Documente Academic
Documente Profesional
Documente Cultură
Exhibit 1
FLINDER VALVES AND CONTROLS INC.
Balance Sheet as of December 31, 2007 for Flinder Valves and Controls Inc.
(dollars in thousands)
Assets
Cash
U.S. Treasury tax notes and other Treasury obligations
Due from U.S. government
Accounts receivable net
Inventories, at lower of cost or market
Other current assets
Total current assets
Investments
Land
Buildings
Equipment
Less: allowance for depreciation
Total plant, property, and equipmentgross
Construction in process
Total plant, property, and equipmentnet*
Patents
Cash value of life insurance
Deferred assets
Total assets
Liabilities and Stockholders Equity
Accounts payable
Wages and salaries accrued
Employees pension cost accrued
Tax accrued
Dividends payable
Provision for federal income tax
Total current liabilities
Deferred federal income tax
Common stock at par (shares authorized and outstanding
2,440,000 shares)
Capital surplus
Earned surplus
Total equity
Total liabilities and stockholders equity
$1,884
9,328
868
2,316
6,888
116
$21,400
1,768
92
6,240
18,904
7,056
18,180
88
18,268
156
376
156
42,124
2,016
504
208
72
560
1,200
4,560
800
1,220
7,180
28,364
36,764
42,124
* Equivalent land in the area had a market value of $320,000, and the building had an estimated market worth of $16,800,000. Eq
Exhibit 2
FLINDER VALVES AND CONTROLS INC.
Summary of Earnings and Dividends for Flinder Valves and Controls Inc.
(dollars in thousands)
(Unaudited)
Three months ended 3/30
2007
2008
$11,728
$14,162
8,730
10,190
2,998
3,972
668
896
14
198
2,344
3,274
1,009
1,391
1,335
1,883
2003
$36,312
25,924
10,388
2,020
92
8,460
3,276
5,184
2004
$34,984
24,200
10,784
2,100
572
9,256
3,981
5,275
2005
$35,252
24,300
10,952
2,252
108
8,808
3,620
5,188
2006
$45,116
31,580
13,536
2,628
72
10,980
4,721
6,259
2007
$49,364
37,044
12,320
2,936
228
9,612
4,037
5,575
Cash dividends
Depreciation
Capital expenditures
Working capital needs
1,680
784
1,486
1,899
2,008
924
1,826
3,492
2,016
1,088
2,011
-1,200
2,304
1,280
2,213
4,289
2,304
1,508
2,433
4,757
576
364
580
1,130
753
394
640
1,365
Ratio analysis
Sales
Cost of goods sold
Gross
Selling,profit general,
administrative
Other incomenet
Income before federal taxes
Net income
100.0
71.4
28.6
5.6
0.3
23.3
14.3
100.0
69.2
30.8
6.0
1.6
26.5
15.1
100.0
68.9
31.1
6.4
0.3
25.0
14.7
100.0
70.0
30.0
5.8
0.2
24.3
13.9
100.0
75.0
25.0
5.9
0.5
19.5
11.3
100.0
74.4
25.6
5.7
0.1
20.0
11.4
###
72.0
28.0
6.3
1.4
23.1
13.3
Sales
Cost of goods sold
Gross
Selling,profit general,
administrative
Other incomenet
Income before taxes
Taxes
Net income
and
and
Exhibit 3
Consolidated Balance Sheet for RSE International as of December 31, 2007
(dollars in thousands except per-share figures)
Assets
Cash
U.S. government securities, at cost
Trade accounts receivable
Inventories, at lower of cost or market
Prepaid taxes and insurance
Total current assets
Investment in wholly-owned Canadian subsidiary
Investment in supplier corporation
Cash value of life insurance
Miscellaneous assets
Property, plant, and equipment, at cost:
Buildings, machinery, equipment
Less: allowances for depreciation and amortization
Property, plant, and equipmentnet
Land
Property, plant, equipment, and landnet
Patents, at cost, less amortization
Total assets
Liabilities and Stockholders Equity
Notes payable to bank
Accounts payable and accrued expenses
Payrolls and other compensation
Taxes other than taxes on income
Provision for federal taxes on income refund, estimated
Current maturities of long-term debt
Total current liabilities
$46,480
117,260
241,760
179,601
2,120
587,221
158,080
104,000
3,920
2,160
671,402
260,001
411,402
22,082
433,484
1,120
$1,289,985
$5,795
90,512
38,399
3,052
32,662
30,900
201,320
119,100
29,668
27,783
125,389
Capital surplus3
Retained earnings
Total equity
21,904
764,821
939,897
$1,289,985
$150,000,000 note, payable semiannually beginning June 30, 2008; $30,900,000 due within
one year, shown in current liabilities. One covenant required the company not to pay cash
dividends, except on preferred stock, or to make other distribution on its shares or acquire any
stock, after December 31, 1999, in excess of net earnings after that date.
