520046000.

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Valuation Analysis for Robertson Tool

All figures in $ Millions

Change the Red numbers only.

Key assumptions in Robertson valuation:
Annual Growth Rate of Sales 5.0% Other Assets/Sales Ratio 0.0%
Income Tax Rate 40.0% Depreciation/PP&E Ratio 11.1%
Net Working Capital/Sales Ratio 34.5% Discount Rate (cost of capital) 10.0%
PP&E/Sales Ratio 34.4%

Margin Improvements Realized Actual Pro Forma

2002 2003 2004 2005 2006 2007
Costs of Goods Sold / Sales 69.0% 67.6% 67.0% 67.0% 66.0% 65.0%
Selling, General & Admin. / Sales 22.0% 21.0% 21.0% 21.0% 20.0% 20.0%

Valuation Analysis for Robertson Tool ($ Millions)

Actual Pro Forma
2002 2003 2004 2005 2006 2007
Sales (5%/Year in Perpetuity) 55.3 58.1 61.0 64.0 67.2 70.6 Scroll
Cost of Goods Sold 37.9 39.3 40.8 42.9 44.4 45.9 Down
SG&A 12.3 12.2 12.8 13.4 13.4 14.1 for
Depreciation 2.1 2.2 2.3 2.4 2.6 2.7 More...
Other 0.0 0.0 0.0 0.0 0.0 0.0
EBIT 3.0 4.4 5.0 5.2 6.8 7.9
Taxes @ 40% 1.2 1.8 2.0 2.1 2.7 3.2
EBIAT 1.8 2.6 3.0 3.1 4.1 4.7
Depreciation 2.1 2.2 2.3 2.4 2.6 2.7
Cash Flows from Operations 3.9 4.9 5.3 5.6 6.7 7.4
Deduct Change in NWC (4.0) 1.0 1.1 1.1 1.2
Deduct Capital Expenditures 3.2 3.3 3.5 3.7 3.8
Deduct Change in Other Assets 0.0 0.0 0.0 0.0 0.0
Cash Flow to Capital 5.7 1.0 1.0 1.9 2.4
Terminal Value of Cash Flows to
Capital 50.9
P.V. Factor @ 10 % 0.9 0.8 0.8 0.7 0.6
Annual Present Value of Cash Flows to
Capital
5.1 0.8 0.8 1.3 33.1
Total Present Value of Cash Flows to Capital 41.2
Debt Outstanding at Acquisition Date 12.0
Present Value of Common Stock 29.2
Present Value of Robertson Common Stock per Share 29.2 /.584 $50 per share
Resulting Year End Capital Investment
Pro Forma
Actual
2002 2003 2004 2005 2006 2007
Net PP&E 19.0 20.0 20.9 22.0 23.1 24.2
Net Working Capital 24.0 20.0 21.0 22.1 23.2 24.3
Other Assets 0.0 0.0 0.0 0.0 0.0 0.0
Total Net Assets 43.0 40.0 42.0 44.1 46.3 48.6

Date 04/22/2021 21:11:27 Page 1

Valuation Analysis for Robertson Tool
All figures in $ Millions

Change the Red numbers only.

Key assumptions in Robertson valuation:
Annual Growth Rate of Sales 5.0% Other Assets/Sales Ratio 0.0%
Income Tax Rate 40.0% Depreciation/PP&E Ratio 11.1%
Net Working Capital/Sales Ratio 34.5% Discount Rate (cost of capital) 10.0%
PP&E/Sales Ratio 34.4%

Margin Improvements Realized Actual Pro Forma

2002 2003 2004 2005 2006 2007
Costs of Goods Sold / Sales 69.0% 67.6% 67.0% 67.0% 66.0% 65.0%
Selling, General & Admin. / Sales 22.0% 21.0% 21.0% 21.0% 20.0% 20.0%

Valuation Analysis for Robertson Tool ($ Millions)

Actual Pro Forma
2002 2003 2004 2005 2006 2007
Sales (5%/Year in Perpetuity) 55.3 58.1 61.0 64.0 67.2 70.6
Cost of Goods Sold 37.9 39.3 40.8 42.9 44.4 45.9
SG&A 12.3 12.2 12.8 13.4 13.4 14.1
Depreciation 2.1 2.2 2.3 2.4 2.6 2.7
Other 0.0 0.0 0.0 0.0 0.0 0.0
EBIT 3.0 4.4 5.0 5.2 6.8 7.9
Taxes @ 40% 1.2 1.8 2.0 2.1 2.7 3.2
EBIAT 1.8 2.6 3.0 3.1 4.1 4.7
Depreciation 2.1 2.2 2.3 2.4 2.6 2.7
Cash Flows from Operations 3.9 4.9 5.3 5.6 6.7 7.4

Deduct Change in NWC (4.0) 1.0 1.1 1.1 1.2

Deduct Capital Expenditures 3.2 3.3 3.5 3.7 3.8
Deduct Change in Other Assets 0.0 0.0 0.0 0.0 0.0
Cash Flow to Capital 5.7 1.0 1.0 1.9 2.4
Terminal Value of Cash Flows to
Capital 50.9
P.V. Factor @ 10 % 0.9 0.8 0.8 0.7 0.6
Annual Present Value of Cash Flows to
Capital 5.1 0.8 0.8 1.3 33.1

Total Present Value of Cash Flows to Capital 41.2

Debt Outstanding at Acquisition Date (12.0)
Present Value of Common Stock 29.2
Present Value of Robertson Common Stock per Share 29.2 /.584 $50
Resulting Year End Capital Investment
Pro Forma
Actual
2002 2003 2004 2005 2006 2007
Net PP&E 19.0 20.0 20.9 22.0 23.1 24.2
Net Working Capital 24.0 20.0 21.0 22.1 23.2 24.3
Other Assets 0.0 0.0 0.0 0.0 0.0 0.0
Total Net Assets 43.0 40.0 42.0 44.1 46.3 48.6
Note: Any reduction in inventory levels triggers additional tax obligations (due to LIFO)
which, for purposes of simplicity, are not included in this valuation model.

End of Model
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Valuation Based on Market Multiples

Latest Quote Prospective

Sales 55.3 55.3
Cash Operating Margin 9.2% 15%
Cash Operating Income 5.1 8.3
Depreciation 2.1 2.2
EBIT 3 6.1
Tax 1.2 2.4
EBIAT 1.8 4
EBIAT Multiple 12.85 12.85
Enterprise Value 23.13 46.99245
Interest-bearing Debt 12.0 12.0
Value of Equity (Mil) 11.1 35.0
Shares Outstanding 0.584 0.584
Value Per Share 19 60