Q1

No. of shares PAT/EPS

Market cap
Debt
Value
Beta (L)
Beta (Un)
Average

Brunswick Southern
0.50
0.20
5.75
4.59
0.48
0.63
6.23
5.22
1.10
1.20
1.02
1.06
1.04

Dixon's target capital structure

D
0.35
E
0.65
V
1.00
Beta (L)
rf
rm
rm - rf

1.59
9.50%
17.00% (Assumed)
7.50%

Ke
Kd
Tax

21.44%
11.25%
48.00% (Ideally, we should take marginal tax rate but that data is not available)

WACC

16.0%

Year
t

1979
0

Opening PPE
Capex
Depr
Closing PPE
NWC
Delta NWC

1980
1
10,600
485
1,060
10,025

1,400

Cash Flows
Op profit (after tax)
Add: Depr
Less: Capex
Less: Delta NWC
FCF
PV of FCF

9,251

Terminal value
NWC released
Tax benefit on PPE scrap
Total TV

2,072
1,569
3,641

t
PVf
PV of TV

10
0.2270
826

Total PV
Acquisition Cost
NPV

10,077
12,000
(1,923)

1981
2

1982
3

1983
4

1984
5

10,025
524
1,109
9,440

9,440
561
1,161
8,840

8,840
607
1,217
8,230

8,230
608
1,278
7,560

1,196
(204)

1,512
316

1,778
266

1,922
144

2,072
150

433
1,060
(485)
204

1,153
1,109
(524)
(316)

1,578
1,161
(561)
(266)

1,630
1,217
(607)
(144)

1,574
1,278
(608)
(150)

1,212

1,422

1,912

2,096

2,094

1985
6

1986
7

1987
8

1988
9

1989
10

7,560
600
1,338
6,822

6,822
600
1,398
6,023

6,023
600
1,458
5,165

5,165
600
1,518
4,246

4,246
600
1,578
3,268

2,072
-

2,072
-

2,072
-

2,072
-

2,072
-

1,574
1,338
(600)
-

1,574
1,398
(600)
-

1,574
1,458
(600)
-

1,574
1,518
(600)
-

1,574
1,578
(600)
-

2,312

2,372

2,432

2,492

2,552

Power Savings %
Graphite Savings %

Year
t

17.50%
100%

1979
0

Investment
Power Savings
Graphite Savings

1980
1

1982
3

1983
4

1984
5

1985
6

(2,250)

Total Savings (after tax)

DTS
Tax saved on scrapping
Total FCF
NPV

1981
2

(2,250)
4,255

1,354
791

1,643
875

1,842
940

2,062
992

2,062
1,042

1,115
108

1,309
108

1,447
108

1,588
108

1,614
108

1,223

1,417

1,555

1,696

1,722

1986
7

1987
8

1988
9

1989
10

2,062
1,042

2,062
1,042

2,062
1,042

2,062
1,042

1,614
108

1,614
108

1,614
108

1,614
108
108

1,722

1,722

1,722

1,830

Q3
The NPV without the laminate technology is negative. But adding the laminate technology NPV makes it positive. However, ther
Dixon can propose a 2-tiered arrangement: Pay $10m initially and then pay up to $2m later depending on the benefits received
Remember that project NPV can be increased by either increasing the cash inflows or by reducing the cash outflows. Re-negot

Q4 and Q5
Strategic issues:
# Since the product is a commodity, being a low-cost producer is very important
# Since the metal electrodes technology is more cost-effective, the Collinsville plant has a disadvantage compared to new plan
# As the case says, getting into Sodium Chlorate manufacturing makes strategic sense for Dixon. So, can it build a new plant w
# Building a new plant from scratch is more challenging. Also, by acquiring Collinsville, Dixon gets ready access to customers a
# Per Exhibit-4, Collinsville capacity of 40k tons is 13% of the Southeastern US total. So scale-wise, Dixon is getting a decent s
# If any of Dixon's competitors takes over Collinsville, it'll make life more difficult for Dixon

The best option for Dixon (given the uncertainty of the laminate technology) is to propose a 2-tiered arrangement as mention

V makes it positive. However, there is some uncertainty regarding how the laminate technology will pan out.
pending on the benefits received from using the laminate technology.
cing the cash outflows. Re-negotiating the purchase price might be the smart thing to do

advantage compared to new plants (as new plants will use metal electrodes)
xon. So, can it build a new plant with the new technology?
gets ready access to customers and market share which it can't get otherwise
e-wise, Dixon is getting a decent sized plant and not a very small and inconsequential player.