1
Issued in January 2007; convertible at rate of 1.24 common share to one preferred share;
redeemable beginning in 2012; sinking fund beginning in 2016.
2
Resulting principally from the excess of par value of 827,800 shares of preferred stock over
the pay value of common share issues in conversion in 2007.
3
Exhibit 4
Summary of Consolidated Earnings and Dividends for RSE International
(dollars in thousands)
2003
$1,623,963
2004
$1,477,402
2005
$1,498,645
2006
$1,980,801
2007
$2,187,208
1,271,563
352,400
1,180,444
296,958
1,140,469
358,176
1,642,084
338,717
1,793,511
393,697
58,463
293,937
126,393
69,438
227,520
95,558
74,932
283,244
116,130
87,155
251,562
101,883
120,296
273,401
109,360
Net earnings
167,544
131,962
167,114
149,679
164,041
19,160
85,754
20,000
77,052
21,480
53,116
24,200
77,340
26,800
92,238
Net sales
Cost of products sold
Gross profit
Depreciation
Cash dividends declared
Exhibit 5
Forecast Financial Statements for RSE International
for the Years Ending December 31, 200712
(dollars in thousands except per-share figures)
Sales
Cost of goods sold
Gross profit
Selling, general, and admin.
Income before tax
Tax expense
Net income
Cash dividends
Depreciation
Net PPE
Net working capital
Earnings per share1
Divs. per share common stock
Div. per share preferred stock
1
2
Actual
2007
$2,187,208
2008
$2,329,373
2009
$2,480,785
Projected
2010
$2,642,037
2011
$2,813,769
2012
$2,996,658
1,793,510
393,698
120,296
273,402
109,361
164,041
1,920,085
409,288
129,786
279,502
111,801
167,701
2,064,243
416,542
139,481
277,061
110,824
166,237
2,216,470
425,567
151,027
274,540
109,816
164,724
2,367,290
446,479
161,315
285,164
114,066
171,098
2,537,259
459,399
169,826
289,573
115,829
173,744
92,238
102,082
108,714
115,779
125,185
133,313
26,800
389,321
422,597
27,950
426,522
447,956
29,770
459,404
486,428
31,700
498,497
528,407
33,170
541,109
574,238
35,960
587,580
624,303
$2.62
$2.60
$2.58
$2.56
$2.66
$2.70
$1.42
$1.58
$1.69
$1.80
$1.94
$2.07
$0.40
62,694,361 common shares in 2007. Thereafter, 64,416,919 shares reflecting conversion of the preferred stock.
1,389,160 preferred shares in 2007. Conversion into 1,722,558 shares of common stock assumed in 2008.
Exhibit 6
FLINDER VALVES AND CONTROLS INC.
Market Prices of Flinder Valves and RSE International Corporation
2003
2004
2005
24.38
22.75
22.75
24.36
20.75
20.38
20.38
20.13
21.50
21.00
21.50
21.00
14.13
13.69
12.83
12.39
12.83
12.04
10.48
11.26
13.95
11.78
11.26
11.87
23.50
23.63
22.75
30.00
20.00
19.88
20.00
22.25
21.75
22.00
22.50
28.50
11.60
11.60
13.61
17.01
10.20
10.90
11.13
13.30
10.67
10.90
13.61
16.78
13.61
13.15
14.22
17.32
12.21
12.04
12.37
13.77
32.13
26.00
31.50
20.73
15.08
20.69
17.32
13.98
$39.75
$38.90
$39.75
$22.58
$18.30
$21.98
$17.63
$15.35
May 1, 2008
Exhibit 7
FLINDER VALVES AND CONTROLS INC.
Market Information on Firms in the Industrial Machinery Sector
Cascade Corp.
Manufactures loading engagement devices
Curtiss-Wright Corporation
Manufactures highly engineered, advanced technologies
that perform critical functions
Flowserve Corp.
Makes, designs, and markets fluid handling
equipment (pumps, valves, and mechanical seals)
Gardner Denver
Manufacturers stationary air compressors, vacuum
products, and blowers
Idex Corp.
