Tea and Bottled Water Consumption
1994 1995 1996 1997 1998 1999
Tea: Gallons Per capita 2,682,200 10.4 2,630,600 10.0 2,590,200 9.7 2,528,500 9.4 2,548,200 9.4 2,595,500 9.5
Bottled W ater Gallons Per capita 2,901,900 11.3 3,167,500 12.0 3,449,300 13.0 3,775,800 14.0 4,146,000 15.3 4,646,100 17.0
Drink Consumption in the United States - wholesale Drink Beer Bottled water Fruit beverages Ready-to-drink teas Soft drinks Spirits Sport drinks W i ne Total beverages
1998 28.49 4.33 12.77 1.34 41.79 15.55 1.59 10.32 116.18
1999 28.92 4.94 13.41 1.46 42.2 15.86 1.75 10.63 119.17
Growth 1.5% 14.1% 5.0% 9.0% 1.0% 2.0% 10.1% 3.0%
1998 54.2 5.2 17.5 2.45 54.3 34.05 2.65 17.38 187.73
1999 55.05 5.92 18.57 2.67 54.84 34.8 2.91 17.91 192.67
Growth 1.6% 13.8% 6.1% 9.0% 1.0% 2.2% 9.8% 3.0%
1995 4,023.8 2,447.7 720.0 231.9 347.8 636.8
2000 3,488.8 2,089.2 596.2 283.8 347.4 751.1
Drink Consumption in the United States - retail Drink Beer Bottled water Fruit beverages Ready-to-drink teas Soft drinks Spirits Sport drinks W i ne Total beverages
Tea and Coffee Consumption
Coffee Ground coffee Instant coffee W hole bean coffee Cocoa mixes Tea bags/loose tea
Historical Financial Ratios for Honest Tea 1998 18.22% -134.40% 1.2524 -168.32% -169.51%
1999 32.00% -80.51% 0.9686 -77.97% -96.74%
1.0070 0.70%
1.2406 19.39%
Sales Sales discounts other income
1998 273,913 (7,807) 5,862
1999 1,229,882 (149,027) 15,167
Total revenues
271,968
1,096,022
Cost of good sold Gross profit
222,414 49,554
745,321 350,701
Broker commissions Consultants General and administrative Payroll taxes and benefits Professional fees Research and development Salaries Sales and marketing Travel and entertainment
81,464 29,970 13,191 35,467 22,254 125,976 87,016 15,647
38,787 43,659 103,242 41,559 24,307 80,957 390,876 399,649 65,865
Total operating expenses (w/o CGS)
410,985
1,188,901
4,090 -
31,136 11,916 1,107
415,075
1,233,060
Gross Profit Margin Profit Margin Total Asset Turnover ROA ROE Equity Multiplier Debt to assets
Historical Financial Performance for Honest Tea Income statements for 1998 to 2000
Bad debt expense Depreciation and amortization Interest expense
Total expense (w/o CGS) Net income
(365,521)
(882,359)
Balance Sheets for 1998 to 2000 1998
Assets Current assets Cash Accounts receivable Inventory Prepaid expense and other current assets Total current assets Investment - Three Rivers Bottling Secured notes receivable - TRB Depreciation Amortization Deposits
Total Assets
1999
33,578 61,066 98,477 -
450,173 176,039 297,571 36,131
193,121
959,914
22,644 1,389 -
(38,207) 57,742 69,022 25,033 58,095
217,154
1,131,599
Liabilities Current liabilities Accounts payable and credit cards
1,518
217,630
Total current liabilities
1,518
217,630
Long term lease obligation
Total liabilities Shareholder equity Value; 125 shares Value; 174 shares Additional paid in capital Loss from investment in TRB Retained earnings
-
1,843
1,518
1 581,153 (365,519)
219,473
2 2,366,662 (206,657) (1,247,879)
Total shareholder equity
215,635
912,128
Total liabilities and shareholder equity
217,153
1,131,601
2000 (annualized) 39.17% -38.63% 0.4415 -17.05% -19.48% 1.1419 12.43%
2000 (half year) 630,022 (51,756) 14,254 592,520 360,459 232,061 20,649 27,344 56,174 17,847 675 8,055 140,175 131,278 42,519 444,716 2,384 13,288 551 460,939 (228,878)
2000
220,982 272,028 433,979 49,284 976,273 (38,207) 82,538 182,335 24,737 114,336 1,342,012
164,945 164,945 1,833 166,778
2 3,161,309 (206,657) (1,779,422) 1,175,232 1,342,010
Financing needed to support sales levels
Revenue Total Assets Revenue/Total Assets
1998 271,968 217,154 1.2524
1999 1,096,022 1,131,599 0.9686
2000 (annualized) 1,185,040 1,342,012 0.8830
1,518 0.70%
219,473 19.39%
166,778 12.43%
Estimated Sales Estimated Assets Total Debt Debt to Total Assets Estimated Debt Funds Estimated Equity Funds
2001
2002
0.88
0.88
9,000,000 10,227,273
40% 4,090,909 6,136,364
16,900,000 19,204,545
40% 7,681,818 11,522,727
Alternative Fundi Pro
Venture Capital
Angels
Other possible groups
g Sources for Equity Con
Conclusion
Honest Tea Multiples Valuation TRIARC COS Equity Value to Revenue Multiple for Industry Group
SARATOGA BEV 0.28 1.67
HONEST TEA Honest Tea Revenue - Historical 2000 Assumed Equity Value to Revenue Implied Value for Equity Honest Tea Revenue - Estimated Assumed Equity Value to Revenue Implied Value for Equity
Honest Tea Weighted Discounted Cash Flow Valuation Scenario 1: Probability 20% Discount Rate 0.1 Equity Cash Flows Growth Rate in CFs Terminal Growth Rate Terminal Value
Equity Value Scenario 2: Probability Discount Rate Equity Cash Flows Growth Rate in CFs
2001 (861,500)
2002 1,105,100
2003 1,768,160 0.6
0.03
$105,526,807.63
50%
2001
2002
-861500
1105100
2003
0.1 0.25
Terminal Growth Rate Terminal Value
Equity Value Scenario 3: Probability Discount Rate Equity Cash Flows Growth Rate in CFs Terminal Growth Rate Terminal Value
Equity Value
30% 0.1
2001 -767067
2002 276275
2003 0.2
Weighted Equity Value 21,105,362
NATIONAL CLEARLY BEV CANADIAN AVG 0.25 31.35
2004
2005
2006
2007
2008
2009
2010
2,829,056 0.6
4,526,490 0.6
5,658,112 0.25
7,072,640 0.25
8,840,800 0.25
11,051,000 0.25
13,813,750 0.25
203,259,464
2004
2005
2006
2007
2008
2009
2010
0.25
0.25
0.25
0.1
0.1
0.1
0.1
2004
2005
2006
2007
2008
2009
2010
0.2
0.2
0.1
0.1
0.1
0.1
0.1
