fvc valuation
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Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinder Valves and Controls
(dollars in thousands)
Actual
00! 00"
Sales #$%&'$ #%&00
Cost of *oods sold '!&0$$ $'&"1
+ross ,rofit 1&'0 1&!"$
Sellin*& *eneral& and administrative &%' '&1
" $0
-ncome before taxes %&1 1&$1.axes $&0'! $&%
/et income #&! #!&$$!
e,reciation #1&0" #1&0
/et PPE #1"&" #&0
PPE
/et or2in* ca,ital #1&"$0 #0&''1
FCFF
/3PA. #!&$$!
#&$$"
4ess5 -ncrease in /6C #'&$%1
Free Cash 7#1&$%
.erminal Value
FCFF8.erminal Value 7#1&$%/PV #1&%$9'$
E:uit; Value #$&$
Par Value ,er Share #1%90"$
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>SE to FVC Share Conversion 2.000
Dilution in Case o Sto!" #u!%ase
Projected >SE Earnin*s #1!&!01
Combined Earnin*s #1!&1$"
3utstandin* >SE Shares(=efore Ac:uirin*) $&$1&%1%
Projected >SE EPS(=efore Ac:uirin*) #90
3utstandin* >SE Shares (After Ac:uirin*) %&%&%1%
Projected >SE EPS(After Ac:uirin*) #9"Dilution 2.9&'
Dilution in !ase o !as% (u!%ase
Projected >SE Earnin*s after interest ex,ense #1'&0%
Projected EPS #9'$
Dilution 2.6)9'
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"9
Avera*e of ,ast dividend *roths
Projected
00% 010 011 01 01'(Stead; State)
#&000 #!'&00 #"1&00 #%0&000
$"&!0 $&10$ %&%" &00
1!&0 1%&0% 1&$ '&"00
$&1$ $&$ &0 &%
$ "" '0 '
1'&'%0 1$&"0 1&10 1"&$0&' &%" &0$ !&'"$
#"&0'$ #"&"% #%&%0 #11&0!
#1&"" #&01 #&1 #&$'
#$&$$ #!&0"" #'0&0$% #''&'0
#&1 #$&%!1 #!&!00 #'0&!0
#"&0'$ #"&"% #%&%0 #11&0!
#$&1% #$&! #&1!' #&"%
#&1"$ #&$ #&!% #'&00
#1&$ #1&!0 #&00$ #&'" #&%1
#"'&!
#1&$ #1&!0 #&00$ #"&%
in* C'")
Stea*+ State,o-t% Rate
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#1&'! #1$&!$ #1!1&0%" #1!'&!$$
#1!$&!1 #1!'&1 #1"1&00$ #1"$&"0
#9" #9 #9 #9!0
#91 #91 #91 #9!2.' 2.02' &.66' &.&2'
Avera*e ilution 90
#11&!$$ #10&' #1&0 #1%&
#91 #9$% #9% #9'
2.)0' 2.)3' 2.63' 2.9'
Avera*e ilution 9$
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FVC /ACC Calulation
m7>f !90 Arithmetic SE for ever; 1 share of FVC or
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Premium &0.9'
SE are ver; ,articular a
Sin!e t%e *ilution in E#S is %i%e in !ase o !as% (u!%ase1 sto!" (u!%ase is (eee*
Sensitiit+Consi*ee*
Sensitive ate
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(After convertin* Preferred Stoc2 to Common Stoc2)
$&0)12621400.00
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and a safe bet
out this
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Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinder Valves and Controls
(dollars in thousands)
Actual
00! 00"
Sales #$%&'$ #%&00
Cost of *oods sold '!&0$$ $'&"1
+ross ,rofit 1&'0 1&!"$
Sellin*& *eneral& and administrative &%' '&1
" $0
-ncome before taxes %&1 1&$1
.axes $&0'! $&%/et income #&! #!&$$!
e,reciation #1&0" #1&0
/et PPE #1"&" #&0
PPE
/et or2in* ca,ital #1&"$0 #0&''1
FCFF
/3PA. #!&$$!
#&$$"
4ess5 -ncrease in /6C #'&$%1
Free Cash 7#1&$%
.erminal Value
FCFF8.erminal Value 7#1&$%
/PV #1&%$9'$E:uit; Value #$&$
Par Value ,er Share #1%90"$
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3utstandin* >SE Shares(=efore Ac:uirin*) $&$1&%1%
Projected >SE EPS(=efore Ac:uirin*) #90
3utstandin* >SE Shares (After Ac:uirin*) %&%0&%1%
Projected >SE EPS(After Ac:uirin*) #91
Dilution 3.)6'
Dilution in !ase o !as% (u!%ase
Projected >SE Earnin*s after interest ex,ense #1&$"Projected EPS #9
Dilution 3.0&3'
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"9
Avera*e of ,ast dividend *roths
Projected
00% 010 011 01 01'(Stead; State)
#&000 #!'&00 #"1&00 #%0&000
$"&!0 $&10$ %&%" &00
1!&0 1%&0% 1&$ '&"00
$&1$ $&$ &0 &%
$ "" '0 '
1'&'%0 1$&"0 1&10 1"&$0
&' &%" &0$ !&'"$#"&0'$ #"&"% #%&%0 #11&0!
