Monmouth Inc. -Solution

Operating and Stockholder Information of RO ROBERTSON TOOL C operaton ale CO!S S!A depreciation interet e"pene income #efore ta" ta"e net income percentage of ale CO!S S!A operating income Stockholder Information EPS $PS #ook %al&e per hare market price P'E hare o&ttanding BALANCE S(EET O) ROBERTSON Tool compan*+ ,--, ASSET cah A'R in%entorie other c&rrent aet net plant . e/&ipement total aet collection period da* of in%entor* ale'total aet da#t a percentage o capital total aet'net 0orth

PRO1)ORMA )OR ROBERSON TOOL BY Mer+ 2incent . R&dd Act&al

Co!S 3 of ale S.!A 3 ale gro0th of ale ale CO!S S.!A depreciation EBIT ta"<=-3 EBIAT Interet Ad>&tment of Interet ?-4: million@ Net Plant . E/&ipment in #eginning of the *ear Capital E"pene $epreciation net plat at the end of the *ear

,--, -456 -4,, -4-76587 7749 9:4;78 ;,4;55 ,4; ,4:88 ;4;7-: ;48,5, -4: ;4,=5,

)i%e Year )orecat of Monmo&th Inc e"l&ding Ro#eron Tool net income ?million dollar@ hare o&ttanding ?million@ EPS NC of Ro#erton non cah CA CL NC NC to ale change of NC other Non cah C ale for ,--, other Non cah C'ale compara#le comp4 In%e'ale total ACC de#t e/&it* cot of de#t cot of de#t at preent of Ro#erton rik premi&m ta" rik free #eta cot of e/&it* ACC

,--, ,8 = ,9 -4,,-=;5 7 7749 -4-6-=;5 -4;9 -4,,-=;5 -4,: -48, -4-55558 ?4:';,@ -4-5 -4= -4-=; ; -4;-; -4-:96,

 Terminal !ro0th rate )REE CAS( )LO O) Ro#erton Tool ale CO!S S.!A depreciation EBIT ta"<=-3 EBIAT add $epreciation cah o0 from operation Le increae NC le cape" free cah o0 ?)C)@  Terminal %al&e P2 at ACC Rate P2 of terminal %al&e  Total P2 $e#t o&ttanding 2al&e of e/&it* O&ttanding hare Per hare of Ro#erton

-4-, ,--, 7749 9:4;78 ;,4;55 ,4; ,4:88 ;4;7-: ;48,5, ,4; 94:,5,

5;4=5;-= ;, =64=5;-= -47:= :=456975

Ma"im&m No4 of Share Calc&lation ; pro>ected net income of Monmo&th , pro>ected net income after ta" of Ro#eron 9 pro>ected Monmo&th net income cm#ined ?;,@ = pro>ected Monmo&th EPS 0itho&t Ro#erton

gi%en

gi%en

Ma" no4 of hare of Monmo&th hare after merger 7 0itho&t dil&ting Monmo&th EPS ?9'=@ 5 Monmo&th hare c&rrent ha%e ?No@ gi%en Ma" no4 of hare of Monmo&th can #e i&ed to 8 Ro#erton 0itho&t dil&ting it EPS ?715@ : No4of Ro#erton hare o&ttanding No of Monmo&th hare that co&ld #e oDered for one hare of Ro#erton 0itho&t dil&ting Monmo&th 6 EPS ?E"change ratio@ If Monmo&th Share a F,=+ the E"change ratio ;- tranlate into price per hare of Ro#erton tock4

,=

Ma* #e e"change ratio 0ill #e #et0een ,4;7 to ,497 t make price more than F7- a &ggeted #* ;; Simmon

 

MPANY ;66: =:47 9,45 ;-48 , -4= ,4: ;4; ;48

;666 =64; 994; ;;4; ,49 -48 ;46 -4: ;4;

,--7948 9746 ;;47 ,4= -4: 94; ;4, ;46

-458 -4,, -4-55

-458 -4,9 -4-79

-458 -4,; -4-89

F

F

F

Million $ollar ,--; ,--, 7=4: 7749 984, 9846 ;;46 ;,49 ,49 ,4; -4: -4: ,45 ,4, ; -46 ;45 ;49

