Clarkson Lumber Company (7.0)

7/21/2019 Clarkson Lumber Company (7.0)

1/17

Financial Model of Clarkson Lumber Co.Prepared by Kenan-Flagler Financial Modelers Inc.

Version 7.0Notes:1. A mortgage loan added

a) Mortgage loan is set to have monthly interest and pricipal paymentsb) 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.


2/17

The Clarkson Lumber Company($ in thousands)December 31, Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000Net Sales Growth Rate 19.0% 30.0% 22.0% 20.0% 18.0% 16.0% 14.0%

Gross Margin (before D&A) 24.6% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2%

SG&A:Owners's Salary Growth Rate 6.7% 6.3% 5.9% 11.1% 10.0% 5.0% 5.0%Salary Growth Rate - Staff 39.9% 29.8% 2.0% 2.0% 2.0% 2.0% 2.0%Bonuses as % of Last Year's Net Income 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%Other SG&A, Utilities % of Net Sales 7.9% 6.0% 6.8% 6.7% 6.0% 6.0% 6.0% 6.0%

Advertising Expense % of Net Sales 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Other Expense / (Income) as % Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Sales discounts:Discounts on Sales - % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%Discounts on Sales - Terms in Days 10 10 10 10 10 10 10 10

Accounts Receivable (Collection period in days) 38 43 49 45 40 40 40 40

Purchases as % of Net Sales 75.6% 78.5% 79.2% 79.0% 79.0% 79.0% 79.0% 79.0%Discounts on Purchases:

Discounts on Purchases - % 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Discounts on Purchases - Terms in Days 10 10 10 10 10 10 10 10

Accounts Payable (Days payable) 35 45 51 10 10 10 10 10Inventory (Days outstanding) 56 60 63 59 57 56 56 57

Other Current Assets as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Accrued Liabilities as % of COGS 1.9% 1.7% 2.2% 2.0% 2.0% 2.0% 2.0% 2.0%Other Current Liabilities as % of COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 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 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Other Long-Term Assets as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Additions to Intangible Assets as % of net sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Other Long-Term Liabilities as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Deferred Income Taxes as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Dividends:Regular Dividends $0 $0 $0 $0 $0 $0 $0 $0

Special Dividends as % of Net Income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Dividend Payout Ratio 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Shares:Shares Issued 0 0 0 0 0 0 0 0Projected Share Price $0.00 $0.00 $0.00 $4.04 $9.22 $13.43 $18.30 $23.38Shares Repurchased 0 50 0 0 0 0 0 0Projected Share Purchase Price $0.00 $4.00 $0.00 $4.04 $9.22 $13.43 $18.30 $23.38

Cash Balances:Cash as % of Net Sales 1.6% 1.5% 1.4% 1.2% 1.2% 1.2% 1.2% 1.2%

Bank Reserve Requirements $0 $0 $0 $100 $100 $100 $100 $100

Interest Rates:Interest Rate - LOC 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%Interest Rate - Cash 0.0% 0.0% 0.0%


3/17

The Clarkson Lumber CompanyConsolidated Income Statement($ in thousands) Histor ical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324Cost of Sales (before D&A) 2,202 2,634 3,424 4,179 5,015 5,917 6,864 7,825

Gross Profit 719 843 1,095 1,334 1,601 1,889 2,191 2,498

SG&A Expenses 531 607 807 883 932 1,035 1,135 1,238Advertising Costs 58 70 90 110 132 156 181 206

Total Operating Expenses 589 677 897 993 1,065 1,191 1,316 1,444

Other Expense (Income) 0 0 0 0 0 0 0 0EBITDA 130 166 198 341 536 698 875 1,054

Depreciation 33 40 43 81 87 89 88 88Amortization 0 0 0 0 0 0 0 0

EBIT 97 126 155 260 449 609 787 966

Interest ExpensesInterest Expense - Fixed Loans 18 27 33 56 39 29 19 8Interest Expense - Line of Credit 1 5 28 48 55 63 65 58

