EXHIBIT (C)(2)
PROJECT MASTERPIECE
PRESENTATION TO THE SPECIAL COMMITTEE
CONFIDENTIAL
------------
September 10, 2000
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
CONFIDENTIAL
================================================================================
CONFIDENTIAL MATERIAL FOR THE SPECIAL COMMITTEE
The following pages contain material provided to the Special Committee of
the Board of Directors of Masterpiece ("Masterpiece" or the "Company") by
CIBC World Markets Corp. ("CIBC") in connection with the proposed
transaction involving Masterpiece and Diamond, a societe anonyme organized
under the laws of France ("Diamond"). The accompanying material was compiled
or prepared on a confidential basis solely for the use of the Special
Committee of the Company and not with a view toward public disclosure under
state and federal securities laws or otherwise. The information contained in
this material was obtained from the Company and public sources, and was
relied upon by CIBC without assuming responsibility of independent
verification as to the accuracy or completeness of such information. Any
estimates and projections for the Company contained herein have been
supplied by the management of the Company, and involve numerous and
significant subjective determinations, which may not be correct. No
representation or warranty, express or implied, is made as to the accuracy
or completeness of such information and nothing contained herein is, or
shall be relied upon as, a representation or warranty, whether as to the
past or the future. This material was not prepared for use by readers not as
familiar with the business and affairs of the Company as the Special
Committee and, accordingly, neither the Special Committee, the Company nor
CIBC or their respective legal or financial advisors or accountants take any
responsibility for the accompanying material when used by persons other than
the Special Committee.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
TABLE OF CONTENTS
================================================================================
1 EXECUTIVE SUMMARY
2 VALUATION OVERVIEW
3 MASTERPIECE OVERVIEW
4 APPENDICES
A Management Case Projections
B Base Case Projections
C Put/Call Agreement
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PROJECT MASTERPIECE / September 10, 2000
1 EXECUTIVE SUMMARY
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
================================================================================
INTRODUCTION
- In contemplation of a potential transaction between Masterpiece, Senior
Management and Diamond (the "Acquiror"), the Special Committee of the
Board of Directors was formed in May 2000 to evaluate the potential
transaction
- Shortly thereafter, the Special Committee selected Dewey Ballantine as
legal counsel and CIBC World Markets as financial advisor to the Special
Committee
- On July 18, 2000, the Company received a proposal from Diamond for the
acquisition by Diamond of all of the Company's outstanding common stock,
excluding common stock held by selected senior management ("Senior
Management"), for between $15.00 and $16.30 per share
- On August 30, 2000, Diamond increased its proposal to a "best and final"
$16.50 per share
- In its role as financial advisor to the Special Committee, CIBC World
Markets has evaluated the fairness, from a financial point of view, of
the consideration to be paid to the holders of the Company's common stock
(other than Senior Management)
- As part of its due diligence process, CIBC World Markets has, among other
things:
- Met with management of the Company to discuss the business,
financial performance and current projections for the Company
- Visited selected facilities of the Company and conducted
plant tours
- Visited Masterpiece headquarters to review certain due
diligence information that was prepared by the Company for
Diamond's review
- Met with management of the Company to discuss third parties
contacted
- Held discussions with the Company's bankers with regard to
potential buyers contacted
- Performed such analyses and investigations and reviewed such
other information as CIBC World Markets deemed appropriate
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
================================================================================
SITUATION OVERVIEW
MARKET PERFORMANCE
- Masterpiece's stock price has significantly underperformed the S&P
500 Index ("S&P 500")
- During the 1 year period from 9/3/99 to 9/6/00, the stock price of
Masterpiece returned -16.6%, compared to a return of -1.3% for an
index of comparable companies(1) and 10.0% for the S&P 500
- During the 3 year period from 9/5/97 to 9/6/00, the stock price of
Masterpiece returned -22.8%, compared to a return of -17.5% for an
index of comparable companies(1) and 60.6% for the S&P 500
FACTORS AFFECTING VALUATION
- Small market capitalization ($165.6 million at a stock price of
$9.75 on 9/6/00)
- Limited public float (approximately 6.0 million shares)
- Limited trading liquidity (average of 5,710 shares traded daily
over the past year)
- No Wall Street equity research coverage
CONTACTED PARTIES
- Although no formal marketing program was commenced, the Company,
through its banker contacted more than 30 potential buyers since
November 1999
- Among the companies contacted, 25 companies were not interested
and 8 buyers showed various levels of interest
- Among the interested buyers, only two buyers performed due
diligence
- Oneida was never contacted because management believed it was
unlikely they could pay a meaningful premium to the current stock
price
----------------------
(1) Consists of Oneida Ltd., Libbey Inc., Lifetime Hoan Corporation and
Waterford Wedgwood PLC.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
================================================================================
TRANSACTION OVERVIEW(1)
PROPOSED TRANSACTION
- Purchase price of $16.50 per share ("Purchase Price"),
representing a 0.9x LTM Revenue multiple and a 6.5x LTM EBITDA
multiple, along with the following premiums:
- 69% premium to the current stock price of $9.75 on
9/6/00
- 70% premium to the 30 day average stock price of
$9.69
- 36% premium to the 52 week trading high of $12.13
- 122% premium to the 52 week trading low of $7.44
- Rollover of approximately 3.0 million shares by Messrs. Blake,
Dingman, Santarelli, Aratani and Yamada (collectively "Senior
Management")
- All Company options, whether or not exercisable or vested, will
have the right to receive consideration equal to the excess of the
Purchase Price over the exercise price of such options
TERMINATION FEES AND EXPENSES
- Fee equal to one-half percent (0.5%) of equity transaction value,
payable upon:
- Failure to receive Masterpiece shareholder approval for the
transaction
- In the event of a material breach of any representation,
warranty or agreement, or occurrence of an event which
could reasonably be expected to give rise to a Company
Material Adverse Effect
- Fee equal to two and one-half percent (2.5%) of equity transaction
value, payable upon:
- Board of Directors withdraws, modifies, or refrains from
giving recommendation for the transaction or recommends a
Competing Transaction
- Board of Directors exercises fiduciary out to terminate the
agreement
----------------------
(1) Based on Draft Merger Agreement dated September 7, 2000.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
================================================================================
TRANSACTION OVERVIEW(1)
STOCKHOLDERS' AGREEMENTS
- Competing transaction fee payable to Diamond upon consummation of
a competing transaction within 12 months after the termination of
the merger agreement
- Senior Management and other significant shareholders will enter
into Stockholders' Agreements which provide for the rollover of
common shares with put/call options and certain other rights
CONDITIONS TO CLOSE
- Customary closing conditions
- Affirmative vote of the holders of a majority of the
outstanding shares
- HSR approval
- All necessary governmental and regulatory approval
- Not more than seven (7.0%) of the shares outstanding shall be
dissenting shares
----------------------
(1) Based on Draft Merger Agreement dated September 7, 2000.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
===============================================================================
MANAGEMENT FINANCIAL FORECASTS
- As part of our analysis, CIBC World Markets has relied upon two
sets of financial projections prepared by the management team
- The first set of projections ("Base Case") represents current
operating performance forecast into the future and assumes (i)
gross margins remain constant by distribution segment, (ii) SG&A
expenses remain a constant percentage of sales by distribution
segment and (iii) sales grow at an annual rate of 4.3% from 1999 to
2004
- The second set of projections ("Management Case") assumes (i) gross
margins increase from 47.6% in 1999 to 49.8% in 2004, (ii) SG&A
expenses as a percentage of sales drop from 35.7% in 1999 to 33.7%
in 2004, and (iii) sales grow at an annual rate of 6.1% from 1999
to 2004
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
EXECUTIVE SUMMARY
===============================================================================
OVERVIEW OF DIAMOND
(Figures in thousands of Euros)
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ORGANIZATIONAL DESCRIPTION
--------------------------------------------------------------------------------
The Durand family owns 100% of the group. The control of the group is organized
through a number of holdings, of which JGDI is the utimate parent company. Each
holding is partly owned by family members, being minority shareholders within
the group. JGDI, as the consolidating entity for the group, accounts for this as
minority shareholders or minority interest.
Mr. Philippe Durand, the group's CEO, and two other individuals control the
group.
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SUMMARY OF NET DEBT
--------------------------------------------------------------------------------
As of 12/31/99,the group had a total of Eur 572 million of cash and cash
equivalents, of which Eur 527 million were classified as financial investments
due to their effective holding period longer than one year. The remaining Eur 45
million were accounted for as short term (less than one year) cash and cash
equivalents. In addition, the decrease in financial assets in 1999 related to a
share capital repurchase.
As of 12/31/99, the financial debt of Eur 105 million included bank debt of Eur
70 million, with maturity less than one year. The major part of the remaining
indebtedness related to the employee profit sharing scheme, of which Eur 23.8
million had a maturity of more than one year.
<TABLE>
<CAPTION>
----------------------------------------------------------
INCOME STATEMENT SUMMARY
----------------------------------------------------------
FYE 12/31 1998 1999
------------- -------------
<S> <C> <C>
Revenues 972,949 1,037,912
Growth NA 6.7%
EBITDA 181,991 184,466
Margin 18.7% 17.8%
EBIT 130,349 129,850
Margin 13.4% 12.5%
Net Income 96,743 79,997
Margin 9.9% 7.7%
Capex 89,136 110,381
Change in working capital 22,840 18,417
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------
BALANCE SHEET SUMMARY
-----------------------------------------------------
12/31/98 12/31/99
----------- ----------
<S> <C> <C>
Tangible Assets, net 272,195 347,324
Financial Assets 1,065,029 527,062
Working Capital 252,183 270,600
Cash & Cash Equivalents 53,383 45,458
----------- ----------
Total 1,642,790 1,190,444
Shareholders Equity 703,660 667,815
Minority Shareholders 834,454 334,745
Reserves 64,035 82,025
Financial Debt 40,641 105,858
----------- ----------
Total 1,642,790 1,190,443
</TABLE>
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
2 VALUATION OVERVIEW
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CIBC WORLD MARKETS REVIEWED VARIOUS MARKET INDICATORS AND EMPLOYED THE FOLLOWING
METHODOLOGIES
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
DESCRIPTION OF METHODOLOGIES
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
METHODOLOGY ADVANTAGES LIMITATIONS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PUBLICLY TRADED Reflects current, market-based - Financial information available for the companies is
COMPANIES ANALYSIS valuation information generally limited to historical data and 1-2 years EPS
forecasts - no long-term projections
- Current market multiples may be market driven and may
not be representative of long-term growth prospects
- Does not take into account control premium
-----------------------------------------------------------------------------------------------------------------------------------
PRECEDENT Reflects direct evidence of value in an - Similar constraints as
publicly traded companies analysis TRANSACTIONS ANALYSIS acquisition context -
including any
`control premium' - Precedent multiples depend on market conditions at the
time of the transaction
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DISCOUNTED CASH Reflects expected future cash flow of - Financial information is necessarily based on the
FLOW ANALYSIS the business - directly related to the judgement of management preparing projections
business being valued
- Does not include any "synergies" available to an acquiror
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LEVERAGED BUYOUT Reflects what a financial buyer can - Stand-alone LBO does not include synergies and may
ANALYSIS afford to pay for a company subject to underestimate strategic sale value
financing limitations and required rates
of return on investment - Value obtained is sensitive to projections and operating
assumptions
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PREMIUMS PAID Reflects premiums paid in public target - May be impacted by liquidity of stock
ANALYSIS acquisitions.
