Clarkson Lumber Company (7.0)

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

Version 7.0
Notes:
1. A mortgage loan added
a) Mortgage loan is set to have monthly interest and pricipal payments
b) 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.
The Clarkson Lumber Company

($ in thousands)
December 31,
Net Sales Growth Rate
Gross Margin (before D&A)
SG&A:
Owners's Salary Growth Rate
Salary Growth Rate - Staff
Bonuses as % of Last Year's Net Income
Other SG&A, Utilities % of Net Sales
Advertising Expense % of Net Sales
Other Expense / (Income) as % Net Sales
Sales discounts:
Discounts on Sales - %
Discounts on Sales - Terms in Days
Accounts Receivable (Collection period in days)
Historical - Year Ending December 31,

1993
1994
1995
19.0%
30.0%
24.6%
24.2%
24.2%
1996
22.0%
24.2%
Projected - Year Ending December 31,

1997
1998
1999
20.0%
18.0%
16.0%
24.2%
24.2%
24.2%
2000
14.0%
24.2%
10.0%
7.9%
2.0%
0.0%
6.7%
39.9%
10.0%
6.0%
2.0%
0.0%
6.3%
29.8%
10.0%
6.8%
2.0%
0.0%
5.9%
2.0%
10.0%
6.7%
2.0%
0.0%
11.1%
2.0%
10.0%
6.0%
2.0%
0.0%
10.0%
2.0%
10.0%
6.0%
2.0%
0.0%
5.0%
2.0%
10.0%
6.0%
2.0%
0.0%
5.0%
2.0%
10.0%
6.0%
2.0%
0.0%
1.0%
10
38
1.0%
10
43
1.0%
10
49
1.0%
10
45
1.0%
10
40
1.0%
10
40
1.0%
10
40
1.0%
10
40
Purchases as % of Net Sales

Discounts on Purchases:
Discounts on Purchases - %
Discounts on Purchases - Terms in Days
Accounts Payable (Days payable)
Inventory (Days outstanding)
75.6%
78.5%
79.2%
79.0%
79.0%
79.0%
79.0%
79.0%
2.0%
10
35
56
2.0%
10
45
60
2.0%
10
51
63
2.0%
10
10
59
2.0%
10
10
57
2.0%
10
10
56
2.0%
10
10
56
2.0%
10
10
57
Other Current Assets as % of Net Sales

Accrued Liabilities as % of COGS
Other Current Liabilities as % of COGS
0.0%
1.9%
0.0%
0.0%
1.7%
0.0%
0.0%
2.2%
0.0%
0.0%
2.0%
0.0%
0.0%
2.0%
0.0%
0.0%
2.0%
0.0%
0.0%
2.0%
0.0%
0.0%
2.0%
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

Other Long-Term Assets as % of Net Sales
Additions to Intangible Assets as % of net sales
Other Long-Term Liabilities as % of Net Sales
Deferred Income Taxes as % of Net Sales
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Dividends:
Regular Dividends
Special Dividends as % of Net Income
Dividend Payout Ratio
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
$0
0.0%
0.0%
Shares:
Shares Issued
Projected Share Price
Shares Repurchased
Projected Share Purchase Price
0
$0.00
0
$0.00
0
$0.00
50
$4.00
0
$0.00
0
$0.00
0
$4.04
0
$4.04
0
$9.22
0
$9.22
0
$13.43
0
$13.43
0
$18.30
0
$18.30
0
$23.38
0
$23.38
Cash Balances:
Cash as % of Net Sales
Bank Reserve Requirements
1.6%
$0
1.5%
$0
1.4%
$0
1.2%
$100
1.2%
$100
1.2%
$100
1.2%
$100
1.2%
$100
Interest Rates:
Interest Rate - LOC
Interest Rate - Cash
11.0%
0.0%
11.0%
0.0%
11.0%
0.0%
11.0%
11.0%
11.0%
11.0%
11.0%
Mortgage:
Issuance
Fixed Annual Interest Rate
Amortization Period
0
0.0%
0
0
0.0%
0
0
0.0%
0
$800
5.0%
5
$0
5.0%
5
$0
5.0%
5
$0
5.0%
5
$0
5.0%
5
@RISK PARAMETERS
1997
1998
1999
20.0%
18.0%
16.0%
4.0%
3.0%
2.0%
20.0%
18.0%
16.0%
2000
14.0%
1.0%
14.0%
1996
22.0%
5.0%
22.0%
@RISK PARAMETERS
1997
1998
1999
20.0%
18.0%
16.0%
4.0%
3.0%
2.0%
20.0%
18.0%
16.0%
2000
14.0%
1.0%
14.0%
Historical Numbers
0.0%
19.0%
30.0%
1996
22.0%
5.0%
22.0%
24.6%
24.2%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
1.0%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
3.0%
24.2%
24.2%
1.0%
24.2%
7.9%
6.0%
6.8%
6.7%
2.0%
6.7%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
6.7%
2.0%
6.7%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
6.0%
2.0%
6.0%
38
43
49
45
6
45
40
5
40
40
4
40
40
3
40
35
6
40
45
6
45
40
5
40
40
4
40
40
3
40
35
6
35
35
45
51
30
5
10
25
5
10
15
5
10
10
3
10
10
1
10
30
5
30
25
5
25
15
5
15
10
3
10
10
1
10
1.0%
2.0%
3.7%
3.0%
0.5%
3.0%
2.0%
0.5%
2.0%
1.0%
0.1%
1.0%
1.0%
0.1%
1.0%
1.0%
0.1%
1.0%
3.0%
0.5%
3.0%
2.0%
0.5%
2.0%
1.0%
0.1%
1.0%
1.0%
0.1%
1.0%
1.0%
0.1%
1.0%
Mean
Std. Dev
Mean
Std. Dev
Mean
Std. Dev
Mean
Std. Dev
Mean
Std. Dev
Mean
Std. Dev
Valuation Summary:
Value Levered Firm (at target capital structure)
Value of Unlevered Firm
Value of Tax Shields
Value of Subsidy
Value of Levered Firm
#REF!
#REF!
#REF!
#REF!
#REF!

