<PAGE>
EXHIBIT 16(C)(5)
================================================================================
Discussion Materials
Prepared For
Independent Committee of the Board of Directors of
BFX Hospitality Group, Inc.
===========================
George K. Baum & Company
www.gkbaum.com
August 11, 2000
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<PAGE>
BFX Hospitality Group, Inc.
===========================
Table of Contents
--------------------------------------------------------------------------------
Tab
---
Overview of Proposed Transaction.......................................... 1
Financial Summary......................................................... 2
Valuation Analysis........................................................ 3
Stock Price Performance........................................A
Transaction Premium Analysis...................................B
Analysis of Selected Comparable Companies......................C
Discounted Cash Flow Analysis..................................D
Present Value of Orderly Liquidation Analysis..................E
Analysis of Selected Comparable Transactions...................F
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August 11, 2000 George K. Baum & Company
<PAGE>
BFX Hospitality Group, Inc.
===========================
Overview of Proposed Transaction - Timeline
--------------------------------------------------------------------------------
. BFX Going Private Transaction
. June 28, 2000 During a quarterly Board of Directors
Meeting Robert H. McLean, Chief
Executive Officer of BFX, informs Board
that he is considering making a proposal
that would acquire outstanding BFX
Common Stock through merger or other
leveraged buyout transaction and that it
might be in best interest of global
stockholders for McLean and possibly
other members of management to purchase
the outstanding stock at negotiated
price in $2.00 to $2.25 per share range.
. June 28, 2000 Board appoints Messrs. Edgar, D'Agostino
and Sarno to serve on Independent
Committee to review BFX's staying public
and to evaluate any Going Private
proposal.
. July 27, 2000 Robert H. McLean, Chief Executive
Officer of BFX, publicly announces that
BFX has entered into negotiations for
possible acquisition of Company's
outstanding common stock by a group
composed of himself and other management
team members for $2.25 per share.
. August 10, 2000 Independent Committee holds a special
meeting to consider fairness of proposed
transaction.
. August 11, 2000 Board of Directors holds a meeting to
discuss Independent Committee's findings
and consider proposal.
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George K. Baum & Company
<PAGE>
BFX Hospitality Group, Inc.
===========================
Overview of Proposed Transaction - Merger Analysis
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Analysis of BFX Going Private Transaction
(in thousands, except per share)
<TABLE>
<CAPTION>
Transaction Metrics LTM Results (6/30/00)(a)
----------------------------------------------- ---------------------------------------------
<S> <C> <C> <C>
Shares Outstanding 3,969 Sales (6/30/00) $17,396
Proposed Offer Price per Share $2.25 EBITDA (299)
---------------------------------- ---------- EBIT (1,630)
Total Equity Value $8,930 Net Income ($1,056)
========== =============
Net Cash (as of 6/30/00)(a): $3,676
-----------------------------------------------
Total Enterprise Value $5,254
==========
</TABLE>
Multiple Analysis on LTM Results
Reported Results
Sales 0.3x
EBITDA NM
EBIT NM
Net Income NM
(a) Nine months ended 6/30/99, provided by BFX management
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George K. Baum & Company
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BFX Hospitality Group, Inc.
===========================
Financial Summary
--------------------------------------------------------------------------------
. BFX experienced growth in sales from fiscal 1996 through fiscal 1999 as
it opened two additional CABO restaurants during this period and
purchased the Stockyards Hotel in Fort Worth, Texas. However, sales
growth for the six months ended 3/31/00 was up only one percent over
last year's same period after an impressive FY 1999 gain of 50% over FY
1998.
. BFX's profitability has not followed the trend in sales growth as they
have experienced a loss from continuing operations net of tax for each
of the fiscal years from 1996-1999. This translates into a loss per
share from continuing operations ranging from a 1997 high of ($1.13) per
share to a 1996 low of ($0.14) per share. BFX turned a profit at the net
income line in 1996 and 1997 of $1.394 million, $0.22 per share and
$6.658 million, $0.96 per share, respectively, but only after adjusting
for income from discontinued operations and a gain on disposal of
assets. Net income losses for fiscal years 1998 and 1999 were $2.509
million, ($0.47) per share and $1.785 million, $(0.44) per share,
respectively.
. BFX's income statement, balance sheet and statement of cash flows from
fiscal 1996 through fiscal 1999 as well as such statements for the nine
months ended June 30, 1999 and same period 2000 are presented on the
following pages.
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Financial Summary - Income Statement
-----------------------------------------------------------------------------------------------------------------------------------
BFX
Historical Income Statements
(in thousands, except per share data)
Fiscal Year Ended September, Nine Months Ended LTM
--------------------------------------- --------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 1997 1998 1999 6/30/1999 6/30/2000 6/30/2000
------- -------- ------- -------- --------- --------- ---------
Net revenues $ 9,298 $ 10,518 $11,513 $ 17,212 $ 12,857 $ 13,041 $ 17,396
Costs and expenses:
Cost of goods sold 2,139 2,277 2,698 4,185 3,131 3,063 4,117
0
Cost of Sales 0
Selling, general and administrative 7,595 14,483 11,974 12,311 8,830 8,243 11,724
Write-down of long-lived assets 1,854 0 0 1,854
Expenses associated with revised EPA remedy 4,417 0 0 0
Depreciation and amortization 969 1,030 1,150 1,590 1,181 922 1,331
Total costs and expenses 10,703 22,207 15,822 19,940 13,142 12,228 19,026
Net loss from continuing operations before
other income (expense) and income taxes $(1,405) $(11,689) $(4,309) $(2,728) $ (285) $ 813 $ (1,630)
------- -------- ------- ------- --------- --------- --------
Other income (expense):
Interest income 485 485 632 138 101 83 120
Interest expense (235) (193) (120) (92) (70) (21) (43)
------- -------- ------- ------- --------- --------- --------
(54) 292 512 46 31 62 77
Gain (Loss) from continuing operations before
income taxes (1,459) (11,397) (3,797) (2,682) (254) 875 (1,553)
Income tax expense (benefit) (538) (3,543) (1,288) (897) (26) 374 (497)
------- -------- ------- ------- --------- --------- --------
Gain (Loss) from continuing operations (921) (7,854) (2,509) (1,785) (228) 501 (1,056)
Discontinued operations:
Income from operations, net of income tax expense 2,315 1,509
Gain on disposal, net of income tax expense 13,003
------- -------- ------- ------- --------- --------- --------
Income from discontinued operations 2,315 14,512 0 0 0 0 0
------- -------- ------- ------- --------- --------- --------
Net income (loss) $1,394 $ 6,658 $(2,509) $(1,785) $ (228) $ 501 $ (1,056)
======= ======== ======= ======= ========= ========= ========
Basic and diluted earnings per share:
Continuing operations $ (0.14) $ (1.13) $ (0.47) $ (0.44)
Discontinued operation $ 0.36 $ 2.09
------- -------- ------- ------- --------- --------- --------
Net income (loss) $ 0.22 $ 0.96 $ (0.47) $ (0.44) $ (0.06) $ 0.13 $ (0.26)
======= ======== ======= ======= ========= ========= ========
Weighted average basic and diluted common shares
outstanding 6,441 6,957 5,349 4,018 4,030 3,972 3,960
------------------------------------------------------------------------------------------------------------------------------------
Revenue Growth 33.86% 13.12% 9.46% 49.50% 58.14% 1.43% 7.12%
EPS Growth (Continuing Operations) NM NM 58% NM NM NM NM
Gross Margin 77% 78% 77% 76% 76% 77% 76%
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George K. Baum & Company
</TABLE>
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Financial Summary - Balance Sheet
------------------------------------------------------------------------------------------------------------------------------------
BFX
Historical Balance Sheets
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
As of
9/30/1996 9/30/1997 09/30/98 09/30/99 6/30/2000
---------- ---------- --------- --------- ----------
Current assets:
Cash and cash equivalents $ 1,659 $ 16,356 $ 5,342 $ 3,036 $ 3,676
Accounts receivable 3,370 66 128 286 292
Note Receivable 43
Inventories 1,396 79 148 208 213
Income tax receivable 1,102 698 0
Prepaid and other current assets 492 62 120 98 256
---------- ---------- --------- --------- ----------
Total current assets 6,917 16,563 6,840 4,326 4,480
Property, plant and equipment, net 9,631 6,417 11,084 10,407 9,938
Goodwill, net of amortization 4,120 3,758 3,397 2,355 2,138
Deferred income taxes 833 1,419 1,824 1,726
Long-term notes receivable 540
Other assets, net 505 513 70 81 134
---------- ---------- --------- --------- ----------
Total Assets $ 23,164 $ 28,084 $ 22,810 $ 18,993 $ 18,416
========== ========== ========= ========= ==========
Current liabilities:
Current portion of long-term debt $ 187 $ 138 $ 138 $ 138
Accounts payable 1,152 300 578 418 589
Accrued liabilities 1,524 5,014 1,843 1,012 811
Accrued EPA costs 250 1,200 1,600
Income taxes 311 314 847 334 639
---------- ---------- --------- --------- ----------
Total current liabilities 3,174 5,766 3,656 3,102 3,639
Long-term debt 2,493 6,978 1,075 937
Accrued EPA costs 2,700 1,570 923
Deferred income taxes 4
Stockholders' equity:
Preferred stock
Common stock 337 389 389 389 389
Additional paid-in capital 14,354 16,578 16,583 16,583 16,583
Retained earnings 3,158 9,816 7,307 5,522 6,023
Treasury stock (356) (4,487) (8,777) (9,110) (9,141)
Employee notes for stock purchases (1,190) (123)
Commitments and contingencies
---------- ---------- --------- --------- ----------
Total Liabilities and Equity $ 23,164 $ 28,084 $ 22,810 $ 18,993 $ 18,416
========== ========== ========= ========= ==========
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Financial Summary - Cash Flow
-----------------------------------------------------------------------------------------------------------------------------------
BFX
Historical Cash Flow Statements
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Nine Months Ended
-----------------------
1996 1997 1998 1999 6/30/1999 6/30/2000
-------- -------- -------- -------- ---------- ----------
Cash flows from operating activities:
Net income (loss) $ 1,394 $ 6,658 $ (2,509) $ (1,785)
Adjustments to reconcile net income (loss) to net
cash used for operating activities:
Depreciation 704 764 789 1,228
Amortization 577 475 361 362
