You are on page 1of 17

Financial Model of Clarkson Lumber Co.

Prepared by Kenan-Flagler Financial Modelers Inc.


Version 7.0
Notes:
1. A mortgage loan added
a) Mortgage loan is set to have monthly interest and pricipal payments
b) Loan assumed to be issued -if any- at the beginning of year 1996!
c) Amount, terms, and interest are user inputs
2. Equity is assumed to be issued at the beginning of 1996 -if any. Number of shares and price/share are user inputs
To "Jump-start" the model in case of !REF errors see the notes in Financing schedule.
KFFM, Inc.

The Clarkson Lumber Company


($ in thousands)
December 31,
Net Sales Growth Rate
Gross Margin (before D&A)
SG&A:
Owners's Salary Growth Rate
Salary Growth Rate - Staff
Bonuses as % of Last Year's Net Income
Other SG&A, Utilities % of Net Sales
Advertising Expense % of Net Sales
Other Expense / (Income) as % Net Sales
Sales discounts:
Discounts on Sales - %
Discounts on Sales - Terms in Days
Accounts Receivable (Collection period in days)

Historical - Year Ending December 31,


1993
1994
1995
19.0%
30.0%
24.6%
24.2%
24.2%

1996
22.0%
24.2%

Projected - Year Ending December 31,


1997
1998
1999
20.0%
18.0%
16.0%
24.2%
24.2%
24.2%

2000
14.0%
24.2%

10.0%
7.9%
2.0%
0.0%

6.7%
39.9%
10.0%
6.0%
2.0%
0.0%

6.3%
29.8%
10.0%
6.8%
2.0%
0.0%

5.9%
2.0%
10.0%
6.7%
2.0%
0.0%

11.1%
2.0%
10.0%
6.0%
2.0%
0.0%

10.0%
2.0%
10.0%
6.0%
2.0%
0.0%

5.0%
2.0%
10.0%
6.0%
2.0%
0.0%

5.0%
2.0%
10.0%
6.0%
2.0%
0.0%

1.0%
10
38

1.0%
10
43

1.0%
10
49

1.0%
10
45

1.0%
10
40

1.0%
10
40

1.0%
10
40

1.0%
10
40

Purchases as % of Net Sales


Discounts on Purchases:
Discounts on Purchases - %
Discounts on Purchases - Terms in Days
Accounts Payable (Days payable)
Inventory (Days outstanding)

75.6%

78.5%

79.2%

79.0%

79.0%

79.0%

79.0%

79.0%

2.0%
10
35
56

2.0%
10
45
60

2.0%
10
51
63

2.0%
10
10
59

2.0%
10
10
57

2.0%
10
10
56

2.0%
10
10
56

2.0%
10
10
57

Other Current Assets as % of Net Sales


Accrued Liabilities as % of COGS
Other Current Liabilities as % of COGS

0.0%
1.9%
0.0%

0.0%
1.7%
0.0%

0.0%
2.2%
0.0%

0.0%
2.0%
0.0%

0.0%
2.0%
0.0%

0.0%
2.0%
0.0%

0.0%
2.0%
0.0%

0.0%
2.0%
0.0%

Capital Expenditures as % of Net Sales

1.0%

2.0%

3.7%

3.0%

2.0%

1.0%

1.0%

1.0%

Additions to Goodwill as % of net sales


Other Long-Term Assets as % of Net Sales
Additions to Intangible Assets as % of net sales
Other Long-Term Liabilities as % of Net Sales
Deferred Income Taxes as % of Net Sales

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

0.0%
0.0%
0.0%
0.0%
0.0%

Dividends:
Regular Dividends
Special Dividends as % of Net Income
Dividend Payout Ratio

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

$0
0.0%
0.0%

Shares:
Shares Issued
Projected Share Price
Shares Repurchased
Projected Share Purchase Price

0
$0.00
0
$0.00

0
$0.00
50
$4.00

0
$0.00
0
$0.00

0
$4.04
0
$4.04

0
$9.22
0
$9.22

0
$13.43
0
$13.43

0
$18.30
0
$18.30

0
$23.38
0
$23.38

Cash Balances:
Cash as % of Net Sales
Bank Reserve Requirements

1.6%
$0

1.5%
$0

1.4%
$0

1.2%
$100

1.2%
$100

1.2%
$100

1.2%
$100

1.2%
$100

Interest Rates:
Interest Rate - LOC
Interest Rate - Cash

11.0%
0.0%

11.0%
0.0%

11.0%
0.0%

11.0%

11.0%

11.0%

11.0%

11.0%

Mortgage:
Issuance
Fixed Annual Interest Rate
Amortization Period

0
0.0%
0

0
0.0%
0

0
0.0%
0

$800
5.0%
5

$0
5.0%
5

$0
5.0%
5

$0
5.0%
5

$0
5.0%
5

@RISK PARAMETERS
1997
1998
1999
20.0%
18.0%
16.0%
4.0%
3.0%
2.0%
20.0%
18.0%
16.0%

2000
14.0%
1.0%
14.0%

1996
22.0%
5.0%
22.0%

@RISK PARAMETERS
1997
1998
1999
20.0%
18.0%
16.0%
4.0%
3.0%
2.0%
20.0%
18.0%
16.0%

2000
14.0%
1.0%
14.0%

Historical Numbers

0.0%

19.0%

30.0%

1996
22.0%
5.0%
22.0%

24.6%

24.2%

24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
1.0%
24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
3.0%
24.2%

