Case study solution of Teuer furniture using Multiples approach...
Group 4 , Section B Name
Roll No.
Vishwas
342
Shorya Chaplot
344
Shubham Gupta
346
Tushar Johri
354
These spreadsheet exhibits relate to the case Teuer Furniture (B): Multiples Valuation, Case #KEL790. ©2014 by the Kellogg School of Management at Northwestern University. This case was prepared by Professor Mitchell A. Petersen. Teuer Furniture is a fictional company whose profile was created based on data from real industry leaders. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617783-7600 outside the United States or Canada) or e-mail
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ation, Case #KEL790.
se was prepared by le was created based on discussion. Cases are f effective or ineffective 800-545-7685 (or 617.edu. No part of this et, or transmitted in any wise—without the
Exhibit 1-A: Bassett Furniture Industries Inc (BSET) Income Statement
12/31/2012
12/31/2011
269.7
253.2
Cost of goods sold
128.4
125.6
Selling, general, and administrative
Revenue
134.8
122.0
Depreciation
0.0
0.0
R&D
0.0
0.0
-5.2
-54.8
Other expenses (income) Interest expenses (net)
-0.2
0.6
12.0
59.7
-14.7
4.4
26.7
55.3
Earnings before interest and taxes
11.7
60.3
Adjusted taxes (all equity firm)
-14.4
4.4
26.1
55.9
12/31/2012
12/31/2011
Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets Cash and equivalents
45.6
69.6
Accounts receivable
15.8
14.8
Inventory
57.9
45.1
Other current assets
13.3
10.7
Total current assets
132.5
140.2
Property, plant, and equipment
56.6
49.9
Goodwill and other intangibles
0.0
0.0
38.0
33.0
Other long-term assets Total long-term assets
94.7
83.0
227.2
223.2
Accounts payable
22.4
18.8
Accrued expenses
Total assets Liabilities
17.4
17.7
Notes payable
0.0
0.0
Current maturities of long-term debt
0.0
0.0
12.8
15.3
52.6
51.8
3.1
3.7
Other liabilities
14.3
15.3
Common equity
157.3
152.4
227.2
223.2
Other current liabilities Total current liabilities Long-term debt and capital leases
Total liabilities and shareholder's equity
Financial Data
Cash flow to assets
-2.2
Stock price
14.2
Common shares outstanding
10.9
Market value of equity
154.7
Enterprise value
112.2
Ratios and Summary Data Sales growth Gross profit margin
6.5%
7.6%
52.4%
50.4%
Net profit margin
9.9%
21.9%
AR/sales
5.8%
5.8%
Inventory/CGS
45.1%
35.9%
AP/CGS
17.5%
15.0%
Net investment
28.3
Multiples Asset price/Cash flow assets
NMF
Asset price/Adjusted net income
4.3x
Asset price/Sales
0.4x
Equity price/Net income
5.8x
12/31/2010
12/31/2009
12/31/2008
235.3
232.7
288.3
122.6
129.9
110.8
103.8
0.0
0.0
0.0
0.0
4.9
21.6
-0.8
2.0
-2.2
-24.5
-0.2
-1.8
-2.0
-22.7
-3.0
-22.5
-0.3
-1.7
-2.7
-20.9
12/31/2010
12/31/2009
11.1
23.2
31.6
34.6
41.8
33.4
7.0
13.3
91.5
104.5
46.3
50.6
15.1
14.9
44.5
46.1
105.8
111.7
197.3
216.2
24.9
14.7
17.4
17.2
0.0
0.0
9.5
4.4
10.1
7.0
61.8
43.3
4.3
32.0
24.9
30.7
106.3
110.3
197.3
216.2
1.1%
-19.3%
47.9%
44.2%
-0.8%
-9.8%
13.4%
14.9%
34.1%
