EXHIBIT 16(C)(4)
BCT InternationaL, Inc. CONFIDENTIAL
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11.20.01
[LOGO]
PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
This presentation and its analyses are only for the use of the Special Committee
of the Board of Directors and are not intended to, nor should they be, relied
upon by any other party, including shareholders of the Company. The consent of
Capitalink is required prior to the disclosure to any third party of this
presentation, its analyses, or of the assessments made by Capitalink. These
materials are based solely on information contained in publicly available
documents and certain other information provided to Capitalink by management and
the Special Committee. Capitalink has not attempted to investigate or verify the
accuracy or completeness of such publicly available information or other
information provided to Capitalink. Capitalink has relied upon the accuracy and
completeness of such publicly available information and other information
supplied to Capitalink. These materials are being furnished, and should be
considered only in connection with, the oral presentation being provided by
Capitalink in connection herewith. The preparation of these materials was
completed on November 16, 2001 based on information publicly available or
supplied to Capitalink through such date (except that Capitalink reviewed two
draft Agreements and Plans of Merger dated November 19 and 20, 2001). Capitalink
is not obligated to update this presentation or its analyses to reflect any
information that becomes publicly available or that is provided to Capitalink
after such date.
[LOGO]
Smart Investment Banking (SM)
BCT InternationaL, Inc. CONFIDENTIAL
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TABLE OF CONTENTS
TRANSACTION OVERVIEW ......................... 3
OVERVIEW OF COMPANY .......................... 15
VALUATION ANALYSIS ........................... 32
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TRANSACTION OVERVIEW
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BCT InternationaL, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
INTRODUCTION
. The Special Committee of the Board of Directors of BCT International,
Inc. ("BCT" or the "Company") has retained Capitalink, L.C.
("Capitalink") to render an opinion as to the fairness, from a
financial point of view, of a proposal by Phoenix Group of Florida,
Inc. ("Phoenix") to purchase, by means of merger to be voted on by
the Company's stockholders, all of the Company's outstanding common
stock that is not beneficially owned by Phoenix or William A.
Wilkerson ("Wilkerson"), or their respective affiliates (collectively
the "Phoenix Group") (the "Proposed Transaction").
. The Company's common stock is publicly traded on the over-the-counter
market under the symbol "BCTI", and as of August 31, 2001, there were
approximately 5,121,000 shares of the Company's common stock
outstanding (excluding treasury shares).
. The closing price of the Company's stock on November 16, 2001 (date
presentation materials completed) and September 20, 2001 (date first
offer was communicated) was $0.69 and $0.65, respectively.
. The consideration proposed by Phoenix is $1.13 in cash for each share
of the Company's common stock not beneficially owned by the Phoenix
Group.
. Wilkerson, who is also the Company's Chairman and Chief Executive
Officer, owns Phoenix.
. As reported in the Schedule 13D/A filed by the Phoenix Group on
September 7, 2001, Phoenix beneficially owns 2,702,312 shares of
common stock or 51.6% of the issued and outstanding common stock and
Wilkerson beneficially owns 62,675 shares of common stock or 1.2% of
the issued and outstanding common stock. In addition, Wilkerson has
an option to acquire an additional 330,000 shares of the common stock
pursuant to the Company's employee option plan. If this option were
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BCT InternationaL, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
INTRODUCTION
exercised Wilkerson would be the owner of 392,675 shares of common
stock or 7.1% of the issued and outstanding common stock.
. As reported in the Schedule 13D/A on or about September 1, 2001,
Phoenix entered into various oral agreements to privately purchase an
aggregate of 288,858 shares of common stock from several shareholders
for a purchase price of $0.90 per share. In addition, Phoenix
reported that it had exercised a previously disclosed option dated
May 31, 2001 to purchase 623,782 shares from a private shareholder
for a purchase price of $1.75 per share.
. In connection with its purchases Phoenix borrowed certain funds
pursuant to a $2,000,000 bank credit facility. As reported in the
Company's Form 8-K filed on August 31, 2001, as a condition of the
borrowing, the Company agreed to provide a corporate guaranty,
including a pledge of substantially all of the Company assets.
Wilkerson requested that the Company provide this guaranty. The
Company formed a Special Committee of the Board of Directors
consisting of Jeffrey Hewson and Phil Pisciotta to consider this
request. Acting on the Special Committee's recommendation, the
Company entered into an agreement with Phoenix and Wilkerson (the
"Phoenix Agreement") to provide the corporate guaranty on the
conditions that:
1. The last year of Wilkerson's employment agreement with the
Company was eliminated, so that the agreement now terminates on
February 28, 2002.
2. Wilkerson and Phoenix, jointly and severally, agreed to (i)
grant the Company an assignable one-year option to repurchase
all of the shares of the Company's common stock bought with the
borrowed funds at the same price paid by Phoenix and (ii) pay
the Company's expenses incurred in connection with the
transaction described below, unless (a) Wilkerson and/or Phoenix
make an offer (which may be contingent upon the receipt of
financing) on or before
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
INTRODUCTION
September30, 2001, to purchase for cash all of the Company's
shares which are held by all other shareholders, and providing
for a closing of that transaction on or before April 15, 2002 and
(b) such transaction closes on terms deemed fair to the Company
and its shareholders by the Special Committee.
3. Wilkerson and Phoenix, jointly and severally, agreed to
immediately reimburse the Company and its subsidiary (Business
Cards Tomorrow, Inc.) for all payments the Company (and its
subsidiary) make pursuant to the corporate guaranty described
above. As collateral for their reimbursement obligations,
Wilkerson and Phoenix granted to the Company a first priority
security interest in any and all shares of the Company's common
stock which Phoenix purchases with the borrowed funds and a
subordinated security interest in the 935,382 shares of the
Company's common stock already owned by Phoenix and pledged to
the bank.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
SUMMARY OF PROPOSED TRANACTIONS TERMS
Price: $1.13 per share.
Transaction Structure: The Phoenix Group will acquire the
outstanding common stock of the Company
that it does not own through a merger
with a wholly owned subsidiary of
Phoenix with the Company, which shall
continue to operate under the name BCT
International, Inc.
Estimated Timetable: The agreement is terminable by either
party if not consummated on or prior to
April 15, 2002.
Dissenters Rights: The consummation of the proposed
transaction is conditioned, among other
things, on holders of no more than 25%
of the Company's outstanding common
stock exercising their right to dissent
from the Proposed Transaction, under
the Delaware General Corporation Law
(the "DGCL"). To the extent provided by
the DGCL, Phoenix will not make any
payment of merger consideration with
respect to shares held by any person
who elects to demand appraisal of such
dissenting stockholder's shares and
duly and timely complies with all the
provisions of the DGCL concerning the
right of holders of shares to require
appraisal of their shares, but such
dissenting stockholders shall have the
right to receive such consideration as
may be determined to be due such
dissenting stockholders pursuant to the
DGCL.
Stock Options: The Company will take necessary action
to cause all outstanding options to
terminate and expire upon consummation
of the Proposed Transaction. Any shares
issued prior to closing pursuant to the
exercise of options will be acquired at
$1.13 per share. Notwithstanding the
foregoing, no
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
SUMMARY OF PROPOSED TRANACTIONS TERMS
consideration shall be paid with respect to Company options
beneficially owned by Wilkerson.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION
. May 21, 2001: Wilkerson acquires an option to purchase 623,782
shares of the Company's common stock at an exercise price of
$1.75 per share from a private shareholder.
. June 19, 2001: A special committee was formed consisting of
Jeffrey Hewson and Phil Pisciotta.
. June 29, 2001: Wilkerson files an amended Form 13D disclosing the
option and that he is considering various alternative courses of
action with respect to the management and ongoing operations of
the Company, including without limitation: (i) the acquisition of
additional common stock of the Company; (ii) the acquisition of
all or substantially all of the assets of the Company or all of
the remaining outstanding Common Stock of the Company (whether by
means of a merger or another form of transaction); (iii) meetings
and discussions with the Board of Directors of the Company (on
which Wilkerson already serves) with the intent to influence the
Company's business and affairs in this regard; and (iv) any other
activities deemed by Wilkerson to be effective for the purpose of
so influencing the business and affairs of the Company.
. August 9, 2001: The Company enters into the Phoenix Agreement
with Phoenix and Wilkerson in which the Company guarantees a
$2,000,000 loan for the benefit of Phoenix and Wilkerson.
. August 22, 2001: Phoenix and Wilkerson jointly file a Form 13D
disclosing that Wilkerson transferred 935,582 shares of common
stock to Phoenix and that Phoenix acquired the rights to purchase
618,442 shares of Common Stock at a price of $1.50 per share from
a private shareholder. In addition, the Form 13D discloses that
on August 20 and 21, 2001, Phoenix purchased 237,848 shares of
common stock in private transactions for an aggregate purchase
price of $214,063 ($.90 per share).
. August 31, 2001: The Company files a Form 8-K disclosing the
Phoenix Agreement.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION
. September 7, 2001: Phoenix and Wilkerson file an amended Schedule
13D disclosing, among other things, private purchases totaling
288,858 shares of common stock at a purchase price of $0.90 per
share.
. September 10, 2001: On September 10, 2001, the Company's common
stock was delisted from NASDAQ National Market based on its
failure to meet the minimum market value public float requirement
of $5 million and began trading on the OTC Bulletin Board.
. September 20, 2001: Offer letter from Phoenix to the Company's
Board indicating a proposal to acquire the Company's outstanding
stock not owned or controlled by the Phoenix Group for $0.85 per
share in cash. The Special Committee retains Capitalink to
provide the fairness opinion in connection with the Proposed
Transaction. Capitalink provides Special Committee with document
request list.
. October 4, 2001: Capitalink reviews with the Special Committee
its preliminary analysis of the Proposed Transaction and the
potential valuation range of the Company.
. October 16, 2001: Conference call for Capitalink to update the
Special Committee on its findings.
. October 18, 2001: Conference call for Capitalink to update the
Special Committee on its findings.
. October 22, 2001: Special Committee receives verbal offer
increasing per share consideration to $0.95.
. October 24, 2001: Conference call for Capitalink to update the
Special Committee on its findings.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
BACKGROUND OF AND EVENTS LEADING TO PROPOSED TRANSACTION
. October 26, 2001: Special Committee receives verbal offer
increasing per share consideration to $1.10.
. November 1, 2001: Conference call for Capitalink to update the
Special Committee on its findings.
. November 5, 2001: Special Committee receives written offer
increasing per share consideration to $1.13.
. November 7, 2001: Conference call for the Special Committee to
discuss the $1.13 per share offer that has been verbally
communicated.
. November 15, 2001: Draft Agreement and Plan of Merger circulated
which includes the $1.13 per share offer.
. November 19, 2001: Amended Draft Agreement and Plan of Merger
circulated.
. November 20, 2001: Draft Final Agreement and Plan of Merger
circulated.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
SCOPE OF ENGAGEMENT
. The Special Committee has retained Capitalink to render an
opinion as to the fairness, from a financial point of view, of a
proposal by Phoenix to purchase, by means of a merger to be voted
on by the Company's stockholders, all of the Company's
outstanding common stock not beneficially owned by the Phoenix
Group.
. For purposes of rendering its opinion, Capitalink has:
. Reviewed documents relating to the Proposed
Transaction, including a draft Agreement and Plan of
Merger among Phoenix, Phoenix Acquisition Corp., and
the Company, as received on November 20, 2001 (the
"Agreement"). Capitalink assumes that the Proposed
Transaction will be consummated in accordance with the
terms described in the Agreement, and that any
revisions thereto will not be detrimental to the
Company or to the holders of its common stock, other
than the Phoenix Group.
. Reviewed publicly available financial information and
other data with respect to the Company, including the
Annual Report on Form 10-K for the fiscal year ended
February 28, 2001, the Quarterly Report on Form 10-Q
for the quarter ended August 31, 2001, the Current
Report on Form 8-K dated August 15, 2001, the amended
Schedule 13D dated June 20, 2001 filed by Wilkerson,
the Schedule 13D dated August 15, 2001 filed by Phoenix
and Wilkerson, the amended Schedule 13D dated August
29, 2001 filed by Steven N. Bronson, the amended
Schedule 13D dated September 1, 2001 filed by Phoenix
and Wilkerson, and certain other relevant financial and
operating data relating to the Company made available
to Capitalink.
. Reviewed and analyzed certain financial characteristics
of companies that were deemed to have characteristics
comparable to those of BCT (however, no companies were
deemed to be directly comparable to BCT).
. Reviewed and analyzed the premium to be paid in the
Proposed Transaction and premiums paid in certain other
transactions (however, no transactions were deemed to
be directly comparable to the Proposed Transaction).
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
SCOPE OF ENGAGEMENT
. Reviewed and discussed with representatives of the
management of BCT certain financial and operating
information furnished by them, including financial analyses
and projections and related assumptions with respect to the
business, operations and prospects of the Company.
. Considered the historical financial results and present
financial condition of BCT.
. Reviewed certain publicly available information concerning
the trading of, and the trading market for, the common
stock of BCT.
. Inquired about and discussed the Proposed Transaction and
other matters related thereto with BCT management, the
Special Committee and its legal counsel.
. Performed such other analyses and examinations as were
deemed appropriate
. The Capitalink opinion is necessarily based upon market, economic
and other conditions, as they exist on, and could be evaluated as
of, November 16, 2001. Accordingly, although subsequent
developments may affect its opinion, Capitalink does not assume
any obligation to update, review or reaffirm its opinion.
. Capitalink has relied upon and assumed the accuracy and
completeness of all of the financial and other information that
was used by it without assuming any responsibility for any
independent verification of any such information and has further
relied upon the assurances of Company management that it is not
aware of any facts or circumstances that would make any such
information inaccurate or misleading. With respect to the
financial projections utilized, Capitalink assumed that such
projections have been reasonably prepared on a basis reflecting
the best currently available estimates and judgments, and that
such projections provide a reasonable basis upon which it could
form an opinion.
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BCT International, Inc. CONFIDENTIAL
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TRANSACTION OVERVIEW
SCOPE OF ENGAGEMENT
. Capitalink has not made a physical inspection of the
properties and facilities of BCT, and has not made or
obtained any evaluations or appraisals of the assets and
liabilities (contingent or otherwise) of the Company.
. Capitalink assumed that the Proposed Transaction will be
consummated in a manner that complies in all respects with
the applicable provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended,
and all other applicable federal and state statues, rules
and regulations. In addition, based upon discussions with
the Company, it is assumed that the Proposed Transaction
will be a taxable event to the BCT shareholders.
. Capitalink has not been requested to opine as to, and the
opinion does not in any manner address, the underlying
business decision of BCT to proceed with or affect the
Proposed Transaction.
. Capitalink has not been requested to explore any
alternatives to the Proposed Transaction.
. The opinion does not intend to be and does not constitute a
recommendation to any shareholder of BCT as to how such
shareholder should vote with respect to the Proposed
Transaction if such matter is put before the shareholders.
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BCT International, Inc. CONFIDENTIAL
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OVERVIEW OF COMPANY
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BCT International, Inc. CONFIDENTIAL
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OVERVIEW OF COMPANY
SUMMARY
. The Company operates the Business Cards Tomorrow franchise
system, the world's largest wholesale franchise printing
chain.
. The Company was founded in 1975, and its franchises
specialize in thermography products, labels, rubber stamps
and business announcements for resale by retail printing
providers.
. Thermography is a specialized printing process that gives a
raised printing effect similar to engraving and requires
specialized equipment and operating techniques which
commercial printers, quick printers, office superstores and
other retail dealers choose not to invest in.
. The franchises typically operate through the placement of
business card, stationery, rubber stamp and labels catalogs
with commercial and retail "quick" printers, office
superstores, forms brokers, office supply companies and
stationers in the franchises' trade areas.
. Franchises specialize in the fast turnaround of their
products, delivering many items, such as business cards, in
one business day, with most products being delivered within
two days of the date of order.
. BCT's operations also include the Pelican Paper Products
Division ("PPP") that supplies paper products, press
supplies and press parts to the BCT franchises. PPP is a
primary supplier of paper products for the BCT franchises.
PPP purchases raw paper directly from paper mills and paper
brokers and utilizes the services of converters to convert
the raw material to finished paper products.
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BCT International, Inc. CONFIDENTIAL
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OVERVIEW OF COMPANY
SUMMARY
. PPP also performs converting and handling services for third
parties. PPP utilizes three public storage facilities located
strategically throughout the United States to house and ship out
paper products to the franchises.
. BCT derives revenues from five principal sources: (i) royalties,
which are based on a percentage of sales of the BCT franchises;
(ii) franchise fees from newly franchised franchises and resale
fees from the resale of operating franchises; (iii) sales of
paper products to franchisees; (iv) catalog and miscellaneous
equipment and parts sales classified as printing sales; and (v)
interest income from financing franchise acquisitions (primarily
resales) and receivables.
. Capitalink noted several general factors to be considered in
connection with the status of BCT as a publicly traded company:
. On September 10, 2001, the Company's common stock was
delisted from NASDAQ National Market based on its failure
to meet the minimum market value public float requirement
of $5 million and began trading on the OTC Bulletin Board.
. As noted hereinafter, the Company does not have a distinct
comparable peer group. For this reason, among others, the
Company does not have any analyst coverage.
. The Company's common stock historically has a limited
trading volume and therefore a lack of liquidity for the
Company's shareholders.
. The Company is not part of a high-growth industry that
attracts investor interest and a high trading multiple.
. The Company has not realized the benefits of public company
status (i.e., ability to raise capital, use of stock as
currency in acquisitions), but incurs the increased
expenses necessary to comply with reporting requirements
and other public company obligations.
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BCT International, Inc. CONFIDENTIAL
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OVERVIEW OF COMPANY
FINANCIAL REVIEW
. Capitalink reviewed the Company's historical financial data and
noted decreasing revenue both for the three months and the six
months ended August 31, 2001 as compared to the corresponding
periods in the prior fiscal year.
. Earnings from operations have decreased over the last two years
and, on an annualized basis, for the six months ended August 31,
2001.
. Capitalink also reviewed the Company's systemwide historical and
projected sales information. In addition, Capitalink also
reviewed Company projections for the fiscal years ending February
2002, 2003 and 2004.
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BCT International, Inc. CONFIDENTIAL
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OVERVIEW OF COMPANY
FINANCIAL REVIEW
Comparative Summary Income Statements
($ in thousands except per share)
for 6 months ended LTM
for years ended February 28/29, August 31, August 31,
------------------------------------------------- ------------------ ----------
1997 1998 1999 2000 2001 2000 2001 2001
------------------------------------------------- ------------------ ----------
Royalties and Franchise Fees $ 4,852 $ 4,921 $ 5,356 $ 5,394 $ 5,267 $ 2,757 $ 2,614 $ 5,124
Paper and Printing Sales 10,118 11,734 12,817 13,881 13,424 6,911 6,385 12,898
Sales of Franchises 40 44 87 27 46 24 22 44
Other Fees - - - - 262 169 173 266
------------------------------------------------- ------------------ ----------
Total Revenue 15,010 16,699 18,260 19,302 18,999 9,861 9,194 18,332
------------------------------------------------- ------------------ ----------
Cost of Paper and Printing Sales 8,823 9,857 10,939 11,574 11,605 5,877 5,527 11,255
Selling, General & Administrative 5,820 4,171 4,290 6,619 6,455 2,553 3,240 7,142
Depreciation and Amortization 247 199 186 189 232 101 114 245
------------------------------------------------- ------------------ ----------
Total Operating Expenses 14,890 14,227 15,415 18,382 18,292 8,531 8,881 18,642
------------------------------------------------- ------------------ ----------
Operating Income (Loss) 120 2,472 2,845 920 707 1,330 313 (310)
Interest Income (Expense) 206 321 340 336 381 100 139 420
Other Income (Expense) - 2 6 952 49 - - 49
------------------------------------------------- ------------------ ----------
Pre-tax Income (Loss) 326 2,795 3,191 2,208 1,137 1,430 452 159
Income Tax (Benefit) 54 986 690 837 442 557 176 61
------------------------------------------------- ------------------ ----------
Income (Loss) from Continuing Operations 272 1,809 2,501 1,371 695 873 276 98
Discontinued Operations, net of Taxes (657) (244) (327) (357) (31) (31) - -
------------------------------------------------- ------------------ ----------
Net Income (Loss) $ (385) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 842 $ 276 $ 98
================================================= ================== ==========
Property & Equipment Depreciation & Amortization $ 221 $ 173 $ 160 $ 163 $ 206 $ 87 $ 100 $ 219
================================================= ================== ==========
Total Depreciation & Amortization $ 247 $ 199 $ 186 $ 189 $ 232 $ 101 $ 114 $ 245
================================================= ================== ==========
Capital Expenditures, net of Disposals (CAPEX, net) $ 240 $ 88 $ 82 $ 262 $ 150 $ 132 $ 51 $ 69
================================================= ================== ==========
Basic Earnings Per Share:
From Continuing Operations $ 0.05 $ 0.35 $ 0.47 $ 0.26 $ 0.13 $ 0.17 $ 0.05 $ 0.01
================================================= ================== ==========
From Extraordinary Items $ (0.13) $ (0.05) $ (0.06) $ (0.07) $ (0.01) $ (0.01) $ - $ -
================================================= ================== ==========
Net Income (Loss) $ (0.08) $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02
================================================= ================== ==========
Weighted Average Shares Outstanding (thousands) 5,018 5,230 5,323 5,257 5,214 5,231 5,124
================================================= ==================
Diluted Earnings Per Share:
From Continuing Operations $ 0.05 $ 0.33 $ 0.45 $ 0.25 $ 0.13 $ 0.17 $ 0.05 $ 0.01
================================================= ================== ==========
From Extraordinary Items $ (0.13) $ (0.04) $ (0.06) $ (0.07) $ (0.01) $ (0.01) $ - $ -
================================================= ================== ==========
Net Income (Loss) $ (0.08) $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02
================================================= ================== ==========
Weighted Average Shares Outstanding (thousands) 5,018 5,540 5,596 5,388 5,235 5,246 5,124
================================================= ==================
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Sources of information: Company Financial Statements and Management