24.2%
1.0%
24.2%

7.9%

6.0%

6.8%

6.7%
2.0%
6.7%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

6.7%
2.0%
6.7%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

6.0%
2.0%
6.0%

38

43

49

45
6
45

40
5
40

40
4
40

40
3
40

35
6
40

45
6
45

40
5
40

40
4
40

40
3
40

35
6
35

35

45

51

30
5
10

25
5
10

15
5
10

10
3
10

10
1
10

30
5
30

25
5
25

15
5
15

10
3
10

10
1
10

1.0%

2.0%

3.7%

3.0%
0.5%
3.0%

2.0%
0.5%
2.0%

1.0%
0.1%
1.0%

1.0%
0.1%
1.0%

1.0%
0.1%
1.0%

3.0%
0.5%
3.0%

2.0%
0.5%
2.0%

1.0%
0.1%
1.0%

1.0%
0.1%
1.0%

1.0%
0.1%
1.0%

Mean
Std. Dev
Net Sales Growth Rate
Mean
Std. Dev
Gross Margin (before D&A)
Mean
Std. Dev
Other SG&A, Utilities % of Net Sales
Mean
Std. Dev
Accounts Receivable (Collection period in days)
Mean
Std. Dev
Accounts Payable (Days payable)
Mean
Std. Dev
Capital Expenditures as % of Net Sales

Valuation Summary:
Value Levered Firm (at target capital structure)
Value of Unlevered Firm
Value of Tax Shields
Value of Subsidy
Value of Levered Firm

#REF!
#REF!
#REF!
#REF!
#REF!

The Clarkson Lumber Company


Consolidated Income Statement
($ in thousands)

Net Sales
Cost of Sales (before D&A)
Gross Profit

Historical - Year Ending December 31,


1993
1994
1995

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

$2,921
2,202
719

$3,477
2,634
843

$4,519
3,424
1,095

$5,513
4,179
1,334

$6,616
5,015
1,601

$7,807
5,917
1,889

$9,056
6,864
2,191

$10,324
7,825
2,498

SG&A Expenses
Advertising Costs
Total Operating Expenses

531
58
589

607
70
677

807
90
897

883
110
993

932
132
1,065

1,035
156
1,191

1,135
181
1,316

1,238
206
1,444

Other Expense (Income)


EBITDA

0
130

0
166

0
198

0
341

0
536

0
698

0
875

0
1,054

33
0
97

40
0
126

43
0
155

81
0
260

87
0
449

89
0
609

88
0
787

88
0
966

Interest Expenses
Interest Expense - Fixed Loans
Interest Expense - Line of Credit
Total Interest Expense
Interest Income
Pretax Income