Total Interest Expense $18 $31 $60 $105 $94 $92 $84 $66Interest Income 0 0 0 0 0 0 0 0

Pretax Income 79 95 95 155 355 517 704 899

Income Taxes 28 33 33 54 124 181 246 315

Net Income $51 $62 $61 $101 $231 $336 $458 $584

Average Shares in Thousands 300 250 250 250 250 250 250 250

Earnings per Share $0.17 $0.25 $0.25 $0.40 $0.92 $1.34 $1.83 $2.34

MarginsGross Margin (before D&A) 24.6% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2%SG&A Expenses as % of Sales 18.2% 17.5% 17.8% 16.0% 14.1% 13.3% 12.5% 12.0%

Advertising Costs as % of Net Sales 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Other Expense / (Income) as % Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%EBITDA Margin 4.5% 4.8% 4.4% 6.2% 8.1% 8.9% 9.7% 10.2%EBIT Margin 3.3% 3.6% 3.4% 4.7% 6.8% 7.8% 8.7% 9.4%Net Income Margin 1.8% 1.8% 1.4% 1.8% 3.5% 4.3% 5.1% 5.7%

Growth Rate Analysis

Net Sales Growth Rate 19.0% 30.0% 22.0% 20.0% 18.0% 16.0% 14.0%EBITDA Growth Rate 27.7% 19.3% 72.4% 57.1% 30.1% 25.5% 20.4%Net Income Growth Rate 20.1% -0.1% 64.2% 128.5% 45.6% 36.3% 27.7%EPS Growth Rate 44.1% -0.1% 64.2% 128.5% 45.6% 36.3% 27.7%

Effective Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

Sales discounts:Discounts on Sales - % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%Discounts on Sales - Terms in Days 10 10 10 10 10 10 10 10Days in Receivables 38 43 49 45 40 40 40 40

Discounts Given on Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%


4/17

The Clarkson Lumber Company($ in thousands)

Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000Current Assets

Cash $47 $52 $63 $100 $100 $100 $109 $124Accounts Receivable, net 306 411 606 680 725 856 992 1,131Inventory 337 432 587 676 783 910 1,057 1,224

690 895 1,256 1,456 1,609 1,865 2,158 2,479Other Current Assets - - - 0 0 0 0 0

TOTAL CURRENT ASSETS $690 $895 $1,256 $1,456 $1,609 $1,865 $2,158 $2,479

PP&E - net $233 $262 $388 $472 $517 $506 $509 $524Goodwill 0 0 0 0 0 0 0 0

Intangiable Assets, net 0 0 0 0 0 0 0 0Deferred Income Taxes 0 0 0 0 0 0 0 0Other Long-Term Assets 0 0 0 0 0 0 0 0

TOTAL ASSETS $923 $1,157 $1,644 $1,928 $2,126 $2,372 $2,667 $3,003

Accounts Payable $213 $340 $503 $117 $140 $166 $192 $219Accrued Liabilities 42 45 75 84 100 118 137 157Other Current Liabilities 0 0 0 0 0 0 0 0

TOTAL CURRENT LIABILITIES $255 $385 $578 $201 $241 $284 $329 $375

Revolving Credit Facility $13 $75 $428 $453 $551 $598 $578 $480Long-Term Debt 160 340 220 756 584 404 216 20Deferred Income Taxes 0 0 0 0 0 0 0 0Other Long-Term Liabilities 0 0 0 0 0 0 0 0

TOTAL LIABILITIES $428 $800 $1,226 $1,409 $1,376 $1,286 $1,124 $875

TOTAL EQUITY 495 357 418 519 750 1,086 1,543 2,127

TOTAL LIABILITIES AND EQUITY $923 $1,157 $1,644 $1,928 $2,126 $2,372 $2,667 $3,003

Check

Total Debt $173 $415 $648 $1,209 $1,135 $1,002 $794 $500Total Book Capitalization 668 772 1,066 1,728 1,885 2,088 2,337 2,627Total Debt / Total Book Capitalization 26% 54% 61% 70% 60% 48% 34% 19%

