SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
to
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
SPANLINK COMMUNICATIONS, INC.
(Name of Subject Company)
SPANLINK COMMUNICATIONS, INC. (Subject Company)
SPANLINK ACQUISITION CORP. (Offeror)
Brett A. Shockley } (Offerors and affiliates of both
Loren A. Singer, Jr.} Spanlink Communications, Inc. and
Todd A. Parenteau } Spanlink Acquisition Corp.)
(Names of Filing Persons)
Common Shares, No Par Value Per Share
(Title of Class of Securities)
846492 10 6
(Cusip Number of Class of Securities)
Brett Shockley
Chief Executive Officer
Spanlink Communications, Inc.
7125 Northland Terrace
Minneapolis, MN 55428
Telephone: (612) 971-2114
Facsimile: (612) 971-2314
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Filing Persons)
Copy to:
Robert Ranum
Fredrikson & Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis, MN 55402
<PAGE>
CALCULATION OF FILING FEE*
- ---------------------------------------------------------------
TRANSACTION VALUATION AMOUNT OF FILING
- ---------------------------------------------------------------
$39,370,000 $7,875
- ---------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee only. This
amount assumes the purchase of 3,750,000 shares of common stock, no par value
(the "Common Shares"), of Spanlink Communications, Inc., at a price of $10.50
per Common Share in cash. The amount of the filing fee calculated in
accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934,
as amended, equals 1/50th of one percent of the value of the transaction.
[X] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE 0-11
(A)(2) AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS
PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: $7,875 Filing Party: Spanlink Communications, Inc.
Form or Registration No.: Schedule TO Date Filed: February 29, 2000;
Amendment No. 1, March 30, 2000
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third party tender offer subject to Rule 14d-1.
[X} going private transaction subject to Rule 13e-3.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
<PAGE>
This Amendment No. 2 amends the Tender Offer Statement on Schedule TO
filed by Spanlink Acquisition Corp., a Minnesota corporation ("Purchaser"), on
February 29, 2000, as amended by Amendment No. 1 on March 30, 2000, relating to
the offer by Purchaser to purchase all of the outstanding common shares, no par
value per share (each a "Common Share"), of Spanlink Communications, Inc., a
Minnesota corporation (the "Company"), not already owned by the Purchaser at
$10.50 per Common Share, net to the seller in cash, without interest (the "Per
Share Amount"), upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 29, 2000 (the "Offer to Purchase"), and in the
related Letter of Transmittal (the "Letter of Transmittal"), copies of which
were attached as Exhibit (a) (1) to the Schedule TO filed February 29, 2000.
Unless otherwise defined herein, all capitalized terms used herein shall have
the respective meanings given such terms in the Offer to Purchase or the
Schedule TO.
Item 12. Materials to be Filed as Exhibits.
Item 12 is hereby amended and supplemented as follows:
(a) (5) (iv) Press Release issued by the Purchaser announcing preliminary
results on the tender offer.
(c) (3) Report of Dougherty Summit Securities LLC delivered to Board of Spanlink
Communications, Inc. in connection with February 23, 1999 valuation analysis.
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: April 5, 2000
SPANLINK ACQUISITION CORP.
By: /s/ Brett A. Shockley
Name: Brett A. Shockley
Title: Chief Executive Officer
SPANLINK COMMUNICATIONS, INC.
By: /s/ Brett A. Shockley
Name: Brett A. Shockley
Title: Chief Executive Officer
/s/ Brett A. Shockley
Brett A. Shockley
/s/ Loren A. Singer, Jr.
Loren A. Singer, Jr.
/s/ Todd A. Paranteau
Todd A. Parenteau
FOR IMMEDIATE RELEASE Contact:
Spanlink Acquisition Corp.
(612) 971-2114
[email protected]
Tim Briggs, CFO
Spanlink Communications, Inc.
(612) 971-2135
[email protected]
SPANLINK ACQUISITION CORP. ANNOUNCES
PRELIMINARY RESULTS OF TENDER OFFER
MINNEAPOLIS, April 4, 2000 - Spanlink Acquisition Corp. (SAC) announced today
that shares of Spanlink Communications, Inc. (Spanlink) tendered into the Tender
Offer together with the founders' shares of Spanlink currently exceed ninety
percent (90%) of the outstanding shares of Spanlink. Holders of Spanlink common
stock who have tendered their shares have the right to withdraw the tenders at
any time prior to the expiration time of 5 p.m., April 12, 2000. As described in
the Offer to Purchase, if SAC acquires ninety percent (90%) or more of Spanlink,
SAC plans to merge with Spanlink without seeking a vote by Spanlink
shareholders, as permitted by the Minnesota Business Corporation Act. SAC plans
to close the Tender Offer and effect the merger of SAC with and into Spanlink as
soon as practicable following the expiration of the Tender Offer.
###
VALUATION MATERIALS PREPARED FOR:
THE BOARD OF DIRECTORS OF
SPANLINK COMMUNICATIONS, INC.
February 23, 1999
DOUGHERTY SUMMIT SECURITIES LLC
THE FOLLOWING INFORMATION IS CONFIDENTIAL AND PROPRIETARY TO DOUGHERTY SUMMIT
SECURITIES LLC. THE INFORMATION HAS BEEN PREPARED FOR THE BENEFIT OF SPANLINK
COMMUNICATIONS, INC. AND IS PROVIDED UPON THE UNDERSTANDING THAT ANY PERSON
ACCEPTING IT WILL NOT, WITHOUT THE PRIOR PERMISSION OF DOUGHERTY SUMMIT
SECURITIES LLC, UTILIZE THE INFORMATION FOR ANY PURPOSE OTHER THAN AS DESCRIBED
HEREIN.
<PAGE>
TABLE OF CONTENTS
TAB PAGE
I. EXECUTIVE SUMMARY 1
II. STOCK PRICE AND VOLUME DATA 4
III. DISCOUNTED CASH FLOW ANALYSIS 7
IV. COMPARABLE PUBLIC COMPANY ANALYSIS 14
V. ANALYSIS OF COMPARABLE MERGER AND ACQUISITION TRANSACTIONS 25
VI. VALUATION CONCLUSION 28
<PAGE>
I. EXECUTIVE SUMMARY
Dougherty Summit Securities LLC ("DSS") was retained by Spanlink
Communications, Inc. ("Spanlink" or the "Company") to provide an
opinion as to the fair value of 100% of the common stock of Spanlink.
This opinion is being provided for the Board of Directors of Spanlink
to evaluate the potential for maximizing shareholder value through a
sale or merger transaction of the Company.
In rendering our valuation opinion, DSS has reviewed, among other
things:
o Audited financial data for the Company for the years ended
December 31, 1996 through 1997;
o Unaudited financial data for year ended December 31, 1998;
o Certain projected financial information for the Company for
the years ending December 31, 1999 through 2003;
o Certain historical stock price and volume trading information
for the Company=s shares;
o We held discussions with senior management of the Company
concerning the historical and current operations of the
business, its financial condition and prospects, as well as
the present strategic and operating issues facing the Company.
o We have assumed that (i) the accuracy of the Company=s
historical financial statements and (ii) the financial
forecasts as provided by Spanlink=s management were reasonably
prepared on a basis reflecting the best currently available
estimates and good faith judgements of the management of
Spanlink.
1
<PAGE>
Based upon our review of the Company=s historical and projected operating
performance and certain other qualitative factors associated with the Company,
we used three valuation techniques to determine a range of fair value for 100%
of the common stock of the Company.
o Our methodologies included:
- A discounted cash flow analysis of the Company
including sensitivity analyses utilizing a range of
assumptions;
- A review and comparison of trading multiples for
comparable publicly-traded companies;
- A review of recently completed precedent transaction
multiples for control acquisitions in the computer
telephony/call center industry and computer software
industry in general (including multiples of revenues
and net income).
Based on our valuation analysis, we determined that fair value for 100%
of the common stock of Spanlink in a sale/merger transaction would, in
all likelihood, be in the range of $8.00 to $10.00 per share.
2
<PAGE>
SPANLINK COMMUNICATIONS, INC.