18
1
$18
0
79

27
5
$31
0
95

33
28
$60
0
95

56
48
$105
0
155

39
55
$94
0
355

29
63
$92
0
517

19
65
$84
0
704

8
58
$66
0
899

Income Taxes
Net Income

28
$51

33
$62

33
$61

54
$101

124
$231

181
$336

246
$458

315
$584

Average Shares in Thousands

300

250

250

250

250

250

250

250

$0.17

$0.25

$0.25

$0.40

$0.92

$1.34

$1.83

$2.34

24.6%
18.2%
2.0%
0.0%
4.5%
3.3%
1.8%

24.2%
17.5%
2.0%
0.0%
4.8%
3.6%
1.8%

24.2%
17.8%
2.0%
0.0%
4.4%
3.4%
1.4%

24.2%
16.0%
2.0%
0.0%
6.2%
4.7%
1.8%

24.2%
14.1%
2.0%
0.0%
8.1%
6.8%
3.5%

24.2%
13.3%
2.0%
0.0%
8.9%
7.8%
4.3%

24.2%
12.5%
2.0%
0.0%
9.7%
8.7%
5.1%

24.2%
12.0%
2.0%
0.0%
10.2%
9.4%
5.7%

19.0%
27.7%
20.1%
44.1%

30.0%
19.3%
-0.1%
-0.1%

22.0%
72.4%
64.2%
64.2%

20.0%
57.1%
128.5%
128.5%

18.0%
30.1%
45.6%
45.6%

16.0%
25.5%
36.3%
36.3%

14.0%
20.4%
27.7%
27.7%

35.0%

35.0%

35.0%

35.0%

35.0%

35.0%

35.0%

35.0%

1.0%
10
38
0.0%

1.0%
10
43
0.0%

1.0%
10
49
0.0%

1.0%
10
45
0.0%

1.0%
10
40
0.0%

1.0%
10
40
0.0%

1.0%
10
40
0.0%

1.0%
10
40
0.0%

Depreciation
Amortization
EBIT

Earnings per Share


Margins
Gross Margin (before D&A)
SG&A Expenses as % of Sales
Advertising Costs as % of Net Sales
Other Expense / (Income) as % Net Sales
EBITDA Margin
EBIT Margin
Net Income Margin
Growth Rate Analysis
Net Sales Growth Rate
EBITDA Growth Rate
Net Income Growth Rate
EPS Growth Rate
Effective Tax Rate
Sales discounts:
Discounts on Sales - %
Discounts on Sales - Terms in Days
Days in Receivables
Discounts Given on Sales

The Clarkson Lumber Company


($ in thousands)
Historical - Year Ending December 31,
1993
1994
1995
Current Assets
Cash
Accounts Receivable, net
Inventory

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

Other Current Assets


TOTAL CURRENT ASSETS

$47
306
337
690
$690

$52
411
432
895
$895

$63
606
587
1,256
$1,256

$100
680
676
1,456
0
$1,456

$100
725
783
1,609
0
$1,609

$100
856
910
1,865
0
$1,865

$109
992
1,057
2,158
0
$2,158

$124
1,131
1,224
2,479
0
$2,479

PP&E - net
Goodwill
Intangiable Assets, net
Deferred Income Taxes
Other Long-Term Assets
TOTAL ASSETS

$233
0
0
0
0
$923

$262
0
0
0
0
$1,157

$388
0
0
0
0
$1,644

$472
0
0
0
0
$1,928

$517
0
0
0
0
$2,126

$506
0
0
0
0
$2,372

$509
0
0
0
0
$2,667

$524
0
0
0
0
$3,003

Accounts Payable
Accrued Liabilities
Other Current Liabilities
TOTAL CURRENT LIABILITIES

$213
42
0
$255

$340
45
0
$385

$503
75
0
$578

$117
84
0
$201

$140
100
0
$241

$166
118
0
$284

$192
137
0
$329

$219
157
0
$375

Revolving Credit Facility


Long-Term Debt
Deferred Income Taxes
Other Long-Term Liabilities
TOTAL LIABILITIES

$13
160
0
0
$428

$75
340
0
0
$800

$428
220
0
0
$1,226

$453
756
0
0
$1,409

$551
584
0
0
$1,376

$598
404
0
0
$1,286

$578
216
0
0
$1,124

$480
20
0
0
$875

495

357

418

519

750

1,086

1,543

2,127

$923

$1,157

$1,644

$1,928

$2,126

$2,372

$2,667

$3,003

Total Debt
Total Book Capitalization
Total Debt / Total Book Capitalization

$173
668
26%

$415
772
54%

$648
1,066
61%

$1,209
1,728
70%

$1,135
1,885
60%

$1,002
2,088
48%

$794
2,337
34%

$500
2,627
19%

EBITDA
Total Debts / EBITDA
Interest Expense
EBITDA Coverage

$130
1.3x
$0

$166
2.5x
$0

$198
3.3x
$0

$341
3.5x
$48
7.0x

$536
2.1x
$55
9.7x

$698
1.4x
$63
11.0x

$875
0.9x
$65
13.5x

$1,054
0.5x
$58
18.1x

$4,519
1.4%

$5,513
1.8%

$6,616
1.5%

$7,807
1.3%

$9,056
1.2%

$10,324
1.2%

TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
Check

Net Sales
Cash as % of Net Sales

$2,921
1.6%

$3,477
1.5%

The Clarkson Lumber Company


($ in thousands)
Historical - Year Ending December 31,
1993
1994
1995
Operating Activities
Net Income
Depreciation
Amortization
Change in Working Capital
Change in Other Long-Term Assets & Liabilities
Cash Flow from Operating Activities:

$51
33
0
(73)

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

$11

$62
40
0
(70)
0
$32

$61
43
0
(157)
0
($53)

$101
81
0
(541)
0
($358)

$231
87
0
(112)
0
$206

$336
89
0
(214)
0
$211

$458
88
0
(238)
0
$307

$584
88
0
(260)
0
$413

Investing Activities
Capital Expenditures
Asset Sales
Additions to Goodwill
Additions to Intangible Assets
Cash Flow from Investing Activities:

($30)
0
0
0
($30)