EBITDA $130 $166 $198 $341 $536 $698 $875 $1,054Total Debts / EBITDA 1.3x 2.5x 3.3x 3.5x 2.1x 1.4x 0.9x 0.5x Interest Expense $0 $0 $0 $48 $55 $63 $65 $58EBITDA Coverage - - - 7.0x 9.7x 11.0x 13.5x 18.1x

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324

Cash as % of Net Sales 1.6% 1.5% 1.4% 1.8% 1.5% 1.3% 1.2% 1.2%


5/17



1993 1994 1995 1996 1997 1998 1999 2000Operating Activities

Net Income $51 $62 $61 $101 $231 $336 $458 $584Depreciation 33 40 43 81 87 89 88 88

Amortization 0 0 0 0 0 0 0 0Change in Working Capital (73) (70) (157) (541) (112) (214) (238) (260)Change in Other Long-Term Assets & Liabilities 0 0 0 0 0 0 0

Cash Flow from Operating Activities: $11 $32 ($53) ($358) $206 $211 $307 $413

Investing ActivitiesCapital Expenditures ($30) ($69) ($169) ($165) ($132) ($78) ($91) ($103)

Asset Sales 0 0 0 0 0 0 0 0Additions to Goodwill 0 0 0 0 0 0 0 0Additions to Intangible Assets 0 0 0 0 0 0 0 0

Cash Flow from Investing Activities: ($30) ($69) ($169) ($165) ($132) ($78) ($91) ($103)

Cash Flow Available for Financing Activities ($19) ($37) ($222) ($524) $73 $133 $217 $310

Financing ActivitiesProceeds from / (Repayment of) Revolver $13 $63 $353 $25 $98 $47 ($20) ($98)Proceeds from / (Repayment of) Long Term Debt (20) 180 (120) 536 (172) (180) (188) (196)Proceeds from / (Repurchase of) Equity 0 (200) 0 0 0 0 0 0Dividends 0 0 0 0 0 0 0 0Option Proceeds 0 0 0 0 0 0 0 0

Cash Flow from Financing Activities: ($7) $43 $233 $561 ($73) ($133) ($208) ($294)

Effects of Exchange Rates on Cash 0 0 0 0 0 0 0 0

Net Change in Cash ($26) $5 $11 $37 $0 $0 $9 $15Beginning Cash Balance 73 47 52 63 100 100 100 109

Ending Cash Balance 73 $47 $52 $63 $100 $100 $100 $109 $124

check


6/17

($ in thousands) Histor ical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000Salaries - Owner 75 80 85 90 100 110 116 121

Salaries - Staff 225 315 409 417 425 434 443 451Bonus 5 6 6 10 23 34 46

Total Salaries 300 400 500 513 535 567 592 618

Other SG&A Utilities 231 207 307 369 397 468 543 619Total SG&A (Excl. Advertising) 531 607 807 883 932 1,035 1,135 1,238

Advertising Expense 58 70 90 110 132 156 181 206

Total SG&A Expense 589 677 897 993 1,065 1,191 1,316 1,444

Net Sales 2,921 3,477 4,519 5,513 6,616 7,807 9,056 10,324Net Income 51 62 61 101 231 336 458 584

Owners's Salary Growth Rate 6.7% 6.3% 5.9% 11.1% 10.0% 5.0% 5.0%Bonuses as % of Last Year's Net Income 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%Salary Growth Rate - Staff 39.9% 29.8% 2.0% 2.0% 2.0% 2.0% 2.0%Other SG&A, Utilities % of Net Sales 7.9% 6.0% 6.8% 6.7% 6.0% 6.0% 6.0% 6.0%

Advertising Expense % of Net Sales 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