Deferred income taxes 594 (837) (586) (405)
Bad debt provision 40 (35)
Net gain on sale of assets (20,301)
Write-down of long-lived assets 1,854
Accrued expenses associatied with revised EPA remedy 4,417
Issuance of common stock in payment for services 139 412 114 47
Expenses associated with acquisition 824
Change in components of current assets and liabilities:
Accounts receivable (662) 1,392 (62) (158)
Inventories 639 143 (69) (60)
Prepaid and other 256 385 11
Accounts payable 34 (36) 278 (160)
Accrued liabilities 119 349 (221) (1,011)
Income taxes 75 259 (569) (109)
-------- -------- -------- -------- ---------- ----------
Net cash used for operating activities $ 3,653 $ (5,260) $ (2,089) $ (186) $ (7) $ 2,002
-------- -------- -------- -------- ---------- ----------
Cash flows from investing activities:
Net additions to property, plant and equipment (1,613) (450) (5,456) (1,725)
Proceeds from sale of operating assets 100 25,194
Acquisitions (1,212)
Additions to other assets (89) 1,632 (236)
-------- -------- -------- -------- ---------- ----------
Net cash provided by (used for) investing activities $ (2,725) $ 24,655 $ (5,456) $ (1,725) $ 1,632 $ (236)
Cash flows from financing activities:
Additions to debt 1,200
Repayments of debt (120) (161) (137) (138) (103) (1,075)
Purchase of short-term investments 0 (2,833)
Exercise of stock options 15
Treasury stock purchases (356) (4,552) (3,332) (257) (51) (51)
-------- -------- -------- -------- ---------- ----------
Net cash used for financing activities $ 724 $ (4,698) $ (3,469) $ (395) $ (345) $ (3,959)
Net increase (decrease) in cash $ 14,697 $(11,014) $ (2,306) $ (1,984) $ (2,193)
Cash at beginning of year 7 1,659 16,356 5,342 5,342 3,036
-------- -------- -------- -------- ---------- ----------
Cash at end of year $ 1,659 $ 16,356 $ 5,342 $ 3,036 $ 3,358 $ 843
======== ======== ======== ======== ========== ==========
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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Valuation Analysis - Stock Price Performance
-------------------------------------------------------------------------------
[TWO YEAR STOCK PRICE PERFORMANCE GRAPH]
[ONE YEAR STOCK PRICE PERFORMANCE GRAPH]
(1) BFX closed at $2.13 on both July 29 and August 11, 1998
(2) BFX closed at $1.38 on both August 6 and August 9, 1999
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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Valuation Analysis - Stock Price Performance - Weighted Average Price
-------------------------------------------------------------------------------
[BFX TRADING VOLUME AT VARIOUS PRICES -
TWO YEARS PRIOR TO OFFER(1) GRAPH]
[BFX TRADING VOLUME AT VARIOUS PRICES -
ONE YEAR PRIOR TO OFFER(1) GRAPH]
(1) Going private transaction announced 7/27/00
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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Valuation Analysis - Stock Price Performance - Weighted Average Price
-------------------------------------------------------------------------------
[BFX TRADING VOLUME AT VARIOUS PRICES -
ONE QUARTER PRIOR TO OFFER(1) GRAPH]
[BFX TRADING VOLUME AT VARIOUS PRICES -
ONE MONTH PRIOR TO OFFER(1) GRAPH]
(1) Going private transaction announced 7/27/00
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George K. Baum & Company
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BFX Hospitality Group, Inc.
==========================
Valuation Analysis - Stock Price Performance - (BFX vs. Index of Selected
Comparable Companies)
-------------------------------------------------------------------------------
[BFX VS. COMP COMPOSITE (TRAILING 2 YEARS) GRAPH]
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Valuation Analysis - Transaction Premium Analysis
---------------------------------------------------------------------------------------------------------------------------------
Market Premium Statistics(a)
<S> <C>
Premium Offered to Target's Share Price Prior to Transaction Announcement
for transaction targets valued $50mm or less, occurring within last two years ---------------------------------
and involving: 1 Day 4 Weeks
----------------------------------------------------------------------------- ----- -------
Going Private Activity Mean 28.5% 35.9%
Median 28.0% 33.3%
Hotel, Restaurant and Hospitality Merger and Acquisition Activity Mean 47.0% 51.0%
Median 12.0% 20.0%
All Merger and Acquisition Activity Mean 40.0% 51.0%
Median 32.0% 41.0%
---------------------------------------------------------------------------------------------------------------------------------
BFX Premium
Prior to July 26, 2000
----------------------
1 Day 4 Weeks
------- -------
BFX Actual Share Price $ 1.00 $ 0.88
Transaction Premium (@ $2.25) to BFX Share Price 125.0% 157.1%
Prior to July 26, 2000
------------------------------------------
1 Month 1 Quarter 1 Year 2 Years
------- --------- ------ -------
Weighted Average BFX Share Price $ 0.95 $ 0.94 $ 0.89 $ 1.33
Merger Premium ($2.25) to Weighted Average BFX Share Price 136.8% 139.4% 152.8% 69.2%
---------------------------------------------------------------------------------------------------------------------------------
(a) Source: Thomson Financial Securities Data, 8/0100
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies
---------------------------------------------------------------------------------------------------------------------------------
BFX Hospitality Group, Inc.
Summary of Selected Comparable Companies
(millions)
LTM
---------------- Restaurants Hotels Holding
Revenue EBITDA Owned Owned Company
------- ------ ----------- ------ -------
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
BFX Hospitality Group, Inc. $17.4 ($0.3) 3 1 Yes
---------------------------------------------------------------------------------------------
Meritage Hospitality Group(a) $31.1 $2.7 25 2 No
Restaurants (Under $50M sales)
------------------------------
Cucos Inc. $16.9 $1.2 21 0 No
California Beach Restaurants, Inc. $13.3 $1.1 2 0 Yes
Silver Diner, Inc. $29.3 $0.0 11 0 No
Austins Steaks & Saloon, Inc $43.9 $2.9 7 0 No
Grill Concepts, Inc. $39.5 $1.3 14 0 No
Small Hotel Owners (Under $50M sales)
-------------------------------------
International Leisure hosts $ 4.7 $1.0 0 1 No
Buckhead America Corp. $32.2 $5.1 0 29 No
-------------------------------------
(a) Business model most closely comparable to the Company
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies - Hospitality Companies
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Company Name Meritage Hospitality Group
Ticker Symbol MHG
Price Date: 07/26/00
Price $2.06
Business Description Meritage Hospitality Group Inc. was incorporated in 1986 and is engaged in the hospitality business
through its operation of two distinct business segments. The company's Food Service Group operates 25
Wendy's Old Fashioned Hamburgers restaurants throughout Western and Southern Michigan. The company's
Lodging Group owns and operates two full service hotels in Michigan.
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies - Restaurant Owners
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Company Name Cucos Inc
Ticker Symbol CUCO
Price Date: 07/26/00
Price $0.86
Business Description Cucos Inc. operates 16 and franchises 5 full-service Mexican restaurants, mainly in the Southeast. As
of June 28, 1998, there were 15 company-owned and five franchised restaurants primarily in Louisiana,
Mississippi and Alabama. Cucos restaurants serve moderately priced "Sonoran" and "Tex-Mex" Mexican
appetizers, entrees and alcoholic beverages, including such traditional Mexican fare as fajitas,
burritos, enchiladas and tamales.
Company Name California Beach Restaurant
Ticker Symbol CBHR
Price Date: 07/26/00
Price $2.08
Business Description California Beach Restaurants, Inc. conducts restaurant operations through its wholly owned subsidiary,
Sea View Restaurants, Inc. The company operates Gladstone's 4 Fish, one of Southern California's best
known fresh seafood restaurants, and RJ's - Beverly Hills, which specializes in classic American food.
Sea View operates Gladstone's pursuant to a concession agreement, which commenced on November 1, 1997,
with the County of Los Angeles.
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George K. Baum & Company
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies - Restaurant Owners
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Company Name Silver Diner Inc
Ticker Symbol SLVR
Price Date: 07/26/00
Price $0.94
Business Description Silver Diner, Inc. operates 11 Silver Diner restaurants, 10 in the Washington/Baltimore metropolitan
area and one in Cherry Hill, N.J., featuring a mix of traditional home-style diner fare and
contemporary American cuisine in art deco style buildings. Silver Diner targets the growing number of
customers tired of traditional fast food whose need for a quick, high-quality, reasonably priced meal
is not being adequately served by existing family or casual theme restaurants; the company capitalizes
on the timeless diner theme to uniquely address this need.
Company Name Austins Steaks & Saloon Inc
Ticker Symbol STAK
Price Date: 07/26/00
Price $0.72
Business Description Austins Steaks & Saloon, Inc. owns and operates seven moderately priced, casual dining full-service
Austins restaurants in three states. The restaurants feature specialty prime rib dishes, a variety of
fresh-cut, aged steaks, home-cooked entrees, salads and sandwiches. On February 23, 1999, the company
signed a letter-of-intent to enter into a business combination with WesterN SizzliN Corp., a
family-style steak, buffet, and bakery restaurant chain.
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George K. Baum & Company
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies - Restaurant Owners
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Company Name Grill Concepts Inc
Ticker Symbol GRIL
Price Date: 07/26/00
Price $1.41
Business Description Grill Concepts, Inc. owns and operates nine Daily Grill restaurants, two The Grill on the Alley
restaurants and three Pizzeria Uno restaurants. In May 1988, The Grill on the Alley restaurant, within
the five-star Fairmont Hotel in San Jose, California, opened representing the company's initial entry
into a hotel venue. Pizzeria Uno restaurants offer a diverse menu featuring gourmet, Chicago-style
deep-dish pizzas, sandwiches, hamburgers, appetizers, salads, desserts and beverages, including a
full liquor selection.
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies - Hotel Owners
---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Company Name Intl Leisure Hosts
Ticker Symbol ILHL
Price Date: 07/26/00
Price $5.13
Business Description International Leisure Hosts, Ltd. owns and operates Flagg Ranch Village, a full-service resort motel
and trailer park located in the John D. Rockefeller Jr. Memorial Parkway about four miles north of
Grand Teton National Park and two miles south of the southern entrance of Yellowstone National Park.
