Equity Valuation Project of Sinclair IS Pharma 2011

SRN 1021950

Submission deadline 260811

Project Title Equity Valuation Project of Sinclair IS Pharma

CFA PROJECT

2

Illustrating recent stock price performance over a one year period

Sinclair IS Pharma an international pharmaceutical company recently created though a

merger of IS Pharma and Sinclair Pharma The corporate headquarter are currently in

London UK and its operational headquarters are in Paris France By merging the two which were currently rivals a fully integrated pan

European specialist pharmaceutical company has been emerged The initial announcement of the merger took place in February i

strong buy

Contact Info

Address 1st Floor Whitfield Court

30-32 Whitfield Street

London W1T 2RQ

United Kingdom

Website httpwwwsinclairispharmacom

Tel +44 20 7467 6920

Fax +44 20 7467 6930

Stock price 08122011 23p

Recent stock performance

1 week -34

4 weeks -175

13 weeks -198

52 weeks -331

Analaysts

Consenus

Buy now

(08122011)

at 23 p

3

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011

pound M

illio

ns

Yearly Sales IS Pharma Sinclair

iiSinclair IS Pharma is an international pharmaceutical company a merger created from the two companies IS Pharma and

Sinclair Pharma The corporate headquarter are currently in London UK and its operational headquarters are in Paris France By merging the two which were currently rivals a fully integrated pan European specialist pharmaceutical company has been emerged The initial announcement of the merger took place in February 2011 The Company provides solutions to treat

wounds dermatological and oral diseases through surface technology and delivery systems The Company operates in two segments International Operations and Country Operations Its areas in dermatology cover fungal infections acne atopic dermatitis and family dermatology Its areas in wound care covers skin disinfection radiation dermatitis treatment and wounds and burns healing Its areas in oral care cover gingivitis periodontitis mouth ulcers and teething

Main Products include iii

Objectives met by Sinclair include reducing overheads by 15 million compared to 2009 they have developed many new programmes including

Terbinafine spray Kelo-cote line extensions and Flammacerium They have recently secured their French reimbursement for

Atopiclair and its Decapinol deal in US

They currently have 3 new drugs developed 6 medical devices 3 cosmetics and an ongoing upgrade of dossiers and line extensions In addition have been able to acquire further products such as Terbinafine an a thletersquos foot spray which are

targeting specialists Partnerships include a licensed Decapinal deal in the US to Sunstar a deal with Invida for South Eas t Asia and they are aiming for more deals in other regions

Sales Analysis

Sinclair IS Pharma reported sales of pound3290 for the fiscal

year ending June 2011 Representing an increase of 191

versus 2010 when the companyrsquos sales were pound2763 million

($511324)

Appendix a

Competitor analysis- Appendix b

Sinclair IS Pharma operate in the Pharmaceutical preparations sector the analysis compares Sinclair IS Pharma to three other

companies which operate in the pharmaceutical sector in the UK They have 101 employees and sales of pound3290 million which

is much higher than its three comparable companies which sales in US dollars are between $174882 and $295202 per

employee

4

Company Year

Ended

Sales

(poundmillions)

Sales

Growth

SalesEmp

(US )

Largest

Region

Sinclair IS

Pharma Plc

Jun

2011

32897 191 511324 Western

Europe

Allergy

Therapeutics

Plc

Jun

2011

41552 20 174882 Central

Europe

(775)

Eco Animal

Health

Group Plc

Mar

2011

27078 244 295202 China

Japan and

the Indian

subcontinent

(369)

Europe

(631)

Vectura

Group Plc

Mar

2011

42900 79 263074 United

Kingdom

(100)

Appendix C

Stock Performance

In past years the stock has underperformed The fiscal year 2004 the stock traded 15750p at its highest versus 2300p on

81211 The 52 weeks ending 081211 the company was down 331 to 2300p During the past 13 weeks the stock has fallen by 198 and the past 52 weeks has performed far worse than its comparable companies which saw changes between -

126 and 135 During the past 13 weeks the stock has fallen 198 During the past 52 weeks the stock of

Sinclair IS Pharma PLC has performed significantly worse than the three comparable companies which saw

changes between 126 and 135 During the 12 months ending 6302011 the company has experienced

losses totalling 500 p per share Note that the earnings number includes or excludes extraordinary charge or

credit This company is currently trading at 246 times the sales The three companies vary greatly in terms of

price to sales ratio trading from 079 times all the way up to 469 times their annual sales Sinclair IS Pharma

PLC is trading at 065 times book value Since the price to book ratio is less than 1 this means that

theoretically the net value of the assets is greater than the value of a company as a going concern At the end

of 2011 this companys intangible assets were quite sizable at pound12361 million while the total common equity

stood at pound12391 million If these intangible assets were to be excluded the companys price to book ratio

would be significantly higher The companys price to book ratio is lower than that of all three comparable

companies which are trading between 141 and 1526 times book value Summary of company valuations as of (08112012)

Company PE PriceBook PriceSales 52 week price

change

Sinclair IS

Pharma Plc

na 065 246 -331

Allergy

Therapeutics Plc

na 1526 079 1351

Eco Animal

Health Group Plc

708 203 419 457

Vectura Group

Plc

na 141 469 -1259

Dividend Analysis ndash Appendix d

The company has reported not paying dividends in the last 12 months and has reported losses during the previous 12 months it

has not been able to pay any dividend during the previous 6 fiscal years

5

Profitability Analysis- Appendix e

The company has sales of pound329 million in 2011 and the cost of goods sold equate to pound1377 million -418 of sales so gross

profit 528 of sales The gross profit margin is lower than that achieved in 2010 when cost of goods sold totalled 366 of

sales The profit margin was the lowest in 2011 than the previous five years 2009 held a high of 697 The companies

EBITDA WAS $-521 million which equates to -158 sales The EBITDA margin worsened in 2011 As it was -18 of sales in

2010 The three comparable companies have positive EBITDA margins whilst IS Pharma Sinclair had a negative margin for

2011 their earnings before extraordinary items were -pound1167 million or -355 of sales This profit margin is an improvement

for the company which was achieved in 2010 when profit margin was-638 of sales N For the past three years the company

has reported losses for before extraordinary items It was 2009 the company reported profits from ordinary operations which

was pound334 million In 2011 the return on equity was -176 which is significantly better than its return in 2010 of -262

showing new changes involved in the structure of the company could be a positive sign

Profitability Comparison

Company Year Gross Profit

Margin

EBITDA

Margin

Earns before

extraordinary

items

Sinclair IS

Pharma

2011 582 -158 -355

Sinclair IS

Pharma

2010 634 -18 -638

Eco Health

Group Plc

2011 396 208 59

Vectura Group

Plc

2011 967 28 -205

Allergy

Therapeutics

Plc

2011 723 39 -64

Financial Position- Appendix f ampg

The companyrsquos long term debt was pound715 million in June2011 and liabilities were pound3722 million The long term debt to equity

ratio was very low 006 suggesting Sinclair IS Pharma is not efficient in collecting payments Accounts receivable was pound1397

million equivalent to 155 days of sales This is higher than at the end of 2010 when it was 119 days of sales in accounts

receivable The 155 days of accounts receivable is higher than its three comparable companies for the year of 2011

