BLAINE KITCHENWARE KITCHENWARE TN Exhbit 1 Effects Effects of the Proposed Repurcha Repurchase se on Baine!s "##$ Baance Baance %heet &' i
Shares Repurchased
14,000
Rearran)e "##$ B*%
Restate "##$ B*% sho+in) effe "##$ 230,866 32,231 174,321 0,!4 488,363
Cash NWC NFA NFA Other, net "#ta$ %e&t '(uit) "#ta$
Purchase Price
Cash NWC NFA NFA Other, net "#ta$
0 488,363 488,363
%e&t '(uit) "#ta$
N#te* "he p#st+transacti#n e(uit) i-ure sh#u$d &e .488,363 + .18/014,00 0, hich is a reducti#n e
'5hi&it 3 Se$ected OperatinOperatin- and and Financia$ Financia$ %ata #r #r Pu&$ic itchen itchenare are Pr#ducers Pr#ducers
Re@enue
#e #e 9 earth earth %e#" %e#"ech ech App$ia App$ia :;< C#rp/ C#rp/ un>erhi un>erhi$$, $$, ?nc ?nc as)
BLAINE KITCHENWARE
Pro ,or-a Harvard Business Pub
BLAINE KITCHENWARE
Pro ,or-a
TN Exhibit ". Effect of Repurchase on Baine!s "##$ Inco-e %tate-ent &' in Thousa TN Exhibit /. Co-parison of "##$ 0istributabe ,unds +ith and +ithout the R Restate "##$ I*% to )ie effect to the repo
"##$ "##$ Post2Repo
63,!46 0 3,37 60,71 18,62! 41,!42
EBIT
P$us* Other ?nc#e
?nt/ Rate
6/7
$ess depreciati#n 18/!
P$us* Other ?nc#e
Post2Repo Pre2Repo
Net ?nc#e Shares 'PS =##> '(uit) RO' 2006 ta5es
EBIT0A EBIT
'=?"B?nt C#@era-e
30/8
Net Inco-e
41,!42 3,630 4,02 !,02 0/!3 0/!1 22!,363 488,363 18/3 11/0 18,626 23,821 ta5es de$ta
"##$
+*o Repo 3/45$#
BLAINE's ACCOUNT
+ith Repo Tax Bi 3/45$#
.!,!14 63,!46 13,06 0 77,41 .23,821 3,630
.!,!14 63,!46 0 .3,37 60,71 .18,626 41,!4
3,630 0 3,630 .1!,307 34,323
41,!4 13,06 ,41 .1!,!62 3,48!
0 0 0
3,37 .1,038 2,337
.,1!6
%HAREH6L0ER%! ACC67NT
.,1!6
%i@idends 100 pa)#ut 'arnin-s #n e5cess cash Pre+ta5 inc#e "a5es 36 Net
36
6
8aue Creation LEN0ER% ACC67NT
"a5 Shie$d .Dth#usands Chan-e in de&t "a5 Rate Ea$ue created
2!,000 30/7 7!,643
14/!8
?nterest earned "a5es Net
1,038
BLAINE KITCHENWARE
Pro ,or-a Harvard Business Pub
BLAINE KITCHENWARE
Pro ,or-a
TN Exhibit ". Effect of Repurchase on Baine!s "##$ Inco-e %tate-ent &' in Thousa TN Exhibit /. Co-parison of "##$ 0istributabe ,unds +ith and +ithout the R Restate "##$ I*% to )ie effect to the repo
"##$ "##$ Post2Repo
63,!46 0 3,37 60,71 18,62! 41,!42
EBIT
P$us* Other ?nc#e
?nt/ Rate
6/7
$ess depreciati#n 18/!
