<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
CPI CORP.
(NAME OF THE ISSUER)
CPI CORP.
SPS INTERNATIONAL HOLDINGS, INC.
SPS ACQUISITION, INC.
AMERICAN SECURITIES PARTNERS II, L.P.
ALYN V. ESSMAN
RUSSELL ISAAK
PATRICK J. MORRIS
(NAME OF PERSON(S) FILING STATEMENT)
------------------------
COMMON STOCK, PAR VALUE $0.40 PER SHARE
(TITLE OF CLASS OF SECURITIES)
125902106
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
<TABLE>
<S> <C>
CPI CORP.
ALYN V. ESSMAN SPS INTERNATIONAL HOLDINGS, INC.
RUSSELL ISAAK SPS ACQUISITION, INC.
PATRICK J. MORRIS AMERICAN SECURITIES PARTNERS II, L.P.
C/O CPI CORP. 122 EAST 42ND STREET
1706 WASHINGTON AVENUE NEW YORK, NEW YORK 10168
ST. LOUIS, MISSOURI 63103 ATTENTION: MARK BANDEEN
(314) 231-1575 (212) 476-8000
</TABLE>
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
------------------------
Copies to:
<TABLE>
<S> <C>
WILLIAM F. WYNNE, JR., ESQ. RICHARD CAPELOUTO, ESQ.
WHITE & CASE LLP SIMPSON THACHER & BARTLETT
1155 AVENUE OF THE AMERICAS 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10036 NEW YORK, NEW YORK 10017
(212) 819-8200 (212) 455-2000
</TABLE>
JOHN A. RAVA, ESQ.
HUSCH & EPPENBERGER, LLC
100 NORTH BROADWAY, SUITE 1300
ST. LOUIS, MISSOURI 63102-2789
(314) 421-4800
This statement is filed in connection with (check the appropriate box):
/x/ a. The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or
Rule 13e-3(c) under the Securities Exchange Act of 1934.
/ / b. The filing of a registration statement under the Securities
Act of 1933.
/ / c. A tender offer.
/ / d. None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. / /
------------------------
<TABLE>
<S> <C>
CALCULATION OF FILING FEE
TRANSACTION VALUATION(1) AMOUNT OF FILING FEE
$386,726,644 $77,345.33
</TABLE>
/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.
<TABLE>
<S> <C>
Amount previously paid: $77,345.33 Filing party: CPI Corp.
Form or registration no.: Schedule 14-A, no. 1-10204 Date filed: July 12, 1999; August 27, 1999;
September 23, 1999, September 27, 1999
and September 28, 1999
</TABLE>
(1) Based upon Exchange Act Rule 0-11(b). Includes $37.00 per share for
9,920,007 shares of common stock of the Issuer plus an aggregate of
$19,686,385 in consideration of 1,399,233 outstanding options to purchase
common stock of the Issuer.
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<PAGE>
INTRODUCTORY NOTE
This Amendment No. 3 amends and supplements the Rule 13e-3 Transaction
Statement on Schedule 13E-3 (as amended and supplemented, the "Schedule 13E-3")
relating to the proposed merger (the "Merger") of SPS Acquisition, Inc., a
Delaware corporation ("Sub"), with and into CPI Corp., a Delaware corporation
(the "Corporation"), pursuant to the Agreement and Plan of Merger dated as of
June 15, 1999, by and among the Corporation, Sub and SPS International Holdings,
Inc., a Delaware corporation ("Parent"). In connection with the Merger, certain
officers and employees of the Corporation, including Alyn V. Essman, Russell
Isaak and Patrick J. Morris, have agreed to invest cash, shares of the
Corporation's common stock or options to purchase the Corporation's common stock
or a combination thereof in Parent in return for equity interests in Parent.
The cross reference sheet below is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the Proxy Statement
(the "Proxy Statement"), filed by the Corporation with the Securities and
Exchange Commission on September 27, 1999 and September 28, 1999 of the
information required to be included in response to the items of Schedule 13E-3.
The information set forth in the Proxy Statement (including the appendixes
thereto) is hereby expressly incorporated herein by reference and the responses
to each item are qualified in their entirety by the information contained in the
Proxy Statement.
2
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO GENERAL INSTRUCTION F
TO SCHEDULE 13E-3
<TABLE>
<CAPTION>
SCHEDULE 13E-3 RESPONSE/CAPTION IN
ITEM NUMBER AND CAPTION PROXY STATEMENT
- ------------------------ --------------------
<S> <C>
</TABLE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
<TABLE>
<S> <C>
(a) Cover Page;
SUMMARY--General--The Parties to the Transaction; Management Investors;
SUMMARY--General--The Merger.
(b) SUMMARY--General--The Special Meeting;
INTRODUCTION--Voting Rights; Agreements to Vote; Vote Required for Approval.
(c) SUMMARY--Comparative Market Price Data.
(d) SUMMARY--Dividends.
(e) Not applicable.
(f) TRANSACTIONS IN COMMON STOCK BY CERTAIN PERSONS.
</TABLE>
ITEM 2. IDENTITY AND BACKGROUND.
<TABLE>
<S> <C>
(a)-(d) and Cover Page;
(g)
SUMMARY--General--The Parties to the Transaction;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest--Equity Investment by Management Investors.
</TABLE>
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
<TABLE>
<S> <C>
(a)-(b) SPECIAL FACTORS--Background of the Merger;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
</TABLE>
ITEM 4. TERMS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a) SUMMARY;
INTRODUCTION;
SPECIAL FACTORS;
THE MERGER;
THE MERGER AGREEMENT;
Appendix A.
(b) SUMMARY;
SPECIAL FACTORS--Certain Effects of the Merger; Plans or Proposals After the Merger;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
</TABLE>
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
<TABLE>
<S> <C>
(a)-(g) SUMMARY--Certain Effects of the Merger;
SPECIAL FACTORS--Certain Effects of the Merger; Plans or Proposals After the Merger;
THE MERGER--Effects of the Merger.
</TABLE>
3
<PAGE>
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
<TABLE>
<S> <C>
(a) SUMMARY--Financing of the Merger;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest;
THE MERGER--Financing of the Merger.
(b) THE MERGER AGREEMENT--Termination Fees; Expenses.
(c) THE MERGER--Financing of the Merger.
(d) Not applicable.
</TABLE>
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
<TABLE>
<S> <C>
(a)-(d) SUMMARY--Certain Effects of the Merger;
SPECIAL FACTORS--Background of the Merger;
SPECIAL FACTORS--CPI's Reasons for the Merger;
Recommendation of Our Board of Directors;
SPECIAL FACTORS--Certain Effects of the Merger; Plans or Proposals After the Merger
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest;
SPECIAL FACTORS--Material U.S. Federal Income Tax Consequences of
the Merger to Our Stockholders.
</TABLE>
ITEM 8. FAIRNESS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a)-(b) SUMMARY;
SPECIAL FACTORS--CPI's Reasons for the Merger; Recommendation of
Our Board of Directors;
SPECIAL FACTORS--CPI and the Senior Management Investors' Belief as to the
Fairness of the Merger;
SPECIAL FACTORS--SPS International, SPS Acquisition and American Securities
Partners II's Belief as to the Fairness of the Merger;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
(c) INTRODUCTION--Voting Rights; Agreements to Vote; Vote Required For Approval.
(d)-(f) SPECIAL FACTORS--Background of the Merger;
SPECIAL FACTORS--CPI's Reasons for the Merger; Recommendation of
Our Board of Directors.
</TABLE>
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
<TABLE>
<S> <C>
(a)-(c) SPECIAL FACTORS--Background of the Merger;
SPECIAL FACTORS--Opinion of Financial Advisor;
SPECIAL FACTORS--CPI's Reasons for the Merger; Recommendation of
Our Board of Directors;
Appendix C.
</TABLE>
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
<TABLE>
<S> <C>
(a) SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest;
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS;
TRANSACTIONS IN COMMON STOCK BY CERTAIN PERSONS.
(b) Not applicable.
</TABLE>
4
<PAGE>
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
<TABLE>
<S> <C>
SUMMARY--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest;
INTRODUCTION--Voting Rights; Agreements to Vote; Vote Required for Approval;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
</TABLE>
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF
CERTAIN PERSONS WITH REGARD TO THE TRANSACTION.
<TABLE>
<S> <C>
(a)-(b) INTRODUCTION--Voting Rights; Agreements to Vote; Vote Required For Approval;
SPECIAL FACTORS--CPI's Reasons for the Merger; Recommendation of
Our Board of Directors;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
</TABLE>
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a) THE MERGER--Rights of Dissenting Stockholders;
Appendix B.
(b) Not applicable.
(c) Not applicable.
</TABLE>
ITEM 14. FINANCIAL INFORMATION.
<TABLE>
<S> <C>
(a) SUMMARY--Our Financial Information and Projections
Annual Report on Form 10-K for the fiscal year ended February 6, 1999 for the Corporation,
which is incorporated by reference in the Proxy Statement.
(b) Not applicable.
</TABLE>
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
<TABLE>
<S> <C>
(a) SUMMARY;
SPECIAL FACTORS--Background of the Merger;
SPECIAL FACTORS--Opinion of Financial Advisor;
SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of
Interest.
(b) INTRODUCTION--Solicitation of Proxies;
EXPENSES OF SOLICITATION.
</TABLE>
ITEM 16. ADDITIONAL INFORMATION.
<TABLE>
<S> <C>
Proxy Statement (and the Appendixes thereto) generally
</TABLE>
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Commitment letter from Credit Suisse First Boston for Senior Secured Credit Facility dated
June 15, 1999.*
(2) Commitment letter from Credit Suisse First Boston for Bridge Loan Facility dated June 15, 1999.*
(3) Letter agreement amending the commitment letter for Senior Secured Credit Facility dated September
8, 1999.*
(4) Letter agreement assigning a portion of the Senior Secured Credit Facility to Morgan Stanley &
Co., dated September 9, 1999.*
(5) Letter agreement assigning a portion of the Bridge Loan Facility to Morgan Stanley Senior Funding,
Inc. dated September 9, 1999.*
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
(b)(1) Opinion of Credit Suisse First Boston Corporation (Attached as Appendix C
to the Proxy Statement).
(2) Written Materials distributed to Board of Directors at May 26, 1999 meeting by
Credit Suisse First Boston Corporation.*
(3) Written Materials distributed to Board of Directors at May 7, 1998 meeting by Credit Suisse First
Boston Corporation.
(4) Written Materials distributed to Board of Directors at December 3, 1998 meeting by Credit Suisse
First Boston Corporation.*
(5) Written Materials distributed to Board of Directors at January 12, 1999 meeting by Credit Suisse
First Boston Corporation.*
(6) Written Materials distributed to Board of Directors at February 4, 1999 meeting by A.G. Edwards.*
(c)(1) Agreement and Plan of Merger, dated as of June 15, 1999, among Parent, Sub and the Corporation.
(Attached as Appendix A to the Proxy Statement).
(2) Form of Subscription Agreement for Accredited Investors (including voting agreements).*
(3) Guarantee of American Securities Capital Partners, L.P. dated June 15, 1999.*
(4) Form of Subscription Agreement for Accredited Investors.*
(d)(1) A copy of the Proxy Statement (filed by CPI Corp. on September 27, 1999 and September 28, 1999 and
incorporated herein by reference).
(e)(1) Section 262 of the Delaware General Corporation Law (Attached as Appendix B
to the Proxy Statement).
(f)(1) Not applicable.
</TABLE>
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* Previously filed.
6
<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information set forth on the cover page and the headings
"SUMMARY--General--The Parties to the Transaction; Management Investors" and "--The Merger" of
the Proxy Statement, which information is incorporated herein by reference.
(b) Reference hereby is made to the information set forth under the headings "SUMMARY--General--The
Special Meeting" and "INTRODUCTION--Voting Rights; Agreements to Vote; Vote Required For
Approval" in the Proxy Statement, which information is incorporated herein by reference.
(c) Reference hereby is made to the information set forth under the heading "SUMMARY--Comparative
Market Price Data" in the Proxy Statement, which information is incorporated herein by
reference.
(d) Reference hereby is made to the information set forth under the heading "SUMMARY--Dividends" in
the Proxy Statement, which information is incorporated herein by reference.
(e) Not applicable.
(f) Reference hereby is made to the information set forth under the heading "TRANSACTIONS IN COMMON
STOCK BY CERTAIN PERSONS" in the Proxy Statement, which information is incorporated herein by
reference.
</TABLE>
ITEM 2. IDENTITY AND BACKGROUND.
<TABLE>
<S> <C>
(a)-(d) and The persons filing this statement are the Corporation, SPS International Holdings, Inc., a
(g) Delaware corporation, SPS Acquisition, Inc., a Delaware corporation, American Securities
Partners II, L.P., a Delaware limited partnership, Alyn V. Essman, Russell Isaak and Patrick J.
Morris. The address of each of SPS International Holdings, Inc., SPS Acquisition, Inc. and
American Securities Partners II, L.P. and their respective officers, directors and controlling
affiliates is 122 East 42nd Street, New York, New York 10168. SPS International Holdings, Inc.
has been organized for the purpose of holding the capital stock of SPS Acquisition, Inc. which
has been formed for the purpose of consummating the merger. Reference hereby is made to the
information set forth on the Cover Page and under the heading "SUMMARY-- General--The Parties to
the Transaction; Management Investors" and "SPECIAL FACTORS--Interests of Certain Persons in the
Merger; Potential Conflicts of Interest--Equity Investment by Management Investors" in the Proxy
Statement, which information is incorporated herein by reference.
(e)-(f) None of the Corporation, SPS International Holdings, Inc., SPS Acquisition, Inc., American
Securities Partners II, L.P., any executive officer, director, general partner or person
controlling the Corporation, SPS International Holdings, Inc., SPS Acquisition, Inc. or American
Securities Partners II, L.P. has during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order enjoining further
violations of, or prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
</TABLE>
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information set forth under the headings "SPECIAL
FACTORS--Background of the Merger; Potential Conflicts of Interest" and "SPECIAL
FACTORS--Interests of Certain Persons in the Merger" in the Proxy Statement, which information
is incorporated herein by reference.
