<PAGE> 1
SCHEDULE 13E-3
(Rule l3e-1)
Transaction Statement Pursuant to Section 13(e) of the Securities
Exchange Act of 1934 and Rule 13e-3 Thereunder
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e)
of the Securities Exchange Act of 1934)
HERBALIFE INTERNATIONAL, INC.
(Name of Issuer)
HERBALIFE INTERNATIONAL, INC.
MARK HUGHES
MH MILLENNIUM HOLDINGS LLC
MH MILLENNIUM ACQUISITION CORP.
(Name of Persons Filing statement)
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Classes of Securities)
---------
426908208 (CLASS A)
426908307 (CLASS B)
(CUSIP Number of Classes of Securities)
-----------
Herbalife International, Inc.
1800 Century Park East
Los Angeles, California 90067
Tel: (310) 410-9600
Attn. Robert A. Sandler, Esq.
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Persons Filing Statement)
Copies to:
Anthony T. Iler, Esq.
Irell & Manella LLP
333 South Hope Street, Suite 3300
Los Angeles, California 90071
(213) 620-1555
------------------
------------------
This statement is filed in connection with (check the appropriate box):
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 registration statement under the Securities
Act of 1933.
c. [x] 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: [ ]
<PAGE> 2
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
$267,834,554 $53,557.00
- --------------------------------------------------------------------------------
*For purposes of calculating the fee only. This amount assumes the
purchase of all shares of Class A common stock, par value $.01 per share, and
all shares of Class B common stock, par value $.01 per share, (collectively,
the "Common Shares") of Herbalife International, Inc. (the "Company") from
stockholders other than the Continuing Stockholder (as defined herein) at a
price per share of $17.00 in cash, plus the payment of the aggregate spread
value of the outstanding options to purchase Common Shares to be cancelled in
the transactions (based upon the applicable strike price and the per share
transaction price), estimated at $57,054,733. The amount of the filing fee,
calculated in accordance with Section 14(g)(3) and Rule 0-11(d) under the
Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of
the aggregate transaction value.
[x] Check box if any part of the fee is offset as provided by Rule
0-ll(a)(2) and identify the filing with which the offsetting fee-was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
- --------------------------------------------------------------------------------
Amount Previously Paid: $53,557
Form or Registration No.: Schedule 14D-1
Filing Party: MARK HUGHES
MH Millennium Holdings LLC
MH Millennium Acquisition Corp.
Date Filed: September 17, 1999
- --------------------------------------------------------------------------------
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3")
is being filed by Herbalife International, Inc., a Nevada corporation (the
"Company" or "Herbalife"), MH Millennium Holdings LLC, a Delaware limited
liability company (the "Parent"), MH Millennium Acquisition Corp., a Nevada
corporation (the "Purchaser") and Mark Hughes ("Mr. Hughes"), pursuant to
Section 13(e) of the Securities Exchange Act of 1934, as amended, and Rule 13e-3
thereunder in connection with the tender offer by Purchaser to purchase all
outstanding shares of Class A common stock, par value $.01 per share of the
Company ("Class A Shares") and Class B common stock, par value $.01 per share
("Class B Shares" and, together with the Class A Shares, the "Shares") of the
Company, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated September 17, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), copies of which
are filed as Exhibits (d)(1) and (d)(2) hereto, respectively. Mr. Hughes and
entities controlled and beneficially owned by him, directly or indirectly (the
"Continuing Stockholder"), has agreed not to tender any Shares owned by the
Continuing Stockholder pursuant to the Offer and to ensure that none of such
Shares will be cancelled for cash in the merger (the "Merger") to be consummated
if the Offer is consummated. In the Merger, all Shares outstanding and held by
stockholders other than the Continuing Stockholder, Parent, Purchaser or the
Company (the "Public Stockholders") (except dissenting Shares) will be cancelled
for $17.00 per Share in cash.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
September 13, 1999, by and among the Company, Parent, Purchaser, Mr. Hughes and
The Mark Hughes Family Trust the ("Merger Agreement"), which provides, among
other things, that after the satisfaction or waiver of the conditions set forth
therein (including, without limitation, the purchase of the Shares pursuant to
the Offer), Purchaser will be merged with and into the Company, and the separate
existence of the Purchaser shall cease and the Company will continue as the
surviving corporation, which will be owned by the Continuing Stockholder.
The Offer will commence on Friday, September 17, 1999 and will expire at 12
midnight, New York City time, on Friday October 15, 1999, unless the Offer is
extended.
The following Cross Reference Sheet, prepared pursuant to General Instruction F
to Schedule 13E-3, shows the location in the Tender Offer Statement on Schedule
14D-1 (the "Schedule 14D-1"), filed by Parent, Purchaser and Mark Hughes with
the Securities and Exchange Commission (the "Commission") on the date hereof, of
the information required to be included in this Schedule 13E-3. The information
set forth in the Schedule 14D-1, including all exhibits thereto, is hereby
expressly incorporated herein by reference as set forth in the Cross Reference
Sheet and the responses in this Schedule 13E-3, and such responses are qualified
in their entirety by reference to the information contained in the Offer to
Purchase and the Schedules and Annexes thereto.
-2-
<PAGE> 3
CROSS REFERENCE SHEET
<TABLE>
ITEM IN WHERE
SCHEDULE 13E-3 IN SCHEDULE 14D-1
- -------------- -----------------
<S> <C>
Item 1(a)-(c)................................................... Item 1(a)-(c)
Item 1(d)....................................................... *
Item 1(e)....................................................... **
Item 1(f)....................................................... *
Item 2.......................................................... Item 2
Item 3.......................................................... Item 3
Item 4(a)....................................................... *
Item 4(b)....................................................... *
Item 5.......................................................... Item 5
Item 6(a)....................................................... Item 4(a)-(b)
Item 6(b)....................................................... *
Item 6(c)....................................................... Item 4(b)-(b)
Item 6(d)....................................................... **
Item 7(a)....................................................... Item 5
Item 7(b)-(d)................................................... *
Item 8.......................................................... *
Item 9.......................................................... *
Item 10(a)...................................................... Item 6(a)
Item 10(b)...................................................... **
Item 11......................................................... Item 7
Item 12......................................................... *
Item 13(a)-(b).................................................. *
Item 13(c)...................................................... **
Item 14(a)...................................................... *
Item 14(b)...................................................... **
Item 15(a)...................................................... *
Item 15(b)...................................................... Item 8
Item 16......................................................... Item 10(f)
Item 17......................................................... Item 11
</TABLE>
- ----------------
* The Item is located in the Schedule 13E-3 only.
** The Item is inapplicable or the answer thereto is in the negative.
-3-
<PAGE> 4
Item 1. Issuer and Class of Security Subject to the Transaction.
(a)-(c) The response to Item 1(a)-(c) of the Schedule 14D-1 is
incorporated herein by reference.
(d) The information set forth in THE TENDER OFFER -- Section 11
("Dividends and Distributions") of the Offer to Purchase is incorporated herein
by reference.
(e) The information set forth in SPECIAL FACTORS -- ("Description of
DECS Securities") and THE TENDER OFFER -- Section 6 ("Price Range of Shares") of
the Offer to Purchase is incorporated herein by reference.
-9-
<PAGE> 5
(f) The information set forth in THE TENDER OFFER -- Section 14
("Recent Purchases of Company Securities") of the Offer to Purchase is
incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) This statement is being filed by Purchaser, Parent, Mr. Hughes
and the Company. The response to Item 2 of the Schedule 14D-1 is incorporated
herein by reference. The business or residence address, principal occupation or
employment at the present time and during the last five years, and the name of
any corporation or other organization in which such Employment or occupation was
conducted, of the directors and executive officers of the Company are set forth
in Schedule II to the Offer to Purchase and are incorporated herein by
reference.
(e)-(f) The response to Item 2 of the Schedule 14D-1 is incorporated
herein by reference with respect to Purchaser and Parent. During the last five
years, neither the Company nor, to the best knowledge of the Company or
Purchaser, any director or executive officer of the Company, (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was 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.
(g) The response to Item 2 of the Schedule 14D-1 is incorporated
herein by reference with respect to Purchaser and Parent. The citizenship of
each of the directors and executive officers of the Company is set forth in
Schedule II to the Offer to Purchase which is incorporated herein by reference.
Item 3. Past Contacts, Transactions or Negotiations.
(a)(1)-(2). The response to Item 3 of the Schedule 14D-1 is
incorporated herein by reference.
(b) Not applicable.
Item 4. Terms of the Transaction.
(a) The information set forth on the cover page of the Offer to
Purchase and in the INTRODUCTION; "SPECIAL FACTORS -- ("Background of the Offer
and the Merger"), ("Interests of Certain Persons); THE TENDER OFFER -- Section 1
("Terms of the Offer"), Section 2 ("Acceptance for Payment and Payment for
Shares"), Section 3 ("Procedures for Tendering Shares"), Section 4 ("Withdrawal
Rights"), Section 5 ("Conditions of the Offer"), Section 10 ("The Merger
Agreement"), Section 11 ("Dividends and Distributions"), Section 12 ("Certain
Legal Matters; Regulatory Approvals") and Section 16 ("Miscellaneous") of the
Offer to Purchase is incorporated herein by reference.
(b) The information set forth in SPECIAL FACTORS -- ("Background of
the Offer and the Merger"), ("Purposes of the Offer and the Merger"), ("Certain
Effects of the Offer and the Merger"), ("Interests of Certain Persons"),
("Description of Ownership of Herbalife Before and After the Offer and the
Merger"); THE TENDER OFFER -- Section 10 ("The Merger Agreement") and Section 11
("Dividends and Distributions") of the Offer to Purchase is incorporated herein
by reference.
Item 5. Plans or Proposals of the Issuer or Affiliate.
(a)-(e) The response to Item 5(a)-(e) of the Schedule 14D-1 is
incorporated herein by reference.
-10-
<PAGE> 6
(f)-(g) The response to Item 5(f)-(g) of the Schedule 14D-1 is
incorporated herein by reference.
Item 6. Source and Amount of Funds or Other Consideration.
(a) The response to Item 4(a)-(b) of the Schedule 14D-1 is
incorporated herein by reference.
(b) The information set forth in Section 15 ("Fees and Expenses")
of the Offer to Purchase is incorporated herein by reference.
(c) The response to Item 4(a)-(b) of the Schedule 14D-1 is
incorporated herein by reference.
(d) Not applicable.
-11-
<PAGE> 7
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a) The response to Item 5 of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in SPECIAL FACTORS -- ("Background of
the Offer and the Merger"), ("Recommendation of the Special Committee and the
Board of Directors; Fairness of the Offer and the Merger") and ("Purposes of the
Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
(c)-(d) The information set forth in SPECIAL FACTORS -- ("Background of
the Offer and the Merger"), ("Recommendation of the Special Committee and the
Board of Directors; Fairness of the Offer and the Merger"), ("Position of the
Purchaser As to the Fairness of the Offer and the Merger"), ("Certain Effects of
the Offer and the Merger"), ("Interests of Certain Persons"), ("Conduct of
Herbalife's Business after the Offer and the Merger"), ("Certain Financial
Projections) and ("Description of Ownership of Herbalife Before and After the
Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
Item 8. Fairness of the Transaction.
(a)-(g) The information set forth in the INTRODUCTION; "SPECIAL FACTORS --
Background of the Offer and the Merger", ("Recommendation of the Special
Committee and the Board of Directors; Fairness of the Offer and the Merger"),
("Position of the Purchaser As to the Fairness of the Offer and the Merger"),
("Opinion of Financial Advisor to the Special Committee"), ("Purpose of the
Offer and the Merger"); THE TENDER OFFER -- Section 4 ("Withdrawal Rights"),
Section 5 ("Conditions of the Offer"), Section 6 ("Price Range of Shares"),
Section 10 ("The Merger Agreement") and Annex C ("Text of Sections 92A.300
through 92A.500 of the Nevada Revised Statutes") of the Offer to Purchase is
incorporated herein by reference.
-12-
<PAGE> 8
(f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a)-(c) The information set forth in SPECIAL FACTORS -- ("Background of the
Offer and the Merger"), ("Opinion of Financial Advisor to the Special
Committee") ("Recommendation of the Special Committee and the Board of
Directors; Fairness of the Offer and the Merger"), ("Opinion of "),
("Position of Purchaser As to the Fairness of the Offer and the Merger") and in
Annex B of the Offer to Purchase is incorporated herein by reference.
Item 10. Interest in Securities of the Issuer.
(a) The Response to Item 6(a) of the Schedule 14D-1 is incorporated
herein by reference.
(b) Not Applicable.
Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's
Securities.
The Response to Item 7 of the Schedule 14D-1 is incorporated herein by
reference.
-13-
<PAGE> 9
Item 12. Present Intention and Recommendation of Certain Persons with Regard to
the Transaction.
(a)-(b) The information set forth in the INTRODUCTION; SPECIAL FACTORS
- -- ("Background of the Offer and the Merger"), ("Recommendation of the Special
Committee and the Board of Directors; Fairness of the Offer and the Merger"),
("Purposes of the Offer and the Merger"), ("Position of the Purchaser As to the
Fairness of the Offer and the Merger"), ("Interests of Certain Persons") and THE
TENDER OFFER -- Section 10 ("The Merger Agreement"); in the Offer to Purchase is
incorporated herein by reference.
Item 13. Other Provisions of the Transaction.
(a)-(b) The information set forth in TENDER OFFER -- Section 7
("Certain Information Concerning the Company") of the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
Item 14. Financial Information.
(a)-(b) The information set forth in THE TENDER OFFER -- Section 7
("Certain Information Concerning the Company"); Schedule III ("Financial
Statements of the Company"); and "DOCUMENTS INCORPORATED BY REFERENCE" of the
Offer to Purchase is incorporated herein by reference.
Item 15. Persons and Assets Employed, Retained or Utilized.
(a) Not applicable.
(b) The response to Item 8 of the Schedule 14D-1 is incorporated
herein by reference.
-14-
<PAGE> 10
Item 16. Additional Information.
The response to Item 10(f) of the Schedule 14D-1 is incorporated herein
by reference.
-15-
<PAGE> 11
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
(a) Not applicable.
(b)(1) Fairness Opinion of Bear, Stearns & Co. Inc. dated
September 13, 1999 (included as Annex B to Exhibit (d)(1).
(b)(2) Presentation materials prepared by Bear, Stearns & Co. Inc.
presented to the Special Committee of the Board of Directors of
the Company on September 13, 1999.
(c)(1) Agreement and Plan of Merger, dated as of September 13, 1999, by
and among the Company, Purchaser, Parent, The Mark Hughes Family
Trust and Mark Hughes (included as Annex A to Exhibit (d)(1)).
(c)(2) The Equity Commitment letter from Mark Hughes to the Company
dated September 10, 1999 (incorporated herein by reference to
Exhibit (c)(2) to the Schedule 14D-1).
(d)(1) Offer to Purchase, dated September 17, 1999 (incorporated herein
by reference to Exhibit (a)(1) to the Schedule 14D-1).
(d)(2) Letter of Transmittal (incorporated herein by reference to
Exhibit (a)(2) to the Schedule 14D-1).
(d)(3) Notice of Guaranteed Delivery (incorporated herein by reference
to Exhibit (a)(3) to the Schedule 14D-1).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (incorporated herein by reference to Exhibit
(a)(4) to the Schedule 14D-1).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (incorporated herein by
reference to Exhibit (a)(5) to the Schedule 14D-1).
(d)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (incorporated herein by reference to Exhibit
(a)(6) to the Schedule 14D-1).
(d)(7) Summary Advertisement, dated September 17, 1999 (incorporated
herein by reference to Exhibit (a)(7) to the Schedule 14D-1).
(d)(8) Press Release, dated September 13, 1999, issued by Purchaser
(incorporated herein by reference to Exhibit (a)(8) to the
Schedule 14D-1).
(e) Description of Dissenter's Rights (included as Annex C to Exhibit
(d)(1)).
(f) Not Applicable.
</TABLE>
-16-
<PAGE> 12
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
September 17, 1999 HERBALIFE INTERNATIONAL, INC.
By: /s/ TIMOTHY GERRITY
-----------------------------------------
Name: Timothy Gerrity
Title: Chief Financial Officer
MARK HUGHES
By: /s/ MARK HUGHES
-----------------------------------------
Name: Mark Hughes
MH MILLENNIUM HOLDINGS LLC
By: /s/ MARK HUGHES
-----------------------------------------
Name: Mark Hughes
Title: Managing Member
MH MILLENNIUM ACQUISITION CORP.
By: /s/ MARK HUGHES
-----------------------------------------
Name: Mark Hughes
Title: President
<PAGE> 13
DATED: September 17, 1999
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
(a) Not applicable.
(b)(1) Fairness Opinion of Bear, Stearns & Co., Inc. dated September 13, 1999
(included as Annex B to Exhibit (d)(1)).
(b)(2) Presentation materials prepared by Bear, Stearns & Co. presented to
the Special Committee of the Board of Directors of the Company on
September 13, 1999.
(c)(1) Agreement and Plan of Merger, dated as of September 13, 1999, by and
among the Company, Purchaser, Parent, The Mark Hughes Family Trust
and Mark Hughes (included as Annex A to Exhibit (d)(1)).
(c)(2) The Equity Commitment Letter from Mark Hughes to the Company
Incorporated herein by reference to Exhibit (c)(2) to the Schedule
14D-1).
(d)(1) Offer to Purchase, dated September 17, 1999 (incorporated herein by
reference to Exhibit (a)(1) to the Schedule 14D-1).
(d)(2) Letter of Transmittal (incorporated herein by reference to Exhibit
(a)(2) to the Schedule 14D-1).
(d)(3) Notice of Guaranteed Delivery (incorporated herein by reference to
Exhibit (a)(3) to the Schedule 14D-1).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (incorporated herein by reference to Exhibit (a)(4) to
the Schedule 14D-1).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (incorporated herein by reference
to Exhibit (a)(5) to the Schedule 14D-1).
(d)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (incorporated herein by reference to Exhibit
(a)(6) to the Schedule 14D-1).
(d)(7) Summary Advertisement, dated September 17, 1999 (incorporated by
reference to Exhibit (a)(7) to the Schedule 14D-1).
(d)(8) Press Release, dated September 13, 1999, issued by Purchaser
(incorporated herein by reference to Exhibit (a)(8) to the
Schedule 14D-1).
(e) Description of Dissenter's Rights (included as Annex C to Exhibit
(d)(1)).
(f) Not applicable.
</TABLE>
[Add 144A]
-17-
<PAGE> 1
BEAR
STEARNS
PRESENTATION TO THE SPECIAL COMMITTEE OF
THE BOARD OF DIRECTORS OF SAGE REGARDING
PROJECT SAGE
SEPTEMBER 13, 1999
<PAGE> 2
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION
1 Review of Proposed Transaction
2 Sage Financial Review
3 Overview of Sage Stock
4 Financial Analysis
A Transaction Multiples and Premia
B Discounted Cash Flow Analysis
C Comparable Company Analysis
D Public Shareholder Valuation
E Precedent M&A Transactions
APPENDICES
A Historical and Projected Financial Statements
B Country-Specific Historical and Projected Retail Sales
C Valuation Multiples Over Time for Comparable Companies
CONFIDENTIAL
<PAGE> 3
BEAR
STEARNS
SECTION 1
REVIEW OF PROPOSED TRANSACTION
<PAGE> 4
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION
PUBLIC STOCKHOLDERS
- - Each share of Class A and Class B Common Stock not held by Mark Hughes
will receive $17.00 in cash(1)
o Class A and Class B contractually required in Charter to get the
same consideration in a merger transaction like this
o Quarterly dividends of $0.15 would continue to be paid, plus a pro
rata stub divided
- - Transaction will require a minimum tender of a "majority of the minority"
of the outstanding shares of each of the Class A and Class B common stock
o Negotiated as part of transaction; not required under Charter or
Nevada law
- - Dissenters will be entitled to appraisal rights
o Cap at 3% of outstanding shares
o Negotiated as part of transaction; not required under Charter or
Nevada law
- ----------
(1) On a primary share basis, Mark Hughes owns approximately 56% of Class A
shares and 60% of Class B shares.
CONFIDENTIAL
1
<PAGE> 5
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY OF KEY TERMS OF THE PROPOSED TRANSACTION (CONT.)
MANAGEMENT
- - All outstanding stock options will become immediately vested
- - Each stock option (other than those held by Mark Hughes and his
affiliates) will be cashed out at closing at a price equal to the excess
of $17.00 over the applicable exercise price of the option.
o Mark Hughes' and his affiliates options will be cancelled
- - Management will receive options to buy approximately 16.5% of the
post-transaction company
MARK HUGHES
- - Will own 100% of Company immediately following the transaction, subject to
management options
- - The Company will make two loans to an entity controlled by Mark Hughes
o $89 million loan so that Hughes may make payments required to retire
the Class B shares of Sage held in the DECS trust
o $125 million loan for Mark Hughes' general purposes
o Such loans would be forgiven under certain circumstances
o The loans would effectively serve as collateral for creditors for at
least 3 years
CONFIDENTIAL
2
<PAGE> 6
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
TRANSACTION VALUE BUILDUP
TRANSACTION VALUE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
================================================================================
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
Price per Share $ 17.00 $ 17.00
Shares Outstanding(1) 9.957 18.607
------- -------
$ 169.3 $ 316.3
Value of Primary Shares $ 485.6
Value of Options, Net of Exercise Proceeds(2) 75.0
-------
Total Common Equity Value $ 560.6
Plus: Debt(3) 5.0
Plus: Minority Interest(3) 2.8
Less: Cash(4) (105.0)
-------
Total Enterprise Value $ 463.4
=======
</TABLE>
- ----------
(1) Source: Sage as of June 30, 1999.
(2) Based on 2,238,703 Class A and 5,265,037 Class B options outstanding at
average exercise price of $7.85 and $6.64, respectively.
(3) As of June 30, 1999 per Sage report on form 10-Q of same date.
(4) Balance sheet cash of $134.6 million as of June 30, 1999 per Sage report
on form 10-Q of same date adjusted to reflect approximately $18.0 million
of distributor bonus payments and approximately $11.6 million in other
cash expenses made in early July 1999.
CONFIDENTIAL
3
<PAGE> 7
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
ESTIMATED SOURCES AND USES OF FUNDS
($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
SOURCES USES
- --------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
Credit facility $129.6 Purchase of common stock held by Public(1) $201.0
Subordinated notes 300.0 Purchase of Common Stock held by Foundation 9.3
Excess cash on balance sheet 70.0 Cash-out of Management stock options(2) 56.8
Loan to Mark Hughes (DECS Trust) 89.3
Loan to Mark Hughes 125.0
Fees & expenses 18.2
------ ------
Total $499.6 Total $499.6
====== ======
</TABLE>
- ----------
(1) Includes $0.7 million for 40,754 shares owned by insiders other than Mark
Hughes.
(2) Excluding options held by Mark Hughes, whose options will be cancelled or
contributed to capital.
CONFIDENTIAL
4
<PAGE> 8
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
POST-DEAL STRUCTURE AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
PRE-DEAL POST-DEAL(1)
-------- ------------
<S> <C> <C>
CAPITAL STRUCTURE
Debt
Revolver/Bank Debt $ -- $129.6
Senior Subordinated Notes -- 300.0
Existing Debt/Capitalized leases 5.0 5.0
------ ------
Total Debt $ 5.0 $434.6
Minority Interest 2.8 2.8
Shareholder's Equity 166.0 (124.5)(3)
------ ------
Total Capitalization $173.8 $312.9
====== ======
Debt/Total Capital 2.9% 138.9%
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA CREDIT STATISTICS
Total Debt/EBITDA TOTAL DEBT ADJUSTED DEBT(2)
---------- ----------------
<S> <C> <C> <C>
o LTM 0.1x 5.0x 3.6x
o 1999E 0.1x 4.7x 3.4x
EBITDA/Cash Interest Expense
o LTM NM 1.9x
o 1999E NM 2.0x
</TABLE>
- ----------
(1) Estimated.