($69)
0
0
0
($69)

($169)
0
0
0
($169)

($165)
0
0
0
($165)

($132)
0
0
0
($132)

($78)
0
0
0
($78)

($91)
0
0
0
($91)

($103)
0
0
0
($103)

Cash Flow Available for Financing Activities

($19)

($37)

($222)

($524)

$73

$133

$217

$310

$13
(20)
0
0
0
($7)

$63
180
(200)
0
0
$43

$353
(120)
0
0
0
$233

$25
536
0
0
0
$561

$98
(172)
0
0
0
($73)

$47
(180)
0
0
0
($133)

($20)
(188)
0
0
0
($208)

($98)
(196)
0
0
0
($294)

Financing Activities
Proceeds from / (Repayment of) Revolver
Proceeds from / (Repayment of) Long Term Debt
Proceeds from / (Repurchase of) Equity
Dividends
Option Proceeds
Cash Flow from Financing Activities:
Effects of Exchange Rates on Cash

Net Change in Cash


Beginning Cash Balance
Ending Cash Balance

73
check

($26)
73
$47

$5
47
$52

$11
52
$63

$37
63
$100

$0
100
$100

$0
100
$100

$9
100
$109

$15
109
$124

($ in thousands)

Salaries - Owner
Salaries - Staff
Bonus
Total Salaries
Other SG&A Utilities
Total SG&A (Excl. Advertising)
Advertising Expense
Total SG&A Expense
Net Sales
Net Income
Owners's Salary Growth Rate
Bonuses as % of Last Year's Net Income
Salary Growth Rate - Staff
Other SG&A, Utilities % of Net Sales
Advertising Expense % of Net Sales
SG&A Expenses as % of Sales

Historical - Year Ending December 31,


1993
1994
1995
75
80
85
225
315
409
5
6

1996
90
417
6

Projected - Year Ending December 31,


1997
1998
1999
100
110
116
425
434
443
10
23
34

2000
121
451
46

300
231
531
58
589

400
207
607
70
677

500
307
807
90
897

513
369
883
110
993

535
397
932
132
1,065

567
468
1,035
156
1,191

592
543
1,135
181
1,316

618
619
1,238
206
1,444

2,921
51

3,477
62

4,519
61

5,513
101

6,616
231

7,807
336

9,056
458

10,324
584

7.9%
2.0%

6.7%
10.0%
39.9%
6.0%
2.0%

6.3%
10.0%
29.8%
6.8%
2.0%

5.9%
10.0%
2.0%
6.7%
2.0%

11.1%
10.0%
2.0%
6.0%
2.0%

10.0%
10.0%
2.0%
6.0%
2.0%

5.0%
10.0%
2.0%
6.0%
2.0%

5.0%
10.0%
2.0%
6.0%
2.0%

18.2%

17.5%

17.8%

16.0%

14.1%

13.3%

12.5%

12.0%

10.0%

The Clarkson Lumber Company


Working Capital Schedule
($ in thousands)

Net Sales
Cost of Sales (before D&A)

Historical - Year Ending December 31,


1993
1994
1995

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

$2,921
2,202

$3,477
2,634

$4,519
3,424

$5,513
4,179

$6,616
5,015

$7,807
5,917

$9,056
6,864

$10,324
7,825

$306
337
0
$643

$411
432
0
$843

$606
587
0
$1,193

$680
676
0
$1,356

$725
783
0
$1,509

$856
910
0
$1,765

$992
1,057
0
$2,049

$1,131
1,224
0
$2,355

Accounts Payable
Accrued Liabilities
Other Current Liabilities
Total Non-Debt Current Liabilities

$213
42
0
$255

$340
45
0
$385

$503
75
0
$578

$117
84
0
$201

$140
100
0
$241

$166
118
0
$284

$192
137
0
$329

$219
157
0
$375

NET WORKING CAPITAL / (DEFICIT)

$388

$458

$615

$1,156

$1,268

$1,482

$1,720

$1,980

($70)

($157)

($541)

($112)

($214)

($238)

($260)

38
56
0.0%

43
60
0.0%

49
63
0.0%

45
59
0.0%

40
57
0.0%

40
56
0.0%

40
56
0.0%

40
57
0.0%

35
1.9%
0.0%

45
1.7%
0.0%

51
2.2%
0.0%

10
2.0%
0.0%

10
2.0%
0.0%

10
2.0%
0.0%

10
2.0%
0.0%

10
2.0%
0.0%

($105)
($95)
$0
$127
$3
$0
($70)

($195)
($155)
$0
$163
$30
$0
($157)

($74)
($89)
$0
($386)
$9
$0
($541)

($45)
($107)
$0
$23
$17
$0
($112)

($131)
($126)
$0
$25
$18
$0
($214)

($137)
($147)
$0
$26
$19
$0
($238)