25.7%
20.3%
11.3%
Firms Bassett Furniture Industries Inc (BSET) Ethan Allen Interiors Inc (ETH) Furniture Brands International Inc (FBN) Haverty Furniture Companies Inc (HVT) La-Z-Boy Incorporated (LZB) Restoration Hardware Holdings Inc (RN) Stanley Furniture Company (STLY) Tempur Sealy International Inc (TPX) Williams-Sonoma Inc (WSM) Teuer
Market Cap 154.671 573.12 59.6568 362.8975 801.3616 2735.5136 65.565 1879.953 4277.6421 328.185
Exhibit 1-B: Ethan Allen Interiors Inc (ETH) Income Statement
6/30/2012
6/30/2011
6/30/2010
6/30/2009
6/30/2008
729.4
679.0
590.1
674.3
980.0
Cost of goods sold
339.1
329.5
309.8
326.9
Selling, general, and administrative
322.0
296.7
262.6
394.5
18.6
20.8
29.4
25.6
R&D
0.0
0.0
0.0
0.0
Other expenses (income)
0.0
0.0
0.0
0.0
Interest expenses (net)
8.5
5.6
7.1
8.4
41.2
26.4
-18.8
-81.2
Revenue
Depreciation
Income before taxes Taxes
-8.5
-2.9
25.5
-28.5
49.7
29.3
-44.3
-52.7
Earnings before interest and taxes
49.7
31.9
-11.7
-72.8
Adjusted taxes (all equity firm)
-10.2
-3.5
15.9
-25.5
59.9
35.4
-27.7
-47.2
6/30/2012
6/30/2011
6/30/2010
6/30/2009
Cash and equivalents
88.7
91.4
84.9
53.0
Accounts receivable
14.9
15.0
17.1
13.1
155.7
141.7
134.0
156.5
Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets
Inventory Other current assets
23.4
20.4
23.6
29.2
282.8
268.5
259.7
251.7
Property, plant, and equipment
295.7
294.9
305.7
333.6
Goodwill and other intangibles
45.1
45.1
45.1
45.1
Other long-term assets
21.2
19.8
21.2
16.1
Total long-term assets
362.0
359.8
372.1
394.8
Total assets
644.8
628.3
631.8
646.5
Accounts payable
27.3
27.0
24.0
22.2
Accrued expenses
58.0
65.0
65.3
58.5
Notes payable
0.0
0.0
0.0
0.0
Current maturities of long-term debt
0.3
0.0
3.9
0.0
65.5
62.6
52.6
31.7
151.1
154.6
145.7
112.5
154.3
165.0
199.4
203.1
Total current assets
Liabilities
Other current liabilities Total current liabilities Long-term debt and capital leases Other liabilities
17.8
27.0
28.2
25.0
Common equity
321.7
281.7
258.5
305.9
644.8
628.3
631.7
646.5
Total liabilities and shareholder's equity
Financial Data Cash flow to assets
27.7
Stock price
19.9
Common shares outstanding
28.8
Market value of equity
573.1
Enterprise value
638.9
Ratios and Summary Data Sales growth
7.4%
15.1%
-12.5%
-31.2%
53.5%
51.5%
47.5%
51.5%
Net profit margin
6.8%
4.3%
-7.5%
-7.8%
AR/sales
2.0%
2.2%
2.9%
1.9%
45.9%
43.0%
43.3%
47.9%
AP/CGS
8.1%
8.2%
7.7%
6.8%
Net investment
32.1
Gross profit margin
Inventory/CGS
Multiples Asset price/Cash flow assets
23.0x
Asset price/Adjusted net income
10.7x
Asset price/Sales Equity price/Net income
0.9x 11.5x
Exhibit 1-C: Furniture Brands International Inc (FBN) Income Statement
12/29/2012
12/31/2011
1072.3
1107.7
Cost of goods sold
827.3
837.1
Selling, general, and administrative
252.8
270.9
18.9
21.9
0.0
0.0
16.6
20.8
5.7
3.6
-49.0
-46.6
-1.8
-2.8
-47.3
-43.8
Earnings before interest and taxes
-43.4
-43.0
Adjusted taxes (all equity firm)
-1.6
-2.6
-41.8
-40.4
12/29/2012
