Professional Documents
Culture Documents
Assets
Cash $1,884
U.S. Treasury tax notes and other Treasury obligations 9,328
Due from U.S. government 868
Accounts receivable net 2,316
Inventories, at lower of cost or market 6,888
Other current assets 116
Total current assets $21,400
Investments 1,768
Land 92
Buildings 6,240
Equipment 18,904
Less: allowance for depreciation 7,056
Total plant, property, and equipment—gross 18,180
Construction in process 88
Total plant, property, and equipment—net* 18,268
Patents 156
Cash value of life insurance 376
Deferred assets 156
Total assets 42,124
Ratio analysis
Sales 100.0 100.0 100.0 100.0 100.0
Cost of goods sold 71.4 69.2 68.9 70.0 75.0
Gross
Selling,profit general, and 28.6 30.8 31.1 30.0 25.0
administrative 5.6 6.0 6.4 5.8 5.9
Other income—net 0.3 1.6 0.3 0.2 0.5
Income before federal taxes 23.3 26.5 25.0 24.3 19.5
Net income 14.3 15.1 14.7 13.9 11.3
(Unaudited)
Three months ended 3/30
2007 2008
$11,728 $14,162
8,730 10,190
2,998 3,972
668 896
14 198
2,344 3,274
1,009 1,391
1,335 1,883
576 753
364 394
580 640
1,130 1,365
100.0 100.0
74.4 72.0
25.6 28.0
5.7 6.3
0.1 1.4
20.0 23.1
11.4 13.3
Exhibit 3
FLINDER VALVES AND CONTROLS INC.
Consolidated Balance Sheet for RSE International as of December 31, 2007
(dollars in thousands except per-share figures)
Assets
Cash $46,480
U.S. government securities, at cost 117,260
Trade accounts receivable 241,760
Inventories, at lower of cost or market 179,601
Prepaid taxes and insurance 2,120
Total current assets 587,221
1
$150,000,000 note, payable semiannually beginning June 30, 2008; $30,900,000 due within
one year, shown in current liabilities. One covenant required the company not to pay cash
dividends, except on preferred stock, or to make other distribution on its shares or acquire any
stock, after December 31, 1999, in excess of net earnings after that date.
2
Issued in January 2007; convertible at rate of 1.24 common share to one preferred share;
redeemable beginning in 2012; sinking fund beginning in 2016.
3
Resulting principally from the excess of par value of 827,800 shares of preferred stock over
the pay value of common share issues in conversion in 2007.
Exhibit 4
FLINDER VALVES AND CONTROLS INC.
Summary of Consolidated Earnings and Dividends for RSE International
(dollars in thousands)
26,800
92,238
Exhibit 5
FLINDER VALVES AND CONTROLS INC.
Forecast Financial Statements for RSE International
for the Years Ending December 31, 2007–12
(dollars in thousands except per-share figures)
Actual Projected
2007 2008 2009 2010
Sales $2,187,208 $2,329,373 $2,480,785 $2,642,037
Cost of goods sold 1,793,510 1,920,085 2,064,243 2,216,470
Gross profit 393,698 409,288 416,542 425,567
Selling, general, and admin. 120,296 129,786 139,481 151,027
Income before tax 273,402 279,502 277,061 274,540
Tax expense 109,361 111,801 110,824 109,816
Net income 164,041 167,701 166,237 164,724
Cash dividends 92,238 102,082 108,714 115,779
1
62,694,361 common shares in 2007. Thereafter, 64,416,919 shares reflecting conversion of the preferred stock.
2
1,389,160 preferred shares in 2007. Conversion into 1,722,558 shares of common stock assumed in 2008.
2011 2012
$2,813,769 $2,996,658
2,367,290 2,537,259
446,479 459,399
161,315 169,826
285,164 289,573
114,066 115,829
171,098 173,744
125,185 133,313
33,170 35,960
541,109 587,580
574,238 624,303
$2.66 $2.70
$1.94 $2.07
13.61 12.21
13.15 12.04
14.22 12.37
17.32 13.77
17.32 13.98
$17.63 $15.35
Exhibit 7
FLINDER VALVES AND CONTROLS INC.
Market Information on Firms in the Industrial Machinery Sector
Price/
Earnings Dividend
Ratio Beta Yield
Cascade Corp.
Manufactures loading engagement devices 10.5 0.95 1.7%
Curtiss-Wright Corporation
Manufactures highly engineered, advanced technologies
that perform critical functions 17.2 1.0 0.7
Flowserve Corp.
