Carey International, Inc. Exhibit (c)(2)
- --------------------------------------------------------------------------------
Presentation to:
Carey International, Inc.
Board of Directors
CAREY
July 15, 2000
Benedetto, Gartland & Company, Inc.
- --------------------------------------------------------------------------------
Carey International, Inc.
- --------------------------------------------------------------------------------
Valuation Summary
Offer Price
Value Per Share Premium/(Discount)/(a)/
------------------ -----------------------
Public Market Valuation $15.00 - $17.00 21.7% - 7.4%
Discounted Cash Flow Analysis $15.00 - $16.00 21.7% - 14.1%
M&A Transaction Comparables $14.00 - $15.00 30.4% - 21.7%
Hypothetical Stock Price $14.00 - $16.00 30.4% - 14.1%
_______________
(a) Assumes offer price of $18.25.
_______________________________________________________________________________
-1- Benedetto, Garland & Company, Inc.
Carey International, Inc.
- --------------------------------------------------------------------------------
Potential Transaction Analysis
(Dollars in millions, except per share data)
Enterprise Value to
-------------------------------------------
Share Premium to Market Price Market Enterprise P/E Multiple EBITDA EBIT
----------------------- ------------------- --------------------- ------------------
Price Current 6/29/2000 Value (a) Value (b) LTM (c) 2000P (d) LTM (e) 2000P (f) LTM (g) 2000P (h)
----- ------- --------- --------- --------- ------- --------- --------- --------- ------- ---------
$17.25 15.5% 63.6% $169.4 $218.4 14.6x 11.8x 7.2x 5.7x 9.8x 7.6x
17.50 17.2% 65.9% 171.9 220.9 14.8x 12.0x 7.3x 5.8x 9.9x 7.6x
17.75 18.8% 68.3% 174.3 223.3 15.0x 12.1x 7.4x 5.8x 10.0x 7.7x
18.00 20.5% 70.7% 176.8 225.8 15.2x 12.3x 7.5x 5.9x 10.1x 7.8x
- -------------------------------------------------------------------------------------------------------------------------------
18.25 22.2% 73.0% 179.2 228.2 15.4x 12.5x 7.6x 6.0x 10.2x 7.9x
- -------------------------------------------------------------------------------------------------------------------------------
18.50 23.8% 75.4% 181.7 230.7 15.6x 12.6x 7.6x 6.0x 10.3x 8.0x
18.75 25.5% 77.8% 184.1 233.1 15.8x 12.8x 7.7x 6.1x 10.5x 8.1x
19.00 27.2% 80.1% 186.6 235.6 16.1x 13.0x 7.8x 6.1x 10.6x 8.2x
19.25 28.9% 82.5% 189.1 238.1 16.3x 13.2x 7.9x 6.2x 10.7x 8.2x
7/14/2000
- ---------
$14.94 $146.7 $195.7 12.6x 10.2x 6.5x 5.1x 8.8x 6.8x
06/29/2000 - Announcement Date
- ----------
$10.55 $103.6 $152.6 8.9x 7.2x 5.1x 4.0x 6.8x 5.3x
- --------------------------------------------
(a) Based on 9.821 million shares outstanding.
(b) Market Value plus net debt of $49.0 million
(c) Based on LTM actual EPS of $1.18.
(d) Based on projected 2000 EPS of $1.46 per management budget with
acquisitions.
(e) Based on actual LTM EBITDA of $30 million.
(f) Based on projected 2000 EBITDA of $38 million per management budget with
acquisitions.
(g) Based on actual LTM EBIT of $22 million.
(h) Based on projected 2000 EBIT of $29 million per management budget with
acquisitions.
________________________________________________________________________________
-2- Benedetto, Gartland & Company, Inc.
Carey International Inc.
- -----------------------------------------------------------------------------------------------------------------
Comparable Public Company Trading Analysis
Transportation Services Companies
% Below/Above Market Enterprise Market Value as Multiple of:
----------------------------------------------
Stock Price 52-week Value Value LTM Cal. 2000 Cal. 2001 Common Cash
Company 14-Jul-00 High - Low (in mil) (in mil) EPS EPS (1) EPS (1) Equity Flow
------------------------------------- ------------- -------- ---------- ------- --------- --------- ------ -------
Central Parking Corp. 24 5/8 31.2% - 71.3% $899 $1,355 29.5x 20.9x 17.4x 2.5x 12.4x
Miller Industries, Inc. 1 3/4 65.9% - 0.0% 82 206 NM NM NM 0.4 3.5
Aviation Sales Company 6 3/8 85.7% - 82.1% 96 539 NM NM NM 0.4 NM
Rural/Metro Corp. 1 3/4 83.5% - 55.6% 26 333 15.6 NM NM 0.2 0.7
United Road Services, Inc. 3 95.9% - 500.0% 5 134 NM NM NM 0.0 NM
------------------------------------------------------------------------------------------------
Mean 22.6x 20.9x 17.4x 0.7x 5.6x
Median 22.6x 20.9x 17.4x 0.4x 3.5x
------------------------------------------------------------------------------------------------
Industry Consolidators
% Below/Above Market Enterprise Market Value as Multiple of:
----------------------------------------------
Stock Price 52-week Value Value LTM Cal. 2000 Cal. 2001 Common Cash
Company 14-Jul-00 High - Low (in mil) (in mil) EPS EPS (1) EPS (1) Equity Flow
------------------------------------- ------------- -------- ---------- ------- --------- --------- ------ -------
NCO Group, Inc. 26 1/16 52.5% - 51.1% $667 $957 16.6x 13.8x 11.1x 1.9x 10.2x
FYI Incorporated 35 9/16 0.5% - 46.6% 534 649 20.9 18.5 15.8 2.7 12.8
Comfort Systems USA, Inc. 4 3/4 74.5% - 31.0% 178 486 4.7 4.0 3.7 0.4 2.8
Consolidated Graphics, Inc. 12 1/8 75.8% - 29.3% 173 413 4.7 5.0 4.1 0.6 2.2
Navigant International 11 1/8 11.0% - 87.4% 155 297 10.4 9.4 8.0 1.2 6.5
Lason, Inc. 2 13/32 95.2% - 6.9% 47 378 NM NM NM 0.1 1.9
-------------------------------------------------------------------------------------------------
Mean 11.5x 10.1x 8.6x 1.2x 6.1x
Median 10.4x 9.4x 8.0x 0.9x 4.6x
-------------------------------------------------------------------------------------------------
All Comparables
------------------------------------------------------------------------------------------------
Mean 14.6x 11.9x 10.0x 1.0x 5.9x
Median 15.6x 11.6x 9.6x 0.4x 3.5x
-------------------------------------------------------------------------------------------------
CARY Valuation Parameter $1.18 $1.34 $1.67 $98.4 $22.7
-------------------------------------------------
Implied CARY Share Price based on All Comparables (2) $17.32 $16.00 $16.72 $9.67 $13.65
$18.50 $15.56 $15.93 $4.40 $8.07
-------------------------------------------------
Carey International, Inc. 14 15/16 44.7%- 129.8% $147 $196 12.6x 11.1x 9.0x 1.5x 6.5x
Transportation Services Companies
Ent. Val. as a Multiple of: 5 Year
---------------------------
LTM LTM LTM EPS Growth
Company Revenue EBIT EBITDA Proj. (1)
----------------------------- -------- ------- ------- ----------
Central Parking Corp. 1.82x 16.8x 10.5x 20.0%
Miller Industries, Inc. 0.36 NM NM 30.0%
Aviation Sales Company 0.79 NM NM 27.5%
Rural/Metro Corp. 0.58 9.7 4.9 20.0%
United Road Services, Inc. 0.51 NM NM 19.0%
--------------------------------------
0.81x 13.2x 7.7x 23.3%
0.58x 13.2x 7.7x 20.0%
--------------------------------------
Industry Consolidators
Ent. Val. as a Multiple of: 5 Year
---------------------------
LTM LTM LTM EPS Growth
Company Revenue EBIT EBITDA Proj. (1)
----------------------------- -------- ------- ------- ----------
NCO Group, Inc. 1.75x 10.8x 8.3x 28.0%
FYI Incorporated 1.66 13.4 10.1 20.7%
Comfort Systems USA, Inc. 0.34 5.4 4.2 6.5%
Consolidated Graphics, Inc. 0.71 5.3 3.9 20.0%
Navigant International 1.20 9.4 7.1 18.0%
Lason, Inc. 0.73 NM NM 27.2%
--------------------------------------
1.06x 8.9x 6.7x 20.1%
0.96x 9.4x 7.1x 20.4%
--------------------------------------
All Comparables
-------------------------------------------------------------------------------------------
Mean 0.95x 10.1x 7.0x 21.5%
Median 0.96x 9.7x 7.1x 20.0%
-------------------------------------------------------------------------------------------
CARY Valuation Parameter $225.3 $22.3 $30.2
--------------------------
Implied CARY Share Price based on All Comparables (2) $16.78 $18.00 $16.55
$11.65 $17.09 $16.83
-------------------------
0.87x 8.8x 6.5x 24.3%
------------------------
Note: Excludes multiples which are not meaningful, negative, or denoted with
an *
(1) Source: IBES. Where 2000/2001 estimates not available, estimate
calculated by growing previous year estimate at 5-year projected growth
rate or historical quarterly growth.