12/31/2011
11.9
25.4
Accounts receivable
125.7
108.0
Inventory
244.3
228.2
11.3
9.5
393.2
371.0
Property, plant, and equipment
103.4
115.8
Goodwill and other intangibles
76.1
77.5
Other long-term assets
45.7
50.2
Total long-term assets
225.2
243.5
Total assets
618.4
614.5
Accounts payable
113.6
85.6
Accrued expenses
58.7
53.6
Notes payable
0.0
0.0
Current maturities of long-term debt
0.0
0.0
Other current liabilities
0.0
0.0
172.3
139.2
Long-term debt and capital leases
105.0
77.0
Other liabilities
286.3
266.1
Common equity
54.8
132.3
618.4
614.5
Revenue
Depreciation R&D Other expenses (income) Interest expenses (net) Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets Cash and equivalents
Other current assets Total current assets
Liabilities
Total current liabilities
Total liabilities and shareholder's equity
Financial Data Cash flow to assets Stock price
-5.8 7.4
Common shares outstanding Market value of equity Enterprise value
8.0 59.7 152.8
Ratios and Summary Data Sales growth
-3.2%
-4.5%
Gross profit margin
22.8%
24.4%
Net profit margin
-4.4%
-3.9%
AR/sales
11.7%
9.7%
Inventory/CGS
29.5%
27.3%
AP/CGS
13.7%
10.2%
Net investment
(36.0)
Multiples Asset Price/Cash flow assets
NMF
Asset price/Adjusted net income
NMF
Asset Price/Sales
0.1x
Equity Price/Net income
NMF
12/31/2010
12/31/2009
12/31/2008
1159.9
1224.4
1744.5
879.2
986.2
285.2
322.8
23.9
20.7
0.0
0.0
16.5
65.8
3.2
5.3
-47.9
-176.5
-8.9
-67.8
-39.0
-108.7
-44.8
-171.1
-8.3
-65.7
-36.4
-105.4
12/31/2010
12/31/2009
52.0
83.9
114.5
184.5
249.7
226.1
11.2
9.3
427.4
503.7
124.9
134.4
86.5
87.6
37.6
32.4
249.0
254.4
676.4
758.1
79.9
83.8
61.2
75.9
0.0
0.0
0.0
17.0
0.0
0.0
141.1
176.8
77.0
78.0
198.8
240.6
259.6
262.8
676.4
758.1
-5.3%
-29.8%
24.2%
19.5%
-3.4%
-8.9%
9.9%
15.1%
28.4%
22.9%
9.1%
8.5%
Exhibit 1-D: Haverty Furniture Companies Inc (HVT) Income Statement
12/31/2012
12/31/2011
670.4
621.4
Cost of goods sold
318.0
300.2
Selling, general, and administrative
309.6
297.8
19.4
18.2
0.0
0.0
-0.8
-0.2
0.6
0.7
Revenue
Depreciation R&D Other expenses (income) Interest expenses (net) Income before taxes Taxes Net Income
23.5
4.6
8.6
-10.9
14.9
15.5
Adjusted income (all equity firm) Earnings before interest and taxes
24.1
5.3
Adjusted taxes (all equity firm)
8.8
-12.6
15.3
17.9
12/31/2012
12/31/2011
53.6
49.6
9.7
11.5
Inventory
96.9
93.7
Other current assets
19.7
22.9
179.9
177.7
193.1
179.3
Net income (all equity firm)
Balance Sheet Assets Cash and equivalents Accounts receivable
Total current assets Property, plant, and equipment Goodwill and other intangibles
0.0
0.0
29.1
28.1
Total long-term assets
222.2
207.4
Total assets
402.1
385.1
Accounts payable
28.2
21.2
Accrued expenses
11.8
11.0
0.0
0.0
Other long-term assets
Liabilities
Notes payable Current maturities of long-term debt Other current liabilities Total current liabilities Long-term debt and capital leases
0.9
0.8
49.0
39.4
89.9
72.4
18.5
12.3
Other liabilities
34.3
37.8
Common equity
