Flevy.com - LBO Model Template

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This is a Sample Leverage Buyout Model Template. In addition, will provide an empty version which allows you to input your own information.

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Flevy.com - LBO Model Template

  1. 1. LBO of Company A($ in millions) TRANSACTION ASSUMPTIONSClosing Date 31-Dec-052005 EBITDA $66.0EBITDA Multiple 6.0xPurchase Price $396.0 TOTAL USES TOTAL SOURUses CapitalizationEquity Purchase Price $396.0 RevolverFinancing Fees $10.0 Term LoanInvestment Banking Fees $4.0 Second LienLegal Fees $1.0 Unsecured Notes with WarrantsOther Fees and Expenses $1.0 Total Debt Total Fees $16.0 EquityTotal Uses $412.0 Total Sources SALE OF COMPANY A IN 2010Closing Date 31-Dec-10 IRR to Financial Sponsor 12/31/05 Initial Equity Investment ($108.0)2010 EBITDA $84.2 Dividends $0.0EBITDA Multiple 6.0x Proceeds at Sale $0.0Purchase Price $505.4 Total Cash Flows to Sponsor ($108.0)Less: Total Debt ($214.9) IRR Calculation 22.6%Plus: Cash Balance $48.8Less: Transaction Fees (1) ($7.1) IRR to Unsecured Lender 12/31/05Equity Value $332.3 Initial Loan ($66.0)% Equity to Sponsor 90.0% Cash Interest Received $0.0Equity to Sponsor $299.0 Principal Repayment at Sale $0.0 Equity from Warrants at Sale $0.0% Equity to Unsecured Lender 10.0% Total Cash Flows to Lender ($66.0)Equity to Unsecured Lender $33.2 IRR Calculation 16.6%(1) Assumes 1% of Purchase Price for Investment Banking Fees, plus $2 million in legal and other expenses. Summary of Relevent Financial Statistics Income Statement Statistics 2006 Revenue $126.0 EBITDA $69.3
  2. 2. Net Income $24.2Net Interest Expense $21.0Cash Interest Expense $14.1Taxes $16.1Revenue Growth naEBITDA Margin 55%EBITDA Growth naNet Income Growth naNet Income Margin 17%Balance Sheet / Cash Flow StatisticsCash $0.0Total Debt $280.2Net Debt $280.2Secured Debt $207.2Capex $8.8Increase (Decrease) in W/C ($0.6)Leverage RatiosTotal Debt / EBITDA 4.0xNet Debt / EBITDA 4.0xSecured Debt / EBITDA 3.0xEBITDA / Net Interest Expense 3.3xEBITDA / Cash Interest Expense 4.9xInterest Coverage StatisticsEBITDA / Net Interest Expense 3.3xEBITDA / Cash Interest 4.9xEBITDA - Capex / Net Interest Expense 2.9xEBITDA - Capex / Cash Interest Expense 4.3xEBITDA - Capex - ∆ W/C / Net Interest Expense 2.9xEBITDA - Capex - ∆ W/C / Cash Interest Expense 4.3xEBITDA - Capex - ∆ W/C - Taxes/ Net Interest Expense 2.1xEBITDA - Capex - ∆ W/C - Taxes/ Cash Interest Expense 3.2x
  3. 3. TOTAL SOURCESAmount EBITDA % of Interest Rate % of FullyFunded Multiple Capitalization Cash Pay PIK Diluted Equity $7.0 0.1x 1.7% 5.0% 0.0% na$132.0 2.0x 32.0% 5.0% 0.0% na $99.0 1.5x 24.0% 8.0% 0.0% na $66.0 1.0x 16.0% 0.0% 10.0% 10%$304.0 4.6x 73.8%$108.0 1.6x 26.2%$412.0 6.2x 100.0% 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 $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 $299.0 $0.0 $0.0 $0.0 $0.0 $299.0 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 $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 $108.9 $0.0 $0.0 $0.0 $0.0 $33.2 $0.0 $0.0 $0.0 $0.0 $142.1 2007 2008 2009 2010$132.3 $138.9 $145.9 $153.2 $72.8 $76.4 $80.2 $84.2
  4. 4. $26.7 $29.2 $31.8 $34.6$20.3 $19.6 $18.8 $18.0$12.7 $11.4 $10.1 $8.9$17.8 $19.4 $21.2 $23.0 5% 5% 5% 5% 55% 55% 55% 55% 5% 5% 5% 5% 10% 9% 9% 9% 15% 14% 13% 12% $6.6 $17.3 $31.3 $48.8$261.6 $245.1 $229.5 $214.9$255.1 $227.8 $198.2 $166.1$181.0 $156.0 $131.0 $106.0 $9.3 $9.7 $10.2 $10.7 $0.4 $0.4 $0.4 $0.4 3.6x 3.2x 2.9x 2.6x 3.5x 3.0x 2.5x 2.0x 2.5x 2.0x 1.6x 1.3x 3.6x 3.9x 4.3x 4.7x 5.7x 6.7x 7.9x 9.5x 3.6x 3.9x 4.3x 4.7x 5.7x 6.7x 7.9x 9.5x 3.1x 3.4x 3.7x 4.1x 5.0x 5.9x 6.9x 8.3x 3.1x 3.4x 3.7x 4.1x 5.0x 5.8x 6.9x 8.2x 2.2x 2.4x 2.6x 2.8x 3.6x 4.1x 4.8x 5.6x
  5. 5. #REF!