(b) Reference hereby is made to the information set forth under the headings "SPECIAL
FACTORS--Background of Merger" and "SPECIAL FACTORS--Interest of Certain Persons in the Merger;
Potential Conflicts of Interest" in the Proxy Statement, which information is incorporated
herein by reference.
</TABLE>
7
<PAGE>
ITEM 4. TERMS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information set forth under the headings "SUMMARY,"
"INTRODUCTION," "SPECIAL FACTORS," "THE MERGER," "The Merger Agreement" and Appendix A in the
Proxy Statement, which information is incorporated herein by reference.
(b) Reference hereby is made to the information set forth under the headings "SUMMARY," "SPECIAL
FACTORS--Certain Effects of the Merger; Plans or Proposals After the Merger" and "SPECIAL
FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of Interest" in the
Proxy Statement, which information is incorporated herein by reference.
</TABLE>
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
<TABLE>
<S> <C>
(a)-(g) Reference hereby is made to the information set forth under the headings "SUMMARY-- Certain
Effects of the Merger," "SPECIAL FACTORS--Certain Effects of the Merger; Plans or Proposals
After the Merger," and "THE MERGER--Effects of the Merger" in the Proxy Statement, which
information is incorporated herein by reference.
</TABLE>
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information set forth under the headings "SUMMARY-- Financing of
the Merger," "SPECIAL FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts
of Interest" and "THE MERGER--Financing of the Merger" in the Proxy Statement, which information
is incorporated herein by reference.
(b) Reference hereby is made to the information set forth under the heading "THE MERGER
AGREEMENT--Termination Fees; Expenses" in the Proxy Statement, which information is incorporated
herein by reference.
(c)-(d) Reference hereby is made to the information set forth under the heading "THE MERGER--Financing
of the Merger" in the Proxy Statement, which information is incorporated herein by reference.
None of Alyn V. Essman, Russell Isaak or Patrick J. Morris expects to borrow any funds in
connection with the Merger.
</TABLE>
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
<TABLE>
<S> <C>
(a)-(d) Reference hereby is made to the information set forth under the headings "SUMMARY-- Certain
Effects of the Merger," "SPECIAL FACTORS--Background of the Merger," "SPECIAL FACTORS--CPI's
Reasons for the Merger; Recommendation of Our Board of Directors," "SPECIAL FACTORS--Certain
Effects of the Merger; Potential Conflicts of Interest," "SPECIAL FACTORS--Interests of Certain
Persons in the Merger" and "SPECIAL FACTORS--Material U.S. Federal Income Tax Consequences of
the Merger to Our Stockholders" in the Proxy Statement, which information is incorporated herein
by reference.
</TABLE>
ITEM 8. FAIRNESS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a)-(b) Reference hereby is made to the information under the headings "SUMMARY," "SPECIAL
FACTORS--CPI's Reasons for the Merger; Recommendation of Our Board of Directors," "SPECIAL
FACTORS--CPI and the Senior Management Investors' Belief as to the Fairness of the Merger,"
"SPECIAL FACTORS--SPS International, SPS Acquisition and American Securities Partners II's
Belief as to the Fairness of the Merger" and "SPECIAL FACTORS-- Interests of Certain Persons in
the Merger; Potential Conflicts of Interest" in the Proxy Statement, which information is
incorporated herein by reference.
(c) The Merger is not structured to require approval by a majority of unaffiliated stockholders.
Reference hereby is made to the information under the heading "INTRODUCTION--Voting Rights;
Agreements to Vote; Vote Required For Approval" in the Proxy Statement, which information is
incorporated herein by reference.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
(d)-(f) Reference is hereby made to the information under the headings "SPECIAL FACTORS--Background of
the Merger" and "SPECIAL FACTORS--CPI's Reasons for the Merger; Recommendation of Our Board of
Directors" in the Proxy Statement, which information is incorporated herein by reference.
</TABLE>
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
<TABLE>
<S> <C>
(a)-(b) Reference hereby is made to Exhibit (b)(2) hereto, the information in Appendix C of the Proxy
Statement and under the headings "SPECIAL FACTORS--Background of the Merger," "SPECIAL
FACTORS--Opinion of Financial Advisor" and "SPECIAL FACTORS--CPI's Reasons for the Merger;
Recommendation of Our Board of Directors," in the Proxy Statement, which information is
incorporated herein by reference.
</TABLE>
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information under the heading "SPECIAL FACTORS-- Interests of
Certain Persons in the Merger; Potential Conflicts of Interest," "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS" and "TRANSACTIONS IN COMMON STOCK BY CERTAIN PERSONS" in the Proxy Statement,
which information is incorporated herein by reference.
(b) None.
</TABLE>
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
<TABLE>
<S> <C>
Reference hereby is made to the information under the headings "SUMMARY--Interests of Certain
Persons in the Merger; Potential Conflicts of Interest," "INTRODUCTION--Voting Rights;
Agreements to Vote; Vote Required For Approval" and "SPECIAL FACTORS-- Interests of Certain
Persons in the Merger; Potential Conflicts of Interest" in the Proxy Statement, which
information is incorporated herein by reference.
</TABLE>
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
<TABLE>
<S> <C>
(a)-(b) Reference hereby is made to the information under the headings "INTRODUCTION--Voting Rights;
Agreements to Vote; Vote Required for Approval," "SPECIAL FACTORS--CPI's Reasons for the Merger;
Recommendation of Our Board of Directors" and "SPECIAL FACTORS--Interests of Certain Persons in
the Merger; Potential Conflicts of Interest" of the Proxy Statement, which information is
incorporated herein by reference.
</TABLE>
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information under the heading "THE MERGER--Rights of Dissenting
Stockholders" and in Appendix B of the Proxy Statement, which information is incorporated herein
by reference.
(b) Not applicable.
(c) Not applicable.
</TABLE>
ITEM 14. FINANCIAL INFORMATION.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information under the heading "SUMMARY--Our Financial
Information and Projections" in the Proxy Statement, which information is incorporated herein by
reference. Reference is hereby made to the Annual Report on Form 10-K for the fiscal year ended
February 6, 1999 for the Corporation, which is incorporated in the Proxy Statement by reference
and incorporated herein by reference. Book value per share of the Corporation's common stock as
of February 6, 1999 and as of July 24, 1999 was $11.81 per share and $11.47 per share,
respectively.
(b) Not applicable.
</TABLE>
9
<PAGE>
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
<TABLE>
<S> <C>
(a) Reference hereby is made to the information under the headings "SUMMARY," "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Opinion of Financial Advisor" and "SPECIAL
FACTORS--Interests of Certain Persons in the Merger; Potential Conflicts of Interest" in the
Proxy Statement, which information is incorporated herein by reference.
(b) Reference hereby is made to the information under the heading "INTRODUCTION--Solicitation of
Proxies" and "EXPENSES OF SOLICITATION" in the Proxy Statement, which information is
incorporated herein by reference.
</TABLE>
ITEM 16. ADDITIONAL INFORMATION.
<TABLE>
<S> <C>
Reference hereby is made to the Proxy Statement, the Appendixes thereto and the exhibits hereto,
which contain additional information regarding the Merger, which information is incorporated
herein by reference.
</TABLE>
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Commitment letter from Credit Suisse First Boston for Senior Secured Credit Facility Loan dated
June 15, 1999.*
(2) Commitment letter from Credit Suisse First Boston for Bridge Loan Facility dated June 15,
1999.*
(3) Letter agreement amending the commitment letter for Senior Secured Credit Facility dated
September 8, 1999.*
(4) Letter agreement assigning a portion of the Senior Secured Credit Facility to Morgan Stanley &
Co. dated September 9, 1999.*
(5) Letter agreement assigning a portion of the Bridge Loan Facility to Morgan Stanley Senior
Funding, Inc. dated September 9, 1999.*
(b)(1) Opinion of Credit Suisse First Boston Corporation (Attached as Appendix C to the Proxy Statement
and incorporated herein by reference).
(2) Written Materials distributed to Board of Directors at May 26, 1999 meeting by Credit Suisse
First Boston Corporation.*
(3) Written Materials distributed to Board of Directors at May 7, 1998 meeting by Credit Suisse
First Boston Corporation.
(4) Written Materials distributed to Board of Directors at December 3, 1998 meeting by Credit Suisse
First Boston Corporation.*
(5) Written Materials distributed to Board of Directors at January 12, 1999 meeting by Credit Suisse
First Boston Corporation.*
(6) Written Materials distributed to Board of Directors at February 4, 1999 meeting by
A.G. Edwards.*
(c)(1) Agreement and Plan of Merger, dated as of June 15, 1999, among Parent, Sub and the Corporation
(Attached as Appendix A to the Proxy Statement and incorporated herein by reference).
(2) Form of Subscription Agreement for Accredited Investors (including voting agreements).*
(3) Guarantee of American Securities Capital Partners, L.P dated June 15, 1999.*
(4) Form of Subscription Agreement for Accredited Investors.*
(d)(1) Proxy Statement (filed by CPI Corp. on September 27, 1999 and September 28, 1999 and
incorporated herein by reference).
(e)(1) Section 262 of the Delaware General Corporation Law (Attached as Appendix B to the Proxy
Statement and incorporated herein by reference).
(f)(1) Not applicable.
</TABLE>
- ------------------
* Previously filed.
10
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: September 28, 1999
CPI CORP.
By: /s/ Alyn V. Essman
Name: Alyn V. Essman
Title: Chief Executive Officer
SPS INTERNATIONAL HOLDINGS, INC.
By: /s/ Mark Bandeen
Name: Mark Bandeen
Title: Co-President
SPS ACQUISITION, INC.
By: /s/ Mark Bandeen
Name: Mark Bandeen
Title: Co-President
AMERICAN SECURITIES PARTNERS II, L.P.
By: AMERICAN SECURITIES ASSOCIATES II,
L.L.C.,
its general partner
By: /s/ Michael G. Fisch
Name: Michael G. Fisch
Title: Managing Member
/s/ Alyn V. Essman
Alyn V. Essman
/s/ Russell Isaak
Russell Isaak
/s/ Patrick J. Morris
Patrick J. Morris
11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(a)(1) -- Commitment letter from Credit Suisse First Boston for Senior Secured Credit Facility Loan
dated June 15, 1999.*
(2) -- Commitment letter from Credit Suisse First Boston for Bridge Loan Facility dated June 15,
1999.*
(3) -- Letter agreement amending the commitment letter for Senior Secured Credit Facility dated
September 8, 1999.*
(4) -- Letter agreement assigning a portion of the Senior Secured Credit Facility to Morgan
Stanley & Co. dated September 9, 1999.*
(5) -- Letter agreement assigning a portion of the Bridge Loan Facility to Morgan Stanley Senior
Funding, Inc. dated September 9, 1999.*
(b)(1) -- Opinion of Credit Suisse First Boston Corporation (Attached as Appendix C
to the Proxy Statement and incorporated herein by reference).
(2) -- Written Materials distributed to Board of Directors at May 26, 1999 meeting by
Credit Suisse First Boston Corporation.*
(3) -- Written Materials distributed to Board of Directors at May 7, 1998 meeting by Credit Suisse
First Boston Corporation.
(4) -- Written Materials distributed to Board of Directors at December 3, 1998 meeting by Credit
Suisse First Boston Corporation.*
(5) -- Written Materials distributed to Board of Directors at January 12, 1999 meeting by Credit
Suisse First Boston Corporation.*
(6) -- Written Materials distributed to Board of Directors at February 4, 1999 meeting by
A.G. Edwards.*
(c)(1) -- Agreement and Plan of Merger, dated as of June 15, 1999, among SPS International Holdings,
Inc., SPS Acquisition, Inc. and CPI Corp. (Attached as Appendix A to the Proxy Statement
and incorporated herein by reference.)
(2) -- Form of Subscription Agreement for Accredited Investors (including voting agreements).*
(3) -- Guarantee of American Securities Capital Partners, L.P. dated June 15, 1999.*
(4) -- Form of Subscription Agreement for Accredited Investors.*
(d)(1) -- Proxy Statement filed by CPI Corp. on September 27, 1999 and September 28, 1999 and
incorporated herein by reference.
(e)(1) -- Section 262 of the Delaware General Corporation Law. (Attached as Appendix B to the Proxy
Statement and incorporated herein by reference).
(f)(1) -- Not applicable.
</TABLE>
- ------------------
* Previously filed.
12
<PAGE>
May 7, 1998 CONFIDENTIAL
Materials Prepared for the Board of Directors
CPI Corp.
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
Table of Contents
- --------------------------------------------------------------------------------
1. Executive Summary
2. Public Market Profile
3. Valuation Considerations
4. Strategic Alternatives
5. Appendix
A. PCA Transaction Overview
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
1.
Executive Summary
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 1
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Executive Summary
- --------------------------------------------------------------------------------
Although CPI has performed well in the market over the last year, the
Company continues to face a number of challenges whose resolution may
require a fundamentally different approach.
o Strong, ongoing excess cash generation with limited internal
reinvestment opportunities
o Persistent market under-valuation relative to the Company's
"intrinsic" value due to:
o Substantial mismatch of earnings and cash flow (public market
focuses on earnings and earnings growth)
o Expensive capital structure (low leverage given financial
profile)
o High perceived reinvestment risk (investor concern that free cash
may be squandered on unproductive investments)
o Poor trading liquidity (lack of critical mass in the market)
o Declining efficacy of share repurchase program
o Heavy technology/training expenditures budgeted for the current year
which will weigh down financial results and potentially exacerbate
the "value gap"
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 2
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Executive Summary (Continued)
- --------------------------------------------------------------------------------
CSFB has evaluated the following strategic alternatives in terms
of their ability to resolve the identified issues facing the
company:
Status o Employ conservative leverage and
Quo pursue opportunistic share
repurchases
Acquisition Strategy or o Deploy available debt capacity
Major New Initiatives toward complementary acquisition(s)
or Joint Ventures or other new initiatives
Public Market o Employ aggressive leverage through
Recapitalization a large one-time share buyback or
special dividend to shareholders
Sale of Merger o sell the company to either a
of the Company strategic or a financial buyer or
effect a strategic merger
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
2.