Research and Development

Expenses were pound718000 equivalent to 225 of sales R amp D increased both as a percentage of sales in 2010 in which pound533 00

was spent 19 of sales R amp D of comparable companies were fairly dispersed with IS Pharma Sinclair in the middle

Inventory Analysis

June 2011 the inventory was pound959 million and cost of goods sold was pound1377 million for the year with a turnover of inventory of

14 times per year which is an increase to the previous year The 14 times turnover is higher than its comparable companies

with IS Pharma Sinclair increasing its inventory turnover consecutively for four years

Financial Position

Company Year LT DEBT

EQUITY

DAYS

ACCOUNTS REC

DAYS

INVENTORY

R amp D SALES

Sinclair IS

Pharma

2011 006 155 254 22

Eco Health Group 2011 578 50 224 40

6

Plc

Vectura Group Plc 2011 0 133 107 01

Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis

Pharmaceutical Industry Competition and market dynamic Health Care Sector overview Appendix h

Stocks show a trend of being less responsive to economic change when comparing to those within the general market

Health inflation is on average higher than the inflation rate

The stock value affected by declining health care related industries and higher rates of unemployment

Strong and expanding sector but is dependent on provisions and management of health care related services

Diverse range of operations eg medical equipment insurance and pharmaceutical companies

Competitive industry but quite stable for investors

The pharmaceutical industry can be traced back to the fourteenth century but more focus on it has been since the 1950rsquos As

the growing population ages there is a growing rise in consumer expectations in this area and pharmaceutical companies are

continuing to create unmet medical needs specifically in developing worlds The main funding behind the pharmaceutical

industry is R amp D investment to create novel drugs Health care costs are currently increasing faster than GDP so therefore it is

unsustainable in healthcares systems in both public and private companies creating barriers to entry being erected There is

growing pressure on pricing and reimbursement and customers increasingly want value for money Also R amp D costs are

increasing more than inflation and the number of new drugs entering the market has fallen The drugs are categorized in two

forms high priced niche specialist drugs lsquoblockbustersrsquo and rans

The pharmaceutical industry relies on a set period of patent protection which provides a monopoly on the profits as a reward for

heavily costs of R amp D This period for which the costs are regained has been shortened by the longer time to market due to the

increased regulations and barriers to market entry based around price and reimbursement

The health industry is a multimillion dollar industry and is known to have a safe nature generic when the economy is down

Pharmaceutical companies always are needed as they are a necessity to people They operate from small to large

experimental companies and manufacture create and market licensed drugs for use as medications The sector is subject to a

variety of laws and regulations in regards to patenting testing and ensuring the safety and efficiency when making and

marketing the drugs

Market IS Pharma Sinclair Operates iniv v

PEST ANALYSIS

7

In terms of political awareness the pharmaceutical industry has increasing awareness due to recognition of the implications of

healthcare as a component of social welfare therefore this will increase the social and financial burden of health care for

example the NHS debate in the UK and Medicare in the US

In 2003 the pharmaceutical industry experienced high mergers and acquisitions Their stock value grew by 105 and health

care grew by 125 from 2003 to 2010 The audit value of the industry was recorded at 500 billion dollars and by 2004 Only

information technology has a higher growth rate at 126 The major countries operating pharmaceutical industries are the US

EU and Japan The Market spreads over nine major geographic markets which account for 80 of the sale (US Japan

France Germany UK Italy Canada Brazil and Spain) The US is the fastest growing country since 1995 and accounts for

60 of sales and alone the US grew by 16 in 2000 total the industry to $133 billion dollars making it a key company to the

pharmaceutical market

In terms of the social impact of the pharmaceutical industry health is an important social and personal role in obtaining soc ieties

needs and therefore cannot be underestimated Global epidemics such as the SARS virus and AIDS which has concerned

awareness from the media has resulted in an increased effort to have good government industry society relations

In terms of technologic advance the industry is very competitive and the technological advances and modern application of

science is forcing the players in the industry to adapt quicker than ever in an evolving environment in which they participat e on

The new advances have increased spending on research and development costs for even more advancement

The legal side of the industry is heavily regulated and compliance enforcing as a result heavy regulatory compliance and legal

overheads have to be taken in Which can be said to restrict the vitality of the environment but the government is now

requesting industry applications non regulatory overheads so that there is no discouragement in the challenges from external

markets

Swot analysis

Strengths

Internal industry components provide value quality and service

Low operating overhead Firm fiscal management low staff turnover

and high ROI

Weaknesses

High risk business modelling

Disengaged board of directors

Dated medical equipment and poor branding Poor staff moral

Diseconomies of scale

Opportunities

Recent published research Increase health conscious consumer

Increased demand for product

Change in food and drug administration standards

Decreased employee health care costs

Threats

Increased government regulation Decreased economy

Increase in r amp d costs

Decrease in global population

Low- patents

at first

Medium- after

patents expire

LOW LOW

High ndash advantage

gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces

Pharmaceutical Sector in Europe

8

Pharmaceuticals in Europe

lsquoMarket entry of generic drugs is delayed and there is a decl ine in the number of novel medicines reaching the market

according to the European Commissions final report on competition in the pharmaceutical sector lsquovi

The pharmaceutical sector is vital to the health of Europes citizens and medicines are a major expense Europe spends euro214

billion per year - in retail prices ndash on pharmaceuticals this is 2 of our GDP This means around euro430 per year for every man

woman and child Europes ageing population will only increase the financial constraints on public health budgets At the same

time many patents for the best selling medicines are due to expire in the next few years So forecasting to the future for this

sector it looks to grow

Price differences of pharmaceuticals across the EU are linked to two main factors

differences in expenditure on health (associated with GDP)

differences in pricing policy and regulation

Reasons for growth in the pharmaceutical market

Porter (1990) states that political and economic changes can lead to increased demand conditions for products Demand conditions are one important component of Porterrsquos Diamond This work has been seen as an important addition to the political social technological and economic factors (PEST) which have often been used to scan the changes taking place in the

business environment Porter (1990) also showed that factor conditions are also important in explaining international product ion Factor conditions in

the US are such that there is a skilled labour supply of researchers in this industry the same is true of the UK Due to the value of the pound it has become more expensive to do business in the UK and so firms like GSK are star ting to do more research in the US and Asia

In terms of other factor conditions China and India have an abundant supply of low cost labour India has become a large world supplier of generics and is also trying to move up the value chain by purchasing European and US firms Porterrsquos approach to analysing the global environment also includes related supporting industries which are left out by tradi tional

PEST analysis This includes infrastructure available in the industry of a particular country Governments have increasingly focused on encouraging clusters and science and technology parks offering shared facilities and experience as well as government support UK examples in the pharmaceutical industry include Oxford and Cambridge where various industr ial links

and universities are widely available With regards to the pharmaceutical industry there has been an emergence of new players in the generic sector particularly

from India and Chinav ii

Upgraded to Overweight European Pharmaceuticals

Indicators are rolling over making EU Pharma to overweight consistent with the positive fundamental view on the

sector Lead indicators in major Western markets are rolling over and the pharmaceutical sector has been one of the most negatively correlated to lead indicators The weighting change is further supported by attractive valuation signs of stabilisation in earnings momentum and pharmrsquos position as the biggest underweight for long-only investors