P$us* Other ?nc#e
Post2Repo Pre2Repo
Net ?nc#e Shares 'PS =##> '(uit) RO' 2006 ta5es
EBIT0A EBIT
'=?"B?nt C#@era-e
30/8
Net Inco-e
41,!42 3,630 4,02 !,02 0/!3 0/!1 22!,363 488,363 18/3 11/0 18,626 23,821 ta5es de$ta
"##$
+*o Repo 3/45$#
BLAINE's ACCOUNT
+ith Repo Tax Bi 3/45$#
.!,!14 63,!46 13,06 0 77,41 .23,821 3,630
.!,!14 63,!46 0 .3,37 60,71 .18,626 41,!4
3,630 0 3,630 .1!,307 34,323
41,!4 13,06 ,41 .1!,!62 3,48!
0 0 0
3,37 .1,038 2,337
.,1!6
%HAREH6L0ER%! ACC67NT
.,1!6
%i@idends 100 pa)#ut 'arnin-s #n e5cess cash Pre+ta5 inc#e "a5es 36 Net
36
6
8aue Creation LEN0ER% ACC67NT
"a5 Shie$d .Dth#usands Chan-e in de&t "a5 Rate Ea$ue created Shares "a5 shie$d -ainBsh Share price &e#re rep# Share price -ain Purchase price Preiu paid Fina$ share price PROS
CONS
2!,000 30/7 7!,643 !,02 1/3 16/2 17/60 18/0 12,618 "h#usand 16/70 72,20
14/!8
?nterest earned "a5es Net
1,038
%ierence 1,16 2,337 3,02 "#ta$ ta5es .43,128 .3!,626 3,02 N#te* #r sip$icit), shareh#$dersD pers#na$ ta5 rate is assued t# &e 36G $endersD ta5 rate is assued t# e(ua$ =$aineDs 30/8
DISTRIBUTABLE FUNDS
Shareh#$ders ater ta5
34,323 0
3,48! 2,337
=etter 'PS =etter RO' Fai$) C#ntr#$ "a5 Shie$ds He#pardiIes ac(uisiti#ns pr#-ra Eu$nera&$e t# pr#duct set&ac>s ?ncreased e5pected c#sts # inancia$ distress '.CF% J Pr#&.inancia$ distress5.C#st # inancia$ distressKdistress
Harvard Business Pub
Harvard Business Pub
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epurchase &' in Thousands(
8/220 Return #n '5cess ar>eta&$e Securities 0 5 6/7 "a5 rate r# case d#cuent
Assues shareh#$ders can in@est at the sae rate as =$ain
Assuin- 30/8 "a5 Rate
esuts
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esuts
epurchase &' in Thousands(
8/220 Return #n '5cess ar>eta&$e Securities 0 5 6/7 "a5 rate r# case d#cuent
Assues shareh#$ders can in@est at the sae rate as =$ain
Assuin- 30/8 "a5 Rate
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Harvard Business Pub
BLAINE KITCHENWARE Debt Shares EV
Wei)hted Aera)e Cost of C
### ###
Tax rat
40% 0.790!"4
67
Part of Tn Exhibit 9. Co-putin) :ini-u- WACC for Baine oer a Ran)e of Capita %tructures
%e&t '5istin- 1 .230,866 Proposa 0,000 AAA AA+ A === == =
84,041
674,788
0ebt * Cap;
0ebt * E
7neered Beta
Leered Beta
Cost of E
Cost of 0ebt
WACC
+31/7 $;5>>?
+24/1 7/4
0/74 #;3@
0/6 #;35
7/82 5;53?
/02 $;39?
!/20 5;9@?
Ris>+Free Rate ar>et Ris> Preiu
11/4 14/2 "#;5? 22/3 28/3 30/!