Flagg is operated as a seasonal resort. The two seasons, summer and winter, coincide with the opening
and closing dates of the two national parks.
Company Name Buckhead America Corp
Ticker Symbol BUCK
Price Date: 07/26/00
Price $5.16
Business Description Buckhead America Corp. is a diversified, hospitality services company. Its principal holdings include
hotels, loans and other investments secured by hotels, franchising rights and other related assets.
Its principal product is the Country Hearth Inn mid-priced hotel chain, which was acquired in May
1994. At February 28, 1998, 29 Country Hearth Inns (11 of which were company-owned) were open and
operating in 11 states. Additionally, the company managed 36 hotels, 13 of which were company-owned.
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<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies
----------------------------------------------------------------------------------------------------------------------------------
Summary of Selected BFX Comparable Companies
(Values in millions, except per share data)
-----------------------------------------------------------------------------------------
Discount/Premium
Stock to LTM Shares
LTM Price ---------------- Out.(1) Equity Firm(2)
Ticker Ending 07/26/00 High Low 07/20/00 Value Value
-----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BFX Hospitality Group, Inc. BFX 06/30/00 $1.000 38.5% 100.0% 3.96 $ 4.0 $ 0.3
----------------------------------------------------------------------------------------------------------------------------------
BFX at $2.25 per share offer
----------------------------
BFX Hospitality Group, Inc. BFX 06/30/00 $2.250 -38.5% 350.0% 3.96 $ 8.9 $ 5.2
----------------------------------------------------------------------------------------------------------------------------------
Restaurants (Under $50M sales)
------------------------------
Cucos Inc. CUCO 04/02/00 $0.875 66.7% 573.1% 2.66 $ 2.3 $ 6.0
California Beach Restaurants, Inc. CBHR 01/31/00 $2.075 65.4% 6593.5% 3.40 $ 7.1 $10.1
Small Hotel Owners (Under $50M sales)
-------------------------------------
International Leisure Hosts ILHL 03/31/00 $5.125 6.8% 57.7% 0.69 $ 3.6 $ 4.7
Select Comparable Group Summmary
----------------------------------------------------------------------------------------------------------------------------------
Mean 46.3% 2408.1%
Median 65.4% 573.1%
Maximum 66.7% 6593.5%
Minimum 6.8% 57.7%
----------------------------------------------------------------------------------------------------------------------------------
Meritage Hospitality Group MHG 05/31/00 $2.063 36.5% 27.0% 5.77 $11.9 $27.3
Restaurants (Under $50M sales)
------------------------------
Silver Diner, Inc. SLVR 04/23/00 $0.938 25.0% 25.1% 11.59 $10.9 $10.6
Austins Steaks & Saloon, Inc. STAK 03/31/00 $0.719 73.9% 27.7% 12.10 $ 8.7 $16.9
Grill Concepts, Inc. GRIL 03/26/00 $1.406 53.1% 60.7% 4.00 $ 5.6 $ 9.7
Small Hotel Owners (Under $50M sales)
-------------------------------------
Buckhead America Corp. BUCK 03/31/00 $5.156 17.5% 28.9% 2.01 $10.4 $43.3
Entire Comparable Group Summary
----------------------------------------------------------------------------------------------------------------------------------
Mean 43.1% 924.2%
Median 44.8% 43.3%
Maximum 73.9% 6593.5%
Minimum 6.8% 25.1%
----------------------------------------------------------------------------------------------------------------------------------
Market Multiples
-----------------------------------------------------------------------------------------
Firm Value/LTM P/E Multiples(3x4)
Equity/ --------------------------------- --------------------------------------------
Book Revenue EBITDA EBIT LTM CY 00E CY 01E
-----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
BFX Hospitality Group, Inc. 0.3x 0.0x NM NM NM NA NA
----------------------------------------------------------------------------------------------------------------------------------
BFX at $2.25 per share offer
----------------------------
BFX Hospitality Group, Inc. 0.6x 0.3x NM NM NM NA NA
----------------------------------------------------------------------------------------------------------------------------------
Restaurants (Under $50M sales)
------------------------------
Cucos Inc. NM 0.4x 4.9x 14.7x NM NA NA
California Beach Restaurants, Inc. 67.9x 0.8x 9.4x NM NM NA NA
Small Hotel Owners (Under $50M sales)
-------------------------------------
International Leisure Hosts 0.8x 1.0x 4.5x 8.1x 117.8x NA NA
Select Comparable Group Summmary
----------------------------------------------------------------------------------------------------------------------------------
Mean 34.3x 0.7x 6.3x 11.4x 117.8x NA NA
Median 34.3x 0.8x 4.9x 11.4x 117.8x NA NA
Maximum 67.9x 1.0x 9.4x 14.7x 117.8x NA NA
Minimum 0.8x 0.4x 4.5x 8.1x 117.8x NA NA
----------------------------------------------------------------------------------------------------------------------------------
Meritage Hospitality Group 2.1x 0.9x 10.2x 21.4x NM NA NA
Restaurants (Under $50M sales)
------------------------------
Silver Diner, Inc. 0.7x 0.4x NM NM NM NA NA
Austins Steaks & Saloon, Inc. 0.7x 0.4x 5.8x 10.1x NM NA NA
Grill Concepts, Inc. 1.5x 0.2x 7.3x 67.8x NM NA NA
Small Hotel Owners (Under $50M sales)
-------------------------------------
Buckhead America Corp. 0.5x 1.3x 8.5x 12.9x 9.5x NA NA
Entire Comparable Group Summary
----------------------------------------------------------------------------------------------------------------------------------
Mean 10.6x 0.7x 7.2x 22.5x 63.6x NA NA
Median 0.8x 0.6x 7.3x 13.8x 63.6x NA NA
Maximum 67.9x 1.3x 10.2x 67.8x 117.8x NA NA
Minimum 0.5x 0.2x 4.5x 8.1x 9.5x NA NA
----------------------------------------------------------------------------------------------------------------------------------
(1) Common shares outstanding excluding common share equivalents.
(2) Firm value represents market value of equity plus book values of total debt, preferred stock, and minority interest les cash
and equivalents.
(3) Source of EPS estimates: First Call (7/20/00). No Estimates Available.
(4) Excluding all non-recurring debits and credits.
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George K. Baum & Company
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BFX Hospitality Group, Inc.
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<TABLE>
Valuation Analysis - Analysis of Selected Comparable Companies
-----------------------------------------------------------------------------------------------------------------------------------
Summary of Selected BFX Comparable Companies
(Values in millions, except per share data)
-------------------------------------------------------------------------------------------------
Growth Statistics
-----------------------------------------------
LTM (EPS)(1)(2) 3-Year CAGR 5-Year EPS(1)
--------------------- ------------------- ---------------------------------
Revenue EBITDA EBIT LTM CY 00E CY 01E Revenue EBITDA EBIT FY EPS(2) Growth Est. PE/g
-------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BFX Hospitality Group, Inc. $17.4 -$0.3 -$1.6 -$0.3 NA NA 27.9% NA NA NA NA NA
-----------------------------------------------------------------------------------------------------------------------------------
BFX at $2.25 per share offer
----------------------------
BFX Hospitality Group, Inc. $17.4 -$0.3 -$1.6 -$0.3 NA NA 27.9% NA NA NA NA NA
-----------------------------------------------------------------------------------------------------------------------------------
Cucos, Inc. $16.9 $1.2 $0.4 -$0.1 NA NA -3.6% NM NM NA NA NA
California Beach Restaurants. Inc. $13.3 $1.1 -$0.1 -$0.3 NA NA -5.0% -19.9% -43.0% NA NA NA
International Leisure Hosts $4.7 $1.0 $0.6 $0.0 NA NA 1.2% 23.7% 36.4% -62.7% NA NA
Comparable Group Summary
-----------------------------------------------------------------------------------------------------------------------------------
Mean -2.5% 1.9% -3.3% -62.7% NA NA
Median -3.6% 1.9% -3.3% -62.7% NA NA
Maximum 1.2% 23.7% 36.4% -62.7% NA NA
Minimum -5.0% -19.9% -43.0% -62.7% NA NA
-----------------------------------------------------------------------------------------------------------------------------------
Meritage Hospitality Group $31.1 $2.7 $1.3 -$0.1 NA NA 5.2% 59.9% NA NA NA NA
Silver Diner, Inc. $29.3 $0.0 -$1.5 -$0.1 NA NA 9.6% NA NA NA NA NA
Austins Steaks & Saloon, Inc. $43.9 $2.9 $1.7 $0.0 NA NA 12.6% -0.1% -11.1% -71.1% NA NA
Grill Concepts, Inc. $39.5 $1.3 $0.1 -$0.1 NA NA 16.1% 54.6% NA NA NA NA
Small Hotel Owners (Under $50M sales)
-----------------------------------------------------
Buckhead America Corp. $32.2 $5.1 $3.3 $0.54 NA NA 43.9% 21.9% 21.5% -37.5% NA NA
Comparable Group Summary
-----------------------------------------------------------------------------------------------------------------------------------
Mean 10.0% 23.3% 1.0% -57.1% NA NA
Median 7.4% 22.8% 5.2% -62.7% NA NA
Maximum 43.9% 59.9% 36.4% -37.5% NA NA
Minimum -5.0% -0.1% -11.1% -71.1% NA NA
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------
(1) Source of EPS estimates: Institutional Brokers Estimate System median estimate (07/20/00).
(2) Excluding all non-recurring debits and credits.