Public Market Profile
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 6
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Executive Summary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 3
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
CPI's Recent Stock Price Performance
- --------------------------------------------------------------------------------
April 29, 1997 through April 29, 1998
Relative Daily Closing Prices
May 28, 1997 Announces First Quarter Earnings
Close: $21.125 (-2.0%)
June 24, 1997 Wasserstein Perella Initiates Equity Research Coverage with
Strong Buy
Close: $19.25 (+2.0%)
August 18, 1997 Announces Second Quarter Earnings and Continued Positive
Sales Trends
Close: $21.125 (-2.0%)
October 2, 1997 Announces Sale of Interest In Kodak JV
Close: $26.875 (+3.1%)
November 13, 1997 Announces Disappointing Third Quarter Trends
Close: $20,125 (-11.5%)
December 5, 1997 Announces Third Quarter Earnings
Close: $18.875 (+3.4%)
December 9, 1997 Announces Dutch Auction Self-Tender Offer
Close $21.563 (+10.6%)
December 30, 1997 Announces Strong Christmas Sales Trends
Close: $22.625 (+0.3%)
January 8, 1998 Announces Preliminary Results of Dutch Auction
Close: $22.25 (-1.4%)
April 9, 1998 Announces Fourth Quarter and Fiscal 1997 Earnings
Close: 26.188 (+3.5%)
Date CPI CORP
29-Apr-1997 16.2500
30-Apr-1997 16.1250
01-May-1997 16.2500
02-May-1997 17.0000
05-May-1997 16.8750
06-May-1997 17.1250
07-May-1997 17.3750
08-May-1997 16.8750
09-May-1997 16.8750
12-May-1997 17.1250
13-May-1997 17.0000
14-May-1997 17.6250
15-May-1997 18.6250
16-May-1997 18.6250
19-May-1997 18.5000
20-May-1997 18.2500
21-May-1997 18.5000
22-May-1997 18.8750
23-May-1997 19.0000
27-May-1997 19.1250
28-May-1997 19.3750
29-May-1997 19.2500
30-May-1997 18.7500
02-Jun-1997 18.7500
03-Jun-1997 18.7500
04-Jun-1997 18.6250
05-Jun-1997 18.7500
06-Jun-1997 18.7500
09-Jun-1997 19.0000
10-Jun-1997 18.7500
11-Jun-1997 18.6250
12-Jun-1997 18.5000
13-Jun-1997 18.8750
16-Jun-1997 18.7500
17-Jun-1997 18.6250
18-Jun-1997 18.8750
19-Jun-1997 19.0000
20-Jun-1997 18.8750
23-Jun-1997 18.8750
24-Jun-1997 19.2500
25-Jun-1997 19.5625
26-Jun-1997 20.3750
27-Jun-1997 20.6250
30-Jun-1997 21.0000
01-Jul-1997 21.0625
02-Jul-1997 21.1250
03-Jul-1997 20.7500
07-Jul-1997 21.0000
08-Jul-1997 21.1250
09-Jul-1997 21.2500
10-Jul-1997 21.1250
11-Jul-1997 22.0000
14-Jul-1997 22.0625
15-Jul-1997 21.6250
16-Jul-1997 21.5625
17-Jul-1997 21.3750
18-Jul-1997 21.5000
21-Jul-1997 21.1250
22-Jul-1997 21.6250
23-Jul-1997 21.3125
24-Jul-1997 20.8750
25-Jul-1997 20.6250
28-Jul-1997 20.3750
29-Jul-1997 19.9375
30-Jul-1997 20.1250
31-Jul-1997 20.3750
01-Aug-1997 20.0625
04-Aug-1997 19.9375
05-Aug-1997 20.0625
06-Aug-1997 19.7500
07-Aug-1997 19.8750
08-Aug-1997 20.1875
11-Aug-1997 20.2500
12-Aug-1997 20.2500
13-Aug-1997 20.0625
14-Aug-1997 20.4375
15-Aug-1997 21.5625
18-Aug-1997 21.1250
19-Aug-1997 21.5000
20-Aug-1997 23.3125
21-Aug-1997 23.5625
22-Aug-1997 23.4375
25-Aug-1997 23.7500
26-Aug-1997 24.3750
27-Aug-1997 24.3750
28-Aug-1997 24.3750
29-Aug-1997 23.7500
02-Sep-1997 25.2500
03-Sep-1997 25.5000
04-Sep-1997 25.0625
05-Sep-1997 25.1250
08-Sep-1997 25.3125
09-Sep-1997 26.1250
10-Sep-1997 26.0000
11-Sep-1997 25.5000
12-Sep-1997 25.6250
15-Sep-1997 25.8750
16-Sep-1997 25.6250
17-Sep-1997 26.1250
18-Sep-1997 26.3125
19-Sep-1997 26.1875
22-Sep-1997 26.3125
23-Sep-1997 26.1875
24-Sep-1997 26.5625
25-Sep-1997 25.3125
26-Sep-1997 25.1250
29-Sep-1997 25.1250
30-Sep-1997 25.5000
01-Oct-1997 26.0625
02-Oct-1997 26.8750
03-Oct-1997 27.3125
06-Oct-1997 27.0000
07-Oct-1997 27.3125
08-Oct-1997 27.3750
09-Oct-1997 25.9375
10-Oct-1997 24.7500
13-Oct-1997 24.8750
14-Oct-1997 26.0000
15-Oct-1997 25.0000
16-Oct-1997 25.5625
17-Oct-1997 25.1250
20-Oct-1997 25.4375
21-Oct-1997 25.1250
22-Oct-1997 24.0000
23-Oct-1997 25.0000
24-Oct-1997 26.1875
27-Oct-1997 25.5625
28-Oct-1997 24.5000
29-Oct-1997 25.8750
30-Oct-1997 26.5000
31-Oct-1997 26.0000
03-Nov-1997 27.5625
04-Nov-1997 27.0000
05-Nov-1997 26.8125
06-Nov-1997 25.3750
07-Nov-1997 25.0000
10-Nov-1997 23.7500
11-Nov-1997 23.6875
12-Nov-1997 22.7500
13-Nov-1997 20.1250
14-Nov-1997 19.9375
17-Nov-1997 20.0000
18-Nov-1997 18.3125
19-Nov-1997 17.7500
20-Nov-1997 18.0000
21-Nov-1997 18.9375
24-Nov-1997 18.3125
25-Nov-1997 18.1250
26-Nov-1997 18.2500
28-Nov-1997 18.6250
01-Dec-1997 18.5625
02-Dec-1997 17.9375
03-Dec-1997 18.0000
04-Dec-1997 18.2500
05-Dec-1997 18.8750
08-Dec-1997 19.5000
09-Dec-1997 21.5625
10-Dec-1997 21.5625
11-Dec-1997 21.5625
12-Dec-1997 21.5625
15-Dec-1997 21.6250
16-Dec-1997 21.5625
17-Dec-1997 21.5625
18-Dec-1997 21.7500
19-Dec-1997 21.6875
22-Dec-1997 22.0000
23-Dec-1997 22.3125
24-Dec-1997 22.1875
26-Dec-1997 22.3750
29-Dec-1997 22.5625
30-Dec-1997 22.6250
31-Dec-1997 22.6250
02-Jan-1998 22.6250
05-Jan-1998 22.6250
06-Jan-1998 22.6875
07-Jan-1998 22.5625
08-Jan-1998 22.2500
09-Jan-1998 21.9375
12-Jan-1998 21.1250
13-Jan-1998 21.0625
14-Jan-1998 20.9375
15-Jan-1998 22.2500
16-Jan-1998 22.4375
20-Jan-1998 22.2500
21-Jan-1998 22.8750
22-Jan-1998 22.8125
23-Jan-1998 22.8750
26-Jan-1998 23.0625
27-Jan-1998 23.1875
28-Jan-1998 23.3750
29-Jan-1998 23.9375
30-Jan-1998 24.0625
02-Feb-1998 24.2500
03-Feb-1998 24.1250
04-Feb-1998 24.3125
05-Feb-1998 24.5625
06-Feb-1998 23.9375
09-Feb-1998 24.2500
10-Feb-1998 24.5000
11-Feb-1998 24.5625
12-Feb-1998 24.5000
13-Feb-1998 24.4375
17-Feb-1998 25.2500
18-Feb-1998 24.6875
19-Feb-1998 25.0000
20-Feb-1998 24.5625
23-Feb-1998 24.0625
24-Feb-1998 24.5000
25-Feb-1998 24.1875
26-Feb-1998 24.1250
27-Feb-1998 24.0625
02-Mar-1998 24.1250
03-Mar-1998 23.9375
04-Mar-1998 23.8750
05-Mar-1998 23.9375
06-Mar-1998 23.6250
09-Mar-1998 23.9375
10-Mar-1998 24.0625
11-Mar-1998 24.4375
12-Mar-1998 24.4375
13-Mar-1998 24.3125
16-Mar-1998 24.3750
17-Mar-1998 24.3125
18-Mar-1998 24.3750
19-Mar-1998 24.1875
20-Mar-1998 24.3750
23-Mar-1998 24.4375
24-Mar-1998 24.6250
25-Mar-1998 24.5625
26-Mar-1998 24.3750
27-Mar-1998 24.5000
30-Mar-1998 24.6875
31-Mar-1998 25.3125
01-Apr-1998 25.8750
02-Apr-1998 25.3125
03-Apr-1998 25.2500
06-Apr-1998 25.5625
07-Apr-1998 25.3750
08-Apr-1998 25.3125
09-Apr-1998 26.1875
13-Apr-1998 26.6250
14-Apr-1998 27.2500
15-Apr-1998 27.2500
16-Apr-1998 26.5000
17-Apr-1998 26.3750
20-Apr-1998 26.0625
21-Apr-1998 26.6250
22-Apr-1998 26.3750
23-Apr-1998 26.5625
24-Apr-1998 26.5625
27-Apr-1998 26.3125
28-Apr-1998 26.1250
29-Apr-1998 26.0000
- --------------------------------------------------------------------------------
Source: FactSet Research Systems, Inc.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 4
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
CPI's Recent Stock Price Performance
- --------------------------------------------------------------------------------
One Year Stock Price Performance
Daily Closing Prices
April 29, 1997 through April 29, 1998
Date CPI CORP S&P INDUSTRIALS PCA INTL INC
---- -------- --------------- ------------
29-Apr-1997 100% 100% 100%
30-Apr-1997 99% 101% 102%
01-May-1997 100% 101% 100%
02-May-1997 105% 102% 103%
05-May-1997 104% 105% 103%
06-May-1997 105% 104% 101%
07-May-1997 107% 103% 104%
08-May-1997 104% 103% 101%
09-May-1997 104% 104% 103%
12-May-1997 105% 106% 106%
13-May-1997 105% 105% 105%
14-May-1997 108% 105% 112%
15-May-1997 115% 106% 104%
16-May-1997 115% 105% 109%
19-May-1997 114% 105% 109%
20-May-1997 112% 106% 110%
21-May-1997 114% 106% 109%
22-May-1997 116% 106% 109%
23-May-1997 117% 107% 107%
26-May-1997 117% 107% 107%
27-May-1997 118% 108% 110%
28-May-1997 119% 107% 118%
29-May-1997 118% 107% 122%
30-May-1997 115% 107% 115%
02-Jun-1997 115% 107% 120%
03-Jun-1997 115% 107% 130%
04-Jun-1997 115% 106% 138%
05-Jun-1997 115% 106% 140%
06-Jun-1997 115% 108% 138%
09-Jun-1997 117% 109% 141%
10-Jun-1997 115% 109% 141%
11-Jun-1997 115% 110% 135%
12-Jun-1997 114% 111% 139%
13-Jun-1997 116% 113% 131%
16-Jun-1997 115% 113% 138%
17-Jun-1997 115% 113% 133%
18-Jun-1997 116% 112% 128%
19-Jun-1997 117% 113% 138%
20-Jun-1997 116% 113% 139%
23-Jun-1997 116% 111% 129%
24-Jun-1997 118% 113% 134%
25-Jun-1997 120% 112% 140%
26-Jun-1997 125% 111% 140%
27-Jun-1997 127% 112% 133%
30-Jun-1997 129% 112% 128%
01-Jul-1997 130% 112% 125%
02-Jul-1997 130% 114% 123%
03-Jul-1997 128% 115% 123%
04-Jul-1997 128% 115% 123%
07-Jul-1997 129% 115% 125%
08-Jul-1997 130% 116% 125%
09-Jul-1997 131% 115% 120%
10-Jul-1997 130% 115% 125%
11-Jul-1997 135% 116% 126%
14-Jul-1997 136% 116% 131%
15-Jul-1997 133% 117% 130%
16-Jul-1997 133% 119% 129%
17-Jul-1997 132% 118% 131%
18-Jul-1997 132% 116% 133%
21-Jul-1997 130% 116% 133%
22-Jul-1997 133% 118% 130%
23-Jul-1997 131% 119% 141%
24-Jul-1997 128% 119% 144%
25-Jul-1997 127% 119% 144%
28-Jul-1997 125% 118% 142%
29-Jul-1997 123% 119% 142%
30-Jul-1997 124% 120% 146%
31-Jul-1997 125% 120% 147%
01-Aug-1997 123% 119% 142%
04-Aug-1997 123% 120% 147%
05-Aug-1997 123% 120% 144%
06-Aug-1997 122% 121% 146%
07-Aug-1997 122% 120% 146%
08-Aug-1997 124% 118% 144%
11-Aug-1997 125% 118% 142%
12-Aug-1997 125% 117% 144%
13-Aug-1997 123% 116% 141%
14-Aug-1997 126% 117% 141%
15-Aug-1997 133% 113% 138%
18-Aug-1997 130% 115% 140%
19-Aug-1997 132% 117% 140%
20-Aug-1997 143% 118% 144%
21-Aug-1997 145% 117% 144%
22-Aug-1997 144% 116% 144%
25-Aug-1997 146% 116% 146%
26-Aug-1997 150% 115% 141%
27-Aug-1997 150% 115% 147%
28-Aug-1997 150% 114% 150%
29-Aug-1997 146% 113% 147%
01-Sep-1997 146% 113% 147%
02-Sep-1997 155% 117% 144%
03-Sep-1997 157% 117% 142%
04-Sep-1997 154% 117% 144%
05-Sep-1997 155% 117% 143%
08-Sep-1997 156% 117% 150%
09-Sep-1997 161% 117% 144%
10-Sep-1997 160% 115% 142%
11-Sep-1997 157% 115% 142%
12-Sep-1997 158% 116% 142%
15-Sep-1997 159% 115% 147%
16-Sep-1997 158% 119% 150%
17-Sep-1997 161% 118% 150%
18-Sep-1997 162% 119% 153%
19-Sep-1997 161% 119% 154%