Makes, designs, and markets fluid handling
equipment (pumps, valves, and mechanical seals) 20.8 1.3 1.0
Gardner Denver
Manufacturers stationary air compressors, vacuum
products, and blowers 10.9 1.3 Nil
Idex Corp.
Manufactures a wide range of pumps and machinery
products 16.1 1.05 1.5
Roper Industries
Manufacturers energy systems and controls, imaging
equipment, and radio frequency products 19.7 1.2 0.5
Tecumseh Products
Manufactures compressors, condensers, and pumps 38.2 1.05 Nil
Watts Industries
Manufactures and sells and extensive line of valves
for the plumbing and heating and water quality markets 15 1.3 1.5
5.1% 29%
12.3 36%
27.0 30%
NMF 19%
10.8 22%
10.8 29%
NMF 8%
8.4 32%
Exhibit 8
FLINDER VALVES AND CONTROLS INC.
Information on Selected Recent Related Mergers
5/25/2006 Armor Holdings Inc. Law enforcement equip Stewart & Stevenson Turbine-driven products
6/26/2006 Bouygues S.A. Construction Alstom SA Power generation equip
9/20/2006 Boeing Co. Aircraft Aviall Inc Vehicle parts
11/10/2006 Daikin Industries Ltd. Air conditioning sys OYL Industries Bhd Airconditioners
12/8/2006 Oshkosh Truck Corp. Heavy duty trucks JLG Industries Inc Excavators/telehandlers
4/11/2007 Rank Group Ltd. Investment holding co SIG Holding AG Packaging/plastics machinery
6/22/2007 Meggitt PLC Aerospace/defense system K&F Industries Holdings Aircraft braking systems
7/31/2007 BAE Systems Inc. Electronic systems Armor Holdings Inc Law enforcement equip
12/3/2007 Carlyle Group LLC Private equity firm Sequa Corp Aircraft engine component
12/20/2007 ITT Corp. Pumps/valves EDO Corp Electn system products
2/6/2008 London Acquisition BV Investment holding co Stork NV Components
6/5/2008 Ingersoll-Rand Co Ltd. Industrial machinery/equip Trane Inc Airconditioners
s machinery
Exhibit 8 (Continued)
FLINDER VALVES AND CONTROLS INC.
Information on Selected Recent Related Mergers
Armor Holdings Inc. Stewart & Stevenson 1,123 726 65.3 1.12
Bouygues S.A. Alstom S.A. 2,467 17,679 nmf 1.48
Boeing Co. Aviall Inc. 2,057 1,371 28.9 1.53
Daikin Industries Ltd. OYL Industries Bhd 1,152 1,581 27.6 1.41
Oshkosh Truck Corp. JLG Industries Inc. 3,252 2,289 20.5 1.30
Rank Group Ltd. SIG Holding AG 2,314 1,418 38.6 1.56
Meggitt PLC K&F Industries Holdings 1,802 424 20.3 4.26
BAE Systems Inc. Armor Holdings Inc. 4,328 2,805 30.5 1.71
Carlyle Group LLC Sequa Corp. 2,007 2,181 34.4 1.25
ITT Corp. EDO Corp. 1,678 945 86.8 1.99
London Acquisition BV Stork NV 2,347 2,153 17.1 0.02
Ingersoll-Rand Co. Ltd. Trane Inc. 9,751 8,328 21.2 1.39
Enterprise Premium 4
Value/ Target Enterprise Weeks Prior to
Operating Value/ Target Announcement
Income Cash Flow Date (%)
Stock Market
S&P 500 Index 1,418 1,468 1,398
Price/earnings ratio 17.7× 18.3× 17.4×
Data Source: Value Line Investment Survey, April 25, 2008; Federal Reserve Bulletin; Compustat
ulletin; Compustat
Exhibit 10
FLINDER VALVES AND CONTROLS INC.
Forecast of Financial Statements for Flinder Valves and Controls
for Years Ending December 31, 2008–12
(dollars in thousands)
Actual Projected
2007 2008 2009 2010
Sales $49,364 $59,600 $66,000 $73,200
Cost of goods sold 37,044 43,816 48,750 54,104
Gross profit general,
Selling, and 12,320 15,784 17,250 19,096
administrative 2,936 3,612 4,124 4,564
Other income—net 228 240 264 288
Income before taxes 9,612 12,412 13,390 14,820
Taxes 4,037 4,965 5,356 5,928
Net income $5,575 $7,447 $8,034 $8,892
$2,212 $2,432
$30,049 $33,306
$27,700 $30,702