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OVERVIEW OF COMPANY
FINANCIAL REVIEW
Common Sized Summary Income Statements
for 6 months ended LTM
for years ended February 28/29, August 31, August 31,
-------------------------------------------- ------------------ ----------
1997 1998 1999 2000 2001 2000 2001 2001
-------------------------------------------- ------------------ ----------
Royalties and Franchise Fees 32.3% 29.5% 29.3% 27.9% 27.7% 28.0% 28.4% 28.0%
Paper and Printing Sales 67.4% 70.3% 70.2% 71.9% 70.7% 70.1% 69.4% 70.4%
Sales of Franchises 0.3% 0.3% 0.5% 0.1% 0.2% 0.2% 0.2% 0.2%
Other Fees 0.0% 0.0% 0.0% 0.0% 1.4% 1.7% 1.9% 1.5%
-------------------------------------------- ------------------ ----------
Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
-------------------------------------------- ------------------ ----------
Cost of Paper and Printing Sales 58.8% 59.0% 59.9% 60.0% 61.1% 59.6% 60.1% 61.4%
Selling, General & Administrative 38.8% 25.0% 23.5% 34.3% 34.0% 25.9% 35.2% 39.0%
Depreciation and Amortization 1.6% 1.2% 1.0% 1.0% 1.2% 1.0% 1.2% 1.3%
-------------------------------------------- ------------------ ----------
Total Operating Expenses 99.2% 85.2% 84.4% 95.2% 96.3% 86.5% 96.6% 101.7%
-------------------------------------------- ------------------ ----------
Operating Income (Loss) 0.8% 14.8% 15.6% 4.8% 3.7% 13.5% 3.4% -1.7%
Interest Income (Expense) 1.4% 1.9% 1.9% 1.7% 2.0% 1.0% 1.5% 2.3%
Other Income (Expense) 0.0% 0.0% 0.0% 4.9% 0.3% 0.0% 0.0% 0.3%
-------------------------------------------- ------------------ ----------
Pre-tax Income (Loss) 2.2% 16.7% 17.5% 11.4% 6.0% 14.5% 4.9% 0.9%
Income Tax (Benefit) 0.4% 5.9% 3.8% 4.3% 2.3% 5.6% 1.9% 0.3%
-------------------------------------------- ------------------ ----------
Income (Loss) from Continuing Operations 1.8% 10.8% 13.7% 7.1% 3.7% 8.9% 3.0% 0.5%
Discontinued Operations, net of Taxes -4.4% -1.5% -1.8% -1.8% -0.2% -0.3% 0.0% 0.0%
-------------------------------------------- ------------------ ----------
Net Income (Loss) -2.6% 9.4% 11.9% 5.3% 3.5% 8.5% 3.0% 0.5%
============================================ ================== ==========
Property & Equipment Depreciation & Amortization 1.5% 1.0% 0.9% 0.8% 1.1% 0.9% 1.1% 1.2%
============================================ ================== ==========
Total Depreciation & Amortization 1.6% 1.2% 1.0% 1.0% 1.2% 1.0% 1.2% 1.3%
============================================ ================== ==========
Capital Expenditures, net of Disposals (CAPEX, net) 1.6% 0.5% 0.4% 1.4% 0.8% 1.3% 0.6% 0.4%
============================================ ================== ==========
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Sources of information: Company Financial Statements and Management
Page 20
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OVERVIEW OF COMPANY
FINANCIAL REVIEW
Comparative Summary Balance Sheets
($ in thousands, except per share)
as of February 28/29, as of August 31,
-------------------------------------------------- --------------------
1997 1998 1999 2000 2001 2000 2001
-------------------------------------------------- --------------------
Assets
Current Assets
Cash & Equivalents $ 314 $ 989 $ 1,143 $ 1,906 $ 1,799 $ 1,316 $ 3,170
Accounts and Notes Receivable, net 1,641 2,418 3,252 3,293 3,568 3,100 2,043
Inventory 2,468 2,354 2,122 2,359 2,352 2,648 2,375
Deferred Income Taxes 312 919 476 482 321 408 321
Prepaid & Other 523 950 1,281 408 134 351 261
-------------------------------------------------- --------------------
Total Current Assets 5,258 7,630 8,274 8,448 8,174 7,823 8,170
Property & Equipment 1,437 1,331 1,442 1,633 1,707 1,690 1,759
Less Accumulated Depreciation (675) (794) (982) (1,104) (1,234) (1,119) (1,336)
-------------------------------------------------- --------------------
Property & Equipment, net 762 537 460 529 473 571 423
Accounts and Notes Receivable, net 3,209 5,376 6,052 7,275 6,362 7,635 6,511
Deferred Income Taxes 1,569 214 246 722 925 819 809
Intangible Assets, net 337 311 284 258 232 245 219
Other Assets 94 89 90 89 24 24 24
-------------------------------------------------- --------------------
$ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156
================================================== ====================
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 1,032 $ 1,264 $ 844 $ 1,111 $ 597 $ 950 $ 286
Accrued Expenses 291 777 753 1,349 403 604 563
Interest Bearing Debt 49 105 113 104 86 104 86
Interest Bearing Debt, Affiliates - - - - - - -
Other 272 339 311 218 167 218 167
-------------------------------------------------- --------------------
Total Current Liabilities 1,644 2,485 2,021 2,782 1,253 1,876 1,102
Long Term Interest Bearing Debt 215 539 433 330 236 271 194
Long Term Interest Bearing Debt,
Affiliates - - - - - - -
Other Long Term - - - 453 417 372 320
-------------------------------------------------- --------------------
Total Liabilities 1,859 3,024 2,454 3,565 1,906 2,519 1,616
Stockholders' Equity
Preferred Stock 60 60 60 - - - -
Common Stock 216 223 230 233 233 233 233
Paid in Capital 12,056 12,254 12,506 12,597 12,597 12,597 12,605
Accumulated Earnings (Deficit) (2,403) (845) 1,322 2,334 2,998 3,176 3,274
Treasury Stock (559) (559) (1,166) (1,408) (1,544) (1,408) (1,572)
-------------------------------------------------- --------------------
Total Stockholders' Equity 9,370 11,133 12,952 13,756 14,284 14,598 14,540
-------------------------------------------------- --------------------
$ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156
================================================== ====================
Net Working Capital $ 3,614 $ 5,145 $ 6,253 $ 5,666 $ 6,921 $ 5,947 $ 7,068
================================================== ====================
Book Value per Share $ 1.81 $ 2.09 $ 2.46 $ 2.68 $ 2.78 $ 2.79 $ 2.84
================================================== ====================
- --------------------------------------------------------------------------------
Sources of information: Company Financial Statements and Management
Page 21
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
FINANCIAL REVIEW
Common Sized Summary Balance Sheets
as of February 28/29, as of August 31,
---------------------------------------- ----------------
1997 1998 1999 2000 2001 2000 2001
---------------------------------------- ----------------
Assets
Current Assets
Cash & Equivalents 2.8% 7.0% 7.4% 11.0% 11.1% 7.7% 19.6%
Accounts and Notes Receivable, net 14.6% 17.1% 21.1% 19.0% 22.0% 18.1% 12.6%
Inventory 22.0% 16.6% 13.8% 13.6% 14.5% 15.5% 14.7%
Deferred Income Taxes 2.8% 6.5% 3.1% 2.8% 2.0% 2.4% 2.0%
Prepaid & Other 4.7% 6.7% 8.3% 2.4% 0.8% 2.1% 1.6%
---------------------------------------- ----------------
Total Current Assets 46.8% 53.9% 53.7% 48.8% 50.5% 45.7% 50.6%
Property & Equipment 12.8% 9.4% 9.4% 9.4% 10.5% 9.9% 10.9%
Less Accumulated Depreciation -6.0% -5.6% -6.4% -6.4% -7.6% -6.5% -8.3%
---------------------------------------- ----------------
Property & Equipment, net 6.8% 3.8% 3.0% 3.1% 2.9% 3.3% 2.6%
Accounts and Notes Receivable, net 28.6% 38.0% 39.3% 42.0% 39.3% 44.6% 40.3%
Deferred Income Taxes 14.0% 1.5% 1.6% 4.2% 5.7% 4.8% 5.0%
Intangible Assets, net 3.0% 2.2% 1.8% 1.5% 1.4% 1.4% 1.4%
Other Assets 0.8% 0.6% 0.6% 0.5% 0.1% 0.1% 0.1%
---------------------------------------- ----------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
======================================== ================
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable 9.2% 8.9% 5.5% 6.4% 3.7% 5.6% 1.8%
Accrued Expenses 2.6% 5.5% 4.9% 7.8% 2.5% 3.5% 3.5%
Interest Bearing Debt 0.4% 0.7% 0.7% 0.6% 0.5% 0.6% 0.5%
Interest Bearing Debt, Affiliates 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other 2.4% 2.4% 2.0% 1.3% 1.0% 1.3% 1.0%
---------------------------------------- ----------------
Total Current Liabilities 14.6% 17.6% 13.1% 16.1% 7.7% 11.0% 6.8%
Long Term Interest Bearing Debt 1.9% 3.8% 2.8% 1.9% 1.5% 1.6% 1.2%
Long Term Interest Bearing Debt, Affiliates 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Long Term 0.0% 0.0% 0.0% 2.6% 2.6% 2.2% 2.0%
---------------------------------------- ----------------
Total Liabilities 16.6% 21.4% 15.9% 20.6% 11.8% 14.7% 10.0%
Stockholders' Equity
Preferred Stock 0.5% 0.4% 0.4% 0.0% 0.0% 0.0% 0.0%
Common Stock 1.9% 1.6% 1.5% 1.3% 1.4% 1.4% 1.4%
Paid in Capital 107.4% 86.6% 81.2% 72.7% 77.8% 73.6% 78.0%
Accumulated Earnings (Deficit) -21.4% -6.0% 8.6% 13.5% 18.5% 18.6% 20.3%
Treasury Stock -5.0% -3.9% -7.6% -8.1% -9.5% -8.2% -9.7%
---------------------------------------- ----------------
Total Stockholders' Equity 83.4% 78.6% 84.1% 79.4% 88.2% 85.3% 90.0%
---------------------------------------- ----------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
======================================== ================
Net Working Capital 32.2% 36.3% 40.6% 32.7% 42.7% 34.7% 43.7%
======================================== ================
- -------------------------------------------------------------------------------
Sources of information: Company Financial Statements and Management
Page 22
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
FINANCIAL REVIEW
Comparative Financial Analysis
($ in thousands, except per share)
as of & as of &
for 6 months for LTM
as of & for years ended February 28/29, ended August 31, August 31,
------------------------------------------------- ------------------ ----------
1997 1998 1999 2000 2001 2000 2001 2001
------------------------------------------------- ------------------ ----------
Financial Review
Revenue $ 15,010 $ 16,699 $ 18,260 $ 19,302 $ 18,999 $ 9,861 $ 9,194 $ 18,332
Paper and Printing Sales Gross Margin $ 1,295 $ 1,877 $ 1,878 $ 2,307 $ 1,819 $ 1,034 $ 858 $ 1,643
Operating Income $ 120 $ 2,472 $ 2,845 $ 920 $ 707 $ 1,330 $ 313 $ (310)
Pre-tax Income (Loss) $ 326 $ 2,795 $ 3,191 $ 2,208 $ 1,137 $ 1,430 $ 452 $ 159
Profit (Loss) from Continuing Operations $ 272 $ 1,809 $ 2,501 $ 1,371 $ 695 $ 873 $ 276 $ 98
Net Income (Loss) $ (385) $ 1,565 $ 2,174 $ 1,014 $ 664 $ 842 $ 276 $ 98
Earnings before Interest & Taxes (EBIT) $ 120 $ 2,474 $ 2,851 $ 1,872 $ 756 $ 1,330 $ 313 $ (261)
Earnings before Interest, Tax, Deprec $ 367 $ 2,673 $ 3,037 $ 2,061 $ 988 $ 1,431 $ 427 $ (16)
& Amort (EBITDA)
Basic Earnings Per Share $ (0.08) $ 0.30 $ 0.41 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02
Diluted Earnings Per Share $ (0.08) $ 0.28 $ 0.39 $ 0.19 $ 0.13 $ 0.16 $ 0.05 $ 0.02
Total Assets $ 11,229 $ 14,157 $ 15,406 $ 17,321 $ 16,190 $ 17,117 $ 16,156 $ 16,156
Net Worth $ 9,370 $ 11,133 $ 12,952 $ 13,756 $ 14,284 $ 14,598 $ 14,540 $ 14,540
Tangible Net Worth $ 9,033 $ 10,822 $ 12,668 $ 13,498 $ 14,052 $ 14,353 $ 14,321 $ 14,321
Total Interest Bearing Debt $ 264 $ 644 $ 546 $ 434 $ 322 $ 375 $ 280 $ 280
Net Interest Bearing Debt $ (50) $ (345) $ (597) $ (1,472) $ (1,477) $ (941) $ (2,890) $ (2,890)
Total Capitalization $ 9,634 $ 11,777 $ 13,498 $ 14,190 $ 14,606 $ 14,973 $ 14,820 $ 14,820
Common Shares Outstanding (thousands) 5,184 5,322 5,257 5,231 5,136 5,231 5,121 5,121
Book Value per Share $ 1.81 $ 2.09 $ 2.46 $ 2.68 $ 2.78 $ 2.79 $ 2.84 $ 2.84
Tangible Book Value per Share $ 1.74 $ 2.03 $ 2.41 $ 2.58 $ 2.74 $ 2.74 $ 2.80 $ 2.80
Financial Strength
Quick Ratio 1.7 2.1 3.0 2.2 4.6 2.8 5.3 5.3
Current Ratio 3.2 3.1 4.1 3.0 6.5 4.2 7.4 7.4
Total Liabilities to Net Worth 19.8% 27.2% 18.9% 25.9% 13.3% 17.3% 11.1% 11.1%
Total Interest Bearing Debt to Net Worth 2.8% 5.8% 4.2% 3.2% 2.3% 2.6% 1.9% 1.9%
Total Interest Bearing Debt to Total
Capitalization 2.7% 5.5% 4.0% 3.1% 2.2% 2.5% 1.9% 1.9%
Net Interest Bearing Debt to Total Capitalization -0.5% -2.9% -4.4% -10.4% -10.1% -6.3% -19.5% -19.5%
Interest Expense to Interest Bearing Debt na na na na na na na na
Total Interest Bearing Debt to EBITDA 0.7 0.2 0.2 0.2 0.3 0.3 0.7 na
EBITDA to Interest Expense na na na na na na na na
EBITDA less CAPEX, net to Interest Expense na na na na na na na na
Effectiveness and Efficiency
Accounts Receivable Turnover na 8.2 6.4 5.9 5.5 3.1 3.3 7.1
Inventory Turnover na 4.1 4.9 5.2 4.9 2.3 2.3 4.5
Asset Turnover na 1.3 1.2 1.2 1.1 0.6 0.6 1.1
Days Sales Outstanding na 44.4 56.7 61.9 65.9 59.6 56.1 51.2
Days Inventory Outstanding na 89.3 74.7 70.7 74.1 78.4 79.1 81.4
Days Payable Outstanding na 27.4 23.4 17.1 12.1 22.5 9.3 12.3
EBIT to Average Assets na 19.5% 19.3% 11.4% 4.5% na na -1.6%
EBIT to Average Net Worth na 24.1% 23.7% 14.0% 5.4% na na -1.8%
EBITDA to Average Assets na 21.1% 20.5% 12.6% 5.9% na na -0.1%
EBITDA to Average Net Worth na 26.1% 25.2% 15.4% 7.0% na na -0.1%
Net Income to Average Assets na 12.3% 14.7% 6.2% 4.0% na na 0.6%
Net Income to Average Net Worth na 15.3% 18.1% 7.6% 4.7% na na 0.7%
- --------------------------------------------------------------------------------
Sources of information: Company Financial Statements and Management
Page 23
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
FINANCIAL REVIEW
Comparative Financial Analysis Continued
($ in thousands, except per share)
as of & as of &
for 6 months for LTM
as of & for years ended February 28/29, ended August 31, August 31,
------------------------------------------------- ------------------ ----------
1997 1998 1999 2000 2001 2000 2001 2001
------------------------------------------------- ------------------ ----------
Profitability Ratios
Paper and Printing Sales Gross Margin 12.8% 16.0% 14.7% 16.6% 13.6% 15.0% 13.4% 12.7%
The following Ratios are as % of Revenue
SG&A 38.8% 25.0% 23.5% 34.3% 34.0% 25.9% 35.2% 39.0%
Operating Income 0.8% 14.8% 15.6% 4.8% 3.7% 13.5% 3.4% -1.7%
Pre-tax Income (Loss) 2.2% 16.7% 17.5% 11.4% 6.0% 14.5% 4.9% 0.9%
Profit (Loss) from Continuing Operations 1.8% 10.8% 13.7% 7.1% 3.7% 8.9% 3.0% 0.5%
Net Income (Loss) -2.6% 9.4% 11.9% 5.3% 3.5% 8.5% 3.0% 0.5%
EBIT 0.8% 14.8% 15.6% 9.7% 4.0% 13.5% 3.4% -1.4%
EBITDA 2.4% 16.0% 16.6% 10.7% 5.2% 14.5% 4.6% -0.1%
Growth Rates
Revenue na 11.3% 9.3% 5.7% -1.6% na -6.8% -3.5%
Operating Income na 1960.0% 15.1% -67.7% -23.2% na -76.5% -143.8%
Pre-tax Income (Loss) na 757.4% 14.2% -30.8% -48.5% na -68.4% -86.0%
Profit (Loss) from Continuing Operations na 565.1% 38.3% -45.2% -49.3% na -68.4% -85.9%
Net Income (Loss) na na 38.9% -53.4% -34.5% na -67.2% -85.2%
EBIT na 1961.7% 15.2% -34.3% -59.6% na -76.5% -134.5%
EBITDA na 628.3% 13.6% -32.1% -52.1% na -70.2% -101.6%
Basic Earnings Per Share na na 36.7% -53.7% -31.6% na -68.8% -84.6%
Diluted Earnings Per Share na na 39.3% -51.3% -31.6% na -68.8% -84.6%
Total Assets na 26.1% 8.8% 12.4% -6.5% na -5.6% -0.2%
Net Worth na 18.8% 16.3% 6.2% 3.8% na -0.4% 1.8%
Tangible Net Worth na 19.8% 17.1% 6.6% 4.1% na -0.2% 1.9%
CAPEX, net na -63.3% -6.8% 219.5% -42.7% na -61.4% -54.0%
Cumulative Average Growth Rate (CAGR) Statistics
Revenue na 11.3% 10.3% 8.7% 6.1% na na na
Operating Income na 1960.0% 386.9% 97.2% 55.8% na na na
Pre-tax Income (Loss) na 757.4% 212.9% 89.2% 36.7% na na na
Profit (Loss) from Continuing Operations na 565.1% 203.2% 71.5% 26.4% na na na
Net Income (Loss) na na na na na na na na
EBIT na 1961.7% 387.4% 149.9% 58.4% na na na
EBITDA na 628.3% 187.7% 77.7% 28.1% na na na
Basic Earnings Per Share na na na na na na na na
Diluted Earnings Per Share na na na na na na na na
Total Assets na 26.1% 17.1% 15.5% 9.6% na na na
Net Worth na 18.8% 17.6% 13.7% 11.1% na na na
Tangible Net Worth na 19.8% 18.4% 14.3% 11.7% na na na
CAPEX, net na -63.3% -41.5% 3.0% -11.1% na na na
Depreciation & Capital Spending
Depreciation to CAPEX, net 92.1% 196.6% 195.1% 62.2% 137.3% 65.9% 196.1% 317.4%
CAPEX, net to Revenue 1.6% 0.5% 0.4% 1.4% 0.8% 1.3% 0.6% 0.4%
- --------------------------------------------------------------------------------
Sources of information: Company Financial Statements and Management
Page 24
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
FINANCIAL REVIEW
Systemwide Actual and Projected Sales Review
Sales
----------------------------------------------------------------------------------
Actual Projected
------------------------------------------ ---------------------------------------
FY 1999 FY 2000 FY 2001 FY2002 FY 2003 FY 2004
------------------------------------------ ---------------------------------------
Printing Sales
Systemwide $105,328,121 $107,685,767 $107,185,301 $101,551,214 $ 94,688,309 $ 93,826,516
Number of Plants 87 86 87 83 74 74
Highest Plant $ 3,595,387 $ 3,806,428 $ 3,723,336 $ 3,663,390 $ 3,844,675 $ 4,036,909
Average Plant $ 1,210,668 $ 1,237,767 $ 1,232,015 $ 1,167,255 $ 1,088,371 $ 1,078,466
Median Plant $ 972,334 $ 1,045,389 $ 1,125,191 $ 1,007,492 $ 914,929 $ 875,628
Lowest Plant (1) $ 12,785 $ 12,542 $ 68,330 $ 77,763 $ 73,875 $ 77,569
Total Top 10 Plants $ 27,029,595 $ 28,114,873 $ 27,146,357 $ 26,810,424 $ 27,156,727 $ 27,691,457
Total Top 20 Plants $ 45,156,731 $ 46,974,683 $ 46,045,662 $ 44,955,726 $ 45,064,845 $ 45,611,841
Total Top 30 Plants $ 59,478,452 61,625,333 $ 60,668,063 $ 59,597,446 $ 59,648,800 $ 60,188,854
As % of Total Plants Sales
Top 10 Plants 25.66% 26.11% 25.33% 26.40% 28.68% 29.51%
Top 20 Plants 42.87% 43.62% 42.96% 44.27% 47.59% 48.61%
Top 30 Plants 56.47% 57.23% 56.60% 58.69% 62.99% 64.15%
Growth Compound Growth
--------------------------------------------------- -------------------
Actual Projected Actual Projected
--------------------------------------------------- -------------------
FY 2000 FY 2001 5mFY02 FY 2002 FY 2003 FY 2004 '99-'01 '99-'04
--------------------------------------------------- -------------------
Printing Sales
Systemwide 2.24% -0.46% -5.01% -5.26% -6.76% -0.91% 0.88% -2.89%
Number of Plants -1.15% 1.16% na -10.84% -10.84% 0.00% 0.00% -3.19%
Highest Plant 5.87% -2.18% na 4.95% 4.95% 5.00% 1.76% 2.34%
Average Plant 2.24% -0.46% na -6.76% -6.76% -0.91% 0.88% -2.29%
Median Plant 7.51% 7.63% na -9.19% -9.19% -4.30% 7.57% -2.07%
Lowest Plant (1) -1.90% 444.81% na -5.00% -5.00% 5.00% 131.18% 43.42%
Total Top 10 Plants 4.02% -3.44% na 1.29% 1.29% 1.97% 0.22% 0.49%
Total Top 20 Plants 4.03% -1.98% na 0.24% 0.24% 1.21% 0.98% 0.20%
Total Top 30 Plants 3.61% -1.55% na 0.09% 0.09% 0.91% 1.00% 0.24%
As % of Total Plants Sales
Top 10 Plants
Top 20 Plants
Top 30 Plants
Sales
-------------------------------------------------------------------------------
Actual Projected
------------------------------------- ----------------------------------------
FY 1999 FY 2000 FY 2001 FY2002 FY 2003 FY 2004
------------------------------------- ----------------------------------------
Paper Sales
Systemwide na $13,641,759 $13,455,224 $12,557,761 $11,720,158 $10,938,423
Highest Plant na $ 562,184 $ 576,980 $ 538,495 $ 502,578 $ 469,056
Average Plant na $ 152,593 $ 154,658 $ 144,342 $ 134,714 $ 125,729
Median Plant na $ 126,770 $ 132,394 $ 123,563 $ 115,322 $ 107,630
Lowest Plant (1) na $ 25,670 $ 20,593 $ 19,219 $ 17,938 $ 16,741
Total Top 10 Plants na $ 3,831,955 $ 3,820,878 $ 3,566,025 $ 3,328,172 $ 3,106,182
Total Top 20 Plants na $ 6,142,096 $ 6,192,476 $ 5,779,438 $ 5,393,949 $ 5,034,173
Total Top 30 Plants na $ 7,966,964 $ 8,050,597 $ 7,513,622 $ 7,012,464 $ 6,544,732
As % of Total Plants Sales
Top 10 Plants na 28.9% 28.4% 28.4% 28.4% 28.4%
Top 20 Plants na 46.3% 46.0% 46.0% 46.0% 46.0%
Top 30 Plants na 60.0% 59.8% 59.8% 59.8% 59.8%
Growth Compound Growth
---------------------------------------------------- -------------------
Actual Projected Actual Projected
------------------------- -------------------------- -------------------
FY 2000 FY 2001 5mFY02 FY 2002 FY 2003 FY 2004 '00-'01 '00-'04
------------------------- -------------------------- -------------------
Paper Sales
Systemwide na -1.37% 17.23% -6.67% -6.67% -6.67% -1.37% -5.37%
Highest Plant na 2.63% na -6.67% -6.67% -6.67% 2.63% -4.43%
Average Plant na 1.35% na -6.67% -6.67% -6.67% 1.35% -4.73%
Median Plant na 4.44% na -6.67% -6.67% -6.67% 4.44% -4.01%
Lowest Plant (1) na -19.78% na -6.67% -6.67% -6.67% -19.78% -10.14%
Total Top 10 Plants na -0.29% na -6.67% -6.67% -6.67% -0.29% -5.11%
Total Top 20 Plants na 0.82% na -6.67% -6.67% -6.67% 0.82% -4.85%
Total Top 30 Plants na 1.05% na -6.67% -6.67% -6.67% 1.05% -4.80%
As % of Total Plants Sales
Top 10 Plants na 28.9% 28.4% 28.4% 28.4% 28.4%
Top 20 Plants na 46.3% 46.0% 46.0% 46.0% 46.0%
Top 30 Plants na 60.0% 59.8% 59.8% 59.8% 59.8%
- --------------------------------------------------------------------------------
(1) Excludes Plants with no reported sales.
Sources of information: Company Financials, Projections and Management.
Page 25
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
. Capitalink reviewed the daily closing market price and trading
volume of the BCT common stock over the period from November 16,
2000 through November 16, 2001.
. Capitalink compared the daily closing market price performance of
the BCT common stock for such period to both the Comparable
Companies (as defined hereinafter) and the Russell 3000 Index.
. Capitalink calculated total trading volumes at various closing
price ranges of BCT common stock. In addition, the number of
trading days, and the respective percentages, at certain trading
volumes, was set forth.
. There was a total of 103 trading days, or 41.4%, where the daily
trading volume was less than 1,000 shares or the stock did not
trade.
Page 26
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
BCT Closing Price & Trading Volume History
November 16, 2000 - November 16, 2001
[GRAPH APPEARS HERE]
BCT International Page 27
- --------------------------------------------------------
Date Volume Close
- --------------------------------------------------------
16-Nov-01 1000 0.69
15-Nov-01 5500 0.7
14-Nov-01 9700 0.56
13-Nov-01 2500 0.56
12-Nov-01 1600 0.56
9-Nov-01 0 0.6
8-Nov-01 400 0.6
7-Nov-01 0 0.6
6-Nov-01 18500 0.6
5-Nov-01 85400 0.5
2-Nov-01 0 0.66
1-Nov-01 0 0.66
31-Oct-01 12500 0.66
30-Oct-01 600 0.57
29-Oct-01 11300 0.55
26-Oct-01 0 0.65
25-Oct-01 0 0.65
24-Oct-01 0 0.65
23-Oct-01 200 0.65
22-Oct-01 0 0.66
19-Oct-01 3200 0.66
18-Oct-01 3400 0.65
17-Oct-01 1000 0.75
16-Oct-01 15000 0.66
15-Oct-01 500 0.75
12-Oct-01 0 0.71
11-Oct-01 200 0.71
10-Oct-01 2500 0.8
9-Oct-01 3800 0.78
8-Oct-01 0 0.71
5-Oct-01 14300 0.71
4-Oct-01 0 0.63
3-Oct-01 45300 0.63
2-Oct-01 3200 0.59
1-Oct-01 0 0.58
28-Sep-01 0 0.58
27-Sep-01 200 0.58
26-Sep-01 45200 0.61
25-Sep-01 1500 0.75
24-Sep-01 5400 0.65
21-Sep-01 4500 0.65
20-Sep-01 100 0.65
19-Sep-01 2700 0.63
18-Sep-01 2700 0.65
17-Sep-01 0 0.57
10-Sep-01 6200 0.57
7-Sep-01 0 0.76
6-Sep-01 200 0.76
5-Sep-01 23800 0.8
4-Sep-01 1000 0.8
31-Aug-01 6200 0.8
30-Aug-01 8000 0.75
29-Aug-01 0 0.9
28-Aug-01 9500 0.9
27-Aug-01 0 0.84
24-Aug-01 5300 0.84
23-Aug-01 7800 0.84
22-Aug-01 14800 0.85
21-Aug-01 8300 0.85
20-Aug-01 2000 0.83
17-Aug-01 1200 0.85
16-Aug-01 100 0.85
15-Aug-01 1000 0.85
14-Aug-01 4100 0.91
13-Aug-01 6500 0.86
10-Aug-01 0 0.94
9-Aug-01 100 0.94
8-Aug-01 1000 0.86
7-Aug-01 0 0.87
6-Aug-01 0 0.87
3-Aug-01 400 0.87
2-Aug-01 5000 0.86
1-Aug-01 8600 0.9
31-Jul-01 100 0.95
30-Jul-01 13600 0.9
27-Jul-01 25600 0.88
26-Jul-01 39600 0.85
25-Jul-01 30700 0.76
24-Jul-01 0 1.01
23-Jul-01 0 1.01
20-Jul-01 13400 1.01
19-Jul-01 2600 1.02
18-Jul-01 2100 1.03
17-Jul-01 6500 1.06
16-Jul-01 100 1.04
13-Jul-01 0 1.04
12-Jul-01 2600 1.04
11-Jul-01 1500 0.98
10-Jul-01 300 1
9-Jul-01 1100 1.02
6-Jul-01 8000 1.03
5-Jul-01 8800 1.1
3-Jul-01 1500 1.08
2-Jul-01 1800 1.1
29-Jun-01 5700 1.03
28-Jun-01 11400 1.08
27-Jun-01 0 0.95
26-Jun-01 0 0.97
25-Jun-01 200 0.97
22-Jun-01 4900 0.97
21-Jun-01 2200 0.96
20-Jun-01 1700 0.98
19-Jun-01 4100 1
18-Jun-01 23800 1.01
15-Jun-01 0 1.05
14-Jun-01 0 1.05
13-Jun-01 6600 1.05
12-Jun-01 7700 1
11-Jun-01 26900 0.91
8-Jun-01 8800 1.01
7-Jun-01 2000 1.02
6-Jun-01 12700 1.03
5-Jun-01 4700 1.16
4-Jun-01 1700 1.27
1-Jun-01 0 1.26
31-May-01 5500 1.26
30-May-01 300 1.15
29-May-01 10300 1.12
25-May-01 0 1.26
24-May-01 5700 1.26
23-May-01 0 1.4
22-May-01 0 1.4
21-May-01 200 1.4
18-May-01 5700 1.26
17-May-01 36500 1.26
16-May-01 900 1.29
15-May-01 400 1.3
14-May-01 14600 1.24
11-May-01 0 1.29
10-May-01 2100 1.29
9-May-01 1600 1.3
8-May-01 2300 1.3
7-May-01 2000 1.31
4-May-01 0 1.22
3-May-01 0 1.22
2-May-01 500 1.22
1-May-01 5100 1.25
30-Apr-01 300 1.25
27-Apr-01 0 1.25
26-Apr-01 0 1.25
25-Apr-01 0 1.25
24-Apr-01 0 1.25
23-Apr-01 500 1.25
20-Apr-01 0 1.4
19-Apr-01 7500 1.4
18-Apr-01 12000 1.25
17-Apr-01 0 1.19
16-Apr-01 0 1.19
12-Apr-01 700 1.19
11-Apr-01 0 1.11
10-Apr-01 1000 1.11
9-Apr-01 1800 1.1
6-Apr-01 7800 0.9375
5-Apr-01 6000 1.0625
4-Apr-01 4000 1
3-Apr-01 13000 1
2-Apr-01 10100 1.0938
30-Mar-01 200 1.1562
29-Mar-01 1100 1.1562
28-Mar-01 1500 1.1562
27-Mar-01 1000 1.1875
26-Mar-01 1700 1.1875
23-Mar-01 0 1.2188
22-Mar-01 1300 1.2188
21-Mar-01 5800 1.25
20-Mar-01 0 1.3125
19-Mar-01 0 1.3125
16-Mar-01 2100 1.3125
15-Mar-01 0 1.375
14-Mar-01 600 1.375
13-Mar-01 0 1.375
12-Mar-01 1800 1.375
9-Mar-01 900 1.375
8-Mar-01 1700 1.375
7-Mar-01 500 1.375
6-Mar-01 3500 1.375
5-Mar-01 2000 1.5
2-Mar-01 0 1.5625
1-Mar-01 0 1.5625
28-Feb-01 10500 1.5625
27-Feb-01 4600 1.4375
26-Feb-01 36300 1.4375
23-Feb-01 19100 1.375
22-Feb-01 34900 1.25
21-Feb-01 8500 1.2188
20-Feb-01 100 1.25
16-Feb-01 100 1.25
15-Feb-01 4500 1.1875
14-Feb-01 7400 1.1875
13-Feb-01 2000 1.2188
12-Feb-01 6200 1.2188
9-Feb-01 3900 1.25
8-Feb-01 0 1.375
7-Feb-01 200 1.375
6-Feb-01 5600 1.25
5-Feb-01 0 1.2812
2-Feb-01 400 1.2812
1-Feb-01 200 1.375
31-Jan-01 4500 1.375
30-Jan-01 15700 1.375
29-Jan-01 0 1.2812
26-Jan-01 3000 1.2812
25-Jan-01 4700 1.2188
24-Jan-01 200 1.3125
23-Jan-01 800 1.2812
22-Jan-01 24600 1.3125
19-Jan-01 0 1.3125
18-Jan-01 1100 1.3125
17-Jan-01 200 1.3125
16-Jan-01 0 1.3125
12-Jan-01 16500 1.3125
11-Jan-01 2900 1.3125
10-Jan-01 2900 1.3125
9-Jan-01 0 1.3125
8-Jan-01 2800 1.3125
5-Jan-01 20200 1.3438
4-Jan-01 500 1.3125
3-Jan-01 6100 1.375
2-Jan-01 2000 1.375
29-Dec-00 18000 1.3125
28-Dec-00 43800 1.3125
27-Dec-00 15600 1.375
26-Dec-00 23200 1.375
22-Dec-00 51100 1.375
21-Dec-00 15100 1.375
20-Dec-00 90100 1.375
19-Dec-00 10600 1.4375
18-Dec-00 22700 1.5
15-Dec-00 3200 1.375
14-Dec-00 1600 1.375
13-Dec-00 100 1.375
12-Dec-00 10500 1.3125
11-Dec-00 6100 1.25
8-Dec-00 9800 1.1875
7-Dec-00 21700 1.3438
6-Dec-00 0 1.3125
5-Dec-00 0 1.3125
4-Dec-00 5000 1.3125
1-Dec-00 2000 1.4375
30-Nov-00 0 1.5156
29-Nov-00 30700 1.5156
28-Nov-00 500 1.4844
27-Nov-00 13700 1.5625
24-Nov-00 6500 1.5312
22-Nov-00 2200 1.5312
21-Nov-00 2800 1.5312
20-Nov-00 4400 1.5625
17-Nov-00 18700 1.625
16-Nov-00 4100 1.5625
Start End High Average Median Low Avg. Volume Median Volume
- ------------------- ------------------ ------------------ -------- --------- ----------------- ------------ -------------
16-Nov-00 S 1.5625 16-Nov-01 S 0.6900 17-Nov-00 S 1.6250 S 1.0869 S 1.1562 5-Nov-01 S 0.5000 6,350 2,000
- --------------------------------------------------------------------------------
Sources of information: Commodity Systems, Inc.