($139)
($167)
$0
$27
$19
$0
($260)

Working Capital Balances


Accounts Receivable, net
Inventory
Other Current Assets
Total Non-cash Current Assets

(Increase)/Decrease in Working Capital


Ratios and Assumptions
Accounts Receivable (Collection period in days)
Inventory (Days outstanding)
Other Current Assets as % of Net Sales
Accounts Payable (Days payable)
Accrued Liabilities as % of COGS
Other Current Liabilities as % of COGS
Cash Flows by Individual Accounts
Accounts Receivable, net
Inventory
Other Current Assets
Accounts Payable
Accrued Liabilities
Other Current Liabilities
(Increase)/Decrease in Working Capital
Inventory and Purchases
Beginning Inventory
Purchases
Inventory Used - (Cost of Sales)
Ending Inventory
Discounts on Purchases:
Discounts on Purchases - %
Discounts on Purchases - Terms in Days
Discounts Taken on Purchases
Margins
Purchases as % of Net Sales
Ending Inventory as % of Net Sales

330
2,209
$2,539
2,202
$337

337
2,729
$3,066
2,634
$432

432
3,579
$4,011
3,424
$587

587
4,268
$4,855
4,179
$676

676
5,122
$5,798
5,015
$783

783
6,044
$6,827
5,917
$910

910
7,011
$7,921
6,864
$1,057

1,057
7,992
$9,049
7,825
$1,224

2.0%
10
0.0%

2.0%
10
0.0%

2.0%
10
0.0%

2.0%
10
2.0%

2.0%
10
2.0%

2.0%
10
2.0%

2.0%
10
2.0%

2.0%
10
2.0%

75.6%
11.5%

78.5%
12.4%

79.2%
13.0%

79.0%
12.3%

79.0%
11.8%

79.0%
11.7%

79.0%
11.7%

79.0%
11.9%

The Clarkson Lumber Company


Depreciation Schedule
($ in thousands)

Historical - Year Ending December 31,


1993
1994
1995

Net Sales
Capital Expenditures
Capital Expenditures as % of Net Sales
Beginning Net PP&E
Capital Expenditures
(Depreciation Expense)
(Asset Sales and Write-Offs)
Ending Net PP&E
Total Depreciation Expense
Depreciation as % of PP&E,net
Depreciation as % of Depreciable Assets
Depreciation as % of CapEx
Existing PP&E, net
Land
Depreciable PP&E,net
Depreciation Expense Projections

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

$2,921
30
1.0%

$3,477
69
2.0%

$4,519
169
3.7%

$5,513
165
3.0%

$6,616
132
2.0%

$7,807
78
1.0%

$9,056
91
1.0%

$10,324
103
1.0%

$236
30
(33)
0
$233

$233
69
(40)
0
$262

$262
169
(43)
0
$388

$388
165
(81)
0
$472

$472
132
(87)
0
$517

$517
78
(89)
0
$506

$506
91
(88)
0
$509

$509
103
(88)
0
$524

$33

$40

$43

$81

$87

$89

$88

$88

14.2%
24.3%
110.0%

15.3%
30.1%
58.0%

11.1%
26.5%
25.4%

233
(100)
$133

262
(100)
$162

388
(100)
$288

Useful life
7.0 years

17.2%
20.9%
49.1%

16.9%
18.5%
66.1%

17.5%
17.2%
113.8%

17.3%
17.4%
97.1%

16.9%
17.4%
85.6%

From Existing PP&E:

$72

$62

$51

$41

$31

From New CapEx:

$9

$18
7

$18
15
4

$18
15
9
5

$18
15
9
10
6

CapEx
1996
1997
1998
1999
2000

165
132
78
91
103

9.0 years
9.0 years
9.0 years
9.0 years
9.0 years

The Clarkson Lumber Company


Other Long-Term Assest & Liabilities Schedule
($ in thousands)

Historical - Year Ending December 31,


1993
1994
1995

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

Assets
Goodwill, net
Intangiable Assets, net
Deferred Income Taxes
Non-Current Deferred Income Taxes
Other Long-Term Assets
Total Other Long-Term Assest:
(Increase)/Decrease in Other Assets:

0
0
0
0
0
$0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

0
0
0
0
0
$0
0

Liabilities
Deferred Income Taxes
Other Long-Term Liabilities
Total Other Long-Term Liabilities
Increase/(Decreae) in Other Liabilities:

$0
0
$0

$0
0
$0
0

$0
0
$0
0

$0
0
$0
0

$0
0
$0
0

$0
0
$0
0

$0
0
$0
0

$0
0
$0
0

$0

$0

$0

$0

$0

$0

$0

Change in Other Long-Term Assets and Liabilities


Goodwill calculation
Beginning Goodwill
Additions to Goodwill
Goodwill Write-down/Amortization
Goodwill Net

