<PAGE>
Exhibit (c)(2)
Confidential
PROJECT TITAN
Presentation to the Special Committee
October 24, 2000
Dain Rauscher Wessels
<PAGE>
Preface
This book has been prepared by Dain Rauscher Wessels ("DRW"), a division of Dain
Rauscher Incorporated, as part of a presentation being made in support of our
opinion as to the fairness from a financial point of view, of the consideration
to be paid by "Titan" to the minority shareholders of "Poseidon" in connection
with Titan's acquisition of its remaining interest in Poseidon. Unless otherwise
noted, the information and analyses contained in this book were prepared as of
October 24, 2000. The material in this book and all analyses contained herein
are confidential and are for the use of the special committee of independent
directors of the Board of Directors of Poseidon, (the "Special Committee") in
connection with its valuation of the proposed transaction. Any use of this
material and/or the analyses contained herein for any other purpose (including
the evaluation of any transaction other than Titan's acquisition of the minority
interest in Poseidon) or any publication of this material or of the analyses
contained herein without the express written consent of DRW is strictly
prohibited. However, notwithstanding the foregoing, DRW consents to inclusion of
this book in the Schedule TO, Schedule 13E-3 and Schedule 14D-9 relating to the
transaction contemplated herein, in accordance with the terms of its engagement
with Poseidon.
Among the activities conducted in the course of our role as financial advisor to
the Special Committee, DRW received and reviewed business and financial
information of Poseidon as developed by the company and held discussions with
the management of the company regarding this information. In connection with the
analyses contained herein, DRW has not independently verified any such
information and has relied on all such information as being complete and
accurate in all material respects. We assume that such information has been
reasonably prepared and reflects the best currently available estimates and
judgment of management, as the case may be. In addition, we have not performed
or obtained any independent appraisal of the properties or assets of either
company.
Several analytical methodologies have been employed herein and no one method of
analysis should be regarded as critical to the overall conclusion we have
reached. Each analytical technique has inherent strengths and weaknesses, and
the nature of the available information may further affect the value of
particular techniques. No long-term projections (beyond 2001) for Poseidon were
made available; accordingly, we were unable to perform a discounted cash flow
analysis. The overall conclusions we have reached are based on all the analysis
and factors presented herein taken as a whole and also on application of our own
experience and judgment. Such conclusions involve significant elements of
subjective judgment and qualitative analysis. We therefore give no opinion as to
the value or merit standing alone of any one or more parts of the material that
follows. Our only opinion is the formal written opinion as to the fairness, from
a financial point of view, of the consideration to be paid by Titan to the
minority shareholders of Poseidon in the proposed transaction. The opinion, the
analysis contained herein and the overall conclusions drawn from such analyses
are necessarily based upon market, economic and other conditions that exist and
can be evaluated as of the date of this book, and on information available to us
as of the date hereof.
2
<PAGE>
<TABLE>
<CAPTION>
Contents Tab
-------- ---
<S> <C>
History & Transaction Overview 1
Poseidon Financial & Trading Information 2
Summary Valuation Analysis 3
Appendices
----------
Premiums Paid Analysis A
Comparable Company Analysis B
</TABLE>
3
<PAGE>
History & Transaction Overview
4
<PAGE>
History
. Poseidon (the "Company") provides Internet-based e-commerce solutions to
enable suppliers, resellers and end-users to buy and sell computer products
online
. Poseidon was established as a business unit within Titan on July 1, 1993.
The Company was incorporated as a separate entity under the laws of the
State of Delaware on July 18, 1994
. The Company's initial public offering was on February 25, 1999 at a price
of $21 per share
. Titan is currently the majority shareholder of Poseidon holding 62.5%/(1)/
of the outstanding common stock
. On September 20, 2000, the Board of Directors of Poseidon formed a Special
Committee to evaluate the Company's strategic alternatives. The Special
Committee selected DRW as its financial advisor
. Poseidon's closing share price on October 24, 2000 was $3.44
(1) Calculated using basic shares outstanding.
5
<PAGE>
Overview of Terms and Conditions
Transaction Overview: Cash tender offer for all outstanding
Class A shares of common stock
Tax and Accounting Treatment: The transaction will be taxable and
accounted for as a purchase
Consideration: $6.375 in cash for each outstanding
share of Class A common stock
No-Shop Covenant: None
Break-Up Fee: None
Expense Reimbursement
upon Termination: Poseidon will pay $1.25 million to Titan
if it accepts a competing offer
6
<PAGE>
Anticipated Timetable (1)
October 25: Sign and Announce Agreement
Early November: Commence Tender Offer
File Tender Offer Statement (Sched. TO)
and Rule 13e-3 Transaction Statement
Mail Solicitation/Recommendation
Statement (Schedule 14D-9) to
Shareholders
Late November: Tender Offer Expires (unless extended in
accordance with the merger agreement)
If Titan Owns at Least 90% of Class A Shares Outstanding: /(2)/
---------------------------------------------------------
Early December: Proceed with Merger (No Stockholder
Vote) File Cert. of Ownership and Merger
with Secretary of State of the State of
Delaware
Transaction Closes
If Titan Owns Less Than 90% of Class A Shares Outstanding: /(2)/
----------------------------------------------------------
Late January: Convene and Hold Special Meeting of
Stockholders for Stockholder Vote /(3)/
File Proxy or Information Statement with
SEC
File Certificate of Merger with
Secretary of State of the State of
Delaware
Transaction Closes
(1) This Timetable is subject to developments that occur after the signing of
the merger agreement, and the agreement is terminable if no tender offer
purchases have occurred by January 31, 2001.
(2) The merger agreement provides for Titan to convert its Class B shares to
Class A shares if necessary to reach a 90% ownership level.
(3) The merger agreement provides for the alternate of action by written consent
if so available.
7
<PAGE>
Summary of Financial Terms
<TABLE>
<S> <C> <C> <C>
Current Market Valuation Transaction Valuation
Current Per Share Stock Price as of 10/24/00 $ 3.44 Transaction Price Per Class A Share $ 6.375
Fully Diluted Shares Outstanding: Fully Diluted Shares Outstanding:
Class A Common Stock/(1)/ 6,195,940 Class A Common Stock/(1)/ 6,195,940
Class B Common Stock/(2)/ 10,316,620 Class B Common Stock/(2)/ -
Dilutive Securities Using TSM/(3)/ 188,668 Dilutive Securities Using TSM/(3)/ 858,581
---------- ----------
Total 16,701,228 Total 7,054,521
Market Capitalization $ 57,410,470 Transaction Value/(5)/ $44,972,574
Less Cash & Short-Term Investments less Debt/(4)/ $ 77,987,393
------------
Enterprise Value ($20,576,923)
Implied Company Valuation
Transaction Price Per Share $ 6.375
Fully Diluted Shares Outstanding:
Class A Common Stock/(1)/ 6,195,940
Class B Common Stock/(2)/ 10,316,620
Dilutive Securities Using TSM/(3)/ 858,581
-----------
Total 17,371,141
Implied Market Capitalization $110,741,027
Less Cash & Short-Term Investments less Debt/(4)/ $ 77,987,393
------------
Enterprise Value $ 32,753,634
</TABLE>
(1) Class A stock owned by minority shareholders. Class A shares have one vote
per share.