TRANSACTION PRICING MATRIX
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRICE PER SHARE $7.00 $8.00 $9.00 $10.00 $11.00 $12.00
(000's) Except Per Share Data
Shares Outstanding 5,080 $35,560 $40,640 $45,720 $50,800 $55,880 $60,960
Options and Warrants 1,268
Average Exercise Price $2.85 $5,262 $6,530 $7,798 $9,066 $10,334 $11,602
EQUITY PURCHASE PRICE $40,822 $47,170 $53,518 $59,866 $66,214 $72,562
PLUS DEBT ASSUMED $900 $900 $900 $900 $900 $900
LESS CASH AND EQUIVALENTS ($3,786) ($3,786) ($3,786) ($3,786) ($3,786) ($3,786)
IMPLIED ENTERPRISE VALUE $37,936 $44,284 $50,632 $56,980 $63,328 $69,676
VALUATION MULTIPLES
ENTERPRISE VALUE: REVENUE
1998 $12,000 $3.16 $3.69 $4.22 $4.75 $5.28 $5.81
Projected 1999 18,000 $2.11 $2.46 $2.81 $3.17 $3.52 $3.87
Projected 2000 27,000 $1.41 $1.64 $1.88 $2.11 $2.35 $2.58
ENTERPRISE VALUE: EBITDA
1998 $1,238 $30.64 $35.77 $40.90 $46.03 $51.15 $56.28
Projected 1999 2,282 $16.62 $19.41 $22.19 $24.97 $27.75 $30.53
Projected 2000 4,827 $7.86 $9.17 $10.49 $11.80 $13.12 $14.43
ENTERPRISE VALUE: EBIT
1998 $888 $42.72 $49.87 $57.02 $64.17 $71.32 $78.46
Projected 1999 1,982 $19.14 $22.34 $25.55 $28.75 $31.95 $35.15
Projected 2000 4,527 $8.38 $9.78 $11.18 $12.59 $13.99 $15.39
EQUITY PURCHASE PRICE: EPS / NET INCOME
1998 $0.16 $848 $48.14 $55.63 $63.11 $70.60 $78.08 $85.57
Projected 1999 0.20 1,119 $36.48 $42.15 $47.83 $53.50 $59.17 $64.85
Projected 2000 0.46 2,668 $15.30 $17.68 $20.06 $22.44 $24.82 $27.20
STOCK PRICE PREMIUMS
EQUITY PURCHASE PRICE / STOCK PRICE
Current Stock Price $4.38 59.8% 82.6% 105.5% 128.3% 151.1% 174.0%
1998 High Stock Price $4.25 64.7% 88.2% 111.8% 135.3% 158.8% 182.4%
</TABLE>
Equity Purchase Price = shares outstanding times the offered price +
options/warrants outstanding times the offered price net of the average exercise
price 1998 results are estimated based on the 9 months ended September 30, 1998
Projected 1999 and 2000 net income calculation assumes a 40% tax rate
3
<PAGE>
II. STOCK PRICE AND VOLUME DATA
For widely held, actively traded public companies, the public market
normally provides an indication of fair market value for a minority
interest in a Company. Spanlink has been a public company since April
24, 1996 and is traded on the Nasdaq Stock Market. Approximately 37% of
the outstanding shares of common stock is controlled, in the aggregate,
by officers and directors. A total of 2.18 million shares traded during
1998, equal to 43% of the outstanding shares and 68% of the public
float. The 30 day, 60 day, 90 day and one-year average daily volume of
Spanlink shares was 9,391; 7,044; 9,108; and 9,235 respectively.
The high and low per share (bid) price of the Spanlink common shares
during 1998 was $4.25 and $2.00, respectively. During 1998, 10% of the
Spanlink shares traded at a price equal to or greater than $4.00 while
the average price was $3.09. Spanlink=s stock price increased 93.8%
from $2.00 on December 31, 1997 to $3.88 on December 31, 1998 while
year-to-date, the price has advanced 12.9% to $4.38. However, the
current price of $4.38 is only 9.4% higher than the IPO price of $4.00
approximately 33 months ago, and is 44% lower than the all-time high of
$7.75 on May 20, 1996.
The relatively low trading volume of Spanlink common stock and the
illiquidity has reduced potential institutional interest in shares of
the Company while equity research coverage remains limited. Thus, we
believe that the market trading price of the stock does not fully
reflect the Company=s value based on its long-term prospects.
<PAGE>
Spanlink Communications, Inc.
Price and Volume
Daily: 12/31/97 to 12/31/98
5
<PAGE>
[Line Chart Omitted]
<TABLE>
<CAPTION>
Date Open High Low Close Volume
<S> <C> <C> <C> <C> <C>
31-Dec-98 $3.81 $3.81 $3.81 $3.81 $400.00
30-Dec-98 $3.88 $4.00 $3.75 $3.75 $4,800.00
29-Dec-98 $4.00 $4.00 $3.75 $3.75 $8,600.00
28-Dec-98 $3.88 $3.88 $3.75 $3.75 $3,900.00
24-Dec-98 $3.63 $3.63 $3.63 $3.63 $700.00
23-Dec-98 $3.88 $3.88 $3.88 $3.88 $200.00
22-Dec-98 $4.00 $4.00 $3.63 $3.75 $31,700.00
21-Dec-98 $4.00 $4.00 $3.69 $4.00 $3,100.00
18-Dec-98 $4.13 $4.13 $3.88 $4.00 $1,900.00
17-Dec-98 $3.88 $4.00 $3.63 $4.00 $7,400.00
16-Dec-98 $3.88 $4.00 $3.88 $3.88 $4,700.00
15-Dec-98 $3.81 $3.88 $3.81 $3.88 $800.00
14-Dec-98 $3.50 $3.88 $3.50 $3.81 $8,300.00
11-Dec-98 $3.63 $4.00 $3.50 $3.88 $22,000.00
10-Dec-98 $4.00 $4.00 $3.75 $3.88 $8,100.00
9-Dec-98 $3.75 $4.00 $3.75 $4.00 $11,900.00
8-Dec-98 $3.75 $3.94 $3.69 $3.75 $20,700.00
7-Dec-98 $3.38 $3.75 $3.38 $3.75 $35,000.00
4-Dec-98 $3.31 $3.44 $3.31 $3.44 $6,400.00
3-Dec-98 $3.31 $3.44 $3.31 $3.44 $2,300.00
2-Dec-98 $3.31 $3.31 $3.31 $3.31 $3,100.00
1-Dec-98 $3.31 $3.44 $3.25 $3.44 $15,800.00
30-Nov-98 $3.44 $3.50 $3.25 $3.44 $14,200.00
27-Nov-98 $3.25 $3.25 $3.25 $3.25 $5,500.00
25-Nov-98 $3.13 $3.25 $3.13 $3.25 $19,300.00
24-Nov-98 $3.13 $3.13 $3.13 $3.13 $600.00
23-Nov-98 $3.13 $3.13 $3.13 $3.13 $7,000.00
19-Nov-98 $3.19 $3.19 $3.13 $3.19 $3,900.00
18-Nov-98 $3.25 $3.27 $3.25 $3.27 $200.00
17-Nov-98 $3.19 $3.19 $3.19 $3.19 $200.00
16-Nov-98 $3.44 $3.44 $3.19 $3.19 $2,200.00
13-Nov-98 $3.31 $3.31 $3.25 $3.25 $3,900.00
12-Nov-98 $3.13 $3.31 $3.13 $3.31 $4,400.00
11-Nov-98 $3.44 $3.44 $2.88 $3.19 $19,100.00
10-Nov-98 $3.44 $3.44 $3.44 $3.44 $1,300.00
9-Nov-98 $3.69 $3.69 $3.38 $3.38 $1,500.00
5-Nov-98 $3.38 $3.50 $3.38 $3.50 $700.00
4-Nov-98 $3.31 $3.50 $3.31 $3.31 $4,600.00
3-Nov-98 $3.44 $3.50 $3.38 $3.38 $12,000.00
30-Oct-98 $3.50 $3.50 $3.25 $3.25 $300.00
29-Oct-98 $3.25 $3.25 $3.25 $3.25 $200.00
28-Oct-98 $3.25 $3.50 $3.25 $3.50 $3,200.00
27-Oct-98 $3.38 $3.50 $3.38 $3.50 $1,700.00
26-Oct-98 $3.50 $3.50 $3.50 $3.50 $200.00
23-Oct-98 $3.13 $3.14 $3.13 $3.13 $3,000.00
22-Oct-98 $3.75 $3.75 $3.19 $3.19 $8,200.00
21-Oct-98 $3.88 $3.88 $3.38 $3.38 $2,700.00
20-Oct-98 $3.31 $3.75 $3.31 $3.31 $3,900.00
19-Oct-98 $3.50 $3.50 $3.13 $3.31 $52,100.00
16-Oct-98 $4.00 $4.00 $3.63 $3.63 $7,400.00