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

Intangible Asset calculation


Beginning Intangible Assets
Additions to Intangible Assets
Intangible Asset Amortization
Intangible Asset, net

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

$2,921
0.0%
0.0%
0.0%
0.0%
0.0%

$3,477
0.0%
0.0%
0.0%
0.0%
0.0%

$4,519
0.0%
0.0%
0.0%
0.0%
0.0%

$5,513
0.0%
0.0%
0.0%
0.0%
0.0%

$6,616
0.0%
0.0%
0.0%
0.0%
0.0%

$7,807
0.0%
0.0%
0.0%
0.0%
0.0%

$9,056
0.0%
0.0%
0.0%
0.0%
0.0%

$10,324
0.0%
0.0%
0.0%
0.0%
0.0%

Net Sales
Deferred Income Taxes as % of Net Sales
Additions to Goodwill as % of net sales
Additions to Intangible Assets as % of net sales
Other Long-Term Assets as % of Net Sales
Other Long-Term Liabilities as % of Net Sales

The Clarkson Lumber Company


($ in thousands)

Beginning Equity Balance


Net Income
Issuance / (Repurchase of) Equity
Dividends Paid
Option Proceeds
Effects of Exchange Rates on Cash
Ending Equity Balance
Share Repurchase Assumptions
Current Year EPS
Assumed Current Year EPS Multiple
Projected Share Purchase Price
Shares Repurchased
$ Amount Repurchased
Share Issue Assumptions
Current Year EPS
Assumed Current Year EPS Multiple
Projected Share Price
Shares Issued
$ Amount Issued
New Shares from Exercised Options
New Shares Issued from Options - thousands
Average Strike Price
$ Received
Shares Outstanding
Beginning Balance (average)
Shares Issued
Shares Repurchased
Ending Balance (average)
Dividend Assumptions
Regular Dividends
Special Dividends
Total Dividends Paid
Special Dividends as % of Net Income
Net Income
Dividend Payout Ratio
Annual Dividend per Share

Historical - Year Ending December 31,


1993
1994
1995
444
495
357
51
62
61
0
(200)
0
0
0
0
0
0
0
0
0
0
$495
$357
$418

1996
418
101
0
0
0
0
$519

Projected - Year Ending December 31,


1997
1998
1999
519
750
1,086
231
336
458
0
0
0
0
0
0
0
0
0
0
0
0
$750
$1,086
$1,543

2000
1,543
584
0
0
0
0
$2,127

$0.17

$0.25

$0.25

$0.40
10.0x
$4.04
0
$0

$0.92
10.0x
$9.22
0
$0

$1.34
10.0x
$13.43
0
$0

$1.83
10.0x
$18.30
0
$0

$2.34
10.0x
$23.38
0
$0

0
$0

$4.00
50
$200

0
$0

$0.17

$0.25

$0.25

$0.40
10.0x
$4.04
0
$0

$0.92
10.0x
$9.22
0
$0

$1.34
10.0x
$13.43
0
$0

$1.83
10.0x
$18.30
0
$0

$2.34
10.0x
$23.38
0
$0

$0.00
0
$0

$0.00
0
$0

$0.00
0
$0

0
0
$0

0
0
$0

0
0
$0

0
0
$0

0
0
$0

0
0
$0

0
0
$0

0
0
$0

300
0
0
300

300
0
50
250

250
0
0
250

250
0
0
250

250
0
0
250

250
0
0
250

250
0
0
250

250
0
0
250

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

0.0%
$51

0.0%
$62

0.0%
$61

0.0%
$101

0.0%
$231

0.0%
$336

0.0%
$458

0.0%
$584

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

0.0%
$0.00

The Clarkson Lumber Company


Shares Outsanding Table
($ in thousands)
Beginning Balance - Basic (actual)
Shares Issued
Shares Repurchased
Ending Balance - Basic (actual)
Basic Weighted Average Shares
Effects of Options
Diluted Weighted Average Shares

Historical - Year Ending December 31,


1993
1994
1995
300
300
250
0
0
0
0
50
0
300
250
250
300
0
300

250
0
250

250
0
250

1996
250
0
0
250
250
0
250

Projected - Year Ending December 31,


1997
1998
1999
250
250
250
0
0
0
0
0
0
250
250
250
250
0
250

250
0
250

250
0
250

2000
250
0
0
250
250
0
250

The Clarkson Lumber Company


Financing Needs & LOC Interest Expense Schedule
($ in thousands)

Historical - Year Ending December 31,


1993
1994
1995
($19)
($37)
($222)
0
(200)
0
0
0
0
0
0
0
0
0
0
73
47
52
(47)
(52)
(63)
$7
($243)
($233)