Page 27
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
BCT vs Comparable Company Index (1) and Russell 3000 Index
November 16, 2000 - November 16, 2001
[GRAPH APPEARS HERE]
Indexed
--------------------------------------------------
Date Company Comparables Russell 3K
- -------------------------------------------------------------------------
16-Nov-01 44.2 143.88 82.8
15-Nov-01 44.8 145.12 83.0
14-Nov-01 35.8 145.38 83.0
13-Nov-01 35.8 145.24 82.7
12-Nov-01 35.8 146.37 81.2
9-Nov-01 38.4 140.69 81.2
8-Nov-01 38.4 142.96 81.2
7-Nov-01 38.4 144.38 81.1
6-Nov-01 38.4 144.00 81.3
5-Nov-01 32.0 148.77 80.1
2-Nov-01 42.2 149.69 79.0
1-Nov-01 42.2 148.47 78.9
31-Oct-01 42.2 145.31 77.2
30-Oct-01 36.5 146.62 77.1
29-Oct-01 35.2 141.48 78.5
26-Oct-01 41.6 143.54 80.3
25-Oct-01 41.6 145.26 80.0
24-Oct-01 41.6 146.66 78.9
23-Oct-01 41.6 152.33 78.8
22-Oct-01 42.2 155.16 79.2
19-Oct-01 42.2 156.32 78.1
18-Oct-01 41.6 160.18 77.6
17-Oct-01 48.0 162.16 78.3
16-Oct-01 42.2 163.52 79.8
15-Oct-01 48.0 165.22 79.2
12-Oct-01 45.4 162.57 79.3
11-Oct-01 45.4 161.65 79.8
10-Oct-01 51.2 157.68 78.4
9-Oct-01 49.9 159.63 76.6
8-Oct-01 45.4 158.74 77.0
5-Oct-01 45.4 160.64 77.6
4-Oct-01 40.3 157.17 77.6
3-Oct-01 40.3 157.56 77.7
2-Oct-01 37.8 156.25 76.1
1-Oct-01 37.1 149.09 75.2
28-Sep-01 37.1 149.94 75.5
27-Sep-01 37.1 148.76 73.8
26-Sep-01 39.0 146.34 73.0
25-Sep-01 48.0 148.36 73.5
24-Sep-01 41.6 134.32 72.9
21-Sep-01 41.6 127.86 70.2
20-Sep-01 41.6 134.39 71.6
19-Sep-01 40.3 144.91 73.9
18-Sep-01 41.6 154.39 75.2
17-Sep-01 36.5 161.27 75.8
10-Sep-01 36.5 167.59 79.7
7-Sep-01 48.6 173.35 79.4
6-Sep-01 48.6 175.31 80.9
5-Sep-01 51.2 182.19 82.6
4-Sep-01 51.2 184.55 82.9
31-Aug-01 51.2 191.16 82.9
30-Aug-01 48.0 191.12 82.6
29-Aug-01 57.6 192.05 83.9
28-Aug-01 57.6 191.96 84.8
27-Aug-01 53.8 190.75 86.0
24-Aug-01 53.8 184.59 86.4
23-Aug-01 53.8 186.36 84.8
22-Aug-01 54.4 187.07 85.0
21-Aug-01 54.4 188.00 84.4
20-Aug-01 53.1 183.63 85.4
17-Aug-01 54.4 184.62 84.8
16-Aug-01 54.4 185.19 86.2
15-Aug-01 54.4 179.78 86.0
14-Aug-01 58.2 181.52 86.6
13-Aug-01 55.0 182.77 86.9
10-Aug-01 60.2 183.46 86.7
9-Aug-01 60.2 182.61 86.2
8-Aug-01 55.0 183.31 86.3
7-Aug-01 55.7 178.79 87.8
6-Aug-01 55.7 183.27 87.6
3-Aug-01 55.7 188.94 88.6
2-Aug-01 55.0 189.20 89.0
1-Aug-01 57.6 190.89 88.7
31-Jul-01 60.8 184.12 88.2
30-Jul-01 57.6 176.14 87.8
27-Jul-01 56.3 167.49 87.9
26-Jul-01 54.4 158.57 87.6
25-Jul-01 48.6 149.42 86.6
24-Jul-01 64.6 144.98 85.4
23-Jul-01 64.6 148.38 86.9
20-Jul-01 64.6 149.52 88.2
19-Jul-01 65.3 148.03 88.5
18-Jul-01 65.9 145.76 88.0
17-Jul-01 67.8 141.18 88.6
16-Jul-01 66.6 140.44 87.6
13-Jul-01 66.6 139.19 88.7
12-Jul-01 66.6 139.19 88.2
11-Jul-01 62.7 140.71 86.1
10-Jul-01 64.0 141.06 86.3
9-Jul-01 65.3 140.96 87.6
6-Jul-01 65.9 145.19 87.0
5-Jul-01 70.4 144.24 89.1
3-Jul-01 69.1 152.15 90.2
2-Jul-01 70.4 154.63 90.4
29-Jun-01 65.9 146.35 89.8
28-Jun-01 69.1 144.84 89.7
27-Jun-01 60.8 145.71 88.5
26-Jun-01 62.1 141.35 88.8
25-Jun-01 62.1 137.02 88.9
22-Jun-01 62.1 138.29 89.4
21-Jun-01 61.4 132.86 90.3
20-Jun-01 62.7 138.27 89.4
19-Jun-01 64.0 148.47 88.5
18-Jun-01 64.6 152.62 88.3
15-Jun-01 67.2 153.01 88.7
14-Jun-01 67.2 153.40 89.1
13-Jun-01 67.2 152.08 90.8
12-Jun-01 64.0 156.55 91.8
11-Jun-01 58.2 156.92 91.7
8-Jun-01 64.6 157.16 92.6
7-Jun-01 65.3 156.93 93.5
6-Jun-01 65.9 155.26 92.9
5-Jun-01 74.2 150.25 93.9
4-Jun-01 81.3 151.06 92.5
1-Jun-01 80.6 149.22 92.1
31-May-01 80.6 144.66 91.6
30-May-01 73.6 145.93 91.0
29-May-01 71.7 151.64 92.5
25-May-01 80.6 150.86 93.4
24-May-01 80.6 146.45 94.4
23-May-01 89.6 144.46 94.1
22-May-01 89.6 141.87 95.7
21-May-01 89.6 140.38 95.9
18-May-01 80.6 135.25 94.2
17-May-01 80.6 136.85 93.9
16-May-01 82.6 141.38 93.5
15-May-01 83.2 134.53 91.0
14-May-01 79.4 136.43 90.9
11-May-01 82.6 136.74 90.7
10-May-01 82.6 131.27 91.4
9-May-01 83.2 128.89 91.5
8-May-01 83.2 129.32 91.9
7-May-01 83.8 128.60 92.0
4-May-01 78.1 123.74 92.3
3-May-01 78.1 124.05 91.0
2-May-01 78.1 123.25 92.4
1-May-01 80.0 123.16 92.2
30-Apr-01 80.0 118.82 91.0
27-Apr-01 80.0 116.62 91.0
26-Apr-01 80.0 118.82 89.7
25-Apr-01 80.0 114.86 89.2
24-Apr-01 80.0 117.84 87.7
23-Apr-01 80.0 115.93 88.7
20-Apr-01 89.6 115.11 90.2
19-Apr-01 89.6 110.11 91.0
18-Apr-01 80.0 108.50 89.7
17-Apr-01 76.2 107.33 86.5
16-Apr-01 76.2 104.45 85.5
12-Apr-01 76.2 105.80 85.9
11-Apr-01 71.0 106.84 84.6
10-Apr-01 71.0 105.33 84.7
9-Apr-01 70.4 105.62 82.4
6-Apr-01 60.0 106.82 81.7
5-Apr-01 68.0 106.54 83.4
4-Apr-01 64.0 107.04 79.8
3-Apr-01 64.0 113.29 80.1
2-Apr-01 70.0 114.92 83.0
30-Mar-01 74.0 114.96 84.3
29-Mar-01 74.0 109.53 83.3
28-Mar-01 74.0 113.65 83.7
27-Mar-01 76.0 113.51 85.8
26-Mar-01 76.0 113.84 83.8
23-Mar-01 78.0 112.08 82.8
22-Mar-01 78.0 114.54 81.2
21-Mar-01 80.0 115.21 81.6
20-Mar-01 84.0 116.22 83.1
19-Mar-01 84.0 114.65 85.1
16-Mar-01 84.0 119.64 83.6
15-Mar-01 88.0 115.38 85.3
14-Mar-01 88.0 119.77 85.0
13-Mar-01 88.0 121.64 87.2
12-Mar-01 88.0 121.79 85.8
9-Mar-01 88.0 122.73 89.6
8-Mar-01 88.0 123.25 91.9
7-Mar-01 88.0 122.20 91.9
6-Mar-01 88.0 122.55 91.4
5-Mar-01 96.0 123.46 90.5
2-Mar-01 100.0 121.70 90.0
1-Mar-01 100.0 123.13 90.3
28-Feb-01 100.0 128.23 90.2
27-Feb-01 92.0 128.46 91.5
26-Feb-01 92.0 122.45 92.5
23-Feb-01 88.0 122.31 90.8
22-Feb-01 80.0 124.08 91.1
21-Feb-01 78.0 127.81 91.5
20-Feb-01 80.0 128.11 93.2
16-Feb-01 80.0 125.94 95.0
15-Feb-01 76.0 115.60 96.7
14-Feb-01 76.0 116.41 95.8
13-Feb-01 78.0 116.20 95.8
12-Feb-01 78.0 113.79 96.7
9-Feb-01 80.0 112.56 95.6
8-Feb-01 88.0 110.15 96.8
7-Feb-01 88.0 112.67 97.5
6-Feb-01 80.0 113.50 98.4
5-Feb-01 82.0 114.13 98.3
2-Feb-01 82.0 114.80 98.1
1-Feb-01 88.0 114.47 99.9
31-Jan-01 88.0 112.55 99.4
30-Jan-01 88.0 113.28 100.1
29-Jan-01 82.0 116.90 99.4
26-Jan-01 82.0 120.24 98.6
25-Jan-01 78.0 118.72 98.7
24-Jan-01 84.0 120.13 99.4
23-Jan-01 82.0 121.26 99.1
22-Jan-01 84.0 121.36 97.6
19-Jan-01 84.0 120.16 97.6
18-Jan-01 84.0 113.75 98.1
17-Jan-01 84.0 137.43 97.0
16-Jan-01 84.0 144.14 96.7
12-Jan-01 84.0 145.43 96.0
11-Jan-01 84.0 120.68 96.5
10-Jan-01 84.0 119.54 95.3
9-Jan-01 84.0 119.21 94.0
8-Jan-01 84.0 116.42 93.6
5-Jan-01 86.0 110.92 93.9
4-Jan-01 84.0 110.58 96.6
3-Jan-01 88.0 108.54 97.9
2-Jan-01 88.0 110.17 93.0
29-Dec-00 84.0 99.55 96.2
28-Dec-00 84.0 94.32 97.4
27-Dec-00 88.0 93.80 96.7
26-Dec-00 88.0 94.48 95.5
22-Dec-00 88.0 96.06 94.9
21-Dec-00 88.0 96.28 92.2
20-Dec-00 88.0 95.57 91.7
19-Dec-00 92.0 94.54 94.9
18-Dec-00 96.0 95.11 96.3
15-Dec-00 88.0 97.50 95.5
14-Dec-00 88.0 98.26 97.4
13-Dec-00 88.0 97.90 99.1
12-Dec-00 84.0 101.92 100.1
11-Dec-00 80.0 95.02 101.0
8-Dec-00 76.0 96.39 100.0
7-Dec-00 86.0 99.11 97.5
6-Dec-00 84.0 98.66 97.9
5-Dec-00 84.0 95.21 99.7
4-Dec-00 84.0 96.62 95.5
1-Dec-00 92.0 96.44 95.1
30-Nov-00 97.0 97.25 94.7
29-Nov-00 97.0 97.60 96.7
28-Nov-00 95.0 97.38 96.4
27-Nov-00 100.0 97.03 97.8
24-Nov-00 98.0 95.90 97.4
22-Nov-00 98.0 97.47 95.6
21-Nov-00 98.0 97.05 97.5
20-Nov-00 100.0 98.70 97.4
17-Nov-00 104.0 100.12 99.6
16-Nov-00 100.0 100.00 100.0
- --------------------------------------------------------------------------------
(1) Reflects the market cap weighted prices of the comparable companies utilized
in the Comparable Company Analysis.
Sources of information: Commodity Systems, Inc.
Page 28
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
BCT Closing Price Ranges as Percentage of Total Trading Days
November 16, 2000 - November 16, 2001
[GRAPH APPEARS HERE]
Price Range S0.000 - S0.750 S0.751 S0.875 S0.876 S1.000 S1.001 - S1.125 S1.126 - S1.250 S1.251 - S1.375
- ---------------------------------------------------------------------------------------------------------------------
Days in Range 45 24 23 29 38 66
Percentage 18.1% 9.6% 9.2% 11.6% 15.3% 26.5%
Price Range S1.376 - S1.500 S1.501 - S1.625 S1.626+
- --------------------------------------------------------------------------------
Days in Range 12 12 0
Percentage 4.8% 4.8% 0.0%
- --------------------------------------------------------------------------------
Sources of information: Commodity Systems, Inc.
Page 29
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
BCT Trading Volume per Price Range as Percentage of Total Volume
November 16, 2000 - November 16, 2001
[GRAPH APPEARS HERE]
Price Range S0.000 - S0.750 S0.751 - S0.875 S0.876 - S1.000 S1.001 - S1.125 S1.126 - S1.250 S1.251 - S1.375
- ---------------------------------------------------------------------------------------------------------------------
Volume 311,800 161,200 135,900 148,700 145,100 498,400
Percentage 19.7% 10.2% 8.6% 9.4% 9.2% 31.5%
Price Range S1.376 - S1.500 S1.501 - S1.625 S1.626+
- --------------------------------------------------------------------------------
Volume 86,400 93,600 0
Percentage 5.5% 5.9% 0.0%
- --------------------------------------------------------------------------------
Sources of information: Commodity Systems, Inc.
Page 30
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
OVERVIEW OF COMPANY
STOCK REVIEW
BCT Trading Volume Ranges as a Percentage of Total Volume
November 16, 2000 - November 16, 2001
[GRAPH APPEARS HERE]
No volume *0**1,000 *1,001**2,500 *2,501**5,000 *5,001**10,000 *10,001**25,000 *25,001**50,000 *50,001
------------------------------------------------------------------------------------------------------------------
Days in Range 58 45 34 30 35 33 11 3
Percentage 23.3% 18.1% 13.7% 12.0% 14.1% 13.3% 4.4% 1.2%
- --------------------------------------------------------------------------------
Sources of information Commodity Systems, Inc.
* means more than
** means less than
Page 31
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
Page 32
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
METHODOLOGIES
. Based upon a review of the Company's historical financial data,
projections, and certain other qualitative data, Capitalink
utilized several methodologies to determine a range of value of
the Company's outstanding common stock that is not beneficially
owned by the Phoenix Group.
. Capitalink did not form a conclusion as to whether any individual
analysis, considered in isolation, supported or failed to support
an opinion as to the fairness, from a financial point of view, of
the Proposed Transaction to the BCT shareholders other than the
Phoenix Group.
. Capitalink did not place any particular reliance or weight on any
individual analysis, but instead concluded that the analyses,
taken as a whole, supported its determination. Accordingly, the
analyses must be considered as a whole and selecting portions of
analyses or the factors considered, without considering all
analyses and factors collectively, could create an incomplete and
incorrect view of the process underlying the analyses in
connection with the preparation of the opinion.
. The methodologies utilized by Capitalink included:
. A review of the historical and projected financial
information of the Company as filed publicly (with respect to
the historical data) and prepared by Company management.
. A review and comparison of trading multiples for comparable
publicly-traded companies.
. Performing a discounted cash flow analysis of the Company
with sensitivity analyses based on a range of assumptions.
. A review of the acquisition premiums paid relative to recent
public market trading prices (i) for acquisitions where the
enterprise value of the transaction was less than $25
million, and (ii) for acquisitions of minority interests
where the enterprise value of the transaction was less than
$25 million.
. A review of the premium of the consideration in the Proposed
Transaction as compared to the closing prices of the
Company's common stock over varying time frames.
. A review of the Company's balance sheet to determine an
approximate adjusted net book value.
Page 33
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
METHODOLOGIES
. It is noted that Capitalink undertook an extensive search for
transactions that might be deemed comparable to the Proposed
Transaction in order to undertake an analysis of the applicable
multiples in such transactions. However, there were no such
transactions identified.
Page 34
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SUMMARY REVIEW
Valuation Summary
$ in thousands, except per share)
Company Implied Price Per Share (1)
---------------------------------------------
Methodology Statistic (1) High Mean Median Low
- ------------------------------------------------------------ ------------- ---------------------------------------------
Comparable Company Analysis
LTM Earnings $ 98 $ 0.26 $ 0.22 $ 0.24 $ 0.16
Estimated Current Fiscal Year Earnings $ 519 $ 1.03 $ 1.03 $ 1.03 $ 1.03
Estimated Next Fiscal Year Earnings $ 371 $ 0.67 $ 0.67 $ 0.67 $ 0.67
Common Equity $ 14,540 $ 2.37 $ 1.86 $ 1.91 $ 1.12
Discounted Cash Flow Analysis
Management Case - EBITDA Multiple na $ 1.24 $ 1.22 na $ 1.21
Management Case - Perpetual Growth na $ 1.09 $ 1.09 na $ 1.08
Revised Case - EBITDA Multiple na $ 1.47 $ 1.44 na $ 1.42
Revised Case - Perpetual Growth na $ 1.23 $ 1.21 na $ 1.20
Acquisitions Premiums Analysis
Control Acquisitions - Stock Price One Day Prior na $ 2.59 $ 1.20 $ 1.05 $ 0.72
Control Acquisitions - Stock Price Five Days Prior na $ 3.33 $ 1.09 $ 0.96 $ 0.48
Minority Interest Acquisitions - Stock Price One Day Prior na $ 2.67 $ 1.01 $ 0.88 $ 0.69
Minority Interest Acquisitions - Stock Price Five Days Prior na $ 2.58 $ 0.91 $ 0.81 $ 0.60
Minority Interest Acquisitions - Stock Price Thirty Days Prior na $ 2.38 $ 1.01 $ 0.90 $ 0.72
Adjusted Book Value Analysis
Liquidation Premise $ 5,213 na $ 1.02 na na
Premiums Paid Analysis
As of November 16, 2001 63.8%
One Day Prior 61.4%
Average 5 Days Prior 84.0%
Average 10 Days Prior 89.3%
Average 20 Days Prior 83.3%
Average 30 Days Prior 73.8%
Average 60 Days Prior 65.1%
Average 90 Days Prior 47.2%
Average Six Months Prior 30.4%
Average One Year Prior 4.0%
- --------------------------------------------------------------------------------
(1) Please reference the appropriate Analysis for further discussion and sources
of information.
Page 35
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
. The selected comparable company analysis provides a range of
value, at a given point in time, based on the market's perception
(as reflected in stock prices) of publicly traded companies
deemed similar to BCT.
. The Company's distinct niche as a franchisor of wholesale
printers eliminates the possibility of locating directly
comparable public companies. Capitalink focused on the printing
industry, locating six companies (the "Comparable Companies").
. Only one of the Comparable Companies, IPI Inc., is a franchisor.
. Based on its market value of approximately $3.5 million, BCT is
smaller than all but one of the Comparable Companies.
. Capitalink focused on the Comparable Companies' respective market
values relative to (a) last twelve months ("LTM") earnings per
share ("EPS"), (b) estimated current fiscal year ("CFY") EPS, (c)
estimated next fiscal year ("NFY") EPS, and (d) common equity.
. While earnings is the most relevant characteristic to be
compared, only three of the Comparable Companies had a positive
LTM EPS, and only one, Consolidated Graphics, Inc. had estimated
CFY and NFY EPS. It is noted that Consolidated Graphics is
considerably larger than the other Comparable Companies, both in
terms of market value and revenue.
Page 36
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
. It is noted that the consideration in the Proposed Transaction
falls in the lower end of the implied market values derived from
the Comparable Companies' common equity multiple.
. Based both on the lack of publicly traded companies that are
deemed directly comparable to BCT and on the lack of earnings
characteristics for the Comparable Companies, Capitalink has not
placed significant weight on the selected comparable company
analysis.
. An analysis of publicly-traded comparable companies is not
mathematical; rather it involves complex consideration and
judgments concerning differences in financial and operating
characteristics of the Comparable Companies and other factors
that could affect the public trading of the Comparable Companies.
Page 37
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
Comparable Company Analysis - Implied Value
($ in thousands, except per share)
Earnings
-----------------------------------
LTM Est CFY (1) Est NFY (1) Common Equity
--------- ----------- ---------- ---------------
BCT International $ 98 $ 519 $ 371 $ 14,540
- ---------------------------------------------------------------------------------------------------
Comparable Companies Multiples
High 13.4x 10.2x 9.2x 0.8x
Mean 11.4 10.2 9.2 0.7
Median 12.5 10.2 9.2 0.7
Low 8.4 10.2 9.2 0.4
Implied Range of Enterprise Value
High na na na na
Mean na na na na
Median na na na na
Low na na na na
Implied Range of Market Value (2)
High $ 1,310 $ 5,269 $ 3,420 $ 12,154
Mean 1,121 5,269 3,420 9,531
Median 1,225 5,269 3,420 9,819
Low 828 5,269 3,420 5,759
Implied Range of Market Value Per Share (3)
High $ 0.26 $ 1.03 $ 0.67 $ 2.37
Mean 0.22 1.03 0.67 1.86
Median 0.24 1.03 0.67 1.91
Low 0.16 1.03 0.67 1.12
- ---------------------------------------------------------------------------------------------------
_______________________________________________________________________________
(1) Estimates have been derived from Company Projections and Management.
(2) Assumes Net Debt of ($5,136). See DCF Analysis for calculation.
(3) Assumes 5,136 shares outstanding. See DCF Analysis for calculation.
Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP,
Commodity Systems, Inc., and/or Hoovers, Inc.
Page 38
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
Comparable Company Analysis - Valuation Multiples
($ in thousands, except per share data)
% Below/Above Market Value as a Multiple of
----------------------------------------------
Stock
Price 52-week Market Enterprise EPS Common Net Tang.
----------------------------
Company 16-Nov-01 High-Low Value Value (1) LTM Est CFY(2) Est NFY(2) Equity Common Eq
-------------------- --------- -------------- -------- ----------- ------ ---------- ---------- ------- ---------
Consolidated
Graphics, Inc $ 16.040 27.4% - 63.5% $209,643 $445,461 13.4x 10.2x 9.2x 0.7x 2.1x
Geographics, Inc. 0.090 79.5% - 63.6% 3,437 13,819 na na na 0.7 1.6
IPI Inc 4.100 25.5% - 98.8% 18,778 (7,402) na na na 0.7 0.7
Impreso, Inc 2.250 33.2% - 50.0% 11,880 35,595 12.5 na na 0.8 0.8
iPrint Technologies 0.200 89.2% - 25.0% 6,048 6,062 na na na 0.4 0.4
Paris Corporation 3.040 17.8% - 73.7% 9,941 2,768 8.4 na na 0.6 0.6
--------------------------------------------------------------
High 13.4x 10.2x 9.2x 0.8x 2.1x
Mean 11.4 10.2 9.2 0.7 1.1
Median 12.5 10.2 9.2 0.7 0.8
Low 8.4 10.2 9.2 0.4 0.4
-------------------------------------------------------------
BCT International $ 0.690 57.5% - 38.0% $ 3,533 $ 643 69.0x 6.9x 9.6x 0.2x 0.2x
Enterprise Value as a Multiple of 5 Year
---------------------------------------------
Revenue LTM LTM EPS Growth
-------------------------
Company LTM Est CFY(2) Est NFY(2) EBIT EBITDA Assets Proj.(2)
--- ---------- ---------- ---- ------ ------ ---------
Consolidated
Graphics, Inc 0.7x 0.7x 0.6x 9.7x 5.1x 0.7x 15.0%
Graphics, Inc 0.4 na na na na 0.5 na
IPI Inc na na na na na na na
Impreso, Inc 0.4 na na 11.3 9.0 0.6 na
iPrint Technologies 0.5 0.6 0.4 na na 0.3 na
Paris Corporation 0.1 na na 1.3 1.0 0.1 na
-------------------------------------------------------
0.7x 0.7x 0.6x 11.3x 9.0x 0.7x 15.0%
0.4 0.6 0.5 7.4 5.0 0.5 15.0%
0.4 0.6 0.5 9.7 5.1 0.5 15.0%
0.1 0.6 0.4 1.3 1.0 0.1 15.0%
-------------------------------------------------------
BCT International 0.0x 0.0x 0.0x na na 0.0x na
- --------------------------------------------------------------------------------
(1) Enterprise Value equals Market Value plus total debt, preferred stock, and
minority interests, less cash.
(2) Sources of estimates: Multex Research and other various securities analysts'
estimates and reports.
Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP,
Commodity Systems, Inc., and/or Hoovers, Inc.
Page 39
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
Comparable Company Analysis - Margin and Other Analyses
($ in thousands)
LTM (1)
----------------------------------------------------------------------------
as Percentage of Revenue Return on
----------------------------------------------------------------------------
Gross Operating Net Average Average
Company Ticker Revenue Margin SG & A Margin EBITDA EBIT Income Assets Common Eq
- ------------------ -------- --------- ------ ------ -------- ------ ---- ------ ------- ---------
Consolidated
Graphics, Inc CGX $661,999 26.6% 18.7% 6.9% 13.2% 6.9% 2.3% 2.3% 5.3%
Geographics, Inc. GGIT 35,922 12.3% 25.8% 13.4% 7.7% 13.5% 16.7% 22.6% 110.9%
IPI Inc IDH 8,069 81.2% 80.1% -12.8% 7.0% -12.8% -10.5% 2.9% 3.7%
Impreso, Inc ZCOM 87,820 11.8% 8.4% 3.4% 4.5% 3.6% 1.1% 1.9% 6.7%
iPrint Technologies IPRT 11,806 35.0% 147.0% 177.4% -130.1% 164.1% -164.1% 71.4% -87.9%
Paris Corporation PBFI 43,232 12.7% 9.8% 2.9% 6.6% 5.1% 2.7% 5.8% 7.8%
--------------------------------------------------------------------------------
High $661,999 81.2% 147.0% 6.9% 13.2% 6.9% 2.7% 5.8% 7.8%
Mean 141,475 29.9% 48.3% -31.7% -20.1% -29.1% -30.9% -14.5% - 30.4%
Median 39,577 19.7% 22.3% -4.9% -1.3% -4.6% -4.7% -0.5% 0.8%
Low 8,069 11.8% 8.4% -177.4% -130.1% -164.1% -164.1% -71.4% -110.9%
--------------------------------------------------------------------------------
BCT International BCTI $ 18,332 38.6% 39.0% -1.7% -0.1% -1.4% 0.5% 0.6% 0.7%
as of Latest Available Filing
- -----------------------------------------------------------------------------------------------------
Accts Days Total Debt Total Debt Latest FY
Receivable Inventory Sales Current to Total to Revenue
Company Turnover Turnover Outstanding Ratio Capitalization EBITDA Growth
- -------------------- --------------------------------------------------------------------------------
Consolidated
Graphics, Inc 5.8x 15.52x 63.2 2.1 44.8% 2.8x 9.4%
Geographics, Inc. 5.6 4.53x 65.0 0.7 67.4% na 34.3%
IPI Inc 6.6 7.09x 55.6 5.1 0.2% na -9.6%
Impreso, Inc 8.9 2.68x 41.0 1.3 62.7% 6.0x 20.5%
iPrint Technologies 5.9 na 62.3 3.0 0.1% na 424.2%
Paris Corporation 8.0 9.80x 45.7 3.5 8.2% 0.5x 21.4%
-----------------------------------------------------------------------------
High 8.9x 15.5x 65.0 5.1 67.4% 6.0x 424.2%
Mean 6.8 7.9 55.5 2.6 30.6% 3.1 83.4%
Median 6.2 7.1 59.0 2.6 26.5% 2.8 20.9%
Low 5.6 2.7 41.0 0.7 0.1% 0.5 -9.6%
-----------------------------------------------------------------------------
BCT International 6.5x 4.76x 55.9 7.4 1.9% na -1.6%
________________________________________________________________________________
(1) May exclude special items, such as extraordinary and non-recurring
expenses. See individual company overviews for details of exclusions, if
any.
Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP,
Commodity Systems, Inc., and/or Hoovers, Inc.