259.4
262.7
402.1
385.1
Total liabilities and shareholder's equity
Financial Data Cash flow to assets
16.2
Stock price
16.3
Common shares outstanding
22.3
Market value of equity
362.9
Enterprise value
328.7
Ratios and Summary Data Sales growth Gross profit margin
7.9%
0.2%
52.6%
51.7%
Net profit margin
2.2%
2.5%
AR/sales
1.4%
1.8%
30.5%
31.2%
AP/CGS
8.9%
7.1%
Net investment
(0.9)
Inventory/CGS
Multiples Asset Price/Cash flow assets
20.3x
Asset price/Adjusted net income
21.5x
Asset Price/Sales Equity Price/Net income
0.5x 24.3x
12/31/2010
12/31/2009
12/31/2008
620.3
588.3
691.1
301.6
282.8
295.4
292.2
16.9
19.3
0.0
0.0
-3.0
-1.4
0.8
0.8
8.7
-5.4
0.2
-1.2
8.4
-4.2
9.5
-4.6
0.3
-1.0
9.2
-3.6
12/31/2010
12/31/2009
58.1
44.5
13.8
15.3
91.9
93.3
13.2
15.2
176.9
168.3
175.5
176.4
0.0
0.0
17.7
16.2
193.2
192.6
370.2
360.9
18.1
19.1
31.4
30.2
0.0
0.0
0.5
0.4
20.6
21.8
70.6
71.4
8.6
6.8
37.9
38.1
253.2
244.6
370.2
360.9
5.5%
-14.9%
51.4%
51.9%
1.4%
-0.7%
2.2%
2.6%
30.5%
33.0%
6.0%
6.8%
Exhibit 1-E: La-Z-Boy Incorporated (LZB) Income Statement
4/28/2012
4/30/2011
1231.7
1187.1
Cost of goods sold
851.8
832.8
Selling, general, and administrative
306.7
299.7
23.5
24.3
0.0
0.0
-18.6
2.1
1.4
2.3
Revenue
Depreciation R&D Other expenses (income) Interest expenses (net) Income before taxes
66.9
26.0
-22.0
8.6
88.9
17.4
Earnings before interest and taxes
68.2
28.3
Adjusted taxes (all equity firm)
-22.5
9.4
90.7
18.9
4/28/2012
4/30/2011
Cash and equivalents
152.4
115.3
Accounts receivable
167.2
161.3
Inventory
143.8
138.4
36.6
17.2
500.0
432.2
114.4
120.6
Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets
Other current assets Total current assets Property, plant, and equipment Goodwill and other intangibles
3.0
3.1
68.3
37.5
Total long-term assets
185.7
161.2
Total assets
685.7
593.5
Accounts payable
56.6
49.5
Accrued expenses
44.9
37.4
0.0
0.0
Other long-term assets
Liabilities
Notes payable Current maturities of long-term debt Other current liabilities Total current liabilities Long-term debt and capital leases
1.8
5.1
46.4
40.0
149.8
132.1
7.9
29.9
Other liabilities
86.1
70.1
Common equity
441.9
361.3
685.7
593.4
Total liabilities and shareholder's equity
Financial Data Cash flow to assets
72.5
Stock price
15.3
Common shares outstanding
52.2
Market value of equity
801.4
Enterprise value
658.8
Ratios and Summary Data Sales growth
3.8%
0.7%
30.8%
29.8%
7.2%
1.5%
AR/sales
13.6%
13.6%
Inventory/CGS
16.9%
16.6%
AP/CGS
6.6%
5.9%
Net investment
18.2
Gross profit margin Net profit margin
Multiples Asset price/Cash flow assets
9.1x
Asset price/Adjusted net income
7.3x
Asset price/Sales
0.5x
Equity price/Net income
9.0x
4/24/2010
4/25/2009
4/25/2008
1179.2
1226.7
1450.9
804.5
887.9
307.5
408.7
25.2
24.1
0.0
0.0
-5.8
-2.6
3.0
5.6
44.7
-97.0
12.7
24.3
32.1
-121.3
47.7
-91.4
13.5
22.9
34.2
-114.4
4/24/2010
4/25/2009
108.4
36.1
165.0
147.9
132.5
140.2
21.2
23.7
427.1
347.8
138.9
150.2
3.1
3.1
38.8
51.4
180.7
204.8
607.8