2-tiered arrangement as mentioned above

Exhibit 8

Pro Forma Financial Statements for the Collinsville Plant (000s)

Expected 12/31
1979

1980

For the Years Ended December 31,

1981
1982
1983
1984

Revenues
Sales (tons)
Average price/ton
Sales ($000)

32,000
$415
$13,280

35,000
$480
$16,800

38,000
$520
$19,760

38,000
$562
$21,356

38,000
$606
$23,028

Manufacturing Costs
Variable: Power
Graphite
Salt and other
Total variable
Fixed: Labor
Maintenance
Other
Total fixed
Total Manufacturing Costs

$6,304
645
1,285
$8,234
$1,180
256
1,154
$2,590
$10,824

$7,735
791
1,621
$10,147
$1,297
277
1,148
$2,722
$12,869

$9,386
875
1,753
$12,014
$1,427
299
1,179
$2,905
$14,919

$10,526
940
1,836
$13,302
$1,580
322
1,113
$3,015
$16,317

$11,780
992
1,956
$14,728
$1,738
354
1,153
$3,245
$17,973

$112
451
$1,060
$1,623
$833

$125
478
$1,110
$1,713
$2,218

$138
508
$1,160
$1,806
$3,035

$152
543
$1,210
$1,905
$3,134

$168
591
$1,270
$2,029
$3,026

Other Charges
Selling
R&D
Depreciation
Total
Operating Profit
ASSETS
Accounts receivable
Inventories
Net PP&E
Total

$1,622
651
10,600
$12,873

$1,328
598
10,025
$11,951

$1,680
756
9,440
$11,876

$1,976
889
8,840
$11,705

$2,136
961
8,230
$11,327

$2,303
1,036
7,560
$10,899

LIABILITIES
Accounts payable
Net Assets

873
$12,000

730
$11,221

924
$10,952

1,087
$10,618

1,175
$10,152

1,267
$9,632

47.5%
62.0
19.5
81.5
6.3
10.0
4.5
5.5
84.5%
7.4%

46.0%
60.4
16.2
76.6
13.2
10.0
4.5
5.5
65.2%
20.3%

47.5%
60.8
14.7
75.5
15.4
10.0
4.5
5.5
53.7%
28.6%

49.3%
62.3
14.1
76.4
14.7
10.0
4.5
5.5
47.5%
30.9%

51.2%
64.0
14.1
78.0
13.1
10.0
4.5
5.5
41.8%
31.4%

Percent of Sales Ratios

Power costs
Variable costs
Fixed costs
Manufacturing costs
Operating profit
Accounts receivable
Inventories
Accounts payable
Net assets
Operating Profit/Net Assets

These pro forma financial statements were based on the following assumptions: (1) Continued use of unlaminated graphite electrodes;
(2) Though excess industry capacity would hold price increases to less than 8% annual rate in 1980, by 1984 the average annual price
increase over the period 19791984 was assumed to equal 8%; (3) Power costs per KWH would increase 12% per year; (4) Depreciation
would increase because Dixon would have written up the value of the Collinsville plant to $10.6 million.
a

Exhibit 1

Financial Statements for American Chemical and Other Selected Large Chemical Companies

1974
Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield

1974

ALLIED CHEMICAL
1975
1976
1977

1978

1974

4,671
198
$4.66
$1.25
5.7%

4,805
212
$4.98
$1.50
4.3%

5,235
251
$5.91
$1.65
5.0%

5,490
349
$8.20
$1.80
4.1%

2,216
151
$5.43
$1.53
6.3%

2,333
116
$4.17
$1.80
5.4%

2,630
117
$4.52
$1.80
4.5%

2,923
135
$4.93
$1.85
4.5%

3,268
120
$4.25
$2.00
7.1%

4,938
558
$3.18
$0.60
2.5%

$23
10
19
2.5

$30
17
22
4.7

$36
21
35

$46
30
33

$48
32
44

$54
23
28

$42
27
33

$45
33
40

$51
39
44

$45
28
28

$35
25
28

5.6

5.4

5.2

7.9

8.8

8.9

6.6

DOW CHEMICAL
1975
1976
1977
4,888
616
$3.33
$0.75
1.7%

8.8

$48
27
46
13.8

1978

5,652
613
$3.30
$0.95
2.3%

6,234
566
$3.01
$1.15
4.5%

6,888
575
$3.16
$1.30
5.6%

$57
38
43

$44
25
27

$31
22
25

13

7.9

2,014
2,109
2,198
2,465
2,527
1,550
1,839
1,959
2,279
2,467
3,498
4,316
5,118
5,889
6,793
44
37
37
29
39
28
34
33
36
38
37
36
37
40
43
20
56
63
63
71
41
72
66
67
64
62
63
64
63
60
57

