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Spyder Active Sports—2004

Harvard Business School Case 206-027
Case Software 9-207-701

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217 138 0.01 1.49 Columbia Sportswear Co. Sports Apparel 0.25 0.79 0.93 0.25 0.84 Skis Rossignol SA Sports Equipment & Apparel 0.64 Current Risk Free Rate (April 2004.80 Nike Inc.64 Quiksilver Inc.17 0.39 0.55 174 118 0.Selected Financial Data about Comparable Companies (in $ millions.59 5. Sports Equipment 1.113 994 0. Sports Apparel 1. Footwear.76% . 20 Year Treasury) 5.70 20. as year end 2004) Five-Year Market Value Total Interest. incl.558 866 0.71 Median 0.302 1.70 0.459 0.81 4.36 559 209 0. Sports Apparel & Footwear 0.06 0. Unlvered Company Name Industry Beta of Equity Bearing Debt Total Value Five Average D/E Beta Adidas-Salomon AG Sports Apparel.16% Market Risk Premium 6. Sports Apparel 1.48 2.20 0.09 0.31 VF Corp Apparel.50% CAPM Cost of Capital (Unlevered) 9.39 0.Average Debt-to.40 K2 Inc.06 1.47 Average 0. & Equipm 0.81 0.239 20 0.44 0.20 0.08 0.20 0.64 0.76% Small Stock Premium 6% Total Cost of Capital 15.41 0.25 0.

888 18.86% 26.169 3.14% 46.90% 14.997 4.00% Capital Expenditures $ 2558.598 Add Back Depreciation 1.081 Implied 2005 EBITDA Multiple 9.558 3.517 24.223 165.86% 47.819 Enterprise Value $124.6 Implied 2005 Sales Multiple 1.40% 16.71 Change in NWC 382.002 50.253 Gross Profit 42.45% 1.75% Total Operating Expenses 32.028 49.26% 1.60% WC 981.14% 14.629 6.683 11.366 85.887 18.204 TV 166.92% Depreciation 16.14% 52.777 27.630 133.895 EBIT 12.165 13.199 Unlevered Net Income 9.98% 2.58 441.60% 1.571 41.89 3996.983 21.50 1690.078 2.64 325.098 Less Capital Expenditures 2.260 3.25% Gross Profit 49.86 1364.09% 13.910 14.78% 30.5 Capital Expenditures % 3.819 9.00% 25.804 77.075 70.419 88.097 3.60% 1.00% 3.709 16.35% 16.95 Investment 1.43 3168.40% Cost of Sales 50.25% 47.00% 25.60% 1.96% Depreciation & Amortization 1.228 3.Consolidated Income Statement and Cash Flow Adjustments—Historical and Forecasted (in $ thousands) FY2004 Current FY2005E FY2006E FY2007E FY2008E FY2009E Net Sales 61.83% EBITDA 15.00% 25.00% 25.988 16.798 Taxes 3.85% 31.660 Discount Rate 15.75% 52.767 12.014 33.554 62.69 4971.57 2651.972 Less Net Working Capital Investment 383 326 441 520 Total Free Cash Flow 7.722 4.00% .08% 16.86% 53.732 Cost of Sales 43.87% Tax Rate 25.76% Terminal Value Growth Rate 6% PV Cash Flows $31.12% 24.60% 1.80% 29.00% 3.49 520.262 PV Terminal Value $92.14 Percent of Sales Net Sales growth 23.281 105.279 55.479 Total Operating Expenses 28.08 2131.00% 3.584 Depreciation 13.

Sports Apparel & Footwear 0.113 994 0.039 130 1. incl. Footwear.17 1.11 Nike Inc. Sports Apparel 0.302 1. Sports Equipment 1.586 $150.48 2.70 20.84 Columbia Sportswear Co.751 1. & Equipme 0.41 839 63 0.44 Sales EBIT Creative Sports Values (2005) $85.736 1.59 5.28 10.13 8.000 .631 $146.25 1.01 1.36 559 209 0.81 0.77 Median 0.29 K2 Inc.643 Implied Enterprise Value (Median) $96.217 138 0.81 4.82 12. Sports Apparel 1.221 586 0.459 0.13 10.20 5.558 866 0.61 11.55 174 118 0.93 0.390 725 1.44 479 25 0.39 6.Selected Financial Data about Comparable Companies (in $ millions 2004) Five-Year Market Value Interest. Sports Apparel 1.08 11.44 Skis Rossignol SA Sports Equipment & Apparel 0.30 10.93 9.239 20 0.94 VF Corp Apparel.42 Average 0.Average Debt-to- Company Name Industry Beta of Equity Bearing Debt Total Value Sales EBITDA EV/Sales EV/EBITDA Adidas-Salomon AG Sports Apparel.92 12.988 Implied Enterprise Value (Average) $109.06 990 220 2.28 10.34 Quiksilver Inc.20 1.281 $13.