15-Oct-98 $3.75 $3.75 $3.38 $3.50 $43,500.00
14-Oct-98 $3.50 $3.75 $3.50 $3.63 $20,200.00
13-Oct-98 $3.55 $3.75 $3.55 $3.75 $6,000.00
12-Oct-98 $3.75 $3.75 $3.75 $3.75 $1,200.00
9-Oct-98 $3.88 $3.88 $3.75 $3.75 $4,800.00
8-Oct-98 $3.75 $3.94 $3.75 $3.75 $16,000.00
7-Oct-98 $3.88 $4.00 $3.75 $3.75 $10,200.00
6-Oct-98 $3.88 $4.00 $3.88 $3.88 $14,000.00
5-Oct-98 $4.00 $4.00 $3.88 $3.88 $23,100.00
2-Oct-98 $4.06 $4.56 $3.88 $4.13 $39,000.00
1-Oct-98 $4.25 $4.25 $4.00 $4.13 $15,300.00
30-Sep-98 $4.00 $4.16 $4.00 $4.13 $13,200.00
29-Sep-98 $4.38 $4.38 $3.88 $4.00 $29,400.00
28-Sep-98 $4.50 $4.75 $4.19 $4.22 $34,200.00
25-Sep-98 $4.00 $4.38 $4.00 $4.25 $29,800.00
24-Sep-98 $3.38 $4.13 $3.38 $4.00 $26,000.00
23-Sep-98 $3.25 $3.39 $3.13 $3.38 $22,600.00
22-Sep-98 $3.25 $3.38 $3.00 $3.25 $27,500.00
21-Sep-98 $2.75 $3.00 $2.75 $3.00 $6,200.00
18-Sep-98 $3.00 $3.00 $3.00 $3.00 $15,100.00
17-Sep-98 $3.13 $3.13 $2.88 $3.00 $5,800.00
16-Sep-98 $2.94 $3.00 $2.88 $3.00 $26,500.00
15-Sep-98 $2.94 $2.94 $2.94 $2.94 $2,500.00
14-Sep-98 $2.94 $2.94 $2.63 $2.94 $3,400.00
11-Sep-98 $2.94 $2.94 $2.94 $2.94 $500.00
10-Sep-98 $2.63 $3.00 $2.63 $2.72 $900.00
9-Sep-98 $2.72 $3.00 $2.72 $3.00 $1,000.00
8-Sep-98 $2.75 $3.00 $2.72 $3.00 $12,000.00
4-Sep-98 $2.88 $2.88 $2.50 $2.50 $300.00
3-Sep-98 $2.50 $2.50 $2.50 $2.50 $1,000.00
1-Sep-98 $2.50 $2.81 $2.38 $2.69 $4,900.00
31-Aug-98 $2.63 $3.00 $2.50 $2.50 $23,700.00
28-Aug-98 $3.00 $3.00 $2.75 $2.75 $6,400.00
26-Aug-98 $3.13 $3.25 $3.00 $3.00 $3,700.00
25-Aug-98 $3.38 $3.38 $3.00 $3.00 $600.00
24-Aug-98 $3.38 $3.38 $3.00 $3.00 $4,700.00
20-Aug-98 $2.75 $3.00 $2.75 $3.00 $1,800.00
19-Aug-98 $3.25 $3.25 $2.88 $3.00 $5,100.00
18-Aug-98 $3.00 $3.25 $2.75 $2.75 $16,400.00
17-Aug-98 $3.00 $3.38 $3.00 $3.13 $4,900.00
14-Aug-98 $3.25 $3.25 $3.25 $3.25 $1,500.00
13-Aug-98 $3.38 $3.38 $3.25 $3.25 $5,500.00
12-Aug-98 $3.50 $3.50 $3.50 $3.50 $2,000.00
11-Aug-98 $3.50 $3.63 $3.38 $3.38 $4,500.00
10-Aug-98 $3.63 $3.63 $3.50 $3.50 $8,700.00
7-Aug-98 $3.50 $3.50 $3.50 $3.50 $1,300.00
6-Aug-98 $3.50 $3.50 $3.50 $3.50 $1,400.00
5-Aug-98 $3.50 $3.50 $3.50 $3.50 $2,000.00
4-Aug-98 $3.50 $3.88 $3.50 $3.50 $8,300.00
3-Aug-98 $3.63 $3.75 $3.50 $3.50 $3,600.00
31-Jul-98 $3.75 $3.75 $3.63 $3.63 $900.00
30-Jul-98 $3.63 $3.75 $3.63 $3.75 $6,300.00
29-Jul-98 $3.50 $3.75 $3.50 $3.50 $2,700.00
28-Jul-98 $3.63 $3.63 $3.50 $3.50 $21,100.00
27-Jul-98 $3.50 $3.50 $3.50 $3.50 $11,700.00
24-Jul-98 $3.25 $3.63 $3.25 $3.63 $31,900.00
23-Jul-98 $3.44 $3.44 $3.25 $3.38 $9,900.00
22-Jul-98 $3.50 $3.50 $3.25 $3.25 $33,200.00
21-Jul-98 $3.25 $3.38 $3.25 $3.38 $71,600.00
20-Jul-98 $3.25 $3.25 $3.25 $3.25 $3,800.00
17-Jul-98 $3.13 $3.38 $3.13 $3.38 $8,100.00
16-Jul-98 $3.00 $3.25 $3.00 $3.25 $13,800.00
15-Jul-98 $3.00 $3.13 $3.00 $3.13 $3,000.00
14-Jul-98 $3.25 $3.25 $3.00 $3.25 $5,600.00
13-Jul-98 $3.25 $3.25 $3.00 $3.00 $3,600.00
10-Jul-98 $3.25 $3.25 $3.25 $3.25 $1,000.00
8-Jul-98 $3.25 $3.50 $3.25 $3.50 $13,700.00
7-Jul-98 $3.00 $3.25 $3.00 $3.13 $7,100.00
2-Jul-98 $3.00 $3.13 $3.00 $3.13 $3,000.00
1-Jul-98 $3.13 $3.25 $3.13 $3.13 $4,100.00
30-Jun-98 $3.13 $3.25 $3.13 $3.25 $9,200.00
29-Jun-98 $3.00 $3.00 $3.00 $3.00 $100.00
26-Jun-98 $3.00 $3.00 $3.00 $3.00 $300.00
25-Jun-98 $2.75 $3.25 $2.75 $3.00 $25,100.00
24-Jun-98 $2.88 $2.88 $2.75 $2.75 $20,000.00
23-Jun-98 $3.00 $3.00 $2.88 $2.88 $6,000.00
22-Jun-98 $3.00 $3.00 $3.00 $3.00 $4,000.00
19-Jun-98 $3.13 $3.13 $3.13 $3.13 $1,000.00
18-Jun-98 $3.13 $3.25 $2.88 $3.00 $8,700.00
17-Jun-98 $3.25 $3.25 $3.13 $3.25 $8,800.00
16-Jun-98 $3.25 $3.25 $3.25 $3.25 $2,600.00
15-Jun-98 $3.25 $3.25 $3.25 $3.25 $1,000.00
12-Jun-98 $3.25 $3.63 $3.25 $3.25 $19,300.00
11-Jun-98 $3.50 $3.50 $3.25 $3.25 $4,000.00
10-Jun-98 $3.25 $3.25 $3.25 $3.25 $2,000.00
9-Jun-98 $3.50 $3.50 $3.38 $3.38 $9,400.00
8-Jun-98 $3.56 $3.56 $3.50 $3.50 $22,100.00
5-Jun-98 $3.63 $3.63 $3.63 $3.63 $4,000.00
4-Jun-98 $3.63 $3.63 $3.63 $3.63 $900.00
2-Jun-98 $3.75 $3.75 $3.63 $3.63 $900.00
1-Jun-98 $3.75 $3.88 $3.56 $3.75 $20,900.00
29-May-98 $3.56 $3.56 $3.56 $3.56 $15,700.00
27-May-98 $3.75 $3.75 $3.50 $3.50 $9,100.00
22-May-98 $3.88 $3.94 $3.75 $3.75 $13,500.00
21-May-98 $3.88 $4.00 $3.75 $3.81 $41,900.00
20-May-98 $4.00 $4.00 $3.75 $3.75 $6,800.00
19-May-98 $3.75 $3.88 $3.75 $3.75 $9,200.00
18-May-98 $3.75 $3.75 $3.75 $3.75 $4,800.00
15-May-98 $3.69 $3.88 $3.69 $3.75 $33,200.00
14-May-98 $3.64 $3.72 $3.63 $3.72 $6,600.00
13-May-98 $3.63 $3.63 $3.63 $3.63 $3,400.00
12-May-98 $3.75 $3.75 $3.63 $3.75 $3,300.00
11-May-98 $3.81 $3.81 $3.63 $3.63 $17,000.00
8-May-98 $3.63 $3.75 $3.50 $3.50 $8,900.00
7-May-98 $3.63 $3.63 $3.50 $3.50 $2,800.00
6-May-98 $3.50 $3.75 $3.31 $3.31 $4,200.00
5-May-98 $3.13 $3.25 $3.13 $3.25 $700.00
4-May-98 $3.63 $3.63 $3.13 $3.13 $1,200.00
1-May-98 $3.50 $3.50 $3.13 $3.50 $14,500.00
30-Apr-98 $3.06 $3.50 $3.06 $3.31 $10,300.00
29-Apr-98 $3.50 $3.50 $3.38 $3.50 $5,800.00
28-Apr-98 $3.75 $3.75 $3.38 $3.50 $14,300.00
27-Apr-98 $3.25 $3.75 $3.25 $3.63 $7,500.00
24-Apr-98 $3.75 $3.75 $3.50 $3.69 $38,200.00
23-Apr-98 $3.56 $3.75 $3.56 $3.75 $5,900.00
22-Apr-98 $3.63 $3.63 $3.50 $3.56 $9,000.00
21-Apr-98 $3.38 $3.88 $3.25 $3.63 $103,000.00
20-Apr-98 $3.06 $3.25 $3.06 $3.25 $19,300.00
15-Apr-98 $3.00 $3.06 $3.00 $3.00 $13,500.00
14-Apr-98 $2.88 $2.88 $2.88 $2.88 $5,500.00
9-Apr-98 $3.06 $3.13 $2.88 $3.00 $7,200.00
8-Apr-98 $3.00 $3.06 $2.88 $3.06 $3,100.00
7-Apr-98 $3.13 $3.13 $3.00 $3.00 $13,900.00
6-Apr-98 $2.94 $3.06 $2.94 $3.00 $9,000.00
3-Apr-98 $2.88 $2.91 $2.88 $2.88 $3,500.00
2-Apr-98 $2.88 $2.97 $2.88 $2.88 $3,800.00
1-Apr-98 $2.88 $2.88 $2.88 $2.88 $4,800.00
30-Mar-98 $2.88 $2.88 $2.88 $2.88 $10,900.00
27-Mar-98 $2.88 $2.95 $2.88 $2.88 $19,300.00
26-Mar-98 $2.88 $2.94 $2.88 $2.94 $1,000.00
25-Mar-98 $2.88 $2.88 $2.88 $2.88 $500.00
24-Mar-98 $3.00 $3.00 $2.88 $2.88 $10,800.00
23-Mar-98 $3.00 $3.00 $3.00 $3.00 $1,000.00
19-Mar-98 $2.75 $3.00 $2.75 $2.75 $3,300.00
18-Mar-98 $3.00 $3.00 $2.75 $2.75 $3,800.00