Page 40
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
Comparable Company Analysis - Income Statement Overview
($ in thousands, except per share data)
Revenue EBITDA (1) EBIT (1) Net Income (1) EPS (1)
-------------------- ------------------- ------------------- ------------------- ----------------
Latest Latest Latest Latest Latest
Company LTM 10-K LTM 10-K LTM 10-K LTM 10-K LTM 10-K
- --------------------------- ---------- --------- --------- -------- --------- -------- --------- -------- -------- ------
Consolidated Graphics, Inc $661,999 $683,396 $ 87,129 $ 97,063 $ 45,985 $ 58,280 $ 15,541 $ 22,111 $ 1.20 $ 1.68
Geographics, Inc. 35,922 36,602 (2,783) (2,064) (4,862) (3,863) (6,002) (5,007) (0.17) (0.14)
IPI Inc 8,069 9,294 (567) 330 (1,030) (204) (851) (192) (0.17) (0.04)
Impreso, Inc 87,820 74,118 3,962 3,481 3,156 2,792 934 931 0.18 0.18
iPrint Technologies 11,806 17,069 (15,365) (32,017) (19,369) (35,975) (19,369) (35,975) (0.62) (1.39)
Paris Corporation 43,232 43,011 2,847 1,991 2,191 1,263 1,166 663 0.36 0.21
---------------------------------------------------------------------------------------------------------------
High $661,999 $683,396 $ 87,129 $ 97,063 $ 45,985 $ 58,280 $ 15,541 $ 22,111 $ 1.20 $ 1.68
Mean 141,475 143,915 12,537 11,464 4,345 3,716 (1,430) (2,912) 0.13 0.08
Median 39,577 39,807 1,140 1,161 581 530 42 235 0.00 0.07
Low 8,069 9,294 (15,365) (32,017) (19,369) (35,975) (19,369) (35,975) (0.62) (1.39)
---------------------------------------------------------------------------------------------------------------
BCT International $ 18,332 $ 18,999 $ (16) $ 988 $ (261) $ 756 $ 98 $ 695 $ 0.01 $ 0.13
Latest Latest
Available Available
Company 10-Q 10-K
- --------------------------- --------- ---------
Consolidated Graphics, Inc 30-Sep-01 31-Mar-01
Geographics, Inc. 30-Jun-01 31-Mar-01
IPI Inc 31-Aug-01 30-Nov-00
Impreso, Inc 31-May-01 31-Aug-00
iPrint Technologies 30-Sep-01 31-Dec-00
Paris Corporation 30-Jun-01 30-Sep-00
BCT International 31-Aug-01 28-Feb-01
- --------------------------------------------------------------------------------
(1) May exclude special items, such as extraordinary and non-recurring expenses.
See individual company overviews for details of exclusions, if any.
Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP,
Commodity Systems, Inc., and/or Hoovers, Inc.
Page 41
BCT International, Inc. CONFIDENTIAL
------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
Comparable Company Analysis - Balance Sheet Overview
($ in thousands)
As of Latest Available Filing
--------------------------------------------------------------------------------------------------------
Cash, Total Total
Equivalents Accounts Current Intangibles, Total Current
Company & Mrkt Sec Receivables Inventory Assets PPE, net net Assets Liabilities
- ---------------------- ----------- ---------- ----------- ---------- ----------- ---------- --------- ----------
Consolidated $ 6,850 $ 113,255 $ 31,045 $ 161,768 $ 287,603 $ 200,904 $ 657,829 $ 77,532
Graphics, Inc
Geographics, Inc. 177 5,453 7,268 13,463 9,141 2,907 25,753 18,013
IPI Inc 26,229 1,089 187 29,705 660 2,624 33,594 5,863
Impreso, Inc 198 10,800 36,667 48,138 10,562 - 58,940 37,382
iPrint Technologies 7,446 2,156 - 14,719 2,657 - 20,137 4,860
Paris Corporation 8,537 5,401 3,842 18,750 1,598 - 20,921 5,358
High $ 26,229 $ 113,255 $ 36,667 $ 161,768 $ 287,603 $ 200,904 $ 657,829 $ 77,532
Mean 8,240 23,026 13,168 47,757 52,037 34,406 136,196 24,835
Median 7,148 5,427 5,555 24,228 5,899 1,312 29,674 11,938
Low 177 1,089 - 13,463 660 - 20,137 4,860
BCT International $ 3,170 $ 2,043 $ 2,375 $ 8,170 $ 423 $ 219 $ 16,156 $ 1,102
----------------------------------------------------
Net Latest
Total Total Tangible Available
Company Debt Common Eq Common Eq Filing
- ---------------------- ----------- ---------- ----------- ---------
Consolidated $ 242,668 $ 298,423 $ 97,519 30-Sep-01
Graphics, Inc
Geographics, Inc. 10,559 5,113 2,206 30-Jun-01
IPI Inc 49 27,682 25,058 31-Aug-01
Impreso, Inc 23,913 14,212 14,212 31-May-01
iPrint Technologies 14 15,269 15,269 30-Sep-01
Paris Corporation 1,364 15,338 15,338 30-Jun-01
High $ 242,668 $ 298,423 $ 97,519
Mean 46,428 62,673 28,267
Median 5,962 15,304 15,304
Low 14 5,113 2,206
BCT International $ 280 $ 14,540 $ 14,321 31-Aug-01
- --------------------------------------------------------------------------------
Sources of information: SEC Edgar filings, Multex, Inc., Bloomberg, LP,
Commodity Systems, Inc., and/or Hoovers, Inc.
Page 42
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
Consolidated Graphics, Inc Overview
- --------------------------------------------------------------------------------
Name Consolidated Graphic Address 5858 Westheimer Officers Joe Davis Attorneys
Symbol CGX City, State Zip Houston, TX 77057 Charles White Auditors Arthur Andersen
Latest Fiscal YE 31-Mar-01 Telephone 713-787-0977 Wayne Rose Transfer Agent American Stock
Latest Rprt Per 30-Sep-01 Fax 713-787-5013 Transfer & Trust
Consolidated Graphics has bought more than 60 medium-sized printing firms since
1985. CGX, which is one of the nation's largest commercial printers, generates
most of its sales by printing items such as brochures, catalogs, and direct mail
fliers. The company also provides electronic services (online digital asset
management, online purchasing) and fulfillment services.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income and Cashflow Statement Data
- --------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Six Months Ended Fiscal Years Ended
------------------------ ------------------------
Sep-01 Sep-01 Sep-00 Mar-01 Mar-00
-------- ------------------------ ------------------------
Revenue $661,999 $ 324,59 $345,989 $683,396 $624,895
COGS 485,738 238,882 247,302 494,158 437,345
-------- ------------------------ ------------------------
Gross Profit 176,261 85,710 98,687 189,238 187,550
Selling, General & 123,983 61,312 61,994 124,665 109,944
Administrative
Research & Development - - - - -
Other Operating 6,440 - - 6,440 -
-------- ------------------------ ------------------------
Operating Income 45,838 24,398 36,693 58,133 77,606
Interest Expense, net 19,660 8,764 10,109 21,005 13,584
Other, net 147 - - 147 108
-------- ------------------------ ------------------------
Pre-tax Income 26,325 15,634 26,584 37,275 64,130
Taxes 10,784 6,254 10,634 15,164 25,651
-------- ------------------------ ------------------------
After-tax Income 15,541 9,380 15,950 22,111 38,479
Minority Interest - - - - -
Equity in Affiliates - - - - -
Normalized Net Income 15,541 9,380 15,950 22,111 38,479
Preferred Dividends - - - - -
-------- ------------------------ ------------------------
Normalized Net Income to Common $ 15,541 $ 9,380 $ 15,950 $ 22,111 $ 38,479
======== ======================== ========================
EBIT $ 45,985 $ 24,398 $ 36,693 $ 58,280 $ 77,714
Depreciation & Amortization $ 41,144 $ 20,832 $ 18,471 $ 38,783 $ 32,881
EBITDA $ 87,129 $ 45,230 $ 55,164 $ 97,063 $110,595
CAPEX $ 21,852 $ 7,485 $ 12,067 $ 26,434 $ 25,172
EBITDA - CAPEX $ 65,277 $ 37,745 $ 43,097 $ 70,629 $ 85,423
GAAP Operating Cash Flow $ 61,951 $ 28,304 $ 34,471 $ 68,118 $ 68,319
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ - $ - $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued $ - $ - $ - $ - $ -
Operations
Extraordinary Items $ - $ - $ - $ - $ -
Total $ - $ - $ - $ - $ -
Total After-tax Special Items $ - $ - $ - $ - $ -
Tax Provision on Special Items $ - $ - $ - $ - $ -
Reported Taxes $ 10,784 $ 6,254 $ 10,634 $ 15,164 $25,651
Reported Net Income $ 15,541 $ 9,380 $ 15,950 $ 22,111 $38,479
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Basic Reported Weighted Avg Shares Out (000's) 13,054 13,318 13,142 15,155
Basic Normalized EPS $ 1.20 $ 0.72 $ 1.20 $ 1.68 $ 2.54
Basic Reported EPS $ 1.20 $ 0.72 $ 1.20 $ 1.68 $ 2.54
Diluted Reported Weighted Avg Shares Out (000's) 13,334 13,329 13,186 15,336
Diluted Normalized EPS $ 1.18 $ 0.70 $ 1.20 $ 1.68 $ 2.51
Diluted Reported EPS $ 1.18 $ 0.70 $ 1.20 $ 1.68 $ 2.51
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- --------------------------------------------------------------------------------
Core Gross Profit 26.6% 26.4% 28.5% 27.7% 30.0%
S,G & A 18.7% 18.9% 17.9% 18.2% 17.6%
Operating Income 6.9% 7.5% 10.6% 8.5% 12.4%
Pre-Tax 4.0% 4.8% 7.7% 5.5% 10.3%
EBIT 6.9% 7.5% 10.6% 8.5% 12.4%
EBITDA 13.2% 13.9% 15.9% 14.2% 17.7%
Normalized Net Income 2.3% 2.9% 4.6% 3.2% 6.2%
Reported Net Income 2.3% 2.9% 4.6% 3.2% 6.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data
- --------------------------------------------------------------------------------
($ in thousands, except per share) As of As of
---------------------
30-Sep-01 Mar-01 Mar-00
--------- ---------------------
Cash & Equivalents $ 6,850 $ 8,667 $ 8,197
Marketable Securities - - -
--------- ---------------------
Total Cash & Mkt Securities 6,850 8,667 8,197
Accounts Receivable 113,255 116,095 115,646
Inventory 31,045 31,536 32,670
Other Current Assets 10,618 8,628 8,518
--------- ---------------------
Total Current Assets 161,768 164,926 165,031
PPE, net 287,603 299,871 310,344
Intangibles, net 200,904 203,030 198,588
Investments - - -
Other Assets 7,554 6,840 6,885
--------- ---------------------
Total Assets $ 657,829 $ 674,667 $ 680,848
========= =====================
Accounts Payable $ 23,994 $ 33,865 $ 55,780
Accrued Expenses 32,425 32,609 35,260
Short Term Debt 16,443 18,711 5,083
Short Term Capital Leases - - -
Other Current Liabilities 4,670 253 3,607
--------- ---------------------
Total Current Liabilities 77,532 85,438 99,730
Other LT Liabilities 55,649 54,966 47,180
Long Term Debt 226,225 246,729 261,407
Long Term Capital Leases - - -
Minority Interests - - -
Pref Stock (Liq Value) - - -
--------- ---------------------
Total Liabilities & Pref Stock 359,406 387,133 408,317
--------- ---------------------
Common Equity 298,423 287,534 272,531
--------- ---------------------
Total Liabilities & Equity $ 657,829 $ 674,667 $ 680,848
========= =====================
Common Shares Outstanding (000's) 13,134 13,019 13,708
Cash Value per share $ 0.52 $ 0.67 $ 0.60
Book Value per share $ 22.72 $ 22.09 $ 19.88
Tangible Book Value per share $ 7.42 $ 6.49 $ 5.39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effectiveness and Efficiency
- --------------------------------------------------------------------------------
A/R Turnover 5.77 x 5.90 x 5.40 x
Inventory Turnover 15.52 x 15.39 x 13.39 x
Asset Turnover 0.99 x 1.01 x 0.92 x
Days Sales Outstanding 63.2 61.9 67.5
Days Inventory Outstanding 23.5 23.7 27.3
Days Payable Outstanding 17.1 26.2 37.2
Return on Avg Assets 2.3% 3.3% na
Return on Avg Common Equity 5.3% 7.9% na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Strength
- --------------------------------------------------------------------------------
Current Ratio 2.09 1.93 1.65
Quick Ratio 1.69 1.56 1.33
Total Debt $ 242,668 $ 265,440 $ 266,490
Net Debt $ 235,818 $ 256,773 $ 258,293
Total Capitalization $ 541,091 $ 552,974 $ 539,021
Total Debt/Total Capitalization 44.8% 48.0% 49.4%
Net Debt/Total Capitalization 43.6% 46.4% 47.9%
Total Debt/EBITDA 2.79 x 2.73 x 2.41 x
EBITDA/Interest Expense 4.43 x 4.62 x 8.14 x
EBITDA-CAPEX/Interest Expense 3.32 x 3.36 x 6.29 x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Information
- --------------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange NYSE
Stock Price $ 16.04
52 Week High $ 22.10
52 Week Low $ 9.81
Avg. Daily Volume (000's) 35
Beta 0.72
Shares Outstanding (000's) 13,070
Total Outstanding Warrants & Options (000's) -
Float (000's) 8,800
Market Cap $ 209,642.8
Enterprise Value (EV) $ 445,460.8
Institutional
% Owned 40.00%
Number of Institutions 157
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Valuation Ratios
- --------------------------------------------------------------------------------
Multiple of
---------------------
Market Cap EV
---------------------
Latest Twelve Months
Revenue 0.32x 0.67x
EBIT 4.56x 9.69x
EBITDA 2.41x 5.11x
Normalized Net Income 13.49x 28.66x
Basic Normalized EPS 13.37x
Projected
Mar-02 Mean Revenue 0.31x 0.67x
Mar-02 Mean Revenue 0.30x 0.65x
Mar-02 Mean EPS 10.15x na
Mar-03 Mean EPS 9.22x na
Most Recent Filing
Assets 0.32x 0.68x
Common Equity 0.70x 1.49x
Tangible Common Equity 2.15x 4.57x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mean Consensus Estimates
- --------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- --------------------------------------------------------------------------------
March-02 2 $668,700 $ 1.58
March-03 2 $688,760 $ 1.74
LT Growth 1 na 15.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Period Growth Rates
- --------------------------------------------------------------------------------
Six Months Ended Fiscal Years Ended
Sep-01 Mar-01
---------------- ------------------
Revenue -6.2% 9.4%
EBIT -33.5% -25.0%
EBITDA -18.0% -12.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
- --------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 43
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
Geographics, Inc. Overview
- --------------------------------------------------------------------------------
Name Geographics, Inc.
Symbol GGIT
Latest Fiscal YE 31-Mar-01
Latest Rprt Per 30-Jun-01
Address 1555 Odell Road
City, State Zip Blaine, WA 98231
Telephone 360-332-6711
Fax 360-332-6352
Officers James Dorman
William Graham
John Rossmiller
William Paquin
Attorneys
Auditors KPMG
Transfer Agent Montreal Trust Centre
- --------------------------------------------------------------------------------
Geographics is primarily engaged in the development, manufacture, marketing and
distribution of specialty paper products, generally made using pre-printed
designs, including stationery, business cards, brochures, memo pads, and poster
boards. Geographics is also engaged in the development, marketing and
distribution of plastic ready-to-assemble filing and storage cabinets.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income and Cashflow Statement Data
- --------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Three Months Ended Fiscal Years Ended
---------------------- --------------------
Jun-01 Jun-01 Jun-00 Mar-01 Mar-00
--------- ---------------------- --------------------
Revenue $ 35,922 $ 8,524 $ 9,204 $ 36,602 $27,255
COGS 31,486 7,039 6,499 30,946 18,999
--------- ---------------------- --------------------
Gross Profit 4,436 1,485 2,705 5,656 8,256
Selling, General & Administrative 9,267 1,915 2,135 9,487 7,576
Research & Development - - - - -
Other Operating - - - - -
--------- ---------------------- --------------------
Operating Income (4,831) (430) 570 (3,831) 680
Interest Expense, net 1,140 218 222 1,144 927
Other, net (31) (13) (14) (32) 483
--------- ---------------------- --------------------
Pre-tax Income (6,002) (661) 334 (5,007) 236
Taxes - - - - -
--------- ---------------------- --------------------
After-tax Income (6,002) (661) 334 (5,007) 236
Minority Interest - - - - -
Equity in Affiliates - - - - -
--------- ---------------------- --------------------
Normalized Net Income (6,002) (661) 334 (5,007) 236
Preferred Dividends - - - - -
--------- ---------------------- --------------------
Normalized Net Income to
Common $ (6,002) $ (661) $ 334 $ 5,007) $ 236
========= ====================== ====================
EBIT $ (4,862) $ (443) $ 556 $ (3,863) $ 1,163
Depreciation & Amortization $ 2,079 $ 687 $ 407 $ 1,799 $ 1,330
EBITDA $ (2,783) $ 244 $ 963 $ (2,064) $ 2,493
CAPEX $ 1,534 $ 507 $ 77 $ 1,104 $ 444
EBITDA - CAPEX $ (4,317) $ (263) $ 886 $ (3,168) $ 2,049
GAAP Operating Cash Flow $ (242) $ 386 $ 274 $ (354) $(2,621)
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ - $ - $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued $ - $ - $ - $ - $ -
Operations
Extraordinary $ - $ - $ - $ - $ -
Items
Total $ - $ - $ - $ - $ -
Total After-tax Special $ - $ - $ - $ - $ -
Items
Tax Provision on Special $ - $ - $ - $ - $ -
Items
Reported Taxes $ - $ - $ - $ - $ -
Reported Net Income $ (6,002) $ (661) $ 334 $ (5,007) $ 236
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Basic Reported Weighted Avg Shares Out (000's) 35,284 35,832 35,284 19,442
Basic Normalized EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01
Basic Reported EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01
Diluted Reported Weighted Avg Shares Out (000's) 35,284 36,711 35,284 20,599
Diluted Normalized EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01
Diluted Reported EPS $ (0.17) $ (0.02) $ 0.01 $ (0.14) $ 0.01
- ----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- --------------------------------------------------------------------------------
Core Gross Profit 12.3% 17.4% 29.4% 15.5% 30.3%
S,G & A 25.8% 22.5% 23.2% 25.9% 27.8%
Operating Income 13.4% 5.0% 6.2% -10.5% 2.5%
Pre-Tax -16.7% -7.8% 3.6% -13.7% 0.9%
EBIT 13.5% -5.2% 6.0% 10.6% 4.3%
EBITDA -7.7% 2.9% 10.5% -5.6% 9.1%
Normalized Net Income 16.7% 7.8% 3.6% 13.7% 0.9%
Reported Net Income -16.7% -7.8% 3.6% -13.7% 0.9%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data
- --------------------------------------------------------------------------------
($ in thousands, except per share) As of As of
----------------------------
30-Jun-01 Mar-01 Mar-00
----------- ----------------------------
Cash & Equivalents $ 177 $ 421 $ 361
Marketable Securities - - -
----------- ----------------------------
Total Cash & Mkt 177 421 361
Securities
Accounts Receivable 5,453 7,344 6,079
Inventory 7,268 6,634 5,301
Other Current Assets 565 604 562
----------- ----------------------------
Total Current Assets 13,463 15,003 12,303
PPE, net 9,141 9,007 9,305
Intangibles, net 2,907 3,127 317
Investments - -
Other Assets 242 198 442
----------- ----------------------------
Total Assets $ 25,753 $ 27,335 $ 22,367
=========== ============================
Accounts Payable $ 5,919 $ 5,401 $ 3,699
Accrued Expenses 2,881 4,237 2,084
Short Term Debt 7,932 8,407 5,765
Short Term Capital Leases - - -
Other Current Liabilities 1,281 1,950 1,628
----------- ----------------------------
Total Current Liabilities 18,013 19,995 13,176
Other LT Liabilities - - -
Long Term Debt 2,627 1,629 3,539
Long Term Capital Leases - - -
Minority Interests - - -
Pref Stock (Liq Value) - - -
----------- ----------------------------
Total Liabilities & Pref Stock 20,640 21,624 16,715
----------- ----------------------------
Common Equity 5,113 5,711 5,652
----------- ----------------------------
Total Liabilities & Equity $ 25,753 $ 27,335 $ 22,367
=========== ============================
Common Shares Outstanding (000's) 38,192 38,193 26,966
Cash Value per share $ 0.00 $ 0.01 $ 0.01
Book Value per share $ 0.13 $ 0.15 $ 0.21
Tangible Book Value per share $ 0.06 $ 0.07 $ 0.20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effectiveness and Efficiency
- --------------------------------------------------------------------------------
A/R Turnover 5.61 x 5.45 x 4.48 x
Inventory Turnover 4.53 x 5.19 x 3.58 x
Asset Turnover 1.35 x 1.47 x 1.22 x
Days Sales Outstanding 65.0 66.9 81.4
Days Inventory Outstanding 80.6 70.4 101.8
Days Payable Outstanding 50.7 41.1 50.8
Return on Avg Assets -22.6% -20.1% na
Return on Avg Common Equity -110.9% -88.1% na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Strength
- --------------------------------------------------------------------------------
Current Ratio 0.75 0.75 0.93
Quick Ratio 0.34 0.42 0.53
Total Debt $ 10,559 $ 10,036 $ 9,304
Net Debt $ 10,382 $ 9,615 $ 8,943
Total Capitalization $ 15,672 $ 15,747 $ 14,956
Total Debt/Total Capitalization 67.4% 63.7% 62.2%
Net Debt/Total Capitalization 66.2% 61.1% 59.8%
Total Debt/EBITDA na na 3.73 x
EBITDA/Interest Expense na na 2.69 x
EBITDA-CAPEX/Interest Expense na na 2.21 x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Information
- --------------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange OTC BB
Stock Price $ 0.09
52 Week High $ 0.44
52 Week Low $ 0.06
Avg. Daily Volume (000's) 18
Beta (0.28)
Shares Outstanding (000's) 38,190
Total Outstanding Warrants & Options (000's) -
Float (000's) 26,000
Market Cap $ 3,437.1
Enterprise Value (EV) $ 13,819.1
Institutional
% Owned 0.00%
Number of Institutions -
- --------------------------------------------------------------------------------
Valuation Ratios
- --------------------------------------------------------------------------------
Multiple of
--------------------------------
Market Cap EV
--------------------------------
Latest Twelve Months
Revenue 0.10x 0.38x
EBIT na na
EBITDA na na
Normalized Net Income na na
Basic Normalized EPS na
Projected
Dec-01 Mean Revenue na na
Dec-01 Mean Revenue na na
Dec-01 Mean EPS na na
Dec-02 Mean EPS na na
Most Recent Filing
Assets 0.13x 0.54x
Common Equity 0.67x 2.70x
Tangible Common Equity 1.56x 6.26x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mean Consensus Estimates
- --------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- --------------------------------------------------------------------------------
December-01 - $ - $ -
December-02 - $ - $ -
LT Growth - na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Period Growth Rates
- --------------------------------------------------------------------------------
Three Months Ended Fiscal Years Ended
Jun-01 Mar-01
---------------- ----------------
Revenue -7.4% 34.3%
EBIT -179.7% -432.2%
EBITDA -74.7% -182.8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
- --------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 44
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
IPI Inc Overview
- --------------------------------------------------------------------------------
Name IPI Inc
Symbol IDH
Latest Fiscal YE 30-Nov-00
Latest Rprt Per 31-Aug-01
Address 8091 Wallace Road
City, State Zip Eden Prairie, MN 55344
Telephone 952-975-6200
Fax 952-975-6262
Officers Robert Sutter
David Engel
David Oswald
Margo Barnhart
Attorneys
Auditors Arthur Andersen
Transfer Agent Norwest Bank Minnesota
IPI has about 220 franchised Insty-Printslocations which provide graphic design,
typesetting, binding, and other commercial printing services to companies for
products such as stationery, business cards, forms, brochures, and overhead
transparencies. Subsidiary Change of Mind Learning Systems franchises
Dreamcatcher Learning Centers, which provide supplemental education in reading,
writing, math, G.E.D. & college prep studies.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income and Cashflow Statement Data
- --------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Nine Months Ended Fiscal Years Ended
----------------- -------------------
Aug-01 Aug-01 Aug-00 Nov-00 Nov-99
-------- ----------------- -------------------
Revenue $ 8,069 $ 5,851 $ 7,076 $ 9,294 $ 10,278
COGS 1,521 4,999 5,944 2,466 3,026
-------- ----------------- -------------------
Gross Profit 6,548 852 1,132 6,828 7,252
Selling, General &
Administrative 6,466 1,059 513 5,920 4,853
Research & Development - - - - -
Other Operating 1,112 - - 1,112 240
-------- ----------------- -------------------
Operating Income (1,030) (207) 619 (204) 2,159
Interest Expense, net 388 (89) (360) 117 -
Other, net - - - - -
-------- ----------------- -------------------
Pre-tax Income (1,418) (118) 979 (321) 2,159
Taxes (567) (47) 391 (129) 864
-------- ----------------- -------------------
After-tax Income (851) (71) 588 (192) 1,295
Minority Interest - - - - -
Equity in Affiliates - - - - -
-------- ----------------- -------------------
Normalized Net Income (851) (71) 588 (192) 1,295
Preferred Dividends - - - - -
-------- ----------------- -------------------
Normalized Net Income to
Common $ (851) $ (71) $ 588 $ (192) $ 1,295
======== ================= ===================
EBIT $ (1,030) $ (207) $ 619 $ (204) $ 2,159
Depreciation & Amortization $ 463 $ 328 $ 399 $ 534 $ 440
EBITDA $ (567) $ 121 $ 1,018 $ 330 $ 2,599
CAPEX $ 185 $ 101 $ 125 $ 209 $ 371
EBITDA - CAPEX $ (752) $ 20 $ 893 $ 121 $ 2,228
GAAP Operating Cash Flow $ (2,153) $(1,592) $ 1,292 $ 731 $ 2,214
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ 16,578 $16,148 $ 474 $ 904 $ 811
Accounting Changes $ - $ - $ - $ - $ -
Discontinued $ - $ - $ - $ - $ -
Operations
Extraordinary $ - $ - $ - $ - $ -
Items
Total $ 16,578 $16,148 $ 474 $ 904 $ 811
Total After-tax Special
Items $ 9,947 $ 9,689 $ 284 $ 542 $ 487
Tax Provision on Special
Items $ 6,631 $ 6,459 $ 190 $ 362 $ 324
Reported Taxes $ 6,064 $ 6,412 $ 581 $ 233 $ 1,188
Reported Net Income $ 9,096 $ 9,618 $ 872 $ 350 $ 1,782
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Basic Reported Weighted Avg
Shares Out (000's) 4,859 4,843 4,847 4,734
Basic Normalized EPS $ (0.17) $ (0.01) $ 0.12 $ (0.04) $ 0.27
Basic Reported EPS $ 1.87 $ 1.98 $ 0.18 $ 0.07 $ 0.38
Diluted Reported Weighted
Avg Shares Out (000's) 4,859 4,843 4,847 4,734
Diluted Normalized EPS $ (0.17) $ (0.01) $ 0.12 $ (0.04) $ 0.27
Diluted Reported EPS $ 1.87 $ 1.98 $ 0.18 $ 0.07 $ 0.38
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- --------------------------------------------------------------------------------
Core Gross Profit 81.2% 14.6% 16.0% 73.5% 70.6%
S,G & A 80.1% 18.1% 7.2% 63.7% 47.2%
Operating Income -12.8% 3.5% 8.7% -2.2% 21.0%
Pre-Tax 17.6% -2.0% 13.8% -3.5% 21.0%
EBIT -12.8% 3.5% 8.7% -2.2% 21.0%
EBITDA 7.0% 2.1% 14.4% 3.6% 25.3%
Normalized Net Income -10.5% 1.2% 8.3% 2.1% 12.6%
Reported Net Income 112.7% 164.4% 12.3% 3.8% 17.3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data
- --------------------------------------------------------------------------------
($ in thousands, except per share) As of As of
------------------
31-Aug-01 Nov-00 Nov-99
--------- ------------------
Cash & Equivalents $ 8,370 $ 643 $ 2,022
Marketable Securities 17,859 15,638 6,504
--------- ------------------
Total Cash & Mkt Securities 26,229 16,281 8,526
Accounts Receivable 1,089 1,370 1,371
Inventory 187 242 271
Other Current Assets 2,200 2,103 4,591
--------- ------------------
Total Current Assets 29,705 19,996 14,759
PPE, net 660 776 1,246
Intangibles, net 2,624 3,393 3,151
Investments - - -
Other Assets 605 753 860
--------- ------------------
Total Assets $ 33,594 $ 24,918 $ 20,016
========= ==================
Accounts Payable $ 281 $ 676 $ 485
Accrued Expenses 861 1,023 878
Short Term Debt - 4,438 -
Short Term Capital Leases - - -
Other Current Liabilities 4,721 200 390
--------- ------------------
Total Current Liabilities 5,863 6,337 1,753
Other LT Liabilities - - -
Long Term Debt - - -
Long Term Capital Leases 49 105 319
Minority Interests - - -
Pref Stock (Liq Value) - - -
--------- ------------------
Total Liabilities & Pref Stock 5,912 6,442 2,072
--------- ------------------
Common Equity 27,682 18,476 17,944
--------- ------------------
Total Liabilities & Equity $ 33,594 $ 24,918 $ 20,016
========= ==================
Common Shares Outstanding (000's) 4,859 4,859 4,734
Cash Value per share $ 5.40 $ 3.35 $ 1.80
Book Value per share $ 5.70 $ 3.80 $ 3.79
Tangible Book Value per share $ 5.16 $ 3.10 $ 3.12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effectiveness and Efficiency
- --------------------------------------------------------------------------------
A/R Turnover 6.56x 6.78x 7.50x
Inventory Turnover 7.09x 9.61x 11.17x
Asset Turnover 0.28x 0.41x 0.51x
Days Sales Outstanding 55.6 53.8 48.7
Days Inventory Outstanding 51.5 38.0 32.7
Days Payable Outstanding 19.2 22.3 21.8
Return on Avg Assets -2.9% -0.9% na
Return on Avg Common Equity -3.7% -1.1% na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Strength
- --------------------------------------------------------------------------------
Current Ratio 5.07 3.16 8.42
Quick Ratio 5.03 3.12 8.26
Total Debt $ 49 $ 4,543 $ 319
Net Debt $ (26,180)$(11,738) $ (8,207)
Total Capitalization $ 27,731 $ 23,019 $ 18,263
Total Debt/Total Capitalization 0.2% 19.7% 1.7%
Net Debt/Total Capitalization -94.4% -51.0% -44.9%
Total Debt/EBITDA na 13.77x 0.12x
EBITDA/Interest Expense na 2.82x na
EBITDA-CAPEX/Interest Expense na 1.03x na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Information
As of Date 16-Nov-01
Exchange AMEX
Stock Price $ 4.10
52 Week High $ 5.50
52 Week Low $ 2.06
Avg. Daily Volume (000's) 9
Beta 0.15
Shares Outstanding (000's) 4,580
Total Outstanding Warrants & Options (000's) -
Float (000's) 1,500
Market Cap $18,778.0
Enterprise Value (EV) $(7,402.0)
Institutional
% Owned 8.00%
Number of Institutions 5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Valuation Ratios
- --------------------------------------------------------------------------------
Multiple of
----------------
Market Cap EV
----------------
Latest Twelve Months
Revenue 2.33x na
EBIT na na
EBITDA na na
Normalized Net Income na na
Basic Normalized EPS na
Projected
Dec-01 Mean Revenue na na
Dec-01 Mean Revenue na na
Dec-01 Mean EPS na na
Dec-02 Mean EPS na na
Most Recent Filing
Assets 0.56x na
Common Equity 0.68x na
Tangible Common Equity 0.75x na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mean Consensus Estimates
- --------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- --------------------------------------------------------------------------------
December-01 - $ - $ -
December-02 - $ - $ -
LT Growth - na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Period Growth Rates
- --------------------------------------------------------------------------------
Nine Months Ended Fiscal Years Ended
Aug-01 Nov-00
--------- --------
Revenue -17.3% -9.6%
EBIT -133.4% -109.4%
EBITDA -88.1% -87.3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
Unusual Items comprise investment income.