Valuation prices worse than worst case gt80 upside possible European pharma trades near its lowest levels over 20 years on relative 1 year forward PE vs msci Europe The last time pharma traded at similar levels was 1993-1994 the sector outperformed the market by 130 in the years that followed With

valuation implying -12 CARG for unlevered FCFrsquos from 2013 to 2020 we see the possibility of gt8- upside should our view of gt35 CARG materialise

Looking ahead European pharma companies by a large margin are the leaders in emerging markets business diversification and other factors that limit the impact of the industry generics cliff With a number of price effects from US reforms and EU austerity annualising

later this year we expect improved earnings momentum

Prefer EU over us PHARMA

The divergence between developed and emerging markets growth is increasingly apparent favouring EU pharma companies due to their lower US exposures higher EM exposures and better business diversification

Risks for the European pharma sector include 1 the inability to increase or restore R amp D productivity 2 pressures on pricing government reforms

9

3 worse than expected margins as key blockbuster products (eg Plavix Seroquel) generalize during the generics cliff

4 pressures on cash flows from the payment of long term standing legal issues 5 and loss of important growth contributions from emerging marketsviii

WACC- Appendix j

WACC Calculation

Target Capital Structure (1)

Debt to Total Capitalization 309

Equity to Total Capitalization 691

Debt to Equity Ratio 453

Cost of Equity

Risk-free rate (2) 40

Market risk Premium (3) 50

Levered Beta (4) 103

Size Premium (5) 17

Cost of Equity 108

Cost of Debt Cost of Debt 70

Taxes 210

After Tax Cost of Debt 55

WACC 92

Given a weighted average cost of capital of 92 as the minimum rate of return at which IS Pharma Sinclair will produce value

for investors

References

All financial data extracted from IS Parma Sinclair Annual Report 2011 2010 and 2009

Comparable data extracted from yahoocomfinance

i What the merger has brought

This merger illustrates two areas of expertise join together to create a company which is a fully integrate pan European

speciality pharmaceutical which should create a synergy to all its shareholders as opportunities such as cross selling can be

made by combing the two companies portfolios and creating an in house development capability on leveraging the existing

portfolio as well as new developments They also can access prospects in emerging markets which would increase its growth

through existing and new regional strategic partnerships To investors the company will be attractive as it represents

commercialisation of partner for out licensors of European network and has already established routes in emerging markets

Now Sinclair IS Pharma operates as a fully integrated specialty Pharma company with enlarged specialty product portfolio with broader reach and is creating substantial Pharma business They operate as a strong European business and have emerging market partnerships and opportunities with a strong partner of

choice for product distribution The future looks strong for future growth and they have capability to self-fund future development with a reduced risk with enhanced growth profile

10

IS Pharma Sinclair growth strategy is to focus on core products have key product launches and drive their efficiencies They try

to sweat their enlarged portfolio to drive growth and be able to grow a brand led business through its acquisition and

development

iiiMain products Atopicliar - used to the treatment of eczemaatopic dermatitis Decapinol - used in the treatment of gingivitisgum disease Aloclair - used in the treatment of mouth ulcers s

Xclair - used in the treatment of radiation dermatitis Effadiane - for the relief of skin dryness through environmental factors Salinum - for the relief of dry mouth condition caused by a deficiency in saliva production

Papulex - used to treat inflammatory blemishes SPHR980 - used to treat head lice

iv IS Pharma Sinclair webpage presentation lsquo2011 reviewrsquo

v Source httpwwwequitymastercomresearch-itsector-infopharma vi httpwwweubusinesscomtopicspharmasector -inquiry-guide

vii httpwwwims-productivitycomusercustomjournal2008SpringIMSspr08pg14_18pdf

viii UBS Investment Research

Appendices

Appendix a ndash Sales Analysis

Year Sales Growth Cost of Goods sold of sales EBITDA OF SALES EBI OF SALES Employee

Sales per employeed

After tax income per employee

2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446

Appendix b - Comparables Comparable Companies Unlevered Beta

Company

Levered Beta (1)

Market Value of Debt (2)

Market Value of Equity (3) Debt Equity

Equity Total Assets

Marginal Tax Rate

SINCLAIR IS PHARMA 052 500 1125 0444444444 0692307692 03

ALLERGY THERAPEUTICS PLC 131 400 868 0460829493 0684542587 03

ECO ANIMAL HEALTH 115 450 7875 0571428571 0636363636 03

VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg

(2) Book Value of Debt

(3) From Bloomberg (4) Unlevered Beta = Predicted Levered Beta (1 +

DebtEquity) x (1-t))

Relevered Beta

Mean Unlevered Beta

Mean Target Debt Equity

Target Marginal Tax Rate Relevered Beta

Target Company

0779158663 0452508961 03 1025962057

Appendix C ndash Price Analysis year Quarter High Price Low Price Closing Price Quarterly Change 12 months change

2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12

Appendix d ndashEarns and Dividend Analysis

EARNINGS AND DIVIDENDS ANALYSIS FundamentalsEarnings amp Dividends Analysis Sinclair IS Pharma PLC

Per Share Pounds SterlingFiscal Year Ends in June

Earnings Per Share Dividends Per Share

12 Months Quarterly Reported Earnings 12 Months Quarterly Reported Dividends

Fiscal Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Years Earnings Change Sep Dec Mar Jun Dividends Change Sep Dec Mar Jun Payout

2003G H 004 nc na na na na 000 nc na na na 000 00

2004DG F 007 nc na na na na 000 nc na na na 000 00

2005D F 005 nc na 004 na 001 000 nc na na na 000 00

2006BD F 005 nc na 003 na 002 000 nc na na na 000 00

2007 AF 005 nc na 003 na 002 000 nc na na na 000 00


2009 F 004 nc na 004 na 008 000 nc na na na 000 00

2010E ACF 014 nc na 013 na 001 000 nc na na na 000 00

2011D ACF 005 nc na 002 na 003 000 nc na na na 000 00

Appendix e - Profitability Analysis

Operating Income Margin

-133 -05 -28 -106 -261

Pretax Income Margin

-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244

Return on Equity - Total

-264 -54 54 -7 -65

Return on Invested Capital

-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18

Interest Expense on Debt

933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp

Administrative Expenses of

652 617 621 715 867

Sales

ResearchExpense amp Development

19 13 28 23 17

OperatingTotal CapitalIncome Return On

-42 21 192 -61 1591

13

Appendix F ndash Balance Sheet data ndash from SPH annual report 2009 -2011

Financial Statement AnalysesBalance Sheet - Five-Year Averages Balance Sheet - (5 Year Averages)