(2) Class B stock owned by Titan. Class B shares have 8 votes per share.
(3) Calculated using the Treasury Stock Method. All options are on Class A
shares.
(4) As of 9/30/00. Source: Poseidon Management.
(5) Calculated as (Class A shares + dilutive securities using TSM) x transaction
price.
8
<PAGE>
Premium Analysis
Premium at
$6.375
Date Share Price Offer Price
------------------------------ --------------- ---------------
Current Stock Price (10/24/00) $ 3.44 85.5%
1 Day Prior $ 3.28 94.3%
1 Week Average $ 3.16 102.0%
1 Month Average $ 3.69 72.6%
52 Week High $74.75 (91.5%)
52 Week Low $ 3.06 108.2%
9
<PAGE>
Poseidon Financial & Trading Information
10
<PAGE>
Poseidon Financial Profile
<TABLE>
<S> <C> <C> <C>
Financial Overview/(1)(2)/
Cash & Short-Term Investments (MM's) $77.99 1999 Calendar Revenue (MM's) $44.01
Cash & Short-Term Investments Per Share/(3)/ $ 4.67 2000 Calendar Revenue Est. (MM's) $51.66
Debt (MM's) $ 0.00 1999 Calendar EPS ($0.55)
Shareholder Equity (MM's) $54.41 2000 Calendar EPS Est. ($0.75)
Stock Price Overview
Current Per Share Stock Price as of 10/24/00 $ 3.44 Market Capitalization (MM's) $57.41
52 Week High $74.75 Enterprise Value (MM's)/(7)/ ($20.58)
52 Week Low $ 3.06 Market Cap/Book Value 1.1 x
Outstanding Shares 16,512,560
Diluted Shares Using TSM/(4)/ 16,701,228
Avg. Daily Volume/(5)/ 216,483
Value of Avg. Daily Vol. (MM's)/(6)/ $ 0.74
</TABLE>
(1) Balance Sheet data as of 09/30/00. Source: Poseidon Management.
(2) Revenue and EPS estimates provided by Poseidon Management. EPS assumes a
$4.2 million restructuring charge in Q4 2000.
(3) Share count calculated using Treasury Stock Method as of 10/24/00
(16,701,228 shares). There are an additional 390,000 shares in treasury stock.
(4) Calculated using the Treasury Stock Method.
(5) LTM moving average.
(6) Value of average daily volume uses closing price as of 10/24/00.
(7) Calculated as Market Capitalization - Cash and Short Term Investments +
Debt.
11
<PAGE>
Poseidon Ownership Analysis
Shares Outstanding: /(1)/
Class A Common Stock - 6,195,940 37.5%
Class B Common Stock - 10,316,620 62.5%
---------------------------------------------------
Total 16,512,560 100.0%
===================================================
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Class A
% of Class % of Class
Insiders /(2)/ Shares Held Outstanding Institutional Investors /(4)/ Shares Held Outstanding
------------------------------ ----------- ----------- --------------------------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Ross Cooley 575,000 9.3% Berger LLC 565,000 9.1%
Christina Jones 518,200 8.4% Invista Capital Management 510,000 8.2%
James Luttenbacher /(3)/ 77,200 1.2% West Highland Capital 362,000 5.8%
Richard Friedman 2,500 0.0% Caxton Corporation 142,300 2.3%
Goldman Sachs and Company 102,220 1.6%
15 Others 295,501 4.8%
------------------------------ ----------- ----------- --------------------------------- ----------- -----------
Total 1,172,900 18.9% Total 1,977,021 31.9%
----------- ----------- ----------- -----------
Public Float /(5)/ 5,023,040 81.1% Retail Float /(6)/ 3,046,019 49.2%
----------- ----------- =========== ===========
-----------------------------------------------------------
Class B Outstanding Option Table /(7)/
% of Class
Rule 144 Investor /(2)/ Shares Held Outstanding Range of Exercise Prices Number WAEP
------------------------------ ---------- ----------- --------------------------------- ----------- -----------
Titan 10,316,620 100.0% $3.00 1,482,388 $ 3.00
$4.88 314,647 $ 4.88
$6.40 - $12.00 555,458 $ 8.57
$13.00 - $30.00 532,428 $26.29
$30.38 - $66.38 224,994 $42.06
----------- -----------
$3.00 - $66.38 3,109,914 $12.72
=========== ===========
</TABLE>
(1) Shares outstanding as of 9/25/00 provided by Poseidon Management. There are
an additional 390,000 shares in treasury stock.
(2) Figures as of 3/22/00 from latest Proxy statement (6/9/00) and Poseidon
Management.
(3) No longer employed by Poseidon.
(4) 13F holders as of 9/30/00; provided by Poseidon Management.
(5) Public float calculated as total Class A shares less Insiders.
(6) Retail float calculated as public float less Institutional Investors.
(7) Options on Class A common stock; provided by Poseidon Management.
12
<PAGE>
Last Twelve Month Daily Stock Price and Trading Volume
Chart depicting both the last twelve month daily stock price and the trading
volume from October 22, 1999 to October 23, 2000. The left axis measures the
stock price, ranging from $0 to $90 per share. The right axis measures the
volume of shares traded, ranging from 0 to 2,500,000. The horizontal axis
between them measures the date for the period beginning October 22, 1999 and
ending October 23, 2000. The chart reflects both declining stock price and
declining trading volume for the period.
Source: FactSet as of 10/24/00.
13
<PAGE>
Poseidon vs. Comparable Company Index vs. NASDAQ Composite - YTD
Charts depicts a comparison of the indexed return of pcOrder stock with a
comparable company's indexed return and with the NASDAQ composite over the
period beginning January 3, 2000 and ending October 23, 2000. The chart
reflects that over a period beginning January 3, 2000 and ending October 23,
2000, the indexed return of pcOrder stock declined more rapidly than the
comparable company's indexed return and the NASDAQ composite.
* Comparable Company Index comprised of Allaire Corp., Calico Commerce, Inc.,
Eprise Corp., NetObjects, Inc., Open Market, Inc., and Viador Inc.