Consolidated Income Statement
($ in thousands)
Net Sales
Cost of Sales (before D&A)
Gross Profit

1993
1994
1995
1996

1997
1998
1999
2000
$2,921
2,202
719
$3,477
2,634
843
$4,519
3,424
1,095
$5,513
4,179
1,334
$6,616
5,015
1,601
$7,807
5,917
1,889
$9,056
6,864
2,191
$10,324
7,825
2,498
SG&A Expenses
Advertising Costs
Total Operating Expenses
531
58
589
607
70
677
807
90
897
883
110
993
932
132
1,065
1,035
156
1,191
1,135
181
1,316
1,238
206
1,444
Other Expense (Income)

EBITDA
0
130
0
166
0
198
0
341
0
536
0
698
0
875
0
1,054
33
0
97
40
0
126
43
0
155
81
0
260
87
0
449
89
0
609
88
0
787
88
0
966
Interest Expenses
Interest Expense - Fixed Loans
Interest Expense - Line of Credit
Total Interest Expense
Interest Income
Pretax Income
18
1
$18
0
79
27
5
$31
0
95
33
28
$60
0
95
56
48
$105
0
155
39
55
$94
0
355
29
63
$92
0
517
19
65
$84
0
704
8
58
$66
0
899
Income Taxes
Net Income
28
$51
33
$62
33
$61
54
$101
124
$231
181
$336
246
$458
315
$584
Average Shares in Thousands
300
250
250
250
250
250
250
250
$0.17
$0.25
$0.25
$0.40
$0.92
$1.34
$1.83
$2.34
24.6%
18.2%
2.0%
0.0%
4.5%
3.3%
1.8%
24.2%
17.5%
2.0%
0.0%
4.8%
3.6%
1.8%
24.2%
17.8%
2.0%
0.0%
4.4%
3.4%
1.4%
24.2%
16.0%
2.0%
0.0%
6.2%
4.7%
1.8%
24.2%
14.1%
2.0%
0.0%
8.1%
6.8%
3.5%
24.2%
13.3%
2.0%
0.0%
8.9%
7.8%
4.3%
24.2%
12.5%
2.0%
0.0%
9.7%
8.7%
5.1%
24.2%
12.0%
2.0%
0.0%
10.2%
9.4%
5.7%
19.0%
27.7%
20.1%
44.1%
30.0%
19.3%
-0.1%
-0.1%
22.0%
72.4%
64.2%
64.2%
20.0%
57.1%
128.5%
128.5%
18.0%
30.1%
45.6%
45.6%
16.0%
25.5%
36.3%
36.3%
14.0%
20.4%
27.7%
27.7%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
1.0%
10
38
0.0%
1.0%
10
43
0.0%
1.0%
10
49
0.0%
1.0%
10
45
0.0%
1.0%
10
40
0.0%
1.0%
10
40
0.0%
1.0%
10
40
0.0%
1.0%
10
40
0.0%
Depreciation
Amortization
EBIT
Earnings per Share