22-Sep-1997 162% 120% 147%
23-Sep-1997 161% 119% 146%
24-Sep-1997 163% 118% 148%
25-Sep-1997 156% 118% 146%
26-Sep-1997 155% 118% 151%
29-Sep-1997 155% 120% 150%
30-Sep-1997 157% 119% 150%
01-Oct-1997 160% 120% 157%
02-Oct-1997 165% 120% 158%
03-Oct-1997 168% 121% 162%
06-Oct-1997 166% 122% 158%
07-Oct-1997 168% 123% 163%
08-Oct-1997 168% 122% 162%
09-Oct-1997 160% 121% 159%
10-Oct-1997 152% 121% 160%
13-Oct-1997 153% 121% 160%
14-Oct-1997 160% 121% 158%
15-Oct-1997 154% 121% 160%
16-Oct-1997 157% 119% 154%
17-Oct-1997 155% 118% 154%
20-Oct-1997 157% 119% 154%
21-Oct-1997 155% 121% 158%
22-Oct-1997 148% 121% 154%
23-Oct-1997 154% 119% 154%
24-Oct-1997 161% 117% 152%
27-Oct-1997 157% 109% 152%
28-Oct-1997 151% 115% 154%
29-Oct-1997 159% 115% 156%
30-Oct-1997 163% 113% 154%
31-Oct-1997 160% 114% 157%
03-Nov-1997 170% 117% 156%
04-Nov-1997 166% 118% 160%
05-Nov-1997 165% 118% 158%
06-Nov-1997 156% 117% 160%
07-Nov-1997 154% 116% 155%
10-Nov-1997 146% 115% 154%
11-Nov-1997 146% 116% 158%
12-Nov-1997 140% 113% 156%
13-Nov-1997 124% 115% 154%
14-Nov-1997 123% 117% 157%
17-Nov-1997 123% 119% 154%
18-Nov-1997 113% 118% 157%
19-Nov-1997 109% 118% 157%
20-Nov-1997 111% 120% 161%
21-Nov-1997 117% 120% 160%
24-Nov-1997 113% 118% 158%
25-Nov-1997 112% 119% 155%
26-Nov-1997 112% 119% 158%
27-Nov-1997 112% 119% 158%
28-Nov-1997 115% 119% 158%
01-Dec-1997 114% 121% 159%
02-Dec-1997 110% 121% 154%
03-Dec-1997 111% 121% 160%
04-Dec-1997 112% 121% 158%
05-Dec-1997 116% 122% 158%
08-Dec-1997 120% 122% 156%
09-Dec-1997 133% 121% 155%
10-Dec-1997 133% 120% 152%
11-Dec-1997 133% 118% 144%
12-Dec-1997 133% 118% 141%
15-Dec-1997 133% 119% 141%
16-Dec-1997 133% 120% 142%
17-Dec-1997 133% 120% 142%
18-Dec-1997 134% 118% 134%
19-Dec-1997 133% 117% 128%
22-Dec-1997 135% 118% 133%
23-Dec-1997 137% 116% 134%
24-Dec-1997 137% 116% 134%
25-Dec-1997 137% 116% 134%
26-Dec-1997 138% 116% 134%
29-Dec-1997 139% 118% 134%
30-Dec-1997 139% 120% 133%
31-Dec-1997 139% 120% 134%
01-Jan-1998 139% 120% 134%
02-Jan-1998 139% 121% 134%
05-Jan-1998 139% 121% 133%
06-Jan-1998 140% 120% 133%
07-Jan-1998 139% 120% 131%
08-Jan-1998 137% 119% 131%
09-Jan-1998 135% 115% 131%
12-Jan-1998 130% 117% 130%
13-Jan-1998 130% 119% 135%
14-Jan-1998 129% 119% 139%
15-Jan-1998 137% 119% 136%
16-Jan-1998 138% 120% 138%
19-Jan-1998 138% 120% 138%
20-Jan-1998 137% 122% 134%
21-Jan-1998 141% 121% 142%
22-Jan-1998 140% 121% 138%
23-Jan-1998 141% 120% 142%
26-Jan-1998 142% 120% 139%
27-Jan-1998 143% 121% 135%
28-Jan-1998 144% 122% 134%
29-Jan-1998 147% 123% 141%
30-Jan-1998 148% 123% 142%
02-Feb-1998 149% 125% 134%
03-Feb-1998 148% 126% 138%
04-Feb-1998 150% 126% 139%
05-Feb-1998 151% 126% 138%
06-Feb-1998 147% 127% 139%
09-Feb-1998 149% 126% 142%
10-Feb-1998 151% 127% 137%
11-Feb-1998 151% 127% 138%
12-Feb-1998 151% 128% 134%
13-Feb-1998 150% 127% 134%
16-Feb-1998 150% 127% 134%
17-Feb-1998 155% 128% 134%
18-Feb-1998 152% 129% 134%
19-Feb-1998 154% 128% 131%
20-Feb-1998 151% 129% 131%
23-Feb-1998 148% 130% 128%
24-Feb-1998 151% 129% 131%
25-Feb-1998 149% 130% 131%
26-Feb-1998 148% 131% 133%
27-Feb-1998 148% 131% 141%
02-Mar-1998 148% 131% 140%
03-Mar-1998 147% 131% 142%
04-Mar-1998 147% 131% 152%
05-Mar-1998 147% 129% 142%
06-Mar-1998 145% 132% 144%
09-Mar-1998 147% 131% 146%
10-Mar-1998 148% 133% 145%
11-Mar-1998 150% 133% 145%
12-Mar-1998 150% 133% 149%
13-Mar-1998 150% 133% 146%
16-Mar-1998 150% 134% 146%
17-Mar-1998 150% 134% 144%
18-Mar-1998 150% 135% 143%
19-Mar-1998 149% 135% 145%
20-Mar-1998 150% 136% 144%
23-Mar-1998 150% 136% 139%
24-Mar-1998 152% 138% 141%
25-Mar-1998 151% 137% 141%
26-Mar-1998 150% 137% 143%
27-Mar-1998 151% 137% 144%
30-Mar-1998 152% 137% 144%
31-Mar-1998 156% 137% 144%
01-Apr-1998 159% 138% 149%
02-Apr-1998 156% 140% 144%
03-Apr-1998 155% 140% 143%
06-Apr-1998 157% 139% 139%
07-Apr-1998 156% 137% 143%
08-Apr-1998 156% 137% 147%
09-Apr-1998 161% 138% 149%
10-Apr-1998 161% 138% 149%
13-Apr-1998 164% 137% 146%
14-Apr-1998 168% 138% 144%
15-Apr-1998 168% 139% 143%
16-Apr-1998 163% 137% 139%
17-Apr-1998 162% 139% 138%
20-Apr-1998 160% 140% 138%
21-Apr-1998 164% 140% 166%
22-Apr-1998 162% 141% 164%
23-Apr-1998 163% 139% 164%
24-Apr-1998 163% 138% 164%
27-Apr-1998 162% 136% 163%
28-Apr-1998 161% 136% 163%
29-Apr-1998 160% 137% 164%
Five Year Stock Price Performance
Weekly Closing Prices
April 30, 1993 through April 29, 1998
Date CPI CORP S&P INDUSTRIALS PCA INTL INC
30-Apr-1993 100% 100% 100%
03-May-1993 96% 101% 100%
04-May-1993 99% 101% 106%
05-May-1993 96% 101% 105%
06-May-1993 99% 101% 108%
07-May-1993 98% 101% 103%
10-May-1993 99% 101% 103%
11-May-1993 95% 101% 105%
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09-Oct-1995 125% 134% 84%
10-Oct-1995 124% 134% 84%
11-Oct-1995 124% 134% 84%
12-Oct-1995 121% 135% 85%
13-Oct-1995 120% 135% 81%
16-Oct-1995 121% 135% 78%
17-Oct-1995 121% 136% 77%
18-Oct-1995 120% 136% 77%
19-Oct-1995 117% 137% 69%
20-Oct-1995 116% 136% 68%
23-Oct-1995 112% 136% 68%
24-Oct-1995 111% 136% 73%
25-Oct-1995 111% 136% 68%
26-Oct-1995 108% 134% 68%
27-Oct-1995 108% 135% 67%
30-Oct-1995 107% 136% 68%
31-Oct-1995 108% 136% 67%
01-Nov-1995 110% 136% 66%
02-Nov-1995 113% 137% 68%
03-Nov-1995 118% 137% 67%
06-Nov-1995 121% 137% 65%
07-Nov-1995 119% 137% 65%
08-Nov-1995 119% 138% 65%
09-Nov-1995 119% 138% 65%
10-Nov-1995 116% 138% 63%
13-Nov-1995 116% 138% 61%
14-Nov-1995 115% 137% 60%
15-Nov-1995 113% 139% 59%
16-Nov-1995 115% 139% 59%
17-Nov-1995 119% 140% 59%
20-Nov-1995 121% 139% 63%
21-Nov-1995 122% 140% 63%
22-Nov-1995 121% 139% 63%
23-Nov-1995 121% 139% 63%
24-Nov-1995 120% 140% 61%
27-Nov-1995 122% 140% 59%
28-Nov-1995 122% 141% 60%
29-Nov-1995 123% 142% 61%
30-Nov-1995 124% 141% 57%
01-Dec-1995 125% 141% 63%
04-Dec-1995 122% 143% 57%
05-Dec-1995 122% 144% 60%
06-Dec-1995 122% 144% 56%
07-Dec-1995 121% 143% 57%
08-Dec-1995 123% 144% 54%
11-Dec-1995 123% 144% 56%
12-Dec-1995 123% 144% 55%
13-Dec-1995 123% 145% 55%
14-Dec-1995 123% 144% 55%
15-Dec-1995 121% 144% 58%
18-Dec-1995 106% 141% 56%
19-Dec-1995 105% 142% 59%
20-Dec-1995 100% 141% 64%
21-Dec-1995 99% 142% 63%
22-Dec-1995 100% 142% 61%
25-Dec-1995 100% 142% 61%
26-Dec-1995 95% 143% 61%
27-Dec-1995 96% 143% 64%
28-Dec-1995 96% 142% 66%
29-Dec-1995 95% 143% 71%
01-Jan-1996 95% 143% 71%
02-Jan-1996 94% 144% 73%
03-Jan-1996 93% 144% 77%
04-Jan-1996 93% 144% 73%
05-Jan-1996 93% 143% 73%
08-Jan-1996 91% 144% 74%
09-Jan-1996 93% 142% 73%
10-Jan-1996 92% 139% 74%
11-Jan-1996 93% 140% 73%
12-Jan-1996 90% 140% 71%
15-Jan-1996 89% 139% 69%
16-Jan-1996 87% 141% 63%
17-Jan-1996 88% 140% 66%
18-Jan-1996 88% 141% 65%
19-Jan-1996 88% 142% 65%
22-Jan-1996 87% 143% 64%
23-Jan-1996 87% 142% 61%
24-Jan-1996 88% 144% 60%
25-Jan-1996 88% 143% 58%
26-Jan-1996 87% 145% 58%
29-Jan-1996 87% 145% 61%
30-Jan-1996 86% 147% 58%
31-Jan-1996 87% 148% 63%
01-Feb-1996 87% 149% 62%
02-Feb-1996 86% 148% 60%
05-Feb-1996 89% 149% 65%
06-Feb-1996 90% 150% 64%
07-Feb-1996 91% 151% 62%
08-Feb-1996 87% 152% 60%
09-Feb-1996 89% 152% 61%
12-Feb-1996 88% 154% 63%
13-Feb-1996 88% 153% 61%
14-Feb-1996 89% 152% 61%
15-Feb-1996 89% 152% 61%
16-Feb-1996 90% 151% 65%
19-Feb-1996 90% 151% 65%
20-Feb-1996 90% 149% 65%
21-Feb-1996 89% 151% 62%
22-Feb-1996 90% 154% 60%
23-Feb-1996 89% 154% 65%
26-Feb-1996 89% 152% 60%
27-Feb-1996 89% 151% 63%
28-Feb-1996 90% 150% 61%
29-Feb-1996 90% 149% 68%
01-Mar-1996 90% 150% 68%
04-Mar-1996 90% 151% 65%
05-Mar-1996 90% 153% 65%
06-Mar-1996 89% 152% 67%
07-Mar-1996 89% 153% 65%
08-Mar-1996 87% 148% 63%
11-Mar-1996 87% 150% 68%
12-Mar-1996 88% 150% 66%
13-Mar-1996 87% 150% 63%
14-Mar-1996 88% 151% 68%
15-Mar-1996 88% 151% 68%
18-Mar-1996 90% 153% 69%
19-Mar-1996 90% 153% 69%
20-Mar-1996 90% 152% 72%
21-Mar-1996 93% 152% 73%
22-Mar-1996 94% 152% 73%
25-Mar-1996 92% 152% 77%
26-Mar-1996 91% 153% 76%
27-Mar-1996 93% 152% 79%
28-Mar-1996 93% 152% 77%
29-Mar-1996 95% 151% 81%
01-Apr-1996 94% 153% 81%
02-Apr-1996 93% 153% 82%
03-Apr-1996 93% 153% 79%
04-Apr-1996 95% 154% 79%
05-Apr-1996 95% 154% 79%
08-Apr-1996 94% 151% 77%
09-Apr-1996 95% 151% 77%
10-Apr-1996 93% 149% 79%
11-Apr-1996 94% 149% 77%
12-Apr-1996 94% 150% 79%
15-Apr-1996 93% 151% 79%
16-Apr-1996 94% 152% 77%
17-Apr-1996 92% 151% 90%
18-Apr-1996 90% 151% 90%
19-Apr-1996 89% 152% 85%
22-Apr-1996 89% 152% 89%
23-Apr-1996 90% 153% 87%
24-Apr-1996 92% 153% 91%
25-Apr-1996 96% 154% 87%
26-Apr-1996 100% 154% 87%
29-Apr-1996 100% 154% 87%
30-Apr-1996 103% 154% 90%
01-May-1996 104% 154% 90%
02-May-1996 105% 152% 87%
03-May-1996 99% 151% 85%
06-May-1996 103% 151% 85%
07-May-1996 104% 151% 87%
08-May-1996 103% 152% 87%
09-May-1996 103% 152% 87%
10-May-1996 104% 153% 90%
13-May-1996 102% 156% 92%
14-May-1996 103% 157% 92%
15-May-1996 104% 157% 87%
16-May-1996 103% 157% 100%
17-May-1996 104% 158% 106%
20-May-1996 104% 159% 105%
21-May-1996 104% 159% 105%
22-May-1996 104% 160% 105%
23-May-1996 104% 160% 105%
24-May-1996 106% 160% 105%
27-May-1996 106% 160% 105%
28-May-1996 108% 159% 105%
29-May-1996 107% 157% 105%
30-May-1996 101% 159% 105%
31-May-1996 97% 158% 110%
03-Jun-1996 92% 158% 103%
04-Jun-1996 93% 159% 106%
05-Jun-1996 93% 160% 106%
06-Jun-1996 96% 159% 103%
07-Jun-1996 96% 159% 104%
10-Jun-1996 98% 159% 102%
11-Jun-1996 100% 159% 103%
12-Jun-1996 99% 158% 106%
13-Jun-1996 98% 158% 105%
14-Jun-1996 99% 157% 105%
17-Jun-1996 98% 157% 106%
18-Jun-1996 98% 156% 107%
19-Jun-1996 97% 156% 105%
20-Jun-1996 96% 157% 105%
21-Jun-1996 97% 158% 107%
24-Jun-1996 97% 158% 106%
25-Jun-1996 97% 158% 106%
26-Jun-1996 97% 157% 105%
27-Jun-1996 98% 158% 108%
28-Jun-1996 98% 158% 108%
01-Jul-1996 98% 159% 108%
02-Jul-1996 99% 158% 106%
03-Jul-1996 99% 158% 108%
04-Jul-1996 99% 158% 108%
05-Jul-1996 99% 155% 107%
08-Jul-1996 98% 154% 110%
09-Jul-1996 95% 154% 111%