(2) Reflects reduction of debt from $125M of proceeds from loan collateral.
(3) Assumes forgiveness of $209 million loans to Mark Hughes.
CONFIDENTIAL
5
<PAGE> 9
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
ILLUSTRATIVE TRANSACTION TIMING
<TABLE>
<CAPTION>
EVENT ESTIMATED DATE DAYS
- ----- -------------- ----
<S> <C> <C>
Announcement of Transaction 9/14 T
Launch tender offer, file Schedules 13E-3, 14D-1, 14D-9 and 9/21 T+7
preliminary 14C with the SEC
Initial expiration date for tender offer 10/19 T+35
Commence Road Show 10/19 T+35
Extended expiration date for tender offer; Closing of tender 11/2 T+49
offer; Closing of bank and high yield financing
</TABLE>
- - Note that the merger agreement provides for extensions of the tender
period in order to gain additional time to raise the required financing
- - Such extensions would in no event be later than March 31, 2000
CONFIDENTIAL
6
<PAGE> 10
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
CONDITIONS TO CLOSING
- - Tender of a "majority of the minority" of the outstanding shares of each
of Class A and Class B common stock
- - Receipt of financing to close transaction and fund loans
o DLJ has issued a "highly confident" letter for financing
- - Accuracy of representations and warranties
- - Receipt of customary regulatory/government approvals
- - No more than 3% of outstanding shares having perfected dissenters' rights
CONFIDENTIAL
7
<PAGE> 11
BEAR
STEARNS
SECTION 2
SAGE FINANCIAL REVIEW
<PAGE> 12
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL FINANCIAL RESULTS(1)
NET SALES
================================================================================
<TABLE>
<S> <C>
1994 $466.9
1995 $489.0
1996 $631.9
1997 $782.5
1998 $866.6
</TABLE>
EBITDA
================================================================================
<TABLE>
<S> <C>
1994 $ 74.2
1995(2) $ 38.6
1996 $ 79.3
1997 $ 97.0
1998 $ 94.2
</TABLE>
EBIT
================================================================================
<TABLE>
<S> <C>
1994 $ 70.7
1995(2) $ 30.5
1996 $ 68.7
1997 $ 86.0
1998 $ 78.4
</TABLE>
EPS
================================================================================
<TABLE>
<S> <C>
1994 $ 1.50
1995(2) $ 0.70
1996 $ 1.43
1997 $ 1.72
1998 $ 1.60
</TABLE>
- ----------
(1) Source: Sage Management report, Sage report on form 10-K dated
December 31, 1998, and report on form 10-Q for six months ended June 30,
1999.
(2) Adjusted for non-recurring pre-tax charge of $2.3 million in 1995.
CONFIDENTIAL
8
<PAGE> 13
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL FINANCIAL RESULTS - RECENT QUARTERS(1)
================================================================================
NET SALES
================================================================================
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4
------ ------ ------ ------
<C> <C> <C> <C> <C>
1997 170 185 207 220
1998 210 210 213 234
1999 226 226
</TABLE>
EBITDA
================================================================================
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4
------ ------ ------ ------
<C> <C> <C> <C> <C>
1997 $ 21 $ 24 $ 25 $ 28
1998 $ 27 $ 28 $ 15 $ 25
1999 $ 23 $ 23
</TABLE>
EBIT
================================================================================
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4
------ ------ ------ ------
<C> <C> <C> <C> <C>
1997 $ 19 $ 21 $ 22 $ 24
1998 $ 24 $ 25 $ 12 $ 19
1999 $ 19 $ 20
</TABLE>
EPS
================================================================================
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4
------ ------ ------ ------
<C> <C> <C> <C> <C>
1997 $0.38 $0.44 $0.45 $0.45
1998 $0.48 $0.50 $0.24 $0.38
1999 $0.38 $0.40
</TABLE>
- ----------
(1) Source: Company public documents and press releases.
CONFIDENTIAL
9
<PAGE> 14
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
REVIEW OF FINANCIAL PERFORMANCE RELATIVE TO BUDGET(1)
NET SALES ($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
Budget Actual
------ ------
<S> <C> <C>
1997 $727 $783
1998 $901 $867
1H 1999(2) $440 $453
</TABLE>
EBITDA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
Budget Actual
------ ------
<C> <C> <C>
1997 $ 94 $ 97
1998 $112 $ 94
1H 1999(2) $ 43 $ 46
</TABLE>
EBIT ($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
Budget Actual
------ ------
<C> <C> <C>
1997 $ 83 $ 86
1998 $104 $ 78
1H 1999(2) $ 38 $ 39
</TABLE>
EARNINGS PER SHARE
================================================================================
<TABLE>
<CAPTION>
Budget Actual
------ ------
<C> <C> <C>
1997 $1.65 $1.72
1998 $2.05 $1.60
1H 1999(2) $0.75 $0.78
</TABLE>
- ----------
(1) Source: Sage Management Business Plans for years 1997, 1998 and 1999
compared to actual performance.
(2) Figures for six months ended June 30, 1999.
CONFIDENTIAL
10
<PAGE> 15
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PROJECTED 1999E RESULTS(1)
SAGE PLAN AND PERFORMANCE TO DATE
QUARTERLY INCOME STATEMENT DATA: RUN RATE AGAINST BUDGET
($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
1999E
------------------------------------------------------- 1H ACTUAL +
Q1A Q2A Q3E Q4E 2H BUDGET BUDGET
------- ------- ------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Retail Sales $ 428.8 $ 425.8 $ 411.4 $ 418.6 $1,684.6 $1,667.2
Distributor allowances (202.4) (199.4) (195.2) (198.8) (795.8) (791.2)
------- ------- ------- ------- -------- --------
Net sales $ 226.4 $ 226.4 $ 216.2 $ 219.8 $ 888.8 $ 876.0
Growth % 8.0% 7.8% 1.5% (6.0%) 2.6% 1.1%
Gross margin $ 167.9 $ 168.7 $ 163.9 $ 166.6 $ 667.2 $ 659.1
Gross margin % 74.2% 74.5% 75.8% 75.8% 75.1% 75.2%
EBITDA $ 23.1 $ 22.9 $ 22.5 $ 26.7 $ 95.2 $ 91.9
EBITDA margin % 10.2% 10.1% 10.4% 12.1% 10.7% 10.5%
EBIT $ 19.0 $ 19.7 $ 19.5 $ 23.4 $ 81.6 $ 80.3
EBIT margin % 8.4% 8.7% 9.0% 10.6% 9.2% 9.2%
Net income $ 11.7 $ 12.2 $ 12.0 $ 14.4 $ 50.3 $ 49.6
Net income margin % 5.2% 5.4% 5.6% 6.6% 5.7% 5.7%
EPS $ 0.38 $ 0.40 $ 0.39 $ 0.46 $ 1.63 $ 1.60
EPS growth % (20.8%) (20.0%) 62.5% 21.1% 1.9% 0.0%
</TABLE>
- ----------
- - Management has stated that it believes it will achieve its full year
budget, notwithstanding some overperformance in the first two quarters.
(1) Source: Sage public documents and Management Business Plan.
CONFIDENTIAL
11
<PAGE> 16
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
FINANCIAL FORECAST
- - We understand from the Special Committee that Sage has historically not
presented long-term financial forecasts to its Board for review
- - There is virtually no Wall Street equity research available to assess Wall
Street's longer-term view of Sage's prospects
- - The long-term forecast presented here is the forecast presented to DLJ to
evaluate the transaction and its financability
CONFIDENTIAL
12
<PAGE> 17
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PROJECTED FINANCIAL RESULTS(1)
NET SALES
================================================================================
<TABLE>
<S> <C>
1999E $876.0
2000P $920.0
2001P $968.0
2002P $1,020.0
2003P $1,071.0
2004P $1,125.0
</TABLE>
EBITDA
================================================================================
<TABLE>
<S> <C>
1999E $ 91.9
2000P $ 94.5
2001P $ 105.3
2002P $ 109.4
2003P $ 106.5
2004P $ 110.3
</TABLE>
EBIT
================================================================================
<TABLE>
<S> <C>
1999E $ 80.3
2000P $ 80.5
2001P $ 90.0
2002P $ 93.0
2003P $ 89.0
2004P $ 94.0
</TABLE>
EPS
================================================================================
<TABLE>
<S> <C>
1999E $ 1.60
2000P $ 1.62
2001P $ 1.82
2002P $ 1.89
2003P $ 1.82
2004P $ 1.94
</TABLE>
- ----------
(1) Source: Sage Management's current Business Plan.
CONFIDENTIAL
13
<PAGE> 18
BEAR
STEARNS
SECTION 3
OVERVIEW OF SAGE STOCK
<PAGE> 19
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SAGE MAJOR EVENTS - LATEST TWO YEARS
- - In December 1997 Sage split its common equity into two classes of stock -
Class A voting and Class B non-voting.
================================================================================
<TABLE>
<CAPTION>
Date Sage A Sage B annotation DATE SAGE A SAGE B
<S> <C> <C> <C> <C> <C> <C>
8/27/97 22.8290 #N/A 8/27/97 22.8290 #N/A
8/28/97 22.9220 #N/A 8/28/97 22.9220 #N/A
8/29/97 23.4493 #N/A 8/29/97 23.4493 #N/A
9/1/97 23.4493 #N/A 9/1/97 23.4493 #N/A
9/2/97 23.2632 #N/A 9/2/97 23.2632 #N/A
9/3/97 23.4493 #N/A 9/3/97 23.4493 #N/A
9/4/97 23.5734 #N/A 9/4/97 23.5734 #N/A
9/5/97 23.2012 #N/A 9/5/97 23.2012 #N/A
9/8/97 20.8439 #N/A 9/8/97 20.8439 #N/A
9/9/97 22.0846 #N/A 9/9/97 22.0846 #N/A
9/10/97 21.4642 #N/A 9/10/97 21.4642 #N/A
9/11/97 21.0920 #N/A 9/11/97 21.0920 #N/A
9/12/97 22.0846 #N/A 9/12/97 22.0846 #N/A
9/15/97 22.4568 #N/A 9/15/97 22.4568 #N/A
9/16/97 22.8290 #N/A 9/16/97 22.8290 #N/A
9/17/97 22.8290 #N/A 9/17/97 22.8290 #N/A
9/18/97 23.6975 #N/A 9/18/97 23.6975 #N/A
9/19/97 23.9456 #N/A 9/19/97 23.9456 #N/A
9/22/97 24.1317 #N/A 9/22/97 24.1317 #N/A
9/23/97 24.0697 #N/A 9/23/97 24.0697 #N/A
9/24/97 23.9456 #N/A 9/24/97 23.9456 #N/A
9/25/97 24.1938 #N/A 9/25/97 24.1938 #N/A
9/26/97 25.3104 #N/A 9/26/97 25.3104 #N/A
9/29/97 26.0548 #N/A 9/29/97 26.0548 #N/A
9/30/97 25.9307 #N/A 9/30/97 25.9307 #N/A
10/1/97 26.9853 #N/A 10/1/97 26.9853 #N/A
10/2/97 26.7372 #N/A 10/2/97 26.7372 #N/A
10/3/97 26.3030 #N/A 10/3/97 26.3030 #N/A
10/6/97 22.8290 #N/A 10/6/97 22.8290 #N/A
10/7/97 24.0697 #N/A 10/7/97 24.0697 #N/A
10/8/97 24.5660 #N/A 10/8/97 24.5660 #N/A
10/9/97 25.5585 #N/A 10/9/97 25.5585 #N/A
10/10/97 26.1789 #N/A 10/10/97 26.1789 #N/A
10/13/97 25.0002 #N/A 10/13/97 25.0002 #N/A
10/14/97 23.5734 #N/A 10/14/97 23.5734 #N/A
10/15/97 23.2012 #N/A 10/15/97 23.2012 #N/A
10/16/97 23.4493 #N/A 10/16/97 23.4493 #N/A
10/17/97 22.8290 #N/A 10/17/97 22.8290 #N/A
10/20/97 23.5114 #N/A 10/20/97 23.5114 #N/A
10/21/97 23.8215 #N/A 10/21/97 23.8215 #N/A
10/22/97 24.4419 #N/A 10/22/97 24.4419 #N/A
10/23/97 24.9382 #N/A 10/23/97 24.9382 #N/A
10/24/97 24.5660 #N/A 10/24/97 24.5660 #N/A
10/27/97 21.7123 #N/A 10/27/97 21.7123 #N/A
10/28/97 23.5734 #N/A 10/28/97 23.5734 #N/A
10/29/97 23.5734 #N/A 10/29/97 23.5734 #N/A
10/30/97 24.6900 #N/A 10/30/97 24.6900 #N/A
10/31/97 24.8141 #N/A 10/31/97 24.8141 #N/A
11/3/97 24.9382 #N/A 24.9382 11/3/97 24.9382 #N/A
11/4/97 23.5734 #N/A 11/4/97 23.5734 #N/A
</TABLE>
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
11/5/97 22.9530 #N/A 11/5/97 22.9530 #N/A
11/6/97 22.7049 #N/A 11/6/97 22.7049 #N/A
11/7/97 22.9530 #N/A 11/7/97 22.9530 #N/A
11/10/97 22.3947 #N/A 11/10/97 22.3947 #N/A
11/11/97 21.7123 #N/A 11/11/97 21.7123 #N/A
11/12/97 21.9605 #N/A 11/12/97 21.9605 #N/A
11/13/97 21.8984 #N/A 11/13/97 21.8984 #N/A
11/14/97 22.0846 #N/A 11/14/97 22.0846 #N/A
11/17/97 22.0225 #N/A 11/17/97 22.0225 #N/A
11/18/97 21.5883 #N/A 11/18/97 21.5883 #N/A
11/19/97 20.7198 #N/A 11/19/97 20.7198 #N/A
11/20/97 21.2161 #N/A 11/20/97 21.2161 #N/A
11/21/97 20.9679 #N/A 11/21/97 20.9679 #N/A
11/24/97 20.7198 #N/A 11/24/97 20.7198 #N/A
11/25/97 20.4716 #N/A 11/25/97 20.4716 #N/A
11/26/97 19.8513 #N/A 11/26/97 19.8513 #N/A
11/27/97 19.8513 #N/A 11/27/97 19.8513 #N/A
11/28/97 19.8513 #N/A 11/28/97 19.8513 #N/A
12/1/97 21.8364 #N/A 12/1/97 21.8364 #N/A
12/2/97 22.3327 #N/A 12/2/97 22.3327 #N/A
12/3/97 21.9605 #N/A 12/3/97 21.9605 #N/A
12/4/97 22.7049 #N/A 12/4/97 22.7049 #N/A
12/5/97 22.4568 #N/A 12/5/97 22.4568 #N/A
12/8/97 22.5808 #N/A 12/8/97 22.5808 #N/A
12/9/97 22.5808 #N/A 12/9/97 22.5808 #N/A
12/10/97 22.3327 #N/A 12/10/97 22.3327 #N/A
12/11/97 22.7049 #N/A 12/11/97 22.7049 #N/A
12/12/97 21.5263 #N/A 12/12/97 21.5263 #N/A
12/15/97 22.2500 22.5000 12/15/97 22.2500 22.5000
12/16/97 23.3750 23.0000 12/16/97 23.3750 23.0000
12/17/97 23.1250 23.0000 12/17/97 23.1250 23.0000
12/18/97 21.6250 21.6250 12/18/97 21.6250 21.6250
12/19/97 23.0000 22.5000 12/19/97 23.0000 22.5000
12/22/97 23.2500 23.0000 12/22/97 23.2500 23.0000
12/23/97 22.2500 21.7500 12/23/97 22.2500 21.7500
12/24/97 21.0000 21.2500 12/24/97 21.0000 21.2500
12/25/97 21.0000 21.2500 12/25/97 21.0000 21.2500
12/26/97 21.5625 20.8750 12/26/97 21.5625 20.8750
12/29/97 21.0000 21.0000 12/29/97 21.0000 21.0000
12/30/97 21.9375 21.5000 12/30/97 21.9375 21.5000
12/31/97 21.0000 21.5000 12/31/97 21.0000 21.5000
1/1/98 21.0000 21.5000 1/1/98 21.0000 21.5000
1/2/98 21.7500 21.4375 1/2/98 21.7500 21.4375
1/5/98 22.7500 22.0000 1/5/98 22.7500 22.0000
1/6/98 22.8750 22.0000 1/6/98 22.8750 22.0000
1/7/98 23.0000 22.0000 1/7/98 23.0000 22.0000
1/8/98 22.2500 20.5000 1/8/98 22.2500 20.5000
1/9/98 20.5000 18.5000 1/9/98 20.5000 18.5000
1/12/98 20.3750 18.0000 1/12/98 20.3750 18.0000
1/13/98 22.5000 19.6250 1/13/98 22.5000 19.6250
1/14/98 22.1875 21.0000 1/14/98 22.1875 21.0000
1/15/98 22.8750 21.5000 1/15/98 22.8750 21.5000
</TABLE>
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1/16/98 23.6250 21.0625 1/16/98 23.6250 21.0625
1/19/98 23.6250 21.0625 1/19/98 23.6250 21.0625
1/20/98 23.7813 21.2500 1/20/98 23.7813 21.2500
1/21/98 23.8750 20.7500 1/21/98 23.8750 20.7500
1/22/98 23.6250 20.8750 23.6250 1/22/98 23.6250 20.8750
1/23/98 23.5000 20.6875 1/23/98 23.5000 20.6875
1/26/98 23.0625 20.6250 1/26/98 23.0625 20.6250
1/27/98 23.5000 20.6250 1/27/98 23.5000 20.6250
1/28/98 22.5625 19.7500 1/28/98 22.5625 19.7500
1/29/98 23.1250 20.5625 1/29/98 23.1250 20.5625
1/30/98 24.5000 21.7500 1/30/98 24.5000 21.7500
2/2/98 22.5000 20.6250 2/2/98 22.5000 20.6250
2/3/98 21.6250 19.8750 2/3/98 21.6250 19.8750
2/4/98 21.0625 19.6250 2/4/98 21.0625 19.6250
2/5/98 21.2500 19.6875 2/5/98 21.2500 19.6875
2/6/98 22.0000 21.0000 2/6/98 22.0000 21.0000
2/9/98 22.1250 21.3750 2/9/98 22.1250 21.3750
2/10/98 22.1250 21.4375 2/10/98 22.1250 21.4375
2/11/98 22.8750 21.5625 2/11/98 22.8750 21.5625
2/12/98 22.7500 21.8750 2/12/98 22.7500 21.8750
2/13/98 23.6250 23.3750 2/13/98 23.6250 23.3750
2/16/98 23.6250 23.3750 2/16/98 23.6250 23.3750
2/17/98 23.9375 23.5625 2/17/98 23.9375 23.5625
2/18/98 24.2500 23.3750 2/18/98 24.2500 23.3750
2/19/98 23.8750 23.3125 23.8750 2/19/98 23.8750 23.3125
2/20/98 23.6250 23.0000 2/20/98 23.6250 23.0000
2/23/98 24.1250 23.7500 2/23/98 24.1250 23.7500
2/24/98 23.2500 23.0000 2/24/98 23.2500 23.0000
2/25/98 24.0000 23.4375 2/25/98 24.0000 23.4375
2/26/98 25.0000 24.1250 2/26/98 25.0000 24.1250
2/27/98 24.0000 23.2500 2/27/98 24.0000 23.2500
3/2/98 23.8750 23.3750 3/2/98 23.8750 23.3750
3/3/98 24.7500 23.5000 3/3/98 24.7500 23.5000
3/4/98 24.4375 23.3125 3/4/98 24.4375 23.3125
3/5/98 24.6250 23.8750 3/5/98 24.6250 23.8750
3/6/98 25.0000 24.0000 3/6/98 25.0000 24.0000
3/9/98 25.7500 24.9688 3/9/98 25.7500 24.9688
3/10/98 26.7500 25.3125 3/10/98 26.7500 25.3125
3/11/98 26.5000 25.3750 3/11/98 26.5000 25.3750
3/12/98 27.3750 26.0000 3/12/98 27.3750 26.0000
3/13/98 27.8125 26.5000 3/13/98 27.8125 26.5000
3/16/98 27.6250 26.5000 3/16/98 27.6250 26.5000
3/17/98 27.2500 26.2500 3/17/98 27.2500 26.2500
3/18/98 27.8125 26.7500 3/18/98 27.8125 26.7500
3/19/98 27.5000 26.5000 3/19/98 27.5000 26.5000
3/20/98 28.0000 26.5000 3/20/98 28.0000 26.5000
3/23/98 27.8750 26.3125 3/23/98 27.8750 26.3125
3/24/98 28.2500 25.8750 3/24/98 28.2500 25.8750
3/25/98 25.9375 23.1250 25.9375 3/25/98 25.9375 23.1250
3/26/98 24.8125 22.7500 3/26/98 24.8125 22.7500
3/27/98 25.1250 23.5000 3/27/98 25.1250 23.5000
3/30/98 25.1250 23.6250 3/30/98 25.1250 23.6250
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
3/31/98 25.2500 23.6875 3/31/98 25.2500 23.6875
4/1/98 25.3750 23.3750 4/1/98 25.3750 23.3750
4/2/98 25.7500 23.8750 4/2/98 25.7500 23.8750
4/3/98 24.7500 23.2500 4/3/98 24.7500 23.2500
4/6/98 24.7500 23.1875 4/6/98 24.7500 23.1875
4/7/98 24.3750 22.8750 4/7/98 24.3750 22.8750
4/8/98 24.1250 23.1250 4/8/98 24.1250 23.1250
4/9/98 24.6875 23.4375 4/9/98 24.6875 23.4375
4/10/98 24.6875 23.4375 4/10/98 24.6875 23.4375
4/13/98 25.0000 23.0000 4/13/98 25.0000 23.0000
4/14/98 25.2500 23.2500 4/14/98 25.2500 23.2500
4/15/98 25.7500 23.5000 4/15/98 25.7500 23.5000
4/16/98 25.2500 23.6250 4/16/98 25.2500 23.6250
4/17/98 25.1875 23.5625 4/17/98 25.1875 23.5625
4/20/98 25.5000 23.7500 4/20/98 25.5000 23.7500
4/21/98 25.8750 23.6875 4/21/98 25.8750 23.6875
4/22/98 26.0000 24.0000 4/22/98 26.0000 24.0000
4/23/98 27.1875 25.5000 4/23/98 27.1875 25.5000
4/24/98 27.4375 25.5000 4/24/98 27.4375 25.5000
4/27/98 27.1875 25.0000 4/27/98 27.1875 25.0000
4/28/98 26.7500 25.0000 4/28/98 26.7500 25.0000
4/29/98 27.7500 26.0000 4/29/98 27.7500 26.0000
4/30/98 27.0000 25.0000 4/30/98 27.0000 25.0000
5/1/98 27.9375 25.8125 5/1/98 27.9375 25.8125
5/4/98 28.2500 26.3750 5/4/98 28.2500 26.3750
5/5/98 29.0000 26.5625 5/5/98 29.0000 26.5625
5/6/98 28.5000 26.5000 5/6/98 28.5000 26.5000
5/7/98 28.3750 25.7500 5/7/98 28.3750 25.7500
5/8/98 28.3750 25.7500 5/8/98 28.3750 25.7500
5/11/98 28.0000 25.6875 5/11/98 28.0000 25.6875