12/8 16/6 26/2 28/8 3!/ 44/6
0/74 0/74 #;3@ 0/74 0/74 0/74
0/80 0/82 0/87 0/88 0/!4 0/!7
!/03 !/13 >;/5? !/44 !/72 !/8
/67 /82 9;53? 6/8 8/00 !/12
8/4 8/40 5;"3? 8/3! 8/3 8/76
%e&t =eta
N#te* Re+$e@ered &eta ca$cu$ati#n is &ased #n a c#nstant capita$ structure 1
n+$e@ered &eta is the ei-hted a@era-e # the #peratin- asset &eta and the &eta # cash, and is a J Operati#ns .Operatin- AssetsB'nterprise Ea$ue Cash.CashB'nterprise Ea$ue/ "his is e(ui@a$ent t# e.'(uit) Ea$ueB'nter prise Ea$ue/ . in "h#usands/
Part # "N '5hi&it
Assu-ptions ar-ina$ "a5 Rate
Cash t# ep$#)
30/80 /02 /00 0/00 20!,000
Harvard Business Pub
BLAINE KITCHENWARE Debt Shares EV
Wei)hted Aera)e Cost of C
### ###
Tax rat
40% 0.790!"4
67
Part of Tn Exhibit 9. Co-putin) :ini-u- WACC for Baine oer a Ran)e of Capita %tructures
%e&t '5istin- 1 .230,866 Proposa 0,000 AAA AA+ A === == =
674,788
84,041
0ebt * Cap;
0ebt * E
7neered Beta
Leered Beta
Cost of E
Cost of 0ebt
WACC
+31/7 $;5>>?
+24/1 7/4
0/74 #;3@
0/6 #;35
7/82 5;53?
/02 $;39?
!/20 5;9@?
Ris>+Free Rate ar>et Ris> Preiu
11/4 14/2 "#;5? 22/3 28/3 30/!
12/8 16/6 26/2 28/8 3!/ 44/6
0/74 0/74 #;3@ 0/74 0/74 0/74
0/80 0/82 0/87 0/88 0/!4 0/!7
!/03 !/13 >;/5? !/44 !/72 !/8
/67 /82 9;53? 6/8 8/00 !/12
8/4 8/40 5;"3? 8/3! 8/3 8/76
%e&t =eta
Baine Proposa 73,860 3,37 "1;>x
AAA 73,860 4,76 19;9x
AA2 73,860 6,423 11;9x
6/7
/67
/82
/87
5@4#@1
11#4/9@
1934"5"
Assu-ptions ar-ina$ "a5 Rate
30/80 /02 /00 0/00
Cash t# ep$#)
20!,000
N#te* Re+$e@ered &eta ca$cu$ati#n is &ased #n a c#nstant capita$ structure 1
n+$e@ered &eta is the ei-hted a@era-e # the #peratin- asset &eta and the &eta # cash, and is a J Operati#ns .Operatin- AssetsB'nterprise Ea$ue Cash.CashB'nterprise Ea$ue/ "his is e(ui@a$ent t# e.'(uit) Ea$ueB'nter prise Ea$ue/ . in "h#usands/
Part # "N '5hi&it 10+)ear "reasur) ?nterest C#@era-e %e&t Rati# RatinM13/0 AAA !/ + 12/0 AA+ 7/0 + !/ A /0 + 7/00 === 4/0 + /0 == 2/0 + 4/0 =
/02 %eau$t Spread 0/6 0/80 0/8 1/83 2/!8 4/10
Debt $elatinshi&s' FL 2006 '=?" ?nterest '5pense Coera)e Ratio
'stiated C#st # %e&t I-pied 0ebt
9#4###
0ebt Waterfa. A BBB 73,860 73,860 !,232 12,310 5;#x $;#x
BB 73,860 16,413 @;9x
B 73,860 1!,6!6 /;5x
6/8
8/00
!/12
13>43#3
"#941$$
"194>$@
Harvard Business Pub
Harvard Business Pub
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?NC
()*+,E ST-TE,E)T
B--)*E SHEET
Case '5hi&it 1
Case '5hi&it 2
+&erating $esults' Reenue
"##@ ">14>@# 204,26 534$3$ 2,2!3 $"4/5/ 6,!87 $>4/3#
"##9 /#34>$@ 220,234 5343/1 27,04! $#4$5" 8,213 $545>9
"##$ /@"4"91 24!,7!4 >"4@95 28,12 $/4>@$ !,!14 3/45$#
$"4/5/ 1,71! 3541#1 24,!8! 9/411" 18,8!