Margins
SG&A Expenses as % of Sales
Advertising Costs as % of Net Sales
Other Expense / (Income) as % Net Sales
EBITDA Margin
EBIT Margin
Net Income Margin
Growth Rate Analysis
EBITDA Growth Rate
Net Income Growth Rate
EPS Growth Rate
Effective Tax Rate
Sales discounts:
Discounts on Sales - %
Discounts on Sales - Terms in Days
Days in Receivables
Discounts Given on Sales

($ in thousands)
1993
1994
1995
Current Assets
Cash
Accounts Receivable, net
Inventory
1996

1997
1998
1999
2000
Other Current Assets

TOTAL CURRENT ASSETS
$47
306
337
690
$690
$52
411
432
895
$895
$63
606
587
1,256
$1,256
$100
680
676
1,456
0
$1,456
$100
725
783
1,609
0
$1,609
$100
856
910
1,865
0
$1,865
$109
992
1,057
2,158
0
$2,158
$124
1,131
1,224
2,479
0
$2,479
PP&E - net
Goodwill
Intangiable Assets, net
Deferred Income Taxes
Other Long-Term Assets
TOTAL ASSETS
$233
0
0
0
0
$923
$262
0
0
0
0
$1,157
$388
0
0
0
0
$1,644
$472
0
0
0
0
$1,928
$517
0
0
0
0
$2,126
$506
0
0
0
0
$2,372
$509
0
0
0
0
$2,667
$524
0
0
0
0
$3,003
Accounts Payable
Accrued Liabilities
Other Current Liabilities
TOTAL CURRENT LIABILITIES
$213
42
0
$255
$340
45
0
$385
$503
75
0
$578
$117
84
0
$201
$140
100
0
$241
$166
118
0
$284
$192
137
0
$329
$219
157
0
$375
Revolving Credit Facility

Long-Term Debt
Other Long-Term Liabilities
TOTAL LIABILITIES
$13
160
0
0
$428
$75
340
0
0
$800
$428
220
0
0
$1,226
$453
756
0
0
$1,409
$551
584
0
0
$1,376
$598
404
0
0
$1,286
$578
216
0
0
$1,124
$480
20
0
0
$875
495
357
418
519
750
1,086
1,543
2,127
$923
$1,157
$1,644
$1,928
$2,126
$2,372
$2,667
$3,003
Total Debt
Total Book Capitalization
Total Debt / Total Book Capitalization
$173
668
26%
$415
772
54%
$648
1,066
61%
$1,209
1,728
70%
$1,135
1,885
60%
$1,002
2,088
48%
$794
2,337
34%
$500
2,627
19%
EBITDA
Total Debts / EBITDA
Interest Expense
EBITDA Coverage
$130
1.3x
$0
$166
2.5x
$0
$198
3.3x
$0
$341
3.5x
$48
7.0x
$536
2.1x
$55
9.7x
$698
1.4x
$63
11.0x
$875
0.9x
$65
13.5x
$1,054
0.5x
$58
18.1x
$4,519
1.4%
$5,513
1.8%
$6,616
1.5%
$7,807
1.3%
$9,056
1.2%
$10,324
1.2%
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
Check
Net Sales
$2,921
1.6%
$3,477
1.5%

($ in thousands)
1993
1994
1995
Operating Activities
Net Income
Depreciation
Amortization
Change in Working Capital
Change in Other Long-Term Assets & Liabilities
Cash Flow from Operating Activities:
$51
33
0
(73)
1996

1997
1998
1999
2000
$11
$62
40
0
(70)
0
$32
$61
43
0
(157)
0
($53)
$101
81
0
(541)
0
($358)
$231
87
0
(112)
0
$206
$336
89
0
(214)
0
$211
$458
88
0
(238)
0
$307
$584
88
0
(260)
0
$413
Investing Activities
Capital Expenditures
Asset Sales
Additions to Goodwill
Additions to Intangible Assets
Cash Flow from Investing Activities:
($30)
0
0
0
($30)
($69)
0
0
0
($69)
($169)
0
0
0
($169)
($165)
0
0
0
($165)
($132)
0
0
0
($132)
($78)
0
0
0
($78)
($91)
0
0
0
($91)
($103)
0
0
0
($103)
Cash Flow Available for Financing Activities
($19)
($37)
($222)
($524)
$73
$133
$217
$310
$13
(20)
0
0
0
($7)
$63
180
(200)
0
0
$43
$353
(120)
0
0
0
$233
$25
536
0
0
0
$561
$98
(172)
0
0
0
($73)
$47
(180)
0
0
0
($133)
($20)
(188)
0
0
0
($208)
($98)
(196)
0
0
0
($294)
Financing Activities
Proceeds from / (Repayment of) Revolver
Proceeds from / (Repayment of) Long Term Debt
Proceeds from / (Repurchase of) Equity
Dividends
Option Proceeds
Cash Flow from Financing Activities:
Effects of Exchange Rates on Cash
Net Change in Cash