  6. 6. Proforma Balance Sheet($ in millions) Adjustments Proforma ProformaBalance Sheet Dec. 31 By the Seller Before New Adjustments Dec. 31Assets 2005 Pre-Transaction Financing Financing Transaction 2005Cash $76.9 ($76.9) $0.0 $0.0 $0.0 $0.0Accounts Receivable $9.9 $0.0 $9.9 $0.0 $0.0 $9.9Inventory $3.0 $0.0 $3.0 $0.0 $0.0 $3.0Other Current Assets $1.0 $0.0 $1.0 $0.0 $0.0 $1.0 Total Current Assets $90.7 ($76.9) $13.9 $0.0 $0.0 $13.9Gross PP&E $345.1 $0.0 $345.1 $0.0 $0.0 $345.1Cumulative Depreciation $45.0 $0.0 $45.0 $0.0 $0.0 $45.0Net PP&E $300.1 $0.0 $300.1 $0.0 $0.0 $300.1Amortizable Intangibles $0.0 $0.0 $0.0 $0.0 $16.0 $16.0Goodwill $5.0 $0.0 $5.0 $0.0 $84.7 $89.7Total Assets $395.9 ($76.9) $319.0 $0.0 $100.7 $419.7LiabilitiesAccounts Payable $3.3 $0.0 $3.3 $0.0 $0.0 $3.3Accrued Liabilities $2.4 $0.0 $2.4 $0.0 $0.0 $2.4Other Current Liabilities $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total Current Liabilities $5.7 $0.0 $5.7 $0.0 $0.0 $5.7Revolving Credit Facility $10.6 ($10.6) $0.0 $7.0 $0.0 $7.0Term Loan $200.0 ($200.0) $0.0 $132.0 $0.0 $132.0Second Lien $0.0 $0.0 $0.0 $99.0 $0.0 $99.0Unsecured Debt $100.0 ($100.0) $0.0 $66.0 $0.0 $66.0Other Liabilities $2.0 $0.0 $2.0 $0.0 $0.0 $2.0 Total Liabilities $318.3 ($310.6) $7.7 $304.0 $0.0 $311.7Shareholders EquityRetainined Earnings $77.6 $0.0 $77.6 $0.0 ($77.6) $0.0Other (Plug / Balance) $0.0 $233.8 $233.8 $0.0 ($125.8) $108.0 Total Shareholders Equity $77.6 $233.8 $311.3 $0.0 ($203.3) $108.0Total Liabilities and Equity $395.9 ($76.9) $319.0 $304.0 ($203.3) $419.7 Check $0.0 $0.0 $0.0 $304.0 ($304.0) $0.0
  7. 7. Goodwill Calculation Equity Purchase Price $396.0 – Book Value of Equity ($311.3) + Existing Goodwill $5.0 = Resulting Goodwill Balance $89.7Intangibles Assets Intangible Assets $0.0 + Financing Fees $10.0 + M&A Fees $4.0 + Legal Fees $1.0 + Other Fees $1.0 = Resulting Intangibles Balance $16.0
  8. 8. COMPANY A FINANCIAL MODEL HISTORICAL FINANCIAL STATEMENTS PROJECTED FINANCIAL STATEMENTS($ in millions) Fiscal Year Ending December 31, Pro Forma Fiscal Year Ending December 31, 2001A 2002A 2003A 2004A 2005A 2005P 2006P 2007P 2008P 2009P 2010PIncome StatementRevenue $100.0 $105.0 $110.0 $115.0 $120.0 $126.0 $132.3 $138.9 $145.9 $153.2 % Growth na 5.0% 4.8% 4.5% 4.3% 5.0% 5.0% 5.0% 5.0% 5.0% (1)Cost of Goods Sold $20.0 $21.0 $22.0 $23.0 $24.0 $25.2 $26.5 $27.8 $29.2 $30.6 COGS as % of Revenue 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%Depreciation $5.0 $5.0 $5.0 $5.0 $5.0 $7.1 $7.3 $7.5 $7.7 $7.9Amortization $0.0 $0.0 $0.0 $0.0 $0.0 $0.8 $0.8 $0.8 $0.8 $0.8Gross Profit $75.0 $79.0 $83.0 $87.0 $91.0 $92.9 $97.8 $102.9 $108.2 $113.8 Gross Profit 75.0% 75.2% 75.5% 75.7% 75.8% 