(2) Based on 9.821 million shares outstanding. Share prices based on
Enterprise Value (Revenue, EBIT, EBITDA) are less net debt of $49.0
mil
- --------------------------------------------------------------------------------
- -3- Benedetto, Gartland & Company, Inc.
Carey International, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
Discounted Cash Flow Analysis 8% Internal Growth Rate, $40.0 Million Acquired Revenue
(dollars in millions, except per share data)
Fiscal Year Ending November 30, Projected Fiscal Year Ended November 30, (a)
-------------------------------- --------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004
-------------------------------- --------------------------------------------
Sales $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1
EBITDA 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4
Less: Depreciation (2.0) (2.5) (3.8) (5.5) (6.9) (7.4) (7.7) (8.1)
-------------------------------- --------------------------------------------
EBITA 9.9 15.8 24.2 32.8 38.2 47.3 57.4 68.3
Less: Taxes @ 41.5% (4.1) (6.5) (10.1) (13.6) (15.9) (19.6) (23.8) (28.4)
-------------------------------- --------------------------------------------
Tax-effected EBITA 5.8 9.2 14.2 19.2 22.4 27.7 33.6 40.0
Plus: Depreciation 5.5 6.9 7.4 7.7 8.1
Plus: Change in
Deferred Taxes 0.0 0.0 0.0 0.0 0.0
Less: Capital/
Acquisition
Expenditures (64.3) (34.6) (32.0) (32.0) (32.0)
Less: Changes in
Working Capital (2.4) (1.8) (2.6) (2.8) (3.0)
-------------------------------- --------------------------------------------
Free Cash Flow ($42.0) ($7.2) $0.5 $6.5 $13.0
A + B = C
---------- --------------------------------- -----------------------
Discounted (b) PV of Terminal Value as a
Cash Flows Multiple of 2004 EBITDA (c) Enterprise Value (d)
--------------------------------- -----------------------
Discount Rate (2000-2004) 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x
- ---------------- ---------- --------------------------------- -----------------------
15.0% ($31.5) $208.9 $246.9 $284.8 $177.4 $215.4 $253.3
15.5% (31.5) 204.4 241.6 278.7 172.9 210.1 247.2
16.0% (31.5) 200.0 236.4 272.8 168.5 204.9 241.3
16.5% (31.5) 195.8 231.4 267.0 164.3 199.9 235.5
17.0% (31.5) 191.6 226.5 261.3 160.1 195.0 229.8
- D + E = F
------------ ----------- ---------------------------------
Value Per Diluted
Net Debt Equity Total Equity Value Share (f)
--------------------------------- -----------------------
Discount Rate 5/31/00 (e) Investments 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x
- ---------------- ----------- ----------- --------------------------------- -----------------------
15.0% $25.9 $0.0 $151.5 $189.5 $227.5 $12.98 $16.24 $19.49
------
15.5% 25.9 0.0 147.0 184.2 221.3 12.60 15.79 18.97
16.0% 25.9 0.0 142.7 179.0 215.4 12.23 15.34 18.46
16.5% 25.9 0.0 138.4 174.0 209.6 11.86 14.91 17.96
------
17.0% 25.9 0.0 134.3 169.1 203.9 11.51 14.49 17.48
-----------------------
______________________
(a) Projections based on BGC and management estimates.
(b) Present values calculated as of latest fiscal year end.
(c) Based on current public market Enterpise Value/EBITDA trading muliptle of
6.5x.
(d) Discounted 5 years; based on 2004 EBITDA of $76.4 million.
(e) Includes option proceeds of: $23.1
(f) Based on 11.667 million diluted shares outstanding as of May 31, 2000.
- --------------------------------------------------------------------------------
-4- Benedetto, Gartland & Company, Inc.
Carey International, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Discounted Cash Flow Analysis 12% Internal Growth Rate, $60.0 Million Acquired Revenue
(dollars in millions, except per share data)
Fiscal Year Ending November 30, Projected Fiscal Year Ended November 30, (a)
--------------------------------- -------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004
--------------------------------- -------------------------------------------------------
Sales $86.4 $123.2 $ 191.1 $261.6 $330.5 $432.8 $547.5 $675.9
EBITDA 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1
Less: Depreciation (2.0) (2.5) (3.8) (5.5) (6.9) (7.4) (7.7) (8.1)
--------------------------------- -------------------------------------------------------
EBITA 9.9 15.8 24.2 32.8 41.6 56.1 72.5 91.0
Less: Taxes @ 41.5% (4.1) (6.5) (10.1) (13.6) (17.3) (23.3) (30.1) (37.8)
--------------------------------- -------------------------------------------------------
Tax-effected EBITA 5.8 9.2 14.2 19.2 24.3 32.8 42.4 53.2
Plus: Depreciation 5.5 6.9 7.4 7.7 8.1
Plus: Change in Deferred Taxes 0.0 0.0 0.0 0.0 0.0
Less: Capital/Acquisition Expenditures (64.3) (49.6) (47.0) (47.0) (47.0)
Less: Changes in Working Capital (2.4) (2.7) (4.0) (4.5) (5.1)
--------------------------------- -------------------------------------------------------
Free Cash Flow ($42.0) ($21.2) ($10.9) ($1.4) $9.2
A + B = C
----------- ------------------------------ --------------------------------
Discounted (b) PV of Terminal Value as a
Cash Flows Multiple of 2004 EBITDA (c) Enterprise Value (d)
--------------------------------- -------------------------------
Discount Rate (2000-2004) 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x
- ----------------------- ----------- --------------------------------- -------------------------------
17.5% ($54.4) $243.3 $287.5 $331.7 $188.9 $233.1 $277.4
18.0% (54.1) 238.2 281.5 324.8 184.1 227.4 270.7
18.5% (53.8) 233.2 275.6 318.0 179.4 221.8 264.2
19.0% (53.5) 228.3 269.8 311.4 174.8 216.3 257.9
19.5% (53.2) 223.6 264.2 304.9 170.4 211.0 251.7
- D + E = F
------------ ------------ ------------------------
Net Debt Equity Total Equity Value Value Per Diluted Share (f)
---------------------------- ----------------------------
Discount Rate 5/31/00 (e) Investments 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x
- ----------------------- ----------- ----------- ---------------------------- -----------------------------
17.5% $25.9 $0.0 $163.0 $207.3 $251.5 $13.97 $17.76 $21.56
-----------
18.0% 25.9 0.0 158.2 201.5 244.8 13.56 17.27 20.98
18.5% 25.9 0.0 153.5 195.9 238.3 13.16 16.79 20.43
19.0% 25.9 0.0 148.9 190.5 232.0 12.77 16.32 19.88
-----------
19.5% 25.9 0.0 144.5 185.1 225.8 12.38 15.87 19.35
---------------------------
- ----------------------------------------
(a) Projections based on BGC and management estimates.
(b) Present values calculated as of latest fiscal year end.
(c) Based on current public market Enterpise Value/EBITDA trading muliptle of
6.5x.
(d) Discounted 5 years; based on 2004 EBITDA of $99.1 million.
(e) Includes option proceeds of: $23.1
(f) Based on 11.667 million diluted shares outstanding as of May 31, 2000.
- --------------------------------------------------------------------------------
-5- Benedetto, Gartland & Company, Inc.
Carey International, Inc.
- --------------------------------------------------------------------------------
Analysis of Weighted Average Cost of Capital
Assumptions
-------------------------------------------------------------------------------------------------------------------------------
Three Month Treasury Bill (at 7/14/00) 5.98% Estimated Future Market Return (b) 13.59%
Ten Year Government Bond (at 7/14/00) 6.09% Estimated Future Risk Free Rate (c) 4.69%
-----------
Historical Spread Between Long Bond & Bill (a) 1.40% Estimated Differential 8.90%
Historical Spread Between Long Bond & S&P500 (a) 7.50% Small Cap Premium (a) 4.20%
-------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Levered Tax Net Debt to Unlevered Levered Unlevered
Comparable Companies Beta (d) Rate Equity (e) Beta (f) Return Return
--------------------------- ------------ ------------- ----------- ------------ ----------- ----------
Carey International, Inc. 1.70 41.5% 33.4% 1.42 19.8% 17.3%
Central Parking Corp. 1.10 41.5% 50.6% 0.85 14.5% 12.2%
NCO Group, Inc. 1.97 41.5% 43.3% 1.57 22.2% 18.7%
FYI Incorporated 0.80 41.5% 21.5% 0.71 11.8% 11.0%
Consolidated Graphics, Inc. 0.85 41.5% 139.5% 0.47 12.3% 8.9%
Navigant International 1.03 41.5% 91.5% 0.67 13.9% 10.7%
------------ ------------- ----------- ------------ ----------- ----------
Average 1.24 41.5% 63.3% 0.95 15.7% 13.1%
-----------------------------------------------------------------------------
Net Debt/Equity Cost of Equity at Various Unlevered Beta and Capital Rates
-----------------------------------------------------------------------------
Capital Structures 0.47 0.71 0.95 1.26 1.57
------------------ ------------- ------------ ------------ ----------- ----------
0.0% 13.1% 15.2% 17.3% 20.1% 22.9%
10.0% 13.3% 15.6% 17.8% 20.8% 23.7%
---------------------------
20.0% 13.5% 15.9% 18.3% 21.4% 24.5%
30.0% 13.8% 16.3% 18.8% 22.1% 25.3%
---------------------------
40.0% 14.0% 16.7% 19.3% 22.7% 26.1%
50.0% 14.3% 17.0% 19.8% 23.4% 27.0%
-----------------------------------------------------------------------------
Net Debt/Capitalization Est. Cost Weighted Average Cost of Capital at Various Unlevered Beta and Capital Rates
-----------------------------------------------------------------------------
Capital Structures of Debt 0.47 0.71 0.95 1.26 1.57
------------------ ------- ------------- ------------ ------------ ----------- ----------
0.0% 9.00% 13.1% 15.2% 17.3% 20.1% 22.9%
9.1% 9.20% 12.6% 14.6% 16.7% 19.4% 22.0%
---------------------------
16.7% 9.40% 12.2% 14.2% 16.2% 18.8% 21.3%
23.1% 9.70% 11.9% 13.8% 15.8% 18.3% 20.8%
---------------------------
28.6% 10.00% 11.7% 13.6% 15.5% 17.9% 20.3%
33.3% 10.40% 11.5% 13.4% 15.2% 17.6% 20.0%
_______________________________________________
* Excluded from averages.