SG&A Expenses as % of Sales 18.2% 17.5% 17.8% 16.0% 14.1% 13.3% 12.5% 12.0%


7/17

The Clarkson Lumber Company

Working Capital Schedule($ in thousands) Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324Cost of Sales (before D&A) 2,202 2,634 3,424 4,179 5,015 5,917 6,864 7,825

Working Capital BalancesAccounts Receivable, net $306 $411 $606 $680 $725 $856 $992 $1,131Inventory 337 432 587 676 783 910 1,057 1,224

Other Current Assets 0 0 0 0 0 0 0 0

Total Non-cash Current Assets $643 $843 $1,193 $1,356 $1,509 $1,765 $2,049 $2,355

Accounts Payable $213 $340 $503 $117 $140 $166 $192 $219

Accrued Liabilities 42 45 75 84 100 118 137 157Other Current Liabilities 0 0 0 0 0 0 0 0

Total Non-Debt Current Liabilities $255 $385 $578 $201 $241 $284 $329 $375

NET WORKING CAPITAL / (DEFICIT) $388 $458 $615 $1,156 $1,268 $1,482 $1,720 $1,980

(Increase)/Decrease in Working Capital ($70) ($157) ($541) ($112) ($214) ($238) ($260)

Ratios and AssumptionsAccounts Receivable (Collection period in days) 38 43 49 45 40 40 40 40Inventory (Days outstanding) 56 60 63 59 57 56 56 57

Other Current Assets as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Accounts Payable (Days payable) 35 45 51 10 10 10 10 10Accrued Liabilities as % of COGS 1.9% 1.7% 2.2% 2.0% 2.0% 2.0% 2.0% 2.0%

Other Current Liabilities as % of COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Cash Flows by Individual Accounts

Accounts Receivable, net ($105) ($195) ($74) ($45) ($131) ($137) ($139)Inventory ($95) ($155) ($89) ($107) ($126) ($147) ($167)Other Current Assets $0 $0 $0 $0 $0 $0 $0

Accounts Payable $127 $163 ($386) $23 $25 $26 $27Accrued Liabilities $3 $30 $9 $17 $18 $19 $19Other Current Liabilities $0 $0 $0 $0 $0 $0 $0

(Increase)/Decrease in Working Capital ($70) ($157) ($541) ($112) ($214) ($238) ($260)

Inventory and PurchasesBeginning Inventory 330 337 432 587 676 783 910 1,057Purchases 2,209 2,729 3,579 4,268 5,122 6,044 7,011 7,992

$2,539 $3,066 $4,011 $4,855 $5,798 $6,827 $7,921 $9,049Inventory Used - (Cost of Sales) 2,202 2,634 3,424 4,179 5,015 5,917 6,864 7,825

Ending Inventory $337 $432 $587 $676 $783 $910 $1,057 $1,224

Discounts on Purchases:Discounts on Purchases - % 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Discounts on Purchases - Terms in Days 10 10 10 10 10 10 10 10

Discounts Taken on Purchases 0.0% 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0%

MarginsPurchases as % of Net Sales 75.6% 78.5% 79.2% 79.0% 79.0% 79.0% 79.0% 79.0%

Ending Inventory as % of Net Sales 11.5% 12.4% 13.0% 12.3% 11.8% 11.7% 11.7% 11.9%


8/17

The Clarkson Lumber CompanyDepreciation Schedule($ in thousands) Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324Capital Expenditures 30 69 169 165 132 78 91 103Capital Expenditures as % of Net Sales 1.0% 2.0% 3.7% 3.0% 2.0% 1.0% 1.0% 1.0%

Beginning Net PP&E $236 $233 $262 $388 $472 $517 $506 $509Capital Expenditures 30 69 169 165 132 78 91 103

(Depreciation Expense) (33) (40) (43) (81) (87) (89) (88) (88)(Asset Sales and Write-Offs) 0 0 0 0 0 0 0 0