5/12/98 27.8125 26.0000 5/12/98 27.8125 26.0000
5/13/98 27.5000 25.6250 5/13/98 27.5000 25.6250
5/14/98 27.3438 25.0000 5/14/98 27.3438 25.0000
5/15/98 26.5000 24.5625 5/15/98 26.5000 24.5625
5/18/98 26.6875 24.8750 5/18/98 26.6875 24.8750
5/19/98 26.5000 24.3125 5/19/98 26.5000 24.3125
5/20/98 26.5000 24.5000 5/20/98 26.5000 24.5000
5/21/98 26.5625 24.9375 5/21/98 26.5625 24.9375
5/22/98 27.5000 25.2500 5/22/98 27.5000 25.2500
5/25/98 27.5000 25.2500 5/25/98 27.5000 25.2500
5/26/98 26.0000 24.0000 5/26/98 26.0000 24.0000
5/27/98 25.0000 23.4375 5/27/98 25.0000 23.4375
5/28/98 25.5625 23.3125 5/28/98 25.5625 23.3125
5/29/98 25.7500 23.3750 5/29/98 25.7500 23.3750
6/1/98 25.6875 23.3750 6/1/98 25.6875 23.3750
6/2/98 25.0625 22.5000 6/2/98 25.0625 22.5000
6/3/98 23.6250 21.3750 6/3/98 23.6250 21.3750
6/4/98 23.3750 20.6250 6/4/98 23.3750 20.6250
6/5/98 24.0000 22.3750 6/5/98 24.0000 22.3750
6/8/98 24.6875 22.7500 6/8/98 24.6875 22.7500
6/9/98 24.0000 22.6875 6/9/98 24.0000 22.6875
6/10/98 23.6875 22.0625 6/10/98 23.6875 22.0625
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
6/11/98 22.9375 21.0000 6/11/98 22.9375 21.0000
6/12/98 23.0000 21.2813 6/12/98 23.0000 21.2813
6/15/98 22.0000 20.3125 6/15/98 22.0000 20.3125
6/16/98 21.9375 19.8750 6/16/98 21.9375 19.8750
6/17/98 22.6250 20.5000 6/17/98 22.6250 20.5000
6/18/98 22.6875 20.2500 6/18/98 22.6875 20.2500
6/19/98 22.1250 19.6250 6/19/98 22.1250 19.6250
6/22/98 22.8750 20.1250 6/22/98 22.8750 20.1250
6/23/98 23.8125 20.7500 6/23/98 23.8125 20.7500
6/24/98 24.1875 21.3750 6/24/98 24.1875 21.3750
6/25/98 24.3125 21.0000 6/25/98 24.3125 21.0000
6/26/98 24.6875 21.3125 6/26/98 24.6875 21.3125
6/29/98 24.9375 20.8750 6/29/98 24.9375 20.8750
6/30/98 24.6250 20.6250 6/30/98 24.6250 20.6250
7/1/98 25.3750 21.2500 7/1/98 25.3750 21.2500
7/2/98 25.6250 21.7500 7/2/98 25.6250 21.7500
7/3/98 25.6250 21.7500 7/3/98 25.6250 21.7500
7/6/98 26.5000 21.8750 7/6/98 26.5000 21.8750
7/7/98 26.7500 22.2500 7/7/98 26.7500 22.2500
7/8/98 27.7500 23.7500 7/8/98 27.7500 23.7500
7/9/98 27.3750 22.7500 7/9/98 27.3750 22.7500
7/10/98 27.3750 22.6250 7/10/98 27.3750 22.6250
7/13/98 27.6250 23.0000 7/13/98 27.6250 23.0000
7/14/98 26.3750 21.7500 7/14/98 26.3750 21.7500
7/15/98 26.5000 22.3750 7/15/98 26.5000 22.3750
7/16/98 26.3750 21.3750 7/16/98 26.3750 21.3750
7/17/98 27.1250 21.7500 7/17/98 27.1250 21.7500
7/20/98 28.0000 22.6250 7/20/98 28.0000 22.6250
7/21/98 27.6875 22.8125 7/21/98 27.6875 22.8125
7/22/98 26.3750 21.5000 26.3750 7/22/98 26.3750 21.5000
7/23/98 21.7500 18.0000 7/23/98 21.7500 18.0000
7/24/98 22.3125 17.7500 7/24/98 22.3125 17.7500
7/27/98 21.5000 17.0000 7/27/98 21.5000 17.0000
7/28/98 21.1250 16.6250 7/28/98 21.1250 16.6250
7/29/98 20.1875 16.2500 7/29/98 20.1875 16.2500
7/30/98 19.0625 15.2500 7/30/98 19.0625 15.2500
7/31/98 19.0625 15.8125 7/31/98 19.0625 15.8125
8/3/98 17.9375 15.2500 8/3/98 17.9375 15.2500
8/4/98 17.1875 14.3750 17.1875 8/4/98 17.1875 14.3750
8/5/98 17.3750 14.3750 8/5/98 17.3750 14.3750
8/6/98 18.2500 15.0625 8/6/98 18.2500 15.0625
8/7/98 18.0625 14.8750 8/7/98 18.0625 14.8750
8/10/98 17.7500 14.1250 8/10/98 17.7500 14.1250
8/11/98 17.0000 13.7500 8/11/98 17.0000 13.7500
8/12/98 17.2500 14.1250 8/12/98 17.2500 14.1250
8/13/98 17.2188 13.7500 8/13/98 17.2188 13.7500
8/14/98 16.5000 13.4375 8/14/98 16.5000 13.4375
8/17/98 16.5000 13.3125 8/17/98 16.5000 13.3125
8/18/98 16.6250 13.1250 8/18/98 16.6250 13.1250
8/19/98 16.8750 13.4375 8/19/98 16.8750 13.4375
8/20/98 16.5000 13.1250 8/20/98 16.5000 13.1250
8/21/98 16.2500 12.8750 8/21/98 16.2500 12.8750
</TABLE>
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
8/24/98 16.6875 12.9375 8/24/98 16.6875 12.9375
8/25/98 16.3750 12.9375 8/25/98 16.3750 12.9375
8/26/98 15.6875 12.5000 8/26/98 15.6875 12.5000
8/27/98 12.5000 10.5000 8/27/98 12.5000 10.5000
8/28/98 14.0000 11.1250 8/28/98 14.0000 11.1250
8/31/98 13.3125 10.3125 8/31/98 13.3125 10.3125
9/1/98 14.1875 10.3750 14.1875 9/1/98 14.1875 10.3750
9/2/98 13.3750 9.5000 9/2/98 13.3750 9.5000
9/3/98 12.8125 9.0000 9/3/98 12.8125 9.0000
9/4/98 13.0000 9.2500 9/4/98 13.0000 9.2500
9/7/98 13.0000 9.2500 9/7/98 13.0000 9.2500
9/8/98 13.3750 9.7500 9/8/98 13.3750 9.7500
9/9/98 13.0000 9.5000 9/9/98 13.0000 9.5000
9/10/98 12.5000 9.1250 9/10/98 12.5000 9.1250
9/11/98 11.7500 9.0000 9/11/98 11.7500 9.0000
9/14/98 11.7500 9.3750 9/14/98 11.7500 9.3750
9/15/98 11.5000 8.6250 9/15/98 11.5000 8.6250
9/16/98 11.5000 8.1250 9/16/98 11.5000 8.1250
9/17/98 10.4375 7.5625 9/17/98 10.4375 7.5625
9/18/98 10.6250 7.8750 9/18/98 10.6250 7.8750
9/21/98 9.7500 7.4063 9/21/98 9.7500 7.4063
9/22/98 10.2500 7.8750 9/22/98 10.2500 7.8750
9/23/98 10.0000 7.8750 9/23/98 10.0000 7.8750
9/24/98 9.8750 7.8750 9/24/98 9.8750 7.8750
9/25/98 9.7500 7.6250 9/25/98 9.7500 7.6250
9/28/98 9.7500 7.4375 9/28/98 9.7500 7.4375
9/29/98 9.5000 7.4375 9/29/98 9.5000 7.4375
9/30/98 9.2500 7.9375 9/30/98 9.2500 7.9375
10/1/98 10.0000 7.6875 10/1/98 10.0000 7.6875
10/2/98 10.2500 8.3125 10/2/98 10.2500 8.3125
10/5/98 10.5000 8.0000 10/5/98 10.5000 8.0000
10/6/98 10.1250 7.8125 10/6/98 10.1250 7.8125
10/7/98 9.1250 7.3125 10/7/98 9.1250 7.3125
10/8/98 8.3750 6.6250 10/8/98 8.3750 6.6250
10/9/98 8.5000 6.9375 10/9/98 8.5000 6.9375
10/12/98 8.4063 7.0000 10/12/98 8.4063 7.0000
10/13/98 8.4063 7.0313 10/13/98 8.4063 7.0313
10/14/98 8.0000 6.6250 10/14/98 8.0000 6.6250
10/15/98 8.0625 6.7500 8.0625 10/15/98 8.0625 6.7500
10/16/98 8.7500 7.8750 10/16/98 8.7500 7.8750
10/19/98 10.3125 9.0625 10/19/98 10.3125 9.0625
10/20/98 12.1250 11.0000 10/20/98 12.1250 11.0000
10/21/98 11.9375 10.1875 10/21/98 11.9375 10.1875
10/22/98 11.1250 10.0000 10/22/98 11.1250 10.0000
10/23/98 11.1875 9.6875 10/23/98 11.1875 9.6875
10/26/98 11.7500 9.8750 10/26/98 11.7500 9.8750
10/27/98 11.5000 9.6875 10/27/98 11.5000 9.6875
10/28/98 10.8750 9.1250 10/28/98 10.8750 9.1250
10/29/98 11.2500 9.1875 10/29/98 11.2500 9.1875
10/30/98 11.4375 9.0000 10/30/98 11.4375 9.0000
11/2/98 12.4375 9.6250 11/2/98 12.4375 9.6250
11/3/98 12.2500 9.6875 11/3/98 12.2500 9.6875
</TABLE>
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
11/4/98 12.5000 9.7500 11/4/98 12.5000 9.7500
11/5/98 12.4375 9.7500 11/5/98 12.4375 9.7500
11/6/98 12.8750 9.9375 11/6/98 12.8750 9.9375
11/9/98 12.9375 9.8125 11/9/98 12.9375 9.8125
11/10/98 12.8750 9.6250 11/10/98 12.8750 9.6250
11/11/98 12.3750 9.6250 11/11/98 12.3750 9.6250
11/12/98 11.3125 8.8750 11/12/98 11.3125 8.8750
11/13/98 11.3125 8.8750 11/13/98 11.3125 8.8750
11/16/98 11.7500 9.1250 11/16/98 11.7500 9.1250
11/17/98 11.7500 9.0625 11/17/98 11.7500 9.0625
11/18/98 11.8125 9.0000 11/18/98 11.8125 9.0000
11/19/98 12.0000 9.1250 11/19/98 12.0000 9.1250
11/20/98 11.8750 9.1875 11/20/98 11.8750 9.1875
11/23/98 12.3125 9.5000 11/23/98 12.3125 9.5000
11/24/98 11.8125 9.6250 11/24/98 11.8125 9.6250
11/25/98 12.2500 9.7500 11/25/98 12.2500 9.7500
11/26/98 12.2500 9.7500 11/26/98 12.2500 9.7500
11/27/98 11.9375 9.8125 11/27/98 11.9375 9.8125
11/30/98 11.8125 9.6875 11/30/98 11.8125 9.6875
12/1/98 11.9375 9.5000 12/1/98 11.9375 9.5000
12/2/98 11.5000 9.3750 12/2/98 11.5000 9.3750
12/3/98 11.6250 9.3750 12/3/98 11.6250 9.3750
12/4/98 11.2500 9.0625 12/4/98 11.2500 9.0625
12/7/98 11.2500 9.1875 12/7/98 11.2500 9.1875
12/8/98 11.3750 9.1875 12/8/98 11.3750 9.1875
12/9/98 11.7500 9.3750 12/9/98 11.7500 9.3750
12/10/98 11.5000 9.1250 12/10/98 11.5000 9.1250
12/11/98 11.5000 9.2500 12/11/98 11.5000 9.2500
12/14/98 11.1250 9.4375 12/14/98 11.1250 9.4375
12/15/98 11.3750 9.4375 12/15/98 11.3750 9.4375
12/16/98 11.9375 9.7500 12/16/98 11.9375 9.7500
12/17/98 12.1250 9.8125 12/17/98 12.1250 9.8125
12/18/98 12.6875 10.0000 12/18/98 12.6875 10.0000
12/21/98 13.8750 10.6875 12/21/98 13.8750 10.6875
12/22/98 14.5000 11.2500 12/22/98 14.5000 11.2500
12/23/98 15.1250 11.7500 12/23/98 15.1250 11.7500
12/24/98 14.8125 12.0000 12/24/98 14.8125 12.0000
12/25/98 14.8125 12.0000 12/25/98 14.8125 12.0000
12/28/98 14.5000 11.5000 12/28/98 14.5000 11.5000
12/29/98 14.3125 11.5000 12/29/98 14.3125 11.5000
12/30/98 14.3750 11.3750 12/30/98 14.3750 11.3750
12/31/98 14.2500 11.4375 12/31/98 14.2500 11.4375
1/1/99 14.2500 11.4375 1/1/99 14.2500 11.4375
1/4/99 13.5625 10.7500 1/4/99 13.5625 10.7500
1/5/99 14.0000 11.5000 1/5/99 14.0000 11.5000
1/6/99 13.9375 11.5625 13.9375 1/6/99 13.9375 11.5625
1/7/99 13.7500 11.5000 1/7/99 13.7500 11.5000
1/8/99 14.3750 11.6250 1/8/99 14.3750 11.6250
1/11/99 14.3750 11.5000 1/11/99 14.3750 11.5000
1/12/99 14.8750 12.3750 1/12/99 14.8750 12.3750
1/13/99 15.2500 12.3125 1/13/99 15.2500 12.3125
1/14/99 15.0000 12.5000 1/14/99 15.0000 12.5000
</TABLE>
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1/15/99 15.1250 12.3750 1/15/99 15.1250 12.3750
1/18/99 15.1250 12.3750 1/18/99 15.1250 12.3750
1/19/99 15.0000 12.3125 1/19/99 15.0000 12.3125
1/20/99 14.6875 12.2500 1/20/99 14.6875 12.2500
1/21/99 14.7500 12.2500 1/21/99 14.7500 12.2500
1/22/99 14.9375 12.3750 1/22/99 14.9375 12.3750
1/25/99 15.0625 12.0000 1/25/99 15.0625 12.0000
1/26/99 15.1875 12.0000 1/26/99 15.1875 12.0000
1/27/99 14.7500 11.7500 1/27/99 14.7500 11.7500
1/28/99 14.4375 11.7500 1/28/99 14.4375 11.7500
1/29/99 15.1875 12.1875 1/29/99 15.1875 12.1875
2/1/99 15.1250 11.7500 2/1/99 15.1250 11.7500
2/2/99 14.7500 11.6250 2/2/99 14.7500 11.6250
2/3/99 14.7500 11.8750 2/3/99 14.7500 11.8750
2/4/99 14.5625 11.8750 2/4/99 14.5625 11.8750
2/5/99 14.1250 11.6875 2/5/99 14.1250 11.6875
2/8/99 14.5000 11.2500 2/8/99 14.5000 11.2500
2/9/99 14.0000 11.3750 2/9/99 14.0000 11.3750
2/10/99 13.7500 11.3750 2/10/99 13.7500 11.3750
2/11/99 14.0625 11.4063 2/11/99 14.0625 11.4063
2/12/99 14.1875 11.1875 2/12/99 14.1875 11.1875
2/15/99 14.1875 11.1875 2/15/99 14.1875 11.1875
2/16/99 13.5000 10.9375 2/16/99 13.5000 10.9375
2/17/99 12.8125 10.8125 2/17/99 12.8125 10.8125
2/18/99 13.0000 10.9375 2/18/99 13.0000 10.9375
2/19/99 13.0000 11.0000 2/19/99 13.0000 11.0000
2/22/99 12.8750 10.8750 2/22/99 12.8750 10.8750
2/23/99 12.7500 10.8750 2/23/99 12.7500 10.8750
2/24/99 12.5000 10.5625 2/24/99 12.5000 10.5625
2/25/99 13.0625 10.9375 2/25/99 13.0625 10.9375
2/26/99 13.3750 11.1250 2/26/99 13.3750 11.1250
3/1/99 13.5000 11.0000 3/1/99 13.5000 11.0000
3/2/99 13.1250 10.8750 3/2/99 13.1250 10.8750
3/3/99 12.7500 10.3750 3/3/99 12.7500 10.3750
3/4/99 12.8125 10.0000 3/4/99 12.8125 10.0000
3/5/99 12.5625 9.7813 3/5/99 12.5625 9.7813
3/8/99 11.6250 9.5000 3/8/99 11.6250 9.5000
3/9/99 11.2500 9.2813 3/9/99 11.2500 9.2813
3/10/99 11.4375 9.5625 3/10/99 11.4375 9.5625
3/11/99 11.5625 9.6875 3/11/99 11.5625 9.6875
3/12/99 11.7500 9.5000 3/12/99 11.7500 9.5000
3/15/99 11.6250 9.5000 3/15/99 11.6250 9.5000
3/16/99 11.8125 9.2500 3/16/99 11.8125 9.2500
3/17/99 11.5625 9.3438 3/17/99 11.5625 9.3438
3/18/99 11.6875 9.6250 3/18/99 11.6875 9.6250
3/19/99 11.8750 9.4844 3/19/99 11.8750 9.4844
3/22/99 11.8750 9.5000 3/22/99 11.8750 9.5000
3/23/99 11.7500 9.2500 3/23/99 11.7500 9.2500
3/24/99 11.6250 9.3750 3/24/99 11.6250 9.3750
3/25/99 11.6875 9.3750 3/25/99 11.6875 9.3750
3/26/99 11.7188 9.3750 3/26/99 11.7188 9.3750
3/29/99 11.4375 9.4375 3/29/99 11.4375 9.4375
</TABLE>
<PAGE> 27
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
3/30/99 11.7500 9.3750 3/30/99 11.7500 9.3750
3/31/99 12.3125 9.3750 3/31/99 12.3125 9.3750
4/1/99 11.6250 9.5000 4/1/99 11.6250 9.5000
4/2/99 11.6250 9.5000 4/2/99 11.6250 9.5000
4/5/99 11.3750 9.3750 4/5/99 11.3750 9.3750
4/6/99 11.5000 9.1875 4/6/99 11.5000 9.1875
4/7/99 10.6250 8.8750 4/7/99 10.6250 8.8750
4/8/99 10.8750 8.8125 4/8/99 10.8750 8.8125
4/9/99 10.8125 8.7500 4/9/99 10.8125 8.7500
4/12/99 10.8125 8.8125 4/12/99 10.8125 8.8125
4/13/99 10.8125 8.8750 4/13/99 10.8125 8.8750
4/14/99 10.7500 8.8125 4/14/99 10.7500 8.8125
4/15/99 10.6250 8.6250 4/15/99 10.6250 8.6250
4/16/99 10.8125 8.7500 4/16/99 10.8125 8.7500
4/19/99 10.7500 8.5625 4/19/99 10.7500 8.5625
4/20/99 10.6250 8.6563 4/20/99 10.6250 8.6563
4/21/99 10.6250 8.7500 4/21/99 10.6250 8.7500
4/22/99 10.9375 9.2500 4/22/99 10.9375 9.2500
4/23/99 10.3750 8.6250 4/23/99 10.3750 8.6250
4/26/99 10.4375 8.7500 4/26/99 10.4375 8.7500
4/27/99 10.1875 8.3750 4/27/99 10.1875 8.3750
4/28/99 10.3750 8.4375 4/28/99 10.3750 8.4375
4/29/99 10.1250 8.7500 4/29/99 10.1250 8.7500
4/30/99 10.3750 8.6250 4/30/99 10.3750 8.6250
5/3/99 10.4375 8.8125 5/3/99 10.4375 8.8125
5/4/99 11.0000 9.0625 5/4/99 11.0000 9.0625
5/5/99 11.4375 9.4375 5/5/99 11.4375 9.4375
5/6/99 11.3125 9.3125 5/6/99 11.3125 9.3125
5/7/99 11.6250 9.5000 5/7/99 11.6250 9.5000
5/10/99 11.8125 9.5000 5/10/99 11.8125 9.5000
5/11/99 11.2500 9.1875 5/11/99 11.2500 9.1875
5/12/99 10.6875 9.0000 5/12/99 10.6875 9.0000
5/13/99 10.8750 9.1250 5/13/99 10.8750 9.1250
5/14/99 10.6875 8.6875 5/14/99 10.6875 8.6875
5/17/99 10.6250 8.6875 5/17/99 10.6250 8.6875
5/18/99 11.1875 8.8750 5/18/99 11.1875 8.8750
5/19/99 10.8750 8.6875 5/19/99 10.8750 8.6875
5/20/99 11.5000 9.2500 5/20/99 11.5000 9.2500
5/21/99 11.8750 9.5000 5/21/99 11.8750 9.5000
5/24/99 11.7500 9.5000 5/24/99 11.7500 9.5000
5/25/99 11.4375 9.4375 5/25/99 11.4375 9.4375
5/26/99 11.6250 9.2500 5/26/99 11.6250 9.2500
5/27/99 11.0000 9.0625 5/27/99 11.0000 9.0625
5/28/99 11.0000 9.2500 5/28/99 11.0000 9.2500
5/31/99 11.0000 9.2500 5/31/99 11.0000 9.2500
6/1/99 11.3750 9.1250 6/1/99 11.3750 9.1250
6/2/99 10.5000 9.0625 6/2/99 10.5000 9.0625
6/3/99 10.8125 8.9375 6/3/99 10.8125 8.9375
6/4/99 10.8125 8.8750 6/4/99 10.8125 8.8750
6/7/99 11.1875 9.0000 6/7/99 11.1875 9.0000
6/8/99 11.2500 8.8750 6/8/99 11.2500 8.8750
6/9/99 10.8750 8.9375 6/9/99 10.8750 8.9375
</TABLE>
<PAGE> 28
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
6/10/99 10.7500 9.0000 6/10/99 10.7500 9.0000
6/11/99 10.6250 9.0625 6/11/99 10.6250 9.0625
6/14/99 10.6875 8.6563 6/14/99 10.6875 8.6563
6/15/99 10.5625 8.8750 6/15/99 10.5625 8.8750
6/16/99 10.7500 8.9375 6/16/99 10.7500 8.9375
6/17/99 10.7500 8.9375 6/17/99 10.7500 8.9375
6/18/99 10.6250 8.9375 6/18/99 10.6250 8.9375
6/21/99 10.9375 8.9063 6/21/99 10.9375 8.9063
6/22/99 10.2500 8.6875 6/22/99 10.2500 8.6875
6/23/99 10.3750 8.6250 6/23/99 10.3750 8.6250
6/24/99 10.3750 8.5625 6/24/99 10.3750 8.5625
6/25/99 10.3125 8.4375 6/25/99 10.3125 8.4375
6/28/99 10.5000 8.4688 6/28/99 10.5000 8.4688
6/29/99 10.3750 8.4375 6/29/99 10.3750 8.4375
6/30/99 10.9375 8.6250 6/30/99 10.9375 8.6250
7/1/99 10.5000 8.4375 7/1/99 10.5000 8.4375
7/2/99 10.5000 8.7500 7/2/99 10.5000 8.7500
7/5/99 10.5000 8.7500 7/5/99 10.5000 8.7500
7/6/99 10.0625 8.4375 7/6/99 10.0625 8.4375
7/7/99 10.5625 8.6250 7/7/99 10.5625 8.6250
7/8/99 10.6875 8.6250 7/8/99 10.6875 8.6250
7/9/99 10.6250 8.6250 7/9/99 10.6250 8.6250
7/12/99 10.7500 8.6250 7/12/99 10.7500 8.6250
7/13/99 10.6250 8.6250 7/13/99 10.6250 8.6250
7/14/99 10.6250 8.5625 7/14/99 10.6250 8.5625
7/15/99 10.7500 8.6875 7/15/99 10.7500 8.6875
7/16/99 10.8750 8.8125 7/16/99 10.8750 8.8125
7/19/99 11.2500 9.0000 7/19/99 11.2500 9.0000
7/20/99 11.1250 9.0313 7/20/99 11.1250 9.0313
7/21/99 11.5625 9.3750 7/21/99 11.5625 9.3750
7/22/99 12.1250 10.1250 10.1250 7/22/99 12.1250 10.1250
7/23/99 12.0000 10.0625 7/23/99 12.0000 10.0625
7/26/99 12.0625 9.7500 7/26/99 12.0625 9.7500
7/27/99 12.0000 9.7500 7/27/99 12.0000 9.7500
7/28/99 12.1875 9.9375 7/28/99 12.1875 9.9375
7/29/99 12.2500 9.9688 7/29/99 12.2500 9.9688
7/30/99 11.5625 9.4063 7/30/99 11.5625 9.4063
8/2/99 12.0000 9.7500 8/2/99 12.0000 9.7500
8/3/99 12.0000 10.0000 8/3/99 12.0000 10.0000
8/4/99 12.1875 9.8750 8/4/99 12.1875 9.8750
8/5/99 12.0625 9.7500 8/5/99 12.0625 9.7500
8/6/99 12.0000 9.6563 8/6/99 12.0000 9.6563
8/9/99 11.9375 9.5625 8/9/99 11.9375 9.5625
8/10/99 11.9375 9.5000 8/10/99 11.9375 9.5000
8/11/99 12.0625 9.5000 8/11/99 12.0625 9.5000
8/12/99 12.0625 9.5625 8/12/99 12.0625 9.5625
8/13/99 12.3125 9.6250 8/13/99 12.3125 9.6250
8/16/99 12.1875 9.5000 8/16/99 12.1875 9.5000
8/17/99 11.7500 9.1875 8/17/99 11.7500 9.1875
8/18/99 11.9375 9.2500 8/18/99 11.9375 9.2500
8/19/99 11.8750 9.0938 8/19/99 11.8750 9.0938
8/20/99 12.0000 9.3125 8/20/99 12.0000 9.3125
</TABLE>
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
8/23/99 12.0000 9.3750 8/23/99 12.0000 9.3750
8/24/99 12.2500 9.4063 8/24/99 12.2500 9.4063
8/25/99 12.0000 9.3750 8/25/99 12.0000 9.3750
8/26/99 12.1250 9.3750 8/26/99 12.1250 9.3750
8/27/99 11.9375 9.4375 8/27/99 11.9375 9.4375
8/30/99 12.0000 9.4063 8/30/99 12.0000 9.4063
8/31/99 12.0000 9.2500 8/31/99 12.0000 9.2500
9/1/99 11.9375 9.3125 9/1/99 11.9375 9.3125
9/2/99 11.7500 9.2500 9/2/99 11.7500 9.2500
9/3/99 11.9375 9.2500 9/3/99 11.9375 9.2500
9/6/99 11.9375 9.2500 9/6/99 11.9375 9.2500
9/7/99 12.0625 9.2500 9/7/99 12.0625 9.2500
9/8/99 12.0625 9.3125 9/8/99 12.0625 9.3125
9/9/99 12.0625 9.3125 9/9/99 12.0625 9.3125
</TABLE>
A 11/03/97 - Proposes dual class recapitalization.
