Roberts Manufacturing Company

Historical and Estimated 2018 Financials

2015 2016 2017 2018

P&L
Net Sales 79,383 85,734 92,593 100,000
Cost of Goods Sold 35,722 38,580 41,667 45,000
Gross Margin 43,661 47,154 50,926 55,000
SG&A 25,403 27,435 29,630 32,000
R&D 6,351 6,859 7,407 8,000
Operating Income 11,907 12,860 13,889 15,000
Interest (Income) Expense 600 600 600 600
Other (Income) Expense 5 7 6 5
Income Before Income Taxes 11,302 12,253 13,283 14,395
Federal Income Taxes 3,843 4,166 4,516 4,894
Net Income 7,460 8,087 8,767 9,501

Balance Sheet
Cash 25 2,404 4,400 7,944
Receivables 15,877 17,147 18,545 20,000
Inventories 14,289 15,432 16,667 18,000
Other 200 800 975 900
Current Assets 30,391 35,783 40,587 46,844
Net Fixed Assets 15,877 17,147 18,750 20,000
Net Goodwill and Intangibles 14,000 13,000 12,000 11,000
Other Non Current Assets 200 210 428 205
Total Assets 60,467 66,140 71,765 78,049

AccountsPayable 3,572 3,858 4,167 4,500

Notes Payable, Bank - - - -
Accrued Expenses & Taxes 4,000 4,500 4,750 5,000
Current Liabilities 7,572 8,358 8,917 9,500
Long Term Debt 10,000 10,000 10,000 10,000
Other 3,000 3,100 2,900 3,300
Stockholders Equity 39,895 44,682 49,949 55,249
Total Liabilities and Equity 60,467 66,140 71,765 78,049

Other Information:
Stock Price 9.22 9.78 10.00 10.59
Shares Outstanding (in millions) 16.7 16.8 16.9 17.0
Market Value of Equity 153,974 164,304 169,000 180,030
Interest rate 6%
Income Tax Rate 34%
Dividends 3,000 3,300 3,500 4,200
Capital Expenditures 3,000 4,200 4,800 5,000
D&A 2,800 2,930 3,197 3,750
Employees 411 450 460 490
Other Information:
Comparable Companies are trading in the following ranges (trailing 12 months):
LOW HIGH
Sales 1.3 2.0
Earnings (P/E) 16.0 20.0
EBITDA 8.0 10.0
PEG 1.3 2.0

Cost of Capital(WACC) 12%

© J.F.Alexander 2003
 Roberts Manufacturing Company
Historical and Estimated 2018 Financials
2015 2016 2017 2018 2015 2016 2017 2018 CAGR
P&L
Net Sales $79,383 $85,734 $92,593 $100,000 100% 100% 100% 100% 8.0%
Cost of Goods Sold 35,722 38,580 41,667 45,000 45% 45% 45% 45% 8.0%
Gross Margin 43,661 47,154 50,926 55,000 55% 55% 55% 55% 8.0%
SG&A 25,403 27,435 29,630 32,000 32% 32% 32% 32% 8.0%
R&D 6,351 6,859 7,407 8,000 8% 8% 8% 8% 8.0%
Operating Income 11,907 12,860 13,889 15,000 15% 15% 15% 15% 8.0%
Interest (Income) Expense 600 600 600 600 1% 1% 1% 1% 0.0%
Other (Income) Expense 5 7 6 5 0% 0% 0% 0% 0.0%
Income Before Income Taxes 11,302 12,253 13,283 14,395 14% 14% 14% 14% 8.4%
Federal Income Taxes 3,843 4,166 4,516 4,894 5% 5% 5% 5% 8.4%
Net Income 7,460 8,087 8,767 9,501 9% 9% 9% 10% 8.4%
EPS 0.45 0.48 0.52 0.56

EBIAT 7,859 8,488 9,167 9,900

Balance Sheet
Cash 25 2,404 4,400 7,944 0% 3% 5% 8%
Receivables 15,877 17,147 18,545 20,000 20% 20% 20% 20%
Inventories 14,289 15,432 16,667 18,000 18% 18% 18% 18%
Other 200 800 975 900 0% 1% 1% 1%
Current Assets 30,391 35,783 40,587 46,844 38% 42% 44% 47%
Net Fixed Assets 15,877 17,147 18,750 20,000 20% 20% 20% 20%
Net Goodwill and Intangibles 14,000 13,000 12,000 11,000 18% 15% 13% 11%
Other Non Current Assets 200 210 428 205 0% 0% 0% 0%
Total Assets 60,467 66,140 71,765 78,049 76% 77% 78% 78%