552.5
54.7
41.6
51.7
75.7
0.0
0.0
1.1
8.7
39.8
0.0
147.3
126.0
46.9
52.1
73.7
68.6
339.8
305.7
607.8
552.5
-3.9%
-15.5%
31.8%
27.6%
2.7%
-9.9%
14.0%
12.1%
16.5%
15.8%
6.8%
4.7%
Exhibit 1-F: Restoration Hardware Holdings Inc (RN) Income Statement
2/2/2013
1/28/2012
1193.0
958.1
Cost of goods sold
756.6
601.7
Selling, general, and administrative
390.4
327.9
Depreciation
0.0
0.0
R&D
0.0
0.0
115.1
1.6
5.8
5.1
-74.8
21.7
-62.0
1.1
-12.8
20.6
Earnings before interest and taxes
-69.0
26.8
Adjusted taxes (all equity firm)
-57.2
1.4
-11.8
25.5
2/2/2013
1/28/2012
Revenue
Other expenses (income) Interest expenses (net) Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets Cash and equivalents
8.4
8.5
17.0
11.8
Inventory
353.3
245.9
Other current assets
114.0
56.7
Accounts receivable
Total current assets
492.8
322.9
Property, plant, and equipment
111.4
83.6
Goodwill and other intangibles
172.7
175.1
12.7
5.3
Total long-term assets
296.9
263.9
Total assets
789.6
586.8
Accounts payable
81.6
47.4
Accrued expenses
Other long-term assets
Liabilities
63.7
58.3
Notes payable
0.0
0.0
Current maturities of long-term debt
2.9
4.1
71.1
52.2
Other current liabilities Total current liabilities
219.4
162.0
Long-term debt and capital leases
84.1
122.3
Other liabilities
34.5
52.1
Common equity
451.6
250.5
789.6
586.8
Total liabilities and shareholder's equity
Financial Data
Cash flow to assets
-173.8
Stock price
70.3
Common shares outstanding
38.9
Market value of equity
2735.5
Enterprise value
2814.2
Ratios and Summary Data Sales growth
24.5%
24.0%
Gross profit margin (revenue-CGS)/Revenue
36.6%
37.2%
net profit margin (net profit/revenue)
-1.1%
2.2%
1.4%
1.2%
Inventory/CGS
46.7%
40.9%
AP/CGS
10.8%
7.9%
Net investment
161.9
AR/sales
Multiples Asset Price/Cash flow assets
NMF
Asset price/Adjusted net income
NMF
Asset Price/Sales
2.4x
Equity Price/Net income
NMF
1/29/2011
1/30/2010
1/30/2010
772.8
625.7
288.3
499.0
423.1
274.8
238.9
0.0
0.0
0.0
0.0
2.1
-10.5
3.2
3.2
-6.4
-29.0
0.7
-0.4
-7.1
-28.6
-3.2
-25.8
0.4
-0.4
-3.6
-25.5
1/29/2011
1/30/2010
13.4
13.2
4.5
4.5
206.4
149.0
20.4
18.8
244.6
185.5
76.5
62.2
178.5
182.3
2.5
1.5
257.4
246.0
502.0
431.5
51.4
47.0
39.3
37.8
0.0
0.0
2.4
1.9
36.6
30.5
129.7
117.2
111.8
57.4
44.6
35.8
215.8
221.1
502.0
431.5
23.5%
117.0%
35.4%
32.4%
-0.9%
-4.6%
0.6%
0.7%
41.4%
35.2%
10.3%
11.1%
Exhibit 1-G: Stanley Furniture Company (STLY) Income Statement
12/31/2012
12/31/2011
98.6
104.6
Cost of goods sold
85.9
92.2
Selling, general, and administrative
16.5
17.6
Depreciation
1.8
1.6
R&D
0.0
0.0
-39.0
-4.1
2.3
2.3
31.0
-5.0
0.7
0.0
30.4
-5.0
Earnings before interest and taxes
33.4
-2.7
Adjusted taxes (all equity firm)
0.7
0.0
32.7
-2.7
12/31/2012
12/31/2011
Cash and equivalents
35.9
15.7
Accounts receivable
10.0
10.3
Inventory
35.1
31.1
6.1
5.5
87.2
62.5
Property, plant, and equipment
19.9
17.6
Goodwill and other intangibles
0.0
0.0
Other long-term assets
3.7
0.5
23.6
18.1
110.7
80.6
Accounts payable