(a) Source: Ibbottson & Sinquefeld 1999 Yearbook.
(b) Thirty year government bond yield plus the historical spread between
the long bond and the S&P 500.
(c) Thirty year government bond yield less the historical spread between
the long bond and the three month bill.
(d) Based on five year historical (or all available) data using the S&P 500
as a proxy for the market. Source: Market Guide.com.
(e) Book Value of Net Debt to Market Value of Equity.
(f) Unlevered beta equals (Levered Beta/(1 + ((1 - Tax Rate) *
Debt/Equity)).
----------------------------------------------------------------------------
-6- Benedetto, Gartland & Company Inc.
Carey International, Inc.
- --------------------------------------------------------------------------------
M & A Transaction Analysis - Selected Service Providers
(Dollars in millions, except per share data)
Date Date Equity Enterprise
Announced Effective Acquiror Name Target Name Business Description Value Value
- ----------- ----------- ------------- ----------- -------------------- ----- -----
06/08/1999 07/26/1999 Stagecoach Holdings, Coach USA Inc. Provides transportation $1,140.7 $1,778.7
plc services
10/19/1998 03/16/1999 Laidlaw Inc. Greyhound Lines Transit services 390.8 722.7
01/17/2000 04/28/2000 Wesco Holdings Midwest Cort Business Services Furniture rental services 384.6 477.2
Corp.
02/22/2000 05/05/2000 Airtours, plc Travel Services Distr. of travel 368.5 356.9
International services (internet)
----------------------
09/02/1998 12/10/1998 Rent-Way Inc. Home Choice Holdings Equipment rental services 231.5 295.7
09/06/1999 12/01/1999 Amdocs Ltd. International Telecom. Computerized billing 226.1 186.5
Data, Inc. services
03/03/1997 05/30/1997 Flserve Inc. BHC Financial Inc. Data processing services 212.1 236.8
03/17/2000 Pending Investor Group Neff Corporation Equipment rental services 190.5 670.1
12/23/1997 04/01/1998 Outsourcing Solutions Union Corp. Adjustment collection 182.7 151.0
Inc. services
02/11/1998 06/10/1998 Apollo Management MTL Inc. Tank truck carrier 181.8 238.5
services
06/07/1999 09/30/1999 Yellow Corp. Jevic Transportation Provides trucking 154.5 193.7
Inc. services
----------------------
08/14/1996 11/07/1996 OSI Holdings Corp. Payco American Corp. Credit collection 142.2 125.8
services
02/10/1999 03/22/1999 GlobeGround GmbH Hudson General Corp Aviation services 132.6 116.8
03/08/1999 06/24/1999 Anteon Corp. Analysis & Technology Provide engineering 108.2 115.3
Inc. services
10/17/1997 02/27/1998 Weiss, Peck & Greer ATC Group Services Inc. Engineering services 93.7 129.2
LLC
11/26/1997 02/25/1998 J.W. Childs Equity Universal Hospital Medical equipment rental 84.9 118.4
Partners LP Services services
---------------------------------------------------
Statistics for Deals with Equity Values ranging from $150-$250 (in red) Average $ 197.0 $ 281.8
Median 190.5 236.8
---------------------------------------------------
CARY Valuation Parameter
---------------------------------------------------
Implied CARY Share Price based on Comparable M&A Transactions (1) Average
Median
---------------------------------------------------
Equity Value Offer Price Premium to
Enterprise Value to LTM to LTM Pre-Announcement Stock Price
- -------------------------- -------------- ------------------------------
EBITDA EBIT Net Inc. 1 Day 1 Week 4 Weeks
------ ---- -------- ----- ------ -------
9.3x 13.6x 20.8x 35.2% 40.6% 62.7%
9.0x 15.6x 20.7x 33.3% 79.3% 42.5%
4.4x 8.9x 13.9x 63.5% 66.5% 62.9%
15.7x 24.8x 43.0x 46.5% 62.5% 86.5%
- -----------------------------------------------------------------------------
3.0x 6.0x NM 7.2% 4.1% 7.7%
4.0x 7.1x 13.5x 61.0% 66.1% 61.0%
7.3x 7.8x 11.6x 67.5% 60.0% 82.3%
5.4x 8.3x NM 9.9% 34.6% 25.2%
7.9x 10.3x NM 14.5% 13.5% 23.5%
6.5x 11.8x 18.0x 37.9% 38.5% 56.1%
5.8x 10.9x 16.1x 30.2% 45.5% 51.4%
- -----------------------------------------------------------------------------
4.3x 14.1x 30.6x 19.1% 17.9% 60.0%
5.5x 9.2x 11.1x 21.6% 38.2% 52.0%
8.7x 11.6x 23.0x 18.9% 16.2% 23.8%
8.3x 10.7x 19.3x 0.0% (8.1%) 10.3%
4.5x 11.5x 20.1x 29.2% 29.2% 25.3%
- -----------------------------------------------------------------------------
5.1x 8.9x 14.8x 32.6% 37.5% 43.9%
5.4x 8.3x 14.8x 30.2% 38.5% 51.4%
- -----------------------------------------------------------------------------
$ 30.2 $ 22.3 $ 12.0 $10.55 $11.25 $ 9.06
- -----------------------------------------------------------------------------
$10.60 $15.21 $18.11 $13.99 $15.47 $13.04
$11.76 $13.87 $18.12 $13.74 $15.58 $13.72
- -----------------------------------------------------------------------------
_____________________________
Source: SEC Filings and Securities Data Corporation.
(1) Based on 9.821 million shares outstanding. Share prices based on Enterprise
Value (Revenue, EBIT, EBITDA) are less net debt of $49.0 million. CARY share
price information reflects 6/29/00 announcement date.
- --------------------------------------------------------------------------------
- -7- Benedetto, Gartland & Company, Inc.
Carey International, Inc.
- --------------------------------------------------------------------------------
Hypothetical Stock Price Analysis 8% Internal Growth Rate, $40.0
Million Acquired Revenue
(Dollars in millions, except per share data)
Year ending on or about November 30,
-----------------------------------------------------------------------------------------------
Historical Projected (a)
-----------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004
-----------------------------------------------------------------------------------------------
Net sales $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1
EBITDA 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4
Earnings per share $0.74 $0.92 $1.17 $1.46 $1.58 $2.02 $2.54 $3.19
Current 1999 Actual P/E Multiple 12.8x 12.8x 12.8x 12.8x 12.8x 12.8x
Implied Stock Price $14.94 $18.67 $20.23 $25.78 $32.48 $40.75
Implied Stock Price Discounted at Cost of Equity
-----------------------------------------------------------------------
Cost of Equity Current 2000 2001 2002 2003 2004
- -------------------------- -----------------------------------------------------------------------
18% $14.94 $15.82 $14.53 $15.69 $16.75 $17.81
-----------------------
____________________________
(a) Projected data based on 2000 budget with acquisitions and management and BGC
estimates.
- --------------------------------------------------------------------------------
-8- Benedetto, Gartland & Company, Inc.
Carey International, Inc.
- --------------------------------------------------------------------------------
Hypothetical Stock Price Analysis 12% Internal Growth Rate, $60.0
Million Acquired Revenue
(Dollars in millions, except per share data)
Year ending on or about November 30,
--------------------------------------------------------------------------------------------
Historical Projected (a)
--------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004
--------------------------------------------------------------------------------------------
Net sales $86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9
EBITDA 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1
Earnings per share $0.74 $0.92 $1.17 $1.46 $1.72 $2.37 $3.17 $4.21
Current 1999 Actual P/E Multiple 12.8x 12.8x 12.8x 12.8x 12.8x 12.8x
Implied Stock Price $14.94 $18.67 $21.98 $30.21 $40.50 $53.71
Implied Stock Price Discounted at Cost of Equity
--------------------------------------------------------------------
Cost of Equity Current 2000 2001 2002 2003 2004
- --------------------------------- --------------------------------------------------------------------
25% $14.94 $14.94 $14.07 $15.47 $16.59 $17.60
--------------------
_________________________________________________
(a) Projected data based on 2000 budget with acquisitions and
management and BGC estimates.
- --------------------------------------------------------------------------------
-9- Benedetto, Gartland & Company, Inc.
