BLAINE KITCHENWARE

Case Exhibit 1

Operating Results: 2004 2005 2006

Revenue 291,940 307,964 342,251
Less: Cost of Goods Sold 204,265 220,234 249,794
Gross Profit 87,676 87,731 92,458
Less: Selling, General & Administrative 25,293 27,049 28,512
Operating Income 62,383 60,682 63,946
Plus: Depreciation & Amortization 6,987 8,213 9,914
EBITDA 69,370 68,895 73,860

EBIT 62,383 60,682 63,946

Plus: Other Income (expense) 15,719 16,057 13,506
Earnings Before Tax 78,101 76,738 77,451
Less: Taxes 24,989 24,303 23,821
Net Income 53,112 52,435 53,630
Dividends 18,589 22,871 28,345

Margins:
Revenue Growth 3.2% 5.5% 11.1%
Gross Margin 30.0% 28.5% 27.0%
EBIT Margin 21.4% 19.7% 18.7%
EBITDA Margin 23.8% 22.4% 21.6%
Effective Tax Rate (1) 32.0% 31.7% 30.8%
Net Income Margin 18.2% 17.0% 15.7%
Dividend payout ratio 35.0% 43.6% 52.9%
BLAINE KITCHENWARE

Case Exhibit 2

Assets: 2004 2005 2006

Cash & Cash Equivalents 67,391 70,853 66,557
Marketable Securities 218,403 196,763 164,309
Accounts Receivable 40,709 43,235 48,780
Inventory 47,262 49,728 54,874
Other Current Assets 2,586 3,871 5,157
Total Current Assets 376,351 364,449 339,678

Property, Plant & Equipment 99,402 138,546 174,321

Goodwill 8,134 20,439 38,281
Other Assets 13,331 27,394 39,973
Total Assets 497,217 550,829 592,253

Liabilities & Shareholders' Equity:

Accounts Payable 26,106 28,589 31,936
Accrued Liabilities 22,605 24,921 27,761
Taxes Payable 14,225 17,196 16,884
Total Current Liabilities 62,935 70,705 76,581
Other liabilities 1,794 3,151 4,814
Deferred Taxes 15,111 18,434 22,495
Total Liabilities 79,840 92,290 103,890
Shareholders' Equity 417,377 458,538 488,363
Total Liabilities & Shareholders' Equity 497,217 550,829 592,253
Exhibit 3 Selected Operating and Financial Data for Public Kitchenware Producers

Home & Hearth Design AutoTech Appliances XQL Corp. Bunkerhill, Inc. EasyLiving Systems
Revenue $589,747 $18,080,000 $4,313,300 $3,671,100 $188,955
EBIT 106,763 2,505,200 721,297 566,099 19,613
EBITDA 119,190 3,055,200 796,497 610,399 23,356
Net income $53,698 $1,416,012 $412,307 $335,073 $13,173

Cash & securities $21,495 $536,099 $21,425 $153,680 $242,102

Net working capital* 54,316 1,247,520 353,691 334,804 21,220
Net fixed assets 900,803 7,463,564 3,322,837 815,304 68,788
Total assets $976,613 $9,247,183 $3,697,952 $1,303,788 $332,110

Net debt (1) $350,798 $4,437,314 $950,802 $238,056 ($64,800)

Total debt 372,293 4,973,413 972,227 391,736 177,302
Book equity $475,377 $3,283,000 $2,109,400 $804,400 $94,919

Market capitalization 776,427 13,978,375 5,290,145 3,962,780 418,749

Enterprise value (MVIC) $1,127,226 $18,415,689 $6,240,947 $4,200,836 $353,949

Equity beta 1.03 1.24 0.96 0.92 0.67

LTM Trading Multiples

MVIC/Revenue 1.91x 1.02x 1.45x 1.14x 1.87x
MVIC/EBIT 10.56x 7.35x 8.65x 7.42x 18.05x
MVIC/EBITDA 9.46x 6.03x 7.84x 6.88x 15.15x
Market/Book equity 1.63x 4.26x 2.51x 4.93x 4.41x

Net Debt/Equity 45.18% 31.74% 17.97% 6.01% -15.47%

Net Debt/Enterprise Value 31.12% 24.10% 15.23% 5.67% -18.31%

* Net working capital excludes cash and securities

(1) Net debt is total long term and short term debt less excess cash.
Blaine Kitchenware
$342,251
63,946
73,860
$53,630

$230,866
32,231
174,321
$592,253

($230,866)
-
$488,363

959,596
$728,730

0.56

2.13x
11.40x
9.87x
1.96x

-24.06%
-31.68%
Exhibit 4 Contemporaneous Capital Market Data: April 21, 2007

Yields on US Treasury Securities

Maturity
30 days 4.55%
60 days 4.73%
90 days 4.91%
1 year 4.90%
5 years 4.91%
10 years 5.02%
20 years 5.26%
30 years 5.10%