AccountsPayable 3,572 3,858 4,167 4,500 5% 5% 4% 5%

Notes Payable, Bank - - - - 0% 0% 0% 0%
Accrued Expenses & Taxes 4,000 4,500 4,750 5,000 5% 5% 5% 5%
Current Liabilities 7,572 8,358 8,917 9,500 10% 10% 10% 10%
Long Term Debt 10,000 10,000 10,000 10,000 13% 12% 11% 10%
Other 3,000 3,100 2,900 3,300 4% 4% 3% 3%
Stockholders Equity 39,895 44,682 49,949 55,249 50% 52% 54% 55%
Total Liabilities and Equity 60,467 66,140 71,765 78,049 76% 77% 78% 78%
Operating Capital 22,793 25,021 27,270 29,400
Invested Capital 49,895 54,682 59,949 65,249
Market Value of Equity 153,974 164,304 169,000 180,030
Cash Flow
Net Income 7,460 8,087 8,767 9,501 9% 9% 9% 10%
D&A 2,800 2,930 3,197 3,750 4% 3% 3% 4%
Capital Expenditures -3,000 -4,200 -4,800 -5,000 -4% -5% -5% -5%
(Inc) Decrease in OC -2,228 -2,249 -2,130 0% -3% -2% -2%
FCF 7,260 4,589 4,914 6,121 9% 5% 5% 6%
Employees 411 450 460 490
Returns/Ratios:
DSO 73.0 73.0 73.1 73.0
Inv Turns 2.5 2.5 2.5 2.5
DSI 146.0 146.0 146.0 146.0
FA T/o 5.0 5.0 4.9 5.0
Asset Turnover 1.3 1.3 1.3 1.3

ROA 12.3% 12.2% 12.2% 12.2%

ROIC 15.8% 15.5% 15.3% 15.2%
ROE 18.7% 18.1% 17.6% 17.2%
Economic Profit 7859 8488 9167 9900

Interest Earned 19.8 21.4 23.1 25.0

Debt to Total Capital(book) 20.0% 18.3% 16.7% 15.3%
Debt to Total Capital(market) 8.1% 7.8% 7.7% 5.3%
Leverage(Assets/Equity) 1.52 1.48 1.44 1.41
Current Ratio 4.0 4.3 4.6 4.9
ROE Analysis
Profitability 9.4% 9.4% 9.5% 9.5%
Asset Turnover x 1.31 1.30 1.29 1.28
Leverage x 1.52 1.48 1.44 1.41
ROE = 18.7% 18.1% 17.6% 17.2%
 2014 2015 2016 2017 2018
Revenue 73,503 79,383 85,734 92,593 100,000 8.0%
Growth Y/Y 8% 8% 8% 8%

2014 2015 2016 2017 2018

Operating Income 11,907 12,860 13,889 15,000 #DIV/0!
Profitability 0.0% 15.0% 15.0% 15.0% 15.0%

2014 2015 2016 2017 2018

Economic Profit 0.0 7,859 8,488 9,167 9,900 #DIV/0!
ROIC 0.0% 15.8% 15.5% 15.3% 15.2%

2014 2015 2016 2017 2018

Asset Turnover 0.0 1.3 1.3 1.3 1.3

2014 2015 2016 2017 2018

DSO 0.0 146.0 146.0 146.0 146.0
DSI 0.0 73.0 73.0 73.1 73.0

2014 2015 2016 2017 2018

Revenue per Employee 193 191 201 204

Figure 2-2 Key Performance Trends

Revenue and Growth Profits and Profitability Economic Profit-ROIC

OP%
120,000 12%
20,000 20.0% 11000 15.8%
Operating Income

100,000 10%
15,000 15.0% 9000 15.6%
80,000 8%
Y/Y Growth %
Revenue $M

7000 15.4%
60,000 6% 10,000 10.0%
5000 15.2%
40,000 4% 5,000 5.0%
3000 15.0%
20,000 2% - 0.0%
1000 14.8%
- 0% 2015 2016 2017 2018
2015 2016 2017 2018 2015 2016 2017 2018
Operating Income Economic Profit
Revenue Growth Y/Y Profitability ROIC

Asset Turnover Receivables(DSO) and Inventory(DSI) Revenue per Employee

1.4 250.0 210

1.3 200.0 205

1.2
150.0 200
Days

000's
1.1
100.0 195
1.0
50.0 190
0.9
0.0 185
0.8 2015 2016 2017 2018 180
2015 2016 2017 2018
2015 2016 2017 2018
DSI DSO