73.7% 73.9% 74.1% 74.2% 74.3%SG&A Expenses $25.0 $26.3 $27.5 $28.8 $30.0 $31.5 $33.1 $34.7 $36.5 $38.3 SG&A as % of Revenue 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%Operating Income / EBIT $50.0 $52.8 $55.5 $58.3 $61.0 $61.4 $64.7 $68.1 $71.8 $75.6 Operating Income / EBIT Margin 50.0% 50.2% 50.5% 50.7% 50.8% 48.7% 48.9% 49.1% 49.2% 49.3%EBITDA $55.0 $57.8 $60.5 $63.3 $66.0 $69.3 $72.8 $76.4 $80.2 $84.2 EBITDA Margin 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% EBITDA Growth na 5.0% 4.8% 4.5% 4.3% 5.0% 5.0% 5.0% 5.0% 5.0%Interest Expense $25.0 $24.5 $24.6 $24.6 $24.6 $21.0 $20.4 $19.9 $19.5 $19.3Interest Income $0.2 $0.2 $0.5 $0.7 $1.0 $0.0 $0.1 $0.3 $0.7 $1.3 Net Interest Expense $24.8 $24.3 $24.1 $23.9 $23.6 $21.0 $20.3 $19.6 $18.8 $18.0Other Income / (Expense) $2.0 $0.0 ($2.0) $1.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Pretax Income $27.2 $28.4 $29.4 $35.4 $37.4 $40.4 $44.4 $48.6 $53.0 $57.6Taxes $10.9 $11.4 $11.8 $14.2 $15.0 $16.1 $17.8 $19.4 $21.2 $23.0 Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%Net Income $16.3 $17.1 $17.6 $21.2 $22.4 $24.2 $26.7 $29.2 $31.8 $34.6 Net Margin 16.3% 16.2% 16.0% 18.5% 18.7% 19.2% 20.1% 21.0% 21.8% 22.6% Net Income Growth na 4.5% 3.4% 20.4% 5.7% 8.0% 10.0% 9.4% 9.0% 8.7%(1) Excludes depreciation and amortization Page 61
  9. 9. COMPANY A FINANCIAL MODEL HISTORICAL FINANCIAL STATEMENTS PROJECTED FINANCIAL STATEMENTS($ in millions) Fiscal Year Ending December 31, Pro Forma Fiscal Year Ending December 31, 2001A 2002A 2003A 2004A 2005A 2005P 2006P 2007P 2008P 2009P 2010PBalance SheetAssetsCash $5.0 $21.3 $39.9 $57.4 $76.9 $0.0 $0.0 $6.6 $17.3 $31.3 $48.8Accounts Receivable $8.2 $8.6 $9.0 $9.5 $9.9 $9.9 $10.5 $11.0 $11.6 $12.2 $12.8Inventory $2.5 $2.6 $2.8 $2.9 $3.0 $3.0 $3.2 $3.3 $3.5 $3.6 $3.8Other Current Assets $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 Total Current Assets $16.7 $33.6 $52.6 $70.7 $90.7 $13.9 $14.7 $21.9 $33.4 $48.1 $66.4 `Gross PP&E $318.9 $324.9 $329.9 $336.1 $345.1 $345.1 $353.9 $363.2 $372.9 $383.1 $393.9Cumulative Depreciation $25.0 $30.0 $35.0 $40.0 $45.0 $45.0 $52.1 $59.3 $66.8 $74.5 $82.3Net PP&E $293.9 $294.9 $294.9 $296.1 $300.1 $300.1 $301.9 $303.9 $306.1 $308.7 $311.5Intangibles $16.0 $15.2 $14.4 $13.6 $12.8 $12.0Goodwill $5.0 $5.0 $5.0 $5.0 $5.0 $89.7 $89.7 $89.7 $89.7 $89.7 $89.7Total Assets $315.6 $333.5 $352.6 $371.9 $395.9 $419.7 $421.4 $429.8 $442.8 $459.3 $479.6LiabilitiesAccounts Payable $2.8 $3.0 $2.9 $3.3 $3.3 $3.3 $3.5 $3.7 $3.9 $4.1 $4.3Accrued Liabilities $2.0 $2.1 $2.2 $2.3 $2.4 $2.4 $2.5 $2.6 $2.8 $2.9 $3.1Other Current Liabilities $1.0 $0.0 $2.0 $1.0 $0.0 $0.0 $1.0 $1.0 $1.0 $1.0 $1.0 Total Current Liabilities $5.8 $5.1 $7.1 $6.6 $5.7 $5.7 $7.0 $7.3 $7.6 $8.0 $8.3Revolving Credit Facility $8.9 $9.3 $9.7 $10.2 $10.6 $7.0 $1.2 $0.0 $0.0 $0.0 $0.0Term Loan $200.0 $200.0 $200.0 $200.0 $200.0 $132.0 $107.0 $82.0 $57.0 $32.0 $7.0Second Lien Debt $99.0 $99.0 $99.0 $99.0 $99.0 $99.0Unsecured Debt $100.0 $100.0 $100.0 $100.0 $100.0 $66.0 $72.9 $80.6 $89.1 $98.5 $108.9Other Liabilities $1.0 $2.0 $1.0 $0.