Source: FactSet as of 10/24/00.
14
<PAGE>
Average Share Price Information as of 10/24/00
<TABLE>
<CAPTION>
Moving Averages
Period Price Volume Value Period Price Volume Value
<S> <C> <C> <C> <C> <C> <C> <C>
5 Day $3.21 347,200 $1,115,742 30 Day $4.08 3,491,700 $14,250,148
----------------------------------------------------- -----------------------------------------------------
10 Day $3.28 733,000 $2,400,991 60 Day $4.68 10,723,100 $50,187,625
----------------------------------------------------- -----------------------------------------------------
20 Day $3.64 2,530,200 $9,205,862 90 Day $5.71 14,946,500 $85,393,166
----------------------------------------------------- -----------------------------------------------------
</TABLE>
_________________________
Source: FactSet.
15
<PAGE>
Analyst Coverage /(1)/
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Poseidon - Analyst Coverage
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Bank Analyst Recommendation Price Target EPS Growth Rate /(2)/ Report Date
-----------------------------------------------------------------------------------------------------------------------------------
Southwest Securities Bradley Whit Neutral NA 10-20% 07/27/00
-----------------------------------------------------------------------------------------------------------------------------------
Pacific Growth Equities, Inc. /(3)/ Bala Srinivasa Buy $15.00 20% 07/27/00
-----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
(1) Analyst coverage does not include SG Cowen research, whose last report was
published on 2/15/00.
(2) Management projects `00 - `01 revenue to decline by 45%.
(3) EPS growth rate provided by Bloomberg.
16
<PAGE>
Historical & Projected Income Statement(1)
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended
3/31/1999 6/30/1999 9/30/1999 12/31/1999 12/31/1999
------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions $3,944 $4,288 $6,257 $6,614 $21,103
Content and services 3,716 4,620 6,800 7,773 22,909
------------- ------------- ------------- ------------- ----------
Total revenues 7,660 8,908 13,057 14,387 44,012
------------- ------------- ------------- ------------- ----------
Cost of revenues:
Software and subscriptions 1,201 1,122 1,387 1,726 5,436
Content and services 2,743 3,357 5,066 5,845 17,011
------------- ------------- ------------- ------------- ----------
Total cost of revenues 3,944 4,479 6,453 7,571 22,447
------------- ------------- ------------- ------------- ----------
Gross Profit:
Software and subscriptions 2,743 3,166 4,870 4,888 15,667
Content and services 973 1,263 1,734 1,928 5,898
------------- ------------- ------------- ------------- ----------
Total gross profit 3,716 4,429 6,604 6,816 21,565
------------- ------------- ------------- ------------- ----------
Operating expenses:
Research and development 1,231 1,537 1,959 2,374 7,101
Selling and marketing 3,975 4,723 4,388 4,746 17,832
General and administrative 1,417 1,386 1,503 2,314 6,620
Amortization of deferred stock compensation 373 321 259 322 1,275
Restructuring charge 0 0 0 0 0
Total operating expenses 6,996 7,967 8,109 9,756 32,828
------------- ------------- ------------- ------------- ----------
Operating loss (3,280) (3,538) (1,505) (2,940) (11,263)
------------- ------------- ------------- ------------- ----------
Interest income 237 604 764 1,005 2,610
Loss before income taxes (3,043) (2,934) (741) (1,935) (8,653)
Income tax benefits 243 0 0 0 243
------------- ------------- ------------- ------------- ----------
Net loss ($2,800) ($2,934) ($741) ($1,935) ($8,410)
============= ============= ============= ============= ==========
Weighted average shares outstanding 13,907 15,530 15,602 15,292 15,292
EPS ($0.20) ($0.19) ($0.05) ($0.13) ($0.55)
EPS (excluding one-time charges) ($0.20) ($0.19) ($0.05) ($0.13) ($0.55)
<CAPTION>
Est. Quarter Proj. Quarter
Quarter Ended Quarter Ended Quarter Ended Ending Proj. Year Ending
3/31/2000 6/30/2000 9/30/2000 12/31/2000 12/31/2000
-------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions $6,905 $7,158 $6,912 $5,315 $26,292
Content and services 8,404 8,217 6,540 2,214 25,376
------------- ------------- ------------- ------------- ----------
Total revenues 15,309 15,375 13,452 7,529 51,668
------------- ------------- ------------- ------------- ----------
Cost of revenues:
Software and subscriptions 1,480 1,199 1,198 1,035 4,912
Content and services 6,645 8,042 5,953 4,127 24,768
------------- ------------- ------------- ------------- ----------
Total cost of revenues 8,125 9,241 7,151 5,162 29,681
------------- ------------- ------------- ------------- ----------
Gross Profit:
Software and subscriptions 5,425 5,959 5,714 4,280 21,379
Content and services 1,759 175 587 (1,913) 608
------------- ------------- ------------- ------------- ----------
Total gross profit 7,184 6,134 6,301 2,367 21,987
------------- ------------- ------------- ------------- ----------
Operating expenses:
Research and development 3,544 4,132 3,754 3,680 15,111
Selling and marketing 4,172 3,203 1,967 1,511 10,854
General and administrative 2,789 1,992 1,839 1,490 8,110
Amortization of deferred stock compensation 258 213 174 146 791
Restructuring charge 0 0 0 4,358 4,358
Total operating expenses 10,763 9,540 7,734 11,184 39,223
------------- ------------- ------------- ------------- ----------
Operating loss (3,579) (3,406) (1,433) (8,817) (17,236)
------------- ------------- ------------- ------------- ----------
Interest income 1,180 1,246 1,187 1,037 4,650
Loss before income taxes (2,399) (2,160) (246) (7,780) (12,585)
Income tax benefits 0 0 0 0 0
------------- ------------- ------------- ------------- ----------
Net loss ($2,399) ($2,160) ($246) ($7,780) ($12,585)
============= ============= ============= ============= ==========
Weighted average shares outstanding 16,669 16,823 16,714 16,798 16,798
EPS ($0.14) ($0.13) ($0.01) ($0.46) ($0.75)
EPS (excluding one-time charges) ($0.14) ($0.13) ($0.01) ($0.20) ($0.49)
<CAPTION>
Proj. Quarter Proj. Quarter Proj. Quarter Proj. Quarter
Ending Ending Ending Ending Proj. Year Ending
3/31/2001 6/30/2001 9/30/2001 12/31/2001 12/31/2001
------------- ------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions $5,299 $5,299 $4,373 $4,790 $19,760
Content and services 1,780 2,025 2,327 2,408 8,540
------------- ------------- ------------- ------------- ---------
Total revenues 7,079 7,324 6,700 7,198 28,300
------------- ------------- ------------- ------------- ---------
Cost of revenues:
Software and subscriptions 979 949 723 724 3,376
Content and services 2,246 2,136 2,312 2,203 8,897
------------- ------------- ------------- ------------- ---------
Total cost of revenues 3,225 3,086 3,035 2,927 12,273
------------- ------------- ------------- ------------- ---------
Gross Profit:
Software and subscriptions 4,320 4,349 3,650 4,065 16,384
Content and services (466) (111) 15 206 (356)
------------- ------------- ------------- ------------- ---------
Total gross profit 3,854 4,238 3,665 4,271 16,028
------------- ------------- ------------- ------------- ---------
Operating expenses:
Research and development 3,455 3,365 1,764 1,732 10,315
Selling and marketing 1,600 1,797 1,901 2,049 7,347
General and administrative 1,140 1,036 1,006 1,066 4,248
Amortization of deferred stock compensation 123 102 84 64 373
Restructuring charge 0 0 0 0 0
Total operating expenses 6,317 6,300 4,754 4,911 22,282
------------- ------------- ------------- ------------- ---------
Operating loss (2,464) (2,062) (1,089) (640) (6,255)
------------- ------------- ------------- ------------- ---------
Interest income 853 777 696 702 3,027
Loss before income taxes (1,611) (1,286) (393) 62 (3,228)
Income tax benefits 0 0 0 0 0
------------- ------------- ------------- ------------- ---------
Net loss ($1,611) ($1,286) ($393) $62 ($3,228)
============= ============= ============= ============= =========
Weighted average shares outstanding 16,882 16,966 17,136 17,307 17,307
EPS ($0.10) ($0.08) ($0.02) $0.00 ($0.19)
EPS (excluding one-time charges) ($0.10) ($0.08) ($0.02) $0.00 ($0.19)
</TABLE>
(1) Estimates and projections provided by Poseidon Management.