- --------------------------------------------------------------------------------
Carey International, Inc. Income Statement 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted) Budget with expected acquisitions
Year ending November 30,
-----------------------------------------------------------------------------------
Historical Budgeted Projected
-----------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
Net sales $ 65.5 $ 86.4 $123.2 $ 191.1 $ 261.6 $ 307.5 $ 373.7 $ 444.4 $ 521.1
Annual growth 31.8% 42.6% 55.1% 36.9% 17.6% 21.4% 19.0% 17.3%
Cost of goods sold 41.6 55.9 79.5 124.5 169.0 198.7 241.2 287.1 336.6
-----------------------------------------------------------------------------------
Gross margin 24.0 30.5 43.7 66.5 92.6 108.9 132.2 157.3 184.5
Sales, general & administrative expenses 15.7 18.8 25.7 38.5 54.3 63.8 77.4 92.2 108.1
Other expense/(income) (0.4) (0.2) (0.3) 0.0 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------------------------------------
Total 15.3 18.6 25.5 38.5 54.3 63.8 77.4 92.2 108.1
EBITDA 8.7 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4
New acquisition goodwill 0.0 0.0 0.0 0.0 0.0 0.6 1.6 2.6 3.0
Base depreciation and amortization 3.2 3.4 4.4 7.1 9.4 11.5 12.0 12.4 12.7
-----------------------------------------------------------------------------------
EBIT 5.5 8.6 13.8 21.0 28.9 32.9 41.1 50.1 60.7
Net interest expense/(income) 1.7 0.9 (0.5) 0.6 3.4 5.2 5.6 5.3 4.5
-----------------------------------------------------------------------------------
Earnings before tax 3.8 7.7 14.3 20.4 25.5 27.7 35.5 44.8 56.2
Provision for taxes (at projected 41.5%) 0.3 3.2 5.9 8.6 10.6 11.6 14.9 18.9 23.6
-----------------------------------------------------------------------------------
Net income from continuing operations 3.5 4.5 8.4 11.8 14.9 16.2 20.6 26.0 32.6
Other Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income $ 3.5 $ 4.5 $ 8.4 $ 11.8 $ 14.9 $ 16.2 $ 20.6 $ 26.0 $ 32.6
===================================================================================
Shares outstanding (000's) 3,794 6,137 9,094 10,057 10,200 10,200 10,200 10,200 10,200
Earnings per share $ 0.92 $ 0.74 $ 0.92 $ 1.17 $ 1.46 $ 1.58 $ 2.02 $ 2.54 $ 3.19
Margins
- -------
Gross before depreciation 36.6% 35.3% 35.5% 34.8% 35.4% 35.4% 35.4% 35.4% 35.4%
EBITDA 13.2% 13.8% 14.8% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7%
EBIT 8.4% 10.0% 11.2% 11.0% 11.1% 10.7% 11.0% 11.3% 11.6%
Net 5.3% 5.2% 6.8% 6.2% 5.7% 5.3% 5.5% 5.8% 6.2%
SG&A before depr. and amort. as a % of sales 23.9% 21.8% 20.9% 20.1% 20.7% 20.7% 20.7% 20.7% 20.7%
Reduction in SG&A 0.0% 0.0% 0.0% 0.0% 0.0%
Coverages
- ---------
EBITDA/Net Interest Expense 5.0x 13.1x NM 48.4x 11.3x 8.7x 9.8x 12.3x 17.0x
EBIT/Net Interest Expense 3.2x 9.4x NM 36.2x 8.5x 6.3x 7.4x 9.4x 13.5x
- --------------------------------------------------------------------------------
Page 1 of 10
- -------------------------------------------------------------------------------
Carey International, Inc. Cash Flow Statement 8% Internal Growth Rate, $40.0
($ in millions, except where noted) Million Acquired Revenue
Year ending November 30,
----------------------------------------------------
Projected
----------------------------------------------------
2000 2001 2002 2003 2004
----------------------------------------------------
OPERATING ACTIVITIES
Net income $ 14.9 $ 16.2 $ 20.6 $ 26.0 $ 32.6
Depreciation and amortization 9.4 12.1 13.7 15.0 15.7
Equity income from unconsolidated affiliates 0.0 0.0 0.0 0.0 0.0
Change in working capital (2.4) (1.8) (2.6) (2.8) (3.0)
Change in other assets and liabilities 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Cash provided by/(used in) operating activities $ 21.9 $ 26.5 $ 31.7 $ 38.1 $ 45.2
INVESTING ACTIVITIES
Capital expenditures ($ 13.3) ($ 4.6) ($ 2.0) ($ 2.0) ($ 2.0)
Acquisition expenditures (45.0) (30.0) (30.0) (30.0) (30.0)
Disposition/(purchase) of assets 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Cash provided by/(used in) investing activities ($ 58.3) ($ 34.6) ($ 32.0) ($ 32.0) ($ 32.0)
Free Cash Flow ($ 36.4) ($ 8.1) ($ 0.3) $ 6.1 $ 13.2
FINANCING ACTIVITIES
Proceeds from/(payments to) term debt $ 32.8 $ 8.1 $ 0.3 ($ 6.1) ($ 13.2)
Proceeds from/(payments to) capital leases 0.0 0.0 0.0 0.0 0.0
Issuance of/(repurchase of) common stock 0.0 0.0 0.0 0.0 0.0
Dividends paid 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Cash provided by/(used in) financing activities $ 32.8 $ 8.1 $ 0.3 ($ 6.1) ($ 13.2)
Effect of exchange rate changes on cash and
cash equivalents $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Increase/(decrease) in cash and cash equivalents (3.6) 0.0 0.0 0.0 0.0
Beginning cash balance 8.6 5.0 5.0 5.0 5.0
----------------------------------------------------
Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
- ------------------------------------------------------------------- Projection 2
Page 2 of 10
- -----------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Balance Sheet 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
--------------------------------------------------------------------------------------
Historical Projected
--------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
--------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 2.9 $ 5.3 $ 14.5 $ 8.6 $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
Accounts receivable, net of allowances 10.5 15.9 17.9 32.4 44.4 52.2 63.3 75.4 88.4
Other receivables 0.4 0.7 1.2 1.7 1.5 1.8 2.2 2.6 3.1
Prepaid expenses and other 2.1 1.4 1.3 1.6 2.2 2.6 3.2 3.8 4.4
--------------------------------------------------------------------------------------
Total current assets 15.9 23.4 34.9 44.4 53.2 61.6 73.7 86.8 100.9
Property and equipment, net 5.8 9.3 12.9 27.4 35.1 32.9 27.5 21.8 15.7
Existing intangibles, net 19.3 42.6 70.4 94.5 135.6 130.9 126.3 121.6 117.0
New acquired goodwill 0.0 0.0 0.0 0.0 0.0 29.4 57.8 85.1 112.1
Deferred income taxes and other 2.2 2.0 1.5 2.8 2.8 2.8 2.8 2.8 2.8
Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1
Total Assets $ 44.0 $85.4 $129.2 $178.1 $235.8 $266.7 $297.2 $327.3 $357.7
======================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 11.6 $17.1 $ 18.1 $ 27.9 $ 37.8 $ 44.5 $ 54.0 $ 64.3 $ 75.4
Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------------
Total current liabilities 11.6 17.1 18.1 27.9 37.8 44.5 54.0 64.3 75.4
Term debt 17.7 3.8 4.3 25.1 57.9 66.0 66.3 60.2 47.0
Capital leases 0.9 1.7 1.2 1.4 1.4 1.4 1.4 1.4 1.4
Deferred liabilities 0.1 1.2 0.4 4.0 4.0 4.0 4.0 4.0 4.0
Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2
Shareholders' Equity:
Capital stock 1.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Additional paid in capital 7.8 45.2 78.7 81.5 81.5 81.5 81.5 81.5 81.5
Retained earnings (1.4) 3.1 11.4 23.0 37.9 54.0 74.6 100.6 133.2
Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------------
Total shareholders' equity 7.6 48.3 90.1 104.6 119.5 135.7 156.3 182.2 214.8
Total Liabilities and Shareholders' Equity $ 44.0 $85.4 $129.2 $178.1 $235.8 $266.7 $297.2 $327.3 $357.7
======================================================================================
Capital Ratios
- --------------
Total Debt/EBITDA 1.5x 1.5x 1.2x 0.9x 0.6x
Debt/Equity 244.8% 11.3% 6.1% 25.3% 49.6% 49.7% 43.4% 33.8% 22.5%
Debt/Total Book Capital 71.0% 10.1% 5.7% 20.2% 33.2% 33.2% 30.2% 25.3% 18.4%
- ------------------------------------------------------------------------------------------------------------------------Projection 2
Page 3 of 10
- --------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Working Capital Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
-----------------------------------------------------------------------------------
Historical Projected
-----------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
-----------------------------------------------------------------------------------
Sales $65.5 $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1
Cost of goods sold 41.6 55.9 79.5 124.5 169.0 198.7 241.2 287.1 336.6
Ratios
- ------
Accounts receivable (Days outstanding) 57.9 66.4 52.2 61.1 61.1 61.1 61.1 61.1 61.1
Other receivables (Days outstanding) 2.2 2.8 3.6 3.3 3.3 3.3 3.3 3.3 3.3
Prepaid expenses/sales 3.1% 1.7% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9%
Accounts payable (Days outstanding) 100.2 109.9 81.9 80.6 80.6 80.6 80.6 80.6 80.6
Other current liabilities/COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
WORKING CAPITAL
Accounts receivable $10.5 $15.9 $17.9 $32.4 $44.4 $52.2 $63.3 $75.4 $88.4
Other receivables 0.4 0.7 1.2 1.7 1.5 1.8 2.2 2.6 3.1
Prepaid expenses 2.1 1.4 1.3 1.6 2.2 2.6 3.2 3.8 4.4