B 01/22/98 - Authorizes new $20M share repurchase program.
C 02/19/98 - Reports record sales and earnings for 1997.
D 03/25/98 - Announces pricing of exchangeable debt issue backed securities
at $23.
E 07/22/98 - Announces 2nd Q earnings representing 11th consecutive quarter
of comparable period increases in sales and earnings.
F 07/22/98 - Announces that challenging currency environment in Asia and
economic uncertainty in Russia is expected to contribute to
slower sales growth.
G 08/04/98 - Authorizes new $20M share repurchase program.
H 08/04/98 - GNC announces downward price revisions.
I 09/01/98 - Announcement of substantial Russian sales decline and related
3rd Q Charge.
J 10/15/98 - Adams, Harkness and Hill downgrades to market performer.
K 01/06/99 - CBOE announces it will begin trading options on Sage.
L 07/22/99 - Royal Numico announces acquisition of GNC.
- ----------
Source: FactSet Research Systems.
CONFIDENTIAL
14
<PAGE> 30
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL RELATIVE PRICE ANALYSIS
SAGE'S TRADING HISTORY MORE CLOSELY TRACKS THAT OF COMPANIES IN THE VITAMIN AND
NUTRITIONAL SUPPLEMENTS INDUSTRY.
LATEST TWELVE MONTHS
================================================================================
<TABLE>
<CAPTION>
Date Sage A Sage B MLM Marketers VNS Supplements S&P 500
<S> <C> <C> <C> <C> <C>
8/4/98 100.0000 100.0000 100.0000 100.0000 100.0000
8/5/98 101.0909 100.0000 98.9489 93.3357 100.8684
8/6/98 106.1818 104.7826 98.1122 100.7394 101.6332
8/7/98 105.0909 103.4783 97.6876 106.3372 101.6164
8/10/98 103.2727 98.2609 97.1909 103.8603 101.0279
8/11/98 98.9091 95.6522 95.0578 99.9777 99.7071
8/12/98 100.3636 98.2609 96.4224 104.4243 101.1286
8/13/98 100.1818 95.6522 93.6376 99.5708 100.2602
8/14/98 96.0000 93.4783 91.2852 99.9331 99.1260
8/17/98 96.0000 92.6087 93.7461 102.1268 101.0773
8/18/98 96.7273 91.3044 93.0457 105.2295 102.7124
8/19/98 98.1818 93.4783 91.1448 103.1083 102.4195
8/20/98 96.0000 91.3044 89.1126 101.5950 101.8170
8/21/98 94.5455 89.5652 87.3938 102.9378 100.8507
8/24/98 97.0909 90.0000 87.7988 102.5645 101.4942
8/25/98 95.2727 90.0000 89.2281 98.0807 101.9336
8/26/98 91.2727 86.9565 87.2105 93.2482 101.1258
8/27/98 72.7273 73.0435 81.6625 91.4797 97.2456
8/28/98 81.4545 77.3913 79.2835 86.8573 95.8046
8/31/98 77.4545 71.7391 73.6652 77.3114 89.2885
9/1/98 82.5455 72.1739 77.5085 83.6055 92.7378
9/2/98 77.8182 66.0870 74.6731 88.3815 92.3843
9/3/98 74.5455 62.6087 72.6920 85.7024 91.6185
9/4/98 75.6364 64.3478 70.4729 85.7955 90.8378
9/7/98 75.6364 64.3478 70.4729 85.7955 90.8378
9/8/98 77.8182 67.8261 72.0751 93.0405 95.4613
9/9/98 75.6364 66.0870 70.1356 90.7169 93.8514
9/10/98 72.7273 63.4783 69.1698 88.2990 91.4254
9/11/98 68.3636 62.6087 68.3476 86.9062 94.1182
9/14/98 68.3636 65.2174 69.2233 89.1478 96.0452
9/15/98 66.9091 60.0000 70.0117 91.4377 96.7877
9/16/98 66.9091 56.5217 72.2895 96.1702 97.5152
9/17/98 60.7273 52.6087 68.8485 94.9500 95.0332
9/18/98 61.8182 54.7826 67.4560 98.0952 95.1470
9/21/98 56.7273 51.5217 64.1496 92.5913 95.5014
9/22/98 59.6364 54.7826 63.0932 90.4442 96.0368
9/23/98 58.1818 54.7826 64.3672 86.2660 99.4376
9/24/98 57.4545 54.7826 63.1035 80.8212 97.2578
9/25/98 56.7273 53.0435 62.7579 79.5342 97.4471
9/28/98 56.7273 51.7391 62.0270 73.4523 97.8146
9/29/98 55.2727 51.7391 62.3468 70.1877 97.8454
9/30/98 53.8182 55.2174 65.1839 69.9642 94.8597
10/1/98 58.1818 53.4783 63.5782 70.2689 92.0037
10/2/98 59.6364 57.8261 66.7889 70.5307 93.5157
10/5/98 61.0909 55.6522 66.0717 68.9980 92.2061
10/6/98 58.9091 54.3478 67.7622 70.0040 91.8358
10/7/98 53.0909 50.8696 71.8753 67.9183 90.5384
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C> <C>
10/8/98 48.7273 46.0870 71.9294 64.3169 89.4900
10/9/98 49.4546 48.2609 69.6088 63.0619 91.8172
10/12/98 48.9091 48.6957 72.7042 67.1277 93.0596
10/13/98 48.9091 48.9130 72.8371 64.0869 92.7881
10/14/98 46.5455 46.0870 73.8874 61.2116 93.7890
10/15/98 46.9091 46.9565 76.6973 61.9696 97.7027
10/16/98 50.9091 54.7826 81.7889 67.2419 98.5356
10/19/98 60.0000 63.0435 83.3423 68.5243 99.0925
10/20/98 70.5455 76.5217 84.7096 70.4234 99.2361
10/21/98 69.4545 70.8696 80.8709 71.2752 99.7948
10/22/98 64.7273 69.5652 82.8685 73.8743 100.5932
10/23/98 65.0909 67.3913 87.2020 71.9392 99.8648
10/26/98 68.3636 68.6957 87.9904 72.2076 100.0187
10/27/98 66.9091 67.3913 88.1127 71.7151 99.3676
10/28/98 63.2727 63.4783 86.8408 69.9600 99.6241
10/29/98 65.4545 63.9130 86.5168 69.4172 101.2881
10/30/98 66.5455 62.6087 89.9037 71.7781 102.4764
11/2/98 72.3636 66.9565 93.4670 76.2249 103.6824
11/3/98 71.2727 67.3913 94.6438 78.3108 103.6115
11/4/98 72.7273 67.8261 92.7780 83.3249 104.3419
11/5/98 72.3636 67.8261 95.1778 63.3451 105.7578
11/6/98 74.9091 69.1304 96.5885 64.6436 106.4256
11/9/98 75.2727 68.2609 93.3890 65.5641 105.4173
11/10/98 74.9091 66.9565 93.9820 65.4281 105.2364
11/11/98 72.0000 66.9565 93.5087 66.2696 104.5564
11/12/98 65.8182 61.7391 92.6318 63.8018 104.2505
11/13/98 65.8182 61.7391 91.2814 64.9924 104.9994
11/16/98 68.3636 63.4783 93.7123 64.9980 105.9462
11/17/98 68.3636 63.0435 92.9055 65.0361 106.2680
11/18/98 68.7273 62.6087 93.3909 64.5099 106.7493
11/19/98 69.8182 63.4783 92.7716 63.5540 107.5076
11/20/98 69.0909 63.9130 92.9713 65.3584 108.5280
11/23/98 71.6364 66.0870 96.5828 64.9198 110.8281
11/24/98 68.7273 66.9565 94.9828 59.4089 110.3412
11/25/98 71.2727 67.8261 95.5732 59.8972 110.7031
11/26/98 71.2727 67.8261 95.5732 59.8972 110.7031
11/27/98 69.4545 68.2609 95.3947 59.8470 111.2124
11/30/98 68.7273 67.3913 93.3969 57.3683 108.5354
12/1/98 69.4545 66.0870 90.6428 51.7081 109.6221
12/2/98 66.9091 65.2174 88.9106 53.4948 109.2462
12/3/98 67.6364 65.2174 86.3738 52.3867 107.2772
12/4/98 65.4545 63.0435 87.8805 51.4211 109.7582
12/7/98 65.4545 63.9130 87.2915 50.6824 110.7805
12/8/98 66.1818 63.9130 85.3824 50.1821 110.1910
12/9/98 68.3636 65.2174 83.5161 53.9001 110.3878
12/10/98 66.9091 63.4783 84.9584 54.2825 108.6651
12/11/98 66.9091 64.3478 87.5597 55.1474 108.7994
12/14/98 64.7273 65.6522 86.2341 54.9109 106.4433
12/15/98 66.1818 65.6522 89.5117 55.8042 108.4608
12/16/98 69.4545 67.8261 91.1454 55.9723 108.3778
12/17/98 70.5455 68.2609 90.6416 55.5946 110.0604
12/18/98 73.8182 69.5652 90.6262 55.7629 110.8113
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C> <C> <C> <C>
12/21/98 80.7273 74.3478 92.1062 54.5801 112.1927
12/22/98 84.3636 78.2609 92.4791 53.6016 112.2608
12/23/98 88.0000 81.7391 97.5788 53.9740 114.5898
12/24/98 86.1818 83.4783 95.6775 53.8484 114.3781
12/25/98 86.1818 83.4783 95.6775 53.8484 114.3781
12/28/98 84.3636 80.0000 96.5257 53.0654 114.3053
12/29/98 83.2727 80.0000 100.4678 53.5169 115.8275
12/30/98 83.6364 79.1304 96.7923 53.4587 114.9060
12/31/98 82.9091 79.5652 97.6601 56.8229 114.6541
1/1/99 82.9091 79.5652 97.6601 56.8229 114.6541
1/4/99 78.9091 74.7826 96.9495 57.8733 114.5487
1/5/99 81.4545 80.0000 97.5174 58.7767 116.1046
1/6/99 81.0909 80.4348 96.2044 59.9895 118.6752
1/7/99 80.0000 80.0000 97.6460 60.5421 118.4317
1/8/99 83.6364 80.8696 96.1067 59.1325 118.9317
1/11/99 83.6364 80.0000 95.1759 58.9891 117.8861
1/12/99 86.5455 86.0870 94.5796 58.8644 115.6130
1/13/99 88.7273 85.6522 90.5916 58.8958 115.1364
1/14/99 87.2727 86.9565 87.1631 58.4341 113.0648
1/15/99 88.0000 86.0870 89.6486 59.8929 115.9628
1/18/99 88.0000 86.0870 89.6486 59.8929 115.9628
1/19/99 87.2727 85.6522 89.8637 62.2365 116.7780
1/20/99 85.4545 85.2174 89.4028 60.6191 117.2089
1/21/99 85.8182 85.2174 88.4372 58.8509 115.2073
1/22/99 86.9091 86.0870 86.9559 58.6043 114.2773
1/25/99 87.6364 83.4783 86.8367 57.9361 115.0972
1/26/99 88.3636 83.4783 84.7873 58.1826 116.8069
1/27/99 85.8182 81.7391 86.0836 55.2901 115.9544
1/28/99 84.0000 81.7391 85.0312 55.2454 118.0250
1/29/99 88.3636 84.7826 87.3769 54.3488 119.3561
2/1/99 88.0000 81.7391 86.5980 54.2175 118.7367
2/2/99 85.8182 80.8696 86.1372 53.7672 117.7098
2/3/99 85.8182 82.6087 90.1233 53.3435 118.6500
2/4/99 84.7273 82.6087 96.8371 53.1277 116.4506
2/5/99 82.1818 81.3043 95.6567 51.8348 115.6027
2/8/99 84.3636 78.2609 92.7073 51.3047 116.0103
2/9/99 81.4545 79.1304 91.9227 50.9444 113.4332
2/10/99 80.0000 79.1304 93.5288 50.2389 114.1244
2/11/99 81.8182 79.3478 94.3756 51.5611 116.9683
2/12/99 82.5455 77.8261 94.0049 50.6656 114.7381
2/15/99 82.5455 77.8261 94.0049 50.6656 114.7381
2/16/99 78.5455 76.0870 95.1523 49.5066 115.8331
2/17/99 74.5455 75.2174 93.7367 46.8800 114.1691
2/18/99 75.6364 76.0870 95.3146 48.2157 115.4050
2/19/99 75.6364 76.5217 94.2874 49.3979 115.5859
2/22/99 74.9091 75.6522 95.5394 49.4088 118.6565
2/23/99 74.1818 75.6522 94.1886 50.3847 118.5670
2/24/99 72.7273 73.4783 93.9016 50.2311 116.9095
2/25/99 76.0000 76.0870 94.3436 49.7309 116.1269
2/26/99 77.8182 77.3913 90.0357 49.5185 115.5029
3/1/99 78.5455 76.5217 92.2365 47.6183 115.3005
3/2/99 76.3636 75.6522 96.4316 47.1596 114.3062
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C> <C> <C> <C>
3/3/99 74.1818 72.1739 98.1904 47.2841 114.5114
3/4/99 74.5455 69.5652 97.4423 48.2615 116.2780
3/5/99 73.0909 68.0435 99.2615 50.9114 118.9671
3/8/99 67.6364 66.0870 99.0032 50.9647 119.6443
3/9/99 65.4545 64.5652 98.6615 51.5401 119.3747
3/10/99 66.5455 66.5217 99.4969 51.4903 120.0276
3/11/99 67.2727 67.3913 100.2808 50.9839 121.0387
3/12/99 68.3636 66.0870 98.6220 50.1928 120.7505
3/15/99 67.6364 66.0870 96.8415 51.0226 121.9322
3/16/99 68.7273 64.3478 95.9144 56.0754 121.8502
3/17/99 67.2727 65.0000 95.9594 60.7366 121.0517
3/18/99 68.0000 66.9565 97.3001 59.7377 122.7988
3/19/99 69.0909 65.9783 97.4088 57.3192 121.1889
3/22/99 69.0909 66.0870 98.1903 57.3008 120.9762
3/23/99 68.3636 64.3478 97.1077 54.6420 117.7238
3/24/99 67.6364 65.2174 94.9237 56.1204 118.3254
3/25/99 68.0000 65.2174 98.0945 54.9360 120.3214
3/26/99 68.1818 65.2174 97.4980 54.3775 119.6508
3/29/99 66.5455 65.6522 99.9201 53.8653 122.2037
3/30/99 68.3636 65.2174 98.1176 52.5909 121.3250
3/31/99 71.6364 65.2174 99.5479 53.4940 119.9838
4/1/99 67.6364 66.0870 100.5054 53.2443 120.6693
4/2/99 67.6364 66.0870 100.5054 53.2443 120.6693
4/5/99 66.1818 65.2174 101.3405 53.7877 123.2250
4/6/99 66.9091 63.9130 98.3654 53.3544 122.9237
4/7/99 61.8182 61.7391 99.8606 51.9911 123.7632
4/8/99 63.2727 61.3044 101.1098 50.3692 125.3572
4/9/99 62.9091 60.8696 104.2561 51.3964 125.7648
4/12/99 62.9091 61.3044 107.7940 51.6120 126.7246
4/13/99 62.9091 61.7391 110.2136 52.7974 125.9020
4/14/99 62.5455 61.3044 112.9587 52.8607 123.9078
4/15/99 61.8182 60.0000 112.3070 49.5522 123.3873
4/16/99 62.9091 60.8696 115.1739 49.9115 123.0273
4/19/99 62.5455 59.5652 114.5798 47.9423 120.2739
4/20/99 61.8182 60.2174 107.3546 49.7966 121.8306
4/21/99 61.8182 60.8696 109.7506 50.2582 124.6241
4/22/99 63.6364 64.3478 107.4205 50.3572 126.7414
4/23/99 60.3636 60.0000 107.1847 48.8135 126.5577
4/26/99 60.7273 60.8696 108.8419 51.2997 126.8552
4/27/99 59.2727 58.2609 107.8922 52.5228 127.1126
4/28/99 60.3636 58.6957 109.3092 50.5066 126.0036
4/29/99 58.9091 60.8696 112.5099 50.7152 125.2500
4/30/99 60.3636 60.0000 113.4351 51.1430 124.5365
5/3/99 60.7273 61.3044 115.5423 53.7602 126.3506
5/4/99 64.0000 63.0435 114.7305 54.2996 124.2398
5/5/99 66.5455 65.6522 112.1135 55.5917 125.6679
5/6/99 65.8182 64.7826 111.4962 55.3660 124.2445
5/7/99 67.6364 66.0870 112.1030 56.7314 125.4524
5/10/99 68.7273 66.0870 109.1927 56.7992 125.0140
5/11/99 65.4545 63.9130 111.3577 56.6306 126.4420
5/12/99 62.1818 62.6087 111.4106 57.1699 127.2246
5/13/99 63.2727 63.4783 112.9684 58.0832 127.5566
</TABLE>
<PAGE> 34
<TABLE>
<S> <C> <C> <C> <C> <C>
5/14/99 62.1818 60.4348 110.7852 57.4313 124.7808
5/17/99 61.8182 60.4348 110.2224 59.0508 124.9384
5/18/99 65.0909 61.7391 109.1234 58.4625 124.3630
5/19/99 63.2727 60.4348 109.4422 60.0055 125.3806
5/20/99 66.9091 64.3478 109.7379 61.4836 124.8769
5/21/99 69.0909 66.0870 109.7814 59.5030 124.0803
5/24/99 68.3636 66.0870 108.8050 58.7929 121.8754
5/25/99 66.5455 65.6522 105.9814 58.4936 119.8000
5/26/99 67.6364 64.3478 107.0056 59.3898 121.6991
5/27/99 64.0000 63.0435 105.0548 55.6515 119.5211
5/28/99 64.0000 64.3478 105.5486 54.5128 121.4267
5/31/99 64.0000 64.3478 105.5486 54.5128 121.4267
6/1/99 66.1818 63.4783 108.5895 54.3021 120.7197
6/2/99 61.0909 63.0435 107.1777 53.4077 120.7710
6/3/99 62.9091 62.1739 110.3715 53.4060 121.2122
6/4/99 62.9091 61.7391 111.4983 53.3175 123.8434
6/7/99 65.0909 62.6087 111.7042 52.8735 124.4749
6/8/99 65.4545 61.7391 113.0342 51.7823 122.8715
6/9/99 63.2727 62.1739 111.6324 50.7988 122.9937
6/10/99 62.5455 62.6087 111.3873 49.3083 121.5181
6/11/99 61.8182 63.0435 112.2489 48.3804 120.6619
6/14/99 62.1818 60.2174 115.2631 47.9135 120.6955
6/15/99 61.4546 61.7391 114.9423 45.0209 121.3633
6/16/99 62.5455 62.1739 114.1093 45.9402 124.0915
6/17/99 62.5455 62.1739 113.7862 46.0121 124.9767
6/18/99 61.8182 62.1739 112.3998 46.3221 125.2509
6/21/99 63.6364 61.9565 114.2544 46.2111 125.8255
6/22/99 59.6364 60.4348 112.1083 45.7327 124.6017
6/23/99 60.3636 60.0000 111.6844 45.8482 124.3387
6/24/99 60.3636 59.5652 112.5773 45.8690 122.7269
6/25/99 60.0000 58.6957 113.1230 45.5731 122.6831
6/28/99 61.0909 58.9131 114.9026 44.9904 124.1792
6/29/99 60.3636 58.6957 117.1626 44.2081 126.0540
6/30/99 63.6364 60.0000 118.0350 45.5226 128.0370
7/1/99 61.0909 58.6957 117.2001 45.9626 128.8065
7/2/99 61.0909 60.8696 117.3799 46.4982 129.7635
7/5/99 61.0909 60.8696 117.3799 46.4982 129.7635
7/6/99 58.5455 58.6957 119.3370 48.1127 129.4743
7/7/99 61.4546 60.0000 118.0658 47.9575 130.1962
7/8/99 62.1818 60.0000 117.8024 48.2774 130.0619
7/9/99 61.8182 60.0000 117.7049 48.5995 130.8883
7/12/99 62.5455 60.0000 116.1129 48.0803 130.4984
7/13/99 61.8182 60.0000 115.0482 48.1315 129.9817
7/14/99 61.8182 59.5652 116.9126 48.9124 130.4117
7/15/99 62.5455 60.4348 115.3398 49.3944 131.4797
7/16/99 63.2727 61.3044 115.5001 48.9542 132.3341
7/19/99 65.4545 62.6087 114.2985 48.5364 131.2959
7/20/99 64.7273 62.8261 113.7455 48.1211 128.4464
7/21/99 67.2727 65.2174 109.2502 47.9861 128.6507
7/22/99 70.5455 70.4348 107.0338 46.4816 126.9419
7/23/99 69.8182 70.0000 102.5183 47.0141 126.5661
7/26/99 70.1818 67.8261 101.1695 46.1292 125.7098
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C> <C> <C> <C>
7/27/99 69.8182 67.8261 102.0140 46.2118 127.1164
7/28/99 70.9091 69.1304 100.5950 45.9529 127.3552
7/29/99 71.2727 69.3478 100.6609 44.8121 125.0821
7/30/99 67.2727 65.4348 100.5246 45.3389 123.9339
8/2/99 69.8182 67.8261 102.0872 45.4428 123.8714
8/3/99 69.8182 69.5652 102.1709 43.8737 123.3239
8/4/99 70.9091 68.6957 98.2717 43.8193 121.7522
8/5/99 70.1818 67.8261 98.8374 43.9070 122.5339
8/6/99 69.8182 67.1739 98.3155 43.9928 121.2821
8/9/99 69.4545 66.5217 97.1378 44.8154 121.0499
8/10/99 69.4545 66.0870 97.5304 44.6638 119.5230
8/11/99 70.1818 66.0870 96.2432 45.8181 121.4351
8/12/99 70.1818 66.5217 97.5342 46.1019 121.0835
8/13/99 71.6364 66.9565 97.5300 47.5821 123.8369
8/16/99 70.9091 66.0870 98.3090 48.4649 124.1251
8/17/99 68.3636 63.9130 99.2546 48.8925 125.3740
8/18/99 69.4545 64.3478 96.6933 48.5454 124.3182
8/19/99 69.0909 63.2609 96.9075 49.9530 123.4554
8/20/99 69.8182 64.7826 99.1442 50.3814 124.6698
8/23/99 69.8182 65.2174 100.3554 48.6167 126.8720
8/24/99 71.2727 65.4348 99.8322 49.3355 127.1779
8/25/99 69.8182 65.2174 103.0295 49.2161 128.8839
8/26/99 70.5455 65.2174 102.3516 48.4364 127.0390
8/27/99 69.4545 65.6522 100.0612 48.5006 125.7574
8/30/99 69.8182 65.4348 97.7294 47.9029 123.4955
8/31/99 69.8182 64.3478 97.2832 48.1908 123.1588
9/1/99 69.4545 64.7826 97.0042 48.4068 124.1531
9/2/99 68.3636 64.3478 97.8206 47.0834 123.0375
9/3/99 69.4545 64.3478 99.5802 47.5635 126.5940
9/6/99 69.4545 64.3478 99.5802 47.5635 126.5940
9/7/99 70.1818 64.3478 92.6880 47.6889 125.9607
9/8/99 70.1818 64.3478 92.5873 47.2265 125.1474
9/9/99 70.1818 64.7826 90.6077 47.4108 125.7005
</TABLE>
- ----------
Source: FactSet Research Systems.