Figures in millions of Pounds Sterling Fiscal Year 2010 2009 2008 2007

Fiscal Year End Date 6302010 6302009 6302008 6302007

Assets Total Assets 814 685 567 44

CashInvestmentsamp Short Term 22 28 43 42

Cash 22 28 43 42

Short Term Investments 0 0 0 0

Receivables (Net) 94 85 72 51

Inventories -Total 33 25 18 11

Raw Materials 1 07 04 03

Work in Process 01 01 01 0

Finished Goods 23 18 13 09

OtherProgress Payments amp 0 0 0 0

Prepaid Expenses Other Current Assets 09 08 06 04

Current Assets - Total 159 146 139 108

Long Term Receivables 02 02 02 02

InvestmentCompaniesin Associated 0 0 0 0

Other Investments 0 0 0 0

Property- Gross Plant and Equipment 27 22 17 12

Accumulated Depreciation 1 07 05 03

EquipmentPropertyndashPlantNet and 17 15 12 08

Other Assets 636 522 414 322

Deferred Charges 0 0 0 0

Tangible Other Assets 06 05 04 04

Intangible Other Assets 63 517 409 318

Total Assets 814 685 567 44

Liabilities amp Shareholders Equity Total Liabilities amp 814 685 567 44

Shareholders Equity Accounts Payable 54 47 38 28

Short Term Debt amp Current 46 17 1 05

Portion of Long Term Debt Accrued Payroll Income Taxes Payable 01 01 01 02

Dividends Payable Other Current Liabilities 43 36 26 19

Current Liabilities - Total 144 101 75 54

Long Term Debt 25 2 11 02

Long Term Debt Excluding 24 19 1 02

Capitalized Leases

14

Capitalized Lease 01 01 01 01

Obligations Provision for Risks and Charges Deferred Income Deferred Taxes -09 -05 -02 -01

Deferred Taxes - Credit Deferred Taxes - Debit Deferred Tax Liability in Untaxed Reserves Other Liabilities 08 07 07 07

Total Liabilities 172 128 93 67

Non-Equity Reserves 0 0 0 0

Minority Interest 0 0 0 0

Preferred Stock 0 0 0 0

Preferred Stock Issued for ESOP ESOP Guarantees - Preferred Issued Common Equity 642 558 473 373

TotalShareholdersLiabilitiesEquityamp 814 685 567 44

Balance Sheet yr to yr change Financial Statement AnalysesBalance Sheet - Year - Year Change

Ba lance Sheet - (Year to Year Percent Change) Figures are the Percent Changes from the Prior Year Fi scal Year 2010 2009 2008 2007 2006

Fiscal Year End Date 6302010 6302009 6302008 6302007 6302006

Assets Tota l Assets 84 1 232 -38 1476

CashInvestmentsamp Short Term 22534 -916 -623 -446 26

Cash 22534 -916 -623 -446 26

Short Term Investments Receivables (Net) 24 -403 1096 -62 636

Inventories -Total 254 126 563 -171 3341

Raw Materials 311 209 668 -167 29727

Work in Process -4 -734 4697 -411 Finished Goods 235 164 438 -165 2242

Progress Payments amp Other Prepaid Expenses Other Current Assets -16 -222 655 376 802

Current Assets - Total 23 -331 603 -187 51

Long Term Receivables

-100 Investment in Associated

Companies Other Investments -100

Property- Gross Plant and Equipment -04 87 109 251 1906

Accumulated Depreciation 227 443 783 19 515

15

EquipmentPropertyndashPlantNet and -198 -101 -75 268 2964

Other Assets 64 121 181 -24 1992

Deferred Charges

Tangible Other Assets 6135 -719 3064 -958 Intangible Other Assets 57 125 177 08 1891

Tota l Assets 84 1 232 -38 1476

Liabilities amp Shareholders Equity

Tota l Liabilities amp 84 1 232 -38 1476

Shareholders Equity

Accounts Payable 109 -148 221 426 49

Short Term Debt amp Current 2944 201 4481 -297 679

Portion of Long Term Debt Accrued Payroll

Income Taxes Payable -957 895 303 -81 19471

Dividends Payable

Other Current Liabilities -00 -56 1529 -68 321

Current Liabilities - Total 769 -37 884 121 51

Long Term Debt -445 112 4839 1403 686

Long Term Debt Excluding -442 129 6933 177 356

Capitalized Leases Capitalized Lease -717 -492 -416 804 180

Obl igations Provis ion for Risks and -714

Charges Deferred Income -896 -216 -566

Deferred Taxes

Deferred Taxes - Credit Deferred Taxes - Debit 537 842 945

Deferred Tax Liability in Untaxed Reserves

Other Liabilities 109

-100 -27 Tota l Liabilities 432 -1 739 165 891

Non-Equity Reserves Minori ty Interest -100

91 120

Preferred Stock Preferred Stock Issued for

ESOP ESOP Guarantees -

Preferred Issued Common Equity -15 16 136 -68 1597

Tota lShareholdersLiabilitiesEquityamp 84 1 232 -38 1476

SPH Balcnce sheet total asset

Figures are expressed as Percent of Total Assets

Total Assets are in millions of Pounds Sterling

Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722

CashInvestmentsamp Short Term 2200 01 1200 4000 7000

Cash 2200 01 1200 4000 7000

Short Term Investments 00 00 00 00 00

Receivables (Net) 96 102 173 101 104

Inventories -Total 5100 4400 4000 3100 3600

Raw Materials 16 13 11 08 09

Work in Process 01 01 02 00 01

Finished Goods 3500 3000 2600 2300 26

OtherProgress Payments amp 00 00 00 00 00

Prepaid Expenses

Other Current Assets 11 12 15 11 08

Current Assets - Total 18 159 239 184 218

Long Term Receivables 00 00 00 1700 00

InvestmentCompaniesin Associated 00 00 00 00 00

Other Investments 00 02 00 00 00

Property- Gross Plant and Equipment 3200 3500 3300 3600 2800


EquipmentPropertyndashPlantNet and 14 19 21 28 2200

Other Assets 80600 82000 73900 77100 76100

Deferred Charges 00 00 00 00 00

Tangible Other Assets 07 01 04 01 26 Intangible Other Assets 799 819 736 77 735

Total Assets 1000 1000 1000 1000 1000

Liabilities amp Shareholders

Equity

Total Liabilities amp 93600 86400 85500 694 72200

Shareholders Equity

Accounts Payable 65 63 75 76 51

Short Term Debt amp Current 157 43 36 08 11

Portion of Long Term Debt

Accrued Payroll

Income Taxes Payable 00 02 01 01 05

Dividends Payable

Other Current Liabilities 5900 6400 6800 33 34

Current Liabilities - Total 281 172 18 118 101

Long Term Debt 27 53 48 1 04

Long Term Debt Excluding 27 53 47 07 03

Capitalized Leases

Capitalized Lease 00 01 01 03 02

Obligations

Provision for Risks and 01 04 02

Charges

Deferred Income 00 03 04 12

Deferred Taxes -21 -15 -08 -05 00

Deferred Taxes - Credit

Deferred Taxes - Debit 21 15 08 05

Deferred Tax Liability in

Untaxed Reserves Other Liabilities 03 03 00 24 24

Total Liabilities 291 22 225 159 131

Non-Equity Reserves 00 00 00 00 00

Minority Interest 00 00 00 00 00

Preferred Stock 00 00 00 00 00

Preferred Stock Issued for ESOP ESOP Guarantees - Preferred Issued

17

Common Equity 709 78 775 841 868

TotalShareholdersLiabilitiesEquityamp 100 100 100 100 100

Appendix g- Income statement- figures from Annual report 2009-2011

Income Statement - (4 Year Averages) Figures in millions of Pounds Sterling Fiscal Year 2010 2009 2008 2007