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</TABLE>
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
VALUATION SUMMARY
(Figures in Dollars per Share)
[BAR CHART]
<TABLE>
<CAPTION>
IMPLIED EQUITY VALUE PER SHARE (IN DOLLARS)
<S> <C> <C>
--------------------------------------------------------------------------------
I. Comparable Company Analysis $14.45 $25.57
--------------------------------------------------------------------------------
II. Precedent Transaction Analysis $12.53 $22.31
--------------------------------------------------------------------------------
III. Discounted Cash Flow Analysis $22.05 $29.00
Management Case
--------------------------------------------------------------------------------
III. Discounted Cash Flow Analysis $15.62 $20.70
Base Case
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IV. Leveraged Buyout Analysis $15.44 $16.12
Management Case
--------------------------------------------------------------------------------
IV. Leveraged Buyout Analysis $11.66 $12.54
Base Case
--------------------------------------------------------------------------------
V. Premiums Paid Analysis $12.07 $15.39
--------------------------------------------------------------------------------
VI. 52 Week Trading Range $7.44 $12.13
--------------------------------------------------------------------------------
Current Price(1) Offer Price
$9.75 $16.50
--------------------------------------------------------------------------------
</TABLE>
-----------
(1) Stock price as of close on September 6, 2000.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
VALUATION SUMMARY
(Figures in Thousands, Except per Share Data)
-------------------------------------------------
6/30/00 Cash $10,566
6/30/00 Debt 91,256
Fully Diluted Shares Outstanding 16,985
-------------------------------------------------
I. COMPARABLE COMPANY ANALYSIS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL MULTIPLE RANGE (1) ENTERPRISE VALUE EQUITY VALUE PER SHARE AMOUNT
------------------ ------------------ ------------------------- ----------------
STATISTIC LOW HIGH LOW HIGH LOW HIGH LOW HIGH
---------- --------- ---------- --------- ---------- ----------- ---------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LTM Revenues $421,700 1.0x 1.5x $421,700 $632,550 $341,010 $551,860 $20.08 $32.49
LTM EBITDA 56,818 6.2 9.7 352,272 551,135 271,582 470,445 15.99 27.70
LTM EBIT 44,364 7.6 14.4 337,166 638,842 256,476 558,152 15.10 32.86
2000E E.P.S. (2) $1.45 7.2 12.0 -- -- 177,777 296,295 10.47 17.44
2001E E.P.S. (2) $1.77 6.0 9.8 -- -- 180,412 294,672 10.62 17.35
REFERENCE RANGE $14.45 $25.57
</TABLE>
II. PRECEDENT TRANSACTION ANALYSIS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL MULTIPLE RANGE (1) ENTERPRISE VALUE EQUITY VALUE PER SHARE AMOUNT
------------------ ------------------ --------------------- -----------------
STATISTIC LOW HIGH LOW HIGH LOW HIGH LOW HIGH
---------- --------- ---------- --------- ---------- ---------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LTM Revenues $421,700 0.5x 1.5x $210,850 $632,550 $130,160 $551,860 $7.66 $32.49
LTM EBITDA 56,818 4.4 5.2 249,999 295,454 169,309 214,764 9.97 12.64
LTM EBIT 44,364 5.5 8.4 244,002 372,658 163,312 291,968 9.61 17.19
LTM E.P.S. $1.39 16.5 19.4 -- -- 388,817 457,155 22.89 26.91
REFERENCE RANGE $12.53 $22.31
</TABLE>
---------------------
(1) Multiple range based on the low and high multiples of the comparable
companies
(2) Based on management case estimates.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
VALUATION SUMMARY
(Figures in Thousands, Except per Share Data)
-------------------------------------------------
6/30/00 Cash $10,566
6/30/00 Debt 91,256
Fully Diluted Shares Outstanding 16,985
-------------------------------------------------
III. DISCOUNTED CASH FLOW ANALYSIS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION> EBITDA
DISCOUNT RATE EXIT MULTIPLE EQUITY VALUE PER SHARE AMOUNT
------------- ------------- ----------------------- ------------------
LOW HIGH LOW HIGH LOW HIGH LOW HIGH
------ ------ ------ ------ ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Based upon Management
Case 2000-2004 projections 10% 12% 5.5x 7.5x $374,577, $492,589 $22.05 $29.00
REFERENCE RANGE $22.05 $29.00
</TABLE>
<TABLE>
<CAPTION> EBITDA
DISCOUNT RATE EXIT MULTIPLE EQUITY VALUE PER SHARE AMOUNT
------------- ------------- ------------------------ ------------------
LOW HIGH LOW HIGH LOW HIGH LOW HIGH
------ ------ ------ ------ ---------- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Based upon Base
Case 2000-2004 projections 10% 12% 5.5x 7.5x $265,363 $351,550 $15.62 $20.70
REFERENCE RANGE $15.62 $20.70
</TABLE>
IV. LEVERAGED BUYOUT ANALYSIS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION> EBITDA
EXIT MULTIPLE IRR RETURN EQUITY VALUE PER SHARE AMOUNT
------------- ------------- -------------------------- ------------------
LOW HIGH LOW HIGH LOW HIGH LOW HIGH
------ ------ ------ ------ ---------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Based upon Management
Case 2000-2004 projections 5.5x 7.5x 30.0% 40.0% $270,503 $282,309 $15.44 $16.12
REFERENCE RANGE $15.44 $16.12
</TABLE>
<TABLE>
<CAPTION>
EBITDA
EXIT MULTIPLE IRR RETURN EQUITY VALUE PER SHARE AMOUNT
------------- ------------- ------------------------- -----------------
LOW HIGH LOW HIGH LOW HIGH LOW HIGH
------ ------ ------ ------ ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Based upon Base
Case 2000-2004 projections 5.5x 7.5x 30.0% 40.0% $202,007 $217,590 $11.66 $12.54
REFERENCE RANGE $11.66 $12.54
</TABLE>
V. PREMIUMS PAID ANALYSIS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK AVERAGE PREMIUM (1 DAY, 1 WEEK, 4 WEEKS) PER SHARE AMOUNT
---------------------------------------- ----------------
PRICE (1) 25TH % 50TH % 75TH % LOW HIGH
----------- ----------------------------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Premiums Prior to Announcement Date $9.69 24.6% 40.5% 58.9% $12.07 $15.39
REFERENCE RANGE $12.07 $15.39
</TABLE>
-----------
(1) Represents average of one day, one week, and four weeks closing stock
prices.
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PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
COMPARABLE COMPANIES ANALYSIS
(Figures in Thousands, Except per Share and multiple Data)
<TABLE>
<CAPTION>
MARKET
STOCK VALUE OF NET FIRM MVE
----------
COMPANY PRICE(a) EQUITY (b) DEBT (c) VALUE (d) LTM NI
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Masterpiece (Pre-Deal) (e) $9.75 $165,608 $80,690 $246,298 7.1 x
----------------------------------------------------------------------------------------------------------------
Masterpiece (At $16.50) $16.50 $289,025 $80,690 $369,715 12.3 x
----------------------------------------------------------------------------------------------------------------
Libbey Inc. LBY $32.31 $509,948 $175,932 $685,880 11.1 x
Lifetime Hoan Corporation (f) LCUT 6.69 71,385 10,286 81,671 20.0
Oneida Ltd. OCQ 14.44 238,161 247,585 485,746 6.8
Waterford Wedgwood PLC (g) WATFZ 11.63 846,881 376,128 1,223,009 14.9
----------------------------------------------------------------------------------------------------------------
HIGH $846,881 14.9 X
MEDIAN 509,948 11.1
MEAN 531,663 10.9
LOW 238,161 6.8
----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
5-YR. CAL. '00 P/E
STOCK PRICE (a) / FIRM VALUE (d) / LTM EST. EPS AS % OF
----------------------------- ------------------------------------------
COMPANY 2000E EPS 2001E EPS REVENUES EBITDA EBIT GROWTH (a) 5 YR. GR.
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Masterpiece (Pre-Deal) 6.7 x 5.5 x 0.6 x 4.3 x 5.6 x NA NA
-----------------------------------------------------------------------------------------------------------------------------------
Masterpiece (At $16.50) 11.4 x 9.3 x 0.9 x 6.5 x 8.3 x NA NA
-----------------------------------------------------------------------------------------------------------------------------------
Libbey Inc. 10.8 x 9.8 x 1.5 x 6.9 x 8.4 x 12.0 % 81.3 %
Lifetime Hoan Corporation NA NA 0.7 8.9 12.8 NA NA
Oneida Ltd. 7.2 6.0 1.0 6.2 7.6 NA NA
Waterford Wedgwood PLC 12.0 9.8 1.3 9.7 14.4 NA NA
-----------------------------------------------------------------------------------------------------------------------------------
HIGH 12.0 X 9.8 X 1.5 X 9.7 X 14.4 X 12.0% 81.3%
MEDIAN 10.8 9.8 1.3 6.9 8.4 12.0 81.3
MEAN 10.0 8.5 1.3 7.6 10.1 12.0 81.3
LOW 7.2 6.0 1.0 6.2 7.6 12.0 81.3
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: EBITDA, EBIT, Net Income to Common, and EPS adjusted for unusual and
nonrecurring items.
LTM: Latest Twelve Months.
NM: Not Meaningful. NA: Not Available
All estimates are presented on a calendar basis.
(a) Stock price and First Call Estimates as of September 6, 2000.
(b) Market Value of Equity (MVE) reflects fully diluted shares (common shares
outstanding, options, warrants, in-the-money convertibles).
(c) Net Debt equals straight debt, minority interest, straight preferred
stock, all out-of-the-money convertibles, less investments in
unconsolidated affiliates and cash.
(d) Firm Value (FV) equals Market Value of Equity plus Net Debt.
(e) Projections for Masterpiece financials are based on management
estimates.
(f) Multiples excluded from the summary statistics.
(g) Figures in $US. Stock Price reflects the price of one ADS, which equals
10 shares.