1.20

1.43

1.25
6.3
3.9
4.1
4.3
6.7
9.2
5.7
5.2
5.4
4.9
10.6
8.2
6.5
4.9
4.4
BBB/A A/A A/Aa

Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield

1974
6,910
404
$2.74
$1.83
6.0%

1975
7,221
272
$1.81
$1.42
3.2%

Common stock prices

High
Low
Close
Closing P/E

$60
28
31
11.3

$45
29
42
23.2

Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

1978

4,828
323
$7.60
$1.00
5.3%

Common stock prices

High
Low
Close
Closing P/E
Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

AMERICAN CHEMICAL
1975
1976
1977

DU PONT
1976
1977
8,361
9,435
459
545
$3.10
$3.69
$1.75
$1.92
3.7%
4.8%

$54
39
45
14.5

$45
35
40
10.8

1978
10,584
787
$5.39
$2.42
5.8%

1974
3,498
323
$9.35
$2.30
5.9%

$46
33
42
7.8

$70
39
41
4.4

MONSANTO
1975
1976
1977
3,625
4,270
4,595
306
366
276
$8.63
$10.05
$7.46
$2.55
$2.75
$3.03
3.4%
3.2%
5.4%

$81
41
76
8.8

$100
76
88
8.8

$89
52
58
7.8

1978
5,019
303
$8.29
$3.18
6.8%

1974
5,320
530
$8.69
$2.18
5.3%

$60
44
47
5.7

$46
32
41
4.7

UNION CARBIDE
1975
1976
1977
5,665
6,346
7,036
382
441
385
$6.23
$7.15
$6.05
$2.40
$2.50
$2.80
3.9%
4.0%
6.8%

$67
40
61
9.8

$77
56
62
8.7

$62
40
41
6.8

1978
7,870
394
$6.09
$2.80
8.2%

$43
34
34
5.6

4,874
5,085
5,772
6,127
6,394
2,396
2,942
3,349
3,668
4,115
3,752
4,485
5,212
5,750
5,997
16
17
22
21
17
25
29
27
28
30
26
30
32
30
28
5
5
4
4
4
79
78
74
75
79
75
71
73
72
70
74
70
68
70
72

1.20

1.43

1.25
9.5
4.1
6.0
6.1
9.5
AAA/Aaa

Equal to earnings before interest and taxes divided by interest expenses.

Standard & Poor's rating/Moody's rating.

11.4
9.1
8.4
7.0
6.5
AA/Aa

14.0
8.4
7.0
5.0
4.9
A/Aa

Exhibit 2

Financial Statements for Universal Paper and Other Selected Large Chemical Companies

1974
1,867
149
$3.60
$0.75
6.3%

Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield
Common stock prices
High
Low
Close
Closing P/E
Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

$17
10
12
3.4

$21
12
19
7.1

$34
18
30
8.1

$36
24
30
7.4

1978
2,525
191
$4.61
$1.00
3.6%

1974
1,172
125
$5.06
$1.75
7.5%

$38
26
28
6.0

$40
20
24
4.7

CROWN ZELLERBACH
1975
1976
1977
1,767
2,136
2,318
75
98
109
$3.01
$3.88
$4.34
$1.80
$1.80
$1.83
5.1%
4.0%
5.6%

$41
24
36
12.0

$49
36
43
11.6

$45
32
34
7.8

1978
2,467
112
$4.39
$1.90
6.2%

1974
3,042
263
$5.95
$1.75
5.6%

$38
29
31
7.1

$56
32
36
6.1

INTERNATIONAL PAPER
1975
1976
1977
3,081
3,541
3,669
218
254
234
$4.93
$5.60
$4.98
$2.00
$2.00
$2.00
3.5%
2.9%
4.6%

$62
35
58
11.8

$80
58
69
12.3

$70
39
44
8.8

1978
4,150
234
$4.94
$2.00
5.5%

$49
35
37
7.5

1,349
1,620
1,787
1,938
2,018
1,220
1,290
1,345
1,446
1,647
2,207
2,801
3,093
3,303
3,407
30
29
32
32
33
33
33
31
30
34
33
41
34
32
28
-----1
1
1
1
1
70
71
68
68
67
66
66
68
69
65
67
59
66
68
72