- --------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 45
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- ------------------------------------------------------------------------------------------------------------------------------------
Impreso, Inc Overview
- ------------------------------------------------------------------------------------------------------------------------------------
Name Impreso, Inc Address 652 Southwestern Officers Marshall Sorokwasz Attorneys
Symbol ZCOM City, State Zip Coppell, TX 75019 Richard Bloom Auditors Arthur Andersen
Latest Fiscal YE 31-Aug-00 Telephone 972-462-0100 Donald Jett Transfer Agent American Stock
Latest Rprt Per 31-May-01 Fax 972-462-7764 Susan Atkins Transfer & Trust
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Income and Cashflow Statement Data
- ------------------------------------------------------------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Nine Months Ended Fiscal Years Ended
--------------------- ----------------------
May-01 May-01 May-00 Aug-00 Aug-99
--------- --------------------- ----------------------
Revenue $ 87,820 $65,660 $ 51,958 $ 74,118 $61,506
COGS 77,481 57,863 45,007 64,625 53,845
--------- --------------------- ----------------------
Gross Profit 10,339 7,797 6,951 9,493 7,661
Selling, General & Administrative 7,397 5,582 5,023 6,838 5,606
Research & Development - - - - -
Other Operating - - - - -
--------- --------------------- ----------------------
Operating Income 2,942 2,215 1,928 2,655 2,055
Interest Expense, net 1,547 1,140 897 1,304 833
Other, net 214 159 82 137 42
--------- --------------------- ----------------------
Pre-tax Income 1,609 1,234 1,113 1,488 1,264
Taxes 675 488 370 557 490
--------- --------------------- ----------------------
After-tax Income 934 746 743 931 774
Minority Interest - - - - -
Equity in Affiliates - - - - -
--------- --------------------- ----------------------
Normalized Net Income 934 746 743 931 774
Preferred Dividends - - - - -
--------- --------------------- ----------------------
Normalized Net Income to Common $ 934 $ 746 $ 743 $ 931 $ 774
========= ===================== ======================
EBIT $ 3,156 $ 2,374 $ 2,010 $ 2,792 $ 2,097
Depreciation & Amortization $ 806 $ 619 $ 502 $ 689 $ 545
EBITDA $ 3,962 $ 2,993 $ 2,512 $ 3,481 $ 2,642
CAPEX $ 1,482 $ 220 $ 1,035 $ 2,297 $ 658
EBITDA - CAPEX $ 2,480 $ 2,773 $ 1,477 $ 1,184 $ 1,984
GAAP Operating Cash Flow $ 3,675 $(5,098 $ (3,676) $ (5,099) $ (91)
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ - $ - $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued Operations $ - $ - $ - $ - $ -
Extraordinary Items $ - $ - $ - $ - $ -
Total $ - $ - $ - $ - $ -
Total After-tax Special Items $ - $ - $ - $ - $ -
Tax Provision on Special Items $ - $ - $ - $ - $ -
Reported Taxes $ 675 $ 488 $ 370 $ 557 $ 490
Reported Net Income $ 934 $ 746 $ 743 $ 931 $ 774
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Basic Reported Weighted Avg 5,283 5,293 5,293 5,293
Shares Out (000's)
Basic Normalized EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15
Basic Reported EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15
Diluted Reported Weighted Avg 5,283 5,293 5,293 5,293
Shares Out (000's)
Diluted Normalized EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15
Diluted Reported EPS $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.15
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- ---------------------------------------------------------------------------------------------------------
Core Gross Profit 11.8% 11.9% 13.4% 12.8% 12.5%
S,G & A 8.4% 8.5% 9.7% 9.2% 9.1%
Operating Income 3.4% 3.4% 3.7% 3.6% 3.3%
Pre-Tax 1.8% 1.9% 2.1% 2.0% 2.1%
EBIT 3.6% 3.6% 3.9% 3.8% 3.4%
EBITDA 4.5% 4.6% 4.8% 4.7% 4.3%
Normalized Net Income 1.1% 1.1% 1.4% 1.3% 1.3%
Reported Net Income 1.1% 1.1% 1.4% 1.3% 1.3%
- ---------------------------------------------------------------------------------------------------------
Under the IBM brand, IMPRESO brand and private label, Impreso makes
continuous-feed stock business forms, thermal and plain fax paper, paper for
copy machines and printers, and special surface papers. They have three
manufacturing plants and distributes in North America through over 45
warehouses.
- -------------------------------------------------------------------------------
Balance Sheet Data
- -------------------------------------------------------------------------------
($ in thousands, except per share) As of As of
-------------------------
31-May-01 Aug-00 Aug-99
------------ -------------------------
Cash & Equivalents $ 187 $ 150 $ 23
Marketable Securities 11 11 11
--------- ------- --------
Total Cash & Mkt Securities 198 161 34
Accounts Receivable 10,800 8,914 6,296
Inventory 36,667 21,233 18,801
Other Current Assets 473 280 724
--------- ------- --------
Total Current Assets 48,138 30,588 25,855
PPE, net 10,562 8,769 7,210
Intangibles, net - - -
Investments - - -
Other Assets 240 27 19
--------- ------- --------
Total Assets $ 58,940 $39,384 $ 33,084
========= ======= ========
Accounts Payable $ 16,176 $ 6,624 $ 9,054
Accrued Expenses 3,157 1,985 1,679
Short Term Debt 17,425 12,469 6,358
Short Term Capital Leases - - -
Other Current Liabilities 624 255 63
--------- ------- --------
Total Current Liabilities 37,382 21,333 17,154
Other LT Liabilities 858 764 728
Long Term Debt 6,488 3,782 2,629
Long Term Capital Leases - - -
Minority Interests - - -
Pref Stock (Liq Value) - - -
--------- ------- --------
Total Liabilities & Pref Stock 44,728 25,879 20,511
--------- ------- --------
Common Equity 14,212 13,505 12,573
--------- ------- --------
Total Liabilities & Equity $ 58,940 $39,384 $ 33,084
========= ======= ========
Common Shares Outstanding (000's) 5,293 5,293 5,293
Cash Value per share $ 0.04 $ 0.03 $ 0.01
Book Value per share $ 2.69 $ 2.55 $ 2.38
Tangible Book Value per share $ 2.69 $ 2.55 $ 2.38
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Effectiveness and Efficiency
- -------------------------------------------------------------------------------
A/R Turnover 8.91 x 9.75 x 9.77 x
Inventory Turnover 2.68 x 3.23 x 2.86 x
Asset Turnover 1.79 x 2.05 x 1.86 x
Days Sales 41.0 37.5 37.4
Outstanding
Days Inventory 136.4 113.1 127.4
Outstanding
Days Payable 49.0 40.0 55.6
Outstanding
Return on Avg Assets 1.9% 2.6% na
Return on Avg 6.7% 7.1% na
Common Equity
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Financial Strength
- -------------------------------------------------------------------------------
Current Ratio 1.29 1.43 1.51
Quick Ratio 0.31 0.44 0.41
Total Debt $ 23,913 $ 16,251 $ 8,987
Net Debt $ 23,715 $ 16,090 $ 8,953
Total Capitalization $ 38,125 $ 29,756 $ 21,560
Total Debt/Total 62.7% 54.6% 41.7%
Capitalization
Net Debt/Total 62.2% 54.1% 41.5%
Capitalization
Total Debt/EBITDA 6.04x 4.67x 3.40x
EBITDA/Interest Expense 2.56x 2.67x 3.17x
EBITDA-CAPEX/Interest Expense 1.60x 0.91x 2.38x
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Market Information
- -------------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange NasdaqSC
Stock Price $ 2.25
52 Week High $ 3.37
52 Week Low $ 1.50
Avg. Daily Volume (000's) 1
Beta 1.19
Shares Outstanding (000's) 5,280
Total Outstanding Warrants & Options (000's) -
Float (000's) 1,500
Market Cap $ 11,880.0
Enterprise Value (EV) $ 35,595.0
Institutional
% Owned 1.00%
Number of Institutions 10
- -------------------------------------------------------------------------------
Valuation Ratios
- -------------------------------------------------------------------------------
Multiple of
---------------------------------
Market Cap EV
---------------------------------
Latest Twelve Months
Revenue 0.14x 0.41x
EBIT 3.76x 11.28x
EBITDA 3.00x 8.98x
Normalized Net Income 12.72x 38.11x
Basic Normalized EPS 12.50x
Projected
Dec-01 Mean Revenue na na
Dec-01 Mean Revenue na na
Dec-01 Mean EPS na na
Dec-02 Mean EPS na na
Most Recent Filing
Assets 0.20x 0.60x
Common Equity 0.84x 2.50x
Tangible Common Equity 0.84x 2.50x
- -------------------------------------------------------------------------------
Mean Consensus Estimates
- -------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- -------------------------------------------------------------------------------
December-01 - $ - $ -
December-02 - $ - $ -
LT Growth - na na
- -------------------------------------------------------------------------------
Period Growth Rates
- -------------------------------------------------------------------------------
Nine Months Ended Fiscal Years Ended
May-01 Aug-00
-------------------- --------------------
Revenue 26.4% 20.5%
EBIT 18.1% 33.1%
EBITDA 19.1% 31.8%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Notes
- -------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 46
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
iPrint Technologies Overview
- --------------------------------------------------------------------------------
Name iPrint Technologies
Symbol IPRT
Latest Fiscal YE 31-Dec-00
Latest Rprt Per 30-Sep-01
Address 255 Constitution
City, State Zip Menlo Park, CA 94025
Telephone 650-298-8500
Fax 650-364-7742
Officers Royal Farros
Robyn Cerutti
Gregory Korjeff
Nickoletta Swank
Attorneys
Auditors Arthur Andersen
Transfer Agent American Stock Transfer & Trust
iPrint Technologies allows customers to design, proof, and order some 3,500
customized print products -- including cards, stationery, label, mugs, and
T-shirts -- through its retail Web site. The company, which outsources the
printing work, also offers specialized printing and photocopying services;
operates co-branded printing Web sites with 3M, OfficeMax, and other firms; and
develops sites for third parties.
- -----------------------------------------------------------------------------------------------------
Income and Cashflow Statement Data
- -----------------------------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Nine Months Ended Fiscal Years Ended
----------------- ------------------
Sep-01 Sep-01 Sep-00 Dec-00 Dec-99
-------- --------- --------- ---------- ----------
Revenue $ 11,806 $ 7,273 $ 12,536 $ 17,069 $ 3,256
COGS 7,671 4,623 8,973 12,021 2,265
-------- --------- --------- ---------- ----------
Gross Profit 4,135 2,650 3,563 5,048 991
Selling, General & Administrative 17,349 11,659 29,074 34,764 10,534
Research & Development 5,877 4,120 4,895 6,652 3,544
Other Operating 1,849 - - 1,849 668
-------- --------- --------- ---------- ----------
Operating Income (20,940) (13,129) (30,406) (38,217) (13,755)
Interest Expense, net - - - - -
Other, net 1,571 968 1,639 2,242 323
-------- --------- --------- ---------- ----------
Pre-tax Income (19,369) (12,161) (28,767) (35,975) (13,432)
Taxes - - - - -
-------- --------- --------- ---------- ----------
After-tax Income (19,369) (12,161) (28,767) (35,975) (13,432)
Minority Interest - - - - -
Equity in Affiliates - - - - -
-------- --------- --------- ---------- ----------
Normalized Net Income (19,369) (12,161) (28,767) (35,975) (13,432)
Preferred Dividends - - - - -
-------- --------- --------- ---------- ----------
Normalized Net Income to Common $(19,369) (12,161) $ (28,767) $ (35,975) $ (13,432)
======== ======= ========= ========== ==========
EBIT $(19,369) (12,161) $ (28,767) $ (35,975) $ (13,432)
Depreciation & Amortization $ 4,004 $ 1,550 $ 1,504 $ 3,958 $ 362
EBITDA $(15,365) $ (10,611) $ (27,263) $ (32,017) $ (13,070)
CAPEX $ 505 $ 372 $ 3,589 $ 3,722 $ 1,851
EBITDA - CAPEX $(15,870) $ (10,983) $ (30,852) $ (35,739) $ (14,921)
GAAP Operating Cash Flow $(16,469) $ (11,035) $ (26,566) $ (32,000) $ (10,845)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ (1,379) $ (1,379) $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued Operations $ - $ - $ - $ - $ -
Extraordinary Items $ - $ - $ - $ - $ -
Total $ (1,379) $ (1,379) $ - $ - $ -
Total After-tax Special Items $ (1,379) $ (1,379) $ - $ - $ -
Tax Provision on Special Items $ - $ - $ - $ - $ -
Reported Taxes $ - $ - $ - $ - $ -
Reported Net Income $(20,748) $ (13,540) $ (28,767) $ (35,975) $ (13,432)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Basic Reported Weighted Avg
Shares Out (000's) 30,180 24,606 25,970 7,265
Basic Normalized EPS $ (0.62) $ (0.40) $ (1.17) $ (1.39) $ (1.85)
Basic Reported EPS $ (0.67) $ (0.45) $ (1.17) $ (1.39) $ (1.85)
Diluted Reported Weighted Avg
Shares Out (000's) 30,180 24,606 25,970 7,265
Diluted Normalized EPS $ (0.62) $ (0.40) $ (1.17) $ (1.39) $ (1.85)
Diluted Reported EPS $ (0.67) $ (0.45) $ (1.17) $ (1.39) $ (1.85)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- -----------------------------------------------------------------------------------------------------
Core Gross Profit 35.0% 36.4% 28.4% 29.6% 30.4%
S,G & A 147.0% 160.3% 231.9% 203.7% 323.5%
Operating Income -177.4% -180.5% -242.5% -223.9% -422.5%
Pre-Tax -164.1% -167.2% -229.5% -210.8% -412.5%
EBIT -164.1% -167.2% -229.5% -210.8% -412.5%
EBITDA -130.1% -145.9% -217.5% -187.6% -401.4%
Normalized Net Income -164.1% -167.2% -229.5% -210.8% -412.5%
Reported Net Income -175.7% -186.2% -229.5% -210.8% -412.5%
- -----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data
- --------------------------------------------------------------------------------
($ in thousands, except per share)
As of As of
-----------------------
30-Sep-01 Dec-00 Dec-99
--------- --------- ----------
Cash & Equivalents $ 7,090 $ 19,283 $ 15,080
Marketable Securities 356 356 -
--------- --------- ----------
Total Cash & Mkt Securities 7,446 19,639 15,080
Accounts Receivable 2,156 1,874 255
Inventory - - -
Other Current Assets 5,117 8,300 892
--------- --------- -----------
Total Current Assets 14,719 29,813 16,227
PPE, net 2,657 4,070 2,136
Intangibles, net - - -
Investments - - -
Other Assets 2,761 205 -
--------- --------- ----------
Total Assets $ 20,137 $ 34,088 $ 18,363
========= ========= ==========
Accounts Payable $ 1,934 $ 2,509 $ 935
Accrued Expenses 2,920 2,546 2,121
Short Term Debt 6 196 96
Short Term Capital Leases - - -
Other Current Liabilities - - -
--------- --------- ----------
Total Current Liabilities 4,860 5,251 3,152
Other LT Liabilities - - -
Long Term Debt 8 12 119
Long Term Capital Leases - - -
Minority Interests - - -
Pref Stock (Liq Value) - - 30,793
--------- --------- ----------
Total Liabilities & Pref Stock 4,868 5,263 34,064
--------- --------- ----------
Common Equity 15,269 28,825 (15,701)
--------- --------- ----------
Total Liabilities & Equity $ 20,137 $ 34,088 $ 18,363
========= ========= ==========
Common Shares Outstanding (000's) 30,240 30,054 8,336
Cash Value per share $ 0.25 $ 0.65 $ 1.81
Book Value per share $ 0.50 $ 0.96 $ (1.88)
Tangible Book Value per share $ 0.50 $ 0.96 $ (1.88)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effectiveness and Efficiency
- --------------------------------------------------------------------------------
A/R Turnover 5.86 x 16.03 x 12.77 x
Inventory Turnover na na na
Asset Turnover 0.44 x 0.65 x 0.18 x
Days Sales Outstanding 62.3 22.8 28.6
Days Inventory Outstanding na na na
Days Payable Outstanding 24.8 11.4 20.1
Return on Avg Assets -71.4% -137.2% na
Return on Avg Common Equity -87.9% -548.2% na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Strength
- --------------------------------------------------------------------------------
Current Ratio 3.03 5.68 5.15
Quick Ratio 3.03 5.68 5.15
Total Debt $ 14 $ 208 $ 31,008
Net Debt (1) $ 14 $ 208 $ 31,008
Total Capitalization $ 15,283 $ 29,033 $ 15,307
Total Debt/Total Capitalization 0.1% 0.7% 202.6%
Net Debt/Total Capitalization 0.1% 0.7% 202.6%
Total Debt/EBITDA na na na
EBITDA/Interest Expense na na na
EBITDA-CAPEX/Interest Expense na na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Information
- --------------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange NasdaqNM
Stock Price $ 0.20
52 Week High $ 1.84
52 Week Low $ 0.16
Avg. Daily Volume (000's) 26
Beta -
Shares Outstanding (000's) 30,240
Total Outstanding Warrants & Options (000's) -
Float (000's) 11,000
Market Cap $ 6,048.0
Enterprise Value (EV) $ 6,062.0
Institutional
% Owned 1.00%
Number of Institutions 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Valuation Ratios
- --------------------------------------------------------------------------------
Multiple of
----------------
Market Cap EV
----------------
Latest Twelve Months
Revenue 0.51x 0.51x
EBIT na na
EBITDA na na
Normalized Net Income na na
Basic Normalized EPS na
Projected
Dec-01 Mean Revenue 0.56x 0.56x
Dec-01 Mean Revenue 0.39x 0.39x
Dec-01 Mean EPS na na
Dec-02 Mean EPS na na
Most Recent Filing
Assets 0.30x 0.30x
Common Equity 0.40x 0.40x
Tangible Common Equity 0.40x 0.40x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mean Consensus Estimates
- --------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- --------------------------------------------------------------------------------
December-01 4 $ 10,871 $ (0.57)
December-02 1 $ 15,560 $ (0.05)
LT Growth - na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Period Growth Rates
- --------------------------------------------------------------------------------
Nine Months Ended Fiscal Years Ended
Sep-01 Dec-00
------ ------
Revenue -42.0% 424.2%
EBIT -57.7% 167.8%
EBITDA -61.1% 145.0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
YTD 9/01 unusual items are restructuring expenses.
(1) Cash is not included in the calcuation for Net Debt due to the large
requirements of cash working capital in the business
- --------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 47
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
Paris Corporation Overview
- --------------------------------------------------------------------------------
Name Paris Corporation
Symbol PBFI
Latest Fiscal YE 30-Sep-00
Latest Rprt Per 30-Jun-01
Address 122 Kisel Road
City, State Zip Burlington, NJ 08016
Telephone 609-387-7300
Fax 609-971-6658
Officers Dominic Toscani
Gerard Toscani
William Lomano
Attorneys
Auditors Goldenberg Rosenthal
Transfer Agent Chase Mellon Shareholder Services
Paris makes papers and other products for laser and inkjet printers, including
its growing Burlington line, which has a marketing agreement with Microsoft's
Picture It creative software products. Paris sells its products through office T
products distributors and retailers in North America. It also owns 57% of
Signature, which markets office products to supermarkets and drugstores.
- -------------------------------------------------------------------------------------
Income and Cashflow Statement Data
- -------------------------------------------------------------------------------------
($ in thousands, except per share)
LTM Nine Months Fiscal Years Ended
--------------------------------------------
Ended
Jun-01 Jun-01 Jun-00 Sep-00 Sep-99
-------- -------- -------- -------- --------
Revenue $ 43,232 $ 32,278 $ 32,057 $ 43,011 $ 35,433
COGS 37,743 27,887 28,665 38,521 31,358
-------- -------------------- --------------------
Gross
Profit 5,489 4,391 3,392 4,490 4,075
Selling, General & 4,238 3,319 3,318 4,237 3,808
Administrative
Research & Development - - - - -
Other Operating - - - - -
-------- -------------------- --------------------
Operating
Income 5,489 4,391 3,392 4,490 4,075
Interest Expense, net 149 149 7 7 58
Other, net 940 602 672 1,010 1,250
-------- -------------------- --------------------
Pre-tax
Income 2,042 1,525 739 1,256 1,459
Taxes 710 424 317 603 548
-------- -------------------- --------------------
After-tax
Income 1,332 1,101 422 653 911
Minority Interest (166) (141) 35 10 50
Equity in Affiliates - - - - -
Normalized Net 1,166 960 457 663 961
Income
Preferred Dividends - - - - -
-------- -------------------- --------------------
Normalized Net Income to $ 1,166 $ 960 $ 457 $ 663 $ 961
======== ==================== ====================
Common
EBIT $ 2,191 $ 1,674 $ 746 $ 1,263 $ 1,517
Depreciation &
Amortization $ 656 $ 299 $ 371 $ 728 $ 556
EBITDA $ 2,847 $ 1,973 $ 1,117 $ 1,991 $ 2,073
CAPEX $ (368) $ (320) $ 248 $ 200 $ 912
EBITDA - CAPEX $ 3,215 $ 2,293 $ 869 $ 1,791 $ 1,161
GAAP Operating Cash
Flow $ 2,354 $ 1,155 $ (840) $ 359 $ 628
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ - $ - $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued $ - $ - $ - $ - $ -
Operations
Extraordinary $ - $ - $ - $ - $ -
Items
Total $ - $ - $ - $ - $ -
Total After-tax Special
Items $ - $ - $ - $ - $ -
Tax Provision on Special
Items $ - $ - $ - $ - $ -
Reported Taxes $ 710 $ 424 $ 317 $ 603 $ 548
Reported Net Income $ 1,166 $ 960 $ 457 $ 663 $ 961
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Basic Reported Weighted Avg
Shares Out (000's) 3,310 3,264 3,234 3,526
Basic Normalized EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27
Basic Reported EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27
Diluted Reported Weighted Avg
Shares Out (000's) 3,310 3,264 3,234 3,526
Diluted Normalized EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27
Diluted Reported EPS $ 0.36 $ 0.29 $ 0.14 $ 0.21 $ 0.27
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- ---------------------------------------------------------------------------------------
Core Gross Profit 12.7% 13.6% 10.6% 10.4% 11.5%
S,G & A 9.8% 10.3% 10.4% 9.9% 10.7%
Operating Income 2.9% 3.3% 0.2% 0.6% 0.8%
Pre-Tax 4.7% 4.7% 2.3% 2.9% 4.1%
EBIT 5.1% 5.2% 2.3% 2.9% 4.3%
EBITDA 6.6% 6.1% 3.5% 4.6% 5.9%
Normalized Net Income 2.7% 3.0% 1.4% 1.5% 2.7%
Reported Net Income 2.7% 3.0% 1.4% 1.5% 2.7%
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Balance Sheet Data
- ---------------------------------------------------------------------------
($ in thousands, except per share) As of As of
---------------------
30-Jun-01 Sep-00 Sep-99
---------- ---------------------
Cash & Equivalents $ 4,475 $ 2,828 $ 3,880
Marketable Securities 4,062 3,686 3,567
--------- ---------------------
Total Cash & Mkt Securities 8,537 6,514 7,447
Accounts Receivable 5,401 5,422 5,959
Inventory 3,842 3,862 4,167
Other Current Assets 970 1,096 645
--------- ---------------------
Total Current Assets 18,750 16,894 18,218
PPE, net 1,598 1,590 1,942
Intangibles, net - - -
Investments - 251 500
Other Assets 573 542 760
--------- ---------------------
Total Assets $ 20,921 $ 19,277 $ 21,420
========= =====================
Accounts Payable $ 3,564 $ 4,147 $ 5,197
Accrued Expenses 289 297 700
Short Term Debt 1,139 - -
Short Term Capital - - -
Leases
Other Current 366 330 623
--------- ---------------------
Liabilities
Total Current Liabilities 5,358 4,774 6,520
Other LT Liabilities - - 219
Long Term Debt - - -
Long Term Capital Leases - - -
Minority Interests 225 84 94
Pref Stock (Liq Value) - - -
--------- ---------------------
Total Liabilities & Pref Stock $ 5,583 4,858 6,833
--------- ---------------------
Common Equity 15,338 14,419 14,587
--------- ---------------------
Total Liabilities & Equity $ 20,921 $ 19,277 $ 21,420
========= =====================
Common Shares Outstanding (000's) 3,271 3,938 3,938
Cash Value per share $ 2.61 $ 1.65 $ 1.89
Book Value per share $ 4.69 $ 3.66 $ 3.70
Tangible Book Value per share $ 4.69 $ 3.66 $ 3.70
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Effectiveness and Efficiency
- ---------------------------------------------------------------------------
A/R Turnover 7.99x 7.56x 5.95x
Inventory Turnover 9.80x 9.60x 7.53x
Asset Turnover 2.15x 2.11x 1.65x
Days Sales Outstanding 45.7 48.3 61.4
Days Inventory Outstanding 37.3 38.0 48.5
Days Payable Outstanding 33.5 39.9 53.9
Return on Avg Assets 5.8% 3.3% na
Return on Avg Commin Equity 7.8% 4.6% na
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Financial Strength
- ---------------------------------------------------------------------------
Current Ratio 3.50 3.54 2.79
Quick Ratio 2.78 2.73 2.16
Total Debt $ 1,364 $ 84 $ 94
Net Debt $ (7,173) $ (6,430) $ (7,353)
Total Capitalization $ 16,702 $ 14,503 $ 14,681
Total Debt/Total Capitalization 8.2% 0.6% 0.6%
Net Debt/Total Capitalization -42.9% -44.3% -50.1%
Total Debt/EBITDA 0.48x 0.04x 0.05x
EBITDA/Interest Expense 19.11x 284.43x 35.74x
EBITDA-CAPEX/Interest 21.58x 255.86x 20.02x
Expense
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Market Information
- ---------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange NasdaqSC
Stock Price $ 3.04
52 Week High $ 3.70
52 Week Low $ 1.75
Avg. Daily Volume (000's) 1
Beta -
Shares Outstanding (000's) 3,270
Total Outstanding Warrants & Options (000's) -
Float (000's) 1,000
Market Cap $ 9,940.8
Enterprise Value (EV) $ 2,767.8
Institutional
% Owned 1.00%
Number of Institutions 5
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Valuation Ratios
- ---------------------------------------------------------------------------
Multiple of
------------------------
Market Cap EV
------------------------
Latest Twelve
Months
Revenue 0.23x 0.06x
EBIT 4.54x 1.26x
EBITDA 3.49x 0.97x
Normalized Net Income 8.53x 2.37x
Basic Normalized EPS 8.44x
Projected
Dec-01 Mean Revenue na na
Dec-01 Mean Revenue na na
Dec-01 Mean EPS na na
Dec-02 Mean EPS na na
Most Recent Filing
Assets 0.48x 0.13x
Common Equity 0.65x 0.18x
Tangible Common Equity 0.65x 0.18x
- ---------------------------------------------------------------------------
- -----------------------------------------------------------------------
Mean Consensus Estimates
- -----------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- -----------------------------------------------------------------------
December-01 - $ - $ -
December-02 - $ - $ -
LT Growth - na na
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
Period Growth Rates
- -----------------------------------------------------------------------
Nine Months Ended Fiscal Years Ended
Jun-01 Sep-00
----------------- ------------------
Revenue 0.7% 21.4%
EBIT 124.4% -16.7%
EBITDA 76.6% -4.0%
- -----------------------------------------------------------------------
Notes
- -----------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 48
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
SELECTED COMPARABLE COMPANY ANALYSIS
- --------------------------------------------------------------------------------
BCT International Overview
- --------------------------------------------------------------------------------
Name BCT International
Symbol BCTI
Latest Fiscal YE 28-Feb-01
Latest Rprt Per 31-Aug-01
Address 3000 N.E. 30th Pl
City, State Zip Fort Lauderdale, FL 33306
Telephone 954-563-1224
Fax 954-565-0742
Officers William Wilkerson
Michael Hull
Henry Johnson
Attorneys
Auditors PriceWaterhouseCoopers
Transfer Agent Registrar & Transfer Co
BCT International is a wholesale printing chain with 84 franchises in the US,
Canada, and Argentina. The franchises specialize in thermography and make items
such as business cards, letterheads, and labels, which are sold to retail
printers, mailing centers, and superstores. BCT's Pelican Paper Products
division supplies paper and printing equipment to the franchisees. The company
also operates Orderprinting.com.