Beginning Cash Balance
Ending Cash Balance
73
check
($26)
73
$47
$5
47
$52
$11
52
$63
$37
63
$100
$0
100
$100
$0
100
$100
$9
100
$109
$15
109
$124
($ in thousands)
Salaries - Owner
Salaries - Staff
Bonus
Total Salaries
Other SG&A Utilities
Total SG&A (Excl. Advertising)
Advertising Expense
Total SG&A Expense
Net Sales
Net Income
Owners's Salary Growth Rate
Bonuses as % of Last Year's Net Income
Salary Growth Rate - Staff
Advertising Expense % of Net Sales
SG&A Expenses as % of Sales

1993
1994
1995
75
80
85
225
315
409
5
6
1996
90
417
6

1997
1998
1999
100
110
116
425
434
443
10
23
34
2000
121
451
46
300
231
531
58
589
400
207
607
70
677
500
307
807
90
897
513
369
883
110
993
535
397
932
132
1,065
567
468
1,035
156
1,191
592
543
1,135
181
1,316
618
619
1,238
206
1,444
2,921
51
3,477
62
4,519
61
5,513
101
6,616
231
7,807
336
9,056
458
10,324
584
7.9%
2.0%
6.7%
10.0%
39.9%
6.0%
2.0%
6.3%
10.0%
29.8%
6.8%
2.0%
5.9%
10.0%
2.0%
6.7%
2.0%
11.1%
10.0%
2.0%
6.0%
2.0%
10.0%
10.0%
2.0%
6.0%
2.0%
5.0%
10.0%
2.0%
6.0%
2.0%
5.0%
10.0%
2.0%
6.0%
2.0%
18.2%
17.5%
17.8%
16.0%
14.1%
13.3%
12.5%
12.0%
10.0%

Working Capital Schedule
($ in thousands)
Net Sales

1993
1994
1995
1996

1997
1998
1999
2000
$2,921
2,202
$3,477
2,634
$4,519
3,424
$5,513
4,179
$6,616
5,015
$7,807
5,917
$9,056
6,864
$10,324
7,825
$306
337
0
$643
$411
432
0
$843
$606
587
0
$1,193
$680
676
0
$1,356
$725
783
0
$1,509
$856
910
0
$1,765
$992
1,057
0
$2,049
$1,131
1,224
0
$2,355
Accounts Payable
Accrued Liabilities
Total Non-Debt Current Liabilities
$213
42
0
$255
$340
45
0
$385
$503
75
0
$578
$117
84
0
$201
$140
100
0
$241
$166
118
0
$284
$192
137
0
$329
$219
157
0
$375
NET WORKING CAPITAL / (DEFICIT)
$388
$458
$615
$1,156
$1,268
$1,482
$1,720
$1,980
($70)
($157)
($541)
($112)
($214)
($238)
($260)
38
56
0.0%
43
60
0.0%
49
63
0.0%
45
59
0.0%
40
57
0.0%
40
56
0.0%
40
56
0.0%
40
57
0.0%
35
1.9%
0.0%
45
1.7%
0.0%
51
2.2%
0.0%
10
2.0%
0.0%
10
2.0%
0.0%
10
2.0%
0.0%
10
2.0%
0.0%
10
2.0%
0.0%
($105)
($95)
$0
$127
$3
$0
($70)
($195)
($155)
$0
$163
$30
$0
($157)
($74)
($89)
$0
($386)
$9
$0
($541)
($45)
($107)
$0
$23
$17
$0
($112)
($131)
($126)
$0
$25
$18
$0
($214)
($137)
($147)
$0
$26
$19
$0
($238)
($139)
($167)
$0
$27
$19
$0
($260)
Working Capital Balances