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 Total Liabilities $315.6 $316.4 $317.9 $316.7 $318.3 $311.7 $289.2 $270.9 $254.8 $239.5 $225.2 $6.9 $7.7 $8.5 $9.4 $10.4Shareholders EquityRetainined Earnings $0.0 $17.1 $34.7 $55.1 $77.6 $0.0 $24.2 $50.9 $80.0 $111.8 $146.4Other (Plug / Balance) $0.0 $0.0 $0.0 $0.0 $0.0 $108.0 $108.0 $108.0 $108.0 $108.0 $108.0 Total Shareholders Equity $0.0 $17.1 $34.7 $55.1 $77.6 $108.0 $132.2 $158.9 $188.0 $219.8 $254.4Total Liabilities and Equity $315.6 $333.5 $352.6 $371.9 $395.9 $419.7 $421.4 $429.8 $442.8 $459.3 $479.6 Check $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Page 62
  10. 10. COMPANY A FINANCIAL MODEL HISTORICAL FINANCIAL STATEMENTS PROJECTED FINANCIAL STATEMENTS($ in millions) Fiscal Year Ending December 31, Pro Forma Fiscal Year Ending December 31, 2001A 2002A 2003A 2004A 2005A 2005P 2006P 2007P 2008P 2009P 2010PCash FlowNet Income na $17.1 $17.6 $21.2 $22.4 $24.2 $26.7 $29.2 $31.8 $34.6Plus / (minus):Depreciation and Amortization na $5 $5 $5 $5 $8 $8 $8 $8 $9Changes in Working Capital Accounts Receivable na ($0.4) ($0.4) ($0.4) ($0.4) ($0.6) ($0.5) ($0.6) ($0.6) ($0.6) Inventory na ($0.1) ($0.1) ($0.1) ($0.1) ($0.2) ($0.2) ($0.2) ($0.2) ($0.2) Other Current Assets na $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Accounts Payable na $0.3 ($0.1) $0.3 $0.0 $0.2 $0.2 $0.2 $0.2 $0.2 Accrued Liabilities na $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 Other Current Liabilities na ($1.0) $2.0 ($1.0) ($1.0) $1.0 $0.0 $0.0 $0.0 $0.0 Change in Other Liabilities na $1 ($1) ($1) $2 $0 $0 $0 $0 $0Cash Flows from Operations na $21.9 $23.1 $24.1 $28.0 $32.7 $34.3 $37.0 $39.8 $42.8Cash Flows from InvestingCapital Expenditures na ($6.0) ($7.0) ($8.0) ($9.0) ($8.8) ($9.3) ($9.7) ($10.2) ($10.7)Asset Dispostions na $0.0 $2.0 $1.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Cash Flows from Investing na ($6.0) ($5.0) ($7.0) ($9.0) ($8.8) ($9.3) ($9.7) ($10.2) ($10.7)Cash Flows from FinancingChange in Revolver na $0.4 $0.4 $0.4 $0.4 ($5.8) ($1.2) $0.0 $0.0 $0.0Change in Term Loan na $0.0 $0.0 $0.0 $0.0 ($25.0) ($25.0) ($25.0) ($25.0) ($25.0)Change in Second Lien $0.0 $0.0 $0.0 $0.0 $0.0Change in Unsecured Debt na $0.0 $0.0 $0.0 $0.0 $6.9 $7.7 $8.5 $9.4 $10.4 Total Cash Flows from Financing na $0.4 $0.4 $0.4 $0.4 ($23.8) ($18.5) ($16.5) ($15.6) ($14.6)Total Cash Flow na $16.3 $18.5 $17.6 $19.5 $0.0 $6.6 $10.8 $14.0 $17.4Beginning Cash Position na $5.0 $21.3 $39.9 $57.4 $0.0 $0.0 $6.6 $17.3 $31.3Change in Cash Position na $16.3 $18.5 $17.6 $19.5 $0.0 $6.6 $10.8 $14.0 $17.4Ending Cash Position na $21.3 $39.9 $57.4 $76.9 $0.0 $6.6 $17.3 $31.3 $48.8 Page 63