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<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
COMPARABLE COMPANIES ANALYSIS
(Figures in Thousands, Except per Share and multiple Data)
<TABLE>
<CAPTION>
MVE STOCK PRICE (a) / FIRM VALUE (d)/ LTM
----------- --------------------------- ----------------------------------------
COMPANY LTM NI 2000E EPS 2001E EPS REVENUES EBITDA EBIT
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Masterpiece (Pre-Deal) (e) 7.1 x 6.7 x 5.5 x 0.6 x 4.3 x 5.6 x
---------------------------------------------------------------------------------------------------------------------------------
Masterpiece (At $16.50) 12.3 x 11.4 x 9.3 x 0.9 x 6.5 x 8.3 x
---------------------------------------------------------------------------------------------------------------------------------
TIER 1
Libbey Inc. LBY 11.1 x 10.8 x 9.8 x 1.5 x 6.9 x 8.4 x
Lifetime Hoan Corporation (f) LCUT 20.0 NA NA 0.7 8.9 12.8
Oneida Ltd. OCQ 6.8 7.2 6.0 1.0 6.2 7.6
Waterford Wedgwood PLC (g) WATFZ 14.9 12.0 9.8 1.3 9.7 14.4
---------------------------------------------------------------------------------------------------------------------------------
HIGH 14.9 x 12.0 x 9.8 x 1.5 x 9.7 x 14.4 x
MEDIAN 11.1 10.8 9.8 1.3 6.9 8.4
MEAN 10.9 10.0 8.5 1.3 7.6 10.1
LOW 6.8 7.2 6.0 1.0 6.2 7.6
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FIRM VALUE (d)/2000E FIRM VALUE (d)/2001E
---------------------------------- ------------------------------------
Company REVENUES EBITDA EBIT REVENUES EBITDA EBIT
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Masterpiece (Pre-Deal) 0.6 x 4.2 x 5.4 x 0.5 x 3.7 x 4.7 x
--------------------------------------------------------------------------------------------------------
Masterpiece (At $16.50) 0.8 x 6.3 x 8.1 x 0.8 x 5.5 x 7.1 x
--------------------------------------------------------------------------------------------------------
TIER 1
Libbey Inc. 1.4 x 6.7 x 8.1 x 1.4 x 6.1 x 7.4 x
Lifetime Hoan Corporation NA NA NA NA NA NA
Oneida Ltd. NA NA NA NA NA NA
Waterford Wedgwood PLC 1.4 9.6 13.5 1.4 8.8 12.2
--------------------------------------------------------------------------------------------------------
HIGH 1.4 x 9.6 x 13.5 x 1.4 x 8.8 x 12.2 x
MEDIAN 1.4 8.1 10.8 1.4 7.4 9.8
MEAN 1.4 8.1 10.8 1.4 7.4 9.8
LOW 1.4 6.7 8.1 1.4 6.1 7.4
--------------------------------------------------------------------------------------------------------
</TABLE>
Note: EBITDA, EBIT, Net Income to Common, and EPS adjusted for unusual and
nonrecurring items.
LTM: Latest Twelve Months.
NM: Not Meaningful. NA:Not Available
All estimates are presented on a calendar basis.
(a) Stock price and First Call Estimates as of September 6, 2000.
(b) Market Value of Equity (MVE) reflects fully diluted shares (common shares
outstanding, options, warrants, in-the-money convertibles).
(c) Net Debt equals straight debt, minority interest, straight preferred stock,
all out-of-the-money convertibles, less investments in unconsolidated
affiliates and cash.
(d) Firm Value (FV) equals Market Value of Equity plus Net Debt.
(e) Projections for Masterpiece financials are based on management estimates.
(f) Multiples excluded from the summary statistics.
(g) Figures in $US. Stock Price reflects the price of one ADS, which equals 10
shares.
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
================================================================================
PRECEDENT TRANSACTIONS ANALYSIS
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
DATE TYPE OF OFFER NET
TARGET ACQUIROR ANN. CONSID. TRANS. VALUE DEBT(a)
--------------------------------- ------------------------ ------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Delco International (Private) Oneida Ltd. (Public) 5/31/00 Cash Purchase $76,000 $0
Viners of sheffield Ltd. (Private) Oneida Ltd. (Public) 5/30/00 Cash Purchase 25,000 0
Sakura, Inc. (Private) Oneida Ltd. (Public) 5/23/00 Cash Purchase 40,000 0
Vidriera Leonesa S.A. (Public) Barbosa & Almeida (Public) 7/28/99 Cash Purchase 53,588 11,747
Oneida Ltd. (Public) (e) Libbey Inc. (Public) 6/16/99 Cash Purchase 641,276 169,446
Denby Group Plc (Public) Table Design Plc (Public) 5/26/99 Cash Purchase 65,006 (3,325)
Corning Consumer Products
Company (Private) Borden Inc. (KKR) (Private) 3/2/98 Cash Purchase 598,000 7,000
Rosenthal AG (Public) Waterford Wedgwood plc (Public) 12/4/97 Cash Purchase 106,786 0
WorldCrisa Corporation (Private) (f) Libbey Inc. (Public) 3/10/97 Cash Purchase 100,000 16,807
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PREMIUM ANALYSIS(d)
----------------------------------
FIRM OFFER ONE FIVE TWENTY
TARGET VALUE(b) PRICE(c) DAY PRIOR DAY PRIOR DAY PRIOR
--------------------------------- ----------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Delco International (Private) $76,000 NA NA NA NA
Viners of sheffield Ltd. (Private) 25,000 NA NA NA NA
Sakura, Inc. (Private) 40,000 NA NA NA NA
Vidriera Leonesa S.A. (Public) 65,335 15.39 19.0% 24.7% 35.4%
Oneida Ltd. (Public) 810,722 37.50 155.3 169.1 165.5
Denby Group Plc (Public) 61,680 1.92 66.0 68.3 47.2
Corning Consumer Products 605,000 NA NA NA NA
Company (Private)
106,786 112.98 17.6 15.3 27.4
Rosenthal AG (Public)
116,807 NA NA NA NA
WorldCrisa Corporation (Private)
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HIGH 66.0% 68.3% 47.2%
MEDIAN 19.0 24.7 35.4
MEAN 34.2 36.1 36.7
LOW 17.6 15.3 27.4
------------------------------------------------------------------------------------------------------
</TABLE>
Note: EBITDA, EBIT, Net Income to Common, and EPS adjusted for unusual and
nonrecurring items.
LTM: Latest Twelve Months.
NM: Not Meaningful. NA:Not Available
(a) Net Debt equal straight debt, minority interest, straight preferred stock,
all convertibles (if applicable), less investments in unconsolidated
affiliates and cash.
(b) Firm Value (FV) equals Offer Value for the Equity of the Target plus Net
Debt.
(c) If more than one Class of shares exist, refers to price of Class A shares.
(d) Premium based on price of common stock for period specified. If more than
one class of share trade, refers to Class A shares.
(e) Withdrawn on July 15, 1999. Excluded from multiple analysis.
(f) Offer Value represents purchase price of WorldCrisa Corporation from Vitros
S.A.and, concurrently, a 49% interest in Vitrocrisa from Vitro in the
formation of a Joint Venture.
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
PRECEDENT TRANSACTIONS ANALYSIS
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
DATE TYPE OF OFFER FIRM
TARGET ACQUIROR ANN. TRANS. VALUE VALUE (a)
------------------------------ ---------------------- -------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Delco International (b) Oneida Ltd. 5/31/00 Purchase $76,000 $76,000
Viners of sheffield Ltd. (b) Oneida Ltd. 5/30/00 Purchase 25,000 25,000
Sakura, Inc. Oneida Ltd. 5/23/00 Purchase 40,000 40,000
Vidriera Leonesa S.A. Barbosa & Almeida 7/28/99 Purchase 53,588 65,335
Oneida Ltd. (c) Libbey Inc. 6/16/99 Purchase 641,276 810,722
Denby Group Plc Table Design Plc 5/26/99 Purchase 65,006 61,680
Corning Consumer Products Company Borden Inc. (KKR) 3/2/98 Purchase 598,000 605,000
Rosenthal AG Waterford Wedgwood plc 12/4/97 Purchase 106,786 106,786
WorldCrisa Corporation (d) Libbey Inc. 3/10/97 Purchase 100,000 116,807
---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
OFFER PRICE (VALUE)/ EPS FIRM VALUE (a) /LTM
--------- ---------- -------- -------- --------- --------
TARGET ACQUIROR LTM FY + 1 FY + 2 REV. EBITDA EBIT
------------------------------ ---------------------- --------- ---------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Delco International (b) Oneida Ltd. NM NM NM 1.0 x NA NA
Viners of sheffield Ltd. (b) Oneida Ltd. NM NM NM 0.9 NA NA
Sakura, Inc. Oneida Ltd. NM NM NM NA NA NA
Vidriera Leonesa S.A. Barbosa & Almeida NA NA NA 1.3 5.1 x 8.4 x
Oneida Ltd. (c) Libbey Inc. 30.7 x NA NA 1.7 13.0 17.0
Denby Group Plc Table Design Plc 16.5 8.9 x 8.8 x 1.2 4.4 5.5
Corning Consumer Products Company Borden Inc. (KKR) 19.4 NM NM 1.1 5.2 7.5
Rosenthal AG Waterford Wedgwood plc NM NA NA 0.5 NA NA
WorldCrisa Corporation (d) Libbey Inc. NM NM NM 1.5 NM NM
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HIGH 19.4 x 8.9 x 8.8 x 1.5 x 5.2 x 8.4 x
MEDIAN 17.9 8.9 8.8 1.2 5.1 7.5
MEAN 17.9 8.9 8.8 1.1 4.9 7.1
LOW 16.5 8.9 8.8 0.5 4.4 5.5
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: EBITDA, EBIT, Net Income to Common, and EPS adjusted for unusual and
nonrecurring items.
LTM: Latest Twelve Months.
NM: Not Meaningful. NA: Not Available
(a) Firm Value (FV) equals Offer Value for the Equity of the Target plus Net
Debt.
(b) Transaction not completed yet and multiples are not included in summary.
(c) Withdrawn on July 15, 1999. Excluded from multiple analysis.
(d) Multiples based on combined purchase price of WorldCrisa Corporation from
Vitros S.A. and, concurrently, a 49% interest in Vitrocrisa from Vitro in
the formation of a Joint Venture.