- --------------------------------------------------------------------------------
Income and Cashflow Statement Data
- --------------------------------------------------------------------------------
($ in thousands, except per share)
Six Months Ended Fiscal Years Ended
LTM ----------------- --------------------
Aug-01 Aug-01 Aug-00 Feb-01 Feb-00
-------- ------- ------- -------- --------
Revenue $ 18,332 $ 9,194 $ 9,861 $ 18,999 $ 19,302
COGS 11,255 5,527 5,877 11,605 11,574
-------- ------ ------- -------- --------
Gross Profit 7,077 3,667 3,984 7,394 7,728
Selling, General &
Administrative 7,142 3,240 2,553 6,455 6,619
Research & Development - - - - -
Other Operating 245 114 101 232 189
-------- ------ ------- -------- --------
Operating Income (310) 313 1,330 707 920
Interest Expense, net (420) (139) (100) (381) (336)
Other, net 49 - - 49 11
-------- ------ ------- -------- --------
Pre-tax Income 159 452 1,430 1,137 1,267
Taxes 61 176 557 442 479
-------- ------ ------- -------- --------
After-tax Income $ 98 $ 276 $ 873 $ 695 $ 788
Minority Interest - - - - -
Equity in Affiliates - - - - -
-------- ------ ------- -------- --------
Normalized Net
Income 98 276 873 695 788
Preferred Dividends - - - - -
Normalized Net Income to -------- ------ ------- -------- --------
Common $ 98 $ 276 $ 873 $ 695 $ 788
======== ====== ======= ======== ========
EBIT $ (261) $ 313 $ 1,330 $ 756 $ 931
Depreciation &
Amortization $ 245 $ 114 $ 101 $ 232 $ 189
$ (16) $ 427 $ 1,431 $ 988 $ 1,120
EBITDA
$ 69 $ 51 $ 132 $ 150 $ 262
CAPEX
EBITDA - CAPEX $ (85) $ 376 $ 1,299 $ 838 $ 858
GAAP Operating Cash fLOW $ 2,171 $1,456 $ (399) $ 316 $ 1,437
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Special Item Reconciliation:
Pre-tax Special Items
Unusual Items $ - $ - $ - $ - $ -
Accounting Changes $ - $ - $ - $ - $ -
Discontinued
Operations $ - $ - $ (31) $ (31) $ (357)
Extraordinary
Items $ - $ - $ - $ - $ 941
Total $ - $ - $ (31) $ (31) $ 584
Total After-tax Special
Items $ - $ - $ (31) $ (31) $ 226
Tax Provision on Special
Items $ - $ - $ - $ - $ 358
Reported Taxes $ 61 $ 176 $ 557 $ 442 $ 837
Reported Net Income $ 98 $ 276 $ 842 $ 664 $ 1,014
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Basic Reported Weighted Avg
Shares Out (000's) 5,124 5,231 5,214 5,257
Basic Normalized EPS $ 0.01 $ 0.05 $ 0.17 $ 0.13 $ 0.15
Basic Reported EPS $ 0.02 $ 0.05 $ 0.16 $ 0.13 $ 0.19
Diluted Reported Weighted Avg
Shares Out (000's) 5,124 5,246 5,235 5,388
Diluted Normalized EPS $ 0.01 $ 0.05 $ 0.17 $ 0.13 $ 0.15
Diluted Reported EPS $ 0.02 $ 0.05 $ 0.16 $ 0.13 $ 0.19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Profitability Ratios (as % of Revenue)
- --------------------------------------------------------------------------------
Core Gross Profit 38.6% 39.9% 40.4% 38.9% 40.0%
S,G & A 39.0% 35.2% 25.9% 34.0% 34.3%
Operating Income -1.7% 3.4% 13.5% 3.7% 4.8%
Pre-Tax 0.9% 4.9% 14.5% 6.0% 6.6%
EBIT -1.4% 3.4% 13.5% 4.0% 4.8%
EBITDA -0.1% 4.6% 14.5% 5.2% 5.8%
Normalized Net Income 0.5% 3.0% 8.9% 3.7% 4.1%
Reported Net Income 0.5% 3.0% 8.5% 3.5% 5.3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data
- --------------------------------------------------------------------------------
($ in thousands, As of As of
except per share) -------------------
31-Aug-01 Feb-01 Feb-00
--------- ------- ----------
Cash & Equivalents $ 3,170 $ 1,799 $ 1,906
Marketable Securities - - -
--------- ------- ----------
Total Cash & Mkt
Securities 3,170 1,799 1,906
Accounts Receivable 2,043 3,568 3,293
Inventory 2,375 2,352 2,359
Other Current Assets 582 455 890
--------- ------- ----------
Total Current Assets 8,170 8,174 8,448
PPE, net 423 473 529
Intangibles, net 219 232 258
Investments - - -
Other Assets 7,344 7,311 8,086
--------- ------- ----------
Total Assets $ 16,156 $16,190 $ 17,321
========= ======= ==========
Accounts Payable $ 286 $ 597 $ 1,111
Accrued Expenses 563 403 1,349
Short Term Debt 86 86 104
Short Term Capital Leases - - -
Other Current
Liabilities 167 167 218
--------- ------- ----------
Total Current
Liabilities 1,102 1,253 2,782
Other LT Liabilities 320 417 453
Long Term Debt 194 236 330
Long Term Capital Leases - - -
Minority Interests - - -
Pref Stock (Liq Value) - - -
--------- ------- ----------
Total Liabilities &
Pref Stock 1,616 1,906 3,565
--------- ------- ----------
Common Equity 14,540 14,284 13,756
--------- ------- ----------
Total Liabilities &
Equity $ 16,156 $16,190 $ 17,321
========= ======= ==========
Common Shares
Outstanding (000's) 5,121 5,136 5,231
Cash Value per share $ 0.62 $ 0.35 $ 0.36
Book Value per share $ 2.84 $ 2.78 $ 2.63
Tangible Book Value $ 2.80 $ 2.74 $ 2.58
per share
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effectiveness and Efficiency
- --------------------------------------------------------------------------------
A/R Turnover 6.53 x 5.54 x 5.86 x
Inventory Turnover 4.76 x 4.93 x 4.91 x
Asset Turnover 1.13 x 1.13 x 1.11 x
Days Sales Outstanding 55.9 65.9 62.3
Days Inventory Outstanding 76.6 74.1 74.4
Days Payable Outstanding 8.6 17.0 22.1
Return on Avg Assets 0.6% 4.1% na
Return on Avg Common Equity 0.7% 5.0% na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Strength
- --------------------------------------------------------------------------------
Current Ratio 7.41 6.52 3.04
Quick Ratio 5.26 4.65 2.19
Total Debt $ 280 $ 322 $ 434
Net Debt $ (2,890) $ (1,477) $ (1,472)
Total Capitalization $ 14,820 $ 14,606 $ 14,190
Total Debt/Total
Capitalization 1.9% 2.2% 3.1%
Net Debt/Total
Capitalization -19.5% -10.1% -10.4%
Total Debt/EBITDA na 0.33 x 0.39 x
EBITDA/Interest
Expense na na na
EBITDA-CAPEX/Interest
Expense na na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Information
- --------------------------------------------------------------------------------
As of Date 16-Nov-01
Exchange OTC BB
Stock Price $ 0.69
52 Week High $ 1.63
52 Week Low $ 0.50
Avg. Daily Volume (000's) 6
Beta 0.47
Shares Outstanding (000's) 5,121
Total Outstanding Warrants &
Options (000's) -
Float (000's) 2,700
Market Cap $ 3,533.5
Enterprise Value (EV) $ 643.5
Institutional
% Owned 1.00%
Number of Institutions 8
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Valuation Ratios
- --------------------------------------------------------------------------------
Multiple of
----------------------
Market Cap EV
----------------------
Latest Twelve Months
Revenue 0.19x 0.04x
EBIT na na
EBITDA na na
Normalized Net Income 36.06x 6.57x
Basic Normalized EPS 69.00x
Projected
Dec-01 Mean Revenue 0.20x 0.04x
Dec-01 Mean Revenue 0.21x 0.04x
Dec-01 Mean EPS 6.93x na
Dec-02 Mean EPS 9.56x na
Most Recent Filing
Assets 0.22x 0.04x
Common Equity 0.24x 0.04x
Tangible Common Equity 0.25x 0.04x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mean Consensus Estimates
- --------------------------------------------------------------------------------
Year Ending # Ests Revenue EPS
- --------------------------------------------------------------------------------
December-01 - $ 17,726 $ 0.10
December-02 - $ 16,610 $ 0.07
LT Growth - na na
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Period Growth Rates
- --------------------------------------------------------------------------------
Six Months Ended Fiscal Years Ended
Aug-01 Feb-01
------ ------
Revenue -6.8% -1.6%
EBIT -76.5% -18.8%
EBITDA -70.2% -11.8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
FY00 & FY01 discontinued operation are losses from Company owned franchises.
FY00 extraordinary item is legal settlement.
- --------------------------------------------------------------------------------
Sources: Multex, Yahoo Finance, and Hoovers
Page 49
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
. The discounted cash flow analysis estimates value based on a
company's projected future free cash flow discounted at a rate
reflecting risks inherent in its business and capital structure.
Free cash flow represents the amount of cash generated and
available for principal, interest and dividend payments after
providing for ongoing business operations.
. While the discounted cash flow analysis is the most scientific of
the methodologies, it is dependent on projections provided by the
Company and is further dependent on numerous industry-specific
and macroeconomic factors.
. Capitalink utilized both the forecasts provided by Company
management ("Management Case"), and the resulting forecasts based
on certain modifications made by Capitalink to the Management
Case ("Revised Case").
. Management Case assumed fiscal year ending February 2003 and
2004 growth rates for royalty income to be -5.4% and -1.0%,
respectively, the Revised Case assumed 0% growth in each
year.
. Management Case assumed fiscal year ending February 2003 and
2004 growth rates for paper sales to be -6.7% for each year,
the Revised Case assumed 0% growth in each year. Capitalink
undertook two sets of discounted cash flow analyses, based on
each of the Management Case and the Revised Case.
. Under the Management Case, projected free cash flows in
fiscal years 2003 and 2004 are $578,000 and $522,000,
respectively.
. Under the Revised Case, projected free cash flows in fiscal
years 2003 and 2004 are $507,000 and $600,000, respectively.
The lower free cash in year 2003 under the Revised Case
results from the higher levels of working capital required by
the greater revenue as compared to the Management Case.
Page 50
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
. In order to arrive at a present value of the free cash flows,
Capitalink utilized discount rates ranging from 25.0% to 37.5%.
This range was based on a derived weighted average cost of capital
equal to 31.4%:
. Capital structure is 7.3% debt, 92.7% equity.
. Cost of equity was determined to be 33.5% based on the
riskless and risk-based rates.
. Cost of debt was determined to be 8.0% based on
outstanding acquisition notes payable.
. The range of terminal values represents the residual value of the
Company at the end of the forecast period. Capitalink presented a
range of terminal values by applying a range of multiples to the
Company's projected EBITDA. Capitalink noted that utilizing the
EBITDA multiple; the terminal value on average represented 101.5%
and 101.1% of the implied enterprise value for the Management Case
and Revised Case, respectively. Thus, all of the value was derived
from a terminal event and not the projected free cash flows.
. In addition, Capitalink presented a perpetual growth scenario
whereby ranges of growth rates were applied to the Company's 2004
free cash flows in order to determine a terminal value, rather
than multiples. Capitalink noted that utilizing the perpetual
growth scenario; the terminal value on average represented 104.2%
and 102.4% of the implied enterprise value for the Management Case
and Revised Case, respectively. Thus, all of the value was derived
from a terminal event and not the projected free cash flows.
. In each of the scenarios discussed, a range of enterprise values
was derived. The enterprise values were reduced by net debt to
arrive at an equity value. Because the "net debt" is actually a
negative due to the Company's available cash and the calculated
present value of the notes receivable (as
Page 51
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
discussed later and assumed to be available excess working
capital), such net debt is added to the enterprise value to arrive
at a market value.
. It was noted that utilizing either terminal value scenario under
both Management and Revised Cases the net debt represented in
excess of 70% of the respectively calculated equity values.
. Capitalink calculated a range of equity values per share based on
approximately 5,136,000 shares outstanding as of August 31, 2001.
The shares outstanding are comprised of 5,121,000 shares of common
stock, and 15,000 "in-the-money" options, at an exercise price is
$1.12 or below.
. Capitalink found that the midpoints of the ranges of equity values
per share with respect to the EBITDA multiple were $1.22 under the
Management Case, and $1.44 under the Revised Case. Under the
perpetual growth scenario, the midpoints were $1.09 under the
Management Case, and $1.21 under the Revised Case.
Page 52
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Financial Projections - Management Case
($ in thousands)
Actual Projected
---------------------------------- ------------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29
---------------------- --------------------------------
2000 2001 2001 2002 2002 2003 2004
---------------------------------- ------------------------------------------
Revenues
Royalty Income $ 5,394 $ 5,267 $ 2,614 $ 2,543 $ 5,157 $ 4,877 $ 4,829
Pelican Paper Sales 13,881 13,424 6,385 6,144 12,529 11,693 10,913
Franchise Sales 27 46 22 18 40 40 40
Other 952 311 139 130 269 282 297
---------------------------------- ------------------------------------------
Total $20,254 $19,048 $ 9,160 $ 8,835 $17,995 $16,893 $16,079
Cost of Goods Sold
Cost of Sales Paper 11,574 11,605 5,527 5,394 10,921 10,193 9,513
---------------------------------- ------------------------------------------
Gross Margin $ 8,680 $ 7,443 $ 3,633 $ 3,441 $ 7,074 $ 6,700 $ 6,566
Less Operating Expenses
Salaries & Employee Benefits na 2,787 1,660 1,367 3,027 2,740 2,822
General and Administrative na 574 235 335 570 599 616
IT Programming Costs na 669 258 199 457 550 550
Occupancy Costs na 204 93 89 182 187 193
Travel and Entertainment na 375 177 193 370 389 396
Professional Fees na 236 251 328 579 200 206
Bad Debt na 1,452 450 450 900 900 900
Management Incentive na 125 100 100 200 250 250
Net Loss Company Plants na 31 16 68 84 120 75
---------------------------------- ------------------------------------------
Total 6,619 6,453 3,240 3,129 6,369 5,934 6,009
---------------------------------- ------------------------------------------
EBITDA $ 2,061 $ 990 $ 393 $ 312 $ 705 $ 766 $ 557
================================== ==========================================
Actual Projected
----------------- --------------------------------------------
FY ended 6 Mths FY ended
February 28/29 Sep - Feb February 28/29
----------------- --------------------------------------------
2000 2001 2002 2002 2003 2004
----------------- --------------------------------------------
Growth Assumptions
Royalty Income na -2.4% -2.7% -2.1% -5.4% -1.0%
Pelican Paper Sales na -3.3% -3.8% -6.7% -6.7% -6.7%
Franchise Sales na 70.4% -18.2% -13.0% 0.0% 0.0%
Other na -67.3% -6.5% -13.5% 5.0% 5.0%
----------------- --------------------------------------------
Total na -6.0% -53.6% -5.5% -6.1% -4.8%
Margin Assumptions
Cost of Paper Sales Margin 16.6% 13.6% 12.2% 12.8% 12.8% 12.8%
Gross Margin 42.9% 39.1% 38.9% 39.3% 39.7% 40.8%
Growth Assumptions
Salaries & Employee Benefits na na -17.7% 8.6% -9.5% 3.0%
General and Administrative na na 42.6% -0.7% 5.0% 3.0%
IT Programming Costs na na -22.9% -31.7% 20.4% 0.0%
Occupancy Costs na na -4.3% -10.8% 3.0% 3.0%
Travel and Entertainment na na 9.0% -1.3% 5.0% 2.0%
Professional Fees na na 30.7% 145.3% -65.5% 3.0%
Bad Debt na na 0.0% -38.0% 0.0% 0.0%
Management Incentive na na 0.0% 60.0% 25.0% 0.0%
----------------- --------------------------------------------
Net Loss Company Plants na na 325.0% 171.0% 42.9% -37.5%
na -2.5% -3.4% -1.3% -6.8% 1.3%
Margin Review
EBITDA Margin % 10.2% 5.2% 3.5% 3.9% 4.5% 3.5%
- --------------------------------------------------------------------------------
Sources of information: Company Financials, Projections and Management.
Page 53
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Discounted Cash Flow Analysis - Management Case
($ in thousands, except per share)
Free Cash Flows
Actual Projected
---------------------------- ------------------------------
FY ended FY ended
February 28/29 6 Mths 6 Mths February 28/29
----------------- Mar - Aug Sep - Feb --------------
2000 2001 2001 2002 2003 2004
---------------------------- ------------------------------
Revenue $ 20,254 $ 19,048 $ 9,160 $ 8,835 $ 16,893 $ 16,079
Cost of Sales 11,574 11,605 5,527 5,394 10,193 9,513
---------------------------- ------------------------------
Gross Margin 8,680 7,443 3,633 3,441 6,700 6,566
Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009
---------------------------- ------------------------------
EBITDA 2,061 988 393 312 766 557
less: Deprec. & Amort. 189 232 114 137 220 220
---------------------------- ------------------------------
EBIT 1,872 756 279 175 546 337
Income Taxes 837 442 176 69 216 133
---------------------------- ------------------------------
After-tax Income before 1,035 314 103 106 330 204
Interest
Add: Deprec. & Amort. 189 232 114 137 220 220
Add: (Used) Sourced by Net 1,365 (1,505) 1,374 (906) 278 248
Wkg Cap.
Less: Capital Expenditures 262 150 51 99 250 150
---------------------------- ------------------------------
Free Cash Flows $ 2,327 $(1,109)$ 1,540 $ (762) $ 578 $ 522
============================ ==============================
Estimated Range of Enterprise Values
Terminal EBITDA Multiple
Discount ----------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
- --------------------------------------------------------------------
25.0% $ 960 $1,129 $1,297 $1,382 $1,550 $1,719
27.5% $ 899 $1,060 $1,221 $1,302 $1,463 $1,625
-----------------
30.0% $ 841 $ 996 | $1,150 $1,227 | $1,382 $1,536
32.5% $ 787 $ 935 | $1,083 $1,157 | $1,305 $1,453
-----------------
35.0% $ 736 $ 878 $1,020 $1,091 $1,232 $1,374
37.5% $ 688 $ 824 $ 960 $1,028 $1,164 $1,300
----------
Average of Box | $ 1,154 |
----------
Estimated Range of Equity Values
Terminal EBITDA Multiple
Discount ---------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
- --------------------------------------------------------------------
25.0% $6,097 $6,266 $6,434 $6,519 $6,687 $6,856
27.5% $6,036 $6,197 $6,358 $6,439 $6,600 $6,761
-----------------
30.0% $5,978 $6,132 | $6,287 $6,364 | $6,518 $6,673
32.5% $5,924 $6,072 | $6,220 $6,294 | $6,442 $6,589
-----------------
35.0% $5,873 $6,015 $6,156 $6,227 $6,369 $6,511
37.5% $5,825 $5,961 $6,097 $6,165 $6,301 $6,437
----------
Average of Box | $ 6,291 |
----------
--------------------------------
Terminal Value - EBITDA Multiple
--------------------------------
Terminal Values
Terminal EBITDA Multiple
---------------------------------------------------------
2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
---------------------------------------------------------
EBITDA Terminal Value $ 1,532 $ 1,811 $ 2,090 $ 2,229 $ 2,507 $ 2,786
=========================================================
Discounted Terminal Values as Percentage of Enterprise Values
Terminal EBITDA Multiple
Discount --------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
- --------------------------------------------------------------------
25.0% 159.6% 97.1% 97.5% 97.6% 97.9% 98.1%
27.5% 98.7% 98.9% 99.0% 99.1% 99.2% 99.3%
-----------------
30.0% 100.9% 100.8% | 100.7% 100.6% | 100.6% 100.5%
32.5% 103.4% 102.8% | 102.4% 102.3% | 102.0% 101.8%
-----------------
35.0% 106.0% 105.0% 104.3% 104.0% 103.6% 103.2%
37.5% 108.8% 107.3% 106.3% 105.9% 105.2% 104.7%
---------
Average of Box | 101.5% |
---------
Estimated Range of Equity Values per Share
Terminal EBITDA Multiple
Discount ------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
- -----------------------------------------------------------------
25.0% $ 1.19 $ 1.22 $ 1.25 $ 1.27 $ 1.30 $ 1.33
27.5% $ 1.18 $ 1.21 $ 1.24 $ 1.25 $ 1.29 $ 1.32
----------------
30.0% $ 1.16 $ 1.19| $ 1.22 $ 1.24 |$ 1.27 $ 1.30
32.5% $ 1.15 $ 1.18| $ 1.21 $ 1.23 |$ 1.25 $ 1.28
----------------
35.0% $ 1.14 $ 1.17 $ 1.20 $ 1.21 $ 1.24 $ 1.27
37.5% $ 1.13 $ 1.16 $ 1.19 $ 1.20 $ 1.23 $ 1.25
--------
Average of Box | $ 1.22 |
--------
- --------------------------------------------------------------------------------
All Discounted amounts have been calculated utilizing a mid-year convention.
Sources of information: Company Financials, Projections and Management.
Page 54
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Discounted Cash Flow Analysis - Management Case
($ in thousands, except per share)
Free Cash Flows
Actual Projected
----------------------------------- ---------------------------------
FY ended FY ended
February 28/29 6 Mths 6 Mths February 28/29
----------------------- Mar - Aug Sep - Feb --------------------
2000 2001 2001 2002 2003 2004
----------------------------------- ---------------------------------
Revenue $ 20,254 $ 19,048 $ 9,160 $ 8,835 $ 16,893 $ 16,079
Cost of Sales 11,574 11,605 5,527 5,394 10,193 9,513
----------------------------------- ---------------------------------
Gross Margin 8,680 7,443 3,633 3,441 6,700 6,566
Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009
----------------------------------- ---------------------------------
EBITDA 2,061 988 393 312 766 557
less: Deprec. & Amort 189 232 114 137 220 220
----------------------------------- ---------------------------------
EBIT 1,872 756 279 175 546 337
Income Taxes 837 442 176 69 216 133
----------------------------------- ---------------------------------
After-tax Income before
Interest 1,035 314 103 106 330 204
Add: Deprec. & Amort 189 232 114 137 220 220
Add: (Used) from by
Net WC 1,365 (1,505) 1,374 (906) 278 248
Less: Capital
Expenditures 262 150 51 99 250 150
----------------------------------- ---------------------------------
Free Cash Flows $ 2,327 $ (1,109) $ 1,540 $ (762) $ 578 $ 522
=================================== =================================
Estimated Range of Enterprise Values
Terminal Perpetual Growth Rates
Discount ----------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
- ----------------------------------------------------------
25.0% $665 $674 $684 $694 $705 $716
27.5% $554 $561 $569 $577 $585 $594
-------------
30.0% $462 $469 | $475 $481 | $488 $495
32.5% $386 $391 | $396 $401 | $407 $412
-------------
35.0% $320 $324 $329 $333 $337 $342
37.5% $263 $267 $271 $274 $278 $282
-------
Average of Box | $ 438 |
-------
Estimated Range of Equity Values
Terminal Perpetual Growth Rates
Discount -----------------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
-----------------------------------------------------------
25.0% $5,801 $5,811 $5,821 $5,831 $5,842 $5,852
27.5% $5,691 $5,698 $5,706 $5,714 $5,722 $5,731
-----------------
30.0% $5,599 $5,605 | $5,612 $5,618 | $5,625 $5,631
32.5% $5,522 $5,528 | $5,533 $5,538 | $5,543 $5,549
-----------------
35.0% $5,457 $5,461 $5,465 $5,470 $5,474 $5,479
37.5% $5,400 $5,404 $5,407 $5,411 $5,415 $5,419
---------
Average of Box | $ 5,575 |
---------
-----------------------------------
Terminal Value - Perpetual Growth
-----------------------------------
Terminal Values
Terminal Perpetual Growth Rates
-------------------------------------------------
-------------------------------------------------
3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
-------------------------------------------------
EBITDA $575 $577 $578 $579 $581 $582
less: Deprec. &
Amort 200 200 200 200 200 200
-------------------------------------------------
EBIT 375 377 378 379 381 382
Income Taxes 148 149 149 150 150 151
-------------------------------------------------
After-tax Income before
Int 227 228 229 230 230 231
Add: Deprec. & Amort 200 200 200 200 200 200
Add: (Used) from by
Net WC -- -- -- -- -- --
Less: Capital
Expenditures 200 200 200 200 200 200
------------------------------------------------
Free Cash Flows $227 $228 $229 $230 $230 $231
================================================
Disc Rate Perpetual Growth Terminal Values
- ------------------------------------------------------------------
25.0% $1,044 $1,060 $1,076 $1,093 $1,111 $1,128
27.5% $ 936 $ 950 $ 963 $ 977 $ 991 $1,006
30.0% $ 849 $ 860 $ 871 $ 883 $ 895 $ 907
32.5% $ 776 $ 786 $ 796 $ 806 $ 816 $ 826
35.0% $ 715 $ 724 $ 732 $ 741 $ 749 $ 758
37.5% $ 663 $ 670 $ 678 $ 685 $ 693 $ 701
Discounted Terminal Values as Percentage of Enterprise Values
Terminal Perpetual Growth Rates
Discount -----------------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
--------------------------------------------------------------------------
25.0% 95.1% 95.2% 95.2% 95.3% 95.4% 95.4%
27.5% 97.9% 97.9% 97.9% 98.0% 98.0% 98.0%
-----------------
30.0% 101.7% 101.7% | 101.7% 101.7% | 101.6% 101.6%
32.5% 106.9% 106.8% | 106.7% 106.6% | 106.5% 106.4%
-----------------
35.0% 113.7% 113.6% 113.4% 113.2% 113.0% 112.9%
37.5% 123.0% 122.7% 122.4% 122.1% 121.8% 121.5%
--------
Average of Box | 104.2% |
--------
Estimated Range of Equity Values per Share
Terminal Perpetual Growth Rates
Discount -----------------------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
-------------------------------------------------------------------------------
25.0% $ 1.13 $ 1.13 $ 1.13 $ 1.14 $ 1.14 $ 1.14
27.5% $ 1.11 $ 1.11 $ 1.11 $ 1.11 $ 1.11 $ 1.12
--------------------
30.0% $ 1.09 $ 1.09 | $ 1.09 $ 1.09 | $ 1.10 $ 1.10
32.5% $ 1.08 $ 1.08 | $ 1.08 $ 1.08 | $ 1.08 $ 1.08
--------------------
35.0% $ 1.06 $ 1.06 $ 1.06 $ 1.06 $ 1.07 $ 1.07
37.5% $ 1.05 $ 1.05 $ 1.05 $ 1.05 $ 1.05 $ 1.06
---------
Average of Box | $ 1.09 |
---------
- --------------------------------------------------------------------------------
All Discounted amounts have been calculated utilizing a mid-year convention.