  11. 11. COMPANY A FINANCIAL MODEL HISTORICAL FINANCIAL STATEMENTS PROJECTED FINANCIAL STATEMENTS($ in millions) Fiscal Year Ending December 31, Pro Forma Fiscal Year Ending December 31, 2001A 2002A 2003A 2004A 2005A 2005P 2006P 2007P 2008P 2009P 2010PCash flow before Revolver $5.8 $7.8 $17.3 $31.3 $48.8Debt and Interest ScheduleRevolverBeginning Revolver Balance $8.9 $9.3 $9.7 $10.2 $7.0 $1.2 $0.0 $0.0 $0.0(Paydown) / Drawdown $0.4 $0.4 $0.4 $0.4 ($5.8) ($1.2) $0.0 $0.0 $0.0Ending Revolver Balance $9.3 $9.7 $10.2 $10.6 $1.2 $0.0 $0.0 $0.0 $0.0Interest Rate 6.0% 6.0% 6.0% 6.0% 5.00% 5.00% 5.00% 5.00% 5.00%Cash Pay Interest Expense $0.54 $0.57 $0.60 $0.62 $0.21 $0.03 $0.00 $0.00 $0.00Term LoanTerm Loan Beginning Balance $200.0 $200.0 $200.0 $200.0 $132.0 $107.0 $82.0 $57.0 $32.0(Paydown) / Drawdown $0.0 $0.0 $0.0 $0.0 ($25.0) ($25.0) ($25.0) ($25.0) ($25.0)Term Loan Ending Balance $200.0 $200.0 $200.0 $200.0 $107.0 $82.0 $57.0 $32.0 $7.0Interest Rate 6.00% 6.00% 6.00% 6.00% 5.00% 5.00% 5.00% 5.00% 5.00%Cash Pay Interest Expense $12.0 $12.0 $12.0 $12.0 $6.0 $4.7 $3.5 $2.2 $1.0Second Lien DebtSecond Lien Debt Beginning Balance $99.0 $99.0 $99.0 $99.0 $99.0(Paydown) / Drawdown $0.0 $0.0 $0.0 $0.0 $0.0Second Lien Debt Ending Balance $99.0 $99.0 $99.0 $99.0 $99.0Cash Pay Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00%Cash Pay Interest Expense $7.9 $7.9 $7.9 $7.9 $7.9PIK Interest Rate 0% 0% 0% 0% 0%PIK Interest Expense $0.0 $0.0 $0.0 $0.0 $0.0Unsecured DebtUnsecured Debt Beginning Balance $100.0 $100.0 $100.0 $100.0 $66.0 $72.9 $80.6 $89.1 $98.5(Paydown) / Drawdown $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Unsecured Debt Ending Balance $100.0 $100.0 $100.0 $100.0 $72.9 $80.6 $89.1 $98.5 $108.9Cash Pay Interest Rate 12% 12% 12% 12% 0% 0% 0% 0% 0%Cash Pay Interest Expense $12.0 $12.0 $12.0 $12.0 $0.0 $0.0 $0.0 $0.0 $0.0PIK Interest Rate 10% 10% 10% 10% 10%PIK Interest Expense $6.9 $7.7 $8.5 $9.4 $10.4Total Interest Expense $24.5 $24.6 $24.6 $24.6 $21.0 $20.4 $19.9 $19.5 $19.3Total Cash Pay Interest Rate Expense $14.1 $12.7 $11.4 $10.1 $8.9Total PIK Interest Rate Expense $6.9 $7.7 $8.5 $9.4 $10.4Interest Earned on Cash $0.2 $0.5 $0.7 $1.0 $0.0 $0.1 $0.3 $0.7 $1.3 Page 64