17-Mar-98 $2.75 $2.75 $2.75 $2.75 $2,200.00
16-Mar-98 $2.75 $2.75 $2.75 $2.75 $6,500.00
13-Mar-98 $2.75 $2.88 $2.75 $2.75 $50,500.00
12-Mar-98 $2.88 $2.88 $2.75 $2.75 $8,800.00
11-Mar-98 $2.63 $2.88 $2.63 $2.88 $4,200.00
10-Mar-98 $2.63 $2.63 $2.63 $2.63 $7,400.00
9-Mar-98 $2.63 $2.63 $2.63 $2.63 $1,700.00
6-Mar-98 $2.63 $2.63 $2.63 $2.63 $9,200.00
5-Mar-98 $2.63 $2.63 $2.63 $2.63 $3,400.00
4-Mar-98 $2.63 $2.63 $2.63 $2.63 $11,600.00
2-Mar-98 $2.63 $2.63 $2.63 $2.63 $3,700.00
27-Feb-98 $2.63 $2.63 $2.63 $2.63 $1,000.00
26-Feb-98 $2.75 $2.75 $2.63 $2.63 $3,800.00
25-Feb-98 $2.63 $2.75 $2.63 $2.75 $23,300.00
24-Feb-98 $2.50 $2.59 $2.50 $2.59 $89,600.00
23-Feb-98 $2.50 $2.50 $2.50 $2.50 $3,900.00
19-Feb-98 $2.50 $2.63 $2.50 $2.63 $1,300.00
18-Feb-98 $2.75 $2.75 $2.50 $2.63 $16,200.00
17-Feb-98 $2.50 $2.50 $2.50 $2.50 $2,000.00
13-Feb-98 $2.50 $2.50 $2.50 $2.50 $800.00
12-Feb-98 $2.50 $2.63 $2.50 $2.50 $6,200.00
11-Feb-98 $2.38 $2.38 $2.38 $2.38 $11,700.00
10-Feb-98 $2.38 $2.38 $2.38 $2.38 $2,000.00
6-Feb-98 $2.38 $2.63 $2.38 $2.38 $14,700.00
5-Feb-98 $2.38 $2.38 $2.38 $2.38 $3,600.00
4-Feb-98 $2.38 $2.38 $2.38 $2.38 $100.00
3-Feb-98 $2.38 $2.50 $2.38 $2.50 $3,500.00
2-Feb-98 $2.56 $2.56 $2.25 $2.31 $5,700.00
30-Jan-98 $2.25 $2.56 $2.25 $2.38 $11,800.00
29-Jan-98 $2.13 $2.50 $2.13 $2.50 $6,400.00
28-Jan-98 $2.19 $2.19 $2.19 $2.19 $4,400.00
26-Jan-98 $2.25 $2.25 $2.19 $2.19 $14,800.00
23-Jan-98 $2.19 $2.25 $2.19 $2.19 $6,200.00
22-Jan-98 $2.19 $2.19 $2.19 $2.19 $9,200.00
21-Jan-98 $2.19 $2.19 $2.19 $2.19 $5,000.00
20-Jan-98 $2.13 $2.13 $2.13 $2.13 $5,900.00
16-Jan-98 $2.13 $2.19 $2.13 $2.13 $8,200.00
15-Jan-98 $2.13 $2.13 $2.13 $2.13 $3,000.00
14-Jan-98 $2.13 $2.13 $2.13 $2.13 $1,600.00
13-Jan-98 $2.13 $2.13 $2.13 $2.13 $2,000.00
12-Jan-98 $2.25 $2.25 $2.25 $2.25 $1,100.00
9-Jan-98 $2.13 $2.25 $2.13 $2.25 $700.00
8-Jan-98 $2.13 $2.25 $2.13 $2.13 $4,600.00
7-Jan-98 $2.13 $2.38 $2.13 $2.38 $7,700.00
6-Jan-98 $2.00 $2.38 $2.00 $2.38 $5,900.00
5-Jan-98 $2.00 $2.38 $2.00 $2.38 $11,900.00
2-Jan-98 $2.13 $2.13 $2.03 $2.03 $5,100.00
</TABLE>
6
<PAGE>
III. DISCOUNTED CASH FLOW METHOD
The Discounted Cash Flow Method is based on projected earnings and
capital requirements and the subsequent cash flows generated by the
assets of a company. The premise underlying this method of analysis is
that the value of a business enterprise is equal to the present worth
of the future economic benefits of ownership.
Spanlink=s stand-alone forecasted cash flows for the five-year period
1999-2003 and the terminal value in 2003 are discounted back to present
value at the weighted average cost of capital and then added together.
The weighted average cost of capital is the weighted average of the
return on debt capital and the return on equity capital given the
company=s long-term or target capital structure. Spanlink is currently
financed almost entirely with equity capital (as are the comparable
public companies). The projections assume that retained earnings will
finance growth, so the weighted average cost of capital is equal to the
cost of equity. Given our assessment of Spanlink=s investment risk,
returns on micro-capitalization common stocks and the level of interest
rates, we estimated the cost of equity to be between 22% and 26%.
Because Spanlink will have the ability to generate cash flow well
beyond the five-year forecast period, we capitalized the value of the
Company at the end of 2003. This terminal value is calculated by
applying EBITDA multiples of between 8 and 12 to Spanlink=s 2003
projected EBITDA. The EBITDA multiples were derived from trading
multiples of the comparable public companies and our estimate of
Spanlink=s earnings growth outlook as of the end of 2003.
7
<PAGE>
Furthermore, because we are appraising the value for Spanlink as if
merged or sold, we need to estimate a control value. A control value
represents the additional value, over a minority interest, that may be
expected by a purchaser of 100% of a Company. Synergistic opportunities
as well as the negotiating strength of the buyer and seller are factors
that ultimately determine merger/acquisition pricing along with the
underlying earnings potential and financial condition of the selling
entity. A control value reflects consideration of all relevant factors
and the resulting control premium is expressed as the percentage by
which the sale/merger price exceeds the minority trading price prior to
public disclosure of the transaction. For example, the average and
median control premium in 1997 for 487 public company merger/sale
transactions (as reported by MergerStat) was 37.5% and 27.5%,
respectively. Control premiums in 1997 were slightly lower than in
recent years.
We identified potential synergies that could result by combining
Spanlink with a strategic buyer as follows: (I) incremental revenue to
Spanlink due to expanded sales distribution provided by a buyer, (ii)
incremental revenue to a buyer by integrating Spanlink=s products to
the buyer=s product line and (iii) reduced selling, general and
administrative expenses by eliminating overlapping sales and marketing
personnel and administrative positions. In addition, Spanlink=s cost of
public company reporting including annual audits would be eliminated.
Quantifying the impact of these potential synergies is somewhat
speculative and will vary depending on the buyer. Also, premiums vary
over time, from industry to industry and from company to company within
8
<PAGE>
an industry. Therefore, to provide a reasonable estimate of control
value, we have applied control premiums ranging from 20% to 40% to the
appraised minority value.
Based on our discounted cash flow analysis, we derived minority
interest values of $5.99 to $10.17 per share with a mid-point value of
$7.93 per share. Applying a range of control premiums of 20% to 40% to
the mid-point value of $7.93 produced a range of sale/merger values of
$9.52 to $11.10 per share.