Ending Net PP&E $233 $262 $388 $472 $517 $506 $509 $524

Total Depreciation Expense $33 $40 $43 $81 $87 $89 $88 $88

Depreciation as % of PP&E,net 14.2% 15.3% 11.1% 17.2% 16.9% 17.5% 17.3% 16.9%Depreciation as % of Depreciable Assets 24.3% 30.1% 26.5% 20.9% 18.5% 17.2% 17.4% 17.4%Depreciation as % of CapEx 110.0% 58.0% 25.4% 49.1% 66.1% 113.8% 97.1% 85.6%

Existing PP&E, net 233 262 388Land (100) (100) (100)Depreciable PP&E,net $133 $162 $288

Depreciation Expense Projections Useful life7.0 years From Existing PP&E: $72 $62 $51 $41 $31

CapEx1996 165 9.0 years From New CapEx: $9 $18 $18 $18 $181997 132 9.0 years 7 15 15 151998 78 9.0 years 4 9 91999 91 9.0 years 5 102000 103 9.0 years 6


9/17

The Clarkson Lumber CompanyOther Long-Term Assest & Liabilities Schedule($ in thousands) Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000Assets

Goodwill, net 0 0 0 0 0 0 0 0Intangiable Assets, net 0 0 0 0 0 0 0 0Deferred Income Taxes 0 0 0 0 0 0 0 0Non-Current Deferred Income Taxes 0 0 0 0 0 0 0 0Other Long-Term Assets 0 0 0 0 0 0 0 0

Total Other Long-Term Assest: $0 $0 $0 $0 $0 $0 $0 $0

(Increase)/Decrease in Other Assets: 0 0 0 0 0 0 0

Liabilities

Deferred Income Taxes $0 $0 $0 $0 $0 $0 $0 $0Other Long-Term Liabilities 0 0 0 0 0 0 0 0

Total Other Long-Term Liabilities $0 $0 $0 $0 $0 $0 $0 $0Increase/(Decreae) in Other Liabilities: 0 0 0 0 0 0 0

Change in Other Long-Term Assets and Liabilities $0 $0 $0 $0 $0 $0 $0

Goodwill calculationBeginning Goodwill 0 0 0 0 0 0 0 0

Additions to Goodwill 0 0 0 0 0 0 0 0Goodwill Write-down/Amortization 0 0 0 0 0 0 0 0

Goodwill Net $0 $0 $0 $0 $0 $0 $0 $0

Intangible Asset calculationBeginning Intangible Assets 0 0 0 0 0 0 0 0

Additions to Intangible Assets 0 0 0 0 0 0 0 0Intangible Asset Amortization 0 0 0 0 0 0 0 0

Intangible Asset, net $0 $0 $0 $0 $0 $0 $0 $0

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324Deferred Income Taxes as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Additions to Goodwill as % of net sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Additions to Intangible Assets as % of net sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Other Long-Term Assets as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Other Long-Term Liabilities as % of Net Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%


10/17



1993 1994 1995 1996 1997 1998 1999 2000Beginning Equity Balance 444 495 357 418 519 750 1,086 1,543

Net Income 51 62 61 101 231 336 458 584Issuance / (Repurchase of) Equity 0 (200) 0 0 0 0 0 0Dividends Paid 0 0 0 0 0 0 0 0Option Proceeds 0 0 0 0 0 0 0 0Effects of Exchange Rates on Cash 0 0 0 0 0 0 0 0

Ending Equity Balance $495 $357 $418 $519 $750 $1,086 $1,543 $2,127

Share Repurchase AssumptionsCurrent Year EPS $0.17 $0.25 $0.25 $0.40 $0.92 $1.34 $1.83 $2.34

Assumed Current Year EPS Multiple 10.0x 10.0x 10.0x 10.0x 10.0xProjected Share Purchase Price $4.00 $4.04 $9.22 $13.43 $18.30 $23.38Shares Repurchased 0 50 0 0 0 0 0 0$ Amount Repurchased $0 $200 $0 $0 $0 $0 $0 $0