Inventory
Total Non-cash Current Assets
(Increase)/Decrease in Working Capital

Ratios and Assumptions
Inventory (Days outstanding)
Other Current Assets as % of Net Sales
Accrued Liabilities as % of COGS
Other Current Liabilities as % of COGS
Cash Flows by Individual Accounts
Inventory
Accounts Payable
Accrued Liabilities
(Increase)/Decrease in Working Capital
Inventory and Purchases
Beginning Inventory
Purchases
Inventory Used - (Cost of Sales)
Ending Inventory
Discounts on Purchases:
Discounts on Purchases - %
Discounts on Purchases - Terms in Days
Discounts Taken on Purchases
Margins
Purchases as % of Net Sales
Ending Inventory as % of Net Sales
330
2,209
$2,539
2,202
$337
337
2,729
$3,066
2,634
$432
432
3,579
$4,011
3,424
$587
587
4,268
$4,855
4,179
$676
676
5,122
$5,798
5,015
$783
783
6,044
$6,827
5,917
$910
910
7,011
$7,921
6,864
$1,057
1,057
7,992
$9,049
7,825
$1,224
2.0%
10
0.0%
2.0%
10
0.0%
2.0%
10
0.0%
2.0%
10
2.0%
2.0%
10
2.0%
2.0%
10
2.0%
2.0%
10
2.0%
2.0%
10
2.0%
75.6%
11.5%
78.5%
12.4%
79.2%
13.0%
79.0%
12.3%
79.0%
11.8%
79.0%
11.7%
79.0%
11.7%
79.0%
11.9%

Depreciation Schedule
($ in thousands)

1993
1994
1995
Net Sales
Beginning Net PP&E
(Depreciation Expense)
(Asset Sales and Write-Offs)
Ending Net PP&E
Total Depreciation Expense
Depreciation as % of PP&E,net
Depreciation as % of Depreciable Assets
Depreciation as % of CapEx
Existing PP&E, net
Land
Depreciable PP&E,net
Depreciation Expense Projections
1996

1997
1998
1999
2000
$2,921
30
1.0%
$3,477
69
2.0%
$4,519
169
3.7%
$5,513
165
3.0%
$6,616
132
2.0%
$7,807
78
1.0%
$9,056
91
1.0%
$10,324
103
1.0%
$236
30
(33)
0
$233
$233
69
(40)
0
$262
$262
169
(43)
0
$388
$388
165
(81)
0
$472
$472
132
(87)
0
$517
$517
78
(89)
0
$506
$506
91
(88)
0
$509
$509
103
(88)
0
$524
$33
$40
$43
$81
$87
$89
$88
$88
14.2%
24.3%
110.0%
15.3%
30.1%
58.0%
11.1%
26.5%
25.4%
233
(100)
$133
262
(100)
$162
388
(100)
$288
Useful life
7.0 years
17.2%
20.9%
49.1%
16.9%
18.5%
66.1%
17.5%
17.2%
113.8%
17.3%
17.4%
97.1%
16.9%
17.4%
85.6%
From Existing PP&E:
$72
$62
$51
$41
$31
From New CapEx:
$9
$18
7
$18
15
4
$18
15
9
5
$18
15
9
10
6
CapEx
1996
1997
1998
1999
2000
165
132
78
91
103
9.0 years
9.0 years
9.0 years
9.0 years
9.0 years

Other Long-Term Assest & Liabilities Schedule
($ in thousands)

1993
1994
1995
1996

1997
1998
1999
2000
Assets
Goodwill, net
Intangiable Assets, net
Non-Current Deferred Income Taxes
Other Long-Term Assets
Total Other Long-Term Assest:
(Increase)/Decrease in Other Assets:
0
0
0
0
0
$0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
Liabilities
Other Long-Term Liabilities
Total Other Long-Term Liabilities
Increase/(Decreae) in Other Liabilities:
$0
0
$0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
0
$0
$0
$0
$0
$0
$0
$0
Change in Other Long-Term Assets and Liabilities

Goodwill calculation
Beginning Goodwill
Additions to Goodwill
Goodwill Write-down/Amortization
Goodwill Net
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
Intangible Asset calculation

Beginning Intangible Assets
Additions to Intangible Assets
Intangible Asset Amortization
Intangible Asset, net
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
$2,921
0.0%
0.0%
0.0%
0.0%
0.0%
$3,477
0.0%
0.0%
0.0%
0.0%
0.0%
$4,519
0.0%
0.0%
0.0%
0.0%
0.0%
$5,513
0.0%
0.0%
0.0%
0.0%
0.0%
$6,616
0.0%
0.0%
0.0%
0.0%
0.0%
$7,807
0.0%
0.0%
0.0%
0.0%
0.0%
$9,056
0.0%
0.0%
0.0%
0.0%
0.0%
$10,324
0.0%
0.0%
0.0%
0.0%
0.0%
Net Sales
Deferred Income Taxes as % of Net Sales
Additions to Goodwill as % of net sales
Additions to Intangible Assets as % of net sales
Other Long-Term Assets as % of Net Sales
Other Long-Term Liabilities as % of Net Sales