9
<PAGE>
SPANLINK COMMUNICATIONS, INC. SUMMARY OF SENSITIVITY ANALYSIS
DISCOUNTED CASH FLOW ANALYSIS
($000's, except per share)
<TABLE>
<CAPTION>
TERMINAL VALUE EBITDA MULTIPLES
DISCOUNT RATE @ 22%
8.0 9.0 10.0 11.0 12.0
<S> <C> <C> <C> <C> <C>
Present Value of 1999-2003 Cash Flows $4,728 $4,728 $4,728 $4,728 $4,728
Present Value of Terminal Value 31,839 35,819 39,799 43,779 47,759
Enterprise Value 36,567 40,547 44,527 48,507 52,486
Less Interest Bearing Debt (943) (943) (943) (943) (943)
Plus Cash and Equivalents 170 170 170 170 170
Common Equity Value $35,794 $39,774 $43,754 $47,734 $51,713
Shares Outstanding 5,085 5,085 5,085 5,085 5,085
Per Share $7.04 $7.82 $8.60 $9.39 $10.17
TERMINAL VALUE EBITDA MULTIPLES
DISCOUNT RATE @ 24%
8.0 9.0 10.0 11.0 12.0
Present Value of 1999-2003 Cash Flows $4,422 $4,422 $4,422 $4,422 $4,422
Present Value of Terminal Value 29,352 33,021 36,690 40,359 44,029
Enterprise Value 33,774 37,443 41,112 44,781 48,450
Less Interest Bearing Debt (943) (943) (943) (943) (943)
Plus Cash and Equivalents 170 170 170 170 170
Common Equity Value $33,001 $36,670 $40,339 $44,008 $47,677
Shares Outstanding 5,085 5,085 5,085 5,085 5,085
Per Share $6.49 $7.21 $7.93 $8.65 $9.38
TERMINAL VALUE EBITDA MULTIPLES
DISCOUNT RATE @ 26%
8.0 9.0 10.0 11.0 12.0
Present Value of 1999-2003 Cash Flows $4,140 $4,140 $4,140 $4,140 $4,140
Present Value of Terminal Value 27,098 30,485 33,872 37,259 40,647
Enterprise Value 31,238 34,625 38,012 41,399 44,787
Less Interest Bearing Debt (943) (943) (943) (943) (943)
Plus Cash and Equivalents 170 170 170 170 170
Common Equity Value $30,465 $33,852 $37,239 $40,626 $44,014
Shares Outstanding 5,085 5,085 5,085 5,085 5,085
Per Share $5.99 $6.66 $7.32 $7.99 $8.66
</TABLE>
10
<PAGE>
SPANLINK COMMUNICATIONS, INC.
DISCOUNTED CASH FLOW ANALYSIS
PROJECTED NET DEBT-FREE CASH FLOW
For the Years Ending December 31
($000's)
<TABLE>
<CAPTION>
1998E 1999E 2000E 2001E 2002E 2003E
<S> <C> <C> <C> <C> <C> <C>
Sales $12,000 $18,000 $27,000 $37,800 $49,140 $61,425
Cost of Sales 4,430 7,200 10,800 15,120 19,656 24,570
Gross Margin 7,570 10,800 16,200 22,680 29,484 36,855
Operating Expenses 6,682 8,818 11,673 15,876 20,639 25,799
Operating Income 888 1,982 4,527 6,804 8,845 11,057
Income Taxes 355 793 1,811 2,722 3,538 4,423
Debt-Free Net Income 533 1,189 2,716 4,082 5,307 6,634
Depreciation and Amortization 450 528 300 300 300 300
Debt-Free Cash Flow 983 1,717 3,016 4,382 5,607 6,934
Change in Working Capital (2,580) (2,000) (1,500) (1,800) (1,890) (2,048)
Capital Expenditures (250) (432) (300) (300) (300) (300)
Net Debt-Free Cash Flow ($1,847) ($715) $1,216 $2,282 $3,417 $4,586
</TABLE>
Note: 1998 data is estimated based on actual results for the nine months ended
September 30, 1998
11
<PAGE>
SPANLINK COMMUNICATIONS, INC.
DISCOUNTED CASH FLOW ANALYSIS
<TABLE>
<CAPTION>
ASSUMPTIONS
For the Years Ending December 31
1999 2000 2001 2002 2003
<S> <C> <C> <C> <C> <C>
Sales Growth 50.0% 50.0% 40.0% 30.0% 25.0%
Operating Margin 11.0% 16.8% 18.0% 18.0% 18.0%
Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%
Unlevered Net Income Margin 6.6% 10.1% 10.8% 10.8% 10.8%
Unlevered Net Income Growth 123.2% 128.4% 50.3% 30.0% 25.0%
Depreciation and Amort. As a % of Sales 2.9% 1.1% 0.8% 0.6% 0.5%
Capital Expenditures as a % of Sales 2.4% 1.1% 0.8% 0.6% 0.5%
Change in WC as a % of Change in Sales 33.3% 16.7% 16.7% 16.7% 16.7%
</TABLE>
12
<PAGE>
SPANLINK COMMUNICATIONS, INC.
COST OF EQUITY CAPITAL
COST OF EQUITY
BUILD-UP METHOD
Cost of equity at mid-point
of 22% to 26% range 24.0%
Less: risk-free rate -5.1% current yield on 30 year T-bonds
Less: equity risk premium -7.8% return on large capitalization stocks
over risk-free rate from 1926-1997
(1998 SBBI Yearbook)
Less: small stock premium -5.4% return on microcapitalization stocks
(decile 10-under $130 million) over
large capitalization stocks from
1926-1997
Implied qualitative premium 5.7% incremental required return due to
risk associated with industry sector
and company
13
<PAGE>
IV. COMPARABLE PUBLIC COMPANY ANALYSIS
The Comparable Public Company Analysis involves comparing certain
fundamental data and performance measures of Spanlink to a group of
publicly traded peers to determine an implied market trading value of a
minority interest. Comparative analysis is particularly useful for
valuing thinly traded micro-capitalization stocks of public companies
(often characterized by substantial insider ownership and/or limited
research coverage) since the market trading value may not fully reflect
current performance and prospects for the Company.
We reviewed information on business operations, financial performance
and valuation multiples for publicly traded companies in the computer
telephony/call center industry and selected ten companies as a basis
for comparison. We note that Spanlink=s earnings growth rate over the
next three years is expected to exceed 60% per year, significantly
higher than all of the comparable public companies. Given this growth
differential and considering Spanlink=s relatively early stage of
business development, in our opinion, it was appropriate to capitalize
1999 projected revenue and 2000 projected earnings in order to reflect
value as opposed to using trailing twelve month results.
14
<PAGE>
In selecting an appropriate revenue multiple to apply to Spanlink=s
1999 projected revenue, we used the 2.0x average multiple of the
comparable public companies. This approach produced a value for
Spanlink of $6.94 per share. In the second approach, we applied a 20 to
28 range of P/E multiples to 2000 projected earnings to derive value.
The P/E multiples were selected based on the comparable public
companies with consideration of Spanlink=s relative investment risk and
growth prospects. Furthermore, since we are using P/E ratios calculated
with latest 12 month earnings data to capitalize Spanlink=s future
earnings, we applied two-year present value factors at rates of between
22% and 26% to obtain estimates of current stock values. This approach
produced minority values ranging from $6.18 to $8.11 per share with a
mid-point value of $7.18.
In summary, the comparable public company analysis produced a range of
minority interest values of $7.18 per share (based on capitalization of
2000 net income using the mid-point value) to $6.94 per share (based on
capitalization of 1999 revenue) with a mid-point value of $7.06.
Applying control premiums ranging from 20% to 40% to the $7.06
mid-point value produced sale/merger values of $8.47 to $9.88 per
share.
15
<PAGE>
SPANLINK COMMUNICATIONS, INC.
MARKET COMPARISON OF SELECTED PUBLIC COMPANIES
(dollars in millions, except per share data)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Prices Earnings Per Share (a)
Latest 52 Week Price As % Of ----------------------
Company Name (Ticker) FYE Quarter High Low 1/22/99 High LTM 1998 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) Dec 9/98 $3.00 $1.00 $2.31 77.0% $0.17 ($0.29) $0.05
Talk Corporation (TALX) Mar 9/98 7.25 3.00 7.00 96.6% (0.25) 0.14 0.26
Davox Corporation (DAVX) Dec 9/98 35.50 4.75 6.50 18.3% 0.99 0.68 0.76
Brite Voice Systems, Inc. (BVSI) Dec 9/98 14.00 7.13 8.00 57.1% 1.63 0.38 0.51
Edify Corporation (EDFY) Dec 9/98 20.88 4.63 7.50 35.9% (0.32) (0.08) 0.25
Periphonics Corporation (PERI) May 11/98 14.00 4.50 11.00 78.6% 0.40 0.52 0.75
Melita International Corporation (MELI) Dec 9/98 19.00 7.00 15.00 78.9% 0.71 0.72 0.89
InterVoice, Inc. (INTV) Feb 11/98 34.00 7.00 32.00 94.1% 0.01 1.22 1.45
Geneysis Telecom. Labs, Inc. (GCTI) June 9/98 39.75 9.13 28.00 70.4% 0.48 0.66 1.03
GeoTel Comm. Corp. (GEOC) Dec 9/98 36.00 6.75 28.75 79.9% 0.33 0.29 0.40
Spanlink Communications, Inc (SPLK)(c) Dec 9/98 $4.38 $2.19 $4.00 91.4% $0.05 $0.12 $0.34
(Continued)
<CAPTION>
(table Continued)
- --------------------------------------------------------------------------------------------------------------
Book
Price/Earnings Ratio (b) Value Market
-------------------- Shares Market Per Value/ Div.