10-Jul-1996 93% 155% 110%
11-Jul-1996 93% 152% 110%
12-Jul-1996 93% 152% 110%
15-Jul-1996 93% 150% 110%
16-Jul-1996 88% 147% 106%
17-Jul-1996 87% 149% 109%
18-Jul-1996 90% 151% 105%
19-Jul-1996 90% 150% 108%
22-Jul-1996 89% 149% 106%
23-Jul-1996 87% 147% 105%
24-Jul-1996 84% 147% 108%
25-Jul-1996 84% 148% 106%
26-Jul-1996 82% 149% 104%
29-Jul-1996 82% 148% 106%
30-Jul-1996 86% 149% 108%
31-Jul-1996 85% 150% 106%
01-Aug-1996 84% 152% 108%
02-Aug-1996 83% 155% 108%
05-Aug-1996 84% 155% 105%
06-Aug-1996 86% 155% 110%
07-Aug-1996 89% 156% 110%
08-Aug-1996 104% 155% 108%
09-Aug-1996 108% 155% 108%
12-Aug-1996 107% 156% 107%
13-Aug-1996 105% 155% 106%
14-Aug-1996 105% 155% 108%
15-Aug-1996 106% 155% 110%
16-Aug-1996 104% 156% 110%
19-Aug-1996 113% 156% 116%
20-Aug-1996 111% 156% 113%
21-Aug-1996 110% 155% 113%
22-Aug-1996 110% 157% 112%
23-Aug-1996 110% 156% 110%
26-Aug-1996 110% 155% 108%
27-Aug-1996 110% 156% 110%
28-Aug-1996 110% 156% 106%
29-Aug-1996 110% 154% 105%
30-Aug-1996 109% 153% 108%
02-Sep-1996 109% 153% 108%
03-Sep-1996 110% 153% 107%
04-Sep-1996 110% 154% 106%
05-Sep-1996 110% 152% 106%
06-Sep-1996 110% 154% 107%
09-Sep-1996 110% 155% 108%
10-Sep-1996 109% 156% 107%
11-Sep-1996 109% 156% 108%
12-Sep-1996 110% 157% 109%
13-Sep-1996 110% 159% 106%
16-Sep-1996 111% 160% 106%
17-Sep-1996 110% 160% 103%
18-Sep-1996 110% 160% 106%
19-Sep-1996 110% 161% 107%
20-Sep-1996 112% 161% 110%
23-Sep-1996 110% 161% 107%
24-Sep-1996 110% 161% 108%
25-Sep-1996 110% 161% 108%
26-Sep-1996 110% 161% 106%
27-Sep-1996 111% 161% 106%
30-Sep-1996 111% 161% 106%
01-Oct-1996 112% 161% 109%
02-Oct-1996 114% 162% 108%
03-Oct-1996 115% 162% 106%
04-Oct-1996 116% 164% 110%
07-Oct-1996 122% 165% 112%
08-Oct-1996 123% 164% 108%
09-Oct-1996 123% 163% 109%
10-Oct-1996 124% 163% 113%
11-Oct-1996 125% 164% 110%
14-Oct-1996 125% 165% 108%
15-Oct-1996 125% 165% 110%
16-Oct-1996 125% 165% 107%
17-Oct-1996 124% 166% 108%
18-Oct-1996 117% 166% 106%
21-Oct-1996 116% 166% 107%
22-Oct-1996 111% 165% 106%
23-Oct-1996 113% 165% 100%
24-Oct-1996 114% 164% 100%
25-Oct-1996 113% 164% 102%
28-Oct-1996 113% 163% 101%
29-Oct-1996 113% 163% 97%
30-Oct-1996 114% 163% 99%
31-Oct-1996 113% 164% 97%
01-Nov-1996 113% 164% 98%
04-Nov-1996 110% 164% 97%
05-Nov-1996 104% 166% 97%
06-Nov-1996 104% 168% 100%
07-Nov-1996 107% 169% 97%
08-Nov-1996 104% 170% 97%
11-Nov-1996 105% 170% 98%
12-Nov-1996 104% 170% 97%
13-Nov-1996 104% 170% 100%
14-Nov-1996 104% 171% 97%
15-Nov-1996 104% 172% 100%
18-Nov-1996 104% 171% 97%
19-Nov-1996 104% 173% 97%
20-Nov-1996 104% 173% 98%
21-Nov-1996 103% 173% 98%
22-Nov-1996 102% 174% 102%
25-Nov-1996 102% 176% 116%
26-Nov-1996 101% 176% 114%
27-Nov-1996 101% 175% 114%
28-Nov-1996 101% 175% 114%
29-Nov-1996 101% 176% 115%
02-Dec-1996 101% 176% 114%
03-Dec-1996 101% 174% 111%
04-Dec-1996 101% 173% 115%
05-Dec-1996 100% 173% 104%
06-Dec-1996 100% 172% 103%
09-Dec-1996 101% 175% 102%
10-Dec-1996 99% 174% 102%
11-Dec-1996 101% 173% 102%
12-Dec-1996 99% 170% 102%
13-Dec-1996 99% 170% 102%
16-Dec-1996 98% 168% 103%
17-Dec-1996 97% 169% 102%
18-Dec-1996 97% 170% 102%
19-Dec-1996 99% 173% 100%
20-Dec-1996 104% 174% 102%
23-Dec-1996 99% 174% 98%
24-Dec-1996 97% 175% 98%
25-Dec-1996 97% 175% 98%
26-Dec-1996 97% 176% 98%
27-Dec-1996 98% 176% 102%
30-Dec-1996 99% 175% 102%
31-Dec-1996 99% 172% 105%
01-Jan-1997 99% 172% 105%
02-Jan-1997 100% 172% 103%
03-Jan-1997 100% 174% 100%
06-Jan-1997 101% 174% 100%
07-Jan-1997 106% 176% 100%
08-Jan-1997 105% 174% 100%
09-Jan-1997 110% 176% 100%
10-Jan-1997 108% 177% 100%
13-Jan-1997 108% 177% 100%
14-Jan-1997 108% 179% 104%
15-Jan-1997 107% 179% 113%
16-Jan-1997 106% 180% 113%
17-Jan-1997 107% 181% 111%
20-Jan-1997 107% 181% 111%
21-Jan-1997 106% 182% 110%
22-Jan-1997 108% 183% 111%
23-Jan-1997 109% 181% 110%
24-Jan-1997 109% 179% 113%
27-Jan-1997 108% 178% 111%
28-Jan-1997 108% 178% 110%
29-Jan-1997 109% 180% 111%
30-Jan-1997 109% 183% 112%
31-Jan-1997 110% 183% 109%
03-Feb-1997 112% 183% 109%
04-Feb-1997 112% 183% 102%
05-Feb-1997 111% 180% 105%
06-Feb-1997 111% 181% 104%
07-Feb-1997 112% 183% 106%
10-Feb-1997 112% 182% 106%
11-Feb-1997 114% 183% 107%
12-Feb-1997 114% 186% 105%
13-Feb-1997 113% 188% 108%
14-Feb-1997 111% 187% 106%
17-Feb-1997 111% 187% 106%
18-Feb-1997 115% 188% 110%
19-Feb-1997 115% 188% 109%
20-Feb-1997 114% 186% 107%
21-Feb-1997 115% 185% 106%
24-Feb-1997 115% 187% 102%
25-Feb-1997 114% 188% 104%
26-Feb-1997 113% 186% 102%
27-Feb-1997 112% 184% 105%
28-Feb-1997 109% 183% 102%
03-Mar-1997 110% 184% 106%
04-Mar-1997 110% 183% 104%
05-Mar-1997 110% 185% 104%
06-Mar-1997 110% 184% 102%
07-Mar-1997 109% 185% 102%
10-Mar-1997 111% 187% 106%
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12-Mar-1997 110% 186% 107%
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14-Mar-1997 107% 184% 105%
17-Mar-1997 107% 184% 106%
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20-Mar-1997 104% 181% 105%
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24-Mar-1997 102% 183% 106%
25-Mar-1997 99% 182% 106%
26-Mar-1997 100% 183% 107%
27-Mar-1997 100% 180% 104%
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31-Mar-1997 100% 176% 108%
01-Apr-1997 100% 176% 103%
02-Apr-1997 101% 174% 106%
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07-Apr-1997 103% 177% 110%
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10-Apr-1997 104% 176% 105%
11-Apr-1997 102% 171% 105%
14-Apr-1997 101% 173% 106%
15-Apr-1997 100% 176% 103%
16-Apr-1997 101% 178% 106%
17-Apr-1997 101% 177% 98%
18-Apr-1997 100% 179% 100%
21-Apr-1997 99% 178% 95%
22-Apr-1997 100% 181% 99%
23-Apr-1997 98% 181% 100%
24-Apr-1997 96% 180% 98%
25-Apr-1997 95% 179% 101%
28-Apr-1997 95% 180% 102%
29-Apr-1997 96% 185% 101%
30-Apr-1997 96% 187% 103%
01-May-1997 96% 186% 101%
02-May-1997 101% 189% 104%
05-May-1997 100% 193% 104%
06-May-1997 101% 193% 102%
07-May-1997 103% 190% 105%
08-May-1997 100% 191% 102%
09-May-1997 100% 192% 104%
12-May-1997 101% 195% 106%
13-May-1997 101% 194% 106%
14-May-1997 104% 195% 113%
15-May-1997 110% 197% 105%
16-May-1997 110% 194% 110%
19-May-1997 110% 195% 110%
20-May-1997 108% 196% 111%
21-May-1997 110% 196% 110%
22-May-1997 112% 195% 110%
23-May-1997 113% 198% 108%
26-May-1997 113% 198% 108%
27-May-1997 113% 199% 110%
28-May-1997 115% 199% 119%
29-May-1997 114% 198% 123%
30-May-1997 111% 198% 116%
02-Jun-1997 111% 198% 121%
03-Jun-1997 111% 197% 131%
04-Jun-1997 110% 196% 139%
05-Jun-1997 111% 196% 141%
06-Jun-1997 111% 200% 140%
09-Jun-1997 113% 201% 142%
10-Jun-1997 111% 202% 142%
11-Jun-1997 110% 203% 136%
12-Jun-1997 110% 206% 140%
13-Jun-1997 112% 208% 132%
16-Jun-1997 111% 208% 139%
17-Jun-1997 110% 208% 134%
18-Jun-1997 112% 207% 129%
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20-Jun-1997 112% 209% 140%
23-Jun-1997 112% 204% 130%
24-Jun-1997 114% 209% 135%
25-Jun-1997 116% 207% 141%
26-Jun-1997 121% 206% 141%
27-Jun-1997 122% 207% 134%
30-Jun-1997 124% 207% 129%
01-Jul-1997 125% 208% 126%
02-Jul-1997 125% 211% 124%
03-Jul-1997 123% 213% 124%
04-Jul-1997 123% 213% 124%
07-Jul-1997 124% 213% 126%
08-Jul-1997 125% 214% 126%
09-Jul-1997 126% 212% 121%
10-Jul-1997 125% 213% 126%
11-Jul-1997 130% 214% 127%
14-Jul-1997 131% 215% 132%
15-Jul-1997 128% 217% 131%
16-Jul-1997 128% 219% 130%
17-Jul-1997 127% 218% 132%
18-Jul-1997 127% 214% 134%
21-Jul-1997 125% 214% 134%
22-Jul-1997 128% 219% 131%
23-Jul-1997 126% 219% 142%
24-Jul-1997 124% 220% 145%
25-Jul-1997 122% 219% 145%
28-Jul-1997 121% 219% 144%
29-Jul-1997 118% 219% 144%
30-Jul-1997 119% 222% 148%
31-Jul-1997 121% 222% 148%
01-Aug-1997 119% 220% 144%
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05-Aug-1997 119% 222% 145%
06-Aug-1997 117% 224% 147%
07-Aug-1997 118% 222% 147%
08-Aug-1997 120% 218% 145%
11-Aug-1997 120% 219% 144%
12-Aug-1997 120% 216% 145%
13-Aug-1997 119% 215% 142%
14-Aug-1997 121% 216% 142%
15-Aug-1997 128% 210% 139%
18-Aug-1997 125% 213% 141%
19-Aug-1997 127% 216% 141%
20-Aug-1997 138% 219% 145%
21-Aug-1997 140% 216% 145%
22-Aug-1997 139% 215% 145%
25-Aug-1997 141% 215% 147%
26-Aug-1997 144% 213% 142%
27-Aug-1997 144% 213% 148%
28-Aug-1997 144% 211% 152%
29-Aug-1997 141% 209% 148%
01-Sep-1997 141% 209% 148%
02-Sep-1997 150% 216% 145%
03-Sep-1997 151% 216% 144%
04-Sep-1997 149% 217% 145%
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08-Sep-1997 150% 216% 152%
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10-Sep-1997 154% 213% 144%
11-Sep-1997 151% 212% 144%
12-Sep-1997 152% 215% 144%
15-Sep-1997 153% 213% 148%
16-Sep-1997 152% 219% 152%
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18-Sep-1997 156% 219% 154%
19-Sep-1997 155% 220% 155%
22-Sep-1997 156% 221% 148%
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24-Sep-1997 157% 219% 149%
25-Sep-1997 150% 218% 148%
26-Sep-1997 149% 219% 152%
29-Sep-1997 149% 221% 152%
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01-Oct-1997 154% 221% 158%
02-Oct-1997 159% 222% 159%
03-Oct-1997 162% 223% 163%
06-Oct-1997 160% 225% 159%
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09-Oct-1997 154% 225% 160%
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24-Oct-1997 155% 217% 153%
27-Oct-1997 151% 202% 153%
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30-Oct-1997 157% 209% 155%
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10-Nov-1997 141% 213% 155%
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03-Mar-1998 142% 243% 143%
04-Mar-1998 141% 242% 154%
05-Mar-1998 142% 239% 143%
06-Mar-1998 140% 244% 145%
09-Mar-1998 142% 243% 147%
10-Mar-1998 143% 245% 146%
11-Mar-1998 145% 246% 146%
12-Mar-1998 145% 246% 150%
13-Mar-1998 144% 246% 147%
16-Mar-1998 144% 248% 147%
17-Mar-1998 144% 248% 145%
18-Mar-1998 144% 249% 144%
19-Mar-1998 143% 250% 146%
