Pacific Grove Spice Company Spreadsheet

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
$93.081
54.452
38.629
$105.182
61.531
43.650
$116.751
68.300
48.452
$127.259
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
15.00%
9.00%
17.50%
19.00%
15.00%
27.00%
13.00%
27.00%
11.00%
27.00%
9.00%
27.00%
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
Common Shares Outstanding
Price per share
Note: 2012-2015 are projected data
16.0
$37.990
1,165,327
$32.60

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%
Growth rate of assets

Liabilities & Owners' Equity
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
* 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

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
Sales
Cost of Goods Sold at 58.5% of sales
Gross Profit Margin
5.0%
Year 2
5.0%
Year 3
5.0%
Year 4
5.0%
Year 5
$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
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 2
Year 3
Year 4
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
Terminal Cash Flows
Recovery of NWC
Total Project Cash Flows
Internal Rate of Return
Net Present Value at 20%
Year 1
-$1,440,000
41.28%
$1,716,414
$2,405,498
$3,278,174
-$1,133,118
$1,265,881
$1,325,287
$1,387,664
Year 5
$2,989,590
$4,442,748

Exhibit 4 - High Country Seasonings Income Statement ($ in millions)
Income Statement
06/30/08
06/30/09
06/30/10
06/30/11
Net Sales
Cost of Goods Sold
Gross Profit Margin
$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

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
$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
10.334
10.885
11.322
11.856
Liabilities + Owners' Equity

Bank Notes Payable
Accounts Payable
Current Portion of Long-Term Debt
Accrued Expenses
Total Current Liabilities
Total Liabilities & Net Worth
* 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.

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%

Pacific Grove Spice Company Spreadsheet

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Pacific Grove Spice Company

Exhibit 1 - Income Statement ($ in millions except for price per share)

Growth rate of sale