Cash Flow Available for Financing Activities


Proceeds from / (Repurchase of) Equity
Dividends
Option Proceeds
Effects of Exchange Rates on Cash
Plus: Beginning Cash Balance
Less: Minimum Cash Balance
Cash Available for Debt Repayment

1996
($524)
0
0
0
0
63
(100)
($561)

Projected - Year Ending December 31,


1997
1998
1999
$73
$133
$217
0
0
0
0
0
0
0
0
0
0
0
0
100
100
100
(100)
(100)
(109)
$73
$133
$208

2000
$310
0
0
0
0
109
(124)
$294

Total Long-Term Debt (Repayments) / Borrowings

($20)

$180

($120)

$536

($172)

($180)

($188)

($196)

Cash Surplus/(Shortfall)

($13)

($63)

($353)

($25)

($98)

($47)

$20

$98

$0
13
$13

$13
63
$75

$75
353
$428

$428
25
$453

$453
98
$551

$551
47
$598

$598
(20)
$578

$578
(98)
$480

$6
11.0%
$1

$44
11.0%
$5

$252
11.0%
$28

$441
11.0%
$48

$502
11.0%
$55

$575
11.0%
$63

$588
11.0%
$65

$529
11.0%
$58

$37
0.0%
$0

$60
0.0%
$0

$49
0.0%
$0

$58
0.0%
$0

$82
0.0%
$0

$100
0.0%
$0

$100
0.0%
$0

$104
0.0%
$0

$47
$0
$47

$52
$0
$52

$63
$0
$63

$66
$100
$100

$79
$100
$100

$94
$100
$100

$109
$100
$109

$124
$100
$124

$5,513
1.2%

$6,616
1.2%

$7,807
1.2%

$9,056
1.2%

Revolving Credit Facility:


Beginning Balance
Discretionary (Paydown) / Borrowings
Ending Balance
Revolving Credit Facility:
Average Balance
Interest Rate - LOC
Interest Expense

Cash Balances:
Average Balance
Interest Rate - Cash
Interest (Income)
Estimated Cash Balance
Bank Reserve Requirements
Minimum Cash Balance
Net Sales
Cash as % of Net Sales

$2,921
1.6%

$3,477
1.5%

$4,519
1.4%

$10,324
1.2%

124

JUMP STARTING EXCEL:


1. Copy Cells G26:K26 to O26:S26
2. Enter 0 "zero" in Cells G26:K26
3. Copy O26:S26 to G26

If interest is earned on cash balances


JUMP START will be required for cells
G33:K33

The Clarkson Lumber Company


Debt Schedule
($ in thousands)
1992
Totals:
Beginning Balance
Issuance
Principal Payments
Ending Balances
Total Long-Term Debt (Repayments) / Borrowings
Interest Payments
Loan Details:
Term Loan
Issuance
Current
Long Term
Total
Payments
Principal
Interest
Interest rate

Historical - Year Ending December 31,


1993
1994

$0
$20
$180

$180
$0
$20
$160

$160
$200
$20
$340

($20)

($20)

$180

$18

$27

0
20
160
$180

0
20
140
$160

0
20
120
$140

$20

$20
$18

$20
$16

10.0%

10.0%

Mr. Holtz
Issuance
Current
Long Term
Total

200
100
100
$200

Payments
Principal
Interest

$0
$11

Interest rate

11.0%

Mortgage Loan
Issuance
Previous Balance
New Balance
Principal Repayment
Other Payments
Total Principal Payments
Ending Balance

0
0
0
0
0
0
0

0
0
0
0
0
0
0

Interest Payment

Fixed Annual Interest Rate


Amortization Period

Amortization Table
Principal

Interest

Month
1
2
3
4
5
6
7
8
9
10
11
12
Month
1
2
3
4
5
6
7
8
9
10
11
12

ear Ending December 31,


1995

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

$340
$0
$120
$220

$220
$800
$264
$756

$756
$0
$172
$584

$584
$0
$180
$404

$404
$0
$188
$216

$216
$0
$196
$20

$20
$0
$20
($0)

($120)

$536

($172)

($180)

($188)

($196)

($20)

$33

$56

$39

$29

$19

$8

$2

$0

0
20
100
$120

0
20
80
$100

0
20
60
$80

0
20
40
$60

0
20
20
$40

0
20
0
$20

0
0
0
$0

0
0
0
$0

$20
$14

$20
$12

$20
$10

$20
$8

$20
$6

$20
$4

$20
$2

$0
$0

10.0%

10.0%

10.0%

10.0%

10.0%

10.0%

10.0%

$0

10.0%

0
100
0
$100

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

0
0
0
$0

$100
$19

$100
$8

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

11.0%

11.0%

11.0%

11.0%

11.0%

11.0%

0
0
0
0
0
0
0

800
0
800
144
0
144
656

0
656
656
152
0
152
504

0
504
504
160
0
160
344

0
344
344
168
0
168
176

0
176
176
176
0
176
0

0
0
0
0
0
0

37

29

22

13

5.0%
5 years

5.0%
4 years

5.0%
3 years

5.0%
2 years

5.0%
1 years

11.0%

0.0%
years

11.0%

(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(144)