20-Mar-1998 144% 252% 145%
23-Mar-1998 145% 252% 140%
24-Mar-1998 146% 254% 142%
25-Mar-1998 146% 254% 142%
26-Mar-1998 144% 254% 144%
27-Mar-1998 145% 252% 145%
30-Mar-1998 146% 253% 145%
31-Mar-1998 150% 254% 145%
01-Apr-1998 153% 256% 150%
02-Apr-1998 150% 259% 145%
03-Apr-1998 150% 259% 144%
06-Apr-1998 151% 257% 140%
07-Apr-1998 150% 254% 144%
08-Apr-1998 150% 253% 148%
09-Apr-1998 155% 254% 150%
10-Apr-1998 155% 254% 150%
13-Apr-1998 158% 253% 147%
14-Apr-1998 161% 255% 145%
15-Apr-1998 161% 256% 144%
16-Apr-1998 157% 254% 140%
17-Apr-1998 156% 257% 140%
20-Apr-1998 154% 258% 139%
21-Apr-1998 158% 259% 167%
22-Apr-1998 156% 260% 165%
23-Apr-1998 157% 258% 165%
24-Apr-1998 157% 255% 165%
27-Apr-1998 156% 251% 164%
28-Apr-1998 155% 251% 165%
29-Apr-1998 154% 253% 165%
- --------------------------------------------------------------------------------
Source: FactSet Research Systems, Inc.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 5
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Review of Self Tender Offer Results
- --------------------------------------------------------------------------------
November 1996 January 1998
o 2,250,000 shares purchased o 1,999,215 shares purchased
at $19.00 per share at $23.00 per share
o Significant oversubscription at o 15% underscribed at high end
the low end of price range of price range
(offer nearly 100%
oversubscribed at $19.00) o Results parallel the consistent
unavailability of stock in the
o 60% of total shares open-market
outstanding tendered at or
below $22.00 per share
The stock remains unavailable for meaningful open-market repurchases.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 6
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
CPI's Public Market Trading Multiples
- --------------------------------------------------------------------------------
CPI Corp.
(Dollars in Millions)
---------------------------------------------------
Recent Stock Price(1) $26.00
LTM High/Low $28.00/$15.44
Fully Diluted Shares Outstanding(2) 10.00
------
Equity Market Value $260.4
(+) Debt(3) 60.0
(-) Receivable from Kodak(4) 38.0
(-) Cash & Equivalents(3) 15.3
------
Adjusted Market Value $267.1
---------------------------------------------------
Market Trading Multiples
- --------------------------------------------------------------------------------
ADJUSTED MARKET VALUE/ EQUITY MARKET VALUE/
---------------------------------- ------------------------------------
OPERATING OPERATING NET IBES NET BOOK
REVENUES(5) CASH FLOW(5) INCOME INCOME(5) INCOME(5) VALUE
- --------------------------------------------------------------------------------
1999E 0.7x 4.3x 10.1x 17.3x NA -
1998E 0.7 5.1 11.6 19.4 18.2 -
LTM 0.7 5.1 9.5 18.4 18.4 2.6x
- --------------------------------------------------------------------------------
Note: Fiscal year ends in January of the following year.
(1) Stock price as of April 29, 1998.
(2) As of February 7, 1998 (including net option shares).
(3) As of the fiscal year ended February 7, 1998.
(4) Present value of the $43.9 million non-interest bearing note from Kodak due
January 1, 1999 less the present value of the estimated cash taxes due upon
maturation of the Kodak note.
(5) Based on CPI Corp. Base Case projections detailed later. Net Income excludes
the amortization of the non-compete agreement with Kodak and all gains or
losses associated with the JV.
(6) Based on IBES consensus earnings estimates.
- --------------------------------------------------------------------------------
Source: FactSet Research Systems, Inc.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
7
CONFIDENTIAL
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Comparable Company Forward Trading Multiples
- --------------------------------------------------------------------------------
CPI's forward trading multiples relative to peers reflect a substantial
disparity between earnings and cash flow.
<TABLE>
<CAPTION>
1998E TRADING MULTIPLES
(Dollars In Millions)
- ----------------------------------------------------------------------------------------------------------------------------------
ADJUSTED VALUE AS EQUITY VALUE/ 1998E MARGINS
EQUITY ADJUSTED A MULTIPLE OF: ------------- ------------- LONG TERM
MARKET MARKET ------------------- CALENDAR LTM GROWTH DEBT/
VALUE VALUE SALES EBITDA EBIT NET INCOME BOOK VALUE EBITDA EBIT ESTIMATE CAPITAL
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CPI Corp. $260.4 $267.1 0.7x 5.1x 11.6x 19.4x 2.6x 14.1% 6.2% NA 37.0%
PCA International(1) $181.7 $220.2 0.8x 4.7x 7.1x 14.1x 4.1x 16.5% 10.9% 20.0% 53.2%
Jostens Inc. $895.4 $943.8 1.2x 7.2x 8.9x 15.1x 7.4x 16.5% 13.5% 10.0% 34.6%
Cole National $554.2 $813.9 0.8x 8.0x 11.4x 17.4x 4.0x 10.1% 7.1% 20.0% 67.9%
Seattle Film Works $162.4 $147.1 1.3x 7.3x 10.4x 13.7x 4.4x 17.5% 14.6% 22.5% 0.0%
MOTO PHOTO(2) $ 18.8 $ 24.3 0.6x 7.3x 9.7x 13.2x 5.0x 8.0% 6.0% NA 74.9%
Eastman Kodak $23,287.5 $23,735.3 1.6x 8.2x 11.6x 17.9x 7.4x 19.5% 13.8% 10.0% 27.5%
Polaroid Corp. $2,003.8 $2,663.0 1.2x 7.1x 10.4x 17.5x 4.1x 16.5% 11.2% 12.0% 60.4%
Applied Graphics(3) $1,118.3 $1,238.3 2.8x 14.7x 18.1x 33.8x 2.5x 19.4% 15.7% 30.0% 25.2%
<CAPTION>
1999E TRADING MULTIPLES
(Dollars In Millions)
- ----------------------------------------------------------------------------------------------------------------------------------
ADJUSTED VALUE AS EQUITY VALUE/ 1999E MARGINS
EQUITY ADJUSTED A MULTIPLE OF: ------------- ------------- LONG TERM
MARKET MARKET ------------------- CALENDAR LTM GROWTH DEBT/
VALUE VALUE SALES EBITDA EBIT NET INCOME BOOK VALUE EBITDA EBIT ESTIMATE CAPITAL
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CPI Corp. $260.4 $267.1 0.7x 4.3x 10.1x 17.3x 2.6x 15.9% 6.8% NA 37.0%
PCA International(1) $181.7 $220.2 0.7x 4.1x 6.1x 11.0x 4.1x 16.4% 11.2% 20.0% 53.2%
Jostens Inc. $895.4 $943.8 1.1x 6.6x 8.2x 13.8x 7.0x 16.9% 13.6% 10.0% 34.6%
Cole National $554.2 $813.9 N/A N/A N/A 14.3x 4.0x N/A N/A 20.0% 67.9%
Seattle Film Works $162.4 $147.1 1.1x 6.5x 7.9x 13.4x 4.4x 17.0% 14.1% 22.5% 0.0%
MOTO PHOTO(2) $ 18.8 $ 24.3 N/A N/A N/A N/A 5.0x N/A N/A NA 74.9%
Eastman Kodak $23,287.5 $23,735.3 1.5x 7.6x 10.5x 14.6x 7.4x 20.0% 14.5% 10.0% 27.5%
Polaroid Corp. $2,003.8 $2,663.0 1.1x 6.5x 9.4x 12.4x 4.1x 17.0% 11.8% 12.0% 60.4%
Applied Graphics(3) $1,118.3 $1,238.3 1.9x 9.0x 10.9x 22.7x 2.5x 20.8% 17.1% 30.0% 25.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Note: Projections based on Value Line and Investext equity research, except net income which is based on calendarized IBES
estimates (CPI fiscal estimate used).
(1) PCA International based on closing price of $21.50 on April 21, 1998 (before annouuncement of the proposed LBO at $26.50 per
share).
(2) MOTO PHOTO multiples are based on LTM results as of December 31, 1997.
(3) Applied Graphics Technology presented pro forma for the pending acquisition of Devon Group.
- --------------------------------------------------------------------------------
</TABLE>
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
3.
Valuation Considerations
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 8
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Historical Results -- Operating Segments
- --------------------------------------------------------------------------------
Portrait Studios
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
1993A-1998P
1993A 1994A 1995A 1996A 1997A 1998P CAGR
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $238.2 $276.4 $279.6 $289.8 $303.7 $314.6 5.2%
% Growth -- 16.0% 1.2% 3.6% 4.8% 0.8%
Total Sittings (000's) 5,998 6,476 5,642 6,022 5,471(1) 5,410 (2.0)%
% Growth -- 8.0% -12.9% 6.7% -9.1% -1.1%
Operating Cash Flow $35.7 $50.7 $60.2 $56.6 $64.6 $59.8 10.8%
% Margin 15.0% 18.4% 21.5% 19.5% 21.3% 19.5%
Operating Income $29.3 $38.5 $42.6 $35.7 $44.6 $35.0
% Margin 12.3% 13.9% 15.2% 12.3% 14.7% 12.7%
Capital Expenditures $19.0 $57.7 $24.8 $18.1 $21.2 $27.0 7.3%
% of Sales 8.0% 20.9% 8.9% 6.2% 7.0% 8.8%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes effect of 53rd week (approximately 70,000 sittings).
Wall Decor
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
1993A-1998P
1993A 1994A 1995A 1996A 1997A 1998P CAGR
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $46.1 $50.1 $58.8 $62.9 $63.0 $65.2 6.9%
% Growth -- 8.7% 17.5% 7.0% 0.3% 2.1%
Operating Cash Flow $6.5 $7.7 $8.2 $6.9 $2.7 $5.8 (2.1)%
% Margin 14.0% 15.4% 13.9% 11.0% 4.3% 9.0%
Operating Income $4.4 $5.5 $5.4 $3.3 ($1.0) $0.9 (28.5)%
% Margin 9.7% 11.0% 9.1% 5.3% -1.5% 1.3%
Capital Expenditures $14.1 $8.0 $9.4 $8.0 $2.0 1.6% (35.1)%
% of Sales 30.5% 16.0% 16.0% 12.7 3.2% 2.5%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 9
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Base Case Projections--Operating Segments
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Portrait Studios - Base Case
1998P-2003P
1997A 1998P 1999P 2000P 2001P 2002P 2003P CAGR
----- ----- ----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $303.7 $314.5 $323.4 $341.1 $359.4 $370.9 $382.4 4.5%
% Growth 4.8% 0.8% 5.6% 5.5% 5.4% 3.2% 3.1%
Total Sittings (000's) 5,471(1) 5,410 5,518 5,629 5,741 5,741 5,741 1.2%
% Growth -9.1% -1.1% 2.0% 2.0% 2.0% 0.0% 0.0%
Operating Cash Flow $64.6 $59.8 $69.5 $79.1 $87.5 $90.8 $94.0 9.5%
% Margin 21.3% 19.5% 21.5% 23.2% 24.4% 24.5% 24.6%
Operating Income $44.6 $35.0 $41.8 $55.0 $67.6 $71.5 $74.5 13.9%
% Margin 14.7% 12.7% 12.9% 16.1% 18.8% 19.3% 19.5%
Capital Expenditures $21.2 $27.0 $12.0 $12.4 $12.7 $13.1 $13.5 (12.9)%
% of Sales 7.0% 8.8% 3.7% 3.6% 3.5% 3.5% 3.5%
</TABLE>
Note: Base Case assumes 2% annual sittings growth until 2001, flat sittings
from 2002-2007, and an annual $2.00 price increase in average sale.