Net Sales or Revenues 246 205 149 107

Cost of Goods Sold 83 67 52 37

Depreciation Depletion amp Amortization 19 15 12 1

Gross Income 144 122 85 6

Selling General amp Administrative Expenses 164 141 11 82

Other Operating Expenses 0 0 0 0

Operating Expenses - Total 267 224 174 129

Operating Income -2 -19 -24 -22

Extraordinary Credit - Pretax 12 12 08 0

Extraordinary Charge - Pretax 41 14 05 03

Non-Operating Interest Income 01 01 02 02

Reserves - IncreaseDecrease Pretax Equity in Earnings 0 0 0 0

Other IncomeExpense - Net -02 -01 0 01

EarningsAmortizationbefore(EBITDA)Interest Taxes Depreciation amp -31 -06 -07 -12

Earnings before Interest amp Taxes(EBIT) -51 -21 -2 -23

Interest Expense on Debt 04 02 01 0

Interest Capitalized 0 0 0 0

Pretax Income -55 -24 -21 -23

Income Taxes -05 -04 -03 01


Equity in Earnings 0 0 0 0

After Tax Other IncomeExpense 0 0 0 0

Discontinued Operations 0 0 NetDividendsIncome before Extraordinary ItemsPreferred -5 -2 -18 -24

Extraordinary Items amp GainLoss Sale of Assets 0 0 0 0

Preferred Dividend Requirements 0 0 0 0

NetCommonIncome after Preferred Dividends - available to -5 -2 -18 -24

Income Statement revenues

Figures are expressed as Percent of Net Sales or Revenues Net Sales or Revenues are in millions of Pounds Sterling Fiscal Year 2010 2009 2008 2007 2006

Net Sales or Revenues 276 304 303 232 116

Cost of Goods Sold 366 303 339 33 354

Depreciation Depletion amp Amortization 116 85 68 61 4

Gross Income 519 612 593 609 606

Selling General amp Administrative Expenses 652 617 621 715 867

Other Operating Expenses 00 00 00 00 00

Operating Expenses - Total 1133 1005 1028 1106 1261

18

Operating Income -133 -05 -28 -106 -261

Extraordinary Credit - Pretax 00 55 135 00 00

Extraordinary Charge - Pretax 482 143 35 71 00

Non-Operating Interest Income 00 00 01 04 24

Reserves - IncreaseDecrease

00

Pretax Equity in Earnings 00 00 00 00 00

Other IncomeExpense - Net -16 -19 -09 07 05

EarningsDepreciationbeforeamp AmortizationInterest Taxes(EBITDA) -515 -27 132 -105 -192

Earnings before Interest amp Taxes(EBIT) -631 -112 64 -166 -232

Interest Expense on Debt 34 21 12 06 05

Interest Capitalized 00 00 00 00 00

Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07


Equity in Earnings 00 00 00 00 00

After Tax Other IncomeExpense 00 00 00 00 00

Discontinued Operations 00 00 00 00 00

NetItemsPreferredIncome beforeDividendsExtraordinary -638 -119 11 -182 -244

ExtraordinaryAssets Items amp GainLoss Sale of 00 00 00 00 00

Preferred Dividend Requirements 00 00 00 00 00

NetavailableIncometo Commonafter Preferred Dividends - -638 -119 11 -182 -244

Appendix h Healthcare industry statistics source Reuters Industry Statistics Stat Notes

stock research rating Hold hellip

Potential saf ety margin 38 hellip

WACC discount rate 7 Low ~ Good f or inv estors

Comparators Stat Notes

rev enue EV multiple 28x High ~ Bad f or inv estors

EBITDA EV multiple 94x High ~ Bad f or inv estors

EBIT EV multiple 129x hellip

Cash f low ev multiple 128x hellip

Book v alue EV multiple 10x Low ~ Good f or inv estors

DISC CASH FLOW Ratios Notes

REVENUE GROWTH 13 High ~ Good f or inv estors

EBITDA MARGIN 26 High ~ Good f or inv estors

EBIT MARGIN 22 High ~ Good f or inv estors

CASH FLOW MARGIN 14 High ~ Good f or inv estors

TAXES RATE 21 hellip

DEBT-EQUITY RATIO 15 Low ~ Good f or inv estors

ROIC 5 Low ~ Bad f or inv estors

RE-inv estment Rate 13 High ~ Bad f or inv estors

WACC discount rate Rates Notes

19

risk f ree rate 4 Low ~ Good f or Inv estors

cost of debt 7 Low ~ Good f or Inv estors

equity risk premium 5 hellip

debt required return of debt 5 Low ~ Good f or Inv estors

required return of equity 7 Low ~ Good f or Inv estors

Appendix j- WACC AND DCF

(in million) Actual CAGR Forecast period

2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143

Depreciation amp Amortization -1 2 2 4 0 -1 -1 -1 -1

sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23

IncreaseDecrease in NWC -6 -6 -7 32 0 0 0 0

Unlevered Free Cash Flow -3 -4 5 34 3 3 3 3

WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067

Present value of free cash flow 33 2 2 2 2

Terminal Value

Terminal Year Free Cash Flow 3

Perpetuity Growth Rate 30

Terminal Year EBITDA 5

Terminal Value 53

Implied Exit Multiple 108x

Discount Period 50

Discount Factor 06

Present Value of Terminal

Value 34

of Enterprise Value 45

(in million) Actual Forecast period Net Working Capital 2007 2008 2009 2010 2011 2012 2013 2014 2015

Account receivables 5 7 9 9

Inventory 1 2 3 3

Prepaid expenses and other 0 1 1 1

Total Current Assets 7 10 12 14 6 6 7 7 8

20

sales 617 644 576 553 224 224 224 224 224

Account payable 3 4 5 5

Accrued Liabilities

Other Current Liabilities

Total Current Liabilities 5 8 10 14 -4 -4 -5 -5 -5

sales -505 -503 -493 -585

146 146 146 146 146

Net Working Capital 15 22 27 34

2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output

Wacc Calculation Enterprise value

Target Capital Structure (1) Present value of Free Cash Flow 42


Equity to Total Capitalization 691 Terminal Value 53

Debt to Equity Ratio 453 Discount Factor 065

Present Value of Terminal Value 34

Cost of Equity of Enterprise Value 45


Market risk Premium (3) 50 Enterprise value 76

Levered Beta (4) 103 Less Total debt 144 Size Premium (5) 17 Plus Cash and Cash Equi 2

Cost of Equity 108 Net Debt 12

Cost of Debt Implied Equity Value 64

Cost of Debt 70 Outstanding shares 380000000

Taxes 210 Implied share price 000

After Tax Cost of Debt 55 Implied multiples

WACC 92

Enterprise Value 76

SALES 2010 27

(1) Obtained from Beta and Capital Structure tab

EBITDA 2010 4

(2) httpwwwtreasurygovresource-centerdata-chart-centerinterest-ratesPagesTextViewaspxdata=yield