#1&"" #&01 #&1 #&$'
#$&$$ #!&0"" #'0&0$% #''&'0
#&1 #$&%!1 #!&!00 #'0&!0
#"&0'$ #"&"% #%&%0 #11&0!
#$&1% #$&! #&1!' #&"%
#&1"$ #&$ #&!% #'&00
#1&$ #1&!0 #&00$ #&'" #&%1
#"'&!
#1&$ #1&!0 #&00$ #"&%
#1&'! #1$&!$ #1!1&0%" #1!'&!$$
#1!$ !1 #1!' 1 #1"1 00$ #1"$ "0
Stea*+ State,o-t% Rate
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#9" #9 #9 #9!0
#9$% #9$" #9% #9$
3.40' 2.' 2.2' &.9'
Avera*e ilution 9%0"
#11&1"' #1%&!0 #1&0$ #1"&%0#90 #9$" #9" #9
3.04' 3.0)' 2.9' 2.9&'
Avera*e ilution 9%%!
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FVC /ACC Calulation
m7>f !90 Arithmetic
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Bustifications
S!enaio 3,timistic
Assumin* an o,timistic Scenario here e ex,ect FVC to overcome SE to FVC Share conversion factor
A conversion factor of 9 for ever; FVC share ould ease the ,ractical issues related to ac:
ence a conversion factor of 9 and an unaltered mar2et to boo2 ratio of 9 ould be an o
6e also ma2e sure that the EPS dilution is less than & as the directors of >SE are ver; ,arti
Sin!e t%e *ilution in E#S is %i%e in !ase o !as% (u!%ase1 sto!" (u!%ase is (eee*
Sensitiit+Consi*ee*
Stable ate
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hibit %
Exhibit %
(After convertin* Preferred Stoc2 to Common Stoc2)
#10&!0&00900
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troducin* ne innovative ,roducts and imorovin* international sales
uisistion
timistic bet
cular about this
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Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinder Valves and Controls
(dollars in thousands)
Actual
00! 00"
Sales #$%&'$ #%&00
Cost of *oods sold '!&0$$ $'&"1
Cost Savin*s 1&00
+ross ,rofit 1&'0 1!&"$
Sellin*& *eneral& and administrative &%' '&1
" $0
-ncome before taxes %&1 1'&%1
.axes $&0'! &
/et income #&! #"&'$!
e,reciation #1&0" #1&0
/et PPE #1"&" #&0
PPE
/et or2in* ca,ital #1&"$0 #0&''1
FCFF
/3PA. #"&'$!
#&$$"
4ess5 -ncrease in /6C #'&$%1
Free Cash 7#%
.erminal Value
Economic Value of 6idenin* +;re
FCFF8.erminal Value 7#%
/PV #%&!'9'
E:uit; Value #%1&$0$
Par Value ,er Share #'!9$1
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Projected >SE Earnin*s #1!&!01
Combined Earnin*s #1!&0$"
3utstandin* >SE Shares(=efore Ac:uirin*) $&$1&%1%
Projected >SE EPS(=efore Ac:uirin*) #90
3utstandin* >SE Shares (After Ac:uirin*) !0&1&%1%
Projected >SE EPS(After Ac:uirin*) #90
Dilution 4.&0'
Dilution in !ase o !as% (u!%ase
Projected >SE Earnin*s after interest ex,ense #1&0"
Projected EPS #91
Dilution 3.34'
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"9
Avera*e of ,ast dividend *roths
Projected
00% 010 011 01 01'(Stead; State)
#&000 #!'&00 #"1&00 #%0&000
$"&!0 $&10$ %&%" &00
'&000 '&000 '&000 '&000
0&0 &0% $&$ &"00
$&1$ $&$ &0 &%
$ "" '0 '
1&'%0 1!&"0 1%&10 1&$0
& !&1" !&"0$ "&"$
#%&"'$ #10&% #11&!0 #1&"!
#1&"" #&01 #&1 #&$'
#$&$$ #!&0"" #'0&0$% #''&'0
#&1 #$&%!1 #!&!00 #'0&!0
#%&"'$ #10&% #11&!0 #1&"!
#$&1% #$&! #&1!' #&"%
#&1"$ #&$ #&!% #'&00
#'&$$ #'&0 #'&"0$ #$&1" #$&$
#1$&'!
#&000 (Conservative A,,roach o
#'&$$ #'&0 #'&"0$ #1&"
Stea*+ State,o-t% Rate
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#1&'! #1$&!$ #1!1&0%" #1!'&!$$
#1!&0!1 #1!&$1 #1"&"0$ #1"&0
#9" #9 #9 #9!0
#90 #9$% #9% #9
3.2' 2.)2' 2.40' &.'
Avera*e ilution 9"!