  12. 12. COMPANY A FINANCIAL MODELHISTORIC VARIABLES AND ASSUMPTIONS FOR PROJECTIONS HISTORICAL VARIABLES AND DRIVERS ASSUMPTIONS FOR PROJECTIONS Fiscal Year Ending December 31, Fiscal Year Ending December 31, 2001A 2002A 2003A 2004A 2005A 2006P 2007P 2008P 2009P 2010PIncome Statement Drivers / AssumptionsRevenue Growth Rate na 5.0% 4.8% 4.5% 4.3% 5.0% 5.0% 5.0% 5.0% 5.0%COGS as % of Revenue 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%Depreciation as % of Gross PP&E 1.6% 1.5% 1.5% 1.5% 1.4% 2.0% 2.0% 2.0% 2.0% 2.0%Goodwill AmortizationIntangible Amortization Per Year 20Intangible Amortization $0.8 $0.8 $0.8 $0.8 $0.8SG&A as % of Sales 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%Other Income / (Expense) $2.0 $0.0 ($2.0) $1.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%Balance Sheet Drivers / AssumptionsDays Accounts Receivable 30 30 30 30 30 30 30 30 30 30Days Inventory 45 45 45 45 45 45 45 45 45 45Other Current Assets $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0Amortize Goodwill? (yes or no) $0.0 $0.0 $0.0 $0.0 $0.0Capex as % of Sales na 5.7% 6.4% 7.0% 7.5% 7.0% 7.0% 7.0% 7.0% 7.0%Asset Disposition na $0.0 $2.0 $1.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Days Payable 50 52 48 51 49 50 50 50 50 50Accrued Liabilities as % of COGS 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%Other Current Liabilities $1.0 $0.0 $2.0 $1.0 $0.0 $1.0 $1.0 $1.0 $1.0 $1.0Other Liailities $1.0 $2.0 $1.0 $0.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0Interest RatesRevolver 2.0%+li 6.00% 6.00% 6.00% 6.00% 6.00% 5.00% 5.00% 5.00% 5.00% 5.00%Term Loan 2.0%+li 6.00% 6.00% 6.00% 6.00% 6.00% 5.00% 5.00% 5.00% 5.00% 5.00%Second Lien Debt (Cash) 8.00% 8.00% 8.00% 8.00% 8.00% Second Lien Debt (PIK) 0.00% 0.00% 0.00% 0.00% 0.00%Unsecured Debt (Cash) 12.0% 12.00% 12.00% 12.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% Unsecured Debt (PIK) 10.00% 10.00% 10.00% 10.00% 10.00%LIBOR 4.00% 4.00% 4.00% 4.00% 4.00% 4.25% 4.50% 4.75% 5.00% 5.25%Interest earned on cash 2% 2.00% 2.00% 2.00% 2.00% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% Page 65
  13. 13. COMPANY A FINANCIAL MODELSENSITIVITIES($ in millions) 2010 EBITDA FOR RANGE OF REVENUE GROWTH RATES AND COGS Annual Revenue Growth Rate $84.2 -20% -15% -10% -5% 0% 5% 10% 15% 20% 14% $24.0 $32.5 $43.2 $56.6 $73.2 $93.4 $117.9 $147.2 $182.1 COGS as % of 16% $23.2 $31.4 $41.8 $54.8 $70.8 $90.4 $114.0 $142.4 $176.2 18% $22.4 $30.3 $40.4 $52.9 $68.4 $87.3 $110.2 $137.6 $170.2 Sales 20% $21.6 $29.3 $39.0 $51.1 $66.0 $84.2 $106.3 $132.7 $164.2 22% $20.8 $28.2 $37.6 $49.2 $63.6 $81.2 $102.4 $127.9 $158.3 24% $20.1 $27.2 $36.1 $47.4 $61.2 $78.1 $98.6 $123.1 $152.3 26% $19.3 $26.1 $34.7 $45.5 $58.8 $75.0 $94.7 $118.3 $146.3 Shading indicates base case scenario Page 66

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