17
<PAGE>
Historical & Projected Income Statement - Margin Analysis/(1)/
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended
3/31/1999 6/30/1999 9/30/1999 12/31/1999 12/31/1999
------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions 51.5% 48.1% 47.9% 46.0% 47.9%
Content and services 48.5% 51.9% 52.1% 54.0% 52.1%
------------ ------------ ------------ ------------- ----------
Total revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------------ ------------ ------------ ------------- ----------
Cost of revenues:
Software and subscriptions 15.7% 12.6% 10.6% 12.0% 12.4%
Content and services 35.8% 37.7% 38.8% 40.6% 38.7%
------------ ------------ ------------ ------------- ----------
Total cost of revenues 51.5% 50.3% 49.4% 52.6% 51.0%
------------ ------------ ------------ ------------- ----------
Gross Profit:
Software and subscriptions 35.8% 35.5% 37.3% 34.0% 35.6%
Content and services 12.7% 14.2% 13.3% 13.4% 13.4%
------------ ------------ ------------ ------------- ----------
Total gross profit 48.5% 49.7% 50.6% 47.4% 49.0%
------------ ------------ ------------ ------------- ----------
Operating expenses:
Research and development 16.1% 17.3% 15.0% 16.5% 16.1%
Selling and marketing 51.9% 53.0% 33.6% 33.0% 40.5%
General and administrative 18.5% 15.6% 11.5% 16.1% 15.0%
Amortization of deferred stock compensation 4.9% 3.6% 2.0% 2.2% 2.9%
Restructuring charge 0.0% 0.0% 0.0% 0.0% 0.0%
Total operating expenses 91.3% 89.4% 62.1% 67.8% 74.6%
------------ ------------ ------------ ------------- ----------
Operating loss (42.8%) (39.7%) (11.5%) (20.4%) (25.6%)
------------ ------------ ------------ ------------ ---------
Interest income 3.1% 6.8% 5.9% 7.0% 5.9%
Loss before income taxes (39.7%) (32.9%) (5.7%) (13.4%) (19.7%)
Income tax benefit 3.2% 0.0% 0.0% 0.0% 0.6%
------------ ------------ ------------ ------------ ---------
Net loss (36.6%) (32.9%) (5.7%) (13.4%) (19.1%)
============ ============ ============ ============ =========
<CAPTION>
Est. Quarter Proj. Quarter
Quarter Ended Quarter Ended Ending Ending Proj. Year Ending
3/31/2000 6/30/2000 9/30/2000 12/31/2000 12/31/2000
------------- ------------- ------------ ---------- -----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions 45.1% 46.6% 51.4% 70.6% 50.9%
Content and services 54.9% 53.4% 48.6% 29.4% 49.1%
------------ ------------ ----------- --------- ----------------
Total revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------------ ------------ ----------- --------- ----------------
Cost of revenues:
Software and subscriptions 9.7% 7.8% 8.9% 13.7% 9.5%
Content and services 43.4% 52.3% 44.3% 54.8% 47.9%
------------ ------------ ----------- --------- ----------------
Total cost of revenues 53.1% 60.1% 53.2% 68.6% 57.4%
------------ ------------ ----------- --------- ----------------
Gross Profit:
Software and subscriptions 35.4% 38.8% 42.5% 56.9% 41.4%
Content and services 11.5% 1.1% 4.4% (25.4%) 1.2%
------------ ------------ ----------- --------- ----------------
Total gross profit 46.9% 39.9% 46.8% 31.4% 42.6%
------------ ------------ ----------- --------- ----------------
Operating expenses:
Research and development 23.1% 26.9% 27.9% 48.9% 29.2%
Selling and marketing 27.3% 20.8% 14.6% 20.1% 21.0%
General and administrative 18.2% 13.0% 13.7% 19.8% 15.7%
Amortization of deferred stock compensation 1.7% 1.4% 1.3% 1.9% 1.5%
Restructuring charge 0.0% 0.0% 0.0% 57.9% 8.4%
Total operating expenses 70.3% 62.0% 57.5% 148.6% 75.9%
------------ ------------ ----------- --------- ----------------
Operating loss (23.4%) (22.2%) (10.7%) (117.1%) (33.4%)
------------ ------------ ----------- --------- ----------------
Interest income 7.7% 8.1% 8.8% 13.8% 9.0%
Loss before income taxes (15.7%) (14.0%) (1.8%) (103.3%) (24.4%)
Income tax benefit 0.0% 0.0% 0.0% 0.0% 0.0%
------------ ------------ ----------- --------- ----------------
Net loss (15.7%) (14.0%) (1.8%) (103.3%) (24.4%)
============ ============ =========== ========= ================
<CAPTION>
Proj. Quarter Proj. Quarter Proj. Quarter Proj. Quarter
Ending Ending Ending Ending Proj. Year Ending
3/31/2001 6/30/2001 9/30/2001 12/31/2001 12/31/2001
------------ ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Software and subscriptions 74.9% 72.3% 65.3% 66.5% 69.8%
Content and services 25.1% 27.7% 34.7% 33.5% 30.2%
----------- ----------- ----------- ------------ ---------------
Total revenues 100.0% 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- ------------ ---------------
Cost of revenues:
Software and subscriptions 13.8% 13.0% 10.8% 10.1% 11.9%
Content and services 31.7% 29.2% 34.5% 30.6% 31.4%
