------------------------------------------
1996A 1997P 1998P 1999P 2000P 2001P
- -------------------------------------------------------------------------------------------------------------------
Revenues:
Sales: 46,286 50,340 52,180 51,020 46,730 42,640
- -------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 46,286 50,340 52,180 51,020 46,730 42,640
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
CGS 31,560 32,787 33,987 33,336 30,569 27,934
- -------------------------------------------------------------------------------------------------------------------
Sales & Marketing 7,228 7,386 7,533 7,440 7,097 6,770
--------------------------------------------------------------------------------
General Administrative 4,727 5,986 6,291 6,256 6,128 6,005
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 11,955 13,372 13,824 13,696 13,225 12,775
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
INCOME FROM OPERATIONS 2,771 4,181 4,369 3,988 2,936 1,931
- -------------------------------------------------------------------------------------------------------------------
Goodwill 49 44 44 44 -- --
- -------------------------------------------------------------------------------------------------------------------
Other expense (income) 67 (418) 80 107 107 107
- -------------------------------------------------------------------------------------------------------------------
Interest Expense 1,126 849 847 1,262 1,118 971
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
PRE-TAX INCOME 1,529 3,706 3,398 2,575 1,711 853
- -------------------------------------------------------------------------------------------------------------------
Tax 156 954 1,388 1,038 664 310
- -------------------------------------------------------------------------------------------------------------------
Tax Rate % 10% 26% 41% 40% 39% 36%
- -------------------------------------------------------------------------------------------------------------------
NET INCOME 1,373 2,752 2,010 1,537 1,047 543
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
EPS $0.06 $0.13 $0.09 $0.07 $0.05 $0.02
SHARES OUT* 21,886 21,886 21,886 21,886 21,886 21,886
- -------------------------------------------------------------------------------------------------------------------
1 Company projections are modified to reflect that no transaction had occurred.
2 These projections have been provided to Commonwealth Associates by Management
of Wedgestone Financial
(23)
SUMMARY BALANCE SHEET
Balance Sheets
---------------------------------------------------------------------------------
1996A 1997P 1998P 1999P 2000P 2001P
---------------------------------------------------------------------------------
ASSETS:
- ---------------------------------
- ---------------------------------
Cash Equivalents 344 980 1,092 2,495 3,743 4,525
Receivables 7,282 7,650 7,102 6,944 6,360 5,804
Current Inventory 4,619 5,800 5,200 5,100 4,677 4,274
Other Assets 565 500 550 550 550 550
Deferred Income Taxes 477 916 685 438 205 -
Land 500 500 500 500 500 500
Buildings and Improvements 1,229 1,275 1,575 1,575 1,575 1,575
Machinery, Equipment and Tooling 8,440 9,300 11,000 12,500 14,000 15,500
Furniture and Office Equipment 1,324 1,450 1,600 1,700 1,850 2,000
Accumulated Depreciation 8,256 9,124 10,273 11,688 13,378 15,343
Net Property Plant and Equipment 3,237 3,401 4,402 4,587 4,547 4,232
Deposits 253 207 100 100 100 100
Non Cash investments 82 - - - - -
Long Term Notes Receivable 81 1,900 1,900 1,900 1,900 1,900
Real Estate Held for Investment 1,086 196 210 210 210 210
Deferred Income Taxes 2,196 1,328 643 205 - -
Goodwill & Other Intangibles 130 87 541 434 327 220
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 20,352 22,965 22,425 22,963 22,619 21,815
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------
- ---------------------------------
Current Portion of Long-term Debt 558 1,038 1,141 757 476 475
Revolver 5,394 4,113 6,699 6,554 6,004 5,480
Accounts Payable 3,882 4,765 4,424 4,326 3,962 3,615
Other liabilities 2,128 1,450 1,450 1,450 1,450 1,450
- -----------------------------------------------------------------------------------------------------------------------------
Long Term Debt 1,269 1,726 1,391 1,019 824 348
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 13,231 13,092 15,105 14,106 12,716 11,369
- -----------------------------------------------------------------------------------------------------------------------------
STOCKHOLDER'S EQUITY
- ---------------------------------
- ---------------------------------
Common Stock 21,886 21,886 14,192 14,192 14,192 14,192
Paid-in capital 31,396 31,396 34,527 34,527 34,527 34,527
Retained earnings (46,163) (43,411) (41,401) (39,864) (38,818) (38,275)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 7,119 9,871 7,318 8,855 9,901 10,444
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 20,350 22,963 22,423 22,961 22,617 21,813
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------
(24)
SUMMARY CASH FLOW STATEMENT
---------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS 1997P 1998P 1999P 2000P 2001P
---------------------------------------------------------------------------------
Net Income 2,752 2,010 1,537 1,047 543
Changes in Assets and Liabilities
(Increase) Decrease in Receivable (368) 548 158 584 566
(Increase) Decrease in Inventory (1,181) 600 100 423 403
(Increase) Decrease in Deferred Income Taxes 429 916 685 438 205
(Increase) Decrease in Goodwill 43 (454) 107 107 107
(Increase) Decrease in Other Assets 193 57 - - -
Increase (Decrease) in Accounts Payable 883 (341) (98) (364) (347)
Increase in Other Liabilities (678) - - - -
- -----------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OP. ACTIVITIES 2,073 3,336 2,489 2,235 1,467
CASH FLOW FROM INVESTING ACTIVITIES
Net Capital Expenditures (164) (1,001) (185) 40 315
- -----------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (164) (1,001) (185) 40 315
CASH FLOWS FROM FINANCING ACTIVITIES
(Increase) Decrease in Long Term Notes Receivable (1,819) - - - -
(Increase) Decrease in Real Estate
Held for Investment 890 (14) - - -
Increase (Decrease) in Long Term Debt 937 (232) (756) (476) (476)
Increase (Decrease) in Revolver (1,281) 2,586 (145) (550) (524)
Increase (Decrease) in Shareholders Equity - (4,563) - - -
- -----------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES (1,273) (2,223) (901) (1,026) (1,000)
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease in Cash) 636 112 1,403 1,249 782
Beginning Cash Balance* 344 980 1,092 2,495 3,743
Ending Cash Balance 980 1,092 2,495 3,743 4,525
- -----------------------------------------------------------------------------------------------------------------------------
(25)
BOOK VALUE PER SHARE
Book Value: 9.184mm
Shares Outstanding: 21.886mm
Book Value per Share: $.42
* Based on Wedgestone Financial's unaudited financials for the quarter ended
September 30, 1997.
(26)