$#4$5" 16,07 3$43/5 24,303 9"4@/9 22,871
$/4>@$ 13,06 334@91 23,821 9/4$/# 28,34
3 2
11 1
:ar)ins.
Re@enue r#th
-ssets' Cash 9 Cash '(ui@a$ents ar>eta&$e Securities Acc#unts Recei@a&$e ?n@ent#r) Other Current Assets Tota Current Assets
Pr#pert), P$ant 9 '(uipent ##di$$ Other Assets Tota Assets iabilities / Sharehlders E1uit2' Acc#unts Pa)a&$e Accrued
?NC
()*+,E ST-TE,E)T
B--)*E SHEET
Case '5hi&it 1
Case '5hi&it 2
+&erating $esults' Reenue
"##@ ">14>@# 204,26 534$3$ 2,2!3 $"4/5/ 6,!87 $>4/3#
"##9 /#34>$@ 220,234 5343/1 27,04! $#4$5" 8,213 $545>9
"##$ /@"4"91 24!,7!4 >"4@95 28,12 $/4>@$ !,!14 3/45$#
$"4/5/ 1,71! 3541#1 24,!8! 9/411" 18,8!
$#4$5" 16,07 3$43/5 24,303 9"4@/9 22,871
$/4>@$ 13,06 334@91 23,821 9/4$/# 28,34
3/2 30/0 21/4 23/8 32/0 18/2 3/0
/ 28/ 1!/7 22/4 31/7 17/0 43/6
11/1 27/0 18/7 21/6 30/8 1/7 2/!
:ar)ins.
Re@enue r#th r#ss ar-in '=?" ar-in '=?"%A ar-in 'ecti@e "a5 Rate .1 Net ?nc#e ar-in %i@idend pa)#ut rati#
.1 =$aineDs uture ta5 rate is assued t# re@ert t# the statut#r) rate # 40/
-ssets' Cash 9 Cash '(ui@a$ents ar>eta&$e Securities Acc#unts Recei@a&$e ?n@ent#r) Other Current Assets Tota Current Assets
Pr#pert), P$ant 9 '(uipent ##di$$ Other Assets Tota Assets iabilities / Sharehlders E1uit2' Acc#unts Pa)a&$e Accrued
N#te* an) ites in =?Ds hist#ri ha@e &een aected &) the irDs ac
S(,P(3(ED B--)*E SHEET Case '5hi&it 2
E
"##@ 67,3!1 218,403 40,70! 47,262 2,86 /3$4/91
"##9 70,83 1!6,763 43,23 4!,728 3,871 /$@4@@>
"##$ 66,7 164,30! 48,780 4,874 ,17 //>4$35
!!,402 8,134 13,331 @>34"13
138,46 20,43! 27,3!4 99#45">
174,321 38,281 3!,!73 9>"4"9/
26,106 22,60 14,22 $"4>/9 1,7!4 1,111 3>45@# 417,377 @>34"13
28,8! 24,!21 17,1!6 3#43#9 3,11 18,434 >"4"># 48,38 99#45">
31,!36 27,761 16,884 3$4951 4,814 22,4! 1#/45># 488,363 9>"4"9/
a$ &a$ance sheets, e/-/ Pr#pert), P$ant 9 '(uipent (uisiti#ns/
-ssets' Cash 9 ar>eta&$e Securities Net W#r>in- Capita$ Net Fi5ed Assets Other, net Tota Assets
"##@ 67,3!1 218,403 40,70! 47,262 /3/43$9
"##9 70,83 1!6,763 43,23 4!,728 /$#4935
"##$ 230,866 32,231 174,321 0,!4 @554/$/
0ebt E
# 417,377 @134/33
# 48,38 @9549/5
# 488,363 @554/$/
N#te* an) ites in =?Ds hist#rica$ &a$ance sheets, e/-/ Pr#pert), P$ant 9 '(uipent ha@e &een aected &) the irDs ac(uisiti#ns/