Share Issue AssumptionsCurrent Year EPS $0.17 $0.25 $0.25 $0.40 $0.92 $1.34 $1.83 $2.34

Assumed Current Year EPS Multiple 10.0x 10.0x 10.0x 10.0x 10.0xProjected Share Price $0.00 $0.00 $0.00 $4.04 $9.22 $13.43 $18.30 $23.38Shares Issued 0 0 0 0 0 0 0 0$ Amount Issued $0 $0 $0 $0 $0 $0 $0 $0

New Shares from Exercised OptionsNew Shares Issued from Options - thousands 0 0 0 0 0 0 0 0

Average Strike Price 0 0 0 0 0 0 0 0$ Received $0 $0 $0 $0 $0 $0 $0 $0

Shares OutstandingBeginning Balance (average) 300 300 250 250 250 250 250 250Shares Issued 0 0 0 0 0 0 0 0Shares Repurchased 0 50 0 0 0 0 0 0

Ending Balance (average) 300 250 250 250 250 250 250 250

Dividend AssumptionsRegular Dividends $0 $0 $0 $0 $0 $0 $0 $0Special Dividends

Total Dividends Paid $0 $0 $0 $0 $0 $0 $0 $0

Special Dividends as % of Net Income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Net Income $51 $62 $61 $101 $231 $336 $458 $584

Dividend Payout Ratio 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Annual Dividend per Share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00


11/17


12/17


Financing Needs & LOC Interest Expense Schedule($ in thousands) Historical - Year Ending December 31, Projected - Year Ending December 31,

1993 1994 1995 1996 1997 1998 1999 2000 0 0Cash Flow Available for Financing Activities ($19) ($37) ($222) ($524) $73 $133 $217 $310

Proceeds from / (Repurchase of) Equity 0 (200) 0 0 0 0 0 0Dividends 0 0 0 0 0 0 0 0Option Proceeds 0 0 0 0 0 0 0 0Effects of Exchange Rates on Cash 0 0 0 0 0 0 0 0Plus: Beginning Cash Balance 73 47 52 63 100 100 100 109 124

Less: Minimum Cash Balance (47) (52) (63) (100) (100) (100) (109) (124)Cash Available for Debt Repayment $7 ($243) ($233) ($561) $73 $133 $208 $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

Revolving Credit Facility:Beginning Balance $0 $13 $75 $428 $453 $551 $598 $578

Discretionary (Paydown) / Borrowings 13 63 353 25 98 47 (20) (98)Ending Balance 0 $13 $75 $428 $453 $551 $598 $578 $480

Revolving Credit Facility:Average Balance $6 $44 $252 $441 $502 $575 $588 $529

Interest Rate - LOC 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%Interest Expense $1 $5 $28 $48 $55 $63 $65 $58

Cash Balances:

Average Balance $37 $60 $49 $58 $82 $100 $100 $104Interest Rate - Cash 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Interest (Income) $0 $0 $0 $0 $0 $0 $0 $0

Estimated Cash Balance $47 $52 $63 $66 $79 $94 $109 $124Bank Reserve Requirements $0 $0 $0 $100 $100 $100 $100 $100

Minimum Cash Balance $47 $52 $63 $100 $100 $100 $109 $124

Net Sales $2,921 $3,477 $4,519 $5,513 $6,616 $7,807 $9,056 $10,324Cash as % of Net Sales 1.6% 1.5% 1.4% 1.2% 1.2% 1.2% 1.2% 1.2%

JUMP STARTING EXCEL:1. Copy Cells G26:K26 to O26:2. Enter 0 "zero" in Cells G26:K3. Copy O26:S26 to G26

If interest is earned on cash baJUMP START will be required fG33:K33


13/17

The Clarkson Lumber CompanyDebt Schedule($ in thousands) Historical - Year Ending D