8.7
10.0
Accrued expenses
6.2
6.5
Notes payable
0.0
0.0
Current maturities of long-term debt
0.0
0.0
Other current liabilities
0.0
0.0
14.9
16.5
0.0
0.0
Revenue
Other expenses (income) Interest expenses (net) Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets
Other current assets Total current assets
Total long-term assets Total assets Liabilities
Total current liabilities Long-term debt and capital leases Other liabilities
8.6
7.1
Common equity
87.2
57.0
110.7
80.6
Total liabilities and shareholder's equity
Financial Data Cash flow to assets Stock price
22.7 4.5
Common shares outstanding
14.6
Market value of equity
65.6
Enterprise value
29.6
Ratios and Summary Data Sales growth
-5.8%
-23.6%
Gross profit margin
12.9%
11.9%
Net profit margin
30.8%
-4.8%
AR/sales
10.2%
9.8%
Inventory/CGS
40.8%
33.7%
AP/CGS
10.1%
10.8%
Net investment
10.0
Multiples Asset price/Cash flow assets
1.3x
Asset price/Adjusted net income
0.9x
Asset price/Sales
0.3x
Equity price/Net income
2.2x
12/31/2010
12/31/2009
12/31/2008
137.0
160.5
226.5
153.1
158.7
11.2
20.7
9.4
6.0
0.0
0.0
7.5
-9.5
3.5
3.7
-47.8
-19.1
-4.0
-7.4
-43.8
-11.7
-44.2
-15.4
-3.7
-5.9
-40.5
-9.5
12/31/2010
12/31/2009
25.5
41.8
13.8
22.2
25.7
37.2
6.9
8.3
72.0
109.6
16.0
31.4
0.0
9.1
0.4
0.5
16.4
40.9
88.4
150.5
9.1
11.6
7.7
9.2
0.0
0.0
2.4
1.4
0.0
0.0
19.2
22.3
0.0
26.4
7.4
8.9
61.8
92.9
88.4
150.4
-14.6%
-29.2%
-11.8%
1.1%
-32.0%
-7.3%
10.1%
13.8%
16.8%
23.5%
6.0%
7.3%
Exhibit 1-H: Tempur Sealy International Inc (TPX) Income Statement
12/31/2012
12/31/2011
1402.9
1417.9
Cost of goods sold
688.3
674.8
Selling, general, and administrative
408.7
341.7
Depreciation
42.0
51.0
R&D
15.6
9.9
0.3
0.2
18.8
11.9
229.2
328.4
122.4
108.8
106.8
219.6
Earnings before interest and taxes
248.0
340.3
Adjusted taxes (all equity firm)
132.4
112.7
115.6
227.6
12/31/2012
12/31/2011
Cash and equivalents
554.3
111.4
Accounts receivable
129.8
142.4
Inventory
93.0
91.2
Other current assets
56.5
34.8
833.6
379.8
Property, plant, and equipment
186.0
160.5
Goodwill and other intangibles
279.2
279.8
26.7
18.1
491.9
458.4
1325.5
838.1
Accounts payable
85.8
69.9
Accrued expenses
84.3
52.6
0.0
0.0
Revenue
Other expenses (income) Interest expenses (net) Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets
Total current assets
Other long-term assets Total long-term assets Total assets Liabilities
Notes payable Current maturities of long-term debt
0.0
0.0
16.1
45.1
186.2
167.6
1025.0
585.0
Other liabilities
53.6
54.8
Common equity
60.7
30.8
1325.5
838.2
Other current liabilities Total current liabilities Long-term debt and capital leases
Total liabilities and shareholder's equity
Financial Data Cash flow to assets
88.5
Stock price
31.5
Common shares outstanding
59.7
Market value of equity
1880.0
Enterprise value
2350.7
Ratios and Summary Data Sales growth
-1.1%
28.3%
Gross profit margin
50.9%
52.4%
Net profit margin
7.6%
15.5%
AR/sales
9.3%
10.0%
Inventory/CGS
13.5%
13.5%
AP/CGS
12.5%