Implied EVSALES 29x

(3) httpwwwftcomcmss030eec02e-03d4-11e1-bbc5-00144feabdc0htmlaxzz1hB0TNS6n

Implied EVEBITDA 200x


(5) Low -Cap Decile size premium based on market capitalization

for growth rate-taken into account a gdp growth rate of 15 and the structure of the company given its recent merge aswell as the financial state of the dcf analysis

Other tables used for analysis

Ratio Analysis

Accounting Ratios Sinclair IS Pharma PLC Fiscal Year 2010 2009 2008 2007 2006


Receivables Turnover 31 35 21 33 15

Receivables - Number of Days 1178 1415 1315 1146 1899

Inventory Turnover 24 26 37 32 26

Inventory - Number of Days 1551 1424 986 1139 1425 GrossEquipmentPropertyTurnoverPlant amp 92 10 109 92 58 NetEquipmentPropertyTurnoverPlant amp 21 185 166 117 75

Depreciation Depletion amp Amortization of Gross Property Plant

amp 1058 85 737 563 231

21

Equipment Depreciation Depletion amp

Amortization 01 01 01 01 -01

Year to Year Change Depreciation Depletion amp

Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization

Figures are expressed as the ratio of Net Sales Net Sales are in millions of Pounds Sterling Fiscal Year 2010 2009 2008 2007 2006


Net Sales 276 304 303 232 116

Cash amp Cash Equivalents 75 03 35 12 433

Short-Term Investments 00 00 00 00 00

Accounts Receivable 327 29 488 304 646

Inventories 173 125 112 93 224


Total Current Assets 61 451 676 551 1352

Totalamp InvestmentsLong Term Receivables 00 05 00 5 00


CompaniesInvestments in Associated 00 00 00 00 00


PropertyGross Plant amp Equipment - 109 10 92 109 173


PropertyNet Plant amp Equipment - 48 54 6 85 134

Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency

Values per Employee are in Pounds Sterling Fiscal Year 2010 2009 2008 2007 2006


Employees 97 125 154 142 71

Values per Employee Sales 284825 243264 196610 163225 163704

Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254

Year to Year Change per Employee Employees -224 -188 85 100 868

Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325

Fixed Charge Coverage

Fiscal Year 2010 2009 2008 2007 2006


EBITTotal Interest Expense -187 -53 53 -299 -499

EBITNet Interest -188 -54 56 -1133 EBIT(TotalDiv) Interest Exp + Pfd -187 -53 53 -299 -499

EBITDividends on Common Shares EBIT(Dividends on Common + Pfd) EBITDATotal Interest Expense -152 -13 109 -189 -414

EBITDANet Interest -154 -13 116 -716 EBITDA(TotalPfd Div) Interest Exp + -152 -13 109 -189 -414

EBITDADividends on Com Shares EBITDA(Dividends on Com + Pfd) Leverage Analysis

Fiscal Year 2010 2009 2008 2007 2006


Long Term Debt of EBIT

2133 Long Term Debt of EBITDA

1036

LongAssetsTerm Debt of Total 27 53 48 1 04

LongCapitalTerm Debt of Total 37 64 59 12 05

LongEquityTerm Debt of Com 38 68 62 12 05

Total Debt of EBIT

3734 Total Debt of EBITDA

1814

Total Debt of Total Assets 185 96 85 18 15

Total Debt of Total Capital 251 116 103 22 17

TotalShortDebtTermDebtof Total Capital amp 207 11 99 21 17

TotalEquityDebt of Common 26 124 109 22 18

Minority Interest of EBIT

06 Minority Interest of EBITDA

03

MinorityAssets Interest of Total 00 00 00 00 00

MinorityCapital Interest of Total 00 00 00 00 00

MinorityEquity Interest of Com 00 00 00 00 00

Preferred Stock of EBIT

00 Preferred Stock of EDITDA

00

PreferredAssets Stock of Total 00 00 00 00 00

PreferredCapital Stock of Total 00 00 00 00 00

PreferredEquity Stock of Total 00 00 00 00 00

23

CommonAssets Equity of Total 709 78 775 841 868

CommonCapital Equity of Total 963 936 941 988 995

Total Capital of Total Assets 736 833 824 851 873

Capital Expenditure of Sales 09 16 05 19 11

FixedEquityAssets of Common 2 24 28 34 25

WorkingCapital Capital of Total -137 -16 72 78 134

Dividend Payout 00 00 00 00 00

FundsTotal DebtFrom Operations of -304 -399 -78 -1917 -2095

Liquidity Analysis Fiscal Year 2010 2009 2008 2007 2006


TotalSalesCurrent Assets Net 61 451 676 551 1352

Cash of Current Assets 123 06 51 218 32

CashCurrentamp EquivalentsAssets of 123 06 51 218 32

Quick Ratio 04 06 1 12 17

ReceivablesAssets of Current 536 643 721 552 478

Receivableof days Turnover - number 1178 1415 1315 1146 1899

InventoriesAssets of Current 283 278 165 169 166

Inventoryof days Turnover - number 1551 1424 986 1139 1425

InventoryEquivalentsto -Cashnumberamp of days 1561 83 112 4645 6949

Receivables of Total Assets 96 102 173 101 104

Current Ratio 06 09 13 16 22


FundsCurrentfromLiabilitiesOperations of -20 -224 -37 -299 -316

FundsLong TermfromDebtOperations of -206 -722 -137 -345 -782

FundsTotal Debtfrom Operations of -304 -399 -78 -1917 -2095

FundsTotal Capitalfrom Operations of -76 -46 -08 -41 -37

Cash Flow (in milllions of Pounds Sterling) Operating Activities -67 0 -36 -15 -29

Financing Activities 265 23 58 -01 54

Investing Activities 179 32 43 06 24

Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012

Operating Income -002 0 -001 -003 -003

Pre-tax Income -011 -004 002 -004 -003

NetOperations)Income (Continuing -011 -004 002 -004 -003

Net Income Before Extra Items -011 -004 004 -005 -003

Extraordinary Items 0 0 0 0 0

NetItemsIncome After Extraordinary -011 -004 004 -005 -003

NetCommonIncomeSharesAvailable to -014 -004 004 -005 -005

Fully Diluted Earnings -014 -004 004 -005 -005

Common Dividends 0 0 0 0 0

Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24

Retained Earnings 013 035 042 038 042

Assets 058 084 092 074 077

2

Illustrating recent stock price performance over a one year period

Sinclair IS Pharma an international pharmaceutical company recently created though a

merger of IS Pharma and Sinclair Pharma The corporate headquarter are currently in

London UK and its operational headquarters are in Paris France By merging the two which were currently rivals a fully integrated pan