(1) Includes Amway Asia Pacific, Amway Japan, Avon, Nature's Sunshine, Nu
Skin, Tupperware and USANA.
(2) Includes Natrol, Nature's Sunshine, NBTY, Nutraceutical, Rexall Sundown,
Twinlab, USANA and Weider Nutrition.
CONFIDENTIAL
15
<PAGE> 36
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SHARES TRADED AT PRICE INCREMENTS - CLASS A(1)
PRIOR SIX MONTHS
================================================================================
Prior 6 Month Data
<TABLE>
<CAPTION>
Price Six Months
<S> <C>
$10.00-$10.50 568,500
$10.50-$11.00 1,380,200
$11.00-$11.50 453,800
$11.50-$12.00 710,600
$12.00-$12.50 493,700
$12.50-$13.00 63,300
$13.00-$13.50 24,100
</TABLE>
PRIOR 1-YEAR AND 2-YEAR
================================================================================
Prior 1 Year Data Prior 2 Year Data
<TABLE>
<CAPTION>
Price One Year Two Year
<S> <C> <C>
$6-$8
$8-$10 1,417,400 1,417,400
$10-$12 4,786,300 4,786,300
$12-$14 2,138,300 2,138,300
$14-$16 1,073,100 1,097,400
$16-$18 581,200
$18-$20 542,900
$20-$22 2,386,501
$22-$24 5,141,335
$24-$26 3,774,067
$26-$28 2,076,934
$28-$30 609,500
</TABLE>
- ----------
Source: FactSet Research Systems.
(1) As of September 9, 1999.
CONFIDENTIAL
16
<PAGE> 37
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SHARES TRADED AT PRICE INCREMENTS - CLASS B(1)
PRIOR SIX MONTHS
================================================================================
Prior 6 Month Data
<TABLE>
<CAPTION>
Price Six Months
<S> <C>
$8.00-$8.50 631,500
$8.50-$9.00 2,340,200
$9.00-$9.50 1,743,000
$9.50-$10.00 1,287,500
$10.00-$10.50 305,200
$10.50-$11.00 85,000
$11.00-$11.50 129,300
</TABLE>
PRIOR 1-YEAR AND 2-YEAR
================================================================================
<TABLE>
<CAPTION>
Prior 1 Year Data Prior 2 Year Data
Price One Year Two Year
<S> <C> <C>
$6-$8 2,341,400 2,341,400
$8-$10 11,994,900 11,994,900
$10-$12 3,988,900 3,988,900
$12-$14 516,000 1,444,700
$14-$16 807,600
$16-$18 364,900
$18-$20 1,613,100
$20-$22 4,851,700
$22-$24 8,255,700
$24-$26 2,318,100
$26-$28 1,211,900
$28-$30
</TABLE>
- ----------
Source: FactSet Research Systems.
(1) As of September 9, 1999.
CONFIDENTIAL
17
<PAGE> 38
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SAGE OWNERSHIP PROFILE
SAGE CLASS A SHAREHOLDERS
================================================================================
<TABLE>
<CAPTION>
HOLDINGS
(SHARES/OPTIONS) % OWNERSHIP
---------------- ----------
<S> <C> <C>
INSIDERS(1)
Mark Hughes (2) 6,579,332 53.9%
Other Insiders(3) 1,252,290 10.3
TOP INSTITUTIONS(4)
Fidelity Mgmt & Research Co 1,037,500 8.5
Ryback Management Corp 851,841 7.0
Brandywine Asset Mgmt, Inc. 652,730 5.3
American Cent Cos 202,100 1.7
Royce & Associates, Inc. 172,700 1.4
California Public Emp Ret Sys 171,400 1.4
Barclays Bank Plc 164,993 1.4
General Motors Invt Mgmt Corp. 140,200 1.1
Goldman Sachs And Company 125,300 1.0
Bankamerica Corporation 100,232 0.8
Bankers Trust N Y Corp 81,664 0.7
PaineWebber Pace Sml Med Val I 75,599 0.6
Dimensional Fd Advisors, Inc. 73,533 0.6
OTHER STOCKHOLDERS 541,103 4.4
---------- -----
TOTAL GROSS DILUTED SHARES(1): 12,195,706 100.0%
========== =====
</TABLE>
SAGE CLASS B SHAREHOLDERS
================================================================================
<TABLE>
<CAPTION>
HOLDINGS
(SHARES/OPTIONS) % OWNERSHIP
---------------- ----------
<S> <C> <C>
INSIDERS(1)
Mark Hughes (2) 12,033,669 50.4%
Other Insiders(3) 4,417,204 18.5
TOP INSTITUTIONS(4)
Fidelity Mgmt & Research Co 2,010,500 8.4
David L. Babson & Co, Inc.(5) 1,370,166 5.7
Brinson Partners, Inc. 1,071,000 4.5
California Public Emp Ret Sys 342,800 1.4
Mellon Private Asset Mgmt 282,242 1.2
Cardinal Capital Mgmt Limited 275,200 1.2
First Wilshire Secs Mgmt, Inc. 244,400 1.0
Kennedy Capital Mgmt, Inc. 181,910 0.8
Dimensional Fd Advisors, Inc. 139,566 0.6
Manley Fuller Asset Mgmt, L.P. 138,600 0.6
Barclays Bank Plc 136,054 0.6
Northern Trust Company Of Ct 122,800 0.5
Brandywine Asset Mgmt, Inc. 104,563 0.4
OTHER STOCKHOLDERS 1,001,907 4.2
---------- -----
TOTAL GROSS DILUTED SHARES(1): 23,872,219 100.0%
========== =====
</TABLE>
TOTAL GROSS DILUTED SHARES: 36,067,925
- ----------
(1) Source: Donaldson, Lufkin and Jenrette as of September 7, 1999.
(2) Includes 5,000,000 Class B shares held in a DECS Trust, 183,333 Class A
shares and 366,666 Class B shares held by the Sage Family Foundation and
999,999 Class A options and 875,001 Class B options.
(3) Including Officers, Directors and employees; includes 1,238,704 Class A
options and 4,417,204 Class B options.
(4) CDA/Spectrum as of June 30, 1999.
(5) Includes 703,333 shares held as a 13F institution and 666,833 shares held
as a management company.
CONFIDENTIAL
18
<PAGE> 39
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
WALL STREET COMMENTARY ON SAGE STOCK
SAGE HAS VERY LIMITED WALL STREET RESEARCH COVERAGE. CURRENTLY, ONLY ADAMS,
HARKNESS AND HILL COVERS THE COMPANY EXTENSIVELY.
================================================================================
<TABLE>
<CAPTION>
EPS/GROWTH PRICE
DATE ANALYST/FIRM RECOMMENDATION ESTIMATE TARGET/TERM COMMENTS
---- ------------ -------------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
7/22/99 Patricia Negron Market Performer EPS Estimate of $1.60 N/A - Still no catalyst in sight for
Adams, Harkness & for CY1999 and $1.65 the stock and, as a result
Hill, Inc. for CY2000. numbers coming down again.
Big dividend yield. U.S.
continues to do well but
Russia continues to be
uncertain.
6/19/99 Patricia Negron Market Performer EPS Estimate of $1.63 N/A - Competition in the U.S.
Adams, Harkness & for CY1999 and $1.70 market is especially strong
Hill, Inc. for CY2000. for direct sellers and
national companies alike.
The second half of the year
is expected to be marginally
better; however, the Company
has opened essentially all
of the large potential
markets for its business.
6/8/99 Tom Kelleher Terminating Coverage N/A N/A - Although there is belief
B. Riley & Co. that the stock is
undervalued, there is
concern about the lack of
visibility in sales and
earnings in certain
markets. This, combined
with management's decision
to not buy back shares and
CEO Mark Hughes control over
the voting shares, leaves us
to believe current outside
shareholders have little
control.
4/28/99 Patricia Negron Market Performer EPS Estimate of $1.63 N/A - Business was generally
Adams, Harkness & for CY1999 and $1.70 good for the quarter with
Hill, Inc. for CY2000. the exception of Russia.
Y2K spending will continue
at high levels throughout
the remainder of the year.
On the analyst conference
call, the company made clear
that it intends to conserve
cash during the year.
4/23/99 C. Warner Wilke Hold EPS Estimate of $1.60 N/A - Top line revenue beat
Prudential for CY1999. projections by 5%.
Securities Introduction of new product
called "Colour by
Dermajectics" should help
revenue projections in
certain countries. Outlook
for 2000 should improve,
however, Japan continues to
be a wild card.
</TABLE>
CONFIDENTIAL
19
<PAGE> 40
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
WALL STREET COMMENTARY ON SAGE STOCK (CONT.)
SAGE HAS LIMITED WALL STREET RESEARCH COVERAGE. CURRENTLY, ONLY ADAMS, HARKNESS
AND HILL COVERS THE COMPANY EXTENSIVELY.
================================================================================
<TABLE>
<CAPTION>
PRICE
EPS/GROWTH TARGET/
DATE ANALYST/FIRM RECOMMENDATION ESTIMATE TERM COMMENTS
- ------- ----------------- ---------------- ----------------------- -------- -----------------------------------
<S> <C> <C> <C> <C> <C>
3/22/99 Patricia Negron Market Performer EPS Estimate of $1.61 N/A CFO was praised for "understanding
Adams, Harkness & for CY1999 and $1.69 the business's key strengths
Hill, Inc. for CY2000. and his vision for the
future". The Thermojectics
bar was the most successful
product for 1998 and is being
rolled out internationally in
1999. The number of
supervisors increased 22% as
of end-February.
2/26/99 C. Warner Wilke Hold EPS Estimate of $1.60 N/A - Although there were
Prudential Securities for CY1999. revenue increases quarter over
quarter, outlook for 1999 is
mixed. The reason is due to
margin pressures associated
with weak Russia sales and Y2K
costs.
2/3/99 Patricia Negron Market Performer EPS Estimate of $1.60 N/A - Overall, we believe the
Adams, Harkness & for CY1999. stock's current multiple
Hill, Inc. reflects the risks in its
specific business model.
10/22/98 M. Wong N/A EPS Estimate of $1.57 N/A - Slashing CY1999 EPS
Salomon Smith Barney for CY1999. estimates from $1.78 to $1.57
Due To Several Factors. These
factors are due to lack of
belief in continuing momentum
of U.S. market, a weak
Japanese economy and
management's projections.
</TABLE>
CONFIDENTIAL
20
<PAGE> 41
BEAR
STEARNS
SECTION 4
FINANCIAL ANALYSIS
<PAGE> 42
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
FINANCIAL ANALYSIS
- - Transaction Multiples and Premia
- - Discounted Cash Flow Analysis
- - Comparable Company Analysis
- - Public Shareholder Valuation
- - Precedent M&A Transactions
CONFIDENTIAL
21
<PAGE> 43
BEAR
STEARNS
SECTION 4-A
TRANSACTION MULTIPLES AND PREMIA
CONFIDENTIAL
<PAGE> 44
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
BUILD-UP OF TRANSACTION VALUE
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
================================================================================
<TABLE>
<CAPTION>
CURRENT MARKET(1)
-------------------------------------------
HYPOTHETICAL
PROPOSED TRANSACTION CLASS A BLENDED PRICE CLASS B
-------------------- ------- ------------- -------
<S> <C> <C> <C> <C>
Price per Share $ 17.00 $12.06 $ 10.27 $ 9.31
Value of Common Stock 485.6 120.1 293.4 173.3
Value of Options, Net of Exercise Proceeds 75.0 9.4 23.5 14.0
-------- ------ ------- ------
Total Value of Equity $ 560.6 $129.5 $ 316.9 $187.3
Net Debt (100.0) (100.0)
Minority Interest 2.8 2.8
-------- -------
Enterprise Value $ 463.4 $ 219.7
</TABLE>
(1) As of September 9, 1999.
CONFIDENTIAL
22
<PAGE> 45
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
TRANSACTION MULTIPLES
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
================================================================================
<TABLE>
<CAPTION>
CURRENT MARKET(1)
------------------------------------------
PROPOSED HYPOTHETICAL
TRANSACTION CLASS A BLENDED PRICE CLASS B
----------- ------- ------------- -------
<S> <C> <C> <C> <C> <C>
Price per Share $17.00 $12.06 $10.27 $9.31
Total Value of Equity 560.6 382.5 316.9 283.3
Total Enterprise Value 463.4 285.3 219.7 186.2
ENTERPRISE VALUE/REVENUE
- LTM $899.8 0.52x 0.32x 0.24x 0.21x
- 1999E 876.0 0.53 0.33 0.25 0.21
- 2000E 920.0 0.50 0.31 0.24 0.20
ENTERPRISE VALUE/EBITDA
- LTM $85.9 5.4x 3.3x 2.6x 2.2x
- 1999E 91.9 5.0 3.1 2.4 2.0
- 2000E 94.5 4.9 3.0 2.3 2.0
ENTERPRISE VALUE/EBIT
- LTM $68.8 6.7x 4.1x 3.2x 2.7x
- 1999E 80.3 5.8 3.6 2.7 2.3
- 2000E 80.5 5.8 3.5 2.7 2.3
PRICE/EARNINGS
- LTM $1.40 12.1x 8.6x 7.3x 6.7x
- 1999E 1.60 10.6 7.5 6.4 5.8
- 2000E 1.62 10.5 7.4 6.3 5.7
</TABLE>
- ----------
(1) As of September 9, 1999.
CONFIDENTIAL
23
<PAGE> 46
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
TRANSACTION PREMIA(1)
================================================================================
<TABLE>
<CAPTION>
HYPOTHETICAL
CLASS A BLENDED PRICE CLASS B
------- ------------- -------
<S> <C> <C> <C>
PREMIUM OVER PRICE:
One-Day Prior 40.9% 65.5% 82.6%
One-Month Prior 42.4 63.6 77.8
20 Trading Days Average 41.5 65.4 81.8
One-Year Average 43.7 64.6 78.5
52-Week High(2) 4.6 20.3 30.8
52-Week Low(3) 126.7 160.6 183.3
</TABLE>
- ----------
(1) As of September 9, 1999 over Transaction consideration of $17.00 per
share.
(2) Highs occurred on 1/13/99 and 1/14/99 for Class A and Class B,
respectively.
(3) Lows occurred on 10/14/98 and 10/8/98 for Class A and Class B,
respectively.
CONFIDENTIAL
24
<PAGE> 47
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
CLASS B SHARE PRICE DISCOUNT TO CLASS A SHARE PRICE
SINCE LISTING OF CLASS B SHARES
================================================================================
<TABLE>
<CAPTION>
DATE Discount B-to-A
----
<S> <C>
12/15/97 (1.11%)
12/16/97 1.63%
12/17/97 0.54%
12/18/97 0.00%
12/19/97 2.22%
12/22/97 1.09%
12/23/97 2.30%
12/24/97 (1.18%)
12/25/97 (1.18%)
12/26/97 3.29%
12/29/97 0.00%
12/30/97 2.03%
12/31/97 (2.33%)
1/1/98 (2.33%)
1/2/98 1.46%
1/5/98 3.41%
1/6/98 3.98%
1/7/98 4.55%
1/8/98 8.54%
1/9/98 10.81%
1/12/98 13.19%
1/13/98 14.65%
1/14/98 5.65%
1/15/98 6.40%
1/16/98 12.17%
1/19/98 12.17%
1/20/98 11.91%
1/21/98 15.06%
1/22/98 13.17%
1/23/98 13.60%
1/26/98 11.82%
1/27/98 13.94%
1/28/98 14.24%
1/29/98 12.46%
1/30/98 12.64%
2/2/98 9.09%
2/3/98 8.81%
2/4/98 7.32%
2/5/98 7.94%
2/6/98 4.76%
2/9/98 3.51%
2/10/98 3.21%
2/11/98 6.09%
2/12/98 4.00%
2/13/98 1.07%
2/16/98 1.07%
2/17/98 1.59%
2/18/98 3.74%
2/19/98 2.41%
2/20/98 2.72%
2/23/98 1.58%
</TABLE>
<PAGE> 48
<TABLE>
<S> <C>
2/24/98 1.09%
2/25/98 2.40%
2/26/98 3.63%
2/27/98 3.23%
3/2/98 2.14%
3/3/98 5.32%
3/4/98 4.83%
3/5/98 3.14%
3/6/98 4.17%
3/9/98 3.13%
3/10/98 5.68%
3/11/98 4.43%
3/12/98 5.29%
3/13/98 4.95%
3/16/98 4.25%
3/17/98 3.81%
3/18/98 3.97%
3/19/98 3.77%
3/20/98 5.66%
3/23/98 5.94%
3/24/98 9.18%
3/25/98 12.16%
3/26/98 9.07%
3/27/98 6.91%
3/30/98 6.35%
3/31/98 6.60%
4/1/98 8.56%
4/2/98 7.85%
4/3/98 6.45%
4/6/98 6.74%
4/7/98 6.56%
4/8/98 4.32%
4/9/98 5.33%
4/10/98 5.33%
4/13/98 8.70%
4/14/98 8.60%
4/15/98 9.57%
4/16/98 6.88%
4/17/98 6.90%
4/20/98 7.37%
4/21/98 9.23%
4/22/98 8.33%
4/23/98 6.62%
4/24/98 7.60%
4/27/98 8.75%
4/28/98 7.00%
4/29/98 6.73%
4/30/98 8.00%
5/1/98 8.23%
5/4/98 7.11%
5/5/98 9.18%
5/6/98 7.55%
</TABLE>
<PAGE> 49
<TABLE>
<S> <C>
5/7/98 10.19%
5/8/98 10.19%
5/11/98 9.00%
5/12/98 6.97%
5/13/98 7.32%
5/14/98 9.38%
5/15/98 7.89%
5/18/98 7.29%
5/19/98 9.00%
5/20/98 8.16%
5/21/98 6.52%
5/22/98 8.91%
5/25/98 8.91%
5/26/98 8.33%
5/27/98 6.67%
5/28/98 9.65%
5/29/98 10.16%
6/1/98 9.89%
6/2/98 11.39%
6/3/98 10.53%
6/4/98 13.33%
6/5/98 7.26%
6/8/98 8.52%
6/9/98 5.79%
6/10/98 7.37%
6/11/98 9.23%
6/12/98 8.08%
6/15/98 8.31%
6/16/98 10.38%
6/17/98 10.37%
6/18/98 12.04%
6/19/98 12.74%
6/22/98 13.66%
6/23/98 14.76%
6/24/98 13.16%
6/25/98 15.77%
6/26/98 15.84%
6/29/98 19.46%
6/30/98 19.39%
7/1/98 19.41%
7/2/98 17.82%
7/3/98 17.82%
7/6/98 21.14%
7/7/98 20.22%
7/8/98 16.84%
7/9/98 20.33%
7/10/98 20.99%
7/13/98 20.11%
7/14/98 21.26%
7/15/98 18.44%
7/16/98 23.39%
7/17/98 24.71%
</TABLE>
<PAGE> 50
<TABLE>
<S> <C>
7/20/98 23.76%
7/21/98 21.37%
7/22/98 22.67%
7/23/98 20.83%
7/24/98 25.70%
7/27/98 26.47%
7/28/98 27.07%
7/29/98 24.23%
7/30/98 25.00%
7/31/98 20.55%
8/3/98 17.62%
8/4/98 19.57%
8/5/98 20.87%
8/6/98 21.16%
8/7/98 21.43%
8/10/98 25.66%
8/11/98 23.64%
8/12/98 22.12%
8/13/98 25.23%
8/14/98 22.79%
8/17/98 23.94%
8/18/98 26.67%
8/19/98 25.58%
8/20/98 25.71%
8/21/98 26.21%
8/24/98 28.99%
8/25/98 26.57%
8/26/98 25.50%
8/27/98 19.05%
8/28/98 25.84%
8/31/98 29.09%
9/1/98 36.75%
9/2/98 40.79%
9/3/98 42.36%
9/4/98 40.54%
9/7/98 40.54%
9/8/98 37.18%
9/9/98 36.84%
9/10/98 36.99%
9/11/98 30.56%
9/14/98 25.33%
9/15/98 33.33%
9/16/98 41.54%
9/17/98 38.02%
9/18/98 34.92%
9/21/98 31.65%
9/22/98 30.16%
9/23/98 26.98%
9/24/98 25.40%
9/25/98 27.87%
9/28/98 31.09%
9/29/98 27.73%
</TABLE>
<PAGE> 51
<TABLE>
<S> <C>
9/30/98 16.54%
10/1/98 30.08%
10/2/98 23.31%
10/5/98 31.25%
10/6/98 29.60%
10/7/98 24.79%
10/8/98 26.42%
10/9/98 22.52%
10/12/98 20.09%
10/13/98 19.56%
10/14/98 20.75%
10/15/98 19.44%
10/16/98 11.11%
10/19/98 13.79%
10/20/98 10.23%
10/21/98 17.18%
10/22/98 11.25%
10/23/98 15.48%
10/26/98 18.99%
10/27/98 18.71%
10/28/98 19.18%
10/29/98 22.45%
10/30/98 27.08%
11/2/98 29.22%
11/3/98 26.45%
11/4/98 28.21%
11/5/98 27.56%
11/6/98 29.56%
11/9/98 31.85%
11/10/98 33.77%
11/11/98 28.57%
11/12/98 27.46%
11/13/98 27.46%
11/16/98 28.77%
11/17/98 29.66%
11/18/98 31.25%
11/19/98 31.51%
11/20/98 29.25%
11/23/98 29.61%
11/24/98 22.73%
11/25/98 25.64%
11/26/98 25.64%
11/27/98 21.66%
11/30/98 21.94%
12/1/98 25.66%
12/2/98 22.67%
12/3/98 24.00%
12/4/98 24.14%
12/7/98 22.45%
12/8/98 23.81%
12/9/98 25.33%
12/10/98 26.03%
</TABLE>
<PAGE> 52
<TABLE>
<S> <C>
12/11/98 24.32%
12/14/98 17.88%
12/15/98 20.53%
12/16/98 22.44%
12/17/98 23.57%
12/18/98 26.88%
12/21/98 29.82%
12/22/98 28.89%
12/23/98 28.72%
12/24/98 23.44%
12/25/98 23.44%
12/28/98 26.09%
12/29/98 24.46%
12/30/98 26.37%
12/31/98 24.59%
1/1/99 24.59%
1/4/99 26.16%
1/5/99 21.74%
1/6/99 20.54%
1/7/99 19.57%
1/8/99 23.66%
1/11/99 25.00%
1/12/99 20.20%
1/13/99 23.86%
1/14/99 20.00%
1/15/99 22.22%
1/18/99 22.22%
1/19/99 21.83%
1/20/99 19.90%
1/21/99 20.41%
1/22/99 20.71%
1/25/99 25.52%
1/26/99 26.56%
1/27/99 25.53%
1/28/99 22.87%
1/29/99 24.62%
2/1/99 28.72%
2/2/99 26.88%
2/3/99 24.21%
2/4/99 22.63%
2/5/99 20.86%
2/8/99 28.89%
2/9/99 23.08%
2/10/99 20.88%
2/11/99 23.29%
2/12/99 26.82%
2/15/99 26.82%
2/16/99 23.43%
2/17/99 18.50%
2/18/99 18.86%
2/19/99 18.18%
2/22/99 18.39%
</TABLE>
<PAGE> 53
<TABLE>
<S> <C>
2/23/99 17.24%
2/24/99 18.34%
2/25/99 19.43%
2/26/99 20.22%
3/1/99 22.73%
3/2/99 20.69%
3/3/99 22.89%
3/4/99 28.13%
3/5/99 28.43%
3/8/99 22.37%
3/9/99 21.21%
3/10/99 19.61%
3/11/99 19.35%
3/12/99 23.68%
3/15/99 22.37%
3/16/99 27.70%
3/17/99 23.75%
3/18/99 21.43%
3/19/99 25.21%
3/22/99 25.00%
3/23/99 27.03%
3/24/99 24.00%
3/25/99 24.67%
3/26/99 25.00%
3/29/99 21.19%
3/30/99 25.33%
3/31/99 31.33%
4/1/99 22.37%
4/2/99 22.37%
4/5/99 21.33%
4/6/99 25.17%
4/7/99 19.72%
4/8/99 23.40%
4/9/99 23.57%
4/12/99 22.70%
4/13/99 21.83%
4/14/99 21.99%
4/15/99 23.19%
4/16/99 23.57%
4/19/99 25.55%
4/20/99 22.74%
4/21/99 21.43%
4/22/99 18.24%
4/23/99 20.29%
4/26/99 19.29%
4/27/99 21.64%
4/28/99 22.96%
4/29/99 15.71%
4/30/99 20.29%
5/3/99 18.44%
5/4/99 21.38%
5/5/99 21.19%
</TABLE>
<PAGE> 54
<TABLE>
<S> <C>
5/6/99 21.48%
5/7/99 22.37%
5/10/99 24.34%
5/11/99 22.45%
5/12/99 18.75%
5/13/99 19.18%
5/14/99 23.02%
5/17/99 22.30%
5/18/99 26.06%
5/19/99 25.18%
5/20/99 24.32%
5/21/99 25.00%
5/24/99 23.68%
5/25/99 21.19%
5/26/99 25.68%
5/27/99 21.38%
5/28/99 18.92%
5/31/99 18.92%
6/1/99 24.66%
6/2/99 15.86%
6/3/99 20.98%
6/4/99 21.83%
6/7/99 24.31%
6/8/99 26.76%
6/9/99 21.68%
6/10/99 19.44%
6/11/99 17.24%
6/14/99 23.47%
6/15/99 19.01%
6/16/99 20.28%
6/17/99 20.28%
6/18/99 18.88%
6/21/99 22.81%
6/22/99 17.99%
6/23/99 20.29%
6/24/99 21.17%
6/25/99 22.22%
6/28/99 23.99%
6/29/99 22.96%
6/30/99 26.81%
7/1/99 24.44%
7/2/99 20.00%
7/5/99 20.00%
7/6/99 19.26%
7/7/99 22.46%
7/8/99 23.91%
7/9/99 23.19%
7/12/99 24.64%
7/13/99 23.19%
7/14/99 24.09%
7/15/99 23.74%
7/16/99 23.40%
</TABLE>
<PAGE> 55
<TABLE>
<S> <C>
7/19/99 25.00%
7/20/99 23.18%
7/21/99 23.33%
7/22/99 19.75%
7/23/99 19.25%
7/26/99 23.72%
7/27/99 23.08%
7/28/99 22.64%
7/29/99 22.88%
7/30/99 22.92%
8/2/99 23.08%
8/3/99 20.00%
8/4/99 23.42%
8/5/99 23.72%
8/6/99 24.27%
8/9/99 24.84%
8/10/99 25.66%
8/11/99 26.97%
8/12/99 26.14%
8/13/99 27.92%
8/16/99 28.29%
8/17/99 27.89%
8/18/99 29.05%
8/19/99 30.58%
8/20/99 28.86%
8/23/99 28.00%
8/24/99 30.23%
8/25/99 28.00%
8/26/99 29.33%
8/27/99 26.49%
8/30/99 27.57%
8/31/99 29.73%
9/1/99 28.19%
9/2/99 27.03%
9/3/99 29.05%
9/6/99 29.05%
9/7/99 30.41%
9/8/99 29.53%
9/9/99 29.53%
</TABLE>
- ----------
Source: FactSet Research Systems.