----------- ----------- ------------ ------------- ----------------
Total cost of revenues 45.6% 42.1% 45.3% 40.7% 43.4%
----------- ----------- ------------ ------------- ----------------
Gross Profit:
Software and subscriptions 61.0% 59.4% 54.5% 56.5% 57.9%
Content and services (6.6%) (1.5%) 0.2% 2.9% (1.3%)
----------- ----------- ------------ ------------- ----------------
Total gross profit 54.4% 57.9% 54.7% 59.3% 56.6%
----------- ----------- ------------ ------------- ----------------
Operating expenses:
Research and development 48.8% 45.9% 26.3% 24.1% 36.4%
Selling and marketing 22.6% 24.5% 28.4% 28.5% 26.0%
General and administrative 16.1% 14.2% 15.0% 14.8% 15.0%
Amortization of deferred stock compensation 1.7% 1.4% 1.3% 0.9% 1.3%
Restructuring charge 0.0% 0.0% 0.0% 0.0% 0.0%
Total operating expenses 89.2% 86.0% 71.0% 68.2% 78.7%
----------- ----------- ------------- ------------- ----------------
Operating loss (34.8%) (28.2%) (16.3%) (8.9%) (22.1%)
----------- ----------- ------------- ------------- ----------------
Interest income 12.0% 10.6% 10.4% 9.7% 10.7%
Loss before income taxes (22.8%) (17.6%) (5.9%) 0.9% (11.4%)
Income tax benefit 0.0% 0.0% 0.0% 0.0% 0.0%
----------- ----------- ------------ ------------ ---------------
Net loss (22.8%) (17.6%) (5.9%) 0.9% (11.4%)
=========== =========== ============ ============ ===============
</TABLE>
(1) Estimates and projections provided by Poseidon Management.
18
<PAGE>
Historical & Projected Balance Sheet (1)
<TABLE>
<CAPTION>
12/31/98 3/31/99 06/30/99 9/30/99
--------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and Equivalents $ 4,726 $ 49,481 $ 47,928 $ 44,580
Short-term investments 0 7,015 696 18,565
Accounts receivable, net 4,775 208 21,010 10,540
Prepaid expenses and other assets 150 484 422 647
Total current assets --------------- ------------- ----------- -------------
9,651 57,188 70,056 74,322
Property and equipment, net 1,938 1,943 2,154 2,729
Other assets 665 0 2,774 60
Total assets --------------- ------------- ----------- -------------
$ 12,254 $ 59,131 $ 74,984 $ 77,121
=============== ============= =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 612 1,148 1,130 1,833
Accrued liabilities 3,150 5,569 9,573 8,733
Payable to Trilogy, net 4,506 0 539 3,628
Deferred revenue 12,531 15,833 29,855 28,407
--------------- ------------- ----------- -------------
Total current liabilities 20,799 22,550 41,097 42,601
Stockholders' equity:
Common Stock 129 155 155 157
Treasury Stock 0 0 0 0
Additional paid-in capital 4,024 51,930 51,855 52,937
Deferred stock compensation (1,726) (1,732) (1,403) (1,131)
Accumulated other comprehensive loss 0 0 (14) 4
Accumulated deficit (10,972) (13,772) (16,706) (17,447)
Total stockholders' equity (8,545) 36,581 33,887 34,520
--------------- ------------- ----------- ------------
Total liabilities and stockholders' equity $ 12,254 $ 59,131 $ 74,984 $ 77,121
--------------- ------------- ----------- ------------
<CAPTION>
12/31/99 3/31/00 6/30/00 09/30/00 Est.
--------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and Equivalents $ 54,113 $ 66,001 $ 65,454 $ 69,135
Short-term investments 27,364 12,059 7,780 8,852
Accounts receivable, net 16,427 11,626 10,210 7,193
Prepaid expenses and other assets 1,030 2,813 1,725 1,560
--------------- ------------- ----------- -------------
Total current assets 98,934 92,499 85,169 86,741
Property and equipment, net 3,592 4,061 3,686 2,870
Other assets 3,212 3,212 3,218 3,218
--------------- ------------- ----------- -------------
Total assets $ 105,738 $ 99,772 $ 92,073 $ 92,829
=============== ============= =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,508 1,685 2,071 1,180
Accrued liabilities 8,814 6,766 6,425 4,091
Payable to Trilogy, net 4,119 7,270 4,284 5,322
Deferred revenue 31,380 25,878 22,722 27,827
--------------- ------------- ----------- -------------
Total current liabilities 45,821 41,599 35,502 38,420
Stockholders' equity:
Common Stock 166 168 169 169
Treasury Stock 0 0 0 (2,293)
Additional paid-in capital 80,401 80,815 81,148 81,293
Deferred stock compensation (1,350) (1,092) (860) (653)
Accumulated other comprehensive loss (1) (20) (28) (3)
Accumulated deficit (19,299) (21,698) (23,858) (24,104)
Total stockholders' equity 59,917 58,173 56,571 54,409
--------------- ------------- ----------- -------------
Total liabilities and stockholders' equity $ 105,738 $ 99,772 $ 92,073 $ 92,829
--------------- ------------- ----------- -------------
<CAPTION>
12/31/00 Proj. 03/31/00 Proj. 06/30/01 Proj. 09/30/01 Proj. 12/31/01 Proj.