Sources of information: Company Financials, Projections and Management.
Page 55
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Long Term and Equity Assumptions - Management Case
($ in thousands)
Actual Projected
-------------------------- ----------------------------------------
FY ended FY ended
February 28/29 6 Mths 6 Mths February 28/29
--------------- Mar - Aug Sep - Feb ----------------- Terminal
2000 2001 2001 2002 2003 2004 Period
-------------------------- ----------------------------------------
Existing Fixed Assets
Gross Assets $1,633 $1,707 $1,759 $1,759 $1,759 $1,759
Less Acc Deprec 1,104 1,234 1,335 1,439 1,563 1,657
-------------------------- -----------------------------
Net Book Value $ 529 $ 473 $ 424 $ 320 $ 196 $ 102
========================== =============================
Deprec Expense $ 163 $ 206 $ 101 $ 104 $ 124 $ 94 $ 70
========================== ========================================
New Fixed Assets
Capex $ 99 $ 250 $ 150 $ 200
========================================
Total Capex
Years
Deprec Expense 5 $ 20 $ 70 $ 100 $ 100
========================================
Net Book Value
Mach & Equip $ 99 $ 349 $ 499
Gross Assets $ 99 $ 349 $ 499
Less Acc Deprec 20 90 190
-----------------------------
Net Book Value $ 79 $ 259 $ 309
=============================
Total Assets
Gross Assets $1,633 $1,707 $1,759 $1,858 $2,108 $2,258
Less Acc Deprec 1,104 1,234 1,335 1,459 1,653 1,847
-------------------------- -----------------------------
Net Book Value $ 529 $ 473 $ 424 $ 399 $ 455 $ 411
========================== =============================
Deprec Expense $ 163 $ 206 $ 101 $ 124 $ 194 $ 194 $ 170
========================== ========================================
Intangibles
Gross Intangible $ 474 $ 474 $ 474 $ 474 $ 474 $ 474
Less Acc Amort 216 242 255 268 294 320
========================== ========================================
Net Book Value $ 258 $ 232 $ 219 $ 206 $ 180 $ 154
========================== ========================================
Amort Expense $ 26 $ 26 $ 13 $ 13 $ 26 $ 26 $ 30
========================== ========================================
Deprec & Amort Expense $ 189 $ 232 $ 114 $ 137 $ 220 $ 220 $ 200
========================== ========================================
Actual
as of
8/31/2001
----------
Equity Value Assumptions
Debt & Other Obligations
Interest Bearing Debt $ 280
Contingent Liabilities (1) 550
Other -
----------
830
----------
Less Cash
Cash on Hand 3,170
Assumed cash from exercise of
options 17
Assumed value of notes (2) 2,780
-----------
5,967
-----------
Net Debt $ (5,137)
===========
Common Stock Equivalents (in
thousands)
Common Stock Outstanding 5,121
Stock issued re Other -
-----------
5,121
-----------
Exercise $
Options in the money: Plan 1 $ 1.12 15
Plan 2 $ - -
-----------
15
-----------
Total Common Stock Equivalents 5,136
===========
- --------------------------------------------------------------------------------
(1) Guarantee of a plant purchase obligation to a third party.
(2) Based upon a collectibility and recovery analysis prepared in consultation
with Company Management. See Note Receivable Summary Analysis.
Sources of information: Company Financials, Projections and Management.
Page 56
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Operating and Working Capital Assumptions - Management Case
($ in thousands)
Actual Projected
---------------------------- -----------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal
------------------ ------------------
2000 2001 2001 2002 2003 2004 Period
---------------------------- -----------------------------------------
Growth Statistics and Assumptions
Revenue na -6.0% na -53.6% 91.2% -4.8%
Cost of Sales na 0.3% na 53.5% 89.0% -6.7%
Operating Expenses na 2.5% na -51.5% 89.7% 1.3%
EBITDA na -52.1% na -68.4% 145.4% -27.2%
EBIT na -59.6% na -76.9% 211.8% -38.2%
After-tax Income Pre-Interest na -69.7% na -66.3% 211.8% -38.2%
Profitability
Gross Margin 42.9% 39.1% 39.7% 38.9% 39.7% 40.8%
EBITDA 10.2% 5.2% 4.3% 3.5% 4.5% 3.5%
EBIT 9.2% 4.0% 3.0% 2.0% 3.2% 2.1%
After-tax Income Pre-Interest 5.1% 1.6% 1.1% 1.2% 2.0% 1.3%
Income Tax Expense and Assumptions
Statutory Tax Rate 39.5% 39.5% 39.5%
Effective Tax Rate 44.7% 58.5% 63.1% 39.5% 39.5% 39.5% 39.5%
Current Period Tax $ 837 $ 442 $ 176 $ 69 $ 216 $ 133
NOL Usage - - - - -
---------------------------- -------------------------------
Income Tax Expense $ 837 $ 442 $ 176 $ 69 $ 216 $ 133
============================ ===============================
Ending NOL Balance $ - $ - $ - $ -
========= ===============================
Actual Projected
---------------------------- -----------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal
------------------ ------------------
2000 2001 2001 2002 2003 2004 Period
---------------------------- -----------------------------------------
Non-Cash Working Capital
Assumptions
Accounts Receivable (AR)
AR Days Outstanding 59 68 na 65 65 65
% of Sales 16.3% 18.7% na 17.8% 17.8% 17.8%
Inventory
Days Inventory Outs. 74 74 na 74 74 74
% Cost of Sales 20.4% 20.3% na 20.3% 20.3% 20.3%
Prepayments
% of Direct and Op Costs 2.2% 0.7% na 0.7% 0.7% 0.7%
Accounts Payable (AP)
AP Days Outstanding 22 12 na 12 12 12
% of Direct and Op Costs 6.1% 3.3% na 3.3% 3.3% 3.3%
Accrued Expenses & Other
% of Direct and Op Costs 8.6% 3.2% na 3.2% 3.2% 3.2%
Changes in Non-Cash Net Working
Capital
Accounts Receivables $ 3,293 $ 3,568 $ 2,043 $ 3,205 $ 3,008 $ 2,863
Inventory 2,359 2,352 2,375 2,214 2,066 1,929
Prepayments 408 134 111 121 113 109
Accounts Payables 1,111 597 286 568 530 510
Accrued Expenses & Other 1,567 570 730 553 516 497
--------------------------- -------------------------------
Non-Cash Net WC $ 3,382 $ 4,887 $ 3,513 $ 4,419 $ 4,141 $ 3,893
============================ ===============================
% of EBITDA 164.1% 494.6% 893.9% 1416.3% 540.8% 698.7%
============================ ===============================
Cash Flow (Used) Sourced by
Non-Cash Net Wrkg Cap $ 1,365 $(1,505) $ 1,374 $ (906) $ 278 $ 248 $ -
============================ =========================================
- --------------------------------------------------------------------------------
Sources of information: Company Financials, Projections and Management.
Page 57
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Cost of Capital Calculation
($ in thousands, except per share)
Cost of Common Stock
Riskless (1)
20 year treasury coupon (Rf) 5.0%
Risk (2)
Equity risk premium (EP) 7.8%
Industry risk premium (IP) 2.3%
Size Premium (SP) 8.4%
Company Specific Risk 10.0%
-----
33.5%
=====
Cost of Debt
Nominal % of Weighted
Type of Debt Rate Amount of Debt Cost of Debt
-----------------------------------------------------------------------------
Acquisition Notes Payble 8.00% $ 280 100.0% 8.0%
- 0.0% 0.0%
- 0.0% 0.0%
- 0.0% 0.0%
- 0.0% 0.0%
-----------------------------------
$ 280 100.0% 8.0%
===================================
Note: Company has $2m unused line of credit at LIBOR + 2.35%. As of
November 16, 2001 LIBOR was 2.10%.
Weighted Average Cost of Capital
Shares Outs. Stock Price Market % of Nominal Effective Cost of Weighted
Type (in thousands) 16-Nov-01 Value Total Capital Rate Tax Rate Capital Cost of Capital
------------------------------------------------------------------------------------------------------------
Debt $ 280 7.3% 8.0% 39.5% 4.8% 0.4%
Common Stock 5,121 $ 0.6900 3,533 92.7% 33.5% 33.5% 31.0%
------- ------- ------
$ 3,813 100.0% 31.4%
======= ======= ======
- --------------------------------------------------------------------------------
(1) As reported by the Federal Reserve Board on a weekly-average basis for the
week ended November 9, 2001.
(2) Sourced from the Ibbotson SBBI Valuation Edition 2001 Yearbook.
Sources of information: Company Financials, Projections and Management.
Page 58
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Financial Projections - Revised Case
($ in thousands)
Actual Projected (1)
----------------------------- ------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29
------------------ -------------------------
2000 2001 2001 2002 2002 2003 2004
----------------------------- ------------------------------------
Revenues
Royalty Income $ 5,394 $ 5,267 $ 2,614 $ 2,543 $ 5,157 $ 5,157 $ 5,157
Pelican Paper Sales 13,881 13,424 6,385 6,144 12,529 12,529 12,529
Franchise Sales 27 46 22 18 40 40 40
Other 952 311 139 130 269 282 297
----------------------------- ------------------------------------
Total $20,254 $19,048 $ 9,160 $ 8,835 $17,995 $18,008 $18,023
Cost of Goods Sold
Cost of Sales Paper 11,574 11,605 5,527 5,394 10,921 10,921 10,921
----------------------------- ------------------------------------
Gross Margin $ 8,680 $ 7,443 $ 3,633 $ 3,441 $ 7,074 $ 7,087 $ 7,102
Less Operating Expenses
Salaries & Employee Benefits na 2,787 1,660 1,367 3,027 2,740 2,822
General and Administrative na 574 235 335 570 599 616
IT Programming Costs na 669 258 199 457 550 550
Occupancy Costs na 204 93 89 182 187 193
Travel and Entertainment na 375 177 193 370 389 396
Professional Fees na 236 251 328 579 200 206
Bad Debt na 1,452 450 450 900 900 900
Management Incentive na 125 100 100 200 250 250
Net Loss Company Plants na 31 16 68 84 120 75
----------------------------- ------------------------------------
Total 6,619 6,453 3,240 3,129 6,369 5,934 6,009
----------------------------- ------------------------------------
EBITDA $ 2,061 $ 990 $ 393 $ 312 $ 705 $ 1,153 $ 1,093
============================= ====================================
Actual Projected (1)
--------------- ------------------------------------
FY ended 6 Mths FY ended
February 28/29 Sep - Feb February 28/29
--------------- ------------------------
2000 2001 2002 2002 2003 2004
--------------- ------------------------------------
Growth Assumptions
Royalty Income na -2.4% -2.7% -2.1% 0.0% 0.0%
Pelican Paper Sales na -3.3% -3.8% 6.7% 0.0% 0.0%
Franchise Sales na 70.4% -18.2% -13.0% 0.0% 0.0%
Other na -67.3% -6.5% -13.5% 5.0% 5.0%
--------------- ------------------------------------
Total na -6.0% -53.6% -5.5% 0.1% 0.1%
Margin Assumptions
Cost of Paper Sales Margin 16.6% 13.6% 12.2% 12.8% 12.8% 12.8%
Gross Margin 42.9% 39.1% 38.9% 39.3% 39.4% 39.4%
Growth Assumptions
Salaries & Employee Benefits na na -17.7% 8.6% -9.5% 3.0%
General and Administrative na na 42.6% -0.7% 5.0% 3.0%
IT Programming Costs na na -22.9% -31.7% 20.4% 0.0%
Occupancy Costs na na -4.3% -10.8% 3.0% 3.0%
Travel and Entertainment na na 9.0% -1.3% 5.0% 2.0%
Professional Fees na na 30.7% 145.3% -65.5% 3.0%
Bad Debt na na 0.0% -38.0% 0.0% 0.0%
Management Incentive na na 0.0% 60.0% 25.0% 0.0%
Net Loss Company Plants na na 325.0% 171.0% 42.9% -37.5%
--------------- ------------------------------------
na -2.5% -3.4% -1.3% 89.7% 1.3%
Margin Review
EBITDA Margin % 10.2% 5.2% 3.5% 3.9% 6.4% 6.1%
- -------------------------------------------------------------------------------
(1) All assumptions remain the same as in Management Case except royalty income
and paper sales stabilize after FY 2002.
Sources of information: Company Financials, Projections and Management.
Page 59
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Discounted Cash Flow Analysis - Revised Case Terminal Values-EBITDA-Multiple
($ in thousands, except per share)
Free Cash Flows
Actual Projected
--------------------------------------------------------------------
FY ended FY ended
February 28/29 6 Mths 6 Mths February 28/29
--------------------- Mar-Aug Sep-Feb ----------------------
2000 2001 2001 2002 2003 2004
--------------------------------------------------------------------
Revenue $20,254 $19,048 $9,160 $8,835 $18,008 $18,023
Cost of Sales 11,574 11,605 5,527 5,394 10,921 10,921
Gross Margin 8,680 7,443 3,633 3,441 7,087 7,102
Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009
EBITDA 2,061 988 393 312 1,153 1,093
less: Deprec. & Amort 189 232 114 137 220 220
EBIT 1,872 756 279 175 933 873
Income Taxes 837 442 176 69 369 345
After-tax Income before 1,035 314 103 106 564 528
Interest
Add: Deprec. & Amort 189 232 114 137 220 220
Add: (Used) Sourced by Net 1,365 (1,505) 1,374 (906) (27) 2
Wkg Cap
Less: Capital Expenditures 262 150 51 99 250 150
Free Cash Flows $ 2,327 $(1,109) $1,540 $ (762) $ 507 $ 600
=================================================================
Estimated Range of Enterprise Values
Terminal EBITDA Multiple
Discount -----------------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
-------------------------------------------------------------------------------
25.0% $1,845 $2,176 $2,506 $2,671 $3,002 $3,333
27.5% $1,744 $2,060 $2,376 $2,535 $2,851 $3,167
30.0% $1,649 $1,952 $2,255 $2,406 $2,709 $3,011
32.5% $1,560 $1,850 $2,140 $2,285 $2,575 $2,865
35.0% $1,476 $1,755 $2,033 $2,172 $2,450 $2,728
37.5% $1,398 $1,664 $1,931 $2,065 $2,332 $2,598
--------
Average of $ 2,272
--------
Estimated Range of Equity Values
Terminal EBITDA Multiple
Discount -----------------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
-------------------------------------------------------------------------------
25.0% $6,982 $7,312 $7,643 $7,808 $8,139 $8,470
27.5% $6,881 $7,197 $7,513 $7,671 $7,988 $8,304
30.0% $6,786 $7,089 $7,391 $7,543 $7,846 $8,148
32.5% $6,697 $6,987 $7,277 $7,422 $7,712 $8,002
35.0% $6,613 $6,891 $7,169 $7,308 $7,587 $7,865
37.5% $6,534 $6,801 $7,068 $7,201 $7,468 $7,735
--------
Average of $ 7,408
--------
Terminal Values
Terminal EBITDA Multiple
-----------------------------------------------------------------
2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
-----------------------------------------------------------------
EBITDA Terminal Value $3,005 $3,551 $4,097 $4,370 $4,917 $5,463
=================================================================
Discounted Terminal Values as Percentage of Enterprise Values
Terminal EBITDA Multiple
Discount -----------------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
-------------------------------------------------------------------------------
25.0% 162.9% 98.8% 99.0% 99.0% 99.1% 99.2%
27.5% 99.7% 99.8% 99.8% 99.8% 99.8% 99.9%
30.0% 101.0% 100.8% 100.7% 100.7% 100.6% 100.5%
32.5% 102.2% 101.9% 101.6% 101.5% 101.4% 101.2%
35.0% 103.6% 103.0% 102.6% 102.4% 102.2% 101.9%
37.5% 105.0% 104.2% 103.6% 103.4% 103.0% 102.7%
------
Average of 101.1%
------
Estimated Range of Equity Values per Share
Terminal EBITDA Multiple
Discount -----------------------------------------------------------------
Rate 2.75x 3.25x 3.75x 4.00x 4.50x 5.00x
-------------------------------------------------------------------------------
25.0% $1.36 $1.42 $1.49 $1.52 $1.58 $1.65
27.5% $1.34 $1.40 $1.46 $1.49 $1.56 $1.62
30.0% $1.32 $1.38 $1.44 $1.47 $1.53 $1.59
32.5% $1.30 $1.36 $1.42 $1.45 $1.50 $1.56
35.0% $1.29 $1.34 $1.40 $1.42 $1.48 $1.53
37.5% $1.27 $1.32 $1.38 $1.40 $1.45 $1.51
--------
Average of $ 1.44
--------
- --------------------------------------------------------------------------------
All Discounted amounts have been calculated utilizing a mid-year convention.
Sources of information: Company Financials, Projections and Management.
Page 60
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Discounted Cash Flow Analysis - Revised Case
($ in thousands, except per share)
Free Cash Flows
Actual Projected
------------------------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29
---------------- -----------------
2000 2001 2001 2002 2003 2004
------------------------------------------------------
Revenue $20,254 $19,048 $ 9,160 $ 8,835 $18,008 $18,023
Cost of Sales 11,574 11,605 5,527 5,394 10,921 10,921
------------------------------------------------------
Gross Margin 8,680 7,443 3,633 3,441 7,087 7,102
Operating Expenses 6,619 6,455 3,240 3,129 5,934 6,009
------------------------------------------------------
EBITDA 2,061 988 393 312 1,153 1,093
less: Deprec. & Amort. 189 232 114 137 220 220
------------------------------------------------------
EBIT 1,872 756 279 175 933 873
Income Taxes 837 442 176 69 369 345
------------------------------------------------------
After-tax Income before 1,035 314 103 106 564 528
Interest
Add: Deprec. & Amort. 189 232 114 137 220 220
Add: (Used) from by 1,365 (1,505) 1,374 (906) (27) 2
Net WC
Less: Capital
Expenditures 262 150 51 99 250 150
------------------------------------------------------
Free Cash Flows $2,327 $(1,109) $ 1,540 $ (762) $ 507 $ 600
======================================================
Estimated Range of Enterprise
Values
Terminal Perpetual Growth Rates
Discount ------------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
------------------------------------------------------
25.0% $ 1,589 $ 1,612 $ 1,635 $ 1,659 $ 1,683 $ 1,708
27.5% $ 1,345 $ 1,363 $ 1,381 $ 1,400 $ 1,419 $ 1,439
30.0% $ 1,147 $ 1,162 $ 1,177 $ 1,192 $ 1,207 $ 1,222
32.5% $ 984 $ 996 $ 1,008 $ 1,020 $ 1,033 $ 1,045
35.0% $ 847 $ 857 $ 867 $ 877 $ 887 $ 898
37.5% $ 731 $ 739 $ 747 $ 756 $ 765 $ 773
-------
Average of Box $ 1,099
-------
Estimated Range of Equity
Values
Terminal Perpetual Growth Rates
Discount ------------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
------------------------------------------------------
25.0% $ 6,726 $ 6,748 $ 6,772 $ 6,796 $ 6,820 $ 6,845
27.5% $ 6,482 $ 6,500 $ 6,518 $ 6,537 $ 6,556 $ 6,575
30.0% $ 6,284 $ 6,299 $ 6,313 $ 6,328 $ 6,344 $ 6,359
32.5% $ 6,121 $ 6,133 $ 6,145 $ 6,157 $ 6,170 $ 6,182
35.0% $ 5,984 $ 5,994 $ 6,004 $ 6,014 $ 6,024 $ 6,035
37.5% $ 5,868 $ 5,876 $ 5,884 $ 5,893 $ 5,901 $ 5,910
-------
Average of Box $ 6,236
-------
---------------------------------
Terminal Value - Perpetual Growth
---------------------------------
Terminal Values
Terminal Perpetual Growth Rates
------------------------------------------------------
3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
------------------------------------------------------
EBITDA $1,128 $1,131 $1,134 $1,136 $1,139 $1,142
less: Deprec. & 200 200 200 200 200 200
------------------------------------------------------
Amort.
EBIT 928 931 934 936 939 942
Income Taxes 367 368 369 370 371 372
------------------------------------------------------
After-tax Income before 561 563 565 566 568 570
Int.
Add: Deprec. & Amort. 200 200 200 200 200 200
Add: (Used) from by - - - - - -
Net WC
Less: Capital
Expenditures 200 200 200 200 200 200
------------------------------------------------------
Free Cash Flows $ 561 $ 563 $ 565 $ 566 $ 568 $ 570
======================================================
Disc Rate Perpetual Growth Terminal Values
---------------------------------------------------
25.0% $ 2,582 $ 2,619 $ 2,658 $ 2,697 $ 2,738 $ 2,779
27.5% $ 2,315 $ 2,346 $ 2,378 $ 2,410 $ 2,443 $ 2,477
30.0% $ 2,099 $ 2,125 $ 2,152 $ 2,179 $ 2,206 $ 2,234
32.5% $ 1,920 $ 1,942 $ 1,964 $ 1,988 $ 2,011 $ 2,035
35.0% $ 1,768 $ 1,788 $ 1,807 $ 1,827 $ 1,847 $ 1,868
37.5% $ 1,639 $ 1,656 $ 1,673 $ 1,691 $ 1,709 $ 1,727
Discounted Terminal Values as Percentage of
Enterprise Values
Terminal Perpetual Growth Rates
Discount -------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
-------------------------------------------------
25.0% 98.3% 98.4% 98.4% 98.4% 98.4% 98.5%
27.5% 99.7% 99.7% 99.7% 99.7% 99.7% 99.7%
30.0% 101.4% 101.4% 101.3% 101.3% 101.3% 101.3%
32.5% 103.5% 103.5% 103.5% 103.4% 103.4% 103.3%
35.0% 106.2% 106.2% 106.1% 106.0% 106.0% 105.9%
37.5% 109.6% 109.5% 109.4% 109.3% 109.2% 109.0%
------
Average of Box 102.4%
------
Estimated Range of Equity Values
per Share
Terminal Perpetual Growth Rates
Discount --------------------------------------------------
Rate 3.25% 3.50% 3.75% 4.00% 4.25% 4.50%
--------------------------------------------------
25.0% $ 1.31 $ 1.31 $ 1.32 $ 1.32 $ 1.33 $ 1.33
27.5% $ 1.26 $ 1.27 $ 1.27 $ 1.27 $ 1.28 $ 1.28
30.0% $ 1.22 $ 1.23 $ 1.23 $ 1.23 $ 1.24 $ 1.24
32.5% $ 1.19 $ 1.19 $ 1.20 $ 1.20 $ 1.20 $ 1.20
35.0% $ 1.17 $ 1.17 $ 1.17 $ 1.17 $ 1.17 $ 1.17
37.5% $ 1.14 $ 1.14 $ 1.15 $ 1.15 $ 1.15 $ 1.15
-------
Average of Box $ 1.21
-------
- --------------------------------------------------------------------------------
All Discounted amounts have been calculated utilizing a mid-year convention.
Sources of information: Company Financials, Projections and Management.
Page 61
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Long Term and Equity Assumptions - Revised Case
($ in thousands)
Actual Projected
------------------------------ -------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar - Aug Sep - Feb February 28/29 Terminal
------------------ --------------------------
2000 2001 2001 2002 2003 2004 Period
------------------------------ -------------------------------------
Existing Fixed Assets
Gross Assets $ 1,633 $ 1,707 $ 1,759 $ 1,759 $ 1,759 $ 1,759
Less Acc Deprec 1,104 1,234 1,335 1,439 1,563 1,657
------------------------------ --------------------------
Net Book Value $ 529 $ 473 $ 424 $ 320 $ 196 $ 102
============================== ==========================
Deprec Expense $ 163 $ 206 $ 101 $ 104 $ 124 $ 94 $ 70
============================== =====================================
New Fixed Assets
Capex $ 99 $ 250 $ 150 $ 200
=================================
Total Capex
Years
Deprec Expense 5 $ 20 $ 70 $ 100 $ 100
=================================
Net Book Value
Mach & Equip $ 99 $ 349 $ 499
Gross Assets $ 99 $ 349 $ 499
Less Acc Deprec 20 90 190
--------------------------
Net Book Value $ 79 $ 259 $ 309
==========================
Total Assets
Gross Assets $ 1,633 $ 1,707 $ 1,759 $ 1,858 $ 2,108 $ 2,258
Less Acc Deprec 1,104 1,234 1,335 1,459 1,653 1,847
------------------------------ --------------------------
Net Book Value $ 529 $ 473 $ 424 $ 399 $ 455 $ 411
============================== ==========================
Deprec Expense $ 163 $ 206 $ 101 $ 124 $ 194 $ 194 $ 170
============================== =====================================
Intangibles
Gross Intangible $ 474 $ 474 $ 474 $ 474 $ 474 $ 474
Less Acc Amort 216 242 255 268 294 320
------------------------------ --------------------------
Net Book Value $ 258 $ 232 $ 219 $ 206 $ 180 $ 154
============================== ==========================
Amort Expense $ 26 $ 26 $ 13 $ 13 $ 26 $ 26 $ 30
============================== =====================================
Deprec & Amort Expense $ 189 $ 232 $ 114 $ 137 $ 220 $ 220 $ 200
============================== =====================================
Actual
as of
8/31/2001
-------------
Equity Value Assumptions
Debt & Other Obligations
Interest Bearing Debt $ 280
Contingent Liabilities (1) 550
Other -
-------------
830
-------------
Less Cash
Cash on Hand 3,170
Assumed cash from exercise of
options 17
Assumed value of notes (2) 2,780
-------------
5,967
-------------
Net Debt $ (5,137)
=============
Common Stock Equivalents (in
thousands)
Common Stock Outstanding 5,121
Stock issued re Other -
-------------
5,121
Exercise $
Options in the money: Plan 1 $ 1.12 15
Plan 2 $ - -
-------------
15
-------------
Total Common Stock Equivalents 5,136
=============
- --------------------------------------------------------------------------------
(1) Guarantee of a plant purchase obligation to a third party.
(2) Based upon a collectibility and recovery analysis prepared in consultation
with Company Management. See Note Receivable Summary Analysis.
Sources of information: Company Financials, Projections and Management.
Page 62
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
Operating and Working Capital Assumptions - Revised Case
($ in thousands)
Actual Projected
--------------------------------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar-Aug Sep-Feb February 28/29
-------------- -------------- Terminal
2000 2001 2001 2002 2003 2004 Period
--------------------------------------------------------------
Growth Statistics and
Assumptions
Revenue na -6.0% na -53.6% 103.8% 0.1%
Cost of Sales na 0.3% na -53.5% 102.5% 0.0%
Operating Expenses na -2.5% na -51.5% 89.7% 1.3%
EBITDA na -52.1% na -68.4% 269.5% -5.2%
EBIT na -59.6% na -76.9% 433.1% -6.5%
After-tax Income
before Inter na -69.7% na -66.3% 433.1% -6.5%
Profitability
Gross Margin 42.9% 39.1% 39.7% 38.9% 39.4% 39.4%
EBITDA 10.2% 5.2% 4.3% 3.5% 6.4% 6.1%
EBIT 9.2% 4.0% 3.0% 2.0% 5.2% 4.8%
After-tax Income 5.1% 1.6% 1.1% 1.2% 3.1% 2.9%
before Inter
Income Tax Expense and
Assumptions
Statutory Tax Rate 39.5% 39.5% 39.5%
Effective Tax Rate 44.7% 58.5% 63.1% 39.5% 39.5% 39.5% 39.5%
Current Period Tax $ 837 $ 442 $ 176 $ 69 $ 369 $ 345
NOL Usage - - - - -
--------------------------------------------------
Income Tax Expense $ 837 $ 442 $ 176 $ 69 $ 369 $ 345
==================================================
Ending NOL Balance $ - $ - $ - $ -
================================
Actual Projected
----------------------------------------------------------------
FY ended 6 Mths 6 Mths FY ended
February 28/29 Mar-Aug Sep-Feb February 28/29
-------------- -------------- Terminal
2000 2001 2001 2002 2003 2004 Period
----------------------------------------------------------------
Non-Cash Working Capital
Assumptions
Accounts Receivable (AR)
AR Days Outstanding 59 68 na 65 65 65
% of Sales 16.3% 18.7% na 17.8% 17.8% 17.8%
Inventory
Days Inventory
Outstanding 74 74 na 74 74 74
% Cost of Sales 20.4% 20.3% na 20.3% 20.3% 20.3%
Prepayments
% of Direct and Op
Costs 2.2% 0.7% na 0.7% 0.7% 0.7%
Accounts Payable (AP)
AP Days Outstanding 22 12 na 12 12 12
% of Direct and Op
Costs 6.1% 3.3% na 3.3% 3.3% 3.3%
Accrued Expenses & Other
% of Direct and Op
Costs 8.6% 3.2% na 3.2% 3.2% 3.2%
Changes in Non-Cash Net
Working Capital
Accounts Receivables $3,293 $ 3,568 $2,043 $ 3,205 $3,207 $3,209
Inventory 2,359 2,352 2,375 2,214 2,214 2,214
Prepayments 408 134 111 121 118 119
Accounts Payables 1,111 597 286 568 554 557
Accrued Expenses &
Other 1,567 570 730 553 539 542
----------------------------------------------------
Non-Cash Net WC $3,382 $ 4,887 $3,513 $ 4,419 $4,446 $4,444
====================================================
% of EBITDA 164.1% 494.6% 893.9% 1416.3% 385.6% 406.7%
====================================================
Cash Flow (Used)
Sourced by Non-Cash
Net Wrkg Cap $1,365 $(1,505) $1,374 $ (906) $ (27) $ 2 $ -
===============================================================
- --------------------------------------------------------------------------------
Sources of information: Company Financials, Projections and Management.