Company Name (Ticker) LTM 1998 1999 Out. Value Share BVPS Yield
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) 13.6 nm 46.2 13.65 $31.5 $1.44 1.60 nm
Talk Corporation (TALX) nm 50.0 26.9 5.35 37.5 12.24 0.57 nm
Davox Corporation (DAVX) 6.6 9.6 8.6 14.26 92.7 4.59 1.42 nm
Brite Voice Systems, Inc. (BVSI) 4.9 21.1 15.7 12.22 97.8 5.97 1.34 nm
Edify Corporation (EDFY) nm nm 30.0 17.32 129.9 2.97 2.52 nm
Periphonics Corporation (PERI) 27.5 21.2 14.7 13.48 148.3 5.78 1.90 nm
Melita International Corporation (MELI) 21.1 20.8 16.9 15.22 228.3 2.80 5.36 nm
InterVoice, Inc. (INTV) 3200.0 26.2 22.1 13.77 440.6 4.43 7.22 nm
Geneysis Telecom. Labs, Inc. (GCTI) 58.3 42.4 27.2 22.86 640.1 3.22 8.70 nm
GeoTel Comm. Corp. (GEOC) 87.1 99.1 71.9 26.82 771.1 1.83 15.70 nm
--------------------- --------------
Mean 17.2 23.5 20.2 3.40 nm
Median 17.4 21.0 19.5 2.21 nm
Spanlink Communications, Inc (SPLK)(c) 80.0 33.3 11.8 5.08 $20.3 $0.63 6.35 nm
</TABLE>
S&P 500 Index 1279.64 956.95 1255.98 98.2%
Russell 2000 Index 491.41 310.28 422.44 86.0%
NOTES
- ----------------
(a) LTM = latest 12 months - used LTM data if at least 6 months from fiscal
year-end (excludes extraordinary or one-time gains/losses) 1998 and
1999 projection based on average of all estimates (reported by IBES
International, Inc.)
(b) Market Value = price times common shares outstanding (excludes options,
convertibles and other common stock equivalents)
(c) DSS research dept. estimate as published
Italicized data excluded from calculation
nm - not meaningful
na - not available
16
<PAGE>
SPANLINK COMMUNICATIONS, INC.
MARKET COMPARISON OF SELECTED PUBLIC COMPANIES
(dollars in millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
(a) (b) LTM Enterprise Value to:
Total Total Ent. -------------------- EBIT EBITDA --------------------
Company Name (Ticker) Debt Cash Value Rev. EBIT EBITDA Margin Margin Rev. EBIT EBITDA
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) $0.7 $11.7 $20.5 $44.8 ($6.9) ($3.6) -15.4% -8.0% 0.5 nm nm
Talk Corporation (TALX) 0.8 0.10 38.2 23.8 (2.3) 0.4 -9.7% 1.6% 1.6 nm 97.8
Davox Corporation (DAVX) 0.0 55.40 37.3 91.1 16.7 20.0 18.3% 22.0% 0.4 2.2 1.9
Brite Voice Systems, Inc. (BVSI) 0.0 11.5 86.3 139.6 5.6 9.8 4.0% 7.0% 0.6 15.4 8.8
Edify Corporation (EDFY) 0.4 30.2 100.1 67.4 (2.2) 2.0 -3.3% 3.0% 1.5 nm 50.1
Periphonics Corporation (PERI) 0.0 25.8 122.5 132.3 8.4 14.2 6.3% 10.7% 0.9 14.6 8.6
Melita International Corporation (MELI) 0.0 27.3 201.0 85.6 15.5 17.3 18.1% 20.2% 2.3 13.0 11.6
InterVoice, Inc. (INTV) 9.0 8.3 441.3 120.8 8.5 19.8 7.0% 16.4% 3.7 51.9 22.3
Geneysis Telecom. Labs, Inc. (GCTI) 0.4 47.3 593.2 84.7 11.3 17.7 13.3% 20.9% 7.0 52.5 33.5
GeoTel Comm. Corp. (GEOC) 0.0 49.7 721.4 36.3 8.7 9.7 24.0% 26.7% 19.9 82.9 74.4
--------------------------------------
Mean 6.3% 12.0% 2.1 14.3 12.8
Median 6.7% 13.6% 1.5 14.6 10.2
Spanlink Communications, Inc (SPLK) $0.9 $0.17 $21.1 $9.9 $0.29 $0.63 2.9% 6.4% 2.1 72.6 33.4
(continued)
<CAPTION>
(table continued
- -------------------------------------------------------------------------------------------------------
1998 vs. (d) 1999 P/E/
3 Year CAGR (c) 1999 Est. 5 yr Est. 5 yr
-------------------------------- Net.Inc. Net.Inc. Net. Inc.
Company Name (Ticker) Rev. EBIT EBITDA EPS Growth Growth Growth
- --------------------------------------- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) -3.3% nm nm nm -117.2% 10.0% na
Talk Corporation (TALX) 20.8% nm -49.9% nm nm 27.5% 97.9%
Davox Corporation (DAVX) 34.3% 50.5% 38.7% 34.2% nm na na
Brite Voice Systems, Inc. (BVSI) 12.9% -26.8% -18.3% 70.3% 34.2% 17.5% 89.6%
Edify Corporation (EDFY) 61.5% nm 185.7% nm -412.5% 29.0% 40.0%
Periphonics Corporation (PERI) 14.2% -16.6% -6.5% -16.6% 44.2% 18.5% 79.3%
Melita International Corporation (MELI) 34.3% 48.8% 44.8% -6.6% 23.6% 30.0% 56.2%
InterVoice, Inc. (INTV) 7.6% -30.3% -12.4% -73.2% 18.9% 19.0% 116.2%
Geneysis Telecom. Labs, Inc. (GCTI) 108.8% 206.9% 159.9% 209.8% 56.1% 54.0% 50.3%
GeoTel Comm. Corp. (GEOC) 189.2% 344.7% 221.2% 91.5% 37.9% 52.0% 138.2%
--------------- ---------------------------------------------
Mean 48.0% 33.2% 62.6% 31.1% -44.1% 28.6% 83.5%
Median 27.6% 48.8% 38.7% 34.2% 21.2% 27.5% 84.5%
Spanlink Communications, Inc (SPLK) 32.0% 13.2% 29.5% -10.6% 183.3% 50.0% 86.2%
</TABLE>
NOTES
- -----------------
EBIT = earnings before interest and taxes (excludes interest income)
EBITDA = earnings before interest, taxes and depreciation & amortization
(a) Total debt includes interest bearing debt plus capital lease obligations
(b) Enterprise value defined as market value of equity plus total debt, minority
interest and preferred stock less cash and marketable securities
(c) As reported by IBES International, Inc.
CAGR = compound annual growth rate (rate computed for less than three years if
losses occurred)
Italicized data excluded from calculation
nm - not meaningful
na - not available
17
<PAGE>
SPANLINK COMMUNICATIONS, INC.
MARKET COMPARISON OF SELECTED PUBLIC COMPANIES
(dollars in millions, except per share data)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
REVENUES EBIT
------------------------------ ---------------------------------
Company Name (Ticker) 1994 1995 1996 1997 1994 1995 1996 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) $45.4 $49.5 $55.3 $48.2 $1.8 ($7.6) ($3.0) ($6.7)
Talk Corporation (TALX) 9.9 13.5 18.4 21.3 (0.8) 0.6 1.7 (1.3)
Davox Corporation (DAVX) 30.1 37.6 53.6 76.8 (2.4) 4.9 9.0 18.9
Brite Voice Systems, Inc. (BVSI) 79.9 97.1 110.4 119.9 13.0 14.3 11.7 2.4
Edify Corporation (EDFY) 8.4 16.0 33.0 57.1 (1.8) (0.2) (2.2) 2.3
Periphonics Corporation (PERI) 64.8 88.8 111.2 117.3 6.9 14.5 20.2 6.4
Melita International Corporation (MELI) na 35.3 47.5 65.8 na 4.7 7.4 11.4
InterVoice, Inc. (INTV) 76.3 97.1 104.9 102.3 9.3 25.1 19.4 (7.6)
Geneysis Telecom. Labs, Inc. (GCTI) 4.5 9.3 37.5 84.7 0.2 (3.3) 1.2 11.3
GeoTel Comm. Corp. (GEOC) 0.0 1.5 9.1 18.6 (3.1) (4.0) 0.4 3.5
Spanlink Communications, Inc (SPLK) $4.6 $4.3 $5.4 $6.6 $0.3 $0.2 ($3.0) ($2.1)
(continued
<CAPTION>
(table continued)
- --------------------------------------------------------------------------------------------------------
EBITDA EARNINGS PER SHARE
-----------------------------------------------------------------
Company Name (Ticker) 1994 1995 1996 1997 1994 1995 1996 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) $2.0 ($7.4) ($2.8) ($6.2) $0.25 ($1.24) ($0.21) $0.01
Talk Corporation (TALX) 1.2 3.1 4.2 1.3 na na 0.18 (0.13)
Davox Corporation (DAVX) 0.7 7.5 11.4 22.3 (0.67) 0.41 0.85 1.60
Brite Voice Systems, Inc. (BVSI) 15.7 18.0 15.6 6.3 0.38 0.33 0.73 0.98
Edify Corporation (EDFY) (1.1) 0.7 (0.2) 5.5 na (0.01) (0.07) 0.24
Periphonics Corporation (PERI) 9.1 17.4 23.9 11.5 0.32 0.69 0.90 0.32
Melita International Corporation (MELI) na 5.7 8.5 12.7 na na na 0.76
InterVoice, Inc. (INTV) 12.8 29.5 24.4 2.1 0.08 0.52 0.40 (0.17)
Geneysis Telecom. Labs, Inc. (GCTI) 0.3 (3.0) 2.6 17.7 na na 0.05 0.37
GeoTel Comm. Corp. (GEOC) (2.9) (3.6) 0.9 4.2 na na 0.09 0.24
Spanlink Communications, Inc (SPLK) $0.4 $0.3 ($2.8) ($1.9) $0.09 $0.07 ($0.66) ($0.42)
</TABLE>
18
<PAGE>
SPANLINK COMMUNICATIONS, INC.