-----------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
===========================
<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Companies
------------------------------------------------------------------------------------------------------------------------------------
Summary of Selected BFX Comparable Companies
(Values in millions, except per share data)
Margin Analysis/1/
---------------------------------------------------------------------------------------
Gross EBITDA EBIT Net Income
------------------ ------------------ ----------------- ------------------
LTM 3-Yr Avg LTM 3-Yr Avg LTM 3-Yr Avg LTM 3-Yr Avg
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
BFX Hospitality Group, Inc. 76.3% 76.9% -1.7% -45.1% -9.4% -54.8% -6.1% -35.6%
-------------------------------------------------------------------------------------------------------------------------------
BFX at $2.25 per share offer
BFX Hospitality Group, Inc. 76.3% 76.9% -1.7% -45.1% -9.4% -54.8% -6.1% -35.6%
-------------------------------------------------------------------------------------------------------------------------------
Cucos Inc. 36.3% 39.6% 7.2% 3.5% 2.4% -0.9% -1.9% -5.5%
California Beach Restaurants, Inc. 10.6% 14.5% 8.1% 9.1% -0.6% 1.6% -8.1% -4.3%
International Leisure Hosts 29.3% 26.2% 21.8% 18.9% 12.2% 9.9% 7.9% 6.5%
Comparable Group Summary
-------------------------------------------------------------------------------------------------------------------------------
Mean 25.4% 26.8% 12.4% 10.5% 4.7% 3.5% -0.7% -1.1%
Median 29.3% 26.2% 8.1% 9.1% 2.4% 1.6% -1.9% -4.3%
Maximum 36.3% 39.6% 21.8% 18.9% 12.2% 9.9% 7.9% 6.5%
Minimum 10.6% 14.5% 7.2% 3.5% -0.6% -0.9% -8.1% -5.5%
-------------------------------------------------------------------------------------------------------------------------------
Meritage Hospitality Group 13.8% 13.2% 8.6% 5.6% 4.1% 1.5% -1.3% -3.7%
Silver Diner, Inc. 39.8% 39.3% 0.1% 0.0% -5.0% -6.2% -4.8% -5.6%
Austins Steaks & Saloon, Inc. 22.6% 24.5% 6.7% 8.7% 3.8% 6.5% -0.3% 2.2%
Grill Concepts, Inc. 72.0% 72.3% 3.4% 2.7% 0.4% -0.5% -1.0% -1.6%
Small Hotel Owners (Under $50M sales)
----------------------------------------------------------
Buckhead America Corp. 31.1% 24.4% 15.8% 13.6% 10.4% 7.1% 5.0% 9.9%
Comparable Group Summary
-------------------------------------------------------------------------------------------------------------------------------
Mean 31.9% 31.7% 9.0% 7.8% 3.5% 2.4% -0.6% -0.2%
Median 30.2% 25.3% 7.6% 7.2% 3.1% 1.5% -1.1% -2.6%
Maximum 72.0% 72.3% 21.8% 18.9% 12.2% 9.9% 7.9% 9.9%
Minimum 10.6% 13.2% 0.1% 0.0% -5.0% -6.2% -8.1% -5.6%
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Total Debt/
ROE Total Capital
---------------------- --------------------
LTM 3-Yr Avg Book Market
-----------------------------------------------------------------------------------
BFX Hospitality Group, Inc. -7.8% -22.3% 0.0% 0.0%
-----------------------------------------------------------------------------------
BFX at $2.25 per share offer
BFX Hospitality Group, Inc. -7.8% -22.3% 0.0% 0.0%
-----------------------------------------------------------------------------------
Cucos Inc. 13.3% 162.8% 222.6% 56.2%
California Beach Restaurants, Inc. 245.2% -77.4% 129.9% 30.4%
International Leisure Hosts 8.7% 7.3% 24.0% 28.3%
Comparable Group Summary
---------------------------------------------------------------------------------------
Mean 89.1% 30.9% 125.5% 38.3%
Median 13.3% 7.3% 129.9% 30.4%
Maximum 245.2% 162.8% 222.6% 56.2%
Minimum 8.7% -77.4% 24.0% 28.3%
---------------------------------------------------------------------------------------
Meritage Hospitality Group -7.3% -34.4% 72.9% 56.7%
Silver Diner, Inc. -8.3% -7.6% 8.5% 12.3%
Austins Steaks & Saloon, Inc. -1.0% 19.7% 38.9% 49.4%
Grill Concepts, Inc. -10.1% -9.2% 42.6% 34.8%
Small Hotel Owners (Under $50M sales)
----------------------------------------------------------
Buckhead America Corp. 7.1% 10.9% 55.8% 70.1%
Comparable Group Summary
---------------------------------------------------------------------------------------
Mean 30.9% 9.0% 74.4% 42.3%
Median 3.1% -0.2% 49.2% 42.1%
Maximum 245.2% 162.8% 222.6% 70.1%
Minimum -10.1% -77.4% 8.5% 12.3%
---------------------------------------------------------------------------------------
----------------------------------------------------------
(1) Excluding all non-recurring debits and credits.
-----------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
==========================
<TABLE>
<CAPTION>
Valuation Analysis - Discounted Cash Flow Analysis
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
BFX Discounted Cash Flow Analysis - Management's Projections
in thousands
------------- ---------------------------------------------------------------
actual projected
------------- ---------------------------------------------------------------
FY 9 months 4th Qtr. 2001 2002 2003 2004 2005
2000 ended 6/30/00 FY 2000
------- ------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $13,555 $10,312 $3,243 $13,584 $13,584 $13,809 $14,034 $14,259
EBITDA 1,735 1,401 334 1,456 1,527 1,600 1,673 1,746
------- ------------- -------- -------- -------- -------- -------- --------
Income Before Taxes (given by company) 699 624 75 403 475 548 731 694
Tax (35%) 245 218 26 141 166 192 256 243
---------------------------------------- ------- ------------- -------- -------- -------- -------- -------- --------
Net Income 454 406 49 262 309 356 475 451
Adjusted Net Income 454 406 49 262 309 356 475 451
Depreciation & Amortization 1,036 778 259 1,053 1,052 1,052 942 1,052
---------------------------------------- ------- ------------- -------- -------- -------- -------- -------- --------
Operating Cash Flow 1,490 1,183 307 1,315 1,361 1,408 1,417 1,503
---------------------------------------- ------- ------------- -------- -------- -------- -------- -------- --------
Net Capital Expenditures (180) (135) (45) (1,275) (270) (315) (360) (405)
Change in Net Working Capital 0 0 0 0 0 0 0 0
---------------------------------------- ------- ------------- -------- -------- -------- -------- -------- --------
Free Cash Flow 1,310 1,048 262 40 1,091 1,093 1,057 1,098
---------------------------------------- ------- ------------- -------- -------- -------- -------- -------- --------
Special Committee Buyout Expenses (650) (650)
CABO (Houston) sale 3,500 3,500
EPA Superfund Debt (650) (650) (1,150) (114) (114) (114) (114)
PV of EPA Debt remaining after 9/30/05 (227) (227)
Cash Balance (10Q-6/31/00) 3,676 3,676
Terminal Value - Multiple of 2005 EBITDA 4.5x 7,857
----------------------------------------------------------------------------------------------------------------------------------
Nominal Cash Flow 6,959 5,911 (1,110) 977 979 943 8,841
NPV of Cash Flows From 2001-2005 3,105 3,105
----------------------------------------------------------------------------------------------------------------------------------
BFX Total Present Value $10,064 $9,016
---------------------------------------------------------------------------
BFX Present Value per Share $2.54 $2.27
---------------------------------------------------------------------------
Shares outstanding 3,969,000 3,969,000
Discounted at 28.1% 28.1%
-------------------------------------------------------------------------------------------------------
Offer Price Exit Multiple 3.5x 4.0x 4.5x 5.0x
$2.25 Discount Rate $2.14 $2.21 $2.27 $2.34
-------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
==========================
Valuation Analysis - Discounted Cash Flow Analysis - Key Assumptions
--------------------------------------------------------------------------------
Assumptions
Risk-free Rate(1) 5.74%
Risk Premium(2) 6.15%
Equity Beta(3) 1.07
Small-cap Premium(2) 3.30%
Company Specific Premiums
Cabo, Ft. Worth property(4) 2.50%
EPA Liability(5) 10.00%
---------------------------------------------
Cost of Equity Capital(6) 28.12%
---------------------------------------------
(1) Yield on the 30-year Treasury Bond as of 8/8/00
(2) Based on Ibbotson's SBBI 1999 Yearbook
(3) S&P Entertainment & Leisure Composite measured daily vs. S&P 500 for last
two years
(4) Company Specific premium concerning viability of Ft. Worth Cabo property
(5) Company specific premium concerning EPA liability
(6) k = (B x RP) + Rf + Rs + R(cabo) + R(epa)
--------------------------------------------------------------------------------
George K. Baum & Company
<PAGE>
BFX Hospitality Group, Inc.