CONFIDENTIAL
25
<PAGE> 56
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
STOCK PREMIUM ANALYSIS
($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
GOING PRIVATE MINORITY BUY-IN
TRANSACTIONS(1) TRANSACTIONS(2)
--------------- ---------------
<S> <C> <C>
Number of Transactions 13 14
ONE-DAY PRIOR PREMIUM
High 87.4% 62.0%
Low (10.6) (5.2)
Median 15.6 20.6
Mean 18.1 23.6
Sage Management/Sage(3)
Class A 40.9% 40.9%
Class B 82.6 82.6
Hypothetical Blended Price 65.5 65.5
ONE-MONTH PRIOR PREMIUM
High 60.0% 61.7%
Low (4.0) 12.1
Median 20.6 25.0
Mean 19.2 30.9
Sage Management/Sage(3)
Class A 42.4% 42.4%
Class B 77.8 77.8
Hypothetical Blended Price 63.6 63.6
</TABLE>
- ----------
(1) Source: Securities Data Company for U.S. completed going-private, all-cash
consideration transactions with a transaction value over $100 million for
the period January 1, 1997 to April 30, 1999.
(2) Source: Securities Data Corporation for U.S. minority buy-in transactions
with a transaction value greater than $200 million from January 1, 1997 to
April 30, 1999.
(3) Premiums based on market prices as of September 9, 1999.
CONFIDENTIAL
26
<PAGE> 57
BEAR
STEARNS
SECTION 4-B
DISCOUNTED CASH FLOW ANALYSIS
<PAGE> 58
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
METHODOLOGY
- - Analyzed Company-provided projections for 2000 to 2006
o Performed sensitivity analysis on Management Projections
- - Discounted unlevered after-tax free cash flows
- - Calculated terminal value after 7 years using perpetuity growth rate
methodology and terminal multiple methodology
- - Used discount rates of between 12.0% and 16.0% as weighted average cost of
capital (WACC)
o Using the Capital Asset Pricing Model (CAPM) for selected companies
comparable to Sage indicated a discount rate of 12.0% - 14.0%
o A higher cost of capital for Sage may be appropriate based on
company specific factors and current VNS industry environment
CONFIDENTIAL
27
<PAGE> 59
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS - MANAGEMENT PLAN
PROJECTED UNLEVERED FREE CASH FLOW ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
FISCAL YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 920.0 $ 968.0 $1,020.0 $1,071.0 $1,125.0 $1,181.0 $1,240.0
% growth -- 5.2% 5.4% 5.0% 5.0% 5.0% 5.0%
EBITDA $ 94.5 $ 105.3 $ 109.4 $ 106.5 $ 110.3 $ 114.4 $ 119.2
% margin 10.3% 10.9% 10.7% 9.9% 9.8% 9.7% 9.6%
Depreciation & amortization $ (14.0) $ (15.3) $ (16.4) $ (17.5) $ (16.3) $ (15.4) $ (15.2)
-------- -------- -------- -------- -------- -------- --------
EBIT $ 80.6 $ 90.1 $ 93.1 $ 89.1 $ 94.1 $ 99.1 $ 104.1
Taxes @ 38.5% (31.0) (34.6) (35.8) (34.3) (36.2) (38.1) (40.0)
-------- -------- -------- -------- -------- -------- --------
UNLEVERED NET INCOME $ 49.6 $ 55.4 $ 57.3 $ 54.8 $ 57.8 $ 60.9 $ 64.0
Plus: Depreciation & amortization $ 14.0 $ 15.3 $ 16.4 $ 17.5 $ 16.3 $ 15.4 $ 15.2
Less: Capital expenditures (17.0) (15.0) (15.0) (15.0) (15.0) (15.0) (15.0)
Less: Change in Working Capital (1.3) (1.6) (4.1) 0.1 0.5 0.7 0.9
-------- -------- -------- -------- -------- -------- --------
UNLEVERED FREE CASH FLOW $ 45.3 $ 54.1 $ 54.6 $ 57.4 $ 59.7 $ 62.0 $ 65.1
======== ======== ======== ======== ======== ======== ========
% growth -- 19.4% 0.9% 5.1% 4.0% 3.9% 5.0%
PV OF UNLEVERED FREE CASH FLOW $ 39.7 $ 41.6 $ 36.8 $ 34.0 $ 31.0 $ 28.3 $ 26.0
======== ======== ======== ======== ======== ======== ========
</TABLE>
SENSITIVITY ANALYSIS - PERPETUAL GROWTH RATE AND WACC
================================================================================
<TABLE>
<CAPTION>
PERPETUAL GROWTH RATE
----------------------------------------------------------
0.0% 1.0% 2.0% 3.0% 4.0%
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
12.0% DISCOUNT RATE
Implied equity value per share $16.55 $17.05 $17.64 $18.33 $19.16
Implied Terminal Trailing
EBITDA multiple 4.5x 4.9x 5.5x 6.1x 7.0x
14.0% DISCOUNT RATE
Implied equity value per share $15.88 $16.32 $16.84 $17.46 $18.19
Implied Terminal Trailing
EBITDA multiple 3.8x 4.2x 4.6x 5.0x 5.6x
16.0% DISCOUNT RATE
Implied equity value per share $15.30 $15.69 $16.15 $16.69 $17.34
Implied Terminal Trailing
EBITDA multiple 3.4x 3.6x 3.9x 4.3x 4.7x
------ ------ ------ ------ ------
</TABLE>
CONFIDENTIAL
28
<PAGE> 60
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS - SENSITIVITY TABLES
PERPETUITY GROWTH RATE METHODOLOGY(1)
================================================================================
<TABLE>
<CAPTION>
CHANGE IN REVENUE GROWTH VS. MANAGEMENT(3)
Change in EBITDA Margin vs. ------------------------------------------------------------------------------------
MANAGEMENT(3) (5.0)% (2.5)% [0.0%] +2.5% +5.0%
- ----------------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
(2)% $11.48 $12.58 $13.87 $15.23 $16.82
(1) 12.41 13.64 15.10 16.63 18.42
[0] 13.33 14.70 16.32 18.03 20.02
+1 14.25 15.77 17.55 19.42 21.62
+2 15.18 16.83 18.78 20.82 23.23
</TABLE>
TERMINAL MULTIPLE METHODOLOGY(2)
================================================================================
<TABLE>
<CAPTION>
CHANGE IN REVENUE GROWTH VS. MANAGEMENT(3)
CHANGE IN EBITDA MARGIN VS. ------------------------------------------------------------------------------------
MANAGEMENT(3) (5.0)% (2.5)% [0.0%] +2.5% +5.0%
-------------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
(2)% $11.71 $12.69 $13.86 $15.07 $16.50
(1) 12.56 13.67 14.98 16.35 17.95
[0] 13.40 14.64 16.10 17.62 19.41
+1 14.25 15.61 17.22 18.89 20.86
+2 15.10 16.58 18.34 20.17 22.32
</TABLE>
[ ] Management Projections
- ----------
Source: Sage Projections.
(1) Based on a WACC of 14.0% and perpetuity growth rate of 1.0%.
(2) Based on a WACC of 14.0% and trailing terminal EBITDA multiple of 4.0x.
(3) Revenue growth rate differences with Management projections are as shown
for the 2000-2006 period. EBITDA margin differences with Management
projections are as shown for the period 2003-2006. EBITDA margin
differences with Management projections for 2000, 2001 and 2002 are
one-fourth, one-half and three-fourths of the differences as shown,
respectively.
CONFIDENTIAL
29
<PAGE> 61
BEAR
STEARNS
SECTION 4-C
COMPARABLE COMPANY ANALYSIS
<PAGE> 62
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
METHODOLOGY
- - Developed a set of public companies comparable to Sage after reviewing the
following factors, among others:
o Business comparability
o Relative size of market capitalization/liquidity
o Growth parameters
o Operating margins
o Other relevant business and financial characteristics
- - The set of comparable companies include: Natrol, Nature's Sunshine, NBTY,
Nu Skin, Nutraceutical, Rexall Sundown, Twinlab, USANA and Weider
Nutrition.
- - Examined various valuation multiples, including: Enterprise value/Sales,
Enterprise value/EBITDA, Enterprise value/EBIT and P/E for the latest
twelve months and the projected calendar years 1999 and 2000, where
available.
- - Source of earnings forecasts for comparable companies are consensus Wall
Street estimates.
CONFIDENTIAL
30
<PAGE> 63
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY ANALYSIS OF SELECTED COMPARABLE COMPANIES(1)
ENTERPRISE VALUE/LTM EBITDA
================================================================================
<TABLE>
<S> <C>
SAGE
At Transaction 5.4x
At Market
Class A 3.3x
Hypothetical Blend 2.6x
Class B 2.2x
COMPARABLE COMPANIES
NBTY 8.6x
RXSD 6.8x
WNI 6.7x
TWLB 6.0x
NTOL 5.6x
HMEAN(2) 5.4x
NUS 5.3x
NUTR 5.2x
USNA 4.3x
NATR 3.6x
</TABLE>
ENTERPRISE VALUE/CALENDAR YEAR 1999E EBITDA
================================================================================
<TABLE>
<S> <C>
SAGE
At Transaction 5.0x
At Market
Class A 3.1x
Hypothetical Blend 2.4x
Class B 2.0x
COMPARABLE COMPANIES
TWLB 8.5x
NBTY 8.4x
WNI 6.8x
RXSD 6.7x
HMEAN(2) 6.2X
NUS 5.9x
NTOL 5.3x
USNA 4.1x
NATR N/A
NUTR N/A
</TABLE>
- ----------
(1) Market prices as of September 9, 1999.
(2) Harmonic mean; excludes Sage.
CONFIDENTIAL
31
<PAGE> 64
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY ANALYSIS OF SELECTED COMPARABLE COMPANIES (CONT.)(1)
ENTERPRISE VALUE/CALENDAR YEAR 2000E EBITDA
<TABLE>
<S> <C>
SAGE
At Transaction 4.9x
At Market
Class A 3.0x
Hypothetical Blend 2.3x
Class B 2.0x
COMPARABLE COMPANIES
TWLB 7.8x
WNI 6.4x
RXSD 5.8x
HMEAN(2) 5.2x
NUS 5.0x
USNA 3.4x
NTOL N/A
NATR N/A
NBTY N/A
NUTR N/A
</TABLE>
- ----------
(1) Market prices as of September 9, 1999.
(2) Harmonic mean; excludes Sage.
CONFIDENTIAL
32
<PAGE> 65
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY ANALYSIS OF SELECTED COMPARABLE COMPANIES (CONT.)(1)
PRICE/LTM EARNINGS
================================================================================
<TABLE>
<S> <C>
SAGE
At Transaction 12.1x
At Market
Class A 8.6x
Hypothetical Blend 7.3x
Class B 6.7x
COMPARABLE COMPANIES
NBTY 25.6x
WNI 15.7x
RXSD 13.0x
NTOL 11.6x
TWLB 11.5x
HMEAN(2) 11.3x
NUS 9.6x
NUTR 9.5x
USNA 9.3x
NATR 7.9x
</TABLE>
PRICE/CALENDAR YEAR 1999E EARNINGS
================================================================================
<TABLE>
<S> <C>
SAGE
At Transaction 10.6x
At Market
Class A 7.5x
Hypothetical Blend 6.4x
Class B 5.8x
COMPARABLE COMPANIES
NBTY 23.0x
TWLB 16.5x
WNI 15.0x
RXSD 13.7x
HMEAN(2) 12.4x
NTOL 11.4x
NUS 10.1x
NATR 9.4x
USNA 9.2x
NUTR N/A
</TABLE>
- ----------
(1) Market prices as of September 9, 1999.
(2) Harmonic mean; excludes Sage.
CONFIDENTIAL
33
<PAGE> 66
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY ANALYSIS OF SELECTED COMPARABLE COMPANIES (CONT.)(1)
PRICE/CALENDAR YEAR 2000E EARNINGS
================================================================================
<TABLE>
<S> <C>
SAGE
At Transaction 10.5x
At Market
Class A 7.4x
Hypothetical Blend 6.3x
Class B 5.7x
COMPARABLE COMPANIES
TWLB 13.0x
HMEAN(2) 9.0x
NUS 8.6x
NATR 8.3x
USNA 7.6x
NTOL N/A
NBTY N/A
NUTR N/A
RXSD N/A
WNI N/A
</TABLE>
- ----------
(1) Market prices as of September 9, 1999.
(2) Harmonic Mean; excludes Sage.
CONFIDENTIAL
34
<PAGE> 67
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
SUMMARY ANALYSIS OF SELECTED COMPARABLE COMPANIES (CONT.)
================================================================================
<TABLE>
<CAPTION>
SAGE
----------------------
AT NATURE'S NUTRA- REXALL WEIDER
TRANSACTION MARKET(4) NATROL SUNSHINE NBTY NU SKIN CEUTICAL SUNDOWN TWINLAB USANA NUTRITION
----------- --------- ------ -------- ---- ------- -------- ------- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Enterprise Value(1) $463 $220 $ 79 $141 $793 $1,019 $ 91 $793 $285 $ 83 $215
Equity Value(1) 561 317 100 170 616 1,043 52 785 238 85 101
LTM Revenues(2) 900 900 75 287 610 922 107 590 321 128 341
LTM Net Income(2) 42 42 9 22 25 109 6 67 21 10 7
Estimated Value of
Public Float(3) NA 130 49 127 431 316 24 374 142 34 37
Insider Ownership(3) 59%(5) 59%(5) 51% 25% 30% 70% 54% 52% 40% 60% 64%
</TABLE>
- - Insiders own a significant share of the common equity of many comparable
companies.
- ----------
(1) Market prices as of September 9, 1999. Sage at transaction consideration
of $17.00 per share.
(2) Per companies' public documents and press releases.
(3) Based on companies' proxy statement.
(4) Using a hypothetical blend of Class A and Class B stock prices.
(5) 59% based on total Class A and Class B primary shares and 67% based on
total Class A and Class B gross diluted shares.
CONFIDENTIAL
35
<PAGE> 68
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
STOCK MARKET VALUATION OF COMPARABLE VNS COMPANIES
VALUATION MULTIPLES SUMMARY(1) ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
SAGE AT NATURE'S NUTRA-
TRANSACTION NATROL SUNSHINE NBTY NU SKIN CEUTICAL(2)
----------- ------ -------- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stock price @ 9/9/99 $17.00 $ 7.50 $ 9.56 $ 8.75 $11.88 $ 4.38
52 week high 00 15.63 17.75 12.75 25.63 7.75
52 week low 00 5.69 8.75 4.38 10.31 3.56
ENTERPRISE VALUE MULTIPLES
Enterprise value $ 463 $ 79 $ 141 $ 793 $1,019 $ 91
LTM revenue 0.52x 1.06x 0.49x 1.30x 1.11x 0.85x
CY 1999 revenue 0.53 0.96 NA 1.26 1.01 NA
CY 2000 revenue 0.50 NA NA NA 0.88 NA
LTM EBITDA 5.4 5.6x 3.6x 8.6x 5.3x 5.2x
CY 1999 EBITDA 5.0 5.3 NA 8.4 5.9 NA
CY 2000 EBITDA 4.9 NA NA NA 5.0 NA
LTM EBIT 6.7 6.1x 4.1x 12.4x 5.7x 7.6x
CY 1999 EBIT 5.8 5.7 NA 12.0 6.5 NA
CY 2000 EBIT 5.8 NA NA NA 5.5 NA
PRICE/EARNINGS MULTIPLES
Equity value $ 561 $ 100 $ 170 $ 616 $1,043 $ 52
LTM EPS 12.1x 11.6x 7.9x 25.6x 9.6x 9.5x
CY 1999 EPS 10.6 11.4 9.4 23.0 10.1 NA
CY 2000 EPS 10.5 NA 8.3 NA 8.6 NA
</TABLE>
<TABLE>
<CAPTION>
REXALL WEIDER HARMONIC
SUNDOWN TWINLAB USANA NUTRITION MEAN(3) MEDIAN(3)
------- ------- ------ --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stock price @ 9/9/99 $12.31 $ 7.44 $ 6.50 $ 4.06
52 week high 24.69 37.38 18.00 10.75
52 week low 10.94 6.50 5.88 3.31
ENTERPRISE VALUE MULTIPLES
Enterprise value $ 793 $ 285 $ 83 $ 215 $ 389 $ 215
LTM revenue 1.34x 0.89x 0.64x 0.63x 0.83x 0.89x
CY 1999 revenue 1.25 0.89 0.63 0.65 0.89 0.96
CY 2000 revenue 1.09 0.81 0.52 0.62 0.73 0.81
LTM EBITDA 6.8x 6.0x 4.3x 6.7x 5.4x 5.6x
CY 1999 EBITDA 6.7 8.5 4.1 6.8 6.2 6.7
CY 2000 EBITDA 5.8 7.8 3.4 6.4 5.2 5.8
LTM EBIT 7.7x 6.8x 5.4x 10.0x 6.7x 6.8x
CY 1999 EBIT 7.6 10.6 5.1 10.1 7.5 7.6
CY 2000 EBIT 6.6 9.5 4.2 9.6 6.4 6.6
PRICE/EARNINGS MULTIPLES
Equity value $ 785 $ 238 $ 85 $ 101 $ 354 $ 170
LTM EPS 13.0x 11.5x 9.3x 15.7x 11.3x 11.5x
CY 1999 EPS 13.7 16.5 9.2 15.0 12.4 12.5
CY 2000 EPS NA 13.0 7.6 NA 9.0 8.5
</TABLE>
- ----------
(1) Based on public filings and press releases by companies, Wall Street
Research and First Call earnings estimates. Stock prices as of
September 9, 1999.
(2) Results are based on fiscal year end (September 30) data.
(3) Excludes Sage.