(1) Excludes effect of 53rd week (approximately 70,000 sittings).
<TABLE>
<CAPTION>
Wall Decor - Base Case
1998P-2003P
1997A 1998P 1999P 2000P 2001P 2002P 2003P CAGR
----- ----- ----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $63.0 $65.2 $66.3 $68.3 $70.3 $72.5 $74.6 3.0%
% Growth 0.3% 2.1% 3.0% 3.0% 3.0% 3.0% 3.0%
Operating Cash Flow $2.7 $5.8 $6.3 $6.7 $7.2 $7.7 $8.1 6.9%
% Margin 4.3% 9.0% 9.5% 9.8% 10.2% 10.6% 10.9%
Operating Income ($1.0) $0.9 $1.6 $2.2 $2.7 $3.3 $3.8 35.7%
% Margin -1.5% 1.3% 2.5% 3.2% 3.9% 4.5% 5.1%
Capital Expenditures $2.0 $1.6 $2.0 $2.1 $2.1 $2.2 $2.3 6.8%
% of Sales 3.2% 2.5% 3.0% 3.0% 3.9% 3.0% 3.0%
</TABLE>
<TABLE>
<CAPTION>
Corporate - Base Case
1998P-2003P
1997A 1998P 1999P 2000P 2001P 2002P 2003P CAGR
----- ----- ----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corporate Expenses $15.4 $15.0 $17.0 $17.4 $17.8 $18.3 $18.7 2.5%
% of Consolidated Sales 4.2% 4.5% 4.4% 4.2% 4.1% 4.1% 4.1%
Capital Expenditures $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 0.0%
</TABLE>
Note: Corporate expense includes corporate depreciation estimated to be
approximately $3.0 million annually.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 10
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Historical and Projected Results -- Operating Segments
- --------------------------------------------------------------------------------
Portrait Studios - Sales, Operating Cash Flow and Operating Income
<TABLE>
<CAPTION>
1997A 1998P 1999P 2000P 2001P 2002P 2003P
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $303.7 $314.5 $323.4 $341.1 $359.4 $370.9 $382.4
Operating Cash Flow $64.6 $59.8 $69.5 $79.1 $87.5 $90.8 $94.0
Operating Income $44.6 $35.0 $41.8 $55.0 $67.6 $71.5 $74.5
</TABLE>
Wall Decor - Sales, Operating Cash Flow and Operating Income
<TABLE>
<CAPTION>
1997A 1998P 1999P 2000P 2001P 2002P 2003P
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $63.0 $65.2 $66.3 $68.3 $70.3 $72.5 $74.6
Operating Cash Flow $2.7 $5.8 $6.3 $6.7 $7.2 $7.7 $8.1
Operating Income ($1.0) $0.9 $1.6 $2.2 $2.7 $3.3 $3.8
</TABLE>
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 11
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Base Case Projections -- Consolidated CPI
- --------------------------------------------------------------------------------
Consolidated - Base Case (1)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
1998P-2003P
1997A 1998P(2) 1999P 2000P 2001P 2002P 2003P CAGR
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $366.7 $370.6 $389.7 $409.4 $429.7 $443.3 $457.0 4.3%
% Growth 4.0% 1.1% 5.2% 5.1% 5.0% 3.2% 3.1%
EBITDA $51.9 $52.1 $61.8 $71.5 $79.9 $83.2 $86.4 10.7%
% Margin 14.1% 14.1% 15.9% 17.5% 18.6% 18.8% 18.9%
EBIT $28.2 $23.1 $26.5 $39.8 $52.5 $56.5 $59.6 20.9%
% Margin 7.7% 6.2% 6.8% 9.7% 12.2% 12.7% 13.0%
Earnings Per Share $1.41(3) $1.34(3) $1.50 $2.46 $3.45 $3.89 $4.29 26.2%
% Growth 33.0% (4.8)% 11.6% 64.1% 40.1% 12.9% 10.4%
- -------------------------------------------------------------------------------------------------------------------
Cash $15.3 $43.7(4) $58.2 $79.6 $96.5 $115.9 $138.0
- -------------------------------------------------------------------------------------------------------------------
Debt $60.0 $60.0 $60.0 $60.0 $51.4 $42.8 $34.3
Equity $102.1 $97.0 $94.2 $102.5 $119.6 $140.3 $164.1
Debt/Capital 37.0% 38.2% 38.9% 36.9% 30.1% 23.4% 17.3%
Debt/EBITDA 1.2x 1.2x 1.0x 0.8x 0.6x 0.5x 0.4x
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Projections exclude income related to the amortization of the non-compete
agreement with Kodak of approximately $5 million in 1998 and $3.2 million in
1999.
(1) From 1998P-2007P, $10 million of free cash flow is applied annually to open
market share repurchases. Excess cash is assumed to accumulate and earn
5.0% interest income.
(2) Based on strategic plan presented to the Board of Directors.
(3) 1997A and 1998E EPS exclude gain (loss) on sale of Kodak JV.
(4) Fiscal year end cash balance reflects the maturation of the Kodak note (face
value of $43.9 million) and the payment of $4.1 million of cash taxes
related to the sale of Kodak JV.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 12
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Discounted Cash Flow Analysis
- --------------------------------------------------------------------------------
Preliminary Valuation Analysis - BASE CASE
(Dollars in Milions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
VALUE RANGE AS A MULTIPLE OF 1997A, 1998P AND 1999P
--------------------------------------------------------------
PRELIMINARY ENTERPRISE UNLEVERED
OPERATING SEGMENT VALUE RANGE YEAR SALES EBITDA EBIT NET INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997A 1.4x - 1.7x 6.7x - 7.8x 9.8x - 11.3x 15.5X - 18.0X
Portrait Studios $ 435 - $ 505 1998P 1.4x - 1.6x 7.3x - 8.4x 11.2x - 13.0x 17.8X - 20.7X
1999P 1.3x - 1.6x 6.3x - 7.3x 10.4x - 12.1x 16.5X - 19.2X
1997A 0.6x - 0.7x 14.7x - 16.5x NM - NM NM - NM
Wall Decor $ 40 - $ 45 1998P 0.6x - 0.7x 6.9x - 7.7x 48.0 - 54.0x 76.2X - 85.8X
1999P 0.6x - 0.7x 6.4x - 7.2x 24.4 - 27.4x 28.7X - 43.6X
Corporate(2) ($95) - ($85)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ENTERPRISE VALUE: $ 380 - $ 465
ADJUSTMENTS:
- -------------------------------------------------------------
(+) Cash(3) $ 15.3 - $ 15.3
(+) Present Value of Kodak Note(4) 38.0 - 38.0
(-) Debt(3) (60.0) - (60.0)
- -------------------------------------------------------------
TOTAL ADJUSTMENTS: ($6.7) - ($6.7)
TOTAL EQUITY VALUE: 373.3 - $458.3
Fully Diluted Shares Outstanding(5) 9.874 - 9.874
- -------------------------------------------------------------
Implied Value per Share $37.81 - $46.42
% Premium to Market(6) 45.4% - 78.5%
- -------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------
Note: Preliminary valuation is as of fiscal year ended 1/31/98.
(1) Based on Terminal EBITDA Multiples of 5.5x - 6.5x and a WACC of 11.0% -
12.0%.
(2) Based on a discounted cash flow analysis of projected corporated expenses.
(3) As of the fiscal year ended February, 1998.
(4) Present value of Kodak Note (face value of $43.9 million at 1/1/99 less
estimated cash taxes of $4.1 million) assuming a 7.0% discount rate.
(5) As of the fiscal year ended February, 1998 reflecting the purchase of
1,999,215 shares through the recently completed Dutch Auction.
(6) Based on CPY share price of $26.00 as of 4/29/98.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 13
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Portrait Studios DCF Sensitivity Analysis
- --------------------------------------------------------------------------------
CPI's high fixed cost position makes its valuation highly sensitive to
future sales growth assumptions.
<TABLE>
<CAPTION>
Valuation Sensitivity Analysis - Sales Growth(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Assumed 10 Year CAGR in Sales - Portrait Studios
+2.0% +2.5% +3.0% +3.5% +4.0% +4.5% +5.0%
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Value $244.2 $284.3 $325.8 $368.7 $413.0 $458.8 $506.1
Value Per Share $24.73 $28.80 $33.00 $37.34 $41.83 $46.47 $51.26
% Premium (Discount) to Market (4.9)% 10.8% 26.9% 43.6% 60.9% 78.7% 97.2%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Implied values based on Terminal EBITDA Multiple of 6.0x and a WACC of
11.5%.
(1) Valuation impacts based on CPI's mix of fixed versus variable costs.
Based on the above analysis, CPI's current stock market
value implies a long term sales growth and EBITDA margin for
Portrait Studios of approximately 2.2% and 19.0%, respectively.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 14
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Leveraged Buyout Analysis
- --------------------------------------------------------------------------------
CPI's strong implied LBO valuation (even before any assumed cost savings) is
reflective of the Company's strong, stable cash flow and considerable debt
capacity.
(Dollars in Millions)
- --------------------------------------------------------------------------------
LEVERAGED BUYOUT ANALYSIS
- --------------------------------------------------------------------------------
- ------------------------------------------ ----------------------------------
Transaction Multiples Transaction Value
- ------------------------------------------ ----------------------------------
----------------------------------
Purchase Price Per Share $35.00
1997A 1998P % Premium to Market 34.6%
----- ------ ----------------------------------
Price/Earnings(1) 24.8x 26.1x Equity Purchase Price 361.8
Enterprise Value/EBITDA(1) 7.1x 7.1x Adjusted Purchase Price 368.5
LBO Equity 100.0
- ------------------------------------------ ----------------------------------
Equity Rates of Return Credit Statistics
- ------------------------------------------ ----------------------------------
Year five Values Terminal EBITDA Multiple 1997PF 1998P
- ---------------- ------------------------ ------ -----
5.0x 6.0x 7.0x Debt/Capital 73.8% 75.6%
---- ---- ---- Debt/EBITDA 5.4x 5.5x
EBITDA $83.2 $83.2 $83.2 EBITDA/Interest 2.1x 2.1x
Enterprise Value 416.1 499.4 582.6
Net Debt 173.2 173.2 173.2 ----------------------------------
----- ----- -----
Implied Equity
Value $243.0 $326.2 $409.4
===== ===== =====
- ------------------------------------------
Five Year IRR 19.4% 26.7% 32.6%
- ------------------------------------------
- --------------------------------------------------------------------------------
Note: Analysis based on Base Case projections excluding any potential cost
---------
savings. Analysis includes estimated fees and assumes all options are
exercised.
(1) Transaction multiples based on CPI Base Case projections.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 15
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Comparable Acquisition Analysis
- --------------------------------------------------------------------------------
Selected Acquisition Precedents
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Adjusted Purchase Purchase Price
Equity Adjusted Price as a Multiple of: as a Multiple of:
---------------------------------- ------------------
Announcement Acquiror/ Description Purchase Purchase LTM LTM Operating LTM Operating LTM Net LTM Book
Date Target of Target Price Price Sales Cash Flow Income Income Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Apr-98 Jupiter Partners/ Operates portrait $229.2 $267.8 1.1x 7.0x 11.7x 24.8x 5.1x
PCA Interna- studios within Kmart
tional(1) and Wal-mart stores.
Jan-97 PCA International/ Operates portrait $53.6 $66.0 0.6x 16.8x NM NM 7.1x
American studios locations.
Studios(2) [Adjusted multiples
based on peak
margins (1993) 7.5x 9.9x ]
Aug-96 Eastman Kodak/ Provides photofinish- $110.0 $110.0 0.6x 9.6x NM NA NA
Fox Photo ing services,
wholesale and retail
photo supplies.
Aug-94 Eastman Kodak/ Provides photo $300.0 $568.0 0.7x NA NA NA NA
Qualex processing and
finishing services.
Aug-91 CPI Corp./ Provides photofinish- $27.0 $62.9 0.9x 5.1x 9.0x 10.2x 7.5x
Fox Photo ing services, wholesale
and retail photo
supplies.
Jul-91 Qualex/ Provides photo $75.0 $75.0 0.8x NA NA NA NA
Guardian Photo processing services.
</TABLE>
- ----------
(1) Based on $26.50 acquisition price per share announced 4/21/98.
(2) Adjusted transaction multiples based on American Studios peak margins (1993)
applied to LTM sales.
<TABLE>
<CAPTION>
CPI's Implied Takeover Valuation Based on Acquisition Precedents (LTM Multiples)
- --------------------------------------------------------------------------------
LTM LTM MULTIPLES OF IMPLIED IMPLIED EQUITY VALUE
BASIS OF MULTIPLE FINANCIAL RESULTS COMPARABLE TRANSACTIONS ENTERPRISE VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $366.7 0.8x - 1.1x $293 - $403 $29.04 - $40.18
Operating Cash Flow $51.9 6.0x - 7.5x $311 - $389 $30.85 - $38.73
Operating Income $28.2 10.0x - 12.0x $282 - $338 $27.88 - $33.60
CSFB Reference Range $300 - $400 $29.71 - $39.84
</TABLE>
- ----------
Note: Implied valuation based on CPI operating results for the year ended
February 7, 1998.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 16
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Preliminary Valuation Summary -- Consolidated CPI Corp.
- --------------------------------------------------------------------------------
CSFB'S preliminary valuation analysis reveals a significant gap between CPI's
private and public market values.
PRELIMINARY VALUATION SUMMARY - CONSOLIDATED CPI CORP.