Manufactures a wide range of pumps and machinery
products
Roper Inds.
Manufacturers energy systems and controls, imaging
equipment, and radio frequency products
Tecumseh Products
Manufactures compressors, condensers, and pumps
Watts Industries
Manufactures and sells and extensive line of valves
for the plumbing and heating and water quality markets
NMF = not meaningful figure.
Source: Value Line Investment Survey, April 25, 2008.
Expected
Growth
Dividend Rate
Yield
to 2010 Debt/Capital
Price/
Earnings
Ratio
Beta
10.5
0.95
1.7%
5.1%
29%
17.2
1.0
0.7
12.3
36%
20.8
1.3
1.0
27.0
30%
10.9
1.3
Nil
NMF
19%
16.1
1.05
1.5
10.8
22%
19.7
1.2
0.5
10.8
29%
38.2
1.05
Nil
NMF
8%
15
1.3
1.5
8.4
32%
Exhibit 8
FLINDER VALVES AND CONTROLS INC.
Information on Selected Recent Related Mergers
Effective Date
5/25/2006
6/26/2006
9/20/2006
11/10/2006
12/8/2006
4/11/2007
6/22/2007
7/31/2007
12/3/2007
12/20/2007
2/6/2008
6/5/2008
Acquirer
Business
Target
Business
Turbine-driven products
Power generation equip
Vehicle parts
Airconditioners
Excavators/telehandlers
Packaging/plastics machinery
Aircraft braking systems
Law enforcement equip
Aircraft engine component
Electn system products
Components
Airconditioners
Exhibit 8 (Continued)
FLINDER VALVES AND CONTROLS INC.
Information on Selected Recent Related Mergers
Acquirer
Target
726
17,679
1,371
1,581
2,289
1,418
424
2,805
2,181
945
2,153
8,328
Equity Value/
Target Net
Income
Enterprise
Value/ Target
Net Sales
Enterprise
Value/ Target
Operating
Income
Enterprise
Value/ Target
Cash Flow
Premium 4
Weeks Prior to
Announcement
Date (%)
65.3
nmf
28.9
27.6
20.5
38.6
20.3
30.5
34.4
86.8
17.1
21.2
1.12
1.48
1.53
1.41
1.30
1.56
4.26
1.71
1.25
1.99
0.02
1.39
33.1
77.9
18.7
21.5
11.9
64.8
13.1
17.1
20.6
34.0
na
14.9
23.7
22.5
14.9
16.8
10.7
14.2
10.8
14.3
12.5
23.9
na
11.6
40.6
-1.2
27.2
19.4
52.3
19.3
13.5
29.3
63.3
40.5
35.2
na
Exhibit 9
FLINDER VALVES AND CONTROLS INC.
Capital Market Interest Rates and Stock Price Indexes
(averages per annum, except April 2008 which offers closing values for April 25, 2008)
2006
2007
April 2008
4.70%
5.00%
4.40%
4.91%
1.28%
4.52%
5.59%
5.80%
6.06%
6.48%
5.56%
5.90%
6.09%
6.48%
5.58%
5.96%
6.32%
6.98%
Stock Market
S&P 500 Index
Price/earnings ratio
1,418
17.7
1,468
18.3
1,398
17.4
13.9
1.4%
14.0
1.4%
Data Source: Value Line Investment Survey, 25 April 2008; Federal Reserve Bulletin; Compustat
Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinders Control and Valve
for Years Ending December 31, 200812
(dollars in thousands)
Sales
Cost of goods sold
Gross
Selling,profit general,
administrative
Other incomenet
Income before taxes
Taxes
Net income
Depreciation
Net PPE
Net working capital
and
Actual
2007
$49,364
37,044
12,320
2,936
228
9,612
4,037
$5,575
2008
$59,600
43,816
15,784
3,612
240
12,412
4,965
$7,447
2009
$66,000
48,750
17,250
4,124
264
13,390
5,356
$8,034
Projected
2010
$73,200
54,104
19,096
4,564
288
14,820
5,928
$8,892
2011
$81,200
59,958
21,242
5,052
320
16,510
6,604
$9,906
2012
$90,000
66,200
23,800
5,692
352
18,460
7,384
$11,076
$1,508
$1,660
$1,828
$2,012
$2,212
$2,432
$18,268
$16,840
$22,056
$20,331
$24,424
$22,515
$27,088
$24,971
$30,049
$27,700
$33,306
$30,702