==========================
<TABLE>
Valuation Analysis - Discounted Cash Flow Analysis - Key Assumptions
-----------------------------------------------------------------------------------------------------------------------------------
BFX Discounted Cash Flow Analysis - Management's Projections - No Vestal Lease
in thousands
actual projected
------------- -----------------------------------------------------------
FY 9 months 4th Qtr. 2001 2002 2003 2004 2005
2000 ended 6/30/00 FY 2000
-------- ------------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 13,555 $ 10,312 $ 3,243 $ 13,359 $ 13,584 $ 13,809 $ 14,034 $ 14,259
EBITDA 1,735 1,401 334 1,456 1,527 1,600 1,673 1,746
-------- ------------- --------- -------- -------- -------- -------- --------
Income Before Taxes (given by company) 699 624 75 403 475 548 731 694
Tax (35%) 245 218 26 141 166 192 256 243
------------------------------------------ ----------------------- --------- -------- -------- -------- -------- --------
Net Income 454 406 49 262 309 356 475 451
Adjusted Net Income 454 406 49 262 309 356 475 451
Depreciation & Amortization 1,036 778 259 1,053 1,052 1,052 942 1,052
------------------------------------------ -------- ------------- --------- -------- -------- -------- -------- --------
Operating Cash Flow 1,490 1,183 307 1,315 1,361 1,408 1,417 1,503
------------------------------------------ -------- ------------- --------- -------- -------- -------- -------- --------
Net Capital Expenditures (180) (135) (45) (1,275) (270) (315) (360) (405)
Change in Net Working Capital 0 0 0 0 0 0 0 0
0
----------------------------------------------------- ------------- --------- ------- --------- -------- -------- --------
Free Cash Flow 1,310 1,048 262 40 1,091 1,093 1,057 1,098
----------------------------------------------------- ------------- --------- -------- -------- -------- -------- --------
Special Committee Buyout Expenses (650) (650)
Vestal, New York Lease (261) (261) (261) (261) (261) (261) (261)
CABO (Houston) sale 3,500 3,500
EPA Superfund Debt (650) (650) (1,150) (114) (114) (114) (114)
PV of EPA Debt remaining after 9/30/05 (227) (227)
Cash Balance (10Q-6/31/00) 3,676 3,676
Terminal Value - Multiple of 2005 EBITDA 4.5x 7,857
---------------------------------------------------------------------------------------------------------------------------------
Nominal Cash Flow 6,698 5,650 (1,371) 716 718 682 8,580
NPV of Cash Flows From 2001-2005 3,073 3,073
---------------------------------------------------------------------------------------------------------------------------------
BFX Total Present Value $ 9,771 $ 8,723
-------------------------------------------------------------------------------
BFX Present Value Per Share $ 2.46 $ 2.20
-------------------------------------------------------------------------------
Shares outstanding 3,969,000 3,969,000
Discounted at 23.1% 23.1%
-----------------------------------------------------------------------------------------------
Offer Price Exit Multiple 3.5x 4.0x 4.5x 5.0x
$2.25 Discount Rate $2.04 $2.12 $2.20 $2.28
-----------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
===========================
Valuation Analysis - Discounted Cash Flow Analysis - Key Assumptions
--------------------------------------------------------------------------------
Assumptions - No Vestal, NY lease
-------------------------------------
Risk -free Rate /1/ 5.74%
Risk Premium /2/ 6.15%
Equity Beta /3/ 1.07
Small-cap Premium /2/ 3.30%
Company Specific Premiums
Cabo, Ft. Worth property /4/ 2.50%
EPA Liability /5/ 5.00%
-------------------------------------
Cost of Equity Capital /6/ 23.12%
-------------------------------------
/1/ Yield on the 30-year Treasury Bond
/2/ Based on Ibbotson's SBBI 1999 Yearbook
/3/ S&P Entertainment & Leisure Composite measured daily vs. S&P 500 for last
two years
/4/ Company specific premium concerning viability of Ft. Worth Cabo property
/5/ Company specific premium concerning EPA liability
/6/ k=(B x RP)+ Rf + Rs + R(cabo) + R(epa)
--------------------------------------------------------------------------------
George K. Baum & Company
<PAGE>
BFX Hospitality Group, Inc.
===========================
Valuation Analysis - Present Value of Orderly Liquidation Analysis
--------------------------------------------------------------------------------
BFX Liquidation Distribution /1/
-------------------------------------------------------------
Distributions Available Net Available for Distribution
Year (9/30) (per share)
----------------------- ------------------------------
2000 $0.00
2001 $2.11
2002 $0.16
2003 $0.05
2004 $0.05
2005 $0.05
2006 $0.05
Net Available Distribution
----------------------------------------------------------------------------
Discount Rate
-----------------------------
10% 15% 20% 25%
----- ----- ----- -----
Total Distribution Present Value
Per Share (9/30/2000) $2.18 $2.06 $1.96 $1.87
Total Distribution Value Per share
(9/30/2006) $2.48
/1/ Liquidation amounts provided by BFX
--------------------------------------------------------------------------------
George K. Baum & Company
<PAGE>
BFX Hospitality Group, Inc.
==========================
<TABLE>
Valuation Analysis - Analysis of Selected Comparable Transactions - Going Private Transactions
-----------------------------------------------------------------------------------------------------------------------------------
Going private transactions ($50mm and under, last 2 years)
Going Private Transactions ($50mm and under, last 2 years)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Date Target Name Share Prices
Announced ------------------------------------ % Enterprise Equity
Offer Closing Closing Premium Premium Shares Value Val
Price Price Price 1 Day* 4 weeks* Acq. ($mil) ($mil)
(per share) 1 day 4 weeks
------------------------------------
prior to announcement date
7/27/2000 BFX $ 2.25 $ 1.00 $ 0.88 125.0% 157.1% $ 3.5 $ 2.5
-----------------------------------------------------------------------------------------------------------------------------------
10/6/1998 Audio Communications Network $ 6.40 $ 4.25 $ 5.00 50.6% 28.0% 100% $ 62.0 $ 29.3
9/11/1998 E-Z Serve Corp 0.60 0.44 0.50 37.1% 20.0% 100% $107.9 $ 43.2
1/12/1999 Lion Brewery Inc 5.02 3.75 3.94 33.9% 27.5% 100% $ 14.4 $ 18.3
3/4/1999 THT Inc 3.50 2.38 2.63 47.4% 33.3% 54% $ 14.3 $ 13.9
3/4/1999 Industrial Acoustics Inc 11.00 11.00 9.75 0.0% 12.8% $ 47.5 $ 33.4
3/4/1999 Reconditioned Systems Inc 3.63 4.13 np np
2/15/1999 Security Natl Bk Sapulpa Okl 100% np np
2/8/1999 World Satellite Network Inc 100% np $ 15.8
3/8/1999 Vaughn Communications 100% $ 64.0 $ 42.5
12/1/1999 ENStar Inc 12.50 8.00 8.25 56.3% 51.5% 35.51% $ 37.2
6/17/1999 R-B Rubber Products Inc 3.00 2.13 2.25 41.2% 33.3% 70.30% $ 6.7
10/29/1999 Kentek Information Systems Inc 8.29 7.63 7.00 8.7% 18.4% 100% $ 38.9
12/10/1999 ThermoSpectra (Thermo Instr) 16.00 11.50 9.94 39.1% 61.0% 8.00% $298.2 $251.6
12/10/1999 Hawaii National Bancshares np $ 32.0
12/10/1999 Concord Fabrics Inc 7.88 5.63 5.88 40.0% 34.0% $ 28.7 $ 18.0
1/19/2000 Anson Bancorp Inc, Wadesboro, NC 100% np $ 10.1
1/19/2000 Geerlings & Wade Inc 10.00 7.84 6.25 27.5% 60.0% $ 37.3 $ 40.4
1/19/2000 CEM Corp 11.15 5.75 6.88 93.9% 62.2% $ 30.4 $ 34.2
3/8/2000 n-Vision Inc 100% np $ 1.3
3/8/2000 ThermoLase Corp (Thermo Trex) 2.44 2.38 1.88 2.7% 30.1% $225.4 $112.2
12/21/1999 OIS Optical Imaging Systems 0.50 0.50 0.72 20.40% np np
12/21/1999 Saratoga Beverage Group Inc 6.00 4.81 3.44 24.7% 74.5% $ 60.3 $ 39.7
12/21/1999 Metrika Systems Corp 9.00 9.63 6.13 -6.5% 46.9% $ 81.2 $ 66.8
12/21/1999 Sunrise Intl Leasing Inc 5.25 5.50 5.19 -4.5% 1.2% $112.1 $ 37.6
4/4/2000 Thermo Sentron Inc (Thermedics) 15.50 14.44 14.50 7.4% 6.9% $153.5 $148.8
2/19/2000 Diehl Graphsoft Inc 9.50 7.13 4.88 33.3% 94.9% 100% $ 28.3 $ 29.5
2/19/2000 Tubby's Inc 100% $ 2.0 $ 2.8
2/19/2000 Acme Electric Corp $ 48.4 $ 39.4
2/19/2000 Old Guard Group Inc 12.00 10.00 9.81 20.0% 22.3% $ 38.8 $ 47.1
2/19/2000 KLLM Transport Services Inc 8.05 6.81 8.13 18.2% -0.9% $ 77.5 $ 33.0
Mean 28.5% 35.9%
Median 28.0% 33.3%
*offer premium over closing price
-----------------------------------------------------------------------------------------------------------------------------------
Date Target Name Target Advisors Target Total
Announced Fees ($mil)
7/27/2000 BFX
-----------------------------------------------------------------------------------------------------------------------------------
10/6/1998 Audio Communications Network Duff and Phelps $0.13
9/11/1998 E-Z Serve Corp Donaldson, Lufkin & Jenrette
Harris Webb & Garrison, Inc.