-----------------------------------------------------------------------------------
CURRENT ASSETS $13.0 $18.0 $20.4 $35.8 $48.2 $56.6 $68.7 $81.8 $95.9
Accounts payable $11.6 $17.1 $18.1 $27.9 $37.8 $44.5 $54.0 $64.3 $75.4
Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------------------------------------
CURRENT LIABILITIES $11.6 $17.1 $18.1 $27.9 $37.8 $44.5 $54.0 $64.3 $75.4
Working capital $1.4 $1.0 $2.3 $7.9 $10.3 $12.1 $14.7 $17.5 $20.6
Cash from/(used in) working capital $0.5 ($1.3) ($5.6) ($2.4) ($1.8) ($2.6) ($2.8) ($3.0)
Cash from/(used in):
- --------------------
Accounts receivable ($5.4) ($1.9) ($14.6) ($12.0) ($7.8) ($11.2) ($12.1) ($13.0)
Other receivables (0.3) (0.6) (0.5) 0.2 (0.3) (0.4) (0.4) (0.5)
Prepaid expenses 0.6 0.1 (0.3) (0.6) (0.4) (0.6) (0.6) (0.7)
Accounts payable 5.5 1.0 9.8 10.0 6.6 9.5 10.3 11.1
Other current liabilities - - - - 0.0 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------------------------------------
Total $0.5 ($1.3) ($5.6) ($2.4) ($1.8) ($2.6) ($2.8) ($3.0)
Deferred income taxes and other $2.2 $2.0 $1.5 $2.8 $2.8 $2.8 $2.8 $2.8 $2.8
Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1
-----------------------------------------------------------------------------------
OTHER ASSETS $3.0 $10.1 $11.0 $11.9 $11.9 $11.9 $11.9 $11.9 $11.9
Deferred liabilities $0.1 $1.2 $0.4 $4.0 $4.0 $4.0 $4.0 $4.0 $4.0
Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2
-----------------------------------------------------------------------------------
OTHER LIABILITIES $6.3 $14.6 $15.5 $19.2 $19.2 $19.2 $19.2 $19.2 $19.2
Changes in Other Assets and Liabilities $1.1 $0.1 $2.8 $0.0 $0.0 $0.0 $0.0 $0.0
- --------------------------------------------------------------------------------------------------------------------------------
Projection 2
Page 4 of 10
- ----------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Depreciation Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
----------------------------------------------------------------------------------------------
Historical Projected
----------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
----------------------------------------------------------------------------------------------
Sales $65.5 $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1
Capital expenditures/sales 4.7% 4.7% 3.6% 6.6% 5.1% 1.5% 0.5% 0.5% 0.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Beginning gross fixed assets $ 37.1 $ 50.4 $ 55.1 $ 57.1 $ 59.1
Capital expenditures $ 3.1 $ 4.1 $ 4.5 $ 12.6 2.0 2.0 2.0 2.0 2.0
Software development 11.3 2.6 0.0 0.0 0.0
(Disposition and other charges) 0.0 0.0 0.0 0.0 0.0
Ending gross fixed assets -------------------------------------------------
$ 50.4 $ 55.1 $ 57.1 $ 59.1 $ 61.1
Beginning accumulated depreciation $ 9.8 $ 15.3 $ 22.2 $ 29.5 $ 37.3
- ----------------------------------------------------------------------------------------------------------------------------------
Beginning (FYE 1999) Implied
Net PP&E $27.4 Useful
Less: Land 0.0 Life
----- ----
PP&E depreciated $27.4 6.0 years $ 4.6 $ 4.6 $ 4.6 $ 4.6 $ 4.6
Total Capital
Expenditures
------------
2000 $2.0 6.0 years $ 0.2 $ 0.3 $ 0.3 $ 0.3 $ 0.3
2001 2.0 0.2 0.3 0.3 0.3
2002 2.0 0.2 0.3 0.3
2003 2.0 0.2 0.3
2004 2.0 0.2
Software Depreciation $11.3 7.0 years $ 0.8 $ 1.6 $ 1.6 $ 1.6 $ 1.6
2.6 0.2 0.4 0.4 0.4
Total depreciation $ 2.5 $ 3.8 $ 5.5 $ 6.9 $ 7.4 $ 7.7 $ 8.1
As a % of net PP&E 19.1% 13.9% 15.7% 20.9% 26.8% 35.4% 51.1%
Ending accumulated depreciation $ 6.0 $ 9.8 $ 15.3 $ 22.2 $ 29.5 $ 37.3 $ 45.3
Property and equipment, net $12.9 $ 27.4 $ 35.1 $ 32.9 $ 27.5 $ 21.8 $ 15.7
- ---------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------- Projection 2
Page 5 of 10
- --------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Debt and Interest Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
----------------------------------------------------
Projected
----------------------------------------------------
2000 2001 2002 2003 2004
----------------------------------------------------
Free cash flow ($ 36.4) ($ 8.1) ($ 0.3) $ 6.1 $13.2
Proceeds from/(repurchase of) equity 0.0 0.0 0.0 0.0 0.0
Dividends paid 0.0 0.0 0.0 0.0 0.0
Foreign currency translation 0.0 0.0 0.0 0.0 0.0
Beginning cash balance 8.6 5.0 5.0 5.0 5.0
Less: Minimum cash balance (5.0) (5.0) (5.0) (5.0) (5.0)
----------------------------------------------------
Total cash available for debt service ($ 32.8) ($ 8.1) ($ 0.3) $ 6.1 $13.2
Beginning balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4
Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - capital leases 1.4 1.4 1.4 1.4 1.4
Discretionary borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4
Funds available for debt repayment ($ 32.8) ($ 8.1) ($ 0.3) $ 6.1 $13.2
Beginning balance - term debt $ 25.1 $57.9 $66.0 $66.3 $60.2
Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - term debt 25.1 57.9 66.0 66.3 60.2
Discretionary borrowings/(repayment) 32.8 8.1 0.3 (6.1) (13.2)
-----------------------------------------------------
Ending balance - term debt $ 57.9 $66.0 $66.3 $60.2 $47.0
Cash available after all repayments $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Plus: Minimum cash balance 5.0 5.0 5.0 5.0 5.0
----------------------------------------------------
Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Average Balance Outstanding
Term debt $ 41.5 $61.9 $66.2 $63.3 $53.6
Capital Leases 1.4 1.4 1.4 1.4 1.4
Cash and cash equivalents 6.8 5.0 5.0 5.0 5.0
Interest Expense
Term debt 8.50% $ 3.5 $ 5.3 $ 5.6 $ 5.4 $ 4.6
Capital Leases 6.00% 0.1 0.1 0.1 0.1 0.1
Cash and cash equivalents 3.00% (0.2) (0.2) (0.2) (0.2) (0.2)
----------------------------------------------------
Total interest expense/(income) $ 3.4 $ 5.2 $ 5.6 $ 5.3 $ 4.5
- --------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------- Projection 2
Page 6 of 10
- ----------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Shareholders' Equity and Investment Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
------------------------------------------------------------
Actual Projected
------------------------------------------------------------
1999 2000 2001 2002 2003 2004
-------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock
Beginning balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1
Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1
Additional paid in capital
Beginning balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5
Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5
Foreign currency translation adjustments
Beginning balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Retained earnings
Beginning balance $ 23.0 $ 37.9 $ 54.0 $ 74.6 $ 100.6
Net income/(loss) 14.9 16.2 20.6 26.0 32.6
Dividends 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 37.9 $ 54.0 $ 74.6 $ 100.6 $ 133.2
- ----------------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Beginning balance
Shares issued/(purchased)
Ending balance
Annual dividend per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Total dividends paid $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------Projection 2
Page 7 of 10
- -------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Amortization Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
-------------------------------------------------------------------
Actual Projected
-------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
-------------------------------------------------------------------
Sales $191.1 $261.6 $307.5 $373.3 $444.4 $521.1
Additions to intangibles/sales 0.0% 17.2% 0.0% 0.0% 0.0% 0.0%
- -------------------------------------------------------------------------------------------------------------------------------
Beginning intangibles $104.3 $149.3 $149.3 $149.3 $149.3
Additions to intangibles 45.0 0.0 0.0 0.0 0.0
(Disposition and other charges) 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------
Ending goodwill $149.3 $149.3 $149.3 $149.3 $149.3
Beginning accumulated amortization $ 6.5 $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6
- -------------------------------------------------------------------------------------------------------------------------------
Implied
Amortization
Period
1999 Beginning net ------
intangibles $94.5 30.0 years $ 3.1 $ 3.1 $ 3.1 $ 3.1 $ 3.1
Additions
---------
2000 $45.0 30.0 years $ 0.8 $ 1.5 $ 1.5 $ 1.5 $ 1.5
2001 0.0 0.0 0.0 0.0 0.0
2002 0.0 0.0 0.0 0.0
2003 0.0 0.0 0.0
2004 0.0 0.0
Total amortization $ 3.3 $ 3.9 $ 4.6 $ 4.6 $ 4.6 $ 4.6
As a % of net goodwill 3.5% 2.9% 3.6% 3.7% 3.8% 4.0%
Ending accumulated amortization $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 $ 32.3