[CIBC WORLD MARKETS LOGO]
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
================================================================================
DISCOUNTED CASH FLOW ANALYSIS-MANAGEMENT CASE(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
ESTIMATED PROJECTED FISCAL YEAR ENDING DECEMBER 31
----------- ----------------------------------------------------------------
2000 2001 2002 2003 2004
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 444,763 $ 476,332 $ 506,536 $ 537,106 $ 569,563
EBITDA 59,100 66,637 74,240 83,970 94,373
Less: Depreciation & Amortization (13,321) (14,707) (15,919) (18,567) (21,067)
----------- ---------- ----------- ----------- -----------
EBIT 45,779 51,930 58,321 65,404 73,307
Less: Income Taxes @ 39.0% (17,854) (20,253) (22,745) (25,507) (28,590)
----------- ---------- ----------- ----------- -----------
UNLEVERED AFTER-TAX INCOME 27,925 31,677 35,576 39,896 44,717
Plus: Depreciation & Amortization 13,321 14,707 15,919 18,567 21,067
Less: Capital Expenditures (10,000) (10,000) (10,000) (25,000) (25,000)
Less: Working Capital Investment 3,440 145 (5,514) (7,249) (7,735)
----------- ---------- ----------- ----------- -----------
FREE CASH FLOW $ 34,686 $ 36,529 $ 35,981 $ 26,214 $ 33,049
=========== ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
TERMINAL VALUE BASED ON EBITDA MULTIPLE --------------------------------------------- -------------
EXIT MULTIPLE IN YEAR 4 (2004) 5.5 x EBITDA 6.5 x EBITDA
--------------------------------------------- -------------
10.0% 11.0% 12.0% 10.0%
--------------------------------------------- -----------
<S> <C> <C> <C> <C>
Discounted Free Cash Flows 2000 - 2004 $ 133,388 $ 130,733 $ 128,175 $ 133,388
Discounted Terminal Value 338,022 324,533 311,696 399,481
----------- ----------- ----------- -----------
ENTERPRISE VALUE 471,411 455,267 439,871 532,869
Less: Debt, Preferred & Minority Interest @ 06/30/00 (91,256) (91,256) (91,256) (91,256)
Plus: Cash @ 06/30/00 10,566 10,566 10,566 10,566
----------- ----------- ----------- -----------
IMPLIED EQUITY VALUE $ 390,721 $ 374,577 $ 359,181 $ 452,179
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
TERMINAL VALUE BASED ON EBITDA MULTIPLE ---------------------------------- --------------------------------------------------
EXIT MULTIPLE IN YEAR 4 (2004) 6.5 X EBITDA 7.5 X EBITDA
---------------------------------- --------------------------------------------------
11.0% 12.0% 10.0% 11.0% 12.0%
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Discounted Free Cash Flows 2000 - 2004 $ 130,733 $ 128,175 $ 133,388 $ 130,733 $ 128,175
Discounted Terminal Value 383,539 368,368 460,940 442,545 425,040
----------- ----------- ----------- ----------- -----------
ENTERPRISE VALUE 514,273 496,543 594,328 573,279 553,215
Less: Debt, Preferred &
Minority Interest @ 06/30/00 (91,256) (91,256) (91,256) (91,256) (91,256)
Plus: Cash @ 06/30/00 10,566 10,566 10,566 10,566 10,566
----------- ----------- ----------- ----------- -----------
IMPLIED EQUITY VALUE $ 433,583 $ 415,853 $ 513,638 $ 492,589 $ 472,525
=========== =========== =========== =========== ===========
</TABLE>
------------------------------------
Shares Outstanding 16,985
------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
EQUITY VALUE BASED ON EBITDA MULTIPLE
-------------------------------------------------------------------------------------------------------
EBITDA Terminal Multiple
Discount -------------------------------------------------------------------------
Rate 5.5x 6.5x 7.5x
-------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
10.0% $23.00 $26.62 $30.24
11.0% $22.05 $25.53 $29.00
12.0% $21.15 $24.48 $27.82
-------------------------------------------------------------------------------------------------------
</TABLE>
---------------------------------
(1) Source: Management estimates.
20
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
================================================================================
DISCOUNTED CASH FLOW ANALYSIS - BASE CASE(1) (Figures in Thousands, Except per
Share Data)
<TABLE>
<CAPTION>
ESTIMATED PROJECTED FISCAL YEAR ENDING DECEMBER 31
------------- -------------------------------------------------------------
2000 2001 2002 2003 2004
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $436,979 $460,176 $481,267 $501,805 $523,040
EBITDA 58,613 61,043 63,685 66,264 68,923
Less: Depreciation & Amortization (13,321) (14,707) (15,919) (17,067) (18,067)
------------- ------------- ------------- ------------- -------------
EBIT 45,292 46,336 47,766 49,198 50,856
Less: Income Taxes @ 39.0% (17,664) (18,071) (18,629) (19,187) (19,834)
------------- ------------- ------------- ------------- -------------
UNLEVERED AFTER-TAX INCOME 27,628 28,265 29,137 30,010 31,022
Plus: Depreciation & Amortization 13,321 14,707 15,919 17,067 18,067
Less: Capital Expenditures (10,000) (10,000) (10,000) (10,000) (10,000)
Less: Working Capital investment (4,353) (7,829) (7,154) (6,982) (7,237)
------------- ------------- ------------- ------------- -------------
FREE CASH FLOW $26,596 $25,143 $27,902 $30,095 $31,852
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
TERMINAL VALUE BASED ON EBITDA MULTIPLE
-------------------------- -------------------------- -----------------------
EXIT MULTIPLE IN YEAR 4 (2004) 5.5 X EBITDA 6.5 X EBITDA 7.5 X EBITDA
-------------------------- -------------------------- -----------------------
10.0% 11.0% 12.0% 10.0% 11.0% 12.0% 10.0% 11.0% 12.0%
-------------------------- -------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Discounted Free Cash Flows 2000-2004 $111,440 $109,040 $106,730 $111,440 $109,040 $106,730 $111,440 $109,040 $106,730
-------------------------- -------------------------- --------------------------
Discounted Terminal Value 246,865 237,013 227,638 291,749 280,107 269,027 336,634 323,200 310,416
-------------------------- -------------------------- --------------------------
ENTERPRISE VALUE 358,305 346,053 334,368 403,189 389,147 375,757 448,074 432,240 417,146
Less: Debt, Preferred & Minority
Interest @ 06/30/00 (91,256) (91,256) (91,256) (91,256) (91,256) (91,256) (91,256) (91,256) (91,256)
Plus: Cash @ 06/30/00 10,566 10,566 10,566 10,566 10,566 10,566 10,566 10,566 10,566
-------------------------- -------------------------- --------------------------
IMPLIED EQUITY VALUE $277,615 $265,363 $253,678 $322,499 $308,457 $295,067 $367,384 $351,550 $336,456
-------------------------- -------------------------- --------------------------
</TABLE>
--------------------------------------
Shares Outstanding 16,985
--------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------
EQUITY VALUE BASED ON EBITDA MULTIPLE
----------------------------------------------------------
Discount EBITDA Terminal Multiple
--------------------------------------------
Rate 5.5x 6.5x 7.5x
----- ------ ------ ------
<S> <C> <C> <C>
10.0% $16.34 $18.99 $21.63
11.0% $15.62 $18.16 $20.70
12.0% $14.94 $17.37 $19.81
</TABLE>
-------------------------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO]
21
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
LBO Returns Summary -- Management Case(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
PURCHASE PRICE @ $15.44 PURCHASE PRICE @ $16.12
---------------------------------------------------- -------------------------------------------------
SOURCES AND USES OF FUNDS SOURCES AND USES OF FUNDS
---------------------------------------------------- -------------------------------------------------
SOURCES SOURCES
---------- -----------
<S> <C> <C> <C>
Acquisition Senior Debt @10.2% 170,000 Acquisition Senior Debt @10.2% 170,000
Acquisition Subordinate Debt @13.5% 70,000 Acquisition Subordinate Debt @13.5% 70,000
Equity 132,471 Equity 144,395
-------- ---------
$372,471 $384,395
USES USES
---------- -----------
Purchase Price $270,503 Purchase Price $282,309
Existing Current Debt 91,256 Existing Current Debt 91,256
Estimated Transaction Costs 3,512 Estimated Transaction Costs 3,630
Deferred Fees 7,200 Deferred Fees 7,200
-------- ---------
$372,471 $384,395
---------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------- -------------------------------------------------
CREDIT RATIOS CREDIT RATIOS
---------------------------------------------------- -------------------------------------------------
2000PF 2000PF
-------- ---------
<S> <C> <C> <C>
Net Debt/EBITDA 3.9x Net Debt/EBITDA 3.9x
EBITDA/Total Interest Expense 2.2x EBITDA/Total Interest Expense 2.2x
---------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------- -------------------------------------------------
IRR IRR
---------------------------------------------------- -------------------------------------------------
2003 2004 2003 2004
<S> <C> <C> <C> <C> <C>
5.5 32% 30% 5.5 28% 27%
6.5 42% 37% 6.5 38% 34%
7.5 52% 43% 7.5 47% 40%
---------------------------------------------------- -------------------------------------------------
</TABLE>
---------------------------------
(1) Source: Management estimates.
22
[CIBC WORLD MARKETS LOGO]
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
================================================================================
LBO Returns Summary -- Base Case(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
PURCHASE PRICE @ $11.66 PURCHASE PRICE @ $12.54
---------------------------------------------------- -------------------------------------------------
SOURCES AND USES OF FUNDS SOURCES AND USES OF FUNDS
---------------------------------------------------- -------------------------------------------------
SOURCES SOURCES
------- -------
<S> <C> <C> <C>
Bank Revolver @9.5% $0 Bank Revolver @9.5% $0
Acquisition Senior Debt @10.2% 170,000 Acquisition Senior Debt @10.2% 170,000
Acquisition Subordinate Debt @13.5% 70,000 Acquisition Subordinate Debt @13.5% 70,000
Equity 63,290 Equity 79,029
--------- --------
$303,290 $319,029
USES USES
------- -------
Purchase Price $202,007 Purchase Price $217,590
Existing Current Debt 91,256 Existing Current Debt 91,256
Estimated Transaction Costs 2,827 Estimated Transaction Costs 2,983
Deferred Fees 7,200 Deferred Fees 7,200
--------- --------
$303,290 $319,029
---------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------- -------------------------------------------------
CREDIT RATIOS CREDIT RATIOS
---------------------------------------------------- -------------------------------------------------
2000PF 2000PF
-------- ----------
<S> <C> <C> <C>
Net Debt/EBITDA 3.9x Net Debt/EBITDA 3.9x
EBITDA/Total Interest Expense 2.2x EBITDA/Total Interest Expense 2.2x
---------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------- -------------------------------------------------
IRR IRR
---------------------------------------------------- -------------------------------------------------
2003 2004 2003 2004
<S> <C> <C> <C> <C> <C>
5.5 34% 30% 5.5 24% 23%
6.5 50% 40% 6.5 39% 32%
7.5 62% 48% 7.5 51% 40%
---------------------------------------------------- -------------------------------------------------
</TABLE>
----------------------------------
(1) Source: Management estimates
23
[CIBC WORLD MARKETS LOGO]
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
VALUATION OVERVIEW
===============================================================================
PREMIUMS PAID ANALYSIS
PARAMETERS
- Announced domestic 100% cash acquisition transactions with more than 50%
shares acquired for the period 01/01/99-09/06/00 with transaction value
ranging from $250 million to $500 million
- Offer price premium measured as premium over share price of the target as
of one day, one week, and four weeks prior to the announcement date
PREMIUM ABOVE SHARE PRICE PRIOR TO ANNOUNCEMENT
<TABLE>
<CAPTION>
ONE DAY ONE WEEK FOUR WEEKS AVERAGE
<S> <C> <C> <C> <C>
High 154.0% 142.4% 480.4% 160.0%
75th Percentile 42.6% 64.7% 76.4% 58.9%
50th Percentile 27.8% 34.5% 47.3% 40.5%
25th Percentile 18.3% 19.8% 31.8% 24.6%
Low -10.3% -6.3% -5.5% -0.9%
------------ ------------ ------------ -------------
Average 35.6% 44.0% 65.7% 48.5%
</TABLE>
<TABLE>
<CAPTION>
PRICE PRIOR TO AVERAGE PREMIUM PER SHARE AMOUNT
ANNOUCEMENT (1 DAY, 1 WEEK, 4 WEEKS)
------------------------------------------------------------------------------------------
AVERAGE PRICE (1) 25th % 50th % 75th % LOW HIGH
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$9.69 24.6% 40.5% 58.9% $12.07 $15.39
------------------------------------------------------------------------------------------
</TABLE>
--------------
(1) Represents average of one day, one week, and four weeks closing stock
prices.