1/12/1999 Lion Brewery Inc Tucker Anthony $0.35
3/4/1999 THT Inc
3/4/1999 Industrial Acoustics Inc
3/4/1999 Reconditioned Systems Inc
2/15/1999 Security Natl Bk Sapulpa Okl Alex Sheshunoff & Co
2/8/1999 World Satellite Network Inc
3/8/1999 Vaughn Communications EVEREN Securities Inc $0.53
12/1/1999 ENStar Inc nm 8
6/17/1999 R-B Rubber Products Inc Pacific Crest Securities $0.05 2
10/29/1999 Kentek Information Systems Inc Janney Montgomery Scott $0.13 8
12/10/1999 ThermoSpectra (Thermo Instr) Tucker Anthony Cleary Gull
12/10/1999 Hawaii National Bancshares
12/10/1999 Concord Fabrics Inc
1/19/2000 Anson Bancorp Inc, Wadesboro, NC Trident Securities
1/19/2000 Geerlings & Wade Inc Lehman Brothers
1/19/2000 CEM Corp
3/8/2000 n-Vision Inc
3/8/2000 ThermoLase Corp (Thermo Trex)
12/21/1999 OIS Optical Imaging Systems
12/21/1999 Saratoga Beverage Group Inc
12/21/1999 Metrika Systems Corp
12/21/1999 Sunrise Intl Leasing Inc
4/4/2000 Thermo Sentron Inc (Thermedics)
2/19/2000 Diehl Graphsoft Inc
2/19/2000 Tubby's Inc
2/19/2000 Acme Electric Corp Ernst & Young LLP
2/19/2000 Old Guard Group Inc
2/19/2000 KLLM Transport Services Inc
-----------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Transactions - All M&A Transactions
----------------------------------------------------------------------------------------------------------------------------------
All M&A transactions - target sales $5 million and under last two years
Date Target Name Target Business Description Offer Share Prices
Announced Price -------------------------------
(per share) Closing Closing Premium Premium
Price Price 1 day 4 weeks
1 day 4 weeks
-------------------------------
prior to annoncement date
7/27/2000 BFX $2.25 $1.00 $0.88 125% 157%
<S> <C> <C> <C> <C> <C> <C> <C>
6/16/2000 CNS Bancorp Jefferson City, Mo Savings and loan $14.70 $11.69 $11.75 26% 25%
6/1/2000 Sparta Foods Mnfr durable, non-durable goods 1.41 0.88 0.81 61% 74%
5/16/2000 Randers Killam Gr Construct nonresidential bldgs 4.50 4.00 3.38 13% 33%
4/10/2000 Carolina Fincorp Inc, NC Commercial bank 15.01 11.38 9.38 32% 60%
3/23/2000 Analogy Inc Design, develop comp software 2.48 1.88 2.13 32% 17%
3/22/2000 Northwest Equity Corp Savings and loan holding co 24.00 19.50 22.25 23% 8%
2/29/2000 Three Rivers Financial Corp Savings and loan holding co 18.36 11.00 12.25 67% 50%
2/18/2000 EuroWeb International Corp Internet Service Provider (ISP) 1.58 1.41 1.28 12% 23%
2/15/2000 Haywood Bancshares Inc Bank holding company 22.21 14.50 14.75 53% 51%
2/1/2000 Aseco Corp Mnfr integrated circuits 4.43 3.47 2.06 28% 115%
1/31/2000 Ferrofluidics Corp Mnfr stable magnetic fluids 6.50 3.94 4.13 65% 58%
1/27/2000 Multigraphics Inc Mnfr printing, graphics equip 1.25 1.81 2.31 -31% 46%
1/21/2000 Carleton Corp Develop integrated software 2.45 2.55 2.06 -4% 19%
1/19/2000 Penobscot Shoe Co Mnfr women's footwear 11.75 12.13 11.88 -3% -1%
1/7/2000 Westwood Homestead Financial Savings and loan 12.53 10.25 10.63 22% 18%
1/7/2000 Thermo Vision (Thermo Inst) Mnfr medical monitoring equip 7.00 4.00 3.38 75% 107%
12/28/1999 Uroquest MMedical Corp Mnfr electromedical equipment 2.27 1.56 1.75 45% 30%
12/27/1999 Asahi-America Inc Manufacture plastics pipe 9.55 7.00 7.75 36% 23%
12/27/1999 Template Software Inc Dvlp software 7.90 5.63 5.06 40% 56%
12/23/1999 Western Beef Inc Own, op grocery stores 8.75 7.00 7.13 25% 23%
12/21/1999 Medical Graphics Corp Mnfr cardio monitoring sys 2.15 1.56 1.69 38% 27%
12/20/1999 KSB Bancorp Inc Bank holding company 22.65 15.38 12.63 47% 79%
12/15/1999 Fulton Bancorp, Fulton, MO Savings and loan 19.15 17.00 14.00 13% 37%
12/10/1999 ThermoSpectra (Thermo Instr) Mnfr precision imaging equip 16.00 11.50 9.94 39% 61%
12/1/1999 ENStar Inc Whl connectivity devices 12.50 8.00 8.25 56% 52%
11/18/1999 RiboGene Inc Pvd physical, bio research svcs 3.08 1.75 1.75 76% 76%
11/12/1999 South Carolina Community Savings and loan holding co 17.50 14.50 14.25 21% 23%
10/29/1999 Thermo Power Corp Manufacture cogeneration sys 12.00 11.38 8.50 5% 41%
10/29/1999 Kentek Information Systems Inc Manufacture mid range printers 8.29 7.63 7.00 9% 18%
10/29/1999 Eagle Bancgroup, Bloomington, IL Bank holding company 25.74 22.00 20.56 17% 25%
10/21/1999 Yieldup International Corp Manufacture industrial equip 2.74 1.94 1.69 41% 62%
10/8/1999 Valley National Corp, CA Bank holding company 20.94 16.88 24%
10/4/1999 Stone Street Bancorp Inc, NC Bank holding company 19.86 12.88 14.125 54% 41%
10/1/1999 Sheridan Energy Inc Pvd oil, gas field svcs 5.50 4.00 3.5 38% 57%
10/1/1999 Miami Subs Corp Own, op fast-food restaurants 2.07 0.31 0.3125 562% 562%
9/30/1999 SunPharm Corp Mnfr anticancer drugs 2.07 1.75 1.1875 18% 74%
9/30/1999 Midwest Bancshares Inc, Iowa Bank holding company 16.88 11.75 13 44% 30%
9/24/1999 North East Insurance Co Ppty and casualty insurance co 3.30 2.50 2.25 32% 47%
9/23/1999 United Foods Inc Produce frozen fruits, veggies 3.50 2.50 2.4375 40% 44%
9/20/1999 Tivoli Industries Inc Mnfr nonres electric lighting 4.50 3.31 3.375 36% 33%
9/16/1999 ADFlex Solutions Inc Mnfr circuit-based systems 3.80 4.00 3.75 -5% 1%
9/3/1999 SFS Bancorp Inc, Schenectady, NY Bank holding company 25.10 21.63 19.125 16% 31%
9/1/1999 First Bank of Philadelphia Commercial bank 6.00 5.75 5.375 4% 12%
8/31/1999 fine.com International Corp Provide computer related svcs 4.55 2.25 2.375 102% 92%
8/27/1999 Doughtie's Foods Process meat products 17.00 13.25 11.9375 28% 42%
8/26/1999 MBLA Financial Corp Securities brokerage firm 24.15 18.75 18.9375 29% 28%
8/22/1999 Petroglyph Energy Inc Oil and gas exploration, prodn 3.00 2.38 2.5 26% 20%
8/15/1999 Trion Manufacture exhaust systems 5.50 3.50 3.5 57% 57%
8/11/1999 American Indemnity Finl Corp Property, casualty insurance 15.60 11.50 10.625 36% 47%
8/11/1999 Metra Biosystems Inc Pvd commercial research svcs 1.78 1.03 0.875 73% 103%
8/10/1999 LabOne Inc (Lab Holdings Inc) Pvd testing svcs for ins in 12.75 10.88 11.75 17% 9%
1.06 1.03 2% 88%
8/9/1999 Killearn Properties Inc Real estate development firm 5.50 5.00 5.125 10% 7%
<CAPTION>
Date Target Name % of Enterprise Family Value Target Advisors
Announced Shares Value ($mil)
Acq. ($mil)
7/27/2000 BFX $3.50 $2.50
<S> <C> <C> <C> <C> <C>
6/16/2000 CNS Bancorp Jefferson City, Mo 100% $80.27 $20.85
6/1/2000 Sparta Foods 100% 20.242 17.16
5/16/2000 Randers Killam Gr 0% 117.008 116.55
4/10/2000 Carolina Fincorp Inc, NC 100% 131.012 29.10 Trident Securities
3/23/2000 Analogy Inc 100% 24.95 24.26 Broadview
3/22/2000 Northwest Equity Corp 100% 82.859 19.81 ABN-AMRO Holding NV
2/29/2000 Three Rivers Financial Corp 100% 76.929 13.21 Trident Securities
2/18/2000 EuroWeb International Corp 53% 13.033 15.62
2/15/2000 Haywood Bancshares Inc 100% 144.093 27.78 Trident Securities
2/1/2000 Aseco Corp 100% 20.022 19.82 Adams Harkness & Hill Inc
1/31/2000 Ferrofluidics Corp 100% 33.865 37.26 Advest Inc
1/27/2000 Multigraphics Inc 100% 11.825 3.56 Piper Jaffray Inc
1/21/2000 Carleton Corp 100% 8.51 8.40 Dougherty Summit Securities
1/19/2000 Penobscot Shoe Co 100% 16.395 16.51 Advest Inc.
1/7/2000 Westwood Homestead Financial 100% 115.435 27.18 Keefe Bruyette & Woods In
1/7/2000 Thermo Vision (Thermo Inst) 0% 56.861 57.50
12/28/1999 Uroquest MMedical Corp 100% 22.28 28.62
12/27/1999 Asahi-America Inc 86% 51.599 33.15 ING Barings
12/27/1999 Template Software Inc 100% 44.675 46.85 US Bancorp Piper Jaffray
12/23/1999 Western Beef Inc 28% np 48.09 Houlihan Lokey Howard & Z
12/21/1999 Medical Graphics Corp 100% 15.696 15.47
12/20/1999 KSB Bancorp Inc 100% 157.58 29.99 Charles Webb & Company
12/15/1999 Fulton Bancorp, Fulton, MO 100% 95.185 31.67
12/10/1999 ThermoSpectra (Thermo Instr) 8% 298.206 251.62 Tucker Anthony Cleary Gul
12/1/1999 ENStar Inc 36% 40.737 37.21
11/18/1999 RiboGene Inc 100% 19.331 22.75 Rabobank International
11/12/1999 South Carolina Community 100% 45.186 9.62 Trident Securities
10/29/1999 Thermo Power Corp 22% 276.272 145.50
10/29/1999 Kentek Information Systems Inc 100% 29.806 38.88 Janney Montgomery Scott I
10/29/1999 Eagle Bancgroup, Bloomington, IL 100% 162.797 28.64 Trident Securities
10/21/1999 Yieldup International Corp 100% 24.791 21.65 Needham & Co Inc
10/8/1999 Valley National Corp, CA 100% 230.105 29.09 Hovde Financial, Inc.
10/4/1999 Stone Street Bancorp Inc, NC 100% 102.715 32.54 Orr Management Co
10/1/1999 Sheridan Energy Inc 100% np 37.02 Donaldson, Lufkin & Jenre
10/1/1999 Miami Subs Corp 100% 58.409 56.08 Raymond James & Asssociate
9/30/1999 SunPharm Corp 100% 15.258 15.62
9/30/1999 Midwest Bancshares Inc, Iowa 100% 122.16 19.21 Keefe Bruyette & Soods Inc
9/24/1999 North East Insurance Co 100% 9.979 10.33 Sandler O'Neill Partners
9/23/1999 United Foods Inc 100% 58.028 14.67 JC Bradford & Co
9/20/1999 Tivoli Industries Inc 100% 6.469 7.17
9/16/1999 ADFlex Solutions Inc 100% 66.258 34.32 BancBoston Robertson Step
9/3/1999 SFS Bancorp Inc, Schenectady, NY 100% 180.143 31.78 Keefe Bruyette & Woods In
9/1/1999 First Bank of Philadelphia 100% 54.985 10.06 Berwind Financial Group
8/31/1999 fine.com International Corp 100% 11.66 12.28 Ragen MacKenzie Group Inc
8/27/1999 Doughtie's Foods 100% 27.338 25.42 Mann Armistead & Epperson
8/26/1999 MBLA Financial Corp 100% 149.855 31.09
8/22/1999 Petroglyph Energy Inc 0% 23.428 16.38
8/15/1999 Trion 100% 49.55 39.56 Harris Williams & Co
8/11/1999 American Indemnity Finl Corp 100% 29.533 39.01 Philo Smith
8/11/1999 Metra Biosystems Inc 100% 19.986 22.73 EGS Securities Corporation
8/10/1999 LabOne Inc (Lab Holdings Inc) 20% 183.95 170.91 US Bancorp
100% 35.83
8/9/1999 Killearn Properties Inc 38% 20.152 4.88
----------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Transactions - All M&A Transactions
------------------------------------------------------------------------------------------------------------------------------------
All M&A transactions - target sales $5 million and under last two years (cont.)