European specialist pharmaceutical company has been emerged The initial announcement of the merger took place in February i

strong buy

Contact Info

Address 1st Floor Whitfield Court

30-32 Whitfield Street

London W1T 2RQ

United Kingdom

Website httpwwwsinclairispharmacom

Tel +44 20 7467 6920

Fax +44 20 7467 6930

Stock price 08122011 23p

Recent stock performance

1 week -34

4 weeks -175

13 weeks -198

52 weeks -331

Analaysts

Consenus

Buy now

(08122011)

at 23 p

3

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011

pound M

illio

ns











Sales Analysis




($511324)

Appendix a





employee

4

Company Year

Ended

Sales

(poundmillions)

Sales

Growth

SalesEmp

(US )

Largest

Region

Sinclair IS

Pharma Plc

Jun

2011

32897 191 511324 Western

Europe

Allergy

Therapeutics

Plc

Jun

2011

41552 20 174882 Central

Europe

(775)

Eco Animal

Health

Group Plc

Mar

2011

27078 244 295202 China

Japan and

the Indian

subcontinent

(369)

Europe

(631)

Vectura

Group Plc

Mar

2011

42900 79 263074 United

Kingdom

(100)

Appendix C

Stock Performance
















change

Sinclair IS

Pharma Plc

na 065 246 -331

Allergy

Therapeutics Plc

na 1526 079 1351

Eco Animal

Health Group Plc

708 203 419 457

Vectura Group

Plc

na 141 469 -1259




5














Margin

EBITDA

Margin

Earns before

extraordinary

items

Sinclair IS

Pharma

2011 582 -158 -355

Sinclair IS

Pharma

2010 634 -18 -638

Eco Health

Group Plc

2011 396 208 59

Vectura Group

Plc

2011 967 28 -205

Allergy

Therapeutics

Plc

2011 723 39 -64









Inventory Analysis




Financial Position


EQUITY

DAYS

ACCOUNTS REC

DAYS

INVENTORY

R amp D SALES

Sinclair IS

Pharma

2011 006 155 254 22


6

Plc


Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis























marketing the drugs


PEST ANALYSIS

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

3

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011

pound M

illio

ns











Sales Analysis




($511324)

Appendix a





employee

4

Company Year

Ended

Sales

(poundmillions)

Sales

Growth

SalesEmp

(US )

Largest

Region

Sinclair IS

Pharma Plc

Jun

2011

32897 191 511324 Western

Europe

Allergy

Therapeutics

Plc

Jun

2011

41552 20 174882 Central

Europe

(775)

Eco Animal

Health

Group Plc

Mar

2011

27078 244 295202 China

Japan and

the Indian

subcontinent

(369)

Europe

(631)

Vectura

Group Plc

Mar

2011

42900 79 263074 United

Kingdom

(100)

Appendix C

Stock Performance
















change

Sinclair IS

Pharma Plc

na 065 246 -331

Allergy

Therapeutics Plc

na 1526 079 1351

Eco Animal

Health Group Plc

708 203 419 457

Vectura Group

Plc

na 141 469 -1259




5














Margin

EBITDA

Margin

Earns before

extraordinary

items

Sinclair IS

Pharma

2011 582 -158 -355

Sinclair IS

Pharma

2010 634 -18 -638

Eco Health

Group Plc

2011 396 208 59

Vectura Group

Plc

2011 967 28 -205

Allergy

Therapeutics

Plc

2011 723 39 -64









Inventory Analysis




Financial Position


EQUITY

DAYS

ACCOUNTS REC

DAYS

INVENTORY

R amp D SALES

Sinclair IS

Pharma

2011 006 155 254 22


6

Plc


Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis























marketing the drugs


PEST ANALYSIS

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

4

Company Year

Ended

Sales

(poundmillions)

Sales

Growth

SalesEmp

(US )

Largest

Region

Sinclair IS

Pharma Plc

Jun

2011

32897 191 511324 Western

Europe

Allergy

Therapeutics

Plc

Jun

2011

41552 20 174882 Central

Europe

(775)

Eco Animal

Health

Group Plc

Mar

2011

27078 244 295202 China

Japan and

the Indian

subcontinent

(369)

Europe

(631)

Vectura

Group Plc

Mar

2011

42900 79 263074 United

Kingdom

(100)

Appendix C

Stock Performance
















change

Sinclair IS

Pharma Plc

na 065 246 -331

Allergy

Therapeutics Plc

na 1526 079 1351

Eco Animal

Health Group Plc

708 203 419 457

Vectura Group

Plc

na 141 469 -1259




5














Margin

EBITDA

Margin

Earns before

extraordinary

items

Sinclair IS

Pharma

2011 582 -158 -355

Sinclair IS

Pharma

2010 634 -18 -638

Eco Health

Group Plc

2011 396 208 59

Vectura Group

Plc

2011 967 28 -205

Allergy

Therapeutics

Plc

2011 723 39 -64









Inventory Analysis




Financial Position


EQUITY

DAYS

ACCOUNTS REC

DAYS

INVENTORY

R amp D SALES

Sinclair IS

Pharma

2011 006 155 254 22


6

Plc


Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis























marketing the drugs


PEST ANALYSIS

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

5














Margin

EBITDA

Margin

Earns before

extraordinary

items

Sinclair IS

Pharma

2011 582 -158 -355

Sinclair IS

Pharma

2010 634 -18 -638

Eco Health

Group Plc

2011 396 208 59

Vectura Group

Plc

2011 967 28 -205

Allergy

Therapeutics

Plc

2011 723 39 -64









Inventory Analysis




Financial Position


EQUITY

DAYS

ACCOUNTS REC

DAYS

INVENTORY

R amp D SALES

Sinclair IS

Pharma

2011 006 155 254 22


6

Plc


Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis























marketing the drugs


PEST ANALYSIS

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

6

Plc


Allergy

Therapeutics Plc

2011 0 48 52 821

Industry Analysis























marketing the drugs


PEST ANALYSIS

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

7




















markets

Swot analysis

Strengths



and high ROI

Weaknesses





Opportunities





Threats




Low- patents

at first

Medium- after

patents expire

LOW LOW


gained by the first

mover

High R amp D

costs and

patents for

market are

limited

Porters five Forces


8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

8






























9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

9



WACC- Appendix j

WACC Calculation





Cost of Equity




Size Premium (5) 17

Cost of Equity 108


Taxes 210


WACC 92


for investors

References












10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

10



development








Appendices



Sales per employeed


2003 9079000 na 2646000 2914 1641000 0180746778 440000 004846349 29 3130689655 1517241379

2004 2655000 -7076 1520000 5725 -1648000 -0620715631 -2754000 -10372881 25 106200 -110160

2005 6971000 16256 2380000 3414 -1412000 -0202553436 -2669000 -03828719 38 1834473684 -7023684211

2006 11623000 6673 4112000 3538 -2233000 -0192119074 -2836000 -0243999 71 1637042254 -3994366197

2007 23178000 9941 7645000 3298 -2434000 -0105013375 -4208000 -01815515 142 1632253521 -2963380282

2008 30278000 3063 10258000 3388 3996000 0131977013 3337000 011021204 154 1966103896 2166883117

2009 30408000 043 9211000 3029 -825000 -0027131018 -3621000 -01190805 125 243264 -28968