Goodwill, net $ 94.5 $135.6 $130.9 $126.3 $121.6 $117.0
- -------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------ Projection 2
Page 8 of 10
- ----------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Revenue Growth Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
--------------------------------------------------------------------
Actual Budgeted Projected
--------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
--------------------------------------------------------------------
Acquired revenue
2000 Base Sales $261.6 $282.5 $305.1 $329.5 $355.9
2001 Acquired Sales 25.0 43.2 46.7 50.4
2002 Acquired Sales 25.0 43.2 46.7
2003 Acquired Sales 25.0 43.2
2004 Acquired Sales 25.0
--------------------------------------------------------------------
$0.0 $261.6 $307.5 $373.3 $444.4 $521.1
Target
Revenue Prototype Year
----------------------------------------------
Quarterly breakdown of acquired revenue Run Rate Q1 Q2 Q3 Q4 Annual
---------- ------ ------ ------ ------ --------
1st Quarter Acquisitions $10.0 $2.5 $2.5 $2.5 $ 2.5 $10.0
2nd Quarter Acquisitions 10.0 2.5 2.5 2.5 7.5
3rd Quarter Acquisitions 10.0 2.5 2.5 5.0
4th Quarter Acquisitions 10.0 2.5 2.5
-------------------------------------------------------------
$40.0 $2.5 $5.0 $7.5 $10.0 $25.0
Year ending November 30,
------------------------------------------------------
Budgeted
------------------------------------------------------
2000 2001 2002 2003 2004
------------------------------------------------------
New acquisition goodwill
2001 Acquired Sales $0.6 $1.0 $1.0 $1.0
2002 Acquired Sales 0.6 1.0 1.0
2003 Acquired Sales 0.6 1.0
2004 Acquired Sales 0.6
------------------------------------------------------
Annual amortization $0.0 $0.6 $1.6 $2.6 $3.6
Purchase
Price by Prototype Year
----------------------------------------------
Quarterly breakdown of new acquisition goodwill Quarter Q1 Q2 Q3 Q4 Annual
--------- ------ ------ ------ ------ --------
1st Quarter Acquisitions $ 7.5 $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.3
2nd Quarter Acquisitions 7.5 0.1 0.1 0.1 0.2
3rd Quarter Acquisitions 7.5 0.1 0.1 0.1
4th Quarter Acquisitions 7.5 0.1 0.1
Total amortization $ 30.0 $ 0.1 $ 0.1 $ 0.2 $ 0.3 $ 0.6
-----------------------------------------------------------
Purchase price as a % of revenue 75.0% 75.0% 75.0% 75.0% 75.0% 75.0%
- --------------------------------------------------------------------------------------------------------------- Projection 2
Page 9 of 10
________________________________________________________________________________
Carey International, Inc. Identified 8% Internal Growth Rate, $40.0
Acquisition Adjustments Million Acquired Revenue
------------------------------------------
Consideration for Identified Acquisitions
Cash $0.0
Stock 0.0 Actual Pro Forma
--------
Total $0.0 11/30/99 Adjustments 11/30/99
------------------------------------------ -------- ----------- --------
ASSETS
Cash and cash equivalents $ 8.6 $ 8.6
Accounts receivable, net of allowances 32.4 32.4
Other receivables 1.7 1.7
Prepaid expenses and other 1.6 1.6
-------- --------
Total current assets 44.4 44.4
Property and equipment, net 27.4 $0.0 27.4
Existing intangibles, net 94.5 0.0 94.5
New acquired goodwill 0.0 0.0
Deferred income taxes and other 2.8 0.0 2.8
Notes receivable 9.1 9.1
----------
Total Assets $178.1 $0.0 $178.1
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 27.9 $ 27.9
Other current liabilities 0.0 0.0
-------- --------
Total current liabilities 27.9 27.9
Term debt 25.1 $0.0 25.1
Capital leases 1.4 1.4
Deferred liabilities 4.0 4.0
Deferred revenue 15.2 15.2
Shareholders' Equity:
Capital stock 0.1 0.1
Additional paid in capital 81.5 0.0 81.5
Retained earnings 23.0 23.0
Foreign currency translation adjustments 0.0 0.0
-------- --------
Total shareholders' equity 104.6 104.6
----------
Total Liabilities and Shareholders' Equity $178.1 $0.0 $178.1
======== ========
Shares Outstanding 10,200 0 10,200
____________________________________________________________________Projection 2
Page 10 of 10
- ------------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Income Statement 12% Internal Growth Model Assumptions Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted) Budget with expected acquisitions
Year ending November 30,
-----------------------------------------------------------------------------------
Historical Budgeted Projected
-----------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
-----------------------------------------------------------------------------------
Net sales $ 65.5 $ 86.4 $123.2 $ 191.1 $ 261.6 $ 330.5 $ 432.8 $547.5 $675.9
Annual growth 31.8% 42.6% 55.1% 36.9% 26.3% 31.0% 26.5% 23.5%
Cost of goods sold 41.6 55.9 79.5 124.5 169.0 213.5 279.6 353.7 436.6
-----------------------------------------------------------------------------------
Gross margin 24.0 30.5 43.7 66.5 92.6 117.0 153.2 193.8 239.3
Sales, general & administrative expenses 15.7 18.8 25.7 38.5 54.3 68.5 89.8 113.6 140.2
Other expense/(income) (0.4) (0.2) (0.3) 0.0 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------------------------------------
Total 15.3 18.6 25.5 38.5 54.3 68.5 89.8 113.6 140.2
EBITDA 8.7 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1
New acquisition goodwill 0.0 0.0 0.0 0.0 0.0 0.9 2.4 3.9 4.5
Base depreciation and amortization 3.2 3.4 4.4 7.1 9.4 11.5 12.0 12.4 12.7
-----------------------------------------------------------------------------------
EBIT 5.5 8.6 13.8 21.0 28.9 36.0 49.0 63.9 81.9
Net interest expense/(income) 1.7 0.9 (0.5) 0.6 3.4 5.8 7.3 7.9 7.7
-----------------------------------------------------------------------------------
Earnings before tax 3.8 7.7 14.3 20.4 25.5 30.2 41.7 56.0 74.2
Provision for taxes (at projected 41.5%) 0.3 3.2 5.9 8.6 10.6 12.6 17.6 23.7 31.2
-----------------------------------------------------------------------------------
Net income from continuing operations 3.5 4.5 8.4 11.8 14.9 17.6 24.1 32.4 42.9
Other Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income $ 3.5 $ 4.5 $ 8.4 $ 11.8 $ 14.9 $ 17.6 $ 24.1 $32.4 $42.9
===================================================================================
Shares outstanding (000's) 3,794 6,137 9,094 10,057 10,200 10,200 10,200 10,200 10,200
Earnings per share $ 0.92 $ 0.74 $ 0.92 $ 1.17 $ 1.46 $ 1.72 $ 2.37 $3.17 $4.21
Margins
- -------
Gross before depreciation 36.6% 35.3% 35.5% 34.8% 35.4% 35.4% 35.4% 35.4% 35.4%
EBITDA 13.2% 13.8% 14.8% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7%
EBIT 8.4% 10.0% 11.2% 11.0% 11.1% 10.9% 11.3% 11.7% 12.1%
Net 5.3% 5.2% 6.8% 6.2% 5.7% 5.3% 5.6% 5.9% 6.3%
SG&A before depr. and amort. as a % of sales 23.9% 21.8% 20.9% 20.1% 20.7% 20.7% 20.7% 20.7% 20.7%
Reduction in SG&A 0.0% 0.0% 0.0% 0.0% 0.0%
Coverages
- ---------
EBITDA/Net Interest Expense 5.0x 13.1x NM 48.4x 11.3x 8.3x 8.7x 10.1x 12.9x
EBIT/Net Interest Expense 3.2x 9.4x NM 36.2x 8.5x 6.2x 6.7x 8.1x 10.6x
- ---------------------------------------------------------------------------------------------------------------------- Projection 2
Page 1 of 10
- ----------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Cash Flow Statement 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
----------------------------------------------------------
Projected
----------------------------------------------------------
2000 2001 2002 2003 2004
----------------------------------------------------------
OPERATING ACTIVITIES
Net income $ 14.9 $ 17.6 $ 24.1 $ 32.4 $ 42.9
Depreciation and amortization 9.4 12.5 14.5 16.3 17.2
Equity income from unconsolidated affiliates 0.0 0.0 0.0 0.0 0.0
Change in working capital (2.4) (2.7) (4.0) (4.5) (5.1)
Change in other assets and liabilities 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------
Cash provided by/(used in) operating activities $ 21.9 $ 27.3 $ 34.6 $ 44.1 $ 55.1
INVESTING ACTIVITIES
Capital expenditures ($13.3) ($4.6) ($2.0) ($2.0) ($2.0)
Acquisition expenditures (45.0) (45.0) (45.0) (45.0) (45.0)
Disposition/(purchase) of assets 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------
Cash provided by/(used in) investing activities ($58.3) ($49.6) ($47.0) ($47.0) ($47.0)
Free Cash Flow ($36.4) ($22.3) ($12.4) ($2.9) $ 8.1
FINANCING ACTIVITIES
Proceeds from/(payments to) term debt $ 32.8 $ 22.3 $ 12.4 $ 2.9 ($8.1)
Proceeds from/(payments to) capital leases 0.0 0.0 0.0 0.0 0.0
Issuance of/(repurchase of) common stock 0.0 0.0 0.0 0.0 0.0
Dividends paid 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------
Cash provided by/(used in) financing activities $ 32.8 $ 22.3 $ 12.4 $ 2.9 ($8.1)
Effect of exchange rate changes on cash and cash $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