Date Target Name Target Business Description Offer Share Prices
Announced Price -------------------------------------
(per share) Closing Closing Premium Premium
Price Price 1 day 4 weeks
1 day 4 weeks
-------------------------------------
prior to announcement date
7/27/2000 BFX $2.25 $1.00 $0.88 125% 157%
<S> <C> <C> <C> <C> <C> <C> <C>
8/4/1999 Golden Genesis Co Mnfr, whl solar electric prods 2.33 1.88 1.5 24% 55%
7/29/1999 Morgan Products Ltd. Mnfr, whl building products 4.00 3.25 2.5 23% 60%
7/21/1999 QMS Inc (Lason Inc) Mnfr printing processors 6.25 5.69 3.875 10% 61%
7/9/1999 Precision Systems Inc. Develop network-based software 1.00 2.06 2.63 -52% -62%
7/8/1999 Endogen Inc Manufacture biotech prod 3.75 2.88 2.625 30% 43%
2.92 1.19 145% 61%
7/2/1999 Atrix International Inc Manufacture, wholesale hardware 2.00 1.50 1.375 33% 45%
7/1/1999 Skaneateles Bancorp Inc Commercial bankholding co 27.89 19.00 15.75 47% 77%
6/30/1999 CRW Financial Inc Pvd credit collection svcs 6.03 5.00 6.5 21% -7%
6/30/1999 Sun Energy Partners LP Oil and gas exploration, prodn 5.75 4.06 3.8125 42% 51%
6/30/1999 Ocal Inc Mnfr coated metal products 3.54 1.75 1.625 102% 118%
6/23/1999 Expert Software Inc Develop software 2.65 1.94 1.625 37% 63%
6/22/1999 NSC Corp (Waste Management) Pvd asbestos abatement svcs 1.25 0.94 0.875 33% 43%
6/18/1999 Standard Funding Corp Insurance agency 3.50 2.75 2.25 27% 56%
6/17/1999 R-B Rubber Products Inc. Mnfr, whl rubber products 3.00 2.13 2.25 41% 33%
6/11/1999 Treadco Inc Own, operate auto supply stores 9.00 6.50 7.25 38% 24%
6/1/1999 Travel Ports of America Inc Own, op truck stop stations 4.30 3.25 3.5 32% 23%
5/19/1999 Shiloh Industries Inc Mnfr automotive stampings 14.50 11.75 11.25 23% 29%
5/14/1999 United Foods Inc Produce frozen fruits, veggies 3.00 2.63 2.9375 14% 2%
5/14/1999 Aquila Gas Pipeline Corp Gas utility 8.00 6.50 4.75 23% 68%
6.06 3.88 56% 100%
5/7/1999 Parts Source Inc Whl, retail auto parts, supplies 3.00 2.50 1.25 20% 140%
5/3/1999 Chyrsalis International Corp Pvd research svcs 0.71 1.06 1.38 -33% 48%
5/3/1999 Quality Semiconductor Manufacture semiconductors 4.77 2.94 2.0625 62% 131%
4/26/1999 Prism Solutions Inc Dvlp data management software 2.26 3.31 1.69 -32% 34%
4/23/1999 HoloPak Technologies Inc Mnfr, whl hot stamp foil 3.64 2.63 1.78125 39% 104%
4/13/1999 Mid-Iowa Financial, Newton, IA Bank holding company 15.00 12.25 11.5 22% 30%
4/9/1999 AG Associates Inc Mnfr single-wafer equipment 5.50 4.38 3.6875 26% 49%
10.25 9.13 12% 28%
4/5/1999 Saba Petroleum Co Oil and gas exploration, prodn 1.84 1.31 1.0625 40% 73%
3/24/1999 Audits & Surveys Worldwide Inc Pvd marketing research svcs 3.24 2.44 2.5 33% 30%
3/22/1999 Security Bank Corp Commercial bank 19.39 11.50 11 69% 76%
3/19/1999 Glenway Financial Corp Bank holding company 19.88 21.75 20.00 -9% -1%
3/19/1999 Gene Medicine Inc Mnfr, dvlp gene therapy prods 2.39 2.00 2.4375 20% -2%
3/15/1999 Pharmhouse Corp Own and operate drug stores 3.25 1.81 1.15625 79% 181%
3/12/1999 Truevision Inc Mnfr color imaging products 0.88 0.81 0.65625 8% 34%
3/9/1999 Forum Retirement Partners LP Own, op retirement centers 5.75 4.63 4.625 24% 24%
3/4/1999 THT Inc Mnfr sanitary paper, steel prod 3.50 2.38 2.625 47% 33%
3/4/1999 COHR Inc Pvd outsourcing svcs 6.50 3.91 3 66% 117%
1/26/1999 Luther Medical Products Inc Manufacture catheter systems 4.70 2.88 2 63% 135%
1/22/1999 Reliance Bankshares Inc Savings and loan 10.40 8.75 8.5 19% 22%
1/12/1999 Lion Brewery Inc Produce beer 4.70 4.13 3.875 14% 21%
1/6/1999 General Microwave Corp Mnfr microwave test equipment 18.00 10.63 9.75 69% 85%
12/31/1998 Red Brick Systems Inc Develop software 2.61 2.25 2.3125 16% 13%
12/31/1998 FemRx Inc Mnfr surgical equipment 2.35 1.81 1.625 30% 45%
12/31/1998 Concentra Corp Dvlp, whl CAD systems software 7.00 4.00 2.5 75% 180%
12/29/1998 Crowley Milner & Co Own, op department stores 3.21 2.63 4.375 22% -27%
12/16/1998 Peerless Group Inc Develop computer software 7.36 4.88 5 51% 47%
12/15/1998 Walshire Assurance Insurance company 8.25 7.50 6.75 10% 22%
12/11/1998 Consilium Inc Develop software 4.30 1.75 1.75 146% 146%
12/8/1998 Consep Inc Manufacture pesticides 1.25 1.34 1.19 -7% 5%
12/8/1998 Lab Specialists of America Inc Provide laboratory testing svc 6.31 4.00 4 58% 58%
11/30/1998 Capital Factors Holdings Inc Pvd short-term bus credit svcs 17.50 16.75 17 4% 3%
11/13/1998 Golden Eagle Group Inc Pvd transp logistics svcs 4.45 1.38 1.375 224% 224%
11/6/1998 Gull Laboratories (Fresenius) Mnfr med diagnostic kits 2.25 2.63 3.88 -14% -42%
<CAPTION>
Date Target Name % of Enterprise Equity Value Target Advisors
Announced Shares Value ($mil)
Acq. ($mil)
7/27/2000 BFX $3.50 $2.50
<S> <C> <S> <C> <C> <C>
8/4/1999 Golden Genesis Co 100% 48.676 39.67 Hanifen Imhoff Inc
7/29/1999 Morgan Products Ltd. 100% 71.954 41.43 Bowles Hollowell Conner
7/21/1999 QMS Inc (Lason Inc) 51% 73.337 66.87 Robinson-Humphrey Co
7/9/1999 Precision Systems Inc. 100% 27.172 20.17 William Blair & Co
7/8/1999 Endogen Inc 100% 12.652 13.49 Adams Harkness & Hill Inc
100% 31.36
7/2/1999 Atrix International Inc 100% 2.527 2.83
7/1/1999 Skaneateles Bancorp Inc 100% 260.456 42.36 McConnell, Budd & Downes
6/30/1999 CRW Financial Inc 100% 41.686 43.83 Janney Montgomery Scott I
6/30/1999 Sun Energy Partners LP 2% 3218.73 2,421.73 No Investment Bank Retain
6/30/1999 Ocal Inc 100% 15.59 20.11 Houlihan Lokey Howard & Z
6/23/1999 Expert Software Inc 100% 21.744 23.34 Piper Jaffray Inc
6/22/1999 NSC Corp (Waste Management) 100% 7.805 12.46 BT Alex Brown Inc
6/18/1999 Standard Funding Corp 100% 47.404 9.66 Ladenburg Thalmann & Co
6/17/1999 R-B Rubber Products Inc. 70% 8.805 6.72 Pacific Crest Securities
6/11/1999 Treadco Inc 49% 63.063 45.94 Stephens Inc
6/1/1999 Travel Ports of America Inc 100% 63.221 36.87 McDonald Investments
5/19/1999 Shiloh Industries Inc 8% 341.029 189.67
5/14/1999 United Foods Inc 63% 49.279 12.58
5/14/1999 Aquila Gas Pipeline Corp 18% 458.096 235.20 Petrie Parkman & Co Inc
100% 41.22
5/7/1999 Parts Source Inc 100% 26.901 10.24 Raymond James & Associate
5/3/1999 Chyrsalis International Corp 100% 18.55 8.19 Vector Securities Intl
5/3/1999 Quality Semiconductor 100% 40.106 36.03 Needham & Co Inc
4/26/1999 Prism Solutions Inc 100% 36.313 42.53 FAC/Equities
4/23/1999 HoloPak Technologies Inc 100% 8.193 9.45 Schroder & Co Inc
4/13/1999 Mid-Iowa Financial, Newton, IA 100% 106.102 26.02 Prairie Capital Services
4/9/1999 AG Associates Inc 100% 38.979 34.58 Soundview Technology Grou
100% 38.90
4/5/1999 Saba Petroleum Co 100% 56.805 20.30 No Investment Bank Retain
3/24/1999 Audits & Surveys Worldwide Inc 100% 47.221 43.22 Allen & Co. Inc
3/22/1999 Security Bank Corp 100% 69.082 19.84 Scott & Stringfellow
3/19/1999 Glenway Financial Corp 100% 265.76 46.56 Stifel Nicolaus & Co Inc
3/19/1999 Gene Medicine Inc 100% 33.77 34.86 PaineWebber
3/15/1999 Pharmhouse Corp 100% 34.718 9.05
3/12/1999 Truevision Inc 100% 7.975 11.53 BancBoston Robertson Step
3/9/1999 Forum Retirement Partners LP 7% 128.485 87.89
3/4/1999 THT Inc 54% 14.322 13.94
3/4/1999 COHR Inc 52% 29.683 41.82 Lehman Brothers
1/26/1999 Luther Medical Products Inc 100% 15.783 16.07
1/22/1999 Reliance Bankshares Inc 100% 31.364 25.23 Robert W Baird & Co Inc
1/12/1999 Lion Brewery Inc 100% 14.413 18.26 Tucker Anthony Inc
1/6/1999 General Microwave Corp 100% 20.921 22.92 Franco Lewis & Company, I
12/31/1998 Red Brick Systems Inc 100% 26.47 33.62 Morgan Stanley & Co
12/31/1998 FemRx Inc 100% 20.649 21.58 Warburg Dillon Read
12/31/1998 Concentra Corp 100% 45.089 46.59 Volpe Brown Whelan & Co
12/29/1998 Crowley Milner & Co 0% 63.238 4.98
12/16/1998 Peerless Group Inc 100% 35.447 36.82 Dain Rauscher Wessels
12/15/1998 Walshire Assurance 100% 42.346 36.65 BT Alex Brown/Wolfensohn
12/11/1998 Consilium Inc 100% 41.319 45.23 Broadview Associates
12/8/1998 Consep Inc 100% 18.48 12.41 Pacific Crest Securities
12/8/1998 Lab Specialists of America Inc 100% 35.716 38.23 Jesup & Lamont Securities
11/30/1998 Capital Factors Holdings Inc 13% 739.913 221.01
11/13/1998 Golden Eagle Group Inc 100% 35.062 30.24 No Investment Bank Retain
11/6/1998 Gull Laboratories (Fresenius) 100% 23.411 18.04 Wasserstein Perella Group
------------------------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Transactions - All M&A Transactions
------------------------------------------------------------------------------------------------------------------------------------
All M&A transactions - target sales $5 million and under last two years (cont.)