CONFIDENTIAL
36
<PAGE> 69
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
FINANCIAL PERFORMANCE OF COMPARABLE VNS COMPANIES
GROWTH RATE AND MARGIN COMPARISON(1)
================================================================================
<TABLE>
<CAPTION>
NATURE'S NUTRA-
SAGE NATROL SUNSHINE NBTY NUSKIN CEUTICAL(2)
---- ------ -------- ---- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
GROWTH RATES
Revenue growth
CAGR 1995-1998 21.0% 42.5% 12.9% 31.9% NA 18.5%
CAGR 1998-1999E 1.1 20.5 NA 8.2 10.0 NA
CAGR 1998-2000E 3.0 NA NA NA 12.5 NA
EBITDA growth
CAGR 1995-1998 33.7% 51.0% 25.5% 52.3% NA 17.9%
CAGR 1998-1999E (0.3) 16.0 NA (7.4) (16.4)% NA
CAGR 1998-2000E 0.2 NA NA NA (0.8) NA
EPS growth
CAGR 1995-1998 31.9% 22.9% 25.7% 33.0% NA NA
CAGR 1998-1999E 0.3 4.4 NA (31.3) (14.9)% NA
CAGR 1998-2000E 0.7 NA NA NA 0.2 NA
MARGINS
EBITDA
Average (1996-1998) 12.0% 19.3% 12.6% 17.3% 20.6% 18.0%
CY 1998 10.9 18.7 13.8 17.4 22.7 18.5
CY 1999 10.7 18.0 NA 14.9 17.2 NA
CY 2000 10.3 NA NA NA 17.6 NA
EBIT
Average (1996-1998) 10.3% 18.1% 11.1% 14.0% 19.3% 14.0%
CY 1998 9.0 17.5 12.2 13.3 21.0 14.0
CY 1999 9.2 16.8 NA 10.5 15.5 NA
CY 2000 8.8 NA NA NA 15.9 NA
Net Income
Average (1996-1998) 6.6% 11.0% 7.3% 7.8% 12.2% 4.6%
CY 1998 5.6 11.0 7.9 6.3 13.1 6.3
CY 1999 5.7 11.1 NA 4.1 10.4 NA
CY 2000 5.5 NA NA NA 10.7 NA
</TABLE>
<TABLE>
<CAPTION>
REXALL WEIDER
SUNDOWN TWINLAB USANA NUTRITION MEAN(3) MEDIAN(3)
------- ------- ----- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
GROWTH RATES
CAGR 1995-1998 44.3% 30.9% 70.5% 27.4% 34.5% 31.7%
CAGR 1998-1999E 14.5 (4.2) 8.4 9.8 9.6 9.8
CAGR 1998-2000E 14.7 2.6 14.7 6.9 10.3 12.5
EBITDA growth
CAGR 1995-1998 59.1% 27.8% 68.2% 10.1% 39.0% 39.4%
CAGR 1998-1999E 4.1 (51.0) 8.8 (6.3) (7.5) (6.3)
CAGR 1998-2000E 9.8 (26.8) 14.8 (0.7) (0.7) (0.7)
EPS growth
CAGR 1995-1998 76.7% 16.9% 50.8% NA 37.7% 29.4%
CAGR 1998-1999E 1.2 (63.1) 4.1 (36.2)% (19.4) (14.9)
CAGR 1998-2000E 9.7 (35.5) 12.3 (15.8) (5.8) 0.2
MARGINS
EBITDA
Average (1996-1998) 20.2% 22.9% 15.3% 14.5% 17.9% 18.0%
CY 1998 20.5 20.5 15.3 11.2 17.6 18.5
CY 1999 18.7 10.5 15.4 9.6 14.9 15.4
CY 2000 18.8 10.4 15.3 9.7 14.4 15.3
EBIT
Average (1996-1998) 18.4% 21.7% 13.0% 11.6% 15.7% 14.0%
CY 1998 18.7 19.0 12.5 8.0 15.1 14.0
CY 1999 16.4 8.4 12.4 6.4 12.3 12.4
CY 2000 16.5 8.6 12.4 6.5 12.0 12.4
Net Income
Average (1996-1998) 12.2% 10.7% 8.1% 5.4% 8.8% 8.1%
CY 1998 12.0 10.3 7.8 3.2 8.7 7.9
CY 1999 10.2 4.0 7.6 1.9 7.0 7.6
CY 2000 10.4 4.1 7.6 2.0 7.0 7.6
</TABLE>
(1) Based on public filings and press releases by companies, Wall Street
research and First Call earnings estimates.
(2) Results are based on fiscal year end (September 30) data.
(3) Excludes Sage.
CONFIDENTIAL
37
<PAGE> 70
BEAR
STEARNS
SECTION 4-D
PUBLIC SHAREHOLDER VALUATION
<PAGE> 71
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
METHODOLOGY
- - A stream of annual dividends is projected for 3-5 years based on the
current indicated annual dividend per share
o This dividend stream is discounted to its present value using the
cost of equity capital for the Company
- - The value of the stock at the end of the projection period is estimated
based on a range of P/E multiples for the stock applied to forecasted EPS
- - The sum of the present value of the dividend stream and the present value
of the stock at the end of the projection period provides an estimated
current value for the stock
CONFIDENTIAL
38
<PAGE> 72
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PUBLIC SHAREHOLDER VALUATION
================================================================================
<TABLE>
<CAPTION>
FISCAL YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------
2000 2001 2002 2003 2004
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Indicated annual dividend(1) $0.60 $0.60 $0.60 $0.60 $0.60
Present value of dividends 0.52 0.45 0.39 0.34 0.30
</TABLE>
SENSITIVITY ANALYSIS--P/E MULTIPLE AND COST OF EQUITY CAPITAL (3-YEAR EXIT)
================================================================================
<TABLE>
<CAPTION>
P/E MULTIPLE
-------------------------------------------------------------------------
COST OF EQUITY CAPITAL 8.0x 10.0x 12.0x 14.0x 16.0x
- ---------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
12.0% $12.20 $14.88 $17.57 $20.26 $22.95
13.0% 11.89 14.51 17.12 19.74 22.36
14.0% 11.59 14.14 16.69 19.24 21.79
15.0% 11.30 13.79 16.27 18.76 21.24
16.0% 11.03 13.45 15.87 18.29 20.71
17.0% 10.76 13.12 15.48 17.84 20.19
18.0% 10.50 12.80 15.10 17.40 19.70
19.0% 10.25 12.49 14.73 16.97 19.22
20.0% 10.01 12.19 14.38 16.57 18.75
</TABLE>
SENSITIVITY ANALYSIS--P/E MULTIPLE AND COST OF EQUITY CAPITAL (5-YEAR EXIT)
================================================================================
<TABLE>
<CAPTION>
P/E MULTIPLE
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COST OF EQUITY CAPITAL 8.0x 10.0x 12.0x 14.0x 16.0x
- ---------------------- ------ ------ ------ ------ ------
12.0% $10.98 $13.19 $15.39 $17.60 $19.80
13.0% 10.55 12.65 14.76 16.87 18.98
14.0% 10.13 12.15 14.17 16.19 18.20
15.0% 9.74 11.67 13.60 15.53 17.46
16.0% 9.36 11.21 13.06 14.91 16.76
17.0% 9.01 10.78 12.55 14.32 16.10
18.0% 8.67 10.37 12.07 13.76 15.46
19.0% 8.35 9.98 11.60 13.23 14.86
20.0% 8.04 9.60 11.16 12.72 14.29
</TABLE>
- ----------
(1) Based on 1998 annual and 1999 quarterly dividends to date and Management
plans.
CONFIDENTIAL
39
<PAGE> 73
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
ROLLING LTM P/E MULTIPLES
1993 - PRESENT(1)(2)
================================================================================
TRAILING PE MULTIPLES OVER TIME
DATE
- --------------------------------------------------
<TABLE>
<CAPTION>
P/E P/E
SAGE A SAGE B
<S> <C> <C>
3/31/93 10.6x #N/A
6/30/93 12.5x #N/A
9/30/93 10.1x #N/A
12/31/93 12.0x #N/A
3/31/94 15.0x #N/A
6/30/94 13.2x #N/A
9/30/94 10.2x #N/A
12/31/94 11.2x #N/A
3/31/95 10.2x #N/A
6/30/95 11.5x #N/A
9/30/95 15.1x #N/A
12/31/95 13.0x #N/A
3/31/96 14.6x #N/A
6/30/96 18.1x #N/A
9/30/96 13.3x #N/A
12/31/96 23.0x #N/A
3/31/97 12.1x #N/A
6/30/97 10.1x #N/A
9/30/97 15.3x #N/A
12/31/97 12.1x 12.4x
3/31/98 13.7x 12.9x
6/30/98 13.0x 10.9x
9/30/98 5.5x 4.7x
12/31/98 8.9x 7.1x
3/31/99 8.2x 6.3x
6/30/99 7.8x 6.2x
</TABLE>
- ----------
(1) Source: FactSet Research Systems.
(2) In December 1997 Sage split its common equity into two classes of
stock-Class A voting and Class B non-voting.
CONFIDENTIAL
40
<PAGE> 74
BEAR
STEARNS
SECTION 4-E
PRECEDENT M&A TRANSACTIONS
<PAGE> 75
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PRECEDENT M&A TRANSACTIONS
- - We analyzed the terms and valuation multiples of 11 M&A transactions in
the VNS sector and 2 in the Multi-level Marketing sector
o Limited public disclosure on certain transactions
- - Most of the transactions occurred during a much more robust period for
valuations of VNS companies
o Only Royal Numico/GNC transaction has occurred since major multiple
contraction in mid/late 1998
o Refer to Appendix C for more information
- - Further, there were no sizable transactions for companies which were both
(i) in the VNS sector and (ii) operated under the MLM business model
- - Accordingly, we have put little weight on this analysis in reaching our
valuation conclusion for this transaction
CONFIDENTIAL
41
<PAGE> 76
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
THE VNS SECTOR HAS SEEN THREE DISTINCT VALUATION PERIODS OVER TIME
1. Period prior to October 1994: DSHEA Act of October 1994 classified dietary
supplements as foods instead of drugs, thus eliminating extensive clinical
trials
2. October 1994 to July 1998: Robust growth in revenues, earnings and
valuation
3. August 1998 to Present: Downward revisions in growth expectations and
valuation
WEEKLY STOCK PRICES: 1/22/93 TO 9/9/99
================================================================================
<TABLE>
<CAPTION>
Date GNCI RXSD Annotation Annotation
<S> <C> <C> <C> <C>
1/22/93 $5.50 #N/A
1/29/93 $5.31 #N/A
2/5/93 $5.69 #N/A
2/12/93 $5.81 #N/A
2/19/93 $4.88 #N/A
2/26/93 $5.38 #N/A
3/5/93 $5.81 #N/A
3/12/93 $6.94 #N/A
3/19/93 $6.38 #N/A
3/26/93 $6.38 #N/A
4/2/93 $6.50 #N/A
4/9/93 $6.50 #N/A
4/16/93 $7.31 #N/A
4/23/93 $6.19 #N/A
4/30/93 $6.25 #N/A
5/7/93 $6.19 #N/A
5/14/93 $7.19 #N/A
5/21/93 $8.50 #N/A
5/28/93 $7.94 #N/A
6/4/93 $9.00 #N/A
6/11/93 $8.94 #N/A
6/18/93 $8.06 $2.71
6/25/93 $8.13 $2.50
7/2/93 $8.56 $2.71
7/9/93 $8.44 $2.71
7/16/93 $9.25 $2.71
7/23/93 $9.50 $2.75
7/30/93 $9.50 $2.79
8/6/93 $9.50 $3.04
8/13/93 $10.69 $3.42
8/20/93 $10.66 $3.58
8/27/93 $11.81 $3.58
9/3/93 $11.50 $3.75
9/10/93 $11.25 $3.75
9/17/93 $12.09 $3.92
9/24/93 $12.38 $4.13
10/1/93 $12.13 $4.67
10/8/93 $13.25 $5.17
10/15/93 $13.13 $6.00
10/22/93 $12.88 $5.50
10/29/93 $13.25 $4.96
11/5/93 $12.63 $4.67
11/12/93 $12.88 $4.75
11/19/93 $12.00 $4.29
11/26/93 $13.00 $4.17
12/3/93 $13.63 $3.92
12/10/93 $14.25 $3.75
</TABLE>
<PAGE> 77
<TABLE>
<S> <C> <C> <C> <C>
12/17/93 $14.50 $4.42
12/24/93 $14.69 $4.75
12/31/93 $14.25 $5.00
1/7/94 $14.13 $4.83
1/14/94 $13.63 $5.67
1/21/94 $13.81 $5.50
1/28/94 $13.63 $5.67
2/4/94 $14.13 $5.92
2/11/94 $14.63 $6.33
2/18/94 $16.06 $6.67
2/25/94 $14.38 $6.96
3/4/94 $14.88 $6.75
3/11/94 $14.00 $6.75
3/18/94 $12.94 $6.58
3/25/94 $13.38 $6.08
4/1/94 $12.38 $5.58
4/8/94 $12.38 $4.08
4/15/94 $11.31 $3.83
4/22/94 $11.75 $3.58
4/29/94 $12.13 $3.17
5/6/94 $12.13 $3.75
5/13/94 $10.63 $3.58
5/20/94 $11.63 $3.25
5/27/94 $10.06 $3.42
6/3/94 $9.75 $3.42
6/10/94 $9.00 $3.25
6/17/94 $9.13 $3.00
6/24/94 $8.00 $2.92
7/1/94 $8.50 $2.75
7/8/94 $7.94 $2.88
7/15/94 $9.38 $2.88
7/22/94 $8.50 $3.00
7/29/94 $9.75 $3.08
8/5/94 $9.50 $3.00
8/12/94 $9.69 $2.92
8/19/94 $11.50 $3.04
8/26/94 $11.38 $3.17
9/2/94 $10.94 $3.08
9/9/94 $10.75 $3.21
9/16/94 $11.00 $3.08
9/23/94 $10.63 $3.00
9/30/94 $11.13 $3.19
10/7/94 $11.38 $3.13
10/14/94 $11.38 $3.88
10/21/94 $12.00 $3.71 $12.00
10/28/94 $12.50 $3.42
11/4/94 $13.56 $3.69
11/11/94 $13.63 $3.63
11/18/94 $13.63 $3.29
11/25/94 $13.63 $3.38
12/2/94 $14.94 $3.50
12/9/94 $13.63 $3.21
</TABLE>
<PAGE> 78
<TABLE>
<S> <C> <C> <C> <C>
12/16/94 $13.50 $3.33
12/23/94 $14.25 $3.13
12/30/94 $14.50 $3.25
1/6/95 $13.38 $3.75
1/13/95 $13.13 $3.83
1/20/95 $12.63 $4.00
1/27/95 $11.88 $4.25
2/3/95 $12.56 $4.13
2/10/95 $12.75 $3.96
2/17/95 $12.63 $4.04
2/24/95 $12.00 $3.67
3/3/95 $11.75 $3.58
3/10/95 $11.94 $3.50
3/17/95 $13.25 $3.29
3/24/95 $14.13 $3.25
3/31/95 $13.88 $3.42
4/7/95 $14.13 $3.25
4/14/95 $13.69 $3.25
4/21/95 $12.25 $3.42
4/28/95 $12.44 $3.13
5/5/95 $13.75 $3.29
5/12/95 $14.13 $3.25
5/19/95 $14.00 $3.04
5/26/95 $14.25 $2.83
6/2/95 $14.88 $2.88
6/9/95 $16.63 $2.92
6/16/95 $17.88 $2.88
6/23/95 $17.69 $2.85
6/30/95 $17.56 $3.29
7/7/95 $19.06 $3.42
7/14/95 $19.63 $3.33
7/21/95 $17.50 $3.38
7/28/95 $17.69 $4.54
8/4/95 $17.81 $4.17
8/11/95 $19.75 $4.29
8/18/95 $20.25 $4.38
8/25/95 $20.81 $4.50
9/1/95 $20.88 $4.92
9/8/95 $21.63 $5.27
9/15/95 $22.13 $5.33
9/22/95 $22.13 $5.54
9/29/95 $22.75 $5.63
10/6/95 $21.13 $5.21
10/13/95 $20.75 $5.25
10/20/95 $22.75 $5.42
10/27/95 $21.75 $4.92
11/3/95 $26.13 $5.08
11/10/95 $23.00 $5.38
11/17/95 $26.00 $5.71
11/24/95 $24.25 $5.96
12/1/95 $22.13 $6.71
12/8/95 $23.75 $6.17
</TABLE>
<PAGE> 79
<TABLE>
<S> <C> <C> <C> <C>
12/15/95 $22.50 $6.33
12/22/95 $20.38 $6.98
12/29/95 $23.00 $7.33
1/5/96 $21.13 $6.67
1/12/96 $22.50 $6.58
1/19/96 $20.25 $6.58
1/26/96 $21.25 $6.63
2/2/96 $22.00 $7.17
2/9/96 $23.25 $8.17
2/16/96 $22.75 $8.88
2/23/96 $22.00 $9.17
3/1/96 $22.38 $8.75
3/8/96 $24.00 $8.71
3/15/96 $25.88 $9.75
3/22/96 $25.00 $9.79
3/29/96 $25.00 $10.04
4/5/96 $21.25 $10.17
4/12/96 $19.50 $13.81
4/19/96 $19.63 $15.00
4/26/96 $20.25 $17.13
5/3/96 $18.63 $16.00
5/10/96 $19.75 $15.06
5/17/96 $18.75 $14.94
5/24/96 $18.00 $13.75
5/31/96 $15.50 $13.25
6/7/96 $16.00 $13.00
6/14/96 $16.63 $12.25
6/21/96 $16.25 $11.88
6/28/96 $17.50 $13.50
7/5/96 $16.00 $13.63
7/12/96 $15.75 $13.50
7/19/96 $13.88 $14.38
7/26/96 $14.38 $13.75
8/2/96 $14.75 $16.25
8/9/96 $14.88 $17.25
8/16/96 $15.50 $16.00
8/23/96 $14.38 $15.88
8/30/96 $14.75 $17.31
9/6/96 $16.25 $16.81
9/13/96 $16.75 $19.19
9/20/96 $17.88 $19.06
9/27/96 $18.00 $18.63
10/4/96 $18.63 $16.63
10/11/96 $19.13 $13.50
10/18/96 $19.75 $12.50
10/25/96 $18.88 $12.38
11/1/96 $17.88 $13.50
11/8/96 $17.88 $14.63
11/15/96 $17.75 $13.91
11/22/96 $17.81 $13.38
11/29/96 $17.25 $12.69
12/6/96 $17.13 $12.94
</TABLE>
<PAGE> 80
<TABLE>
<S> <C> <C> <C> <C>
12/13/96 $16.63 $12.88
12/20/96 $17.13 $13.13
12/27/96 $16.63 $13.13
1/3/97 $17.13 $13.63
1/10/97 $18.13 $14.81
1/17/97 $18.00 $15.31
1/24/97 $18.75 $15.69
1/31/97 $18.13 $16.00
2/7/97 $18.13 $14.47
2/14/97 $18.06 $14.69
2/21/97 $18.00 $14.25
2/28/97 $18.00 $13.06
3/7/97 $21.69 $12.44
3/14/97 $21.00 $13.63
3/21/97 $20.00 $12.75
3/28/97 $20.63 $12.56
4/4/97 $21.63 $12.06
4/11/97 $21.13 $9.94
4/18/97 $20.38 $10.19
4/25/97 $20.13 $10.25
5/2/97 $22.38 $10.16
5/9/97 $21.88 $12.00
5/16/97 $22.88 $11.88
5/23/97 $22.88 $12.75
5/30/97 $23.25 $13.38
6/6/97 $25.13 $15.50
6/13/97 $25.38 $16.81
6/20/97 $28.00 $17.66
6/27/97 $27.25 $18.69
7/4/97 $26.38 $17.88
7/11/97 $26.13 $18.00
7/18/97 $26.00 $18.31
7/25/97 $26.81 $18.00
8/1/97 $28.44 $17.94
8/8/97 $26.81 $17.31
8/15/97 $26.38 $16.88
8/22/97 $26.75 $17.19
8/29/97 $27.75 $17.38
9/5/97 $28.50 $19.00
9/12/97 $28.00 $17.38
9/19/97 $28.06 $19.81
9/26/97 $29.75 $20.56
10/3/97 $30.13 $21.50
10/10/97 $29.19 $22.03
10/17/97 $28.75 $21.00
10/24/97 $30.94 $22.38
10/31/97 $31.50 $21.88
11/7/97 $30.94 $22.88
11/14/97 $33.50 $22.56
11/21/97 $34.00 $22.00
11/28/97 $34.13 $23.75
12/5/97 $34.63 $26.31
</TABLE>
<PAGE> 81
<TABLE>
<S> <C> <C> <C> <C>
12/12/97 $33.75 $25.13
12/19/97 $30.94 $27.06
12/26/97 $32.50 $29.38
1/2/98 $33.63 $29.19
1/9/98 $31.38 $27.13
1/16/98 $34.88 $31.25
1/23/98 $34.50 $33.53
1/30/98 $36.06 $34.56
2/6/98 $37.63 $36.75
2/13/98 $38.00 $37.69
2/20/98 $38.56 $38.38
2/27/98 $39.75 $37.00
3/6/98 $39.06 $37.06
3/13/98 $40.75 $36.75
3/20/98 $39.75 $36.81
3/27/98 $38.00 $30.38
4/3/98 $38.06 $32.31
4/10/98 $36.06 $33.00
4/17/98 $34.50 $35.44
4/24/98 $34.63 $32.25
5/1/98 $35.31 $31.91
5/8/98 $34.75 $31.38
5/15/98 $34.31 $31.56
5/22/98 $33.94 $32.63
5/29/98 $31.56 $33.50
6/5/98 $31.63 $33.38
6/12/98 $31.94 $34.56
6/19/98 $30.38 $35.00
6/26/98 $29.88 $35.88
7/3/98 $31.56 $36.50
7/10/98 $32.06 $37.56
7/17/98 $32.25 $36.50
7/24/98 $29.44 $31.88
7/31/98 $28.63 $30.19
8/7/98 $22.00 $27.50 $22.00
8/14/98 $19.88 $24.88
8/21/98 $19.81 $26.00
8/28/98 $14.88 $21.00
9/4/98 $12.94 $17.50
9/11/98 $13.50 $19.31
9/18/98 $11.75 $23.50
9/25/98 $11.56 $18.00
10/2/98 $10.63 $17.38
10/9/98 $9.50 $17.13
10/16/98 $13.13 $17.63
10/23/98 $15.00 $18.69
10/30/98 $14.56 $17.94
11/6/98 $15.56 $12.94
11/13/98 $15.81 $15.50
11/20/98 $16.69 $14.94
11/27/98 $17.75 $13.75
12/4/98 $16.81 $11.63
</TABLE>
<PAGE> 82
<TABLE>
<S> <C> <C> <C> <C>
12/11/98 $15.25 $13.31
12/18/98 $14.63 $13.94
12/25/98 $14.31 $13.38
1/1/99 $16.25 $14.00
1/8/99 $18.50 $14.13
1/15/99 $17.31 $15.56
1/22/99 $16.72 $14.56
1/29/99 $16.13 $13.75
2/5/99 $15.69 $13.88
2/12/99 $15.06 $13.69
2/19/99 $14.25 $13.44
2/26/99 $13.38 $14.31
3/5/99 $12.19 $17.00
3/12/99 $12.13 $16.44
3/19/99 $13.63 $21.06
3/26/99 $13.25 $19.38
4/2/99 $14.31 $18.56
4/9/99 $14.28 $17.69
4/16/99 $13.88 $17.00
4/23/99 $13.56 $16.50
4/30/99 $16.56 $17.31
5/7/99 $17.75 $19.06
5/14/99 $17.50 $18.56
5/21/99 $17.63 $19.25
5/28/99 $16.56 $17.06
6/4/99 $18.00 $16.31
6/11/99 $18.06 $13.63
6/18/99 $19.50 $13.09
6/25/99 $19.56 $12.75
7/2/99 $22.88 $12.69 $22.88
7/9/99 $24.63 $13.25
7/16/99 $24.63 $13.00
7/23/99 $24.81 $12.81
7/30/99 $24.81 $12.44
8/6/99 $24.75 $12.00
8/13/99 $24.81 $12.94
8/20/99 $24.81 $13.25
8/27/99 $24.81 $12.88
9/3/99 $24.81 $12.44
9/9/99 $24.81 $12.31
</TABLE>
[A] 10/25/94 - DSHEA Act of 1994 became effective on October 25, 1994. The Act
classified dietary supplements as foods instead of drugs
[B] 08/04/98 - GNC announces downward product price revisions on August 4, 1998
[C] 07/05/99 - Royal Numico announces acquisition of GNC
- ----------
(1) GNC stock started trading on 1/21/93. GNC is the largest healthfood stores
channel specialty retailer of nutritional supplements.