equivalents
Increase/(decrease) in cash and cash (3.6) 0.0 0.0 0.0 0.0
equivalents
Beginning cash balance 8.6 5.0 5.0 5.0 5.0
----------------------------------------------------------
Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
- --------------------------------------------------------------------------------------------------------- Projection 2
Page 2 of 10
- ------------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Balance Sheet 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
----------------------------------------------------------------------------------------
Historical Projected
----------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
----------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 2.9 $ 5.3 $ 14.5 $ 8.6 $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
Accounts receivable, net of allowances 10.5 15.9 17.9 32.4 44.4 56.1 73.4 92.9 114.7
Other receivables 0.4 0.7 1.2 1.7 1.5 1.9 2.5 3.2 4.0
Prepaid expenses and other 2.1 1.4 1.3 1.6 2.2 2.8 3.7 4.7 5.8
----------------------------------------------------------------------------------------
Total current assets 15.9 23.4 34.9 44.4 53.2 65.8 84.7 105.8 129.4
Property and equipment, net 5.8 9.3 12.9 27.4 35.1 32.9 27.5 21.8 15.7
Existing intangibles, net 19.3 42.6 70.4 94.5 135.6 130.9 126.3 121.6 117.0
New acquired goodwill 0.0 0.0 0.0 0.0 0.0 44.1 86.6 127.7 168.2
Deferred income taxes and other 2.2 2.0 1.5 2.8 2.8 2.8 2.8 2.8 2.8
Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1
Total Assets $ 44.0 $ 85.4 $129.2 $178.1 $235.8 $285.7 $337.0 $388.8 $442.3
========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8
Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------
Total current liabilities 11.6 17.1 18.1 27.9 37.8 47.8 62.6 79.2 97.8
Term debt 17.7 3.8 4.3 25.1 57.9 80.2 92.6 95.5 87.4
Capital leases 0.9 1.7 1.2 1.4 1.4 1.4 1.4 1.4 1.4
Deferred liabilities 0.1 1.2 0.4 4.0 4.0 4.0 4.0 4.0 4.0
Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2
Shareholders' Equity:
Capital stock 1.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Additional paid in capital 7.8 45.2 78.7 81.5 81.5 81.5 81.5 81.5 81.5
Retained earnings (1.4) 3.1 11.4 23.0 37.9 55.4 79.6 111.9 154.9
Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------
Total shareholders' equity 7.6 48.3 90.1 104.6 119.5 137.1 161.2 193.5 236.5
Total Liabilities and Shareholders' Equity $ 44.0 $ 85.4 $129.2 $178.1 $235.8 $285.7 $337.0 $388.8 $442.3
========================================================================================
Capital Ratios
- --------------
Total Debt/EBITDA 1.5x 1.7x 1.5x 1.2x 0.9x
Debt/Equity 244.8% 11.3% 6.1 % 25.3% 49.6% 59.6% 58.3% 50.1% 37.6%
Debt/Total Book Capital 71.0% 10.1% 5.7 % 20.2% 33.2% 37.3% 36.8% 33.4% 27.3%
- ----------------------------------------------------------------------------------------------------------------------- Projection 2
Page 3 of 10
- -----------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Working Capital Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
------------------------------------------------------------------------------------
Historical Projected
------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
------------------------------------------------------------------------------------
Sales $ 65.5 $ 86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9
Cost of goods sold 41.6 55.9 79.5 124.5 169.0 213.5 279.6 353.7 436.6
Ratios
- ------
Accounts receivable (Days outstanding) 57.9 66.4 52.2 61.1 61.1 61.1 61.1 61.1 61.1
Other receivables (Days outstanding) 2.2 2.8 3.6 3.3 3.3 3.3 3.3 3.3 3.3
Prepaid expenses/sales 3.1% 1.7% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9%
Accounts payable (Days outstanding) 100.2 109.9 81.9 80.6 80.6 80.6 80.6 80.6 80.6
Other current liabilities/COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
WORKING CAPITAL
Accounts receivable $ 10.5 $ 15.9 $ 17.9 $ 32.4 $ 44.4 $ 56.1 $ 73.4 $ 92.9 $114.7
Other receivables 0.4 0.7 1.2 1.7 1.5 1.9 2.5 3.2 4.0
Prepaid expenses 2.1 1.4 1.3 1.6 2.2 2.8 3.7 4.7 5.8
------------------------------------------------------------------------------------
CURRENT ASSETS $ 13.0 $ 18.0 $ 20.4 $ 35.8 $ 48.2 $ 60.8 $ 79.7 $100.8 $124.4
Accounts payable $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8
Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
------------------------------------------------------------------------------------
CURRENT LIABILITIES $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8
Working capital $ 1.4 $ 1.0 $ 2.3 $ 7.9 $ 10.3 $ 13.0 $ 17.1 $ 21.6 $ 26.7
Cash from/(used in) working capital $ 0.5 ($1.3) ($5.6) ($2.4) ($2.7) ($4.0) ($4.5) ($5.1)
Cash from/(used in):
- ------------------
Accounts receivable ($5.4) ($1.9) ($14.6) ($12.0) ($11.7) ($17.4) ($19.5) ($21.8)
Other receivables (0.3) (0.6) (0.5) 0.2 (0.4) (0.6) (0.7) (0.8)
Prepaid expenses 0.6 0.1 (0.3) (0.6) (0.6) (0.9) (1.0) (1.1)
Accounts payable 5.5 1.0 9.8 10.0 10.0 14.8 16.6 18.6
Other current liabilities -- -- 0.0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------
Total $ 0.5 ($1.3) ($5.6) ($2.4) ($2.7) ($4.0) ($4.5) ($5.1)
Deferred income taxes and other $ 2.2 $ 2.0 $ 1.5 $ 2.8 $ 2.8 $ 2.8 $ 2.8 $2.8 $2.8
Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1
------------------------------------------------------------------------------------
OTHER ASSETS $ 3.0 $ 10.1 $ 11.0 $ 11.9 $ 11.9 $ 11.9 $ 11.9 $11.9 $11.9
Deferred liabilities $ 0.1 $ 1.2 $ 0.4 $ 4.0 $ 4.0 $ 4.0 $ 4.0 $4.0 $4.0
Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2
------------------------------------------------------------------------------------
OTHER LIABILITIES $ 6.3 $ 14.6 $ 15.5 $ 19.2 $ 19.2 $ 19.2 $ 19.2 $19.2 $19.2
Changes in Other Assets and Liabilities $ 1.1 $ 0.1 $ 2.8 $ 0.0 $ 0.0 $ 0.0 $0.0 $0.0
- ----------------------------------------------------------------------------------------------------------------------- Projection 2
Page 4 of 10
- ------------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Depreciation Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
-------------------------------------------------------------------------------
Historical Projected
-------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004
-------------------------------------------------------------------------------
Sales $65.5 $86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9
Capital expenditures/sales 4.7% 4.7% 3.6% 6.6% 5.1% 1.4% 0.5% 0.4% 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning gross fixed assets $37.1 $50.4 $55.1 $57.1 $59.1
Capital expenditures $3.1 $4.1 $4.5 $12.6 2.0 2.0 2.0 2.0 2.0
Software development 11.3 2.6 0.0 0.0 0.0
(Disposition and other charges) 0.0 0.0 0.0 0.0 0.0
---------------------------------------------
Ending gross fixed assets $50.4 $55.1 $57.1 $59.1 $61.1
Beginning accumulated depreciation $9.8 $15.3 $22.2 $29.5 $37.3
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning (FYE 1999) Implied
Net PP&E $27.4 Useful
Less: Land 0.0 Life
----- ----
PP&E depreciated $27.4 6.0 years $4.6 $4.6 $4.6 $4.6 $4.6
Total Capital
Expenditures
------------
2000 $2.0 6.0 years $0.2 $0.3 $0.3 $0.3 $0.3
2001 2.0 0.2 0.3 0.3 0.3
2002 2.0 0.2 0.3 0.3
2003 2.0 0.2 0.3
2004 2.0 0.2
Software Depreciation $11.3 7.0 years $0.8 $1.6 $1.6 $1.6 $1.6
2.6 0.2 0.4 0.4 0.4
---------------------------------------------
Total depreciation $2.5 $3.8 $5.5 $ 6.9 $7.4 $7.7 $8.1
As a % of net PP&E 19.1% 13.9% 15.7% 20.9% 26.8% 35.4% 51.1%
Ending accumulated depreciation $6.0 $9.8 $15.3 $22.2 $29.5 $37.3 $45.3
Property and equipment, net $12.9 $27.4 $35.1 $32.9 $27.5 $21.8 $15.7
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------
Projection 2
Page 5 of 10
- ---------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Debt and Interest Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
----------------------------------------------------
Projected
----------------------------------------------------
2000 2001 2002 2003 2004
----------------------------------------------------
Free cash flow ($36.4) ($22.3) ($12.4) ($ 2.9) $ 8.1
Proceeds from/(repurchase of) equity 0.0 0.0 0.0 0.0 0.0
Dividends paid 0.0 0.0 0.0 0.0 0.0
Foreign currency translation 0.0 0.0 0.0 0.0 0.0
Beginning cash balance 8.6 5.0 5.0 5.0 5.0
Less: Minimum cash balance (5.0) (5.0) (5.0) (5.0) (5.0)
----------------------------------------------------
Total cash available for debt service ($32.8) ($22.3) ($12.4) ($ 2.9) $ 8.1
Beginning balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4
Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - capital leases 1.4 1.4 1.4 1.4 1.4