MARKET COMPARISON OF SELECTED PUBLIC COMPANIES
(dollars in millions)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Leverage/Coverage Ratios
Balance Sheet Data (a) ---------------------------------------
Return on Equity ---------------------- (b) Total LTM
------------------------------- Total Total Book Debt/ Liab./ Debt/ EBITDA/ Current
Company Name (Ticker) 1994 1995 1996 1997 Assets Liab. Value Tot. Cap. Equity EBITDA Int. Exp. Ratio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Syntellect, Inc. (SYNL) 6.0% -54.0% -12.0% 0.6% $32.1 $12.4 $19.7 3.4% 62.9% -19.4% nm 2.0
Talk Corporation (TALX) na -11.0% -9.8% -5.4% 25.1 5.5 19.6 3.9% 28.1% 205.1% nm 2.2
Davox Corporation (DAVX) -80.0% 58.6% 54.0% 47.8% 93.4 27.9 65.5 0.0% 42.6% 0.0% nm 3.1
Brite Voice Systems, Inc. (BVSI) 13.8% 10.4% 18.1% 18.8% 103.5 30.5 73.0 0.0% 41.8% 0.0% nm 2.7
Edify Corporation (EDFY) na 0.8% -4.3% 7.5% 70.7 19.2 51.5 0.8% 37.3% 20.0% nm 3.3
Periphonics Corporation (PERI) 15.2% 20.0% 19.3% 5.9% 100.6 22.7 77.9 0.0% 29.1% 0.0% nm 3.6
Melita International Corporation (MELI)na na 86.8% 43.7% 64.3 21.7 42.6 0.0% 50.9% 0.0% nm 2.7
InterVoice, Inc. (INTV) 4.6% 29.5% 16.3% -7.2% 93.3 32.3 61.0 12.9% 53.0% 45.5% nm 1.8
Geneysis Telecom. Labs, Inc. (GCTI) na 176.0% 2.9% 12.2% 104.7 31.1 73.6 0.5% 42.3% 2.3% nm 2.7
GeoTel Comm. Corp. (GEOC) 10.0% 10.0% 10.0% 10.0% 63.9 14.8 49.1 0.0% 30.1% 0.0% nm 4.0
-------------------------------------------------------------------------------------------------------
Mean -6.1% 2.8% 18.1% 13.4% 2.2% 41.8% 25.3% nm 2.8
Median 11.3% 0.8% 13.2% 8.8% 0.3% 42.0% 0.0% nm 2.7
Spanlink Communications, Inc (SPLK) na -67.9% -113.5% -52.3% $5.9 $2.7 $3.2 22.0% 84.4% 142.9% nm 1.6
</TABLE>
NOTES
- --------------
(a) Balance sheet data as of latest quarter
(b) Total capitalization defined as interest bearing debt plus minority
interest, preferred stock and common stockholders' equity
19
<PAGE>
SPANLINK COMMUNICATIONS, INC.
Enterprise Value / 1999 Projected Revenue Multiples
Ranked By Projected Long Term Earnings Growth Rate
(dollars in millions)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Enterprise
Value as a
Multiple of:
1999 Est. 5 yr 1999
Proj. Net. Inc. Proj.
Company Name (Ticker) Rev. Growth Rev.
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Syntellect, Inc. (SYNL) $58.0 10.0% 0.4
Davox Corporation (DAVX) 133.0 17.5% 0.3
Periphonics Corporation (PERI) 168.0 18.5% 0.7
InterVoice, Inc. (INTV) 155.0 19.0% 2.8
Talk Corporation (TALX) 36.1 27.5% 1.1
Brite Voice Systems, Inc. (BVSI) 168.5 29.0% 0.5
Melita International Corporation (MELI) 109.0 30.0% 1.8
GeoTel Comm. Corp. (GEOC) 72.5 52.0% 10.0
Geneysis Telecom. Labs, Inc. (GCTI) 165.9 54.0% 3.6
Edify Corporation (EDFY) 98.1 na nm
- --------------------------------------------------------------------------------
Arithmetic Mean 2.3
Harmonic Mean 2.0 (a)
Median 1.1
Mean based on Companies with:
Greater than 25% LT Growth 1.7 (b)
Less than 25% LT Growth 1.1
</TABLE>
NOTES
- ---------------
(a) Harmonic mean for all companies is 2.0x and is calculated as total
enterprise value for the group divided by total revenue for the group.
Each company's multiple is therefore weighted based on its revenue and
enterprise value relative to the group total (includes Edify Corp.)
(b) excluding GeoTel Comm. Corp.
20
<PAGE>
SPANLINK COMMUNICATIONS, INC.
VALUATION USING PRICE/PROJECTED REVENUE MULTIPLE
(dollars in millions, except per share)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
IMPLIED DEBT IMPLIED
SPLK ENT VALUE/ ENTERPRISE LESS EQUITY PER
VALUATION PARAMETER DATA LTM REVENUES VALUE CASH VALUE SHARE
- ------------------------- ------ ------------ ---------- ------ ------- -----
<S> <C> <C> <C> <C> <C> <C>
1999 Projected Revenues $18.0 2.0 x $36.00 $0.73 $35.3 $6.94
</TABLE>
NOTES
- --------------------
Selected multiple equal to the harmonic mean multiple for all of the comparable
public companies
21
<PAGE>
SPANLINK COMMUNICATIONS, INC.
VALUATION ANALYSIS BASED ON ESTIMATED 2000 EARNINGS PER SHARE
<TABLE>
<CAPTION>
Present Value of Future Stock Prices
Projected 2000 Net Income $2,668,000 at Discount Rates of:
Common Shares Outstanding $5,800,000 -------------------------------------
EPS, 2000 $0.46 22% 24% 26%
----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Implied Stock Price
P/E Multiple 20 $9.20 $6.18 $5.98 $5.80
P/E Multiple 22 $10.12 $6.80 $6.58 $6.37
P/E Multiple 24 $11.04 $7.42 $7.18 $6.95
P/E Multiple 26 $11.96 $8.04 $7.78 $7.53
P/E Multiple 28 $12.88 $8.65 $8.38 $8.11
</TABLE>
NOTES
- -------------------
Range of P/E ratios derived from the comparable public companies
Because P/E ratios based on latest 12 months earnings are being applied to
Spanlink's future earnings, we have discounted the stock prices to present value
for two years at the equity cost of capital.
EPS calculated using a 40% tax rate on pretax earnings and fully diluted shares
outstanding
22
<PAGE>
DESCRIPTION OF COMPARABLE PUBLIC COMPANIES
Brite Voice Systems, Inc. designs, integrates, assembles, markets, and supports
voice processing and call processing systems and services. The Company=s
services and systems integrate voice recognition, voice/facsimile messaging,
audio-tex, and interactive computer applications. Brite also offers a variety of
telecommunications management services.
Davox Corporation supplies inbound, outbound, and call-blended solutions for
businesses involved in collections, telemarketing, customer service,
fund-raising, and other customer contact activities. The Company markets suites
of call center management solutions under the names "Unison" and "Concerto" that
provide open system, client/server, and relational database technology.
Edify Corporation provides software and services to help corporations build
software-automating business processes that involve direct information access by
customers, employees, and prospects. The Company=s technologies enable
information retrieval from various data sources, and its presentation through
telephones, Internet browsers, pagers, fax machines and electronic mail.
Genesys Telecommunications Laboratories, Inc. provides telecommunications
framework and a suite of applications including call routing, reporting,
outbound dialing, Internet, and video multimedia applications. The Company
develops software solutions for the finance, healthcare, telemarketing,
telecommunications, retail, and transportation industries.