(2) Rexall Sundown stock started trading on 6/18/93. Rexall is the largest
mass channel (F/D/M) player.
CONFIDENTIAL
42
<PAGE> 83
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PRECEDENT M&A TRANSACTIONS - VITAMIN AND NUTRITIONAL SUPPLEMENTS INDUSTRY
SINCE 1996(1) ($ IN MILLIONS, EXCEPT MULTIPLES)
================================================================================
<TABLE>
<CAPTION>
ENTERPRISE VALUE/
-----------------------------------------
LATEST TWELVE MONTHS PROJECTED
EQUITY AGGREGATE ----------------------- --------------
DATE DATE ACQUIRER/TARGET PURCHASE PURCHASE NET NET
ANN. EFFECTIVE (TARGET BUSINESS DESCRIPTION) PRICE PRICE SALES EBITDA EBIT SALES EBIT
- -------- --------- -------------------------------------------- -------- -------- ------ ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PENDING PENDING SAGE MANAGEMENT / SAGE $ 560.6 $ 463.4 0.52x 5.4x 6.7x 0.53x 5.8x
7/6/99 8/11/99 Royal Numico N.V./General Nutrition 1,769.5 2,527.3 1.77 10.1 14.1 1.68 12.8
Companies, Inc. (retailer of vitamins
and mineral supplements)
6/16/98 6/16/98 American Home Products/Solgar(3) 425.0 425.0 4.25 -- -- -- --
4/2/98 4/20/98 NBTY Inc/Nutrition Headquarters and 176.7 183.3 2.29 12.5 13.9 2.36 --
Affiliates (direct mail marketer of
nutritional supps.)
3/17/98 4/30/98 Twinlab Corporation/Bronson Div. 55.0 55.0 1.71 5.2 5.8 -- --
(Jones Medical)
12/24/97 1/29/98 Rexall Sundown, Inc./Richardson Labs, Inc. 85.1 88.5 3.24 -- 23.7 1.77 8.8
(manufacturer of natural diet products)
7/28/97 8/8/97 NBTY, Inc./Holland & Barrett Holdings 169.0 176.7 1.06 10.3 14.9 1.04 7.7(4)
Limited (UK retailer of vitamins and
health foods)
7/1/97 Withdrawn Rexall Sundown, Inc./Twinlab Corporation 781.2 895.0 5.05 20.6 21.6 4.45 18.7
(manufacturer of vitamins, nutritional
supps.)
6/30/97 6/30/97 North Castle Part. (Recap.)/Leiner Group 205.0 324.8 0.78 7.4 10.4 -- --
(manufacturer of vitamins, nutritional
supps.)
6/23/97 10/31/97 United Natural Foods, Inc./Stow Mills, Inc. 90.9 123.8 0.59 23.6 32.6 -- --
(distributor of natural products and
health foods)
6/9/97 9/12/97 Whole Foods Market, Inc./Amrion, Inc. 153.6 147.1 2.48 16.5 20.1 1.66 11.8
(direct mail marketer of nutritional
supps.)
3/12/96 5/7/96 Green Equity Investors & Twin Laboratories/ 217.0 216.0 1.45 6.4 6.9 -- --
Twin Laboratories (manufacturer of
vitamins, nutritional supps.)
HIGH(2) $1,769.5 $2,527.3 5.05x 23.6x 32.6x 4.45x 18.7x
LOW(2) 55.0 55.0 0.59 5.2 5.8 1.04 7.7
HARMONIC MEAN(2) 375.3 469.3 1.50 9.9 12.6 1.78 10.9
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE/(5)
-----------------------------
DATE DATE ACQUIRER/TARGET LTM NET PROJ. NET BOOK
ANN. EFFECTIVE (TARGET BUSINESS DESCRIPTION) INCOME INCOME VALUE
- ------- --------- ------------------------------------------ ------ -------- -------
<S> <C> <C> <C> <C> <C>
PENDING PENDING SAGE MANAGEMENT / SAGE 12.1x 10.6x 3.4x
7/6/99 8/11/99 Royal Numico N.V./General Nutrition 21.0 18.8 14.4
Companies, Inc. (retailer of vitamins
and mineral supplements)
6/16/98 6/16/98 American Home Products/Solgar(3) -- -- --
4/2/98 4/20/98 NBTY Inc/Nutrition Headquarters and 20.7 -- --
Affiliates (direct mail marketer of
nutritional supps.)
3/17/98 4/30/98 Twinlab Corporation/Bronson Div. 9.3 -- --
(Jones Medical)
12/24/97 1/29/98 Rexall Sundown, Inc./Richardson Labs, Inc. 40.3 14.2 --
(manufacturer of natural diet products)
7/28/97 8/8/97 NBTY, Inc./Holland & Barrett Holdings 22.0 10.9(4) 5.5
Limited (UK retailer of vitamins and
health foods)
7/1/97 Withdrawn Rexall Sundown, Inc./Twinlab Corporation 43.9 34.8 NM
(manufacturer of vitamins, nutritional
supps.)
6/30/97 6/30/97 North Castle Part. (Recap.)/Leiner Group 46.5 -- NM
(manufacturer of vitamins, nutritional
supps.)
6/23/97 10/31/97 United Natural Foods, Inc./Stow Mills, Inc. 124.1 -- 19.9
(distributor of natural products and
health foods)
6/9/97 9/12/97 Whole Foods Market, Inc./Amrion, Inc. 29.4 -- 4.6
(direct mail marketer of nutritional
supps.)
3/12/96 5/7/96 Green Equity Investors & Twin Laboratories/ 11.8 -- 3.8
Twin Laboratories (manufacturer of
vitamins, nutritional supps.)
HIGH(2) 124.1X 34.8X 19.9X
LOW(2) 9.3 10.9 3.8
HARMONIC MEAN(2) 22.5 16.4 6.4
</TABLE>
- ----------
(1) Excludes all material extraordinary and non-recurring items.
(2) Excludes Sage Management / Sage.
(3) Per Forbes magazine, September 21, 1998, page 89.
(4) May include prospective synergies.
(5) Where applicable, P/E ratios instead of Equity Value/Net Income multiples.
CONFIDENTIAL
43
<PAGE> 84
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PRECEDENT M&A TRANSACTIONS - MULTI-LEVEL MARKETING COMPANIES
SINCE 1996(1) ($ IN MILLIONS, EXCEPT MULTIPLES)
================================================================================
<TABLE>
<CAPTION>
ENTERPRISE VALUE/
----------------------------------------------
EQUITY AGGREGATE LATEST TWELVE MONTHS PROJECTED
DATE DATE ACQUIRER/TARGET PURCHASE PURCHASE -------------------------- -----------------
ANN. EFFECTIVE (TARGET BUSINESS DESCRIPTION) PRICE PRICE NET SALES EBITDA EBIT NET SALES EBIT
- ------- --------- ---------------------------------------- -------- -------- --------- ------ ---- --------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PENDING PENDING SAGE MANAGEMENT / SAGE $560.6 $463.4 0.52x 5.4x 6.7x 0.53x 5.8x
1/26/98 4/30/98 Clayton, Dubilier & Rice/Jafra Cosmetics 202.5 202.5 0.88 6.7 7.8 -- --
(multi level marketer of cosmetics)
11/12/97 11/12/97 TwinLab/Changes International 13.7 13.7 0.69 -- 8.1 0.34x 4.0x
HIGH(2) $202.5 $202.5 0.88x 6.7x 8.1x 0.34x 4.0x
LOW(2) 13.7 13.7 0.69 6.7 7.8 0.34 4.0
HARMONIC MEAN(2) 0.77 6.7 7.9 0.34 4.0
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE/(3)
-------------------------
DATE DATE ACQUIRER/TARGET LTM NET PROJ. NET BOOK
ANN. EFFECTIVE (TARGET BUSINESS DESCRIPTION) INCOME INCOME VALUE
- ------- --------- ---------------------------------------- ------ --------- -----
<S> <C> <C> <C> <C> <C>
PENDING PENDING SAGE MANAGEMENT / SAGE 12.1x 10.6x 3.4x
1/26/98 4/30/98 Clayton, Dubilier & Rice/Jafra Cosmetics 11.1 -- --
(multi level marketer of cosmetics)
11/12/97 11/12/97 TwinLab/Changes International -- -- --
HIGH(2) 11.1x NA NA
LOW(2) 11.1 NA NA
HARMONIC MEAN(2) 11.1 NA NA
</TABLE>
- ----------
(1) Excludes all material extraordinary and non-recurring items.
(2) Excludes Sage Management / Sage.
(3) Where applicable, P/E ratios instead of Equity Value/Net Income multiples.
CONFIDENTIAL
44
<PAGE> 85
BEAR
STEARNS
APPENDICES
<PAGE> 86
BEAR
STEARNS
APPENDIX A
HISTORICAL AND PROJECTED
FINANCIAL STATEMENTS
<PAGE> 87
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL FINANCIAL RESULTS(1)
INCOME STATEMENT DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
FISCAL YEARS ENDED DECEMBER 31, SIX MONTHS ENDED
------------------------------------------------------ ------------------ LTM ENDED
1994 1995 1996 1997 1998 06/30/98 06/30/99 06/30/99
------ ------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail Sales $884.1 $923.6 $1,200.1 $1,490.7 $1,644.8 $796.6 $854.6 $1,702.8
Distributor Allowance (417.2) (434.6) (568.2) (708.2) (778.2) (376.9) (401.8) (803.1)
------ ------ -------- -------- -------- ------ ------ --------
Net Sales $466.9 $489.0 $ 631.9 $ 782.5 $ 866.6 $419.7 $452.8 $ 899.7
Growth % 4.7% 29.2% 23.8% 10.7% 7.9%
Gross Margin $336.2 $345.4 $ 463.5 $ 577.4 $ 635.8 $311.6 $336.7 $ 660.9
Gross margin % 72.0% 70.6% 73.3% 73.8% 73.4% 74.2% 74.4% 73.5%
EBITDA $ 74.2 $ 38.6(2) $ 79.3 $ 97.0 $ 94.2 $ 54.3 $ 46.0 $ 85.9
EBITDA margin % 15.9% 7.9% 12.6% 12.4% 10.9% 12.9% 10.2% 9.6%
EBIT $ 70.7 $ 30.5(2) $ 68.7 $ 86.0 $ 78.4 $ 48.3 $ 38.7 $ 68.8
EBIT margin % 15.1% 6.2% 10.9% 11.0% 9.0% 11.5% 8.6% 7.7%
Net Income $ 46.0 $ 21.1(2) $ 44.8 $ 54.7 $ 48.5 $ 30.1 $ 23.9 $ 42.3
Net income margin % 9.9% 4.3% 7.1% 7.0% 5.6% 7.2% 5.3% 4.7%
EPS $ 1.50 $ 0.70(2) $ 1.43 $ 1.72 $ 1.60 $ 0.99 $ 0.79 $ 1.40
EPS growth % -- (53.6%) 105.4% 20.3% (7.0%) -- (20.2%) --
------ ------ -------- -------- -------- ------ ------ --------
</TABLE>
- ----------
(1) Source: Sage management report, Sage 10-K dated 12/31/98, and press
release dated 7/21/99.
(2) Excludes non-recurring pre-tax charge of $2.3 million in 1995.
CONFIDENTIAL
45
<PAGE> 88
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL FINANCIAL RESULTS(1) (CONT.)
QUARTERLY INCOME STATEMENT DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
1997 1998
---------------------------------------- ------------------------------------------
Q1(2) Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4
------- ------- ------- ------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues by region:
Asia/Pacific Rim $ 125.5 $ 140.7 $ 182.4 $ 194.8 $ 643.4 $ 151.4 $ 154.8 $ 174.1 $ 210.4
Europe 106.3 113.3 109.6 123.9 453.1 135.8 125.5 108.9 112.9
The Americas 92.1 96.0 101.9 104.1 394.1 111.2 117.8 119.7 122.3
------- ------- ------- ------- -------- ------- ------- ------- -------
Total revenues $ 323.9 $ 350.0 $ 393.9 $ 422.9 $1,490.7 $ 398.4 $ 398.1 $ 402.7 $ 445.6
Revenues by product:
Weight management $ 97.9 $ 103.8 $ 126.4 $ 120.8 $ 448.9 $ 118.4 $ 128.0 $ 132.3 $ 134.1
Food & supplements 167.0 192.1 210.7 236.0 805.8 204.9 207.5 214.0 238.8
Personal care
products 42.4 37.0 36.8 50.4 166.6 55.2 45.9 41.0 56.8
Other 16.6 17.1 20.0 15.7 69.4 19.9 16.7 15.4 15.9
------- ------- ------- ------- -------- ------- ------- ------- -------
Total revenues $ 323.9 $ 350.0 $ 393.9 $ 422.9 $1,490.7 $ 398.4 $ 398.1 $ 402.7 $ 445.6
Distributor
allowances (154.0) (165.1) (186.7) (202.5) (708.2) (188.7) (188.2) (189.7) (211.7)
------- ------- ------- ------- -------- ------- ------- ------- -------
Net sales $ 169.9 $ 184.9 $ 207.2 $ 220.4 $ 782.5 $ 209.7 $ 209.9 $ 213.0 $ 233.9
Revenue growth % -- -- -- -- -- 23.4% 13.5% 2.8% 6.1%
Gross margin $ 124.2 $ 136.8 $ 153.6 $ 162.9 $ 577.4 $ 155.2 $ 156.3 $ 155.3 $ 169.0
Gross margin % 73.1% 74.0% 74.1% 73.9% 73.8% 74.0% 74.4% 72.9% 72.2%
EBITDA $ 20.7 $ 23.8 $ 24.6 $ 27.8 $ 97.0 $ 26.7 $ 27.6 $ 14.8 $ 25.1
EBITDA margin % 12.2% 12.9% 11.9% 12.6% 12.4% 12.7% 13.1% 6.9% 10.7%
EBIT $ 18.5 $ 21.4 $ 21.9 $ 24.2 $ 86.0 $ 23.7 $ 24.5 $ 11.5 $ 18.6
EBIT margin % 10.9% 11.6% 10.6% 11.0% 11.0% 11.3% 11.7% 5.4% 7.9%
Net income $ 11.9 $ 13.7 $ 14.3 $ 14.8 $ 54.7 $ 14.8 $ 15.3 $ 7.1 $ 11.3
Net income margin % 7.0% 7.4% 6.9% 6.7% 7.0% 7.1% 7.3% 3.3% 4.8%
EPS $ 0.38 $ 0.44 $ 0.45 $ 0.45 $ 1.72 $ 0.48 $ 0.50 $ 0.24 $ 0.38
EPS growth % -- -- -- -- -- 26.3% 13.6% (46.7%) (15.6%)
</TABLE>
<TABLE>
<CAPTION>
1999
---------------------------------
TOTAL Q1 Q2 LTM
-------- ------- ------ --------
<S> <C> <C> <C> <C>
Revenues by region:
Asia/Pacific Rim $ 690.7 $ 193.4 $ 167.3 $ 745.2
Europe 483.1 114.3 121.9 458.0
The Americas 471.0 121.1 136.6 499.7
-------- ------- ------ --------
Total revenues $1,644.8 $ 428.8 $ 425.8 $1,702.8
Revenues by product:
Weight management $ 512.8 $ 225.8 185.6 677.8
Food & supplements 865.2 140.2 184.1 777.1
Personal care
products 198.9 51.8 42.8 192.4
-------- ------- ------ --------
Other 67.9 11.0 13.3 55.6
-------- ------- ------ --------
Total revenues $1,644.8 $ 428.8 $ 425.8 $1,702.8
Distributor
allowances (778.2) (202.4) (199.4) (803.1)
-------- ------- ------ --------
Net sales $ 866.6 $ 226.4 $ 226.4 $ 899.7
Revenue growth % 10.8% 8.0% 7.8% 6.2%
Gross margin $ 635.8 $ 167.9 $ 168.7 $ 660.9
Gross margin % 73.4% 74.2% 74.5% 73.5%
EBITDA $ 94.2 $ 23.1 $ 22.9 $ 85.9
EBITDA margin % 10.9% 10.2% 10.1% 9.6%
EBIT $ 78.4 $ 19.0 $ 19.7 $ 68.8
EBIT margin % 9.0% 8.4% 8.7% 7.7%
Net income $ 48.5 $ 11.7 $ 12.2 $ 42.3
Net income margin % 5.6% 5.2% 5.4% 4.7%
EPS $ 1.60 $ 0.38 $ 0.40 $ 1.40
EPS growth % (7.0%) (20.8%) (20.0%) (25.5%)
</TABLE>
- ----------
(1) Source: Company public documents, press releases and Management guidance.
(2) 1997 Q1 revenue classification by product is estimated based on current
classification standards that include certain items in weight management
that were originally placed in the food & supplements category.
CONFIDENTIAL
46
<PAGE> 89
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
PROJECTED FINANCIAL RESULTS(1)
INCOME STATEMENT DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
================================================================================
<TABLE>
<CAPTION>
PROJECTED FISCAL YEARS ENDED DECEMBER 31,
ESTIMATED FYE ---------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Sales $ 1,667.2 $ 1,750.0 $ 1,842.0 $ 1,941.0 $ 2,038.0 $ 2,140.0
Distributor Allowance (791.2) (830.0) (874.0) (921.0) (967.0) (1,015.0)
--------- --------- --------- --------- --------- ---------
Net Sales $ 876.0 $ 920.0 $ 968.0 $ 1,020.0 $ 1,071.0 $ 1,125.0
Net sales growth % 1.1% 5.0% 5.2% 5.4% 5.0% 5.0%
Gross Margin $ 659.1 $ 694.5 $ 742.0 $ 786.0 $ 825.0 $ 867.0
Gross margin % 75.2% 75.5% 76.7% 77.1% 77.0% 77.1%
EBITDA $ 91.9 $ 94.5 $ 105.3 $ 109.4 $ 106.5 $ 110.3
EBITDA margin % 10.5% 10.3% 10.9% 10.7% 9.9% 9.8%
EBIT $ 80.3 $ 80.5 $ 90.0 $ 93.0 $ 89.0 $ 94.0
EBIT margin % 9.2% 8.8% 9.3% 9.1% 8.3% 8.4%
Net Income $ 49.6 $ 50.3 $ 56.5 $ 58.5 $ 56.4 $ 60.2
Net income margin % 5.7% 5.5% 5.8% 5.7% 5.3% 5.4%
EPS $ 1.60 $ 1.62 $ 1.82 $ 1.89 $ 1.82 $ 1.94
EPS growth % 0.0% 1.3% 12.3% 3.6% (3.7%) 6.8%
--------- --------- --------- --------- --------- ---------
</TABLE>
- ------------------
(1) Source: Sage internal projections. Sage Management has provided
projections for 1999 - 2006.
CONFIDENTIAL
47
<PAGE> 90
BEAR
STEARNS
APPENDIX B
COUNTRY-SPECIFIC HISTORICAL AND PROJECTED RETAIL SALES
<PAGE> 91
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
HISTORICAL AND PROJECTED RETAIL SALES(1)
($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
1994A 1995A 1996A 1997A 1998A 1999E 2000E 2001E 2002E 2003E
----- ----- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Japan $ 19 $ 82 $ 311 $ 526 $ 548 $ 577 $ 583 $ 589 $ 595 $ 601
Korea 0 0 2 15 31 48 48 48 48 50
Hong Kong 5 11 12 22 35 45 45 45 45 45
Taiwan 0 4 26 48 45 45 45 48 50 50
Other Asia 32 47 28 34 29 30 31 33 34 34
USA $295 $334 $ 280 $ 299 $ 364 $ 374 $ 385 $ 397 $ 409 $ 421
Brazil 0 24 76 50 46 32 32 32 32 33
Other Americas 59 48 34 45 61 65 68 71 75 79
Russia $ 0 $ 30 $ 142 $ 158 $ 97 $ 36 $ 38 $ 40 $ 42 $ 44
Italy 72 57 54 65 99 110 116 121 127 140
Germany 159 116 54 44 55 55 57 60 63 70
Other Europe 242 172 180 186 226 230 242 254 266 280
---- ---- ------ ------ ------ ------ ------ ------ ------ ------
Total Current Sources $884 $924 $1,200 $1,491 $1,635 $1,646 $1,689 $1,737 $1,786 $1,846
New Country Openings(2) 9 21 61 106 155 191
------ ------ ------ ------ ------ ------
Total Retail Sales $884 $924 $1,200 $1,491 $1,645 $1,667 $1,750 $1,842 $1,941 $2,038
==== ==== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
- ----------
(1) Source: Sage internal figures per Management plan.
(2) Including India and China.
CONFIDENTIAL
48
<PAGE> 92
BEAR
STEARNS
APPENDIX C
VALUATION MULTIPLES OVER TIME FOR COMPARABLE COMPANIES
<PAGE> 93
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
COMPARISON: MARKET CAPITALIZATION
($ IN MILLIONS)
================================================================================
<TABLE>
<CAPTION>
12/31/97(1) 6/30/98(1) 9/9/99(2)
----------- ---------- ---------
<S> <C> <C> <C>
Sage A(3) $ 611 $ 710 $ 383
NATR $ 483 $ 416 $ 170
NBTY $ 621 $1,190 $ 616
NTOL NA NA $ 100
NUS $1,497 $1,665 $1,043
NUTR NA $ 124 $ 52
RXSD $2,049 $2,517 $ 785
TWLB $ 676 $1,379 $ 238
USNA $ 116 $ 202 $ 85
WNI $ 304 $ 421 $ 101
</TABLE>
- ----------
(1) Source: 12/31/97 and 6/30/98 - FactSet Research Systems.
(2) Equity value calculated based on latest company reports or press releases
using fully diluted shares outstanding.
(3) Assuming Class A share prices for both Class A and Class B shares
outstanding.
CONFIDENTIAL
49
<PAGE> 94
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
COMPARISON: LTM EBITDA MULTIPLES(1)
================================================================================
<TABLE>
<CAPTION>
12/31/97(1) 6/30/98(1) 9/9/99(2)
----------- ---------- ---------
<S> <C> <C> <C>
Sage A(3) 4.9x 5.7x 3.3x
NATR 12.3x 9.5x 3.6x
NBTY 13.0x 16.3x 8.6x
NTOL NA NA 5.6x
NUS 7.8x 9.8x 5.3x
NUTR NA 7.1x 5.2x
RXSD 27.5x 27.1x 6.8x
TWLB 15.4x 23.6x 6.0x
USNA 8.8x 11.8x 4.3x
WNI 10.6x 13.5x 6.7x
</TABLE>
- ----------
(1) Source: FactSet Research Systems.
(2) LTM EBITDA and latest balance sheets per company reports or press
releases.
(3) Assuming Class A share prices for both Class A and Class B shares
outstanding.
CONFIDENTIAL
50
<PAGE> 95
BEAR
STEARNS PROJECT SAGE
- --------------------------------------------------------------------------------
COMPARISON: LTM P/E MULTIPLES(1)
================================================================================
<TABLE>
<CAPTION>
12/31/97(1) 6/30/98(1) 9/9/99(3)
----------- ---------- ---------
<S> <C> <C> <C>
Sage A(2) 12.1x 13.0x 8.6x
NATR 24.3x 19.5x 7.9x
NBTY 22.9x 34.0x 25.6x
NTOL NA NA 11.6x
NUS 13.5x 14.3x 9.6x
NUTR NA 25.0x 9.5x
RXSD 48.7x 42.5x 13.0x
TWLB 26.9x 41.2x 11.5x
USNA 18.3x 26.2x 9.3x
WNI 61.6x 30.4x 15.7x
</TABLE>
- ----------
(1) Source: FactSet Research Systems.
(2) Based on Class A share prices.
(3) Based on LTM earnings per share.
CONFIDENTIAL
51