Date Target Name Target Business Description Offer Share Prices
Announced Price -------------------------------------
(per share) Closing Closing Premium Premium
Price Price 1 day 4 weeks
1 day 4 weeks
-------------------------------------
prior to announcement date
7/27/2000 BFX $2.25 $1.00 $0.88 125% 157%
<S> <C> <C> <C> <C> <C> <C> <C>
11/6/1998 Carnegie Group Inc Operate laboratories 5.00 2.63 1.8125 90% 176%
10/30/1998 Gamma Biologicals Inc Mnfr blood transfusion prod 5.40 2.88 4.375 88% 23%
10/26/1998 Cayenne Software Inc Dvlp bus applications software 0.38 0.44 0.81 -14% -54%
10/9/1998 American Materials & Techs Mnfr advanced composites 6.00 3.00 3.3125 100% 81%
10/6/1998 Audio Communications Network Pvd bus music bdcstg svcs 6.40 4.25 5 51% 28%
9/30/1998 Liberty Technologies Inc Mnfr, whl diagnostic devices 3.50 2.50 2.375 40% 47%
9/11/1998 E-Z Serve Corp. Whl and retail gasoline 0.60 0.44 0.5 37% 20%
8/31/1998 Newstar Media Inc Manufactures audio books 1.44 1.38 1.9375 5% -26%
8/31/1998 Personnel Management Inc Employment agency 16.00 12.75 13 25% 23%
Mean 40% 51%
Median 32% 41%
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Date Target Name % of Enterprise Equity Value Target Advisors
Announced Shares Value ($mil)
Acq. ($mil)
7/27/2000 BFX $3.50 $2.50
<S> <C> <C> <C> <C> <C>
11/6/1998 Carnegie Group Inc 100% 29.145 34.63 Updata Capital Inc
10/30/1998 Gamma Biologicals Inc 100% 25.31 25.63 Dain Rauscher Wessels
10/26/1998 Cayenne Software Inc 100% 6.596 7.99 Adams Harkness & Hill Inc
10/9/1998 American Materials & Techs 100% 35.05 26.73 William Sword
10/6/1998 Audio Communications Network 100% 62.047 29.27 Duff and Phelps
9/30/1998 Liberty Technologies Inc 100% 17.306 17.63 Legg Mason Wood Walker
9/11/1998 E-Z Serve Corp. 100% 107.882 43.18 Donaldson, Lufkin & Jenrette
8/31/1998 Newstar Media Inc 0% 22.128 9.66
8/31/1998 Personnel Management Inc 100% 37.497 34.91 George K Baum & Co
---------------------------------------------------------------------------------------------------------------------
George K. Baum & Company
</TABLE>
<PAGE>
BFX Hospitality Group, Inc.
<TABLE>
<CAPTION>
Valuation Analysis - Analysis of Selected Comparable Transactions - Industry Specific SIC Codes/(1)/
-----------------------------------------------------------------------------------------------------------------------------------
Hotel, restaurant and hospitality M&A transactions ($50mm and under, last 2 years)
Date Target Name Target Business Description Offer Share Prices
Announced Price -------------------------------------
(per share) Closing Closing Premium Premium
Price Price 1 day 4 weeks
1 day 4 weeks
-------------------------------------
prior to announcement date
7/27/2000 BFX $2.25 $1.00 $0.88 125% 157%
<S> <C> <C> <C> <C> <C> <C> <C>
12/29/1999 VICORP Restaurants Inc Own, op franchised restaurants 19.00 16.75 15.81 13% 20%
12/15/1999 Lone Star Steakhouse & Saloon Own, operate restaurants 7.97 7.97 9.06 0% -12%
12/7/1999 Planet Hollywood International Own & operate restaurants 4.50 4.00 3.31 13% 36%
11/5/1999 Ogden Corp Pvd airline support services 10.00 10.38 10.06 -4% -1%
10/19/1999 Lodgian Inc Own, op hotels 4.25 4.38 4.31 -3% -1%
10/15/1999 Interstate Hotels Corp Own, op hotels 4.56 3.00 2.88 52% 59%
10/1/1999 Miami Subs Corp Own, op fast-food restaurants 2.07 0.31 0.31 562% 562%
8/19/1999 Triarc Cos Inc Own, op fast-food restaurants 20.44 21.94 21.00 -7% -3%
8/9/1999 Rally's Hamburgers Inc Own, op drive-through rests 1.06 1.03 0.56 2% 88%
7/8/1999 Coffee People Inc (Second Cup) Own and operate coffee shops 2.92 1.19 1.81 145% 61%
6/10/1999 Amerihost Properties Inc Own and operate hotels, motels 4.00 3.44 3.25 16% 23%
5/10/1999 Signature Inns Inc Own and operate hotels 6.06 3.88 3.03 56% 100%
4/5/1999 Back Bay Restaurants Group Inc Own, op Italian restaurants 10.25 9.13 8.00 12% 28%
3/10/1999 Players International Inc Own, op riverboat casinos 6.04 6.00 5.63 1% 7%
2/19/1999 Eateries Inc Own and operate restaurants 5.13 5.25 5.44 -2% -6%
2/18/1999 ExecuStay Corp Own and operate rooming houses 13.00 13.56 12.75 -4% 2%
11/30/1998 Miami Subs Corp Own, op fast-food restaurants 0.52 0.31 0.31 65% 65%
10/30/1998 Uno Restaurant Corp Own, op franchised restaurants 7.00 5.81 6.81 20% 3%
10/23/1998 Sunterra Corp Own, operate timeshare resorts 8.34 8.56 7.25 -3% 15%
9/25/1998 Cooker Restaurant Corp Own, operate restaurants 12.00 8.38 9.44 43% 27%
9/25/1998 Max & Erma's Restaurant Inc Own and operate restaurants 6.63 6.63 6.75 0% -2%
Mean 47% 51%
Median 12% 20%
/(1)/ SIC Codes: 5812, 5813, 7011, 7041, 7033, 7021, 7032
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Date Target Name % of Enterprise Equity Value Target Advisors
Announced Shares Value ($mil)
Acq. ($mil)
7/27/2000 BFX $3.50 $2.50
/1/SIC Codes: 5812,5813,7011,7041,7033,7021,7032
<S> <C> <C> <C> <C> <C>
12/29/1999 VICORP Restaurants Inc 0% 166.55 168.02
12/15/1999 Lone Star Steakhouse & Saloon 10% 220.42 285.36
12/7/1999 Planet Hollywood International 9% 576.75 437.50
11/5/1999 Ogden Corp 0% 2,472.59 494.66
10/19/1999 Lodgian Inc 0% 984.08 119.12
10/15/1999 Interstate Hotels Corp 0% nm 27.65
10/1/1999 Miami Subs Corp 100% 58.41 56.08 Raymond James & Associates Inc.
8/19/1999 Triarc Cos Inc 8% 1,043.98 399.97
8/9/1999 Rally's Hamburgers Inc 100% 103.31 35.83 Schroder & Co Inc
7/8/1999 Coffee People Inc (Second Cup) 100% 36.15 31.36 Black & Co Inc
6/10/1999 Amerihost Properties Inc 0% 89.46 24.27
5/10/1999 Signature Inns Inc 100% 140.09 41.22 McDonald Investments
4/5/1999 Back Bay Restaurants Group Inc 100% 42.58 38.90 Schroder & Co Inc.
3/10/1999 Players International Inc 3% 337.94 193.42
2/19/1999 Eateries Inc 0% np 20.26
2/18/1999 ExecuStay Corp 44% 129.91 107.00
11/30/1998 Miami Subs Corp 0% 16.35 14.02
10/30/1998 Uno Restaurant Corp 0% 120.33 75.98
10/23/1998 Sunterra Corp 0% 910.00 299.43
9/25/1998 Cooker Restaurant Corp 39% 160.24 121.91
9/25/1998 Max & Erma's Restaurant Inc 12% 50.89 28.20
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George K. Baum & Company
</TABLE>