($ in thousands)
Beginning Equity Balance

Net Income
Issuance / (Repurchase of) Equity
Dividends Paid
Option Proceeds
Ending Equity Balance
Share Repurchase Assumptions
Current Year EPS
Assumed Current Year EPS Multiple
Projected Share Purchase Price
Shares Repurchased
$ Amount Repurchased
Share Issue Assumptions
Current Year EPS
Assumed Current Year EPS Multiple
Projected Share Price
Shares Issued
$ Amount Issued
New Shares from Exercised Options
New Shares Issued from Options - thousands
Average Strike Price
$ Received
Shares Outstanding
Beginning Balance (average)
Shares Issued
Shares Repurchased
Ending Balance (average)
Dividend Assumptions
Regular Dividends
Special Dividends
Total Dividends Paid
Special Dividends as % of Net Income
Net Income
Dividend Payout Ratio
Annual Dividend per Share

1993
1994
1995
444
495
357
51
62
61
0
(200)
0
0
0
0
0
0
0
0
0
0
$495
$357
$418
1996
418
101
0
0
0
0
$519

1997
1998
1999
519
750
1,086
231
336
458
0
0
0
0
0
0
0
0
0
0
0
0
$750
$1,086
$1,543
2000
1,543
584
0
0
0
0
$2,127
$0.17
$0.25
$0.25
$0.40
10.0x
$4.04
0
$0
$0.92
10.0x
$9.22
0
$0
$1.34
10.0x
$13.43
0
$0
$1.83
10.0x
$18.30
0
$0
$2.34
10.0x
$23.38
0
$0
0
$0
$4.00
50
$200
0
$0
$0.17
$0.25
$0.25
$0.40
10.0x
$4.04
0
$0
$0.92
10.0x
$9.22
0
$0
$1.34
10.0x
$13.43
0
$0
$1.83
10.0x
$18.30
0
$0
$2.34
10.0x
$23.38
0
$0
$0.00
0
$0
$0.00
0
$0
$0.00
0
$0
0
0
$0
0
0
$0
0
0
$0
0
0
$0
0
0
$0
0
0
$0
0
0
$0
0
0
$0
300
0
0
300
300
0
50
250
250
0
0
250
250
0
0
250
250
0
0
250
250
0
0
250
250
0
0
250
250
0
0
250
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
$51
0.0%
$62
0.0%
$61
0.0%
$101
0.0%
$231
0.0%
$336
0.0%
$458
0.0%
$584
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00
0.0%
$0.00

Shares Outsanding Table
($ in thousands)
Beginning Balance - Basic (actual)
Shares Issued
Shares Repurchased
Ending Balance - Basic (actual)
Basic Weighted Average Shares
Effects of Options
Diluted Weighted Average Shares

1993
1994
1995
300
300
250
0
0
0
0
50
0
300
250
250
300
0
300
250
0
250
250
0
250
1996
250
0
0
250
250
0
250

1997
1998
1999
250
250
250
0
0
0
0
0
0
250
250
250
250
0
250
250
0
250
250
0
250
2000
250
0
0
250
250
0
250

Financing Needs & LOC Interest Expense Schedule
($ in thousands)

1993
1994
1995
($19)
($37)
($222)
0
(200)
0
0
0
0
0
0
0
0
0
0
73
47
52
(47)
(52)
(63)
$7
($243)
($233)
Cash Flow Available for Financing Activities

Proceeds from / (Repurchase of) Equity
Dividends
Option Proceeds
Plus: Beginning Cash Balance
Less: Minimum Cash Balance
Cash Available for Debt Repayment
1996
($524)
0
0
0
0
63
(100)
($561)

1997
1998
1999
$73
$133
$217
0
0
0
0
0
0
0
0
0
0
0
0
100
100
100
(100)
(100)
(109)
$73
$133
$208
2000
$310
0
0
0
0
109
(124)
$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
$0
13
$13
$13
63
$75
$75
353
$428
$428
25
$453
$453
98
$551
$551
47
$598
$598
(20)
$578
$578
(98)
$480
$6
11.0%
$1
$44
11.0%
$5
$252
11.0%
$28
$441
11.0%
$48
$502
11.0%
$55
$575
11.0%
$63
$588
11.0%
$65
$529
11.0%
$58
$37
0.0%
$0
$60
0.0%
$0
$49
0.0%
$0
$58
0.0%
$0
$82
0.0%
$0
$100
0.0%
$0
$100
0.0%
$0
$104
0.0%
$0
$47
$0
$47
$52
$0
$52
$63
$0
$63
$66
$100
$100
$79
$100
$100
$94
$100
$100
$109
$100
$109
$124
$100
$124
$5,513
1.2%
$6,616
1.2%
$7,807
1.2%
$9,056
1.2%
Revolving Credit Facility:

Beginning Balance
Discretionary (Paydown) / Borrowings
Ending Balance
Revolving Credit Facility:
Average Balance
Interest Rate - LOC
Interest Expense
Cash Balances:
Average Balance
Interest Rate - Cash
Interest (Income)
Estimated Cash Balance
Bank Reserve Requirements
Minimum Cash Balance
Net Sales
$2,921
1.6%
$3,477
1.5%
$4,519
1.4%
$10,324
1.2%
124
JUMP STARTING EXCEL:

1. Copy Cells G26:K26 to O26:S26
2. Enter 0 "zero" in Cells G26:K26
3. Copy O26:S26 to G26
If interest is earned on cash balances

JUMP START will be required for cells
G33:K33

Debt Schedule
($ in thousands)
1992
Totals:
Beginning Balance
Issuance
Principal Payments
Ending Balances
Total Long-Term Debt (Repayments) / Borrowings
Interest Payments
Loan Details:
Term Loan
Issuance
Current
Long Term
Total
Payments
Principal
Interest
Interest rate

1993
1994
$0
$20
$180
$180
$0
$20
$160
$160
$200
$20
$340
($20)
($20)
$180
$18
$27
0
20
160
$180
0
20
140
$160
0
20
120
$140
$20
$20
$18
$20
$16
10.0%
10.0%
Mr. Holtz
Issuance
Current
Long Term
Total
200
100
100
$200
Payments
Principal
Interest
$0
$11
Interest rate
11.0%
Mortgage Loan
Issuance
Previous Balance
New Balance
Principal Repayment
Other Payments
Total Principal Payments
Ending Balance
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Interest Payment
Fixed Annual Interest Rate

Amortization Period
Amortization Table
Principal
Interest
Month
1
2
3
4
5
6
7
8
9
10
11
12
Month
1
2
3
4
5
6
7
8
9
10
11
12
ear Ending December 31,

1995
1996

1997
1998
1999
2000
$340
$0
$120
$220
$220
$800
$264
$756
$756
$0
$172
$584
$584
$0
$180
$404
$404
$0
$188
$216
$216
$0
$196
$20
$20
$0
$20
($0)
($120)
$536
($172)
($180)
($188)
($196)
($20)
$33
$56
$39
$29
$19
$8
$2
$0
0
20
100
$120
0
20
80
$100
0
20
60
$80
0
20
40
$60
0
20
20
$40
0
20
0
$20
0
0
0
$0
0
0
0
$0
$20
$14
$20
$12
$20
$10
$20
$8
$20
$6
$20
$4
$20
$2
$0
$0
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
$0
10.0%
0
100
0
$100
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
$100
$19
$100
$8
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
11.0%
11.0%
11.0%
11.0%
11.0%
11.0%
0
0
0
0
0
0
0
800
0
800
144
0
144
656
0
656
656
152
0
152
504
0
504
504
160
0
160
344
0
344
344
168
0
168
176
0
176
176
176
0
176
0
0
0
0
0
0
0
37
29
22
13
5.0%
5 years
5.0%
4 years
5.0%
3 years
5.0%
2 years
5.0%
1 years
11.0%
0.0%
years
11.0%
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(12)
(144)
(12)
(12)
(12)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(152)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(13)
(14)
(14)
(160)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(14)
(168)
(14)
(14)
(14)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(15)
(176)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(37)
(3)
(3)
(3)
(3)
(3)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(29)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(1)
(22)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(13)
(1)
(1)
(1)
(1)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(0)
(5)

1993
1994
1995
ACTIVITY RATIOS
A/R Days: receivables/(net sales/365)
A/P Days: payables/(purchases/365)
Inventory Days:inventory/(cogs/365)
Inventory Turnover: cogs/inventory
Asset Turnover: net sales/total assets
Fixed Asset Turnover: net sales/net fixed assets
PROFITABILITY RATIOS
Gross Profit/Sales
Net Income/Sales
Return on Assets
Net Income/Equity (ROE)
EBIT/Total Assets
Average Tax Rate
LIQUIDITY RATIOS
Current Assets/Current Liabilities
(Current Assets-Inventory)/Liabilities
Equity/Fixed Assets
EBIT/Interest (interest coverage)
LEVERAGE RATIOS
Debt/Total Assets
Debt/Equity
Total Assets/Equity
1996