Seasoned corporate bond yields Default spread

Moody's Aaa 5.88% 0.86%
Aa 6.04% 1.02%
A 6.35% 1.33%
Baa Err:522 Err:522
Ba 7.88% 2.86%
B 8.94% 3.92%
 Effects of the Proposed Repurchase on Blaine's 2006 Balance Sheet ($ in Thousands)

Shares Repurchased 14,000 Purchase Price $18.50

Rearrange 2006 B/S Restate 2006 B/S showing effect of Repo

2006 2006
Cash 230,866 Cash 21,866
NWC 32,231 NWC 32,231
NFA 174,321 NFA 174,321
Other, net 50,945 Other, net 50,945
Total 488,363 Total 279,363

Debt 0 -47.27% Debt 50,000 D/E =

Equity 488,363 -89.66% Equity 229,363 D/Capital
Total 488,363 Total 279,363
21.80%
17.90%
Effect of Repurchase on Blaine's 2006 Income Statement ($ in Thousands) Comparison of 2006 Distributable Funds w
Restate 2006 I/S to give effect to the repo
2006 BLAINE's ACCOUNT
Post-Repo Int. Rate 6.75% EBITDA
EBIT 63,946 less depreciation
Plus: Other Income 0 EBIT
Less: Interest expense 3,375 EBIT/Int 18.9 Plus: Other Income
Earnings Before Tax 60,571 Less: Interest expense
Less: Taxes 18,632 Earnings Before Tax
Net Income 41,939 Less: Taxes 30.76%
Post-Repo Pre-Repo Net Income
EPS $ 0.93 $ 0.91 0.93
ROE 18.3% 10.98% -21.79% SHAREHOLDERS' ACCOUNT
2006 taxes 18,632 23,821 Dtaxes = (5,189) Dividends @ 100% payout
Shares Outstanding 45,052 59,052 Capitalized = 15,380 Earnings on excess cash
Dtaxes = 79,668 Pre-tax income

LENDERS ACCOUNT
Interest earned
Taxes
Net

DISTRIBUTABLE FUNDS
Shareholders pre-tax
Lenders after tax

Total taxes
6 Distributable Funds with and without the Repurchase ($ in Thousands)
2006 2006
w/o Repo with Repo
73,860 73,860
(9,914) (9,914)
63,946 63,946
13,506 0
0 (3,375)
77,451 60,571
(23,821) (18,632) (5,189)
53,630 41,939

53,630 41,939
0 13,506
53,630 55,445

53,630 55,445

0 3,375
0 0
0 3,375

Difference
53,630 55,445 1,814
0 3,375 3,375
5,189
(23,821) (18,632) 5,189
 Computing Minimum WACC for Blaine over a Range of Capital Structures
Cost Cost
Debt / Debt / levered Levered of of Assumptions
Cap. Equity Beta Beta Equity Debt WACC Marginal Tax Rate
Existing 1 -89.7% -47.3% 0.78 0.56 7.82% 7.82% 10.62% Risk-Free Rate
Proposal 17.9% 21.8% 0.78 0.88 9.44% 6.75% 8.48% Market Risk Prem
30% 0.78 0.92 9.63% 0 9.63%
AAA 30.1% 21.8% 0.78 0.88 9.44% 5.67% 7.62% Debt Beta
AA- 39.5% 65.3% 0.78 1.09 10.46% 5.82% 7.71%
A 56.3% 128.8% 0.78 1.39 11.95% 5.87% 7.21%
BBB+ 64.3% 180.3% 0.78 1.63 13.16% 6.85% 7.34%
BB 73.4% 276.5% 0.78 2.08 15.41% 8.00% 7.62%
B+ 77.3% 340.6% 0.78 2.38 16.92% 8.00% 7.55%

Note: Re-levered beta calculation is based on a constant capital structure

1
Un-levered beta is the weighted average of the operating asset beta and the beta of cash, and is
βa = βOperations(Operating Assets/Enterprise Value) + βCash(Cash/Enterprise Value). This is equivalent to
βe(Equity Value/Enterprise Value). ($ in Thousands.)

Blaine Debt Waterfall:

10-year Treasury 5.02% Debt Relationships: Proposal AAA AA-
Interest FY 2006 EBIT 73,860 73,860 73,860
Coverage Debt Default Interest Expense 3,375 4,765 6,423
Ratio Rating Spread Coverage Ratio 21.9x 15.5x 11.5x
>13.0 AAA 0.65%
.5 - 12.0 AA- 0.80%
7.0 - 9.5 A 0.85% Estimated Cost of Debt 6.75% 5.67% 5.82%
.0 - 7.00 BBB+ 1.83%
4.0 - 5.0 BB 2.98% Implied Debt 50,000 84,041 110,354
.50 - 4.0 B+ 4.10% EQUITY ### ### ###
CAPITAL ### ### ###
Note: The debt beta at each rating is assumed to be zeD/CAPAPITAL 17.90% 30.08% 39.50%
D/EQUITY 21.80% 43.03% 65.29%

La beta del equity tiene deuda negativa por la deuda que tiene.
 Assumptions
Marginal Tax Rate 40.00%
Risk-Free Rate 5.02%
Market Risk Prem 5.00%