1992 1993 1994Totals:

Beginning Balance $180 $160Issuance $0 $0 $200Principal Payments $20 $20 $20Ending Balances $180 $160 $340

Total Long-Term Debt (Repayments) / Borrowings ($20) ($20) $180

Interest Payments $18 $27

Loan Details:Term LoanIssuance 0 0 0 Current 20 20 20 Long Term 160 140 120Total $180 $160 $140

PaymentsPrincipal $20 $20 $20Interest $18 $16

Interest rate 10.0% 10.0%

Mr. HoltzIssuance 200 Current 100

Long Term 100Total $200

PaymentsPrincipal $0Interest $11

Interest rate 11.0%

Mortgage LoanIssuance 0 0Previous Balance 0 0

New Balance 0 0Principal Repayment 0 0Other Payments 0 0

Total Principal Payments 0 0Ending Balance 0 0

Interest Payment 0 0

Fixed Annual Interest RateAmortization Period


14/17

Amortization TablePrincipal Month

1 - -

2 - -3 - -4 - -5 - -6 - -7 - -8 - -9 - -

10 - -11 - -12 - -

- -Interest Month

1 - -2 - -3 - -4 - -

5 - -6 - -7 - -8 - -

9 - -10 - -11 - -12 - -

- -


15/17

ecember 31, Projected - Year Ending December 31,

1995 1996 1997 1998 1999 2000 0 0

$340 $220 $756 $584 $404 $216 $20$0 $800 $0 $0 $0 $0 $0

$120 $264 $172 $180 $188 $196 $20 $0$220 $756 $584 $404 $216 $20 ($0)

($120) $536 ($172) ($180) ($188) ($196) ($20)

$33 $56 $39 $29 $19 $8 $2 $0

0 0 0 0 0 0 0 020 20 20 20 20 20 0 0

100 80 60 40 20 0 0 0$120 $100 $80 $60 $40 $20 $0 $0

$20 $20 $20 $20 $20 $20 $20 $0$14 $12 $10 $8 $6 $4 $2 $0

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

0 0 0 0 0 0 0 0100 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0$100 $0 $0 $0 $0 $0 $0 $0

$100 $100 $0 $0 $0 $0 $0 $0$19 $8 $0 $0 $0 $0 $0 $0

11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0% 11.0%

0 800 0 0 0 00 0 656 504 344 176 00 800 656 504 344 176 00 144 152 160 168 176 00 0 0 0 0 0 0

0 144 152 160 168 176 00 656 504 344 176 0 0

0 37 29 22 13 5 0

5.0% 5.0% 5.0% 5.0% 5.0% 0.0%5 years 4 years 3 years 2 years 1 years years


16/17

- (12) (12) (13) (14) (14) -

- (12) (12) (13) (14) (14) -- (12) (12) (13) (14) (14) -- (12) (13) (13) (14) (15) -- (12) (13) (13) (14) (15) -- (12) (13) (13) (14) (15) -- (12) (13) (13) (14) (15) -- (12) (13) (13) (14) (15) -- (12) (13) (13) (14) (15) -

- (12) (13) (13) (14) (15) -- (12) (13) (14) (14) (15) -- (12) (13) (14) (14) (15) -

- (144) (152) (160) (168) (176) -

- (3) (3) (2) (1) (1) -- (3) (3) (2) (1) (1) -- (3) (3) (2) (1) (1) -- (3) (3) (2) (1) (1) -

- (3) (3) (2) (1) (0) -- (3) (2) (2) (1) (0) -- (3) (2) (2) (1) (0) -- (3) (2) (2) (1) (0) -

- (3) (2) (2) (1) (0) -- (3) (2) (2) (1) (0) -- (3) (2) (2) (1) (0) -- (3) (2) (1) (1) (0) -- (37) (29) (22) (13) (5) -


17/17


Historical - Year Ending December 31, Projected - Year Ending December 31,1993 1994 1995 1996 1997 1998 1999 2000ACTIVITY RATIOS