-45: -4,, -4-5, F

-456 -4,, -4-7= F

,46; ;45 =64=

;4:: 94,7 ,48= ,4,9 ;45 ;45 ;45 ;45 =645: 7;499 7,4=8 794; 9919= 971=: ,61=; ,7199 ,919, ;;1;51 ;-1,51 61;91 61;,1 ;-1;=1 7:=--7:=--7:=--7:=--7:=---

Million $ollar ; : ;: ; ,: ;6 =8 79d* ;89 da* ;4;85765 -4,86-8 ;47;5;,6

)ORECASTS

Lia#ilitie A'P other c&rrent lia#ilitie long term de#t

, , = ;,

net 0orth

9;

total

=8

-4-55558

,--9 -45: -4,;

,--= -458 -4,

,--7 -455 -4;6

7:45 5,4-6569 574:-,79 964:=: =;45-=6= =94=,658 ;,49-5 ;,4=;696 ;,47-,=: ,49 ,47 ,48 =4;=5 7478,5 84;8-986 ;457:= ,4,,6-= ,4:5:;7, ,4=:85 949=975 =49-,,,: ,4--85 ;6 = ,49 ,-48

Million $ollar ,--8 5648,6,5 894:6-9, =749,=-, =:4-,:8; ;94,=:75 ;=4-96;5 ,46 ,46 :4,755:, :46,,=7; 949-,589 9475:6:; =467=--6 74979=8;

,4:5975 94:,,,,: =4=8=--6 =4:89=8; ,-48 ,;48 ,,45 ,947 947 945 94: ,46 ,47 ,48 ,46 ,46 ,;48 ,,45 ,947 ,947

,--9 ,--= ;; ;;46 =4,; =4,; ,45;,:,8 ,4:,55-9 ,--9

,--5 ,--8 to InGnit* -457 -457 -4;6 -4;6

,--=

,--7 ;,4: =4,; 94-=-9: ,--7

,--5 ,--8 ;94: ;7 =4,; =4,; 94,886; 9475,6=7 ,--5

,--8

;,46;598 ;945:8;7 ;=47-96, ;74956== ;54,:55 pro>ected to red&ce to compara#le companie ?BBB@ In%e'ale to ;93  it o0n other 1;-4-:959 -488-88: -4:;588= -4:577;= -46;8;5= ?61=@

5 -4-55558 BBB after ta" H -4-= -4-55558 ame to BBB Grm

9-*r TB a of BBB

,--9 7:45 964:=: ;,49-5 ,49 =4;=5 ;457:= ,4=:85 ,49 =48:85 1;-4-:959 = ;-4:8;,9 ;-4:8;,9

,--= 5,4-6569 =;45-=6= ;,4=;696 ,47 7478,5 ,4,,6-= 949=975 ,47 74:=975 -488-88: 947 ;478,8:, ;478,8:,

,--7 574:-,79 =94=,658 ;,47-,=: ,48 84;8-986 ,4:5:;7, =49-,,,: ,48 84--,,,: -4:;588= 945 ,47:7=7= ,47:7=7=

;-4-,677 ;499:58, ,4-9-,,6

Million ,--5 ,--8 ,--: 5648,6,5 5648,6,5 =749,=-, =749,=-, ;94,=:75 ;94,=:75 ,46 ,46 :4,755:, :4,755:, 949-,589 949-,589 =467=--6 =467=--6 ,46 ,46 84:7=--6 84:7=--6 -4:577;= -46;8;5= 94: ,46 94;::=67 =4-95:=5 94;::=67 =4-95:=5 =4;;87:, 5=4=;887 ,49-66;6 ,456:-:8 =94-7=7:

At ,3 Terminal !ro0th Rate+ Price per hare F:=456

,--9 ;; ,4--85

,--= ,--7 ,--5 ,--8 ;;46 ;,4: ;94: ;7 ,4:5975 94:,,,,: =4=8=--6 =4:89=8;

;94--85 ;=485975 ;545,,,9 ;:4,8=-; ;64:89=8 ,45; ,4:9 94-= 94,8 9475 =46:9877 74,;5:-5 74=58:9: 747::9:, 747:,=95 =4,; =4,; =4,; =4,; =4,;

-4889877 ;4--5:-5 ;4,78:9: ;498:9:, ;498,=95 -47:=

-47:=

-47:=

-47:=

-47:=

;49,=6,9 ;48,96:, ,4;79:9, ,495-,=9 ,497--5;

9;486:;= =;49877: 7;456;68 7545=7:= 754=-;=5

CA to ale a the In%entor* for Ro#erton i higher