Pacific Grove Spice Company

Pacific Grove Spice Company Exhibit 1 - Income Statement ($ in millions except for price per share) Income Statement Net Sales Cost of Goods Sold Gross Profit Margin

06/30/07

06/30/08

06/30/09

06/30/10

06/30/11

06/30/12

06/30/13

06/30/14

06/30/15

$46.180 26.784 19.396

$53.107 30.802 22.305

$57.887 33.575 24.312

$68.017 39.790 28.227

$80.940 47.512 33.428

$93.08 54.452 38.629

$105.182 61.531 43.650

$116.751 68.300 48.452

$127.26 74.447 52.813

0.739 14.916 3.741

0.850 17.260 4.195

0.926 18.871 4.515

1.088 21.902 5.237

1.295 26.063 6.070

1.489 29.321 7.819

1.683 33.132 8.835

1.868 36.777 9.807

2.036 40.087 10.690

Interest Expense Earnings Before Income Taxes

2.906 0.835

2.940 1.255

2.668 1.847

2.423 2.814

2.817 3.253

3.237 4.581

3.582 5.254

3.894 5.913

4.124 6.566

Income Taxes Net Income

0.225 0.610

0.339 0.916

0.499 1.348

0.760 2.054

0.879 2.374

1.237 3.344

1.418 3.835

1.597 4.316

1.773 4.793

R&D Expense SG&A Expense Earnings Before Interest & Taxes

Growth rate of sale Income tax rate assumed Price/Earnings Ratio Market Value of Equity

15.00%

9.00%

17.50%

19.00%

15.00% 27.00%

13.00% 27.00%

11.00% 27.00%

9.00% 27.00%

0.084

0.084

0.084

16.0 $37.990

Common Shares Outstanding Price per share

1,165,327 $32.60

Note: 2012-2015 are projected data COGS/Sales

58.70%

R&D Expense/Sales

1.60%

SG&A Expense/Sales

32.20%

Interest Expense EBIT/Sales

0.081

0.079

0.078

0.077

Prime + 5%

0.0825

0.075

0.084

Pacific Grove Spice Company Exhibit 2 - Balance Sheet ($ in millions) Assets

06/30/07

06/30/08

06/30/09

06/30/10

06/30/11

06/30/12

06/30/13

06/30/14

06/30/15

Cash Accounts Receivable Inventories Prepaid Expenses Total Current Assets

$2.325 9.489 6.697 0.770 19.281

$2.680 10.912 7.701 0.840 22.133

$2.924 11.895 8.394 0.910 24.123

$3.440 13.976 9.947 0.828 28.191

$4.102 16.632 11.878 0.969 33.581

$4.672 19.126 13.613 1.117 38.528

$5.279 21.613 15.383 1.262 43.537

$5.860 23.990 17.075 1.401 48.326

$6.387 26.149 18.612 1.527 52.675

Net Property & Equipment * Other Long-Term Assets Total Assets

15.200 2.241 36.722

16.000 2.479 40.612

17.300 2.671 44.094

19.100 3.074 50.365

22.400 3.639 59.620

25.157 4.189 67.874

28.427 4.733 76.697

31.554 5.254 85.134

34.395 5.727 92.797

10.6%

8.6%

14.2%

18.4%

13.8%

13.0%

11.0%

9.0%

06/30/07

06/30/08

06/30/09

06/30/10

06/30/11

06/30/12

06/30/13

06/30/14

06/30/15

Bank Notes Payable Accounts Payable Current Portion of Long-Term Debt Accrued Expenses Total Current Liabilities