--------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and Equivalents $ 56,856 $ 51,767 $ 46,389 $ 46,780 $ 45,692
Short-term investments 8,852 8,852 8,852 8,852 8,852
Accounts receivable, net 2,000 1,985 6,182 3,318 5,470
Prepaid expenses and other assets 613 456 321 259 197
--------------- ------------- ----------- ------------- ----------
Total current assets 68,322 63,061 61,745 59,210 60,212
Property and equipment, net 2,222 1,746 1,353 1,046 706
Other assets 3,218 3,218 3,218 3,218 3,218
--------------- ------------- ----------- ------------- ----------
Total assets $ 73,762 $ 68,025 $ 66,316 $ 63,474 $ 64,136
=============== ============= =========== ============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,040 1,488 1,495 1,482 1,501
Accrued liabilities 2,635 1,100 2,148 1,300 2,223
Payable to Trilogy, net 0 2,757 0 721 0
Deferred revenue 23,349 19,283 21,236 19,539 20,556
--------------- ------------- ----------- ------------- ----------
Total current liabilities 28,024 24,628 24,879 23,042 24,280
Stockholders' equity:
Common Stock 169 169 169 169 169
Treasury Stock (2,293) (2,293) (2,293) (2,293) (2,293)
Additional paid-in capital 81,294 81,294 81,294 81,294 81,294
Deferred stock compensation (507) (384) (282) (198) (134)
Accumulated other comprehensive loss (3) (3) (3) (3) (3)
Accumulated deficit (32,921) (35,385) (37,448) (38,537) (39,176)
Total stockholders' equity 45,738 43,397 41,437 40,432 39,856
--------------- ------------- ----------- ------------- ----------
Total liabilities and stockholders' equity $ 73,762 $ 68,025 $ 66,316 $ 63,474 $ 64,136
--------------- ------------- ----------- ------------- ----------
</TABLE>
(1) Estimates and projections provided by Poseidon Management.
19
<PAGE>
Historical & Projected Balance Sheet - Margin Analysis/(1)/
<TABLE>
<CAPTION>
12/31/98 3/31/99 06/30/99 9/30/99 12/31/99 3/31/00 6/30/00
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and Equivalents 38.6% 83.7% 63.9% 57.8% 51.2% 66.2% 71.1%
Short-term investments 0.0% 11.9% 0.9% 24.1% 25.9% 12.1% 8.4%
Accounts receivable, net 39.0% 0.4% 28.0% 13.7% 15.5% 11.7% 11.1%
Prepaid expenses and other assets 1.2% 0.8% 0.6% 0.8% 1.0% 2.8% 1.9%
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current assets 78.8% 96.7% 93.4% 96.4% 93.6% 92.7% 92.5%
Property and equipment, net 15.8% 3.3% 2.9% 3.5% 3.4% 4.1% 4.0%
Other assets 5.4% 0.0% 3.7% 0.1% 3.0% 3.2% 3.5%
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
=========== =========== =========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 5.0% 1.9% 1.5% 2.4% 1.4% 1.7% 2.2%
Accrued liabilities 25.7% 9.4% 12.8% 11.3% 8.3% 6.8% 7.0%
Payable to Trilogy, net 36.8% 0.0% 0.7% 4.7% 3.9% 7.3% 4.7%
Deferred revenue 102.3% 26.8% 39.8% 36.8% 29.7% 25.9% 24.7%
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current liabilities 169.7% 38.1% 54.8% 55.2% 43.3% 41.7% 38.6%
Stockholders' equity:
Common Stock 1.1% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2%
Treasury Stock 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Additional paid-in capital 32.8% 87.8% 69.2% 68.6% 76.0% 81.0% 88.1%
Deferred stock compensation (14.1%) (2.9%) (1.9%) (1.5%) (1.3%) (1.1%) (0.9%)
Accumulated other comprehensive loss 0.0% 0.0% (0.0%) 0.0% (0.0%) (0.0%) (0.0%)
Accumulated deficit (89.5%) (23.3%) (22.3%) (22.6%) (18.3%) (21.7%) (25.9%)
Total stockholders' equity (69.7%) 61.9% 45.2% 44.8% 56.7% 58.3% 61.4%
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and stockholders'
equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
09/30/00 Est. 12/31/00 Proj. 03/31/01 Proj. 06/30/01 Proj. 09/30/01 Proj. 12/31/01 Proj.
------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and Equivalents 74.5% 77.1% 76.1% 70.0% 73.7% 71.2%
Short-term investments 9.5% 12.0% 13.0% 13.3% 13.9% 13.8%
Accounts receivable, net 7.7% 2.7% 2.9% 9.3% 5.2% 8.5%
Prepaid expenses and other assets 1.7% 0.8% 0.7% 0.5% 0.4% 0.3%
------------- -------------- -------------- -------------- -------------- --------------
Total current assets 93.4% 92.6% 92.7% 93.1% 93.3% 93.9%
Property and equipment, net 3.1% 3.0% 2.6% 2.0% 1.6% 1.1%
Other assets 3.5% 4.4% 4.7% 4.9% 5.1% 5.0%
------------- -------------- -------------- -------------- -------------- --------------
Total assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
============= ============== ============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1.3% 2.8% 2.2% 2.3% 2.3% 2.3%
Accrued liabilities 4.4% 3.6% 1.6% 3.2% 2.0% 3.5%
Payable to Trilogy, net 5.7% 0.0% 4.1% 0.0% 1.1% 0.0%
Deferred revenue 30.0% 31.7% 28.3% 32.0% 30.8% 32.1%
------------- -------------- -------------- -------------- -------------- --------------
Total current liabilities 41.4% 38.0% 36.2% 37.5% 36.3% 37.9%
Stockholders' equity:
Common Stock 0.2% 0.2% 0.2% 0.3% 0.3% 0.3%
Treasury Stock (2.5%) (3.1%) (3.4%) (3.5%) (3.6%) (3.6%)
Additional paid-in capital 87.6% 110.2% 119.5% 122.6% 128.1% 126.8%
Deferred stock compensation (0.7%) (0.7%) (0.6%) (0.4%) (0.3%) (0.2%)
Accumulated other comprehensive loss (0.0%) (0.0%) (0.0%) (0.0%) (0.0%) (0.0%)
Accumulated deficit (26.0%) (44.6%) (52.0%) (56.5%) (60.7%) (61.1%)
Total stockholders' equity 58.6% 62.0% 63.8% 62.5% 63.7% 62.1%
------------- -------------- -------------- -------------- -------------- --------------
Total liabilities and stockholders'
equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
(1) Estimates and projections provided by Poseidon Management.