(12)
(12)
(12)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(152)

(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(14)
(14)
(160)

(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(168)

(14)
(14)
(14)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(176)

(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(37)

(3)
(3)
(3)
(3)
(3)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(29)

(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(1)
(22)

(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(13)

(1)
(1)
(1)
(1)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(5)

The Clarkson Lumber Company


Historical - Year Ending December 31,
1993
1994
1995
ACTIVITY RATIOS
A/R Days: receivables/(net sales/365)
A/P Days: payables/(purchases/365)
Inventory Days:inventory/(cogs/365)
Inventory Turnover: cogs/inventory
Asset Turnover: net sales/total assets
Fixed Asset Turnover: net sales/net fixed assets
PROFITABILITY RATIOS
Gross Profit/Sales
Net Income/Sales
Return on Assets
Net Income/Equity (ROE)
EBIT/Total Assets
Average Tax Rate
LIQUIDITY RATIOS
Current Assets/Current Liabilities
(Current Assets-Inventory)/Liabilities
Equity/Fixed Assets
EBIT/Interest (interest coverage)
LEVERAGE RATIOS
Debt/Total Assets
Debt/Equity
Total Assets/Equity

1996

Projected - Year Ending December 31,


1997
1998
1999

2000

38
35
56
6.5x
3.2x
12.5x

43
45
60
6.1x
3.0x
13.3x

49
51
63
5.8x
2.7x
11.6x

45
10
59
6.2x
2.9x
11.7x

40
10
57
6.4x
3.1x
12.8x

40
10
56
6.5x
3.3x
15.4x

40
10
56
6.5x
3.4x
17.8x

40
10
57
6.4x
3.4x
19.7x

24.6%
1.8%
5.6%
10.3%
10.5%
35.0%

24.2%
1.8%
5.3%
17.2%
10.9%
35.0%

24.2%
1.4%
3.7%
14.7%
9.4%
35.0%

24.2%
1.8%
5.2%
19.4%
13.5%
35.0%

24.2%
3.5%
10.8%
30.8%
21.1%
35.0%

24.2%
4.3%
14.2%
30.9%
25.7%
35.0%

24.2%
5.1%
17.2%
29.7%
29.5%
35.0%

24.2%
5.7%
19.5%
27.5%
32.2%
35.0%

2.7x
1.4x
2.1x

2.3x
1.2x
1.4x

2.2x
1.2x
1.1x

7.3x
3.9x
1.1x
5.4x

6.7x
3.4x
1.4x
8.1x

6.6x
3.4x
2.1x
9.6x

6.6x
3.3x
3.0x
12.2x

6.6x
3.3x
4.1x
16.6x

46.3%
0.9x
1.9x

69.2%
2.2x
3.2x

74.6%
2.9x
3.9x

73.1%
2.7x
3.7x

64.7%
1.8x
2.8x

54.2%
1.2x
2.2x

42.1%
0.7x
1.7x

29.2%
0.4x
1.4x

1993

1994

1995

1996

1997

1998

1999

2000

TABLE USED TO CALCULATE FINANCIAL RATIOS


BALANCE SHEET ITEMS
Accounts Receivable, net
Accounts and Notes Payable
Inventory
TOTAL CURRENT ASSETS
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY
Total Capital (D + E)
PP&E - net
TOTAL ASSETS

306
213
337
690
255
428
495
923
233
923

411
340
432
895
385
800
357
1,157
262
1,157

606
503
587
1,256
578
1,226
418
1,644
388
1,644

680
117
676
1,456
201
1,409
519
1,928
472
1,928

725
140
783
1,609
241
1,376
750
2,126
517
2,126

856
166
910
1,865
284
1,286
1,086
2,372
506
2,372

992
192
1,057
2,158
329
1,124
1,543
2,667
509
2,667

1,131
219
1,224
2,479
375
875
2,127
3,003
524
3,003

NET INCOME ITEMS


Net Sales
Cost of Sales (before D&A)
Purchases
Interest Expense - Line of Credit
EBIT
Net Income
Income Taxes

2,921
2,202
2,209
0
97
51
28

3,477
2,634
2,729
0
126
62
33

4,519
3,424
3,579
0
155
61
33

5,513
4,179
4,268
48
260
101
54

6,616
5,015
5,122
55
449
231
124

7,807
5,917
6,044
63
609
336
181

9,056
6,864
7,011
65
787
458
246

10,324
7,825
7,992
58
966
584
315