A/R Days: receivables/(net sales/365) 38 43 49 45 40 40 40 40A/P Days: payables/(purchases/365) 35 45 51 10 10 10 10 10

Inventory Days:inventory/(cogs/365) 56 60 63 59 57 56 56 57Inventory Turnover: cogs/inventory 6.5x 6.1x 5.8x 6.2x 6.4x 6.5x 6.5x 6.4x

Asset Turnover: net sales/total assets 3.2x 3.0x 2.7x 2.9x 3.1x 3.3x 3.4x 3.4xFixed Asset Turnover: net sales/net fixed assets 12.5x 13.3x 11.6x 11.7x 12.8x 15.4x 17.8x 19.7x

PROFITABILITY RATIOS

Gross Profit/Sales 24.6% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2% 24.2%Net Income/Sales 1.8% 1.8% 1.4% 1.8% 3.5% 4.3% 5.1% 5.7%Return on Assets 5.6% 5.3% 3.7% 5.2% 10.8% 14.2% 17.2% 19.5%Net Income/Equity (ROE) 10.3% 17.2% 14.7% 19.4% 30.8% 30.9% 29.7% 27.5%EBIT/Total Assets 10.5% 10.9% 9.4% 13.5% 21.1% 25.7% 29.5% 32.2%

Average Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%

LIQUIDITY RATIOSCurrent Assets/Current Liabilities 2.7x 2.3x 2.2x 7.3x 6.7x 6.6x 6.6x 6.6x(Current Assets-Inventory)/Liabilities 1.4x 1.2x 1.2x 3.9x 3.4x 3.4x 3.3x 3.3x

Equity/Fixed Assets 2.1x 1.4x 1.1x 1.1x 1.4x 2.1x 3.0x 4.1xEBIT/Interest (interest coverage) - - - 5.4x 8.1x 9.6x 12.2x 16.6x

LEVERAGE RATIOSDebt/Total Assets 46.3% 69.2% 74.6% 73.1% 64.7% 54.2% 42.1% 29.2%Debt/Equity 0.9x 2.2x 2.9x 2.7x 1.8x 1.2x 0.7x 0.4xTotal Assets/Equity 1.9x 3.2x 3.9x 3.7x 2.8x 2.2x 1.7x 1.4x

TABLE USED TO CALCULATE FINANCIAL RATIOS1993 1994 1995 1996 1997 1998 1999 2000

BALANCE SHEET ITEMS

Accounts Receivable, net 306 411 606 680 725 856 992 1,131Accounts and Notes Payable 213 340 503 117 140 166 192 219Inventory 337 432 587 676 783 910 1,057 1,224TOTAL CURRENT ASSETS 690 895 1,256 1,456 1,609 1,865 2,158 2,479TOTAL CURRENT LIABILITIES 255 385 578 201 241 284 329 375

TOTAL LIABILITIES 428 800 1,226 1,409 1,376 1,286 1,124 875TOTAL EQUITY 495 357 418 519 750 1,086 1,543 2,127

Total Capital (D + E) 923 1,157 1,644 1,928 2,126 2,372 2,667 3,003

PP&E - net 233 262 388 472 517 506 509 524TOTAL ASSETS 923 1,157 1,644 1,928 2,126 2,372 2,667 3,003

NET INCOME ITEMSNet Sales 2,921 3,477 4,519 5,513 6,616 7,807 9,056 10,324Cost of Sales (before D&A) 2,202 2,634 3,424 4,179 5,015 5,917 6,864 7,825Purchases 2,209 2,729 3,579 4,268 5,122 6,044 7,011 7,992Interest Expense - Line of Credit 0 0 0 48 55 63 65 58EBIT 97 126 155 260 449 609 787 966

Net Income 51 62 61 101 231 336 458 584Income Taxes 28 33 33 54 124 181 246 315

Documents

Clarkson Lumber Company (7.0)