20
<PAGE>
Summary Valuation Analysis
21
<PAGE>
Process Summary
. Special Committee formed on September 20, 2000
. DRW engaged by the Special Committee on September 25, 2000
. DRW conducted due diligence September 27 through October 17, 2000 (See
Summary Due Diligence findings on following page)
. First offer by Titan $5.00
. Negotiated offer price $6.375
22
<PAGE>
Summary Due Diligence Findings
. Management's opinions vary as to the future direction of the Company
. Employee turnover has been high for several months
. Only 8 "profitable" customers. None are referenceable and, in aggregate,
they provide negative future cash flows despite their characterization as
being profitable accounts
. The Company has had no new software bookings in the last 9 months
. Poseidon has not done any long-term strategic planning nor does it have
financial projections beyond 12/31/01
. The ambiguous nature of the language in the technology licensing agreements
between Titan and Poseidon and the history of product development by both
companies make it difficult to determine the distinct ownership of the
products between them
. Titan's controlling ownership and voting position, its competing business
unit, the relative importance of its configuration software in Poseidon's
selling process and the difficulty associated with the separation of
intellectual property between Titan and Poseidon present significant
challenges to the marketability of Poseidon to an independent third party
23
<PAGE>
Premiums Paid Analysis
<TABLE>
<CAPTION>
Acquisitions of Minority Interest/(1)/
---------------------------------
1 Day Prior/(2)/ 1 Week Avg./(2)/ 1 Month Avg./(2)/
-------------------- -------------------- ---------------------
<S> <C> <C> <C>
Mean 47.2% 45.2% 45.6%
Median 35.4% 31.2% 38.4%
Precedent Transactions/(3)/
----------------------
1 Day Prior 1 Week Avg. 1 Month Avg.
-------------------- -------------------- ---------------------
Mean 45.6% 49.1% 57.6%
Median 28.3% 38.2% 53.5%
======================================================================================================================
Poseidon/(4)/ 94.3% 102.0% 72.6%
======================================================================================================================
</TABLE>
(1) See Appendix A for detail.
(2) All periods relative to announcement period.
(3) Includes acquisitions of software companies with revenues greater than $5
million, announced after January 1, 1999 and with transaction values between $10
million and $500 million. Source: Commscan M&A Desk.
(4) Periods relative to 10/24/00.
24
<PAGE>
Multiples Analysis
<TABLE>
<CAPTION>
Precedent Transaction Analysis:/(1)/
-------------------------------
---------------------------------------- --------------
Transaction Value/LTM Revenue/(2)/ Poseidon
---------------------------------------- --------------
Mean Median Low High
---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C>
2.5 x 1.9 x 0.2 x 9.9 x 1.9 x /(3)/
Comparable Companies:/(4)/
---------------------
----------------------------------------
Growth Rates
----------------------------------------
Mean Median Low High
---------- ---------- ------- --------
CY'00 Revenue Growth Rate 152.0% 96.0% 23.3% - 423.1% 17.4%
CY'01 Revenue Growth Rate 61.5% 54.7% 13.9% - 112.6% (45.3%)
----------------------------------------
Enterprise Value/Revenue
----------------------------------------
Mean Median Low High
---------- ---------- ------- --------
CY'00 Revenue 2.2 x 2.0 x 1.3 x - 3.9 x 0.6 x
CY'01 Revenue 1.3 x 1.2 x 0.8 x - 2.1 x 1.2 x
----------------------------------------
Enterprise Value/Gross Margin
----------------------------------------
Mean Median Low High
---------- ---------- ------- --------
CY'00 Gross Margin 3.3 x 2.8 x 2.0 x - 5.6 x 1.5 x
CY'01 Gross Margin 1.9 x 1.8 x 1.2 x - 3.0 x 1.9 x
--------------
</TABLE>
(1) Includes acquisitions of software companies with revenues greater than $5
million as announced after January 1, 1999 and with transaction values between
$10 million and $500 million. Source: Commscan M&A Desk.
(2) LTM revenues from time of announcement.
(3) Implied company value / LTM revenue.
(4) See Appendix B for detail.
25
<PAGE>
Appendices
26
<PAGE>
Premiums Paid Analysis
27
<PAGE>
Premium Analysis for Acquisition of Minority Interest
<TABLE>
<CAPTION>
(Dollars in millions)
Date Date Acquiror Target Target Remaining Enterprise
Announced Completed Acquiror Ticker Target Ticker Description Interest Value
--------- --------- ------------------- --------- ---------------- -------- ------------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/27/98 12/14/98 Allmerica Financial AFC Citizens Corp. CZC Underwrites 17.5% $1,134
Corp. property and
casualty
insurance
3/8/99 12/1/99 Investor Group Private ENStar, Inc. ENSR Network comms 45.0% $38
service providers
7/29/99 9/14/99 Investors (63% of Private Concord Fabrics CIS Fabric 37.0% $21
Shareholders) Inc. designer/developer
9/8/99 6/28/00 Investors Private Sunrise SUNL Sells data 40.6% $12
(Peter King) International processing
Leasing Corp. equipment
1/31/00 6/30/00 Thermo Electron TMO Thermedics Inc TMD Drug testing 24.5% $454
Corporation equipment
manufacturer
1/31/00 4/13/00 Thermo Instrument THI Thermo Bio TBA Analytic equip. 22.7% $612
Systems, Inc. Analysis for biotech
Corp.
2/22/00 6/15/00 Global Crossing Ltd. GBLX IXnet, Inc. EXNT Manufactures office 27.0% $1,781
furniture
3/24/99 11/4/99 Warburg, Pincus Private Knoll Inc. KNL Extranet 43.5% $1,137
Ventures connections for
LP/Investor Group financial industry
4/24/00 7/14/00 Management Group Private Cherry Corp. CHERA Semiconductor 46.0% $417
(Led by Peter component
Cherry) manufacturer
6/22/00 Pending G.C. Associates Private American AMEP Educational 31.2% $84
Holdings Educational products
Corp. Products, Inc.
8/31/00 Pending Minolta Co., 7753 JP Minolta-QMS, Inc. MQC Document imaging 49.0% $81
Ltd./(2)/ manufacturer
9/21/00 Pending Ford Motor Co. F Hertz Corp. HRZ Automobile and 18.5% $1,294
machinery leasor
----------------------------------------------------------------------------------------------------------------------------------
10/24/00 Pending Titan Private Poseidon/(3)/ eCommerce solution 38.0% ($21)
provider
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(Dollars in millions)
Prices Premium Analysis
------------------------------------- ------------------------
Offer
Date Date Price Per 1 Day 1 Week 1 Month 1 Day 1 Week 1 Month Consid-
Announced Completed Acquiror Share Prior/(1)/ Average/(1)/ Average/(1)/ Prior Average Average eration
--------- --------- -------------------- ---------- ---------- ------------ ------------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/27/98 12/14/98 Allmerica Financial $29.00 $27.56 $28.31 $27.14 5.2% 2.4% 6.8% Cash
Corp.
3/8/99 12/1/99 Investor Group $10.00 $8.00 $7.92 $7.96 25.0% 26.3% 25.6% Cash
7/29/99 9/14/99 Investors (63% of $7.88 $5.63 $5.79 $5.74 40.1% 36.2% 37.3% Cash
Shareholders)
9/8/99 6/28/00 Investors $9.50 $4.25 $4.31 $4.22 123.5% 120.6% 125.0% Cash
(Peter King)
1/31/00 6/30/00 Thermo Electron $8.00 $6.13 $6.36 $5.73 30.6% 25.7% 39.5% Stock
Corporation
1/31/00 4/13/00 Thermo Instrument $28.00 $18.50 $18.35 $17.54 51.4% 52.6% 59.7% Cash
Systems, Inc.