1.52

1.03

1.43
6.8
5.0
6.8
7.4
9.2
8.1
4.5
5.3
5.7
4.7
11.1
5.4
5.1
4.7
5.3
A/Aa
A/A
AA/Aa

1974
1,526
82
$3.27
$0.60
9.2%

Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield
Common stock prices
High
Low
Close
Closing P/E
Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

UNIVERSAL PAPER
1975
1976
1977
1,902
2,136
2,248
109
154
168
$2.63
$3.72
$4.06
$0.75
$0.75
$0.85
3.9%
2.5%
2.8%

$13
8
9
2.8

MEAD CORPORATION
1975
1976
1977
1,245
1,599
1,822
53
89
98
$2.05
$3.61
$4.10
$0.80
$0.89
$0.98
6.6%
4.4%
4.7%

$13
9
12
5.9

$23
12
21
5.8

$24
18
22
5.4

1978
2,322
121
$5.12
$1.21
6.8%

1974
1,439
95
$4.10
$1.48
6.5%

$34
17
23
4.5

$35
19
25
6.1

KIMBERLY-CLARK
1975
1976
1977
1,484
1,585
1,726
103
121
131
$4.41
$5.21
$5.60
$1.60
$1.80
$2.20
4.4%
4.1%
5.1%

$37
24
37
8.4

$47
36
44
8.4

$48
37
43
7.7

1978
1,911
149
$6.36
$2.60
6.4%

1974
1,471
105
$4.76
$1.25
7.3%

$50
39
41
6.4

$37
18
19

ST. REGIS PAPER

1975
1976
1977
1,395
1,642
1,996
96
91
107
$4.27
$3.82
$3.36
$1.43
$1.55
$1.66
4.5%
4.2%
5.6%

$35
20
34
4

$31
34
39
10.2

$39
29
31

1978
2,300
127
$3.94
$1.74
6.4%

$35
26
28
9.2

7.1

826
880
965
1,071
1,171
1,030
1,086
1,196
1,347
1,435
1,127
1,189
1,296
1,694
1,791
34
35
33
38
36
24
21
20
20
19
33
29
26
31
30
6
6
5
4
1
--------60
59
62
58
63
76
79
80
80
81
67
71
74
69
70

2.16

99

1.14
4.6
2.9
4.5
4.7
5.3
9.1
8.3
10.0
10.1
10.
7.6
7.2
6.1
5.6
5.9
A/A
AA/Aa
NR/NR

Equal to earnings before interest and taxes divided by interest expenses.

Standard & Poor's rating/Moody's rating.

Exhibit 3

Year
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

Expected.

Sales and Capacity of Sodium Chlorate Producers in the United States

Sales of
Sodium Chlorate
220,000 tons
260,000
280,000
300,000
310,000
270,000
345,000
380,000
410,000
435,000a

Domestic
Capacity
270,000 tons
300,000
300,000
320,000
335,000
355,000
370,000
385,000
420,000
455,000

Average Price
$129/ton
136
144
152
188
243
295
367
392
413a

Exhibit 4

Domestic Producers of Sodium Chlorate

Producer
Hooker Chemical Corporation

Pennwalt Corporation

American Chemical Corporation

Kerr-McGee Corporation
Inter. Minerals & Chemicals Corporation
Olin Corporation
ERCO Corporation
Universal Paper Corporation
Georgia Pacific Corporation
Brunswick Chemical Company
Southern Chemicals Corporation
Pacific Eng. And Prod. Co. of Nevada
U.S. Total
Southeastern U.S. Total

Plants serving the Southeastern U.S. market.