1997
1998
1999
2000
38
35
56
6.5x
3.2x
12.5x
43
45
60
6.1x
3.0x
13.3x
49
51
63
5.8x
2.7x
11.6x
45
10
59
6.2x
2.9x
11.7x
40
10
57
6.4x
3.1x
12.8x
40
10
56
6.5x
3.3x
15.4x
40
10
56
6.5x
3.4x
17.8x
40
10
57
6.4x
3.4x
19.7x
24.6%
1.8%
5.6%
10.3%
10.5%
35.0%
24.2%
1.8%
5.3%
17.2%
10.9%
35.0%
24.2%
1.4%
3.7%
14.7%
9.4%
35.0%
24.2%
1.8%
5.2%
19.4%
13.5%
35.0%
24.2%
3.5%
10.8%
30.8%
21.1%
35.0%
24.2%
4.3%
14.2%
30.9%
25.7%
35.0%
24.2%
5.1%
17.2%
29.7%
29.5%
35.0%
24.2%
5.7%
19.5%
27.5%
32.2%
35.0%
2.7x
1.4x
2.1x
2.3x
1.2x
1.4x
2.2x
1.2x
1.1x
7.3x
3.9x
1.1x
5.4x
6.7x
3.4x
1.4x
8.1x
6.6x
3.4x
2.1x
9.6x
6.6x
3.3x
3.0x
12.2x
6.6x
3.3x
4.1x
16.6x
46.3%
0.9x
1.9x
69.2%
2.2x
3.2x
74.6%
2.9x
3.9x
73.1%
2.7x
3.7x
64.7%
1.8x
2.8x
54.2%
1.2x
2.2x
42.1%
0.7x
1.7x
29.2%
0.4x
1.4x
1993
1994
1995
1996
1997
1998
1999
2000
TABLE USED TO CALCULATE FINANCIAL RATIOS

BALANCE SHEET ITEMS
Accounts and Notes Payable
Inventory
TOTAL CURRENT ASSETS
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY
Total Capital (D + E)
PP&E - net
TOTAL ASSETS
306
213
337
690
255
428
495
923
233
923
411
340
432
895
385
800
357
1,157
262
1,157
606
503
587
1,256
578
1,226
418
1,644
388
1,644
680
117
676
1,456
201
1,409
519
1,928
472
1,928
725
140
783
1,609
241
1,376
750
2,126
517
2,126
856
166
910
1,865
284
1,286
1,086
2,372
506
2,372
992
192
1,057
2,158
329
1,124
1,543
2,667
509
2,667
1,131
219
1,224
2,479
375
875
2,127
3,003
524
3,003
NET INCOME ITEMS

Net Sales
Purchases
Interest Expense - Line of Credit
EBIT
Net Income
Income Taxes
2,921
2,202
2,209
0
97
51
28
3,477
2,634
2,729
0
126
62
33
4,519
3,424
3,579
0
155
61
33
5,513
4,179
4,268
48
260
101
54
6,616
5,015
5,122
55
449
231
124
7,807
5,917
6,044
63
609
336
181
9,056
6,864
7,011
65
787
458
246
10,324
7,825
7,992
58
966
584
315

Clarkson Lumber Company (7.0)

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Clarkson Lumber Company (7.0)

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Financial Model of Clarkson Lumber Co.

Prepared by Kenan-Flagler Financial Modelers Inc.

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

Purchases as % of Net Sales

Other Current Assets as % of Net Sales

Capital Expenditures as % of Net Sales

Additions to Goodwill as % of net sales

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

Other Expense (Income)

Average Shares in Thousands

Earnings per Share

The Clarkson Lumber Company

Projected - Year Ending December 31,

Other Current Assets

Revolving Credit Facility

The Clarkson Lumber Company

Projected - Year Ending December 31,

Cash Flow Available for Financing Activities

Net Change in Cash

Historical - Year Ending December 31,

Projected - Year Ending December 31,

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

NET WORKING CAPITAL / (DEFICIT)

Working Capital Balances

(Increase)/Decrease in Working Capital

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

From Existing PP&E:

From New CapEx:

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

Change in Other Long-Term Assets and Liabilities

Intangible Asset calculation

The Clarkson Lumber Company

Beginning Equity Balance

Historical - Year Ending December 31,

Projected - Year Ending December 31,

The Clarkson Lumber Company

Historical - Year Ending December 31,

Projected - Year Ending December 31,

The Clarkson Lumber Company

Historical - Year Ending December 31,

Cash Flow Available for Financing Activities

Projected - Year Ending December 31,

Total Long-Term Debt (Repayments) / Borrowings

Revolving Credit Facility:

JUMP STARTING EXCEL:

If interest is earned on cash balances

The Clarkson Lumber Company

Historical - Year Ending December 31,

Fixed Annual Interest Rate

ear Ending December 31,

Projected - Year Ending December 31,

The Clarkson Lumber Company

Projected - Year Ending December 31,

TABLE USED TO CALCULATE FINANCIAL RATIOS