Debt Beta 0.00

his is equivalent to

Debt Waterfall:
A BBB+ BB B+
73,860 73,860 73,860 73,860
9,232 12,310 16,413 19,696
8.0x 6.0x 4.5x 3.8x

5.87% 6.85% 8.00% 9.12%

157,282 179,707 205,166 215,964

122,081 99,656 74,197 63,399
279,363 279,363 279,363 279,363
56.30% 64.33% 73.44% 77.31%
128.83% 180.33% 276.52% 340.64%
Computing Minimum WACC for Blaine over a Range of Capital Structures
Cost Cost
Debt / Debt / nlevered Levered of of
Cap. Equity Beta Beta Equity Debt WACC
Existing 1 -89.7% -47.3% 0.78 0.56 7.82% 7.82% 10.62%
Proposal 17.9% 21.8% 0.78 0.88 9.44% 6.75% 8.48%
30% 0.78 0.92 9.63% 0 9.63%
AAA 18.3% 12.4% 0.78 0.84 9.22% 5.67% 8.16%
AA- 23.6% 30.9% 0.78 0.93 9.65% 5.82% 8.20%
A 32.5% 48.2% 0.78 1.01 10.06% 5.87% 7.93%
BBB+ 37.5% 59.9% 0.78 1.06 10.33% 6.85% 8.00%
BB 43.6% 77.3% 0.78 1.14 10.74% 8.00% 8.15%
B+ 47.3% 89.7% 0.78 1.20 11.03% 9.12% 8.40%

Note: Re-levered beta calculation is based on a constant capital structure

1
Un-levered beta is the weighted average of the operating asset beta and the beta of cash, and is
βa = βOperations(Operating Assets/Enterprise Value) + βCash(Cash/Enterprise Value). This is equivalent to
βe(Equity Value/Enterprise Value). ($ in Thousands.)

Blaine
10-year Treasury 5.02% Debt Relationships: Proposal AAA
Interest FY 2006 EBIT 73,860 73,860
Coverage Debt Default Interest Expense 3,375 4,765
Ratio Rating Spread Coverage Ratio 21.9x 15.5x
>13.0 AAA 0.65%
9.5 - 12.0 AA- 0.80%
7.0 - 9.5 A 0.85% Estimated Cost of Debt 6.75% 5.67%
5.0 - 7.00 BBB+ 1.83%
4.0 - 5.0 BB 2.98% Implied Debt 50,000 84,041
2.50 - 4.0 B+ 4.10% EQUITY 403,131 375,616
CAPITAL 453,131 459,657
Note: The debt beta at each rating is assumed to be zero. D/CAPIT 11.03% 18.28%
D/EQUIT 12.40% 22.37%
Firm Value FCF $ 38,367.45 $ 38,367.45
WACC 8.48% 8.16%
$490,000.00
FIRM VA $ 452,701.65 $ 470,426.91
$480,000.00
*Al momento de aumentar el firm value se puede aumenta
$470,000.00 *Estan recomprando porque hay exceso de dinero
Firm Value *La caja es importante para mantener la flexibilidad, que n
$460,000.00

$450,000.00

$440,000.00

$430,000.00
 Firm Value
$460,000.00

$450,000.00

$440,000.00

$430,000.00
0.00% 50.00% 100.00%
 Assumptions
Marginal Tax Rate 40.00%
Risk-Free Rate 5.02%
Market Risk Premium 5.00%

Debt Beta 0.00

is is equivalent to

Debt Waterfall:
AA- A BBB+ BB B+
73,860 73,860 73,860 73,860 73,860
6,423 9,232 12,310 16,413 19,696
11.5x 8.0x 6.0x 4.5x 3.8x

5.82% 5.87% 6.85% 8.00% 9.12%

110,354 157,282 179,707 205,166 215,964

357,567 326,358 299,788 265,527 240,631
467,921 483,640 479,495 470,693 456,595
23.58% 32.52% 37.48% 43.59% 47.30%
30.86% 48.19% 59.94% 77.27% 89.75%
$ 38,367.45 $ 38,367.45 $ 38,367.45 $ 38,367.45 $ 38,367.45
8.20% 7.93% 8.00% 8.15% 8.40%
$ 467,920.42 $ 483,640.57 $ 479,494.93 $ 470,692.52 $ 456,595.29

l firm value se puede aumentar la deuda.

hay exceso de dinero
mantener la flexibilidad, que no se vacie
 5.49% 11.13%
Operating Results: 2004 2005 2006
Revenue ### ### 342,251
Less: Cost of Goods Sold ### ### 249,794
Gross Profit 87,676 87,731 92,458
Less: Selling, General & Administrative 25,293 27,049 28,512
Operating Income 62,383 60,682 63,946
Plus: Depreciation & Amortization 6,987 8,213 9,914
EBITDA 69,370 68,895 73,860

EBIT 62,383 60,682 63,946

ASSUMPTIONS FOR FCF

NO GROWTH
NOPAT $ 38,367.45 perpetuity
DEPRECIATION
CAPEX + CHNWC
FCF $ 38,367.45