24
[CIBC WORLD MARKETS LOGO]
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
3 MASTERPIECE OVERVIEW
[CIBC WORLD MARKETS LOGO] 25
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
5 YEAR FINANCIAL PERFORMANCE (1995-1999)
(Fiscal Year Ended December 31; Figures in Millions)
[REVENUE BAR CHART]
[EBT(1) BAR CHART]
[EBITDA(1) BAR CHART]
[NET INCOME(1) BAR CHART]
------------
(1) Excludes $2.4 million restructuring charge in 1998 and $4.1 million store
closures charge in 1996.
[CIBC WORLD MARKETS LOGO] 26
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
5 YEAR PROJECTED FINANCIAL PERFORMANCE (2000-2004) - MANAGEMENT CASE(1)
(Fiscal Year Ended December 31; Figures in Millions)
[REVENUE BAR CHART]
[EBIT BAR CHART]
[EBITDA BAR CHART]
[NET INCOME BAR CHART]
------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 27
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
5 YEAR PROJECTED FINANCIAL PERFORMANCE (2000-2004) - BASE CASE(1)
(Fiscal Year Ended December 31; Figures in Millions)
[REVENUE BAR CHART]
[EBIT BAR CHART]
[EBITDA BAR CHART]
[NET INCOME BAR CHART]
------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 28
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
OPERATION RESULTS BY DISTRIBUTION CHANNEL - MANAGEMENT CASE(1) (Figures in
Thousands, Except per Share Data)
<TABLE>
<CAPTION>
WHOLESALE
-----------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 137,794 $ 140,423 $ 147,163 $ 157,123 $ 165,263
Cost of Goods Sold 76,563 78,043 83,620 88,555 92,713
--------- --------- --------- --------- ---------
GROSS PROFIT 61,231 62,380 63,543 68,568 72,550
SG&A 45,591 42,257 47,070 52,063 53,457
Other Operating Expenses 2,400 0 (2,513) (1,964) (1,936)
--------- --------- --------- --------- ---------
EBITDA 13,240 20,123 18,986 18,469 21,029
Depreciation 4,997 5,715 6,248 7,248 8,598
Amortization 289 294 300 300 300
--------- --------- --------- --------- ---------
EBIT 7,954 14,114 12,438 10,921 12,131
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 1.9% 4.8% 6.8% 5.2%
Gross Margin 44.4% 44.4% 43.2% 43.6% 43.9%
SG&A as a % of Sales 33.1% 30.1% 32.0% 33.2% 32.4%
EBITDA Margin 9.6% 14.3% 12.9% 12.0% 13.0%
EBIT Margin 5.8% 10.1% 8.5% 7.2% 7.6%
<CAPTION>
RETAIL
-----------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 238,774 $ 245,151 $ 254,785 $ 272,616 $ 290,234
Cost of Goods Sold 117,461 119,377 121,023 128,758 136,318
--------- --------- --------- --------- ---------
GROSS PROFIT 121,313 125,774 133,762 143,858 153,916
SG&A 97,390 97,036 99,451 103,267 109,339
Other Operating Expenses 0 0 (120) (128) (136)
--------- --------- --------- --------- ---------
EBITDA 23,923 28,738 34,431 40,719 44,713
Depreciation 4,817 6,096 6,455 6,841 6,703
Amortization 0 0 0 0 0
--------- --------- --------- --------- ---------
EBIT 19,106 22,642 27,976 33,878 38,010
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 2.7% 3.9% 7.0% 6.5%
Gross Margin 50.8% 51.3% 52.5% 52.8% 53.0%
SG&A as a % of Sales 40.8% 39.6% 39.0% 37.9% 37.7%
EBITDA Margin 10.0% 11.7% 13.5% 14.9% 15.4%
EBIT Margin 8.0% 9.2% 11.0% 12.4% 13.1%
<CAPTION>
INTERNATIONAL
-----------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 34,097 $ 39,041 $ 42,815 $ 46,593 $ 51,039
Cost of Goods Sold 22,133 25,144 25,946 27,918 30,333
--------- --------- --------- --------- ---------
GROSS PROFIT 11,964 13,897 16,869 18,675 20,706
SG&A 7,670 8,760 11,562 12,054 13,064
Other Operating Expenses 0 0 (376) (392) (392)
--------- --------- --------- --------- ---------
EBITDA 4,294 5,137 5,683 7,013 8,034
Depreciation 688 318 318 318 318
Amortization 0 0 0 0 0
--------- --------- --------- --------- ---------
EBIT 3,606 4,819 5,365 6,695 7,716
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 14.5% 9.7% 8.8% 9.5%
Gross Margin 35.1% 35.6% 39.4% 40.1% 40.6%
SG&A as a % of Sales 22.5% 22.4% 27.0% 25.9% 25.6%
EBITDA Margin 12.6% 13.2% 13.3% 15.1% 15.7%
EBIT Margin 10.6% 12.3% 12.5% 14.4% 15.1%
</TABLE>
----------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 29
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
OPERATION RESULTS BY DISTRIBUTION CHANNEL - BASE CASE(1) (Figures in Thousands,
Except per Share Data)
<TABLE>
<CAPTION>
WHOLESALE
---------------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 137,794 $ 140,423 $ 144,355 $ 151,284 $ 156,125
Cost of Goods Sold 76,563 78,043 80,228 84,079 86,770
--------- --------- --------- --------- ---------
GROSS PROFIT 61,231 62,380 64,127 67,205 69,355
SG&A 45,591 42,257 43,440 45,525 46,982
Other Operating Expenses 2,400 0 (2,513) (1,964) (1,936)
--------- --------- --------- --------- ---------
EBITDA 13,240 20,123 23,200 23,644 24,309
Depreciation 4,997 5,715 6,248 7,248 8,598
Amortization 289 294 300 300 300
--------- --------- --------- --------- ---------
EBIT 7,954 14,114 16,652 16,096 15,411
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 1.9% 2.8% 4.8% 3.2%
Gross Margin 44.4% 44.4% 44.4% 44.4% 44.4%
SG&A as a % of Sales 33.1% 30.1% 30.1% 30.1% 30.1%
EBITDA Margin 9.6% 14.3% 16.1% 15.6% 15.6%
EBIT Margin 5.8% 10.1% 11.5% 10.6% 9.9%
<CAPTION>
RETAIL
---------------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 238,774 $ 245,151 $ 249,809 $ 262,299 $ 274,103
Cost of Goods Sold 117,461 119,377 121,645 127,727 133,475
--------- --------- --------- --------- ---------
GROSS PROFIT 121,313 125,774 128,164 134,572 140,628
SG&A 97,390 97,036 98,879 103,823 108,495
Other Operating Expenses 0 0 (120) (128) (136)
--------- --------- --------- --------- ---------
EBITDA 23,923 28,738 29,404 30,876 32,268
Depreciation 4,817 6,096 6,455 6,841 6,703
Amortization 0 0 0 0 0
--------- --------- --------- --------- ---------
EBIT 19,106 22,642 22,949 24,035 25,565
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 2.7% 1.9% 5.0% 4.5%
Gross Margin 50.8% 51.3% 51.3% 51.3% 51.3%
SG&A as a % of Sales 40.8% 39.6% 39.6% 39.6% 39.6%
EBITDA Margin 10.0% 11.7% 11.8% 11.8% 11.8%
EBIT Margin 8.0% 9.2% 9.2% 9.2% 9.3%
<CAPTION>
INTERNATIONAL
---------------------------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales $ 34,097 $ 39,041 $ 42,815 $ 46,593 $ 51,039
Cost of Goods Sold 22,133 25,144 27,575 30,008 32,871
--------- --------- --------- --------- ---------
GROSS PROFIT 11,964 13,897 15,240 16,585 18,168
SG&A 7,670 8,760 9,607 10,455 11,452
Other Operating Expenses 0 0 (376) (392) (392)
--------- --------- --------- --------- ---------
EBITDA 4,294 5,137 6,009 6,523 7,108
Depreciation 688 318 318 318 318
Amortization 0 0 0 0 0
--------- --------- --------- --------- ---------
EBIT 3,606 4,819 5,692 6,205 6,790
MARGIN & GROWTH RATE ANALYSIS
-----------------------------
Revenue Growth -- 14.5% 9.7% 8.8% 9.5%
Gross Margin 35.1% 35.6% 35.6% 35.6% 35.6%
SG&A as a % of Sales 22.5% 22.4% 22.4% 22.4% 22.4%
EBITDA Margin 12.6% 13.2% 14.0% 14.0% 13.9%
EBIT Margin 10.6% 12.3% 13.3% 13.3% 13.3%
</TABLE>
----------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 30
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
MASTERPIECE LTM ANNOTATED PRICE / VOLUME GRAPH (September 3, 1999 - September 6,
2000)
The 52 week high / low range was $7.44 to $12.13
Offer Price of $16.50 represents a 36% premium to the 52 week high
[VOLUME LINE GRAPH]
------------
(A) 10/28/99: Reports EPS of $0.30 for the third quarter ended September 30,
1999 vs. $0.25 a year ago.
(B) 02/29/00: Reports financial results and 58% increase in EPS for the year
ended December 31, 1999. EPS for the year was $1.23 vs. $0.78 a
year ago.
(C) 04/27/00: Reports EPS of $0.00 for the first quarter ended March 31, 2000
vs. a loss of $0.07 a year ago.
(D) 07/27/00: Announces improved financial results for the 2nd
quarter ended June 30, 2000 marking the 7th consecutive quarter
of operating profit improvement.
[CIBC WORLD MARKETS LOGO] 31
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
MASTERPIECE 3 YEAR PRICE / VOLUME GRAPH (September 5, 1997 - September 6, 2000)
The 3 year high / low range was $7.38 to $15.00
Offer Price of $16.50 represents a 10% premium to the 3 year high
[VOLUME LINE GRAPH]
------------
(A) 09/24/97: Announces share repurchase program of up to $10
million of common stock.
(B) 04/17/98: Reports loss of $0.14 for the first quarter ended
March 31, 1998 vs. ESP of $0.02 a year ago. Warburg Dillon Read
downgrades rating to neutral from outperform, citing
significant distribution problems with the new Charleston
facility. Analyst cuts 1998 EPS estimate from $1.35 to $1.02
and 1999 ESP estimate from $1.50 to $1.35.
(C) 07/30/98: Reports loss of $0.10 (including restructuring charge
of $0.08) for the second quarter ended June 30, 1998 vs. EPS of
$0.09 a year ago.
(D) 04/13/99: Announces increase in share repurchase program of an
additional $10 million of common stock.
(E) 07/27/00: Announces improved financial results for the 2nd
quarter ended June 30, 2000 marking the 7th consecutive quarter
of operating profit improvement.
[CIBC WORLD MARKETS LOGO] 32
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
STOCK PRICE PERFORMANCE OF MASTERPIECE VS. S&P 500 AND COMPARABLE COMPANY INDEX
(1)
(September 3, 1999- September 6, 2000)
[LINE GRAPH]
---------------------
(1) Comparable Company Index includes Oneida Ltd., Libbey Inc., Lifetime Hoan
Corporation and Waterford Wedgwood PLC.