Capacity

Plants

114,000 tons Columbus, MSa

Taft, LAa
Niagara Falls, NY
72,000
Calvert City, KYa
Portland, OR
Tacoma, WA
65,000
Collinsville, Ala
Wenatchee, WA
63,000
Hamilton, MSa
Henderson, NV
40,000
Orrington, ME
20,000
McIntosh, Ala
20,000
Monroe, LAa
20,000
Rome, GAa
15,000
Plaquemine, LAa
11,000
Brunswick, GAa
10,000
Reigelwood, NCa
Butler, Ala
5,000
Henderson, NV
455,000 tons

Capacity
65,000 tons
###
9,000
###
###
9,000
###
###
###
###
###
###
###
###
###
###
6,000
4,000
5,000
455,000 tons
311,000 tons

Exhibit 5

Financial Statements of Selected Sodium Chlorate Producers

Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield

1974
641
27
$2.81
$1.24
7.4%

1975
714
33
$3.25
$1.36
4.6%

PENNWALT
1976
777
35
$3.56
$1.54
4.9%

1977
835
42
$4.23
$2.25
5.2%

1978
921
45
$4.54
$2.05
6.7%

Common stock prices

High
Low
Close
Closing P/E

$26
15
17
6
371

$30
17
28

$38
27
33

$39
32
39

$43
32
33

441

469

500

524

28
-72

34
-66

33
-67

34
-66

31
-69

Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

9.3

Sales ($ millions)
Net income ($ millions)
Earnings per share
Dividends per share
Dividend yield
Common stock prices
High
Low
Close
Closing P/E

$27
13
15
8.6

GEORGIA-PACIFIC
1975
1976
1977
2,359
3,038
3,675
148
215
262
$1.54
$2.12
$2.54
$0.49
$0.70
$0.83
1.9%
2.1%
3.5%

$30
16
26
16.9

$37
26
37
17.4

Equal to earnings before interest and taxes divided by interest expenses. raded.

Standard & Poor's rating/Moody's rating.

Stock not publicly traded.

7.3

19
-81

$95
60
70
13.6
1,091
20
-80

$83
61
68
13.1
1,325
24
-76

$75
45
47
10.2
1,433
21
-79

$53
40
48
10.5
1,533
17
-83

$41
21
39
10.9
577
42
10
48

$49
31
38

$42
33
41

3.8
781
38
4
58

$44
35
41

5.3
990
37
2
61

$44
34
35

6.7
1,083

5.3
1,161

36
1
63

32
1
67

$37
25
28
11.0

1978
4,403
302
$2.93
$1.03
4.5%

$33
24
24
8.2

BRUNSWICK CHEMICAL
1974
1975
1976
1977
1978
1974
1.9
2.1
3.0
4.0
4.3
1.7
0.20
0.15
0.37
0.71
0.79
0.10
$0.40
$0.30
$0.74
$1.42
$1.58
$0.61
$0.10
$0.10
$0.15
$0.35
$0.40
-c
c
c
2.9%
3.5%
c

c
c
c
c

c
c
c
c

c
c
c
c

13
7
12
8.5

14
9
11.50
7.3

SOUTHERN CHEMICALS
1975
1976
1977
1978
2.0
2.7
3.6
3.9
(0.05)
0.28
0.74
0.73
($0.24)
$1.38
$3.69
$3.66
--$0.30
$0.30
c
c
1.2%
1.3%

c
c
c
c

c
c
c
c

c
c
c
c

28
11
25
6.7

31
20
23
6.4

1,935
2,150
2,045
2,541
2,878
1.8
1.9
2.1
2.6
3.2
1.6
1.5
1.8
2.4
3.0
45
42
22
29
29
33
30
25
19
15
50
50
41
28
21
---------------55
58
78
71
71
67
70
75
81
85
50
50
59
72
79

1.50
1.10

1.2
c
c
c
c
c
c
4.3
4.4
8.1
9.9
9.3
6.7
5.0
12.3
47
53
3.5
0.4
9.0
22
24
AA/Aa
Not Rated
Not Rated

9.2

$93
47
72
15.5
851

1.33

1.06

0.81
2.9
3.3
3.8
4.1
4.2
19.4
17.1
10.8
8.4
6.4
5.5
11.6
8.4
5.5
6.3
A/A
AA/Aa
NR/A

1974
2,432
164
$1.74
$0.47
3.1%

Total capitalization
% Debt
% Preferred stock
% Common stock
Beta
Interest coveragea
Bond ratingb

8.6

KERR-MCGEE
INTERNATIONAL MINERALS AND CHEMICALS
1974
1975
1976
1977
1978
1974
1975
1976
1977
1978
1,550
1,799
1,955
2,165
2,072
859
1,303
1,260
1,280
1,364
116
131
134
119
118
70
166
135
108
120
$4.64
$5.15
$5.19
$4.61
$4.57
$3.59
$9.91
$7.73
$6.09
$6.61
$0.85
$1.00
$1.19
$1.25
$1.25
$0.57
$1.38
$2.10
$2.45
$2.60
1.4%
1.4%
1.8%
2.7%
2.6%
1.9%
5.3%
5.9%
6.4%
7.4%