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IMPLIED VALUATION MULTIPLES
------------------------------------------------------
ENTERPRISE UNLEVERED
VALUATION METHODOLOGY VALUE RANGE YEAR REVENUES EBITDA EBIT NET INCOME
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DISCOUNTED CASH FLOW ANALYSIS $380 - $460 1999P 1.0x - 1.2x 6.1x - 7.4x 14.3x - 17.4x 22.8x - 27.6x
Implied Price Per share $37.81 - $45.91 1998P 1.0x - 1.2x 7.3x - 8.8x 16.5x - 19.9x 26.1x - 31.6x
% Premium/(Discount) to Market 45.4% - 76.6%
COMPARABLE COMPANY ANALYSIS $250 - $300 1999P 0.6x - 0.8x 4.0x - 4.9x 9.4x - 11.3x 15.0x - 18.0x
Implied Price Per share $24.65 - $29.71 1998P 0.7x - 0.8x 4.8x - 5.8x 10.8x - 13.0x 17.2x - 20.6x
% Premium/(Discount) to Market -5.2% - 14.3%
COMPARABLE ACQUISITION ANALYSIS $300 - $400 1999P 0.8x - 1.0x 4.9x - 6.5x 11.3x - 15.1x 18.0x - 24.0x
Implied Price Per share $29.71 - $39.84 1998P 0.8x - 1.1x 5.8x - 7.7x 13.0x - 17.3x 20.6x - 27.5x
% Premium/(Discount) to Market 14.3% - 53.2%
LEVERAGED BUYOUT ANALYSIS $320 - $360 1999P 0.8x - 0.9x 5.2x - 5.8x 12.1x - 13.6x 19.2x - 21.6x
Implied Price Per share $31.73 - $35.79 1998P 0.9x - 1.0x 6.1x - 6.9x 13.9x - 15.6x 22.0x - 24.8x
% Premium/(Discount) to Market 22.1% - 37.6%
</TABLE>
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 17
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Summary Perspectives
- --------------------------------------------------------------------------------
Our preliminary analysis is based solely on the CPI Base Case projections.
o CPI Base Case scenario was prepared by Management to represent a
"most-likely" outcome
A potential acquiror would analyze CPI under a range of scenarios. While
addressing downside scenarios, a potential acquiror will closely scrutinize
CPI's fixed cost structure:
General Corporate Expense
FY '98 Business Plan vs. FY '97 Actual
BUSINESS
ACTUAL FY '97 PLAN FY '98
Indirect Salaries & Other:
- -------------------------
Indirect Administrative Salaries $ 6,945 $ 5,734
Fox Joint Venture Consulting (948) --
---------- ----------
Indirect Admin Salaries - Net of
Consulting 5,997 5,734
Public Reporting 179 230
Bonus Adjustment 2,301 1,145
---------- ----------
Total Indirect Salaries & Other: $ 8,477 $ 7,109
========== ==========
Administrative Overhead:
- -----------------------
SERP's/Key Manager Insurance 409 1,784
Deferred Compensation 565 5
Worker's Compensation 10 395
Pension 241 626
Employee Insurance 3,801 4,100
Other Expense Variances - Net 1,932 2,537
---------- ----------
Total Administrative Overhead $ 7,198 $ 8,717
========== ==========
Total Corporate Expense $ 15,435 16,556
========== ==========
% of Sales 4.2% 4.5%
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
4.
Strategic Alternatives
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 18
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Spectrum of Strategic Alternatives
- --------------------------------------------------------------------------------
Status Quo
- ----------
Key Issues
o Utilization of ongoing free cash flows
o Appropriate leverage targets
o Internal investment opportunities
o Efficacy of continued share repurchases
Acquisition Strategy or Major New Initiative or JV
- --------------------------------------------------
Key Issues
o Acquisition debt capacity
o Universe of complementary acquisitions
o Acquisition track record
o Anticipated market receptivity
Public Market Recapitalization
- ------------------------------
Key Issues
o Debt capacity/pro forma debt ratings
o Special dividend versus self-tender offer
o Anticipated liquidity and trading performance of equity stub
o Pro forma management ownership
Sale or Merger of the Company
- -----------------------------
Key Issues
o Universe of buyers (strategic versus financial)
o Acquisition precedents
o Technological risks/opportunities
o Perceived integration benefits
o EPS impact on acquiror (how dilutive?)
o Form of consideration
o Pooling versus purchase
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
19
CONFIDENTIAL
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Perspectives on an Ongoing Share Repurchase Program
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Preliminary Financial Consequences
- ----------------------------------------------------------------------------------------------------------------
Base Case 1998P 1999P 2000P 2001P 2002P 2003P CAGR
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Per Share $1.34 $1.50 $2.46 $3.45 $3.89 $4.29 $26.2%
%Growth 8.3% 11.6% 64.1% 40.1% 12.9% 10.4%
Cash Balance $43.7 $58.2 $79.6 $96.5 $115.9 $138.0
- ----------------------------------------------------------------------------------------------------------------
Net Debt /EBITDA 0.3x 0.0x 0.0x 0.0x 0.0x 0.0x
EBITDA /Interest 42.5x 13.7x 15.9x 17.8x 21.6x 26.9
Debt/Capital 38.2% 38.9% 36.9% 30.1% 23.4% 17.3%
Cumulative Amount Repurchased ($MM) $10.0 $20.0 $30.0 $40.0 $50.0 $60.0
Cumulative Shares Repurchased 0.3 0.6 0.9 1.0 1.2 1.4
Repurchase Price Per Share $30.00 $35.00 $41.82 $55.14 $58.34 $64.39
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
50.0% Debt / Capital Target 1998P 1999P 2000P 2001P 2002P 2003P CAGR
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Per Share $1.34 $1.58 $2.66 $3.83 $4.48 $5.14 $30.8%
%Growth 8.3% 17.5% 68.8% 43.9% 16.8% 14.8%
Accretion/(Dilution) $0.00 $0.08 $0.20 $0.39 $0.59 $0.594
% Accretion/(Dilution) 0.0% 5.2% 8.2% 11.2% 15.1% 19.6%
Cash Balance $6.8 $24.0 $37.0 $28.3 $18.5 $8.2
Net Debt /EBITDA 1.0x 0.6x 0.3x 0.3x 0.3x 0.3x
EBITDA /Interest 42.5x 13.7x 15.9x 17.8x 21.6x 26.9
Debt/Capital 50.0% 50.0% 50.0% 50.0% 50.0% 50.0%
Cumulative Amount Repurchased ($MM) $46.9 $53.7 $71.7 $106.7 $144.7 $185.2
Cumulative Shares Repurchased 1.6 1.8 2.2 2.7 3.3 3.8
Repurchase Price Per Share $30.00 $35.00 $45.26 $61.32 $67.13 $77.04
- ----------------------------------------------------------------------------------------------------------------------------------
Note: All cases assume the indicated share repurchase occurs on the last day of each fiscal year. The Base Case assumes $10 million
of share repurchases each year. The %50.0 Debt / Capital Targe Cae assumes all free cash flow and available debt capacity
(up to 50.0%) are applied to repurchase stock at the stated price.
</TABLE>
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
20
CONFIDENTIAL
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Perspectives on a Public Market Recapitalization
- --------------------------------------------------------------------------------
Recapitalization Analysis - $200 Million
---------------------------------------------------------------------------
1998E EBITDA Multiple 5.75x 6.00x 6.25x
---------------------------------------------------------------------------
Special Dividend ($ million) $200.0 $200.0 $200.0
Value of Equity Stub ($ million) $83.4 $96.5 $109.5
Special Dividend Per Share $20.26 $20.26 $20.26
Value of Equity Stub Per Share 8.45 9.77 11.09
------ ------ ------
Implied Recapitalization Value $28.71 $30.03 $31.34
% Premium / (Discount) to Market 10.4% 15.5% 20.6%
<TABLE>
<CAPTION>
Pro Forma Income Statement and Capitalization
(Dollars in Millions, Except per Share Data)
- ------------------------------------------------------------------------------------------------------------------------
Base Case 1997PF 1998P 1999P 2000P 2001P 2002P 2003P '99'-03 CAGR
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Base Case
- ---------
EPS -- $1.34 $1.50 $2.46 $3.45 $3.89 $4.29 30.1%
%Growth -- -- 11.6% 64.1% 40.1% 12.9% 10.4%
Debt $60.0 $60.0 $60.0 $60.0 51.4 $42.8 $34.3
Equity $120.1 $97.0 $94.2 $102.5 $119.6 $140.3 $164.1
Pro Forma
- ---------
EPS -- $0.25 $0.44 $2.36 $2.79 $3.18 $3.89 72.6%
%Growth -- -- 75.7% 438.7% 18.2% 14.0% 22.3%
Debt $226.0 $221.0 $199.0 $169.5 $135.2 $97.6 $75.0
Equity ($97.9) ($98.5) ($96.2) ($82.4) ($59.1) ($31.6) (0.2)
Debt/EBITDA 4.4x 4.2x 3.2x 2.4x 1.7x 1.2x 0.9x
EBITDA/Interest Expense 3.5x 2.7x 3.3x 4.2x 5.4x 7.0x 9.7x
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 21
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Perspectives on a Public Market Recapitalization (continued)
- --------------------------------------------------------------------------------
Advantages
- ----------
o Generates an immediate payment to shareholders (via a special dividend or
buyback) while significantly boosting expected equity returns to continuing
shareholders
o Generates substantial tax-shield benefits for shareholders through the
aggressive use of debt
o Alleviates reinvestment risk while imposing a greater discipline on capital
budgeting and expense management by requiring that free cash be dedicated
toward debt paydown
o Offers opportunity to further concentrate Management ownership, thereby more
closely aligning Management's interests with shareholders'
Disadvantages
- -------------
o Exacerbates existing liquidity issues (equity stub may trade poorly in the
aftermarket)
o Reduces financial flexibility to react to technological changes or fundamental
industry shifts
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 22
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Perspectives on a Sale of the Company
- --------------------------------------------------------------------------------
CPI would be viewed as highly attractive asset by strategic and financial
buyers alike.
o Leading market position
o Broad geographic coverage in North America
o Large, loyal customer base with attractive demographics
o Superior customer service capabilities
o Well positioned to benefit from emerging technologies in digital
imaging and archiving
o Improved industry fundamentals
o Strong, stable cash generation with minimal capital requirements
However, many potential corporate buyers would face near-term earnings
dilution due to the unavailability of pooling accounting and relatively
high goodwill charges.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 23
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
Perspectives on CPI Partners or Acquirors
- --------------------------------------------------------------------------------
Selected Potential Strategic Buyers
-----------------------------------
o Potential strategic acquiror #1
o Potential strategic acquiror #2
o Potential strategic acquiror #3
o Potential strategic acquiror #4
o Potential strategic acquiror #5
o Potential strategic acquiror #6
o Potential strategic acquiror #7
o Potential strategic acquiror #8
o Potential strategic acquiror #9
o Potential strategic acquiror #10
o Potential strategic acquiror #11
o Potential strategic acquiror #12
o Potential strategic acquiror #13
Selected Potential Financial Buyers
-----------------------------------
o Potential financial acquiror #1
o Potential financial acquiror #2
o Potential financial acquiror #3
o Potential financial acquiror #4
o Potential financial acquiror #5
o Potential financial acquiror #6
o Potential financial acquiror #7
o Potential financial acquiror #8
o Potential financial acquiror #9
o Potential financial acquiror #10
o Potential financial acquiror #11
o Potential financial acquiror #12
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
A.
PCA Transaction Overview
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 24
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
PCA International -- Transaction Overview
- --------------------------------------------------------------------------------
PCA International Inc. and Jupiter Partners L.P., a New York-based
investment firm that was formerly associated with Forstmann Little,
announced on April 21, 1998 that they have entered into a merger
agreement under which Jupiter Partners and PCA's senior management will
acquire a majority of PCA for $26.50 per share (a 23.3% premium to the
prior day's closing price and a 20.5% premium to PCA's stock price four
weeks prior).
Terms of the agreement include the following:
o Shareholders of common stock can elect to receive $26.50 in cash for
each share or to retain (subject to proration) a share of stock in
the surviving entity
o Public shareholders will be permitted to retain (subject to
proration) a continuing equity interest in the Company of no more
than approximately 4.5% and no less than approximately 3.4% of the
current outstanding shares of the Company
o The transaction will be accounted for as a recapitalization (which
avoids recognition of purchase goodwill)
PCA Press release estimated the value of the deal at about $276 million
including the refinancing of existing debt
The transaction, expected to be completed in July, has been approved by
PCA's Board and is subject to the approval of its shareholders.
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
CONFIDENTIAL 25
- --------------------------------------------------------------------------------
CPI CORP. PRELIMINARY ANALYSIS
PCA International -- Transaction Value and Multiples
- --------------------------------------------------------------------------------
PCA International
(Dollars in Millions)
---------------------
Acquisition Price(1) $26.50
Fully Diluted Shares Outstanding(1) 8.7
-------
Equity Purchase Price(2) $229.2
(+) Debt(3) 50.8
(-) Cash & Equivalents(3) 12.3
-------
Adjusted Purchase Price $267.8
-------
Implied Transaction Multiples
- -----------------------------
ADJUSTED MARKET VALUE/ EQUITY MARKET VALUE/
I/B/E/S
OPERATING OPERATING NET NET BOOK
REVENUES CASH FLOW INCOME INCOME INCOME VALUE
1999E(4) 0.8X 5.0X 7.4X 12.3X 13.5X(5) --
1998E(4) 0.9 5.7 8.6 16.1 18.3(5) --
LTM 1.1 7.0 11.7 24.8 24.8 5.1x
- ----------
(1) Based on the proposed offer price announced April 20, 1998.
(2) Included net option shares.
(3) As per 10-K dated February 1, 1998.
(4) Based on Investext equity research estimates dated December 15, 1997. Since
December, PCA's consensus estimates have dropped from $1.65 to $1.45 for
1998E and from $2.15 to $1.96 for 1999E.
(5) Based on consensus earnings estimates (as supplied by I/B/E/S).
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
<PAGE>
- --------------------------------------------------------------------------------
CPI CORP.
- --------------------------------------------------------------------------------
5.
Appendix
- --------------------------------------------------------------------------------
CREDIT | FIRST
SUISSE | BOSTON