[CIBC WORLD MARKETS LOGO] 33
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
STOCK PRICE PERFORMANCE OF MASTERPIECE VS. S&P 500 AND COMPARABLE COMPANY INDEX
(1)
(September 5, 1997 - September 6, 2000)
[LINE GRAPH]
---------------------
(1) Comparable Company Index includes Oneida Ltd., Libbey Inc., Lifetime Hoan
Corporation and Waterford Wedgwood PLC.
[CIBC WORLD MARKETS LOGO] 34
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
THE MAJORITY OF THE SHARES HAVE TRADED BETWEEN $8.00 AND $12.50
================================================================================
MASTERPIECE LTM VOLUME DISTRIBUTION ANALYSIS(1) (September 3, 1999 - September
6, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
<S> <C>
$8.00-$9.50 4.50%
$9.50-$11.00 12.88%
$11.00-$12.50 6.73%
</TABLE>
-------------------------
(1) 1.5 million cumulative shares were traded, representing 24.11% of the public
float of 6.0 million shares outstanding.
[CIBC WORLD MARKETS LOGO] 35
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
APPROXIMATELY 64% OF MASTERPIECE IS CONTROLLED THROUGH INSIDER OWNERSHIP
================================================================================
SHAREHOLDER PROFILE ANALYSIS(1)
--------------------------------------------------------------------------------
INSTITUTIONAL HOLDERS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative
Institutional Holders Shares Percent Percent
-------------------------------- ---------- --------- -----------
<S> <C> <C> <C>
Dimensional Fund Advisors Inc. 823,100 4.8% 4.8%
Fidelty Management & Research 575,500 3.4% 8.2%
Royce & Associates, Inc. 543,000 3.2% 11.4%
Brandywine Asset Management 169,000 1.0% 12.4%
Gabelli Asset Management Company 142,000 0.8% 13.3%
Barclays Global Investors 117,497 0.7% 14.0%
State Street Global Advisers 67,000 0.4% 14.4%
Caterpillar Investment Management, Ltd. 55,000 0.3% 14.7%
AXA Rosenberg Investment Managment 54,800 0.3% 15.0%
Mellon Bank (Private Asset Management) 46,511 0.3% 15.3%
Other Institutions 217,746 1.3% 16.6%
--------------------------------- ---------- -------- -----------
Total Institutional Ownership 2,811,854 16.6% 16.6%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION SUMMARY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Percent
------------------------------------
<S> <C> <C>
Institutional Holders 2,811,854 16.6%
Insider Ownership 10,945,982 64.4%
Retail 3,227,609 19.0%
-------------------------------- ------------------------------------
Total Common Shares Outstanding 16,985,445 100.0%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
INSIDER OWNERSHIP
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Insiders Shares Percent
----------------- -------------------------------------------
<S> <C> <C>
Alfred J. Blake 3,956,353 23.3%
George T. Aratani 2,488,469 14.7%
Anthony F. Santarelli 1,587,038 9.3%
Norman R. Higo 1,544,274 9.1%
Raymond B. Dingman 1,294,037 7.6%
Tadao Yamada 1,272,463 7.5%
Other Insiders 75,811 0.4%
------------- ---------
Total Insiders (2) (3) 10,945,982 64.4%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION SUMMARY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[CHART]
<S> <C>
Institutional Holders 16.6%
Retail 19.0%
Insider Ownership 64.4%
--------------------------------------------------------------------------------
</TABLE>
--------------------------
(1) Source: GEO (5/17/00) and 10Q dated 6/30/00.
(2) Based on proxy dated 5/24/00.
(3) Excludes 821,250 options held by all directors and executive officers as a
group and 1,272,463 shares excluded in the proxy dated 5/24/00.
[CIBC WORLD MARKETS LOGO] 36
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
THE COMPANY EXHIBITS MARGINS THAT ARE LOWER THAN THOSE OF ITS COMPETITORS
COMPANY OVERVIEW
================================================================================
LTM FINANCIAL PERFORMANCE
(Figures in Millions)
--------------------------------------------------------------------------------
LTM REVENUES ($ MILLIONS)
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: $502
--------------------------------------------------------------------------------
LTM EBIT MARGINS (1)
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 11.3%
--------------------------------------------------------------------------------
LTM EBITDA MARGIN (1)
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 14.7%
--------------------------------------------------------------------------------
LTM NET MARGINS (1)
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 6.5%
----------------------------
(1) Excludes non-recurring, extraordinary charges.
[CIBC WORLD MARKETS LOGO] 37
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
THE COMPANY'S VALUATION MULTIPLES ARE LOWER ACROSS ALL RELEVANT METRICS,
RELATIVE TO THOSE OF ITS PEER GROUP
================================================================================
COMPARATIVE MULTIPLE ANALYSIS
--------------------------------------------------------------------------------
FIRM VALUE / LTM REVENUES
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 1.1X
--------------------------------------------------------------------------------
FIRM VALUE / LTM EBIT
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 10.6X
--------------------------------------------------------------------------------
FIRM VALUE / LTM EBITDA
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 7.9X
--------------------------------------------------------------------------------
PRICE / LTM EARNINGS
--------------------------------------------------------------------------------
[BAR GRAPH]
AVERAGE: 13.7X
[CIBC WORLD MARKETS LOGO] 38
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
COMPANY OVERVIEW
================================================================================
PEER COMPARISON - TABLEWARE INDUSTRY(1)
(Figures in Millions, except per share amounts)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
LIFETIME WATERFORD
MASTERPIECE ONEIDA LIBBEY HOAN WEDGWOOD
-------------------------------------------------------------------------------------------------------------------
LTM OPERATING STATISTICS:
<S> <C> <C> <C> <C> <C>
Revenue $421.7 $488.0 $468.1 $115.2 $935.6
EBITDA 56.8 78.3 99.7 9.2 126.1
EBIT 44.4 64.2 81.3 6.4 84.7
Net Income 23.5 35.0 45.8 3.6 57.0
EBITDA Margin 13.5% 16.0% 21.3% 8.0% 13.5%
EBIT Margin 10.5% 13.2% 17.4% 5.5% 9.1%
Net Margin 5.6% 7.2% 9.8% 3.1% 6.1%
Net Debt/EBITDA 1.4x 3.2x 1.8x 1.1x 3.0x
FINANCIAL:
Market Capitalization $165.6 $238.2 $509.9 $71.4 $846.9
Net Debt 80.7 247.6 10.3 10.3 376.1
Firm Value $246.3 485.7 685.9 81.7 1,223.0
VALUATION:
Firm Value/LTM Revenues 0.6x 1.0x 1.5x 0.7x 1.3x
Firm Value/LTM EBITDA 4.3x 6.2x 6.9x 8.9x 9.7x
Firm Value/LTM EBIT 5.6x 7.6x 8.4x 12.8x 14.4x
Price/LTM NI 7.1x 6.8x 11.1x 20.0x 14.9x
Float (% of total shares) 35.9% 95.7% 94.1% 53.6% 73.0%
Diluted Shares Outstanding 17.0 16.5 15.8 10.7 72.9
-------------------------------------------------------------------------------------------------------------------
</TABLE>
----------------------------
(1) Stock prices as of close on September 6, 2000. 39
[CIBC WORLD MARKETS LOGO]
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
4 APPENDICES
[CIBC WORLD MARKETS LOGO] 40
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
A. MANAGEMENT CASE PROJECTIONS
[CIBC WORLD MARKETS LOGO]
41
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
================================================================================
MASTERPIECE INCOME STATEMENT - MANAGEMENT CASE(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
Actual Estimated Projected
--------------------------------- ----------- ---------------------------------------------
Fiscal Year End 12/31 1997 1998 1999 2000 2001 2002 2003 2004
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales
Wholesale $145,669 $137,794 $140,423 $147,163 $157,123 $165,263 $172,700 $180,299
Retail 223,459 238,774 245,151 254,785 272,616 290,234 308,519 327,955
International 28,089 34,097 39,041 42,815 46,593 51,039 55,888 61,309
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
Total Sales 397,217 410,665 424,615 444,763 476,332 506,536 537,106 569,563
Cost of Goods Sold 208,833 216,157 222,564 230,589 245,231 259,364 272,138 285,782
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
GROSS PROFIT 188,384 194,508 202,051 214,174 231,101 247,172 264,968 283,781
SG&A 143,720 150,940 151,433 158,083 166,948 175,396 183,462 191,872
Other Operating Expenses 0 2,400 (3,086) (3,009) (2,484) (2,464) (2,464) (2,464)
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
EBITDA 44,664 41,168 53,704 59,100 66,637 74,240 83,970 94,373
Depreciation 6,777 10,502 12,129 13,021 14,407 15,619 18,267 20,767
Amortization 0 0 0 300 300 300 300 300
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
EBIT 37,887 30,666 41,575 45,779 51,930 58,321 65,404 73,307
Interest Expense (net) 2,205 6,956 6,666 5,457 3,659 2,160 1,040 (309)
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
PRE-TAX INCOME 35,682 23,710 34,909 40,322 48,271 56,161 64,364 73,616
Provision for Taxes 14,018 9,447 13,316 15,566 18,690 21,741 25,219 28,827
--------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
NET INCOME TO COMMON $21,664 $14,263 $21,593 $24,756 $29,581 $34,420 $39,145 $44,789
========= ============ ========== =========== ========== ========== ============ ==========
Number of Shares Outstanding 18,445 18,324 17,632 17,030 16,710 16,326 16,326 16,326
Fully Diluted E.P.S. (In Dollars) $1.17 $0.78 $1.22 $1.45 $1.77 $2.11 $2.40 $2.74
Margin & Growth Rate Analysis
-----------------------------
Wholesale Growth -- (5.4%) 1.9% 4.8% 6.8% 5.2% 4.5% 4.4%
Retail Growth -- 6.9% 2.7% 3.9% 7.0% 6.5% 6.3% 6.3%
International Growth -- 21.4% 14.5% 9.7% 8.8% 9.5% 9.5% 9.7%
Revenue Growth -- 3.4% 3.4% 4.7% 7.1% 6.3% 6.0% 6.0%
Gross Margin 47.4% 47.4% 47.6% 48.2% 48.5% 48.8% 49.3% 49.8%
SG&A as a % of Sales 36.2% 36.8% 35.7% 35.5% 35.0% 34.6% 34.2% 33.7%
EBITDA Margin 11.2% 10.0% 12.6% 13.3% 14.0% 14.7% 15.6% 16.6%
EBIT Margin 9.5% 7.5% 9.8% 10.3% 10.9% 11.5% 12.2% 12.9%
Effective Tax Rate 39.3% 39.8% 38.1% 38.6% 38.7% 38.7% 39.2% 39.2%
Net Margin 5.5% 3.5% 5.1% 5.6% 6.2% 6.8% 7.3% 7.9%
Net Income Growth -- (34.2%) 51.4% 14.6% 19.5% 16.4% 13.7% 14.4%
</TABLE>