10.4%
Net investment
27.1
Multiples Asset price/Cash flow assets
26.6x
Asset price/Adjusted net income
20.3x
Asset price/Sales Equity price/Net income
1.7x 17.6x
12/31/2010
12/31/2009
12/31/2008
1105.4
831.2
927.8
550.0
437.5
258.1
208.6
44.0
40.2
7.4
0.0
0.5
-0.4
14.5
17.3
230.9
128.0
73.7
43.0
157.2
85.0
245.4
145.4
78.4
48.9
167.0
96.5
12/31/2010
12/31/2009
53.6
14.0
115.6
105.6
69.9
57.7
32.4
31.7
271.5
209.0
159.8
172.5
281.2
258.1
3.5
3.8
444.5
434.4
716.0
643.4
48.3
47.8
60.3
81.5
0.0
0.0
0.0
0.0
37.7
7.3
146.2
136.5
407.0
297.5
36.7
37.1
126.0
172.3
716.0
643.4
33.0%
-10.4%
50.2%
47.4%
14.2%
10.2%
10.5%
12.7%
12.7%
13.2%
8.8%
10.9%
Exhibit 1-I: Williams-Sonoma Inc (WSM) Income Statement
2/3/2013
1/29/2012
4042.9
3720.9
Cost of goods sold
2450.4
2261.0
Selling, general, and administrative
1035.9
940.1
134.5
130.6
0.0
0.0
Other expenses (income)
13.0
7.5
Interest expenses (net)
-0.8
-0.1
410.0
381.8
153.2
144.9
256.7
236.9
Earnings before interest and taxes
409.2
381.7
Adjusted taxes (all equity firm)
152.9
144.9
256.2
236.9
2/3/2013
1/29/2012
424.6
502.8
63.0
46.0
Inventory
640.0
553.5
Other current assets
189.2
174.2
1316.8
1276.4
812.0
734.7
Revenue
Depreciation R&D
Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets Cash and equivalents Accounts receivable
Total current assets Property, plant, and equipment Goodwill and other intangibles
0.0
0.0
58.9
49.8
870.9
784.5
2187.7
2060.8
Accounts payable
259.2
218.3
Accrued expenses
120.6
111.8
0.0
0.0
Other long-term assets Total long-term assets Total assets Liabilities
Notes payable Current maturities of long-term debt Other current liabilities Total current liabilities Long-term debt and capital leases
1.7
1.8
275.6
239.9
657.1
571.8
3.8
5.5
Other liabilities
217.7
228.3
Common equity
1309.1
1255.3
2187.7
2060.8
Total liabilities and shareholder's equity
Financial Data Cash flow to assets Stock price
126.0 43.8
Common shares outstanding
97.7
Market value of equity
4277.6
Enterprise value
3858.6
Ratios and Summary Data Sales growth Gross profit margin
8.7%
6.2%
39.4%
39.2%
Net profit margin
6.4%
6.4%
AR/sales
1.6%
1.2%
Inventory/CGS
26.1%
24.5%
AP/CGS
10.6%
9.7%
Net investment
130.3
Multiples Asset price/Cash flow assets
30.6x
Asset price/Adjusted net income
15.1x
Asset price/Sales Equity price/Net income
1.0x 16.7x
1/30/2011
1/31/2010
1/31/2009
3504.2
3102.7
3364.7
2130.3
1999.5
888.3
797.1
144.6
151.8
0.0
0.0
17.5
32.7
0.4
1.4
323.1
120.3
122.8
42.8
200.2
77.5
323.4
121.7
123.0
43.3
200.4
78.3
1/30/2011
1/31/2010
628.4
513.9
41.6
44.2
513.4
466.1
164.3
155.9
1347.6
1180.2
730.6
829.0
0.0
0.0
53.6
69.9
784.2
899.0
2131.7
2079.2
228.0
188.2
122.4
107.7
0.0
0.0
1.5
1.6
259.8
265.9
611.7
563.5
7.1
8.7
254.1
295.4
1258.9
1211.6
2131.7
2079.2
12.9%
-7.8%
39.2%
35.6%
5.7%
2.5%
1.2%
1.4%
24.1%
23.3%
10.7%
9.4%
Exhibit 2: Teuer Furniture Income Statement
12/31/2012
12/31/2011
148.2
134.1
Cost of goods sold
62.0
55.5
Selling, general, and administrative