Exhibit 6

Financial Statements for the Collinsville Plant ('000s)

1974

For the Years Ended December 31,

1975
1976
1977
1978

1979a

Revenues
Sales (tons)
Average price/ton
Sales ($000)

36,899
$188
$6,937

Manufacturing Costs
Variable: Power
Graphite
Salt and other
Total variable
Fixed: Labor
Maintenance
Other
Total fixed
Total Manufacturing Costs

$2,935
$3,395
$4,631
$5,530
$6,173
$6,759
354
369
545
653
689
714
693
800
1,047
1,274
1,307
1,385
$3,982
$4,564
$6,223
$7,457
$8,169
$8,858
$590
$608
$646
$739
$924
$1,072
143
201
220
272
235
237
474
659
902
1,063
509
1,107
$1,207
$1,468
$1,768
$2,074
$1,668
$2,416
$5,189
$6,032
$7,991
$9,531
$9,837
###

Other Charges
Depreciation
Selling
R&D
Total
Operating Profit

$433
114
105
$652
$1,096

$394
92
154
$640
$817

$402
126
207
$735
$2,326

$391
155
274
$820
$4,357

$384
181
351
$916
$4,845

$399
204
429
$1,032
$3,597

ASSETS
Accounts receivable
Inventories
Net PP&E
Total

$701
254
4,066
$5,021

$779
544
3,978
$5,301

$1,128
681
4,003
$5,812

$1,456
647
3,853
$5,956

$1,575
639
3,964
$6,178

$1,622
651
4,014
$6,287

$402
###

$472
###

$619
###

$780
###

$795
###

$873
###

42.3%
57.4
17.4
74.8
15.8
10.1
3.7
5.8
66.6
23.7

45.3%
60.9
19.6
80.5
10.9
10.4
7.3
6.3
64.5
16.9

41.9%
56.3
16.0
72.3
21.0
10.2
6.2
5.6
47.0
44.8

37.6%
50.7
14.1
64.8
29.6
9.9
4.4
5.3
35.2
84.2

39.6%
52.4
10.7
63.1
31.1
10.1
4.1
5.1
34.5
90.0

42.5%
55.7
15.2
70.9
22.6
10.2
4.1
5.5
34.0
66.4

LIABILITIES
Accounts payable
Net Assets
Percent of Sales Ratios
Power costs
Variable costs
Fixed costs
Manufacturing costs
Operating profit
Accounts receivable
Inventories
Accounts payable
Net assets
Operating Profit/Net Assets

30,819
$243
$7,489

37,464
$295
###

40,076
$367
###

39,790
$392
###

38,507
$413
###

Expected.

Exhibit 7

Financial Statements of Dixon Corporation (000s)

1975
Sales
Cost of goods sold
Selling and administrative
Research
Interest
Taxes

For the Years Ended December 31,

1976
1977
1978

1979

$19,128
14,085
1,952
325
400
1,125

$23,830
16,889
2,308
388
320
1,878

$28,348
19,950
2,824
593
240
2,285

$34,770
24,467
3,291
682
160
2,932

$42,259
29,185
4,436
716
80
3,818

$1,241
$1.13
$0.20

$2,047
$1.86
$0.30

$2,456
$2.23
$0.40

$3,238
$2.94
$0.40

$4,024
$3.66
$0.50

Cash and marketable securities

Other current assets
Property, plant and equipment
Total assets

$385
4,208
7,436
$12,029

$357
5,016
7,895
$13,268

$556
5,939
8,354
$14,849

$1,273
7,267
8,842
$17,382

$2,996
8,917
8,918
$20,831

Current liabilities
Debt (incl. cur. mat.)
Stockholders equity
Total liabilities

$2,314
5,000
4,715
$12,029

$2,836
4,000
6,432
$13,268

$3,402
3,000
8,447
$14,849

$4,138
2,000
11,244
$17,382

$5,113
1,000
14,718
$20,831

$714
$9
------

$822
$20
------

$1930
$27
1.06
Not rated

Profit after taxes

Earnings per share
Dividends per share

Stock price range

Closing stock price
Beta
Bond rating

Expected.

$2540
$3545
$38 $40 (10/30)
-----------

Tax rate

1975

1976

1977

1978

1979

47.55%

47.85%

48.20%

47.52% 48.69%
Consider -->

Average

47.96%
48%