GeoTel Communications Corporation provides Computer Telephony Integration (CTI)
software solutions focused on voice and data routing technology. The Company=s
products enable customer-oriented companies to deliver responsive and
cost-effective customer service. GeoTel sells its products around the world.
InterVoice, Inc. develops, sells, and services call automation systems. The
Company=s systems include interactive voice response systems, which allow
individuals access to computer databases using their telephones, personal
computers, credit card terminals, or voices.
Melita International Corporation provides customer contact and intelligent call
management systems that enable businesses to automate call center activities and
enhance their telephony-based computer interaction. The Company=s principal
product is "PhoneFrame Explorer." Melita currently has over 600 systems
installed worldwide.
23
<PAGE>
Periphonics Corporation develops, markets, and supports products and services
for computer telephony integration and for telecom enhanced network services.
The Company uses interactive voice response speech input, messaging, fax, and
Web browsers. Periphonics=s products and services automate cell transaction
processing.
Syntellect Inc. develops, markets, and integrates voice, Internet, and call
processing systems and services and applications software solutions worldwide.
The Company=s product line includes voice processing, Internet transaction
processing, computer telephony integration, and predictive dialing products.
Syntellect operates a worldwide distribution network.
TALX Corporation provides interactive Web, interactive voice response, computer
telephony integration software, and services. The Company=s customers include
large organizations such as federal government agencies and Fortune 500
companies. TALX=s software and services enable an organization=s employees and
others to access, input, and update information without human assistance.
24
<PAGE>
V. ANALYSIS OF COMPARABLE MERGER AND ACQUISITION TRANSACTIONS
The Comparable Merger and Acquisition Transaction Method involves a
review of the purchase price and valuation multiples paid in selected
merger and acquisition transactions of similar public and private
companies. These transactions represent a change-of-control, therefore
no control premium is required. This is in contrast to the discounted
cash flow and the comparable public company methods which measure a
minority interest value and require that a control premium be applied
to estimate a sale/merger value.
We recognize that stock market and economic conditions can affect
merger values as well as individual company performance and perceived
synergies between two companies. Nonetheless, the values placed on
similar companies in sale/merger transactions does provide important
valuation parameters in the merger market.
We reviewed transactions since 1996 involving the sale or merger of
public companies or the purchase of private companies by public
companies (to the extent financial data was disclosed) in the computer
telephony/call center industry and related software companies that were
under $200 million in transaction value. We located four transactions
as listed on the following page. Applying both the median revenue and
net income multiples to Spanlink=s 1998 financial data produced a range
of values of $7.46 to $8.36 per share. Because the transactions
represent acquisition of control, we have not applied a control
premium. However, given the limited number of data points in the
computer telephony/call center industry, and the wide range of
multiples in general, we would place less weight on the results of this
method as compared to the discounted cash flow and comparable public
company methods.
25
<PAGE>
SPANLINK COMMUNICATIONS, INC.
COMPARABLE MERGER & ACQUISITION TRANSACTIONS
(dollars in millions)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Puchase Price
-------------- Premium
LTM CFYe Ent. Value/LTM Over Method
Date PURCHASE Net Net ENT. --------------------- Unaffected of
Acquiror / Target Announced PRICE Income Income VALUE Rev. EBIT EBITDA Price Payment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oracle Corporation / 8/21/98 $11.4 nm na $10.6 0.6 nm nm 24.0% Cash
Versatility, Inc.
Aspect Telecommunications, Inc. / 4/01/98 $71.00 nm na 78.1 2.7 nm nm na Cash
Voicetek Telecommunications Corp.
Davox Corp. / 3/10/98 84.9 nm na 82.5 12.1 nm nm 43.1% Stock
AnswerSoft, Inc.
Seibel Systems, Inc. / 3/02/98 $462.20 $75.77 $64.90 395.2 4.5 39.1 28.6 88.6% Stock
Scopus Technology, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Mean $157.4 75.8 64.9 $141.6 5.0 39.1 28.6 51.9%
Median $78.0 $75.77 $64.90 $80.3 3.6 $39.1 $28.6 43.1%
</TABLE>
NOTES
- -------------
na = not availabe
nm = not meaningful
All company financial data available at time of the initial announcement
Purchase Price = consideration paid for common stock
Enterprise Value = Puchase price plus debt less cash
Transactions represent change of corporate control
Unaffected price is trading price 5 days prior to initial announcement of the
proposed transaction
Premium is based on the percent that the transaction price exceeds the stock
trading price 5 days prior to announcement of the transaction
A review of 33 sale/merger transactions of selected software and technology
companies under $200 million in transaction value produced the following
multiples (excluding outliers):
LTM LTM 5 Day 30 Day
Rev. Net Inc Premium Premium
---------------------------------
Mean 3.1 40.0 62.4% 73.4%
Median 2.4 42.7 36.1% 55.8%
High 14.7 72.7 432.2% 288.6%
Low 0.6 18.0 7.9% 1.9%
26
<PAGE>
SPANLINK COMMUNICATIONS, INC.
VALUATION ANALYSIS USING COMPARABLE MERGER & ACQUISITION TRANSACTIONS
(dollars in millions, except per share)
- ------------------------------------------------------------------------------
MEDIAN MULTIPLE OF COMPARABLE MERGER &
ACQUISITION TRANSACTIONS
-----------------------------------------------------
SPLK PRICE/
VALUATION PARAMETER DATA LTM EARNINGS
- -------------------- ------- --------------
1998 Earnings $0.50 75.8 x
MEDIAN MULTIPLE OF COMPARABLE MERGER &
ACQUISITION TRANSACTIONS
-----------------------------------------------------
IMPLIED DEBT
SPLK ENT. VALUE/ ENTERPRISE LESS
VALUATION PARAMETER DATA LTM REVENUE VALUE CASH
- -------------------- ------- ------------ ------------ -----
1998 REVENUE $12.0 3.6 x $43.20 $0.73
IMPLIED
EQUITY PER
VALUATION PARAMETER VALUE SHARE
- --------------------- -------- -------
LTM Earnings $37.9 $7.46
LTM Revenue $42.5 $8.36
-------- -------
Mean $40.2 $7.91
27
<PAGE>
VI. VALUATION CONCLUSION
METHODOLOGY VALUATION RANGES
-------------------------------- ----------------
DISCOUNTED CASH FLOW $9.52 to $11.10
COMPARABLE PUBLIC COMPANY $8.47 to $ 9.88
COMPARABLE M/A TRANSACTIONS $7.46 to $ 8.36
REFERENCE RANGE $8.00 to $10.00
To establish the reasonableness of our conclusions, we estimated
Spanlink=s potential earnings to a typical buyer by increasing
Spanlink=s projected 1999 stand-alone net income of $1.1 million by 50%
to equal $1.65 million. This represents our estimate of the level of
earnings a buyer might be expected to generate from Spanlink through
operational synergies. A buyer would pay for Spanlink=s stand-alone
earnings plus some portion of the $550,000 incremental earnings from
synergies ($1.65 million less $1.1 million). We assumed that a buyer
would pay Spanlink between 30% and 70% of the incremental value from
synergies(1). Using that assumption and a 30 to 40 range of P/E
multiples(2), this analysis produced a range of control values for
Spanlink of between $7.47 to $11.69 per share with a mid-point of
$9.47. The results, shown on the following page, support our valuation
conclusion of $8.00 to $10.00 per share.
- ---------------
(1) Generally, the more potential buyers who can realize full synergies, the
higher the percentage of synergies the ultimate buyer will pay the seller
for.
(2) In 1997, the median P/E multiple paid in 69 public company
mergers/acquisitions, between $50 and $100 million in value, was 22.7. P/E
multiples in software industry transactions as well as trading multiples of
related public companies are substantially higher than 22.7. In our
opinion, it is reasonable to expect a buyer to pay 30 to 40 times
Spanlink=s 1999 projected earnings.
28
<PAGE>
SPANLINK COMMUNICATIONS, INC.
VALUATION ANALYSIS
BASED ON PROJECTED 1999 EARNINGS WITH SYNERGIES
($000's, except per share)
Projected 1999 Net Income / Stand-Alone: $1,100
Projected 1999 Net Income / With Full Synergies: $1,650
<TABLE>
<CAPTION>
TOTAL VALUE BASED ON
RANGE OF BUYOUT P/E RATIOS
30 35 40
<S> <C> <C> <C> <C>
Percent of Synergies Buyer Willing to Pay For: -----------------------------------------
30% $37,950 $44,275 $50,600
50% $41,250 $48,125 $55,000
70% $44,550 $51,975 $59,400
<CAPTION>
PER SHARE VALUE BASED ON
RANGE OF BUYOUT P/E RATIOS
30 35 40
<S> <C> <C> <C> <C>
Percent of Synergies Buyer Willing to Pay For: -----------------------------------------
30% $7.47 $8.72 $9.96
50% $8.12 $9.47 $10.83
70% $8.77 $10.23 $11.69
</TABLE>
29