$7.669 2.203 0.973 0.771 11.616

$8.820 2.532 1.060 0.884 13.296

$9.613 2.760 1.124 0.965 14.462

$11.295 3.271 1.240 1.129 16.935

$13.442 3.905 1.483 1.345 20.175

$15.492 4.476 1.614 1.545 23.127

$17.506 5.057 1.751 1.746 26.061

$19.432 5.614 1.842 1.938 28.826

$21.181 6.119 1.869 2.113 31.282

Long-Term Debt Total Liabilities

14.600 26.216

15.894 29.190

16.862 31.324

18.606 35.541

22.247 42.422

24.204 47.331

26.258 52.319

27.614 56.440

28.028 59.310

Common Stock Retained Earnings Total Shareholder Equity

6.881 3.625 10.506

6.881 4.541 11.422

6.881 5.889 12.770

6.881 7.943 14.824

6.881 10.317 17.198

6.881 13.661 20.543

6.881 17.497 24.378

6.881 21.813 28.694

6.881 26.606 33.488

Total Liabilities & Net Worth

36.722

40.612

44.094

50.365

59.620

67.874

76.697

85.134

92.797

Growth rate of assets Liabilities & Owners' Equity

* Net property & equipment for all years is calculated as net property & equipment from the prior year, plus capital expenditures in the same year, minus depreciation expense in the same year. Depreciation expense is included in reported operating expenses; it is not broken out separately. Note: 2012-2015 are projected data Total Debt

$23.242

$25.774

$27.599

$31.141

$37.172

$41.311

$45.516

$48.888

$51.078

Interest Bearing Debt

$23.242

$25.774

$27.599

$31.141

$37.172

$41.311

$45.516

$48.888

$51.078

Interest Bearing Debt/Total Assets

63%

63%

63%

62%

62%

61%

59%

57%

55%

Equity Multiplier

3.50

3.56

3.45

3.40

3.47

3.30

3.15

2.97

2.77

Debt/Equity

221%

226%

216%

210%

216%

201%

187%

170%

153%

1.29

1.43

1.69

2.16

2.15

2.42

2.47

2.52

2.59

Times Interest Earned

Pacific Grove Spice Company Exhibit 3 - Capital Budgeting Analysis of Television Program Opportunity Initial Investment Cash Flows Equipment

Year 0 -$1,440,000

Growth Rate of Sales Operating Cash Flows

Year 1

5.0% Year 2

5.0% Year 3

5.0% Year 4

5.0% Year 5

Sales Cost of Goods Sold at 58.5% of sales Gross Profit Margin

$8,100,000 4,738,500 3,361,500

$8,505,000 4,975,425 3,529,575

$8,930,250 5,224,196 3,706,054

$9,376,763 5,485,406 3,891,356

$9,845,601 5,759,676 4,085,924

Promotion Expense at 11% of sales General & Administrative Expense Depreciation Expense Incremental Operating Profit

891,000 760,000 288,000 1,422,500

935,550 798,000 288,000 1,508,025

982,328 837,900 288,000 1,597,826

1,031,444 879,795 288,000 1,692,118

1,083,016 923,785 288,000 1,791,123

Income Taxes at 27% Incremental Net Income

384,075 1,038,425

407,167 1,100,858

431,413 1,166,413

456,872 1,235,246

483,603 1,307,520

+ Depreciation Expense Incremental Operating Cash Flow

288,000 1,326,425

288,000 1,388,858

288,000 1,454,413

288,000 1,523,246

288,000 1,595,520

Yearly Net Working Capital Investment Additional A/R at 75 Days Sales Outstanding Additional Inventory at 4 Inventory Turns Additional A/P at 30 Days COGS Total NWC Investment

Year 1 $1,664,384 1,184,625 389,466 -2,459,543

Year 2 $83,219 59,231 19,473 -122,977

Year 3 $87,380 62,193 20,447 -129,126

Year 4 $91,749 65,302 21,469 -135,582

Year 5 $96,337 68,568 22,543 -142,361

Year 1

Year 2

Year 3

Year 4

Year 5 $2,989,590

-$1,133,118

$1,265,881

$1,325,287

$1,387,664

$4,442,748

Terminal Cash Flows Recovery of NWC Total Project Cash Flows Internal Rate of Return Net Present Value at 20% Net Present Value at 15% Net Present Value at 10%

-$1,440,000 41.28% $1,716,414 $2,405,498 $3,278,174

Pacific Grove Spice Company Exhibit 4 - High Country Seasonings Income Statement ($ in millions) Income Statement Net Sales Cost of Goods Sold Gross Profit Margin