Revenue
41.3
36.7
Depreciation
1.5
1.8
R&D
0.0
0.0
Other expenses (income)
7.4
6.7
Interest expenses (net)
0.0
0.0
36.1
33.4
14.4
13.4
21.7
20.0
Earnings before interest and taxes
36.1
33.4
Adjusted taxes (all equity firm)
14.4
13.4
21.7
20.0
12/31/2012
12/31/2011
Income before taxes Taxes Net Income Adjusted income (all equity firm)
Net income (all equity firm)
Balance Sheet Assets
0.0
0.0
Accounts receivable
Cash and equivalents
48.2
42.4
Inventory
33.3
29.2
0.0
0.0
Other current assets Total current assets
81.5
71.6
Property, plant, and equipment
3.9
3.1
Goodwill and other intangibles
0.0
0.0
Other long-term assets
0.0
0.0
Total long-term assets
3.9
3.1
85.5
74.8
Accounts payable
11.4
10.0
Accrued expenses
1.7
1.5
Notes payable
0.0
0.0
Current maturities of long-term debt
0.0
0.0
Other current liabilities
0.0
0.0
Total assets Liabilities
Total current liabilities
13.0
11.5
Long-term debt and capital leases
0.0
0.0
Other liabilities
0.0
0.0
Common equity
72.4
63.3
85.5
74.8
Total liabilities and shareholder's equity
Financial Data
Cash flow to assets
12.5
Stock price Common shares outstanding
9.9
Market value of equity
0.0
Enterprise value
0.0
Ratios and Summary Data Sales growth
10.5%
20.3%
Gross profit margin
58.2%
58.6%
Net profit margin
14.6%
14.9%
AR/sales
32.5%
31.6%
Inventory/CGS
53.8%
52.7%
AP/CGS
18.3%
18.0%
Net investment
9.1
Multiples Asset Price/Cash flow assets
0.0x
Asset price/Adjusted net income
0.0x
Asset Price/Sales
0.0x
Equity Price/Net income
0.0x
12/31/2010
12/31/2009
12/31/2008
111.5
90.7
79.2
49.1
47.3
32.5
29.6
2.0
2.2
0.0
0.0
5.6
5.4
0.0
0.0
22.2
6.2
8.9
0.5
13.3
5.6
22.2
6.2
8.9
0.5
13.3
5.6
12/31/2010
12/31/2009
0.0
0.0
36.6
29.1
26.8
24.9
0.0
0.0
63.4
53.9
3.8
5.1
0.0
0.0
0.0
0.0
3.8
5.1
67.3
59.0
9.1
8.3
1.4
1.2
0.0
0.0
0.0
0.0
0.0
0.0
10.5
9.5
0.0
0.0
0.0
0.0
56.8
49.6
67.3
59.0
22.9%
14.5%
56.0%
47.8%
12.0%
6.2%
32.9%
32.0%
54.6%
52.6%
18.6%
17.5%
Exhibit: Comparable Firm Characteristics Firm Characteristic
BSET
ETH
FBN
HVT
LZB
RN
STLY
TPX
WSM
Teuer
Business- Manufacturing Geographical Presence
Yes USA
Yes International
Yes International
No NA
Yes USA, Canada
No USA, Canada
Yes USA
Yes International
No International
No USA
154.67
573.12
59.66
362.90
801.36
2735.51
65.57
1879.95
4277.64
307.00
Market Cap
Based on the above parameters, HVT, RN and WSM have been chosen.
Exhibit: Multiples of Comparable Firms Multiples
BSET
ETH
FBN
HVT
LZB
RN
STLY
TPX
WSM
Mean
Median
High
Low
Asset price/Cash flow assets
20.26
NMF
30.63
25.44
25.44
30.63
20.26
Asset price/Adjusted net income Asset price/Sales
21.47 0.49
NMF 2.36
15.06 0.95
18.27 1.27
18.27 0.95
21.47 2.36
15.06 0.49
318.24 395.49 187.92
Proposed EV 318.24 383.12 395.49 464.94 141.46 349.62
253.37 326.03 72.68
300.55
285.06
217.36
Teuer Furniture CFA Adjusted Net Income Sales Net Income Net Debt
12.51 21.65 148.22 21.65 13.05
Average Equity
Equity Value : 301 ±10% 10% is taken based on the Industry standards
399.23
301