2/22/00 6/15/00 Global Crossing Ltd. $62.03 $52.50 $50.65 $44.01 18.2% 22.5% 40.9% Stock
3/24/99 11/4/99 Warburg, Pincus $25.00 $15.25 $17.06 $18.33 63.9% 46.5% 36.4% Cash
Ventures
LP/Investor Group
4/24/00 7/14/00 Management Group $26.40 $13.00 $12.93 $14.40 103.1% 104.3% 83.3% Cash
(Led by Peter
Cherry)
6/22/00 Pending G.C. Associates $10.00 $9.38 $9.31 $9.09 6.7% 7.4% 10.1% Cash
Holdings
Corp.
8/31/00 Pending Minolta Co., $5.25 $3.00 $2.99 $3.01 75.0% 75.7% 74.7% Cash
Ltd./(2)/
8/31/00 Pending Ford Motor Co. $30.00 $24.25 $24.65 $27.82 23.7% 21.7% 7.8% Cash
----------------------------------------
High 123.5% 120.6% 125.0%
Low 5.2% 2.4% 6.8%
Mean 47.2% 45.2% 45.6%
Median 35.4% 31.2% 38.4%
----------------------------------------
----------------------------------------------------------------------------------------------------------------------
10/24/00 Pending Titan 6.38 $3.28 $3.16 $3.69 94.3% 102.0% 72.6%
----------------------------------------------------------------------------------------------------------------------
/(1)/ All periods are relative to announcement period.
/(2)/ Minolta share price calculated using Japanese Yen spot rate as of 10/23/00.
/(3)/ All periods relative to 10/24/00.
Source: Commscan M&A Desk, SEC filings and press releases.
</TABLE>
28
<PAGE>
Comparable Company Analysis
29
<PAGE>
Comparable Company Analysis (1)
(Dollars and shares in millions, except per share data.)
<TABLE>
<CAPTION>
Stock Price Information Market Cap. & Other Financial Data
Price @ 52 Week Range Market Revenue Balance Sheet Enterprise
------------- ----------------- -------------
Company Symbol FYE 10/24/00 High Low Cap. CY99 CY00 CY01 Cash Debt Value (EV)
------------------------------------ ------ --- --------- ---- --- --- ---- ---- ---- ---- ---- ----------
Platform
--------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Allaire Corp. ALLR Dec $6.50 $94.13 $6.00 $205 $55.2 $117.6 $170.1 $26.3 $ 3.0 $181
NetObjects Inc. NETO Sep $3.53 $45.69 $1.75 $114 $24.5 $ 43.7 $ 65.1 $11.5 $ 0.3 $103
Viador Inc. VIAD Dec $6.88 $64.81 $3.56 $142 $10.2 $ 30.1 $ 56.8 $26.3 $ 3.0 $119
Mean:
Median:
Content Management
------------------
Eprise Corporation EPRS Dec $4.75 $27.44 $3.13 $130 $ 3.7 $ 19.1 $ 40.7 $79.2 $ 0.0 $ 51
Open Market, Inc. OMKT Dec $3.38 $65.50 $2.31 $163 $83.0 $102.3 $116.5 $39.4 $12.0 $136
Mean:
Median:
Configuration
-------------
Calico Commerce, Inc. CLIC Mar $3.81 $75.75 $2.25 $136 $30.1 $ 53.8 $ 86.4 $68.7 $ 3.1 $ 70
Overall Mean:
Overall Median:
Low:
High:
------------------------------------------------------------------------------------------------------------------------------------
Poseidon (at offer price)/(2)/ Dec $6.38 $74.75 $3.06 $111 $44.0 $ 51.7 $ 28.3 $78.0 $ 0.0 $ 33
Poseidon (at 10/24/00 closing price)/(2)/ Dec $3.44 $74.75 $3.06 $ 57 $44.0 $ 51.7 $ 28.3 $78.0 $ 0.0 $(21)
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EV/ Revenue EV/ Gross Margin Growth & Margin Data
Revenue Growth MRQ
--------------------
Company CY00 CY01 CY00 CY01 99 - 00 00 - 01 GM
------------------------------------ ---- ---- ---- ---- ------- ------- --
Platform
--------
<S> <C> <C> <C> <C> <C> <C> <C>
Allaire Corp. 1.5 x 1.1 x 2.0 x 1.3 x 113.2% 44.6% 79%
NetObjects Inc. 2.4 x 1.6 x 3.2 x 2.2 x 78.3% 48.9% 69%
Viador Inc. 3.9 x 2.1 x 5.6 x 3.0 x 195.1% 88.7% 69%
---------------------------------------------------------------
2.6 x 1.6 x 3.6 x 2.2 x 128.9% 60.7% 72%
2.4 x 1.6 x 3.2 x 2.2 x 113.2% 48.9% 69%
---------------------------------------------------------------
Content Management
------------------
Eprise Corporation 2.6 x 1.2 x 4.3 x 1.6 x 423.1% 112.6% 55%
Open Market, Inc. 1.3 x 1.2 x 2.3 x 2.0 x 23.3% 13.9% 57%
---------------------------------------------------------------
2.0 x 1.2 x 3.3 x 1.8 x 223.2% 63.2% 56%
2.0 x 1.2 x 3.3 x 1.8 x 223.2% 63.2% 56%
---------------------------------------------------------------
Configuration
-------------
Calico Commerce, Inc. 1.3 x 0.8 x 2.2 x 1.2 x 78.9% 60.6% 56%
---------------------------------------------------------------
2.2 x 1.3 x 3.3 x 1.9 x 152.0% 61.5% 64%
2.0 x 1.2 x 2.8 x 1.8 x 96.0% 54.7% 63%
1.3 x 0.8 x 2.0 x 1.2 x 23.3% 13.9% 55%
3.9 x 2.1 x 5.6 x 3.0 x 423.1% 112.6% 79%
---------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Poseidon (at offer price)/(2)/ 0.6 x 1.2 x 1.5 x 1.9 x 17.4% (45.3%) 47%
Poseidon (at 10/24/00 closing price)/(2)/ NM NM NM NM 17.4% (45.3%) 47%
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Revenue and earnings estimates provided by Dain Rauscher, First Call, and
various Wall Street sources.
(2) Revenue and earnings estimates provided by Poseidon Management.
30