2010 27628000 -914 10100000 3656 -14227000 -0514948603 -17628000 -06380484 97 2848247423 -1817319588

2011 32897000 1907 13765000 4184 -7667000 -0233060765 -1166000 -0035444 101 3257128713 -1154455446


Company

Levered Beta (1)



Equity Total Assets

Marginal Tax Rate




VECTURA GROUP 112 375 1125 0333333333 075 03

Median 1135

0452636969 068842514

Mean 1025

0452508961 0690803479

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

11

(1) From Bloomberg




Relevered Beta

Mean Unlevered Beta



Target Company

0779158663 0452508961 03 1025962057


2003 Oct - Dec 1435 1205 138 NA NA

2004 Jan - March 1575 138 1445 471 NA

Apr - June 1565 138 14 -311 NA

July - Sep 1175 1015 1 -2857 NA

Oct - Dec 1255 0925 123 2300 -1090

2005 Jan - March 1405 1185 1238 065 -1440

Apr - June 1325 114 132 662 -570

July - Sep 1375 109 1165 -1174 1650

Oct - Dec 1385 114 123 558 000

2006 Jan - March 142 1255 126 244 180

Apr - June 1265 101 1194 -524 -950

July - Sep 1235 097 097 -1876 -1670

Oct - Dec 1195 0995 1087 1206 -1160

2007 Jan - March 1295 103 125 1500 -080

Apr - June 151 116 1215 -280 180

July - Sep 127 0745 085 -3004 -1240

Oct - Dec 086 0635 0705 -1706 -3510

2008 Jan - March 069 032 0363 -4851 -7100

Apr - June 0435 0358 0363 000 -7020

July - Sep 071 0308 0423 1653 -5030

Oct - Dec 045 016 018 -5745 -7450

2009 Jan - March 033 013 0268 4889 -2620

Apr - June 0335 023 025 -672 -3100

July - Sep 0475 0233 044 7600 410

Oct - Dec 047 0315 034 -2273 8890

2010 Jan - March 0354 029 0305 -1029 1400

Apr - June 0325 0241 0265 -1311 600

July - Sep 0297 0245 0275 377 -3750

Oct - Dec 0428 0265 0405 4727 1910

2011 Jan - March 0425 0335 0363 -1037 1890

Apr - June 038 0283 0284 -2176 710

July - Sep 032 0225 0249 -1232 -950

08122011

0213 -1980 -3310

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

12



















-133 -05 -28 -106 -261


-664 -133 52 -172 -237

EBIT Margin

-631 -112 64 -166 -232

Net Income Margin

-638 -119 11 -182 -244


-264 -54 54 -7 -65


-21 -4 56 -66 -62

Return on Assets

-186 -35 48 -58 -54

Asset Turnover

03 04 04 03 02

Financial Leverage

26 124 109 22 18


933000 636000 367000 129000 54000

Effective Tax Rate

Cash Flow Sales

-19 -109 -19 -106 -198

Selling General amp


652 617 621 715 867

Sales


19 13 28 23 17


-42 21 192 -61 1591

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

13







Cash 22 28 43 42
















Other Assets 636 522 414 322













Capitalized Leases

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

14















Cash 22534 -916 -623 -446 26



Raw Materials 311 209 668 -167 29727









15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

15


Other Assets 64 121 181 -24 1992

Deferred Charges


Tota l Assets 84 1 232 -38 1476



Shareholders Equity





Dividends Payable



Long Term Debt -445 112 4839 1403 686





Deferred Taxes






91 120








Fiscal Year 20100 20090 20080 20070 20060


Assets

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

16

Total Assets 936 864 855 694 722


Cash 2200 01 1200 4000 7000


Receivables (Net) 96 102 173 101 104




Finished Goods 3500 3000 2600 2300 26


Prepaid Expenses









Other Assets 80600 82000 73900 77100 76100



Total Assets 1000 1000 1000 1000 1000


Equity


Shareholders Equity




Accrued Payroll


Dividends Payable





Capitalized Leases


Obligations


Charges


Deferred Taxes -21 -15 -08 -05 00










17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

17

Common Equity 709 78 775 841 868



































Gross Income 519 612 593 609 606




18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

18






00







Pretax Income -664 -133 52 -172 -237

Income Taxes -26 -14 -58 1 07





























19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

19








2007 2008 2009 2010 (07 -10) 2011 2012 2013 2014 2015

Sales 11 15 21 25 32 27 29 31 33 36

growth 393 376 200 80 80 80 80 80

Total costs 13 17 22 27 27 -23 -25 -27 -29 -31

sales 857 857 857 857 857

EBITDA -3 -1 -1 -1 -27 4 4 4 5 5 margin -290 -40 -34 -49 143 143 143 143 143


sales 75 -101 -83 -175 18 18 18 18 18

EBIT -2 -2 -2 -6 34 3 4 4 4 5

Taxes (30) 0 0 0 -1 -1 -1 -1 -1 -1

Capex -01 45 26 137 -1 -1 -1 -1 -1

sales -302 -127 -556 23 23 23 23 23



WACC 92

Discount Period

05 15 25 35 45

Discount Factor

096 088 080 074 067


Terminal Value




Terminal Value 53


Discount Period 50

Discount Factor 06


Value 34




Inventory 1 2 3 3



20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

20

sales 617 644 576 553 224 224 224 224 224


Accrued Liabilities



sales -505 -503 -493 -585

146 146 146 146 146


2 2 2 3 3

sales 144 145 133 138 8 8 8 8 8

Input Output
















WACC 92

Enterprise Value 76

SALES 2010 27


EBITDA 2010 4


Implied EVSALES 29x







Ratio Analysis








amp 1058 85 737 563 231

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

21




Amortization 239 254 45 2054 -611

Year to Year Change

Asset Utilization



Net Sales 276 304 303 232 116




Inventories 173 125 112 93 224










Other Assets 273 233 2089 231 4722

Total Assets 3388 2841 2825 2996 6208

Employee efficiency



Employees 97 125 154 142 71


Net Income -181732 -28968 21669 -29634 -39944

Cash Earnings -54216 -26576 -3682 -17225 -32493

Working Capital -97165 -9192 32825 32296 118423

Total Debt 178093 66680 47065 8986 15507

Total Capital 710598 575680 457604 416176 886831

Total Assets 964918 690992 555494 489000 1016254


Sales 171 237 205 -03 -108

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

22

Net Income

-2337 Cash Earnings

Working Capital

-128 16 -727 -192

Total Debt 1671 417 4238 -421 -10

Total Capital 234 258 10 -531 387

Total Assets 396 244 136 -519 325


Fiscal Year 2010 2009 2008 2007 2006







Fiscal Year 2010 2009 2008 2007 2006




1036




Total Debt of EBIT


1814







03






00




23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

23






























Per Share data

Fiscal Year 2010 2009 2008 2007 2006


Sales 017 029 032 025 012


Pre-tax Income -011 -004 002 -004 -003








Cash Earnings -004 -004 -001 -003 -004

Book Value 041 065 071 062 067

24


Assets 058 084 092 074 077

24


Assets 058 084 092 074 077

Documents

Equity Valuation Project of Sinclair IS Pharma 2011