06/30/08

06/30/09

06/30/10

06/30/11

$15.401 9.887 5.514

$15.919 10.284 5.635

$16.664 10.732 5.932

$17.564 11.329 6.235

R&D Expense SG&A Expense Earnings Before Interest & Taxes

0.000 4.359 1.155

0.000 4.553 1.082

0.000 4.816 1.116

0.000 5.041 1.194

Interest Expense Earnings Before Income Taxes

0.057 1.098

0.072 1.010

0.060 1.056

0.063 1.131

Income Taxes Net Income

0.297 0.801

0.273 0.737

0.285 0.771

0.306 0.825

Dividends Paid

0.288

0.254

0.422

0.401

Pacific Grove Spice Company Exhibit 5 - High Country Seasonings Balance Sheet ($ in millions) Assets

06/30/08

06/30/09

06/30/10

06/30/11

Cash Accounts Receivable Inventories Prepaid Expenses Total Current Assets

$0.585 3.165 2.060 0.231 6.041

$0.610 3.271 2.142 0.239 6.262

$0.639 3.424 2.236 0.250 6.549

$0.673 3.609 2.360 0.263 6.905

Net Property & Equipment * Other Long-Term Assets Total Assets

3.831 0.462 10.334

4.146 0.477 10.885

4.273 0.500 11.322

4.424 0.527 11.856

06/30/08

06/30/09

06/30/10

06/30/11

Bank Notes Payable Accounts Payable Current Portion of Long-Term Debt Accrued Expenses Total Current Liabilities

$0.791 0.813 0.000 0.262 1.866

$0.818 0.845 0.000 0.271 1.934

$0.856 0.882 0.000 0.283 2.021

$0.902 0.931 0.000 0.299 2.132

Long-Term Debt Total Liabilities

0.000 1.866

0.000 1.934

0.000 2.021

0.000 2.132

Common Stock Retained Earnings Total Shareholder Equity

4.584 3.884 8.468

4.584 4.367 8.951

4.584 4.716 9.300

4.584 5.140 9.724

Total Liabilities & Net Worth

10.334

10.885

11.322

11.856

Liabilities + Owners' Equity

* Net property & equipment for all years is calculated as net property & equipment from the prior year, plus capital expenditures in the same year, minus depreciation expense in the same year. Depreciation expense is included in reported operating expenses; it is not broken out separetely.

Pacific Grove Spice Company Exhibit 6 - Industry Information McCormick & Company* 2010 2011

ConAgra Foods** 2010 2011

Pacific Grove Spice Co. 2010 2011

Sales revenue (in millions) Net income (in millions) Earnings per share Closing stock price Price/earnings ratio

$3,336.8 $370.2 $2.79 $44.01 15.8

$3,440.5 $386.5 $2.92 $49.60 17.0

$12,014.9 $725.8 $1.63 $24.02 14.7

$12,303.1 $817.0 $1.90 $25.76 13.6

$68.0 $2.1 $1.76 $25.87 14.7

$80.9 $2.4 $2.04 $32.60 16.0

Total liabilities (in millions) Interest-bearing debt (in millions)

$1,957.0 $880.3

$1,947.3 $989.7

$6,809.1 $3,487.2

$6,700.2 $3,233.8

$35.5 $31.1

$42.4 $37.2

Book value of equity (in millions)

$1,462.7

$1,642.1

$4,928.9

$4,708.5

$14.8

$17.2

Shares outstanding (in millions) Market value of equity (in millions)

133.1 $5,857.7

132.4 $6,567.0

443.6 $10,655.3

429.7 $11,069.1

1.2 $30.1

1.2 $38.0

Equity beta coefficient

0.50

0.60

* McCormick's fiscal year-end is November 30. The 2011 data presents the most recent four quarters of income statement information and the May 31, 2011, balance sheet information. ** ConAgra's fiscal year-end is May 31. The 2011 data presents the full 2011 fiscal year.

Current market interest rates in July of 2011: Long-term U.S. Treasury Bonds

4.25%

Long-term AA Corporate Bonds

5.20%

Long-Term BBB Corporate Bonds

5.65%

Market Risk Premium, S&P 500 vs. Long-term Treasuries

7.00%

0.85

Prime Interest Rate

3.25%