Transcript Visible Interactive Transaction

Centex Valuation
Summer 2002
Scott Meadow
University of Chicago
Scott Meadow
1
Pro Forma Income Statement Projections
June 1985
July
Total Revenue
-Cost of Service
$
$
271,800
197,500
$
$
Difference
310,500 =$12K
216,600
Management Fee
- Operating Expenses
$
$
74,300
191,600
$
$
93,900
228,800
Earnings before Interest
and Taxes
$
(117,300) $
(134,900)
August
$
$
Difference
372,800 =$11K
264,000
$
$
108,800
323,800
$ (215,000)
Pro Forms Balance Sheet Projections
Current Assets
$
517,800
$
636,700
$1,311,600
Total Assets
$
766,700
$
920,100
$1,617,000
Current Liabilities
Total Liabilities
Total Capital
$
$
$
516,700 $
691,200 $
(75,500) $
799,300
949,300
(29,200)
$ 983,600
$1,133,600
$ 483,400
NWC
Ch. NWC / Ch. Sales
$
1,100 $
$
(162,600)
(4)
Scott Meadow
$
$
328,000
8
2
Pro Forma Income Statement Projections
September
October
November
December
Total Revenue
-Cost of Service
$
$
474,400 $
335,700 $
623,500 $
441,600 $
793,300 $
559,200 $
959,600
674,100
Management Fee
- Operating Expenses
$
$
138,700 $
325,800 $
181,900 $
384,000 $
234,100 $
460,200 $
285,500
433,300
Earnings before Interest
and Taxes
$
(187,100) $ (202,100) $
(226,100) $
(147,800)
Pro Forms Balance Sheet Projections
Current Assets
$ 1,338,100 $ 1,302,400 $
1,364,200 $
1,494,900
Total Assets
$ 1,660,700 $ 1,683,300 $
1,767,800 $
1,924,300
Current Liabilities
Total Liabilities
Total Capital
$ 1,146,800 $ 1,355,300 $
$ 1,296,800 $ 1,505,300 $
$
363,900 $ 178,000 $
1,666,900 $
1,816,900 $
(49,100) $
1,971,400
2,121,400
(197,100)
NWC
Ch. NWC / Ch. Sales
$
$
(302,700) $
(1) $
(476,500)
(1)
Scott Meadow
191,300 $
(1) $
(52,900) $
(2) $
3
July
June
Current Assets
$ 636.70 - $ 517.80 = $ (118.90)
Current Liabilities $ 799.30 - $ 516.70 = $ 282.60
Change in NWC
Change in Sales
Scott Meadow
$ 162.60 - $ (1.10) = $ 163.70
= 423%
$ 310.50 - $ 271.80 = $ 38.70
4
Pro Forma Income Statement Projections
Tax Rate
Assume NWC/Sales
TV growth
Risk Free Rate
Discount Rate
Hurdle Rate
40.00%
-20%
5%
12%
19%
50%
1985
1986
1987
1988
Total Revenue
-Cost of Service
$ 3,805,900.00 $ 23,782,711.00 $ 32,582,687.00 $ 34,211,821.35
$ (2,688,700.00) $ (16,801,433.32) $ (23,018,227.10) $ (24,169,138.46)
Gross Margin
$ 1,117,200.00
- Operating Expenses
Earnings before Interest
and Taxes
Scott Meadow
$
6,981,277.68
$
9,564,459.90
$ 10,042,682.89
$ (2,347,500.00) $ (6,000,000.00) $ (6,000,000.00) $ (6,300,000.00)
$ (1,230,300.00) $
981,277.68
$
3,564,459.90
$
3,742,682.89
5
Earnings before Interest
and Taxes
Taxes
Increase in NWC
$ (1,230,300.00) $
$
$
$
761,180.00 $
981,277.68
3,995,362.20
$ 3,564,459.90 $ 3,742,682.89
$ (1,326,175.03) $ (1,497,073.16)
$ 1,759,995.20 $
325,826.87
FCF
TV
FCF+TV
$
(469,120.00) $
4,976,639.88
$
3,998,280.06
$
(469,120.00) $
4,976,639.88
$
3,998,280.06
Tax loss carryforward
$ (1,230,300.00) $
Value (12% Discount Rate)
Value (19% Discount Rate)
Value (50% Discount Rate)
$
$
$
Scott Meadow
$ 2,571,436.60
$ 18,750,058.57
$ 21,321,495.18
(249,022.32)
19,695,752
15,937,400
7,295,422
6
Angel Investors Average Cost
$
$
Total Investment = $
Scott Meadow
350,000
100,000
450,000
/
/
$ 2.25 Share
$ 0.45 Warrant
Total Shares
Total Investment
=
Total Shares
$ 450,000
377,778
= 155,556
= 222,222
= 377,778
=
$ 1.19
Theoretical
Average
Share Price
7
Equity Value/Share
Dollars Invested
Percentage Ownership
Valuation Post-Money
$1mm / 0.54
Valuation Pre-Money
Centex
0.45/Share
$1,000,000
0.54%
$1,850,000
$ 850,000
On Exposure
Equity Invested
$1,000,000
Debt Obligation
$1,000,000
Total Exposure
$2,000,000
Percentage Ownership 54%
Valuation Post-Money
2.0 / 0.54 = $3,700,000
Valuation Pre-Money
$3.7mm - $2.0mm=$1,700,000
Scott Meadow
8
Equity Value/Share
Dollars Invested
Percentage Ownership
Valuation Post-Money
$1.5 mm / 0.54
Valuation Pre-Money
Centex
0.67/Share
$1,500,000
0.54%
$2,777,000
$1,277,000
On Exposure
Equity Invested
$1,500,000
Debt Obligation
$1,500,000
Debt Conversion to Equity
$ 350,000
Total Exposure
$3,350,000
Percentage Ownership 59%
Valuation Post-Money
3.350 / 0.59 = $5,662,000
Valuation Pre-Money
$5.662mm - $3.350 = $2,312,00
Scott Meadow
9