Discretionary borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4
Funds available for debt repayment ($32.8) ($22.3) ($12.4) ($ 2.9) $ 8.1
Beginning balance - term debt $25.1 $57.9 $80.2 $92.6 $ 95.5
Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------
Ending balance - term debt 25.1 57.9 80.2 92.6 95.5
Discretionary borrowings/(repayment) 32.8 22.3 12.4 2.9 (8.1)
----------------------------------------------------
Ending balance - term debt $57.9 $80.2 $92.6 $95.5 $ 87.4
Cash available after all repayments $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Plus: Minimum cash balance 5.0 5.0 5.0 5.0 5.0
----------------------------------------------------
Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Average Balance Outstanding
Term debt $41.5 $69.0 $86.4 $94.0 $ 91.5
Capital Leases 1.4 1.4 1.4 1.4 1.4
Cash and cash equivalents 6.8 5.0 5.0 5.0 5.0
Interest Expense
Term debt 8.50% $ 3.5 $ 5.9 $ 7.3 $ 8.0 $ 7.8
Capital Leases 6.00% 0.1 0.1 0.1 0.1 0.1
Cash and cash equivalents 3.00% (0.2) (0.2) (0.2) (0.2) (0.2)
----------------------------------------------------
Total interest expense/(income) $ 3.4 $ 5.8 $ 7.3 $ 7.9 $ 7.7
- ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------- Projection 2
Page 6 of 10
Carey International, Inc. 12% Internal Growth Rate, $60.0
Shareholders' Equity and Investment Million Acquired Revenue
Schedule
($ in millions, except where noted)
Year ending November 30,
-----------------------------------------------------------------------
Actual Projected
-----------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
-----------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock
Beginning balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1
Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1
Additional paid in capital
Beginning balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5
Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5
Foreign currency translation adjustments
Beginning balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
Retained earnings
Beginning balance $ 23.0 $ 37.9 $ 55.4 $ 79.6 $111.9
Net income/(loss) 14.9 17.6 24.1 32.4 42.9
Dividends 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0
-----------------------------------------------------
Ending balance $ 37.9 $ 55.4 $ 79.6 $111.9 $154.9
- ------------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Beginning balance
Shares issued/(purchased)
Ending balance
Annual dividend per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Total dividends paid $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0
- ------------------------------------------------------------------------------------------------------------------------------
____________________________________________________________________Projection 2
Page 7 of 10
- --------------------------------------------------------------------------------
Carey International, Inc. Amortization Schedule 12% Internal Growth Rate,
($ in millions, except where noted) $60.0 Million Acquired Revenue
Year ending November 30,
--------------------------------------------------------------
Actual Projected
--------------------------------------------------------------
1999 2000 2001 2002 2003 2004
--------------------------------------------------------------
Sales $191.1 $261.6 $330.5 $432.8 $547.5 $675.9
Additions to intangibles/sales 0.0% 17.2% 0.0% 0.0% 0.0% 0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning intangibles $104.3 $149.3 $149.3 $149.3 $149.3
Additions to intangibles 45.0 0.0 0.0 0.0 0.0
(Disposition and other charges) 0.0 0.0 0.0 0.0 0.0
---------------------------------------------------
Ending goodwill $149.3 $149.3 $149.3 $149.3 $149.3
Beginning accumulated amortization $ 6.5 $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6
- ------------------------------------------------------------------------------------------------------------------------------------
Implied
Amortization
Period
------
1999 Beginning net intangibles $94.5 30.0 years $ 3.1 $ 3.1 $ 3.1 $ 3.1 $ 3.1
Additions
2000 $45.0 30.0 years $ 0.8 $ 1.5 $ 1.5 $ 1.5 $ 1.5
2001 0.0 0.0 0.0 0.0 0.0
2002 0.0 0.0 0.0 0.0
2003 0.0 0.0 0.0
2004 0.0 0.0
Total amortization $ 3.3 $ 3.9 $ 4.6 $ 4.6 $ 4.6 $ 4.6
As a % of net goodwill 3.5% 2.9% 3.6% 3.7% 3.8% 4.0%
Ending accumulated amortization $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 $ 32.3
Goodwill, net $ 94.5 $135.6 $130.9 $126.3 $121.6 $117.0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------- Projection 2
Page 8 of 10
- ----------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. Revenue Growth Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue
($ in millions, except where noted)
Year ending November 30,
-----------------------------------------------------------------------
Actual Budgeted Projected
-----------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
-----------------------------------------------------------------------
Acquired revenue
2000 Base Sales $261.6 $293.0 $328.1 $367.5 $411.6
2001 Acquired Sales 37.5 67.2 75.3 84.3
2002 Acquired Sales 37.5 67.2 75.3
2003 Acquired Sales 37.5 67.2
2004 Acquired Sales 37.5
-----------------------------------------------------------------------
$ 0.0 $261.6 $330.5 $432.8 $547.5 $675.9
Target
Revenue Prototype Year
------------------------------------------------------------
Quarterly breakdown of acquired revenue Run Rate Q1 Q2 Q3 Q4 Annual
-------- -- -- -- -- ------
1st Quarter Acquisitions $15.0 $ 3.8 $ 3.8 $ 3.8 $ 3.8 $ 15.0
2nd Quarter Acquisitions 15.0 3.8 3.8 3.8 11.3
3rd Quarter Acquisitions 15.0 3.8 3.8 7.5
4th Quarter Acquisitions 15.0 3.8 3.8
-----------------------------------------------------------------------
$60.0 $ 3.8 $ 7.5 $ 11.3 $ 15.0 $ 37.5
Year ending November 30,
-------------------------------------------------------------
Budgeted
-------------------------------------------------------------
2000 2001 2002 2003 2004
-------------------------------------------------------------
New acquisition goodwill
2001 Acquired Sales $ 0.9 $ 1.5 $ 1.5 $ 1.5
2002 Acquired Sales 0.9 1.5 1.5
2003 Acquired Sales 0.9 1.5
2004 Acquired Sales 0.9
-------------------------------------------------------------
Annual amortization $ 0.0 $ 0.9 $ 2.4 $ 3.9 $ 4.5
Purchase
Price by Prototype Year
------------------------------------------------------------
Quarterly breakdown of new acquisition goodwill Quarter Q1 Q2 Q3 Q4 Annual
------- -- -- -- -- ------
1st Quarter Acquisitions $11.3 $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.4
2nd Quarter Acquisitions 11.3 0.1 0.1 0.1 0.3
3rd Quarter Acquisitions 11.3 0.1 0.1 0.2
4th Quarter Acquisitions 11.3 0.1 0.1
-----------------------------------------------------------------------
Total amortization $45.0 $ 0.1 $ 0.2 $ 0.3 $ 0.4 $ 0.9
Purchase price as a % of revenue 75.0% 75.0% 75.0% 75.0% 75.0% 75.0%
- --------------------------------------------------------------------------------------------------------------- Projection 2
Page 9 of 10
- --------------------------------------------------------------------------------------------------------------------------------
Carey International, Inc. 12% Internal Growth Rate, $60.0 Million Acquired Revenue
Identified Acquisition
Adjustments
-----------------------------------------
Consideration for Identified Acquisitions
Cash $0.0
Stock 0.0 Actual Pro Forma
------
Total $0.0 11/30/1999 Adjustments 11/30/1999
----------------------------------------- ---------- ----------- ----------
ASSETS $ 8.6 $ 8.6
Cash and cash equivalents 32.4 32.4
Accounts receivable, net of allowances 1.7 1.7
Other receivables 1.6 1.6
------- -------
Prepaid expenses and other 44.4 44.4
Total current assets
Property and equipment, net 27.4 $ 0.0 27.4
Existing intangibles, net 94.5 0.0 94.5
New acquired goodwill 0.0 0.0
Deferred income taxes and other 2.8 0.0 2.8
Notes receivable 9.1 9.1
--------
Total Assets $ 178.1 $ 0.0 $ 178.1
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 27.9 $ 27.9
Other current liabilities 0.0 0.0
------- -------
Total current liabilities 27.9 27.9
Term debt 25.1 $ 0.0 25.1
Capital leases 1.4 1.4
Deferred liabilities 4.0 4.0
Deferred revenue 15.2 15.2
Shareholders' Equity:
Capital stock 0.1 0.1
Additional paid in capital 81.5 0.0 81.5
Retained earnings 23.0 23.0
Foreign currency translation adjustments 0.0 0.0
------- --------
Total shareholders' equity 104.6 104.6
---------
Total Liabilities and Shareholders' Equity $ 178.1 $ 0.0 $ 178.1
======= ========
Shares Outstanding 10,200 0 10,200
- --------------------------------------------------------------------------------------------------------------------------------
Page 10 of 10 Projection 2