Page 63
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
PREMIUMS PAID ANALYSIS
. The premiums paid analysis involves the comparison of the
consideration in the Proposed Transaction to the average closing
price of the Company's common stock over varying time periods prior
to November 16, 2001.
. The premium in the Proposed Transaction is based on the
consideration per share of $1.13.
. It is noted that the per share consideration of $1.13 in the
Proposed Transaction has represented a premium to the trading price
of the Company's since June 2001; however, prior to such time, it
would have represented a discount to the stock price for most of
November 2000 - May 2001.
Page 64
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
PREMIUMS PAID ANALYSIS
Premiums Paid Analysis
Per Share Consideration $ 1.1300
Closing Price
per Share Premium
------------- ---------
As of November 16, 2001 $ 0.6900 63.8%
Sensitivity Analysis:
Prior Day Closing Price $ 0.7000 61.4%
Prior 5 Trading Day Average Closing Price $ 0.6140 84.0%
Prior 10 Trading Day Average Closing Price $ 0.5970 89.3%
Prior 20 Trading Day Average Closing Price $ 0.6165 83.3%
Prior 30 Trading Day Average Closing Price $ 0.6503 73.8%
Prior 60 Trading Day Average Closing Price $ 0.6843 65.1%
Prior 90 Trading Day Average Closing Price $ 0.7677 47.2%
Prior Six Month Average Closing Price $ 0.8666 30.4%
Prior Year Average Closing Price $ 1.0869 4.0%
- --------------------------------------------------------------------------------
Sources of information: Draft Agreement. Share price data provided by Commodity
Systems, Inc.
Page 65
BCT International, Inc. CONFIDENTIAL
- --------------------------------------------------------------------------------
VALUATION ANALYSIS
PREMIUMS PAID ANALYSIS
BCT International - Daily Premiums Paid
November 16, 2000 - November 16, 2001
Daily Exchange Premium/(Discount) Analysis Page 66
BCTI Offer Premium/
Date Close Price (Discount)
---------------------------------------- -----------
16-Nov-01 0.69 $ 1.1300 63.8%
15-Nov-01 0.7 $ 1.1300 61.4%
14-Nov-01 0.56 $ 1.1300 101.8%
13-Nov-01 0.56 $ 1.1300 101.8%
12-Nov-01 0.56 $ 1.1300 101.8%
9-Nov-01 0.6 $ 1.1300 88.3%
8-Nov-01 0.6 $ 1.1300 88.3%
7-Nov-01 0.6 $ 1.1300 88.3%
6-Nov-01 0.6 $ 1.1300 88.3%
5-Nov-01 0.5 $ 1.1300 126.0%
2-Nov-01 0.66 $ 1.1300 71.2%
1-Nov-01 0.66 $ 1.1300 71.2%
31-Oct-01 0.66 $ 1.1300 71.2%
30-Oct-01 0.57 $ 1.1300 98.2%
29-Oct-01 0.55 $ 1.1300 105.5%
26-Oct-01 0.65 $ 1.1300 73.8%
25-Oct-01 0.65 $ 1.1300 73.8%
24-Oct-01 0.65 $ 1.1300 73.8%
23-Oct-01 0.65 $ 1.1300 73.8%
22-Oct-01 0.66 $ 1.1300 71.2%
19-Oct-01 0.66 $ 1.1300 71.2%
18-Oct-01 0.65 $ 1.1300 73.8%
17-Oct-01 0.75 $ 1.1300 50.7%
16-Oct-01 0.66 $ 1.1300 71.2%
15-Oct-01 0.75 $ 1.1300 50.7%
12-Oct-01 0.71 $ 1.1300 59.2%
11-Oct-01 0.71 $ 1.1300 59.2%
10-Oct-01 0.8 $ 1.1300 41.3%
9-Oct-01 0.78 $ 1.1300 44.9%
8-Oct-01 0.71 $ 1.1300 59.2%
5-Oct-01 0.71 $ 1.1300 59.2%
4-Oct-01 0.63 $ 1.1300 79.4%
3-Oct-01 0.63 $ 1.1300 79.4%
2-Oct-01 0.59 $ 1.1300 91.5%
1-Oct-01 0.58 $ 1.1300 94.8%
28-Sep-01 0.58 $ 1.1300 94.8%
27-Sep-01 0.58 $ 1.1300 94.8%
26-Sep-01 0.61 $ 1.1300 85.2%
25-Sep-01 0.75 $ 1.1300 50.7%
24-Sep-01 0.65 $ 1.1300 73.8%
21-Sep-01 0.65 $ 1.1300 73.8%
20-Sep-01 0.65 $ 1.1300 73.8%
19-Sep-01 0.63 $ 1.1300 79.4%
18-Sep-01 0.65 $ 1.1300 73.8%
17-Sep-01 0.57 $ 1.1300 98.2%
10-Sep-01 0.57 $ 1.1300 98.2%
7-Sep-01 0.76 $ 1.1300 48.7%
6-Sep-01 0.76 $ 1.1300 48.7%
5-Sep-01 0.8 $ 1.1300 41.3%
4-Sep-01 0.8 $ 1.1300 41.3%
31-Aug-01 0.8 $ 1.1300 41.3%
30-Aug-01 0.75 $ 1.1300 50.7%
29-Aug-01 0.9 $ 1.1300 25.6%
28-Aug-01 0.9 $ 1.1300 25.6%
27-Aug-01 0.84 $ 1.1300 34.5%
24-Aug-01 0.84 $ 1.1300 34.5%
23-Aug-01 0.84 $ 1.1300 34.5%
22-Aug-01 0.85 $ 1.1300 32.9%
21-Aug-01 0.85 $ 1.1300 32.9%
20-Aug-01 0.83 $ 1.1300 36.1%
17-Aug-01 0.85 $ 1.1300 32.9%
16-Aug-01 0.85 $ 1.1300 32.9%
15-Aug-01 0.85 $ 1.1300 32.9%
14-Aug-01 0.91 $ 1.1300 24.2%
13-Aug-01 0.86 $ 1.1300 31.4%
10-Aug-01 0.94 $ 1.1300 20.2%
9-Aug-01 0.94 $ 1.1300 20.2%
8-Aug-01 0.86 $ 1.1300 31.4%
7-Aug-01 0.87 $ 1.1300 29.9%
6-Aug-01 0.87 $ 1.1300 29.9%
3-Aug-01 0.87 $ 1.1300 29.9%
2-Aug-01 0.86 $ 1.1300 31.4%
1-Aug-01 0.9 $ 1.1300 25.6%
31-Jul-01 0.95 $ 1.1300 18.9%
30-Jul-01 0.9 $ 1.1300 25.6%
27-Jul-01 0.88 $ 1.1300 28.4%
26-Jul-01 0.85 $ 1.1300 32.9%
25-Jul-01 0.76 $ 1.1300 48.7%
24-Jul-01 1.01 $ 1.1300 11.9%
23-Jul-01 1.01 $ 1.1300 11.9%
20-Jul-01 1.01 $ 1.1300 11.9%
19-Jul-01 1.02 $ 1.1300 10.8%
18-Jul-01 1.03 $ 1.1300 9.7%
17-Jul-01 1.06 $ 1.1300 6.6%
16-Jul-01 1.04 $ 1.1300 8.7%
13-Jul-01 1.04 $ 1.1300 8.7%
12-Jul-01 1.04 $ 1.1300 8.7%
11-Jul-01 0.98 $ 1.1300 15.3%
10-Jul-01 1 $ 1.1300 13.0%
9-Jul-01 1.02 $ 1.1300 10.8%
6-Jul-01 1.03 $ 1.1300 9.7%
5-Jul-01 1.1 $ 1.1300 2.7%
3-Jul-01 1.08 $ 1.1300 4.6%
2-Jul-01 1.1 $ 1.1300 2.7%
29-Jun-01 1.03 $ 1.1300 9.7%
28-Jun-01 1.08 $ 1.1300 4.6%
27-Jun-01 0.95 $ 1.1300 18.9%
26-Jun-01 0.97 $ 1.1300 16.5%
25-Jun-01 0.97 $ 1.1300 16.5%
22-Jun-01 0.97 $ 1.1300 16.5%
21-Jun-01 0.96 $ 1.1300 17.7%
20-Jun-01 0.98 $ 1.1300 15.3%
19-Jun-01 1 $ 1.1300 13.0%
18-Jun-01 1.01 $ 1.1300 11.9%
15-Jun-01 1.05 $ 1.1300 7.6%
14-Jun-01 1.05 $ 1.1300 7.6%
13-Jun-01 1.05 $ 1.1300 7.6%
12-Jun-01 1 $ 1.1300 13.0%
11-Jun-01 0.91 $ 1.1300 24.2%
8-Jun-01 1.01 $ 1.1300 11.9%
7-Jun-01 1.02 $ 1.1300 10.8%
6-Jun-01 1.03 $ 1.1300 9.7%
5-Jun-01 1.16 $ 1.1300 -2.6%
4-Jun-01 1.27 $ 1.1300 -11.0%
1-Jun-01 1.26 $ 1.1300 -10.3%
31-May-01 1.26 $ 1.1300 -10.3%
30-May-01 1.15 $ 1.1300 -1.7%
29-May-01 1.12 $ 1.1300 0.9%
25-May-01 1.26 $ 1.1300 -10.3%
24-May-01 1.26 $ 1.1300 -10.3%
23-May-01 1.4 $ 1.1300 -19.3%
22-May-01 1.4 $ 1.1300 -19.3%
21-May-01 1.4 $ 1.1300 -19.3%
18-May-01 1.26 $ 1.1300 -10.3%
17-May-01 1.26 $ 1.1300 -10.3%
16-May-01 1.29 $ 1.1300 -12.4%
15-May-01 1.3 $ 1.1300 -13.1%
14-May-01 1.24 $ 1.1300 -8.9%
11-May-01 1.29 $ 1.1300 -12.4%
10-May-01 1.29 $ 1.1300 -12.4%
9-May-01 1.3 $ 1.1300 -13.1%
8-May-01 1.3 $ 1.1300 -13.1%
7-May-01 1.31 $ 1.1300 -13.7%
4-May-01 1.22 $ 1.1300 -7.4%
3-May-01 1.22 $ 1.1300 -7.4%
2-May-01 1.22 $ 1.1300 -7.4%
1-May-01 1.25 $ 1.1300 -9.6%
30-Apr-01 1.25 $ 1.1300 -9.6%
27-Apr-01 1.25 $ 1.1300 -9.6%
26-Apr-01 1.25 $ 1.1300 -9.6%
25-Apr-01 1.25 $ 1.1300 -9.6%
24-Apr-01 1.25 $ 1.1300 -9.6%
23-Apr-01 1.25 $ 1.1300 -9.6%
20-Apr-01 1.4 $ 1.1300 -19.3%
19-Apr-01 1.4 $ 1.1300 -19.3%
18-Apr-01 1.25 $ 1.1300 -9.6%
17-Apr-01 1.19 $ 1.1300 -5.0%
16-Apr-01 1.19 $ 1.1300 -5.0%
12-Apr-01 1.19 $ 1.1300 -5.0%
11-Apr-01 1.11 $ 1.1300 1.8%
10-Apr-01 1.11 $ 1.1300 1.8%
9-Apr-01 1.1 $ 1.1300 2.7%
6-Apr-01 0.9375 $ 1.1300 20.5%
5-Apr-01 1.0625 $ 1.1300 6.4%
4-Apr-01 1 $ 1.1300 13.0%
3-Apr-01 1 $ 1.1300 13.0%
2-Apr-01 1.0938 $ 1.1300 3.3%
30-Mar-01 1.1562 $ 1.1300 -2.3%
29-Mar-01 1.1562 $ 1.1300 -2.3%
28-Mar-01 1.1562 $ 1.1300 -2.3%
27-Mar-01 1.1875 $ 1.1300 -4.8%
26-Mar-01 1.1875 $ 1.1300 -4.8%
23-Mar-01 1.2188 $ 1.1300 -7.3%
22-Mar-01 1.2188 $ 1.1300 -7.3%
21-Mar-01 1.25 $ 1.1300 -9.6%
20-Mar-01 1.3125 $ 1.1300 -13.9%
19-Mar-01 1.3125 $ 1.1300 -13.9%
16-Mar-01 1.3125 $ 1.1300 -13.9%
15-Mar-01 1.375 $ 1.1300 -17.8%
14-Mar-01 1.375 $ 1.1300 -17.8%
13-Mar-01 1.375 $ 1.1300 -17.8%
12-Mar-01 1.375 $ 1.1300 -17.8%
9-Mar-01 1.375 $ 1.1300 -17.8%
8-Mar-01 1.375 $ 1.1300 -17.8%
7-Mar-01 1.375 $ 1.1300 -17.8%
6-Mar-01 1.375 $ 1.1300 -17.8%
5-Mar-01 1.5 $ 1.1300 -24.7%
2-Mar-01 1.5625 $ 1.1300 -27.7%
1-Mar-01 1.5625 $ 1.1300 -27.7%
28-Feb-01 1.5625 $ 1.1300 -27.7%
27-Feb-01 1.4375 $ 1.1300 -21.4%
26-Feb-01 1.4375 $ 1.1300 -21.4%
23-Feb-01 1.375 $ 1.1300 -17.8%
22-Feb-01 1.25 $ 1.1300 -9.6%
21-Feb-01 1.2188 $ 1.1300 -7.3%
20-Feb-01 1.25 $ 1.1300 -9.6%
16-Feb-01 1.25 $ 1.1300 -9.6%
15-Feb-01 1.1875 $ 1.1300 -4.8%
14-Feb-01 1.1875 $ 1.1300 -4.8%
13-Feb-01 1.2188 $ 1.1300 -7.3%
12-Feb-01 1.2188 $ 1.1300 -7.3%
9-Feb-01 1.25 $ 1.1300 -9.6%
8-Feb-01 1.375 $ 1.1300 -17.8%
7-Feb-01 1.375 $ 1.1300 -17.8%
6-Feb-01 1.25 $ 1.1300 -9.6%
5-Feb-01 1.2812 $ 1.1300 -11.8%
2-Feb-01 1.2812 $ 1.1300 -11.8%
1-Feb-01 1.375 $ 1.1300 -17.8%
31-Jan-01 1.375 $ 1.1300 -17.8%
30-Jan-01 1.375 $ 1.1300 -17.8%
29-Jan-01 1.2812 $ 1.1300 -11.8%
26-Jan-01 1.2812 $ 1.1300 -11.8%
25-Jan-01 1.2188 $ 1.1300 -7.3%
24-Jan-01 1.3125 $ 1.1300 -13.9%
23-Jan-01 1.2812 $ 1.1300 -11.8%
22-Jan-01 1.3125 $ 1.1300 -13.9%
19-Jan-01 1.3125 $ 1.1300 -13.9%
18-Jan-01 1.3125 $ 1.1300 -13.9%
17-Jan-01 1.3125 $ 1.1300 -13.9%
16-Jan-01 1.3125 $ 1.1300 -13.9%
12-Jan-01 1.3125 $ 1.1300 -13.9%
11-Jan-01 1.3125 $ 1.1300 -13.9%
10-Jan-01 1.3125 $ 1.1300 -13.9%
9-Jan-01 1.3125 $ 1.1300 -13.9%
8-Jan-01 1.3125 $ 1.1300 -13.9%
5-Jan-01 1.3438 $ 1.1300 -15.9%
4-Jan-01 1.3125 $ 1.1300 -13.9%
3-Jan-01 1.375 $ 1.1300 -17.8%
2-Jan-01 1.375 $ 1.1300 -17.8%
29-Dec-00 1.3125 $ 1.1300 -13.9%
28-Dec-00 1.3125 $ 1.1300 -13.9%
27-Dec-00 1.375 $ 1.1300 -17.8%
26-Dec-00 1.375 $ 1.1300 -17.8%
22-Dec-00 1.375 $ 1.1300 -17.8%
21-Dec-00 1.375 $ 1.1300 -17.8%
20-Dec-00 1.375 $ 1.1300 -17.8%
19-Dec-00 1.4375 $ 1.1300 -21.4%
18-Dec-00 1.5 $ 1.1300 -24.7%
15-Dec-00 1.375 $ 1.1300 -17.8%
14-Dec-00 1.375 $ 1.1300 -17.8%
13-Dec-00 1.375 $ 1.1300 -17.8%
12-Dec-00 1.3125 $ 1.1300 -13.9%
11-Dec-00 1.25 $ 1.1300 -9.6%
8-Dec-00 1.1875 $ 1.1300 -4.8%
7-Dec-00 1.3438 $ 1.1300 -15.9%
6-Dec-00 1.3125 $ 1.1300 -13.9%
5-Dec-00 1.3125 $ 1.1300 -13.9%
4-Dec-00 1.3125 $ 1.1300 -13.9%
1-Dec-00 1.4375 $ 1.1300 -21.4%
30-Nov-00 1.5156 $ 1.1300 -25.4%
29-Nov-00 1.5156 $ 1.1300 -25.4%
28-Nov-00 1.4844 $ 1.1300 -23.9%
27-Nov-00 1.5625 $ 1.1300 -27.7%
24-Nov-00 1.5312 $ 1.1300 -26.2%
22-Nov-00 1.5312 $ 1.1300 -26.2%
21-Nov-00 1.5312 $ 1.1300 -26.2%
20-Nov-00 1.5625 $ 1.1300 -27.7%
17-Nov-00 1.625 $ 1.1300 -30.5%
16-Nov-00 1.5625
Premiums Paid Analysis
Per Share Consideration $ 1.1300
Closing Price
per Share Premium
-------------- --------------
As of November 16, 2001 $ 0.6900 63.8%
Sensitivity Analysis:
Prior Day Closing Price $ 0.7000 61.4%
Prior 5 Trading Day Average Closing Price $ 0.6140 84.0%
Prior 10 Trading Day Average Closing Price $ 0.5970 89.3%
Prior 20 Trading Day Average Closing Price $ 0.6165 83.3%
Prior 30 Trading Day Average Closing Price $ 0.6503 73.8%
Prior 60 Trading Day Average Closing Price $ 0.6843 65.1%
Prior 90 Trading Day Average Closing Price $ 0.7677 47.2%
Prior Six Month Average Closing Price $ 0.8666 30.4%
Prior Year Average Closing Price $ 1.0869 4.0%
Page 66
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ACQUISITION PREMIUMS ANALYSIS
. The acquisition premiums analysis involves the comparison of the
premium in the Proposed Transaction to premiums in other
transactions. Capitalink reviewed the premiums paid in two groups of
acquisitions. It is noted that neither of the groups of acquisitions
represent transactions comparable to the Proposed Transaction, as
such comparable transactions could not be located:
. Acquisitions since January 1, 2001 where the enterprise
value of the acquired company was less than $25 million.
. Acquisitions of minority interests since January 1999 with
deal size less than $25 million.
. Capitalink believes an examination of the premiums paid in the
minority acquisitions are significant as, in the Proposed
Transaction, the acquisition on its own does not convey control of
the acquired company. The premium in such a scenario should not be
as high as a situation where control is acquired.
. Based on the premiums paid in the scenarios set forth above,
Capitalink derived an implied range of per share market values in
the Proposed Transaction (i.e., what the consideration in the
Proposed Transaction would be if the premium was as noted in the
low, mean, median, and high ranges of the selected acquisitions).
The mean and medians of the implied value per share for the total
market acquisitions ranged from $.96 - $1.20; and for the minority
interest acquisitions, ranged from $.81 - $1.01.
Page 67
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ACQUISITION PREMIUMS ANALYSIS
Acquisition Premiums Analysis
Prior One Day Prior 5 Day Prior 30 Day
------------- ----------- ------------
Share Price $ 0.69 $ 0.60 $ 0.66
Transaction Premium (at $1.13 per Share Consideration) 63.8% 88.3% 71.2%
Using Recent Total Market Acquisition Premiums (1)
- --------------------------------------------------------------------------------
Acquisition Premium
High 275.0% 455.6%
Mean 73.5% 82.3%
Median 51.7% 60.0%
Low 3.8% -19.8%
Implied Range of Market Value per Share
High $ 2.59 $ 3.33
Mean 1.20 1.09
Median 1.05 0.96
Low 0.72 0.48
- --------------------------------------------------------------------------------
Using Recent Total Market, Minority Interest Acquisition Premiums (2)
- --------------------------------------------------------------------------------
Acquisition Premium
High 286.7% 329.4% 260.8%
Mean 46.6% 51.2% 53.1%
Median 27.6% 34.5% 36.1%
Low 0.0% 0.0% 9.5%
Implied Range of Market Value per Share
High $ 2.67 $ 2.58 $ 2.38
Mean 1.01 0.91 1.01
Median 0.88 0.81 0.90
Low 0.69 0.60 0.72
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Includes all transactions since January 1, 2001 with enterprise value * $25
million.
(2) Includes all minority interest transactions since January 1, 1999 with a
deal value * $25 million.
* represents less than sign
Sources of information: Commodity Systems, Inc, Mergerstat, Inc. and Bloomberg,
LP.
Page 68
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ADJUSTED NET BOOK VALUE ANALYSIS
. The adjusted net book value analysis is balance sheet-oriented
methodology whereby a company's balance sheet is restated to fair
market value. This involves the revaluation of the assets and
liabilities recorded on the balance sheet, and the identification
and valuation of otherwise unrecorded tangible and intangible assets
and liabilities.
. In the use of the adjusted net book value analysis, Capitalink
assumed the value of the Company in an orderly liquidation. In such
a liquidation scenario, Capitalink assumed that the assets are sold
piecemeal, not as part of a mass assemblage. It is further assumed
that the assets have been given adequate exposure in their normal
secondary market, and there is an incurred liquidation cost.
. Capitalink utilized the Company's balance sheet as of August 31,
2001, the latest available financial data prior to the date of the
opinion. The balance sheet indicates a net book value, prior to any
adjustment, of approximately $14.5 million.
. Each of the adjustments are footnoted on the attached analysis;
however, please note the following:
. Both inventory and plant and equipment are discounted
significantly based on their specialized natures and the
existence of a limited marketplace.
. The Company has an aggregate of $7,284,000 in notes
receivable from 31 of its franchisees (the "Notes"). Based
on discussions with Company management, Capitalink
determined the payment probability for each of the Notes.
Payment probability is based on a number of factors
including, the franchisee's performance record, debt
balances, management quality, and local market. In the
aggregate, the payment probability was 52%, or receipt of
$3,814,000 is expected, over the aggregate life of the
Notes.
. Additionally, based on discussions with Company management,
it was determined that the Company would collect an
aggregate $2,018,000 from the collateral and guarantees
securing the
Page 69
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ADJUSTED NET BOOK VALUE ANALYSIS
Notes. Therefore, over the aggregate life of the Notes,
approximately $5,832,000 is expected to be collected, or 80% of the
value of the Notes.
. Utilizing the Company's weighted average cost of capital (as
discussed in the discounted cash flow analysis) and applying the
varying time horizons for each of the Notes, Capitalink derived the
net present value of the amount anticipated to be collected. The net
present value of the amount to be collected was calculated to be
approximately $2,780,000, which is the adjusted amount reflected in
the adjusted net book value analysis.
. It is important to note that Capitalink derived payment
probabilities of the Notes in conjunction with and based on
discussions with management. Capitalink does not assure that the
amounts noted herein will be collected.
. The adjusted net book value of $6,516,000 would be further reduced by the
liquidation costs of 20%, resulting in a fair market value of $5,213,000,
or $.1.02 per share.
Page 70
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ADJUSTED NET BOOK VALUE ANALYSIS
Adjusted Net Book Value Analysis
as of August 31, 2001
($ in thousands)
|-----------------------------|
| Liquidation Premise |
| --------------------------- |
Unadjusted | |
Book Value | Adjs (1) Notes Adjusted |
------------ |---------- ------- ----------|
Current Assets: | |
Cash & Equivalents $ 2,823 | $ - $ 2,823 |
Cash National Account 347 | (149) a 198 |
Accounts Receivable, net 2,818 | (1,409) b 1,409 |
Inventory 2,375 | (1,544) c 831 |
Assets Held For Sale 150 | (150) d - |
Prepaid Expenses 111 | (111) e - |
---------- | --------- -------- |
Total Current Assets 8,624 | (3,363) 5,261 |
| |
Long Term Assets: | |
Net Property, Plant & 423 | (275) f 148 |
Equipment | |
Notes Receivables, net 5,736 | (2,956) g 2,780 |
Intangible Assets 219 | (219) h - |
Security Deposits 24 | - I 24 |
Deferred Tax Assets 1,155 | (1,155) j - |
---------- | --------- -------- |
Total Long Term Assets 1,398 | (1,374) 24 |
---------- | --------- -------- |
| |
Total Assets $ 16,181 | $ (7,968) $ 8,213 |
========== | ========= ======== |
|-----------------------------|
|-----------------------------|
| Liquidation Premise |
| --------------------------- |
Unadjusted | |
Book Value | Adjs (1) Notes Adjusted |
------------ |---------- ------- ----------|
| |
Current Liabilities: | |
Notes Payable, Current 86 | - 86 |
Accounts Payable 286 | (149) k 137 |
Accured Expenses 580 | - 580 |
Deferred Revenue, Current - | - - |
---------- | --------- -------- |
Total Current Liabilities 952 | (149) 803 |
| |
Long Term Liabilities | |
Notes Payable 194 | - 194 |
Deferred Revenue 487 | (487) l - |
---------- | --------- -------- |
Total Long Term Liabilities 681 | - 194 |
| |
Contingent Liabilities | |
Other - | 700 m 700 |
---------- | --------- -------- |
Total Contingent Liabilities - | 700 700 |
---------- | --------- -------- |
| |
Total Liabilities 1,633 | - 1,697 |
---------- | --------- -------- |
| |
Net Book Value $ 14,548 | $ (7,968) $ 6,516 |
========== | ========= ======== |
|-----------------------------|
Adjusted Net Book Value 6,516
Less Liquidation Costs (2) 20% (1,303)
--------
$ 5,213
========
Fair Market Value
Number Outstanding Shares as of August 31, 2001 5,121
Fair Market Value, Per Share $ 1.02
========
Explanation of Notes:
a Amounts due to franchises and to the national account.
b Expect to collect 50% of total Accounts Receivable.
c 65% reduction due to specialized inventory and limited market.
d Includes BCT's share of BCT Hawaii. FMV is negative.
e No value under liquidation scenario.
f 65% reduction due to specialized assets and limited market.
g Adjusted as per Notes analysis.
h Consist of rights to franchise BCTs in Canada. No Liquidation value.
I No value under liquidation scenario.
j No value under liquidation scenario.
k Corresponding liability removed as per adjustment in (a)
l No value under liquidation scenario.
m Contingent liabilities include note guarantee for BUT 3039 and remaining
office leases.
- --------------------------------------------------------------------------------
(1) Adjustments determined in discussions with Company Management.
(2) Liquidation costs include legal, accounting, and adminstrative expenses.
Sources of Information: Company Financials and Management
Page 71
BCT International, Inc. CONFIDENTIAL
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VALUATION ANALYSIS
ADJUSTED NET BOOK VALUE ANALYSIS
Notes Receivable Summary Analysis
as of August 31, 2001
($ in thousands)
Total Notes Receivable $ 7,284
Number of Notes Receivable 31
Largest Note Receivable $ 730
Average Note Receivable $ 235
Median Note Receivable $ 211
Smallest Note Receivable $ 6
Collections and Recoveries (1)
Percent Percent
Collected Net Present Collected
Amount or Recovered Value (4) or Recovered
------- ------------ ----------- ------------
Estimated Collections (2) $ 3,814 52.4% $ 1,830 25.1%
Estimated Recoveries (3) 2,018 27.7% 949 13.0%
------- ------------ ----------- ------------
$ 5,832 80.1% $ 2,780 38.2%
======= ============ =========== ============
- --------------------------------------------------------------------------------
(1) The collectibility and recovery analysis was prepared in consultation with
Company Management.
(2) Represents estimated receipts during the term or any applicable default
period.
(3) Represents estimated recovery, net of collection costs, from collateral or
guarantees.
(4) Present value of receipts and recovery calculated at the Company's Weighted
Average Cost of Capital (WACC). See DCF Analysis for WACC calculation.
Sources of Information: Company Financials and Management
Page 72