#10&1 #1%&10% #1&$"' #1"&1%
#9$%' #9$!0 #9% #910
3.3' 3.4&' 3.2' 3.23'
Avera*e ilution '9''0
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FVC /ACC Calulation
m7>f !90 Arithmetic
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esource mana*em
6e also loo2 the >SE to FVC Share conversion factor
A conversion factor of 9 for ever; FVC share ould ease the ,
ence both the factors combined to*ether& e arrive at 9 conv
6e also ma2e sure that the EPS dilution is less than & as the d
Sin!e t%e *ilution in E#S is %i%e in !ase o !as% (u!%ase1 s
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hibit %
Exhibit %
(After convertin* Preferred Stoc2 to Common Stoc2)
# 1'$&0!"&000900
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and ,rofits from 6idenin* +;re
nt S;stem& and the additional transition costs to match the s;ner*; benefits& 6e reduce th
actical issues related to ac:uisistion
rsion factor and 19 atio ('' loer)
rectors of >SE are ver; ,articular about this
to!" (u!%ase is (eee*
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Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinder Valves and Controls
(dollars in thousands)
Actual
00! 00"
Sales #$%&'$ #%&00
Cost of *oods sold '!&0$$ $'&"1
Cost Savin*s 1&00
+ross ,rofit 1&'0 1!&"$
Sellin*& *eneral& and administrative &%' '&1
" $0-ncome before taxes %&1 1'&%1
.axes $&0'! &
/et income #&! #"&'$!
e,reciation #1&0" #1&0
/et PPE #1"&" #&0
PPE
/et or2in* ca,ital #1&"$0 #0&''1
FCFF
/3PA. #"&'$!
#&$$"
4ess5 -ncrease in /6C #'&$%1
Free Cash 7#%
.erminal ValueEconomic Value of 6idenin* +;re
FCFF8.erminal Value 7#%
/PV #10&0%9'
E:uit; Value #%!&1$%
Par Value ,er Share #'%9"1
for @ears Endin* ecember '1& 00"1
3ther income
net
4ess5 Ca,ital ex,enditures(Chan*e in /et PPE 8e,reciation)
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SE to FVC Share Conversion 2.)0
Dilution in Case o Sto!" #u!%ase
Projected >SE Earnin*s #1!&!01
Combined Earnin*s #1!&0$"
3utstandin* >SE Shares(=efore Ac:uirin*) $&$1&%1%
Projected >SE EPS(=efore Ac:uirin*) #90
3utstandin* >SE Shares (After Ac:uirin*) !1&1&%1%
Projected >SE EPS(After Ac:uirin*) #9$"
Dilution 4.93'
Dilution in !ase o !as% (u!%ase
Projected >SE Earnin*s after interest ex,ense #11&$
Projected EPS #90!
Dilution 3.63'
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"9
Avera*e of ,ast dividend *roths
Projected
00% 010 011 01 01'(Stead; State)
#&000 #!'&00 #"1&00 #%0&000
$"&!0 $&10$ %&%" &00
'&000 '&000 '&000 '&000
0&0 &0% $&$ &"00
$&1$ $&$ &0 &%
$ "" '0 '1&'%0 1!&"0 1%&10 1&$0
& !&1" !&"0$ "&"$
#%&"'$ #10&% #11&!0 #1&"!
#1&"" #&01 #&1 #&$'
#$&$$ #!&0"" #'0&0$% #''&'0
#&1 #$&%!1 #!&!00 #'0&!0
#%&"'$ #10&% #11&!0 #1&"!
#$&1% #$&! #&1!' #&"%
#&1"$ #&$ #&!% #'&00
#'&$$ #'&0 #'&"0$ #$&1" #$&$
#1$&'!#1&000 (Su,er 3,timistic A,,roac
#'&$$ #'&0 #'&"0$ #1&"
Stea*+ State,o-t% Rate
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#1&'! #1$&!$ #1!1&0%" #1!'&!$$
#1!&0!1 #1!&$1 #1"&"0$ #1"&0
#9" #9 #9 #9!0
#9$" #9$! #9! #9
4.0' 3.6' 3.24' 2.)2'
Avera*e ilution '9!0'
#10&00 #1"&$! #1$&% #1!&!
#9$" #9$1 #90 #901
3.)2' 3.)' 3.6&' 3.6'Avera*e ilution '9'
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FVC /ACC Calulation
m7>f !90 Arithmetic
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9! Shares of >SE for ever; 1 share of FVC or # 1$!&$"&"00900
Premium 2.06'
esource mana*ement S;s
6e also loo2 the >SE to FVC Share conversion factor
A conversion factor of 9! for ever; FVC share ould ease the ,ractic
ence both the factors combined to*ether& e arrive at 9! conversion
6e also ma2e sure that the EPS dilution is less than & as the directors
.his is our al2aa; ,rice as there are no more :uanitifiable benefits to
and the EPS dilution ould *o be;ond in 00" in case of a hi*her o
.his ill not be considered favorable b; >SE =oard
Sin!e t%e *ilution in E#S is lo-e in !ase o !as% (u!%ase1 -e o o
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d Stoc2 to Common Stoc2)
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;ner*; 8 ?ncertain 6idenin* +;re Project
em& and the additional transition costs to match the s;ner*; benefits& 6e reduce the SE are ver; ,articular about this
consider
fer ,rice
!as% (u!%ase
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