----------------------------------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 42
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
================================================================================
MASTERPIECE BALANCE SHEET STATEMENT - MANAGEMENT CASE(1) (Figures in Thousands,
Except per Share Data)
<TABLE>
<CAPTION>
Actual Estimated Projected
-------------------------------- ----------- ---------------------------------------------
Fiscal Year End 12/31 1997 1998 1999 2000 2001 2002 2003 2004
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $61,218 $39,792 $45,650 $56,984 $71,265 $84,418 $96,635 $111,509
Accounts Receivable 25,594 25,436 29,684 30,861 31,839 33,604 35,632 37,785
Inventory 150,417 156,931 155,204 145,200 145,000 145,000 152,141 159,769
Other Current Assets 7,559 8,008 7,504 10,000 11,000 11,000 11,664 12,369
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL CURRENT ASSETS 244,788 230,167 238,042 243,045 259,104 274,022 296,072 321,432
Net Property, Plant & Equipment 119,723 129,054 127,665 124,644 120,237 114,618 121,352 125,585
Existing Goodwill 5,036 4,747 4,740 4,440 4,140 3,840 3,540 3,240
Other Intangible Assets 0 0 0 0 0 0 0 0
Other Assets 886 774 956 1,000 1,000 1,000 1,000 1,000
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL ASSETS $370,433 $364,742 $371,403 $373,129 $384,481 $393,480 $421,964 $451,257
======== ============ ========== =========== ========== ========== ============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank Revolver $1,632 $1,690 $1,514 $2,000 $2,000 $1,000 $1,000 $1,000
Accounts Payable 22,084 11,572 18,113 18,766 19,958 21,108 22,147 23,258
Other Current Liabilities 27,642 35,710 33,314 29,770 30,501 25,602 27,147 28,788
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL CURRENT LIABILITIES 51,358 48,972 52,941 50,536 52,459 47,710 50,295 53,046
Other Liabilities 0 0 0 0 0 0 0 0
Deferred Tax 2,983 4,397 5,977 5,000 5,000 5,000 5,000 5,000
Existing Senior Debt Masterpiece 120,000 110,000 100,000 90,000 80,000 70,000 60,000 45,000
Existing Subordinated Debt Masterpiece 0 0 0 0 0 0 0 0
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL LONG TERM DEBT 120,000 110,000 100,000 90,000 80,000 70,000 60,000 45,000
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL LIABILITIES 174,341 163,369 158,918 145,536 137,459 122,710 115,295 103,046
Minority Interest 0 0 0 0 0 0 0 0
Existing Preferred Stock 0 0 0 0 0 0 0 0
Common Equity 196,092 201,373 212,485 227,593 247,022 270,770 306,669 348,211
-------- ------------ ---------- ----------- ---------- ---------- ------------ ----------
TOTAL LIABILITIES AND EQUITY $370,433 $364,742 $371,403 $373,129 $384,481 $393,480 $421,964 $451,257
======== ============ ========== =========== ========== ========== ============ ==========
</TABLE>
----------------------------------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 43
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
================================================================================
MASTERPIECE CASH FLOW STATEMENT - MANAGEMENT CASE(1) (Figures in Thousands,
Except per Share Data)
<TABLE>
<CAPTION>
Actual Estimated Projected
----------------------- ---------- --------------------------------------------
Fiscal Year End 12/31 1998 1999 2000 2001 2002 2003 2004
---------- ------------ ---------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATIONS
Net Income $14,263 $21,593 $24,756 $29,581 $34,420 $39,145 $44,789
Depreciation 10,502 12,129 13,021 14,407 15,619 18,267 20,767
Amortization of Existing Goodwill 0 0 300 300 300 300 300
Amortization of Intangible Assets 0 0 0 0 0 0 0
Deferred Taxes 1,414 1,580 (977) 0 0 0 0
Minority Interest 0 0 0 0 0 0 0
Change in Working Capital (10,076) 2,733 3,440 145 (5,514) (7,249) (7,735)
Change in Other Assets 112 (182) (44) 0 0 0 0
Change in Other Liabilities 0 0 0 0 0 0 0
---------- ------------ ---------- ---------- ----------- ----------- ---------
CASH PROVIDED / (USED) BY
OPERATING ACTIVITIES $16,215 $37,853 $40,496 $44,433 $44,825 $50,463 $58,120
CASH FLOW FROM INVESTING ACTIVITIES
Capital Expenditures (19,239) (10,123) (10,000) (10,000) (10,000) (25,000) (25,000)
---------- ------------ ---------- ---------- ----------- ----------- ---------
CASH PROVIDED / (USED) BY
INVESTING ACTIVITIES ($19,239) ($10,123) ($10,000) ($10,000) ($10,000) ($25,000) ($25,000)
CASH FLOW FROM FINANCING ACTIVITIES
Change in Existing Senior Debt Masterpiece (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (15,000)
Change in Existing Subordinated Debt Masterpiece 0 0 0 0 0 0 0
Change in Existing Preferred Stock 0 0 0 0 0 0 0
Dividend Paid to Common Shareholders (3,653) (3,511) (3,420) (3,326) (3,246) (3,246) (3,246)
Change in Common Equity (4,892) (8,463) (6,228) (6,826) (7,426) 0 0
---------- ------------ ---------- ---------- ----------- ----------- ---------
CASH PROVIDED / (USED) BY
FINANCING ACTIVITIES (18,545) (21,974) (19,648) (20,152) (20,672) (13,246) (18,246)
---------- ------------ ---------- ---------- ----------- ----------- ---------
Minimum Cash 0 0 0 0 0 0 0
Adjustment of Foreign Exchange Effect 86 278
(Deficiency) / Excess Cash 39,735 45,826 56,498 71,265 85,418 96,635 111,509
(Payments) / Borrowings on Revolver 57 (176) 486 0 (1,000) 0 0
---------- ------------ ---------- ---------- ----------- ----------- ---------
TOTAL CHANGE IN CASH ($21,426) $5,858 $11,334 $14,281 $13,153 $12,217 $14,874
========== ============ ========== ========== =========== =========== =========
Beginning Cash Balance 61,218 39,792 45,650 56,984 71,265 84,418 96,635
Change In Cash (21,426) 5,858 11,334 14,281 13,153 12,217 14,874
---------- ------------ ---------- ---------- ----------- ----------- ---------
ENDING CASH BALANCE $39,792 $45,650 $56,984 $71,265 $84,418 $96,635 $111,509
========== ============ ========== ========== =========== =========== =========
</TABLE>
----------------------------------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 44
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
B. BASE CASE PROJECTIONS
[CIBC WORLD MARKETS LOGO] 45
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
================================================================================
MASTERPIECE INCOME STATEMENT -- BASE CASE(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
ACTUAL ESTIMATED
---------------------------------------------------------------- --------------
Fiscal Year End 12/31 1997 1998 1999 2000
------------ ------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales
Wholesale $145,669 $137,794 $140,423 $144,355
Retail 223,459 238,774 245,151 249,809
International 28,089 34,097 39,041 42,815
------------ ------------- -------------- --------------
Total Sales 397,217 410,665 424,615 436,979
Cost of Goods Sold 208,833 216,157 222,564 229,448
------------ ------------- -------------- --------------
GROSS PROFIT 188,384 194,508 202,051 207,531
SG&A 143,720 150,940 151,433 151,926
Other Operating Expenses 0 2,400 (3,086) (3,009)
------------ ------------- -------------- --------------
EBITDA 44,664 41,168 53,704 58,613
Depreciation 6,777 10,502 12,129 13,021
Amortization 0 0 0 300
------------ ------------- -------------- --------------
EBIT 37,887 30,666 41,575 45,292
Interest Expense (net) 2,205 6,956 6,666 5,457
------------ ------------- -------------- --------------
PRE-TAX INCOME 35,682 23,710 34,909 39,835
Provision for Taxes 14,018 9,447 13,316 15,566
------------ ------------- -------------- --------------
NET INCOME TO COMMON $21,664 $14,263 $21,593 $24,269
============ ============= ============== ==============
Number of Shares Outstanding 18,445 18,324 17,632 17,030
Fully Diluted E.P.S. (In Dollars) $1.17 $0.78 $1.22 $1.43
MARGIN & GROWTH RATE ANALYSIS
Wholesale Growth -- (5.4%) 1.9% 2.8%
Retail Growth -- 6.9% 2.7% 1.9%
International Growth -- 21.4% 14.5% 9.7%
Revenue Growth -- 3.4% 3.4% 2.9%
Gross Margin 47.4% 47.4% 47.6% 47.5%
SG&A as a % of Sales 36.2% 36.8% 35.7% 34.8%
EBITDA Margin 11.2% 10.0% 12.6% 13.4%
EBIT Margin 9.5% 7.5% 9.8% 10.4%
Effective Tax Rate 39.3% 39.8% 38.1% 39.1%
Net Margin 5.5% 3.5% 5.1% 5.6%
Net Income Growth -- (34.2%) 51.4% 12.4%
</TABLE>
<TABLE>
<CAPTION>
PROJECTED
------------------------------------------------------------------------------
Fiscal Year End 12/31 2001 2002 2003 2004
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales
Wholesale $151,284 $156,125 $160,028 $163,549
Retail 262,299 274,103 285,889 298,182
International 46,593 51,039 55,888 61,309
------------ ------------- ------------- -------------
Total Sales 460,176 481,267 501,805 523,040
Cost of Goods Sold 241,814 253,116 264,147 275,582
------------ ------------- ------------- -------------
GROSS PROFIT 218,362 228,151 237,658 247,458
SG&A 159,803 166,930 173,857 180,999
Other Operating Expenses (2,484) (2,464) (2,464) (2,464)
------------ ------------- ------------- -------------
EBITDA 61,043 63,685 66,264 68,923
Depreciation 14,407 15,619 16,767 17,767
Amortization 300 300 300 300
------------ ------------- ------------- -------------
EBIT 46,336 47,766 49,198 50,856
Interest Expense (net) 3,659 2,160 2,742 1,251
------------ ------------- ------------- -------------
PRE-TAX INCOME 42,677 45,606 46,455 49,605
Provision for Taxes 18,690 21,741 18,235 19,463
------------ ------------- ------------- -------------
NET INCOME TO COMMON $23,987 $23,865 $28,221 $30,142
============ ============= ============= =============
Number of Shares Outstanding 16,710 16,326 16,326 16,326
Fully Diluted E.P.S. (In Dollars) $1.44 $1.46 $1.73 $1.85
MARGIN & Growth RATE ANALYSIS
Wholesale Growth 4.8% 3.2% 2.5% 2.2%
Retail Growth 5.0% 4.5% 4.3% 4.3%
International Growth 8.8% 9.5% 9.5% 9.7%
Revenue Growth 5.3% 4.6% 4.3% 4.2%
Gross Margin 47.5% 47.4% 47.4% 47.3%
SG&A as a % of Sales 34.7% 34.7% 34.6% 34.6%
EBITDA Margin 13.3% 13.2% 13.2% 13.2%
EBIT Margin 10.1% 9.9% 9.8% 9.7%
Effective Tax Rate 43.8% 47.7% 39.3% 39.2%
Net Margin 5.2% 5.0% 5.6% 5.8%
Net Income Growth (1.2%) (0.5%) 18.3% 6.8%
</TABLE>
-----------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 46
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
===============================================================================
MASTERPIECE BALANCE SHEET -- BASE CASE(1)
(Figures in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
ACTUAL ESTIMATED
------------------------------------------- --------------
Fiscal Year End 12/31 1997 1998 1999 2000
------------ ------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $61,218 $39,792 $45,650 $48,704
Accounts Receivable 25,594 25,436 29,684 30,548
Inventory 150,417 156,931 155,204 160,005
Other Current Assets 7,559 8,008 7,504 7,722
------------ ------------- -------------- --------------
TOTAL CURRENT ASSETS 244,788 230,167 238,042 246,980
Net Property, Plant & Equipment 119,723 129,054 127,665 124,644
Existing Goodwill 5,036 4,747 4,740 4,440
Other Intangible Assets 0 0 0 0
Other Assets 886 774 956 1,000
------------ ------------- -------------- --------------
TOTAL ASSETS $370,433 $364,742 $371,403 $377,064
============ ============= ============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank Revolver $1,632 $1,690 $1,514 $2,000
Accounts Payable 22,084 11,572 18,113 18,673
Other Current Liabilities 27,642 35,710 33,314 34,284
------------ ------------- -------------- --------------
TOTAL CURRENT LIABILITIES 51,358 48,972 52,941 54,957
Other Liabilities 0 0 0 0
Deferred Tax 2,983 4,397 5,977 5,000
Existing Senior Debt Masterpiece 120,000 110,000 100,000 90,000
Existing Subordinated Debt Masterpiece 0 0 0 0
------------ ------------- -------------- --------------
TOTAL LONG TERM DEBT 120,000 110,000 100,000 90,000
------------ ------------- -------------- --------------
TOTAL LIABILITIES 174,341 163,369 158,918 149,957
Minority Interest 0 0 0 0
Existing Preferred Stock 0 0 0 0
Common Equity 196,092 201,373 212,485 227,106
------------ ------------- -------------- --------------
TOTAL LIABILITIES AND EQUITY $370,433 $364,742 $371,403 $377,064
============ ============= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
PROJECTED
--------------------------------------------------------------
Fiscal Year End 12/31 2001 2002 2003 2004
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $49,417 $50,375 $65,434 $78,160
Accounts Receivable 32,170 33,644 35,080 36,565
Inventory 168,628 176,509 184,202 192,176
Other Current Assets 8,132 8,505 8,868 9,243
-------------- -------------- -------------- --------------
TOTAL CURRENT ASSETS 258,348 269,034 293,585 316,144
Net Property, Plant & Equipment 120,237 114,618 107,852 100,085
Existing Goodwill 4,140 3,840 3,540 3,240
Other Intangible Assets 0 0 0 0
Other Assets 1,000 1,000 1,000 1,000
-------------- -------------- -------------- --------------
TOTAL ASSETS $383,725 $388,492 $405,976 $420,469
============== ============== ============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank Revolver $2,000 $1,000 $1,000 $1,000
Accounts Payable 19,680 20,599 21,497 22,428
Other Current Liabilities 36,104 37,759 39,370 41,036
-------------- -------------- -------------- --------------
TOTAL CURRENT LIABILITIES 57,784 59,358 61,867 64,464
Other Liabilities 0 0 0 0
Deferred Tax 5,000 5,000 5,000 5,000
Existing Senior Debt Masterpiece 80,000 70,000 60,000 45,000
Existing Subordinated Debt Masterpiece 0 0 0 0
-------------- -------------- -------------- --------------
TOTAL LONG TERM DEBT 80,000 70,000 60,000 45,000
-------------- -------------- -------------- --------------
TOTAL LIABILITIES 142,784 134,358 126,867 114,464
Minority Interest 0 0 0 0
Existing Preferred Stock 0 0 0 0
Common Equity 240,941 254,134 279,109 306,005
-------------- -------------- -------------- --------------
TOTAL LIABILITIES AND EQUITY $383,725 $388,492 $405,976 $420,469
============== ============== ============== ==============
</TABLE>
-----------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 47
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
MANAGEMENT PROJECTIONS
===============================================================================
MASTERPIECE CASH FLOW STATEMENT -- BASE CASE(1) (Figures in Thousands, Except
per Share Data)
<TABLE>
<CAPTION>
ACTUAL ESTIMATED
---------------------------------------- --------------
Fiscal Year End 12/31 1998 1999 2000
------------ ------------- --------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATIONS
Net Income $14,263 $21,593 $24,269
Depreciation 10,502 12,129 13,021
Amortization of Existing Goodwill 0 0 300
Amortization of Intangible Assets 0 0 0
Deferred Taxes 1,414 1,580 (977)
Minority Interest 0 0 0
Change in Working Capital (10,076) 2,733 (4,353)
Change in Other Assets 112 (182) (44)
Change in Other Liabilities 0 0 0
------------ ------------- --------------
CASH PROVIDED / (USED) BY OPERATING ACTIVITIES $16,215 $37,853 $32,216
CASH FLOW FROM INVESTING ACTIVITIES
Capital Expenditures (19,239) (10,123) (10,000)
------------ ------------- --------------
CASH PROVIDED / (USED) BY INVESTING ACTIVITIES ($19,239) ($10,123) ($10,000)
CASH FLOW FROM FINANCING ACTIVITIES
Change in Existing Senior Debt Masterpiece (10,000) (10,000) (10,000)
Change in Existing Subordinated Debt Masterpiece 0 0 0
Change in Existing Preferred Stock 0 0 0
Dividend Paid to Common Shareholders (3,653) (3,511) (3,420)
Change in Common Equity (4,892) (8,463) (6,228)
------------ ------------- --------------
CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (18,545) (21,974) (19,648)
------------ ------------- --------------
Minimum Cash 0 0 0
Adjustment of Foreign Exchange Effect 86 278
(Deficiency) / Excess Cash 39,735 45,826 48,218
(Payments) / Borrowings on Revolver 57 (176) 486
------------ ------------- --------------
TOTAL CHANGE IN CASH ($21,426) $5,858 $3,054
============ ============= ==============
Beginning Cash Balance 61,218 39,792 45,650
Change In Cash (21,426) 5,858 3,054
------------ ------------- --------------
ENDING CASH BALANCE $39,792 $45,650 $48,704
============ ============= ==============
</TABLE>
<TABLE>
<CAPTION>
PROJECTED
-----------------------------------------------------------------
Fiscal Year End 12/31 2001 2002 2003 2004
-------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATIONS
Net Income $23,987 $23,865 $28,221 $30,142
Depreciation 14,407 15,619 16,767 17,767
Amortization of Existing Goodwill 300 300 300 300
Amortization of Intangible Assets 0 0 0 0
Deferred Taxes 0 0 0 0
Minority Interest 0 0 0 0
Change in Working Capital (7,829) (7,154) (6,982) (7,237)
Change in Other Assets 0 0 0 0
Change in Other Liabilities 0 0 0 0
-------------- ------------ ------------- --------------
CASH PROVIDED / (USED) BY OPERATING ACTIVITIES $30,865 $32,630 $38,305 $40,972
CASH FLOW FROM INVESTING ACTIVITIES
Capital Expenditures (10,000) (10,000) (10,000) (10,000)
-------------- ------------ ------------- --------------
CASH PROVIDED / (USED) BY INVESTING ACTIVITIES ($10,000) ($10,000) ($10,000) ($10,000)
CASH FLOW FROM FINANCING ACTIVITIES
Change in Existing Senior Debt Masterpiece (10,000) (10,000) (10,000) (15,000)
Change in Existing Subordinated Debt Masterpiece 0 0 0 0
Change in Existing Preferred Stock 0 0 0 0
Dividend Paid to Common Shareholders (3,326) (3,246) (3,246) (3,246)
Change in Common Equity (6,826) (7,426) 0 0
-------------- ------------ ------------- --------------
CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (20,152) (20,672) (13,246) (18,246)
-------------- ------------ ------------- --------------
Minimum Cash 0 0 0 0
Adjustment of Foreign Exchange Effect
(Deficiency) / Excess Cash 49,417 51,375 65,434 78,160
(Payments) / Borrowings on Revolver 0 (1,000) 0 0
-------------- ------------ ------------- --------------
TOTAL CHANGE IN CASH $713 $958 $15,059 $12,726
============== ============ ============= ==============
Beginning Cash Balance 48,704 49,417 50,375 65,434
Change In Cash 713 958 15,059 12,726
-------------- ------------ ------------- --------------
ENDING CASH BALANCE $49,417 $50,375 $65,434 $78,160
============== ============ ============= ==============
</TABLE>
----------------
(1) Source: Management estimates.
[CIBC WORLD MARKETS LOGO] 48
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
C. PUT/CALL AGREEMENT
[CIBC WORLD MARKETS LOGO] 49
<PAGE>
PROJECT MASTERPIECE / SEPTEMBER 10, 2000
PUT/CALL AGREEMENT
===============================================================================
SUMMARY OF PUT/CALL AGREEMENT
(Figures in Thousands, Except per Share Data)
- Management has entered into a Put/Call agreement which provides for the
sale of management's shares based upon specified EPS targets
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
PUT/CALL PROVISION ANALYSIS -- MANAGEMENT CASE
----------------------------------------------------------------------------------------------------------------------------
PROJECTED
-------------------------------------------
Fiscal Year End 12/31 2001 2002 2003
---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Income - Management Case $29,581 $34,420 $39,145
Shares Outstanding for E.P.S. calculations 17,200 17,200 17,200
---------- ---------- ----------
E.P.S. $1.72 $2.00 $2.28
---------- ---------- ----------
Cumulative E.P.S. at end of 2003 $6.00
Target cumulative E.P.S. in 2003 $4.54
----------
Difference from target $1.46
Additional consideration generated (difference
annualized then multiplied by 8.7) $4.22
Base consideration $16.50
----------
Future value of total consideration $20.72
Discount Rate 10.0% 12.5% 15.0% 17.5% 20.0%
-------- ---------- ---------- ---------- ----------
Present Value of Total Consideration at 12/31/00 $15.57 $14.56 $13.63 $12.78 $11.99
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
PUT/CALL PROVISION ANALYSIS -- BASE CASE
----------------------------------------------------------------------------------------------------------------------------
PROJECTED
-------------------------------------------
Fiscal Year End 12/31 2001 2002 2003
---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Income - Base Case $23,987 $23,865 $28,221
Shares Outstanding for E.P.S. calculations 17,200 17,200 17,200
---------- ---------- ----------
E.P.S. $1.39 $1.39 $1.64
---------- ---------- ----------
Cumulative E.P.S. at end of 2003 $4.42
Target cumulative E.P.S. in 2003 $4.54
----------
Difference from target ($0.12)
Additional consideration generated $0.00
Base consideration $16.50
----------
Future value of total consideration $16.50
Discount Rate 10.0% 12.5% 15.0% 17.5% 20.0%
-------- ---------- ---------- ---------- ----------
Present Value of Total Consideration at 12/31/00 $12.40 $11.59 $10.85 $10.17 $9.55
</TABLE>
[CIBC WORLD MARKETS LOGO] 50
