April 8, 2004

M E M B E RM E M B E R

Chicago Bar Association

Mergers & Acquisitions

Subcommittee

2

Valuation Methodologies

Current Market Conditions

Billow Butler & Company

Discussion Topics

3

PublicCompanies

PublicCompanies

ComparableTransactionsComparableTransactions

DiscountedCash FlowsDiscountedCash Flows

Analysis of valuation multiples of comparable publicly-traded companies to gain insight into multiples for privately-held companies. Traditionally, small private companies are acquired at a discount to public multiples.

Analysis of valuation multiples of comparable publicly-traded companies to gain insight into multiples for privately-held companies. Traditionally, small private companies are acquired at a discount to public multiples.

Analysis of valuation multiples implicit in recent acquisitions involving comparable private and public companies. Takes into consideration premiums/discounts for size of transactions.

Analysis of valuation multiples implicit in recent acquisitions involving comparable private and public companies. Takes into consideration premiums/discounts for size of transactions.

Analysis of future cash flows and residual value discounted to the present using a return on capital rate required by investors; requires the development of a 5-year financial plan.

Analysis of future cash flows and residual value discounted to the present using a return on capital rate required by investors; requires the development of a 5-year financial plan.

Valuation Methodologies

Leveraged Buyout

Leveraged Buyout

Analysis of the purchase price a financial investor group could pay given various return to investors parameters; heavily dependent on the debt markets; requires the development of a 5-year financial plan.

Analysis of the purchase price a financial investor group could pay given various return to investors parameters; heavily dependent on the debt markets; requires the development of a 5-year financial plan.

4

Quality of Earnings

Historical Track Record of Growth & Profitability

Past or Current Trends Benefiting / Impacting the Company

Customer Base Profile; Concentration; Contracts

Quality of Earnings: Persistence / Variability

Achievability of Projected Financial Results

Prospects and Opportunities for Continued Growth

New Product Initiatives

Capacity and Nature of Equipment and Facilities to Accommodate Future Growth

5

Add-Backs

Add-backs are items (normally expenses) that are currently incurred by the company that may not be incurred under the control of a

prospective buyer

These may include such discretionary items as:Above-market executive compensationConsulting fees paid to investors or investor groupsFamily-member compensationPerquisites: autos, life insurance, travel, etc.

The other category of add-backs includes extraordinary or one-time items, such as the gain on sale of assets, life insurance proceeds, an

unusual bad debt write-off, moving expenses, etc.

It is important that each add-back can be tied back to the company’s financial statements

6

Add-Back Schedule

2001 2002 2003Above Market Salaries

_______________(name) _____ _____ ____________________(name) _____ _____ _____

Bonus_______________(name) _____ _____ ____________________(name) _____ _____ _____

PerquisitesTravel & Entertainment _____ _____ _____Auto Expenses _____ _____ _____Dues & Subscriptions _____ _____ _____Medical Reimbursements _____ _____ _____Other _____ _____ _____Other _____ _____ _____

Non-Recurring ChargesOne-Time Excessive

Bad Debt Write-Off _____ _____ _____

Extraordinary Gain (loss) On Sale of Assets _____ _____ _____

Other _____ _____ _____Other _____ _____ _____

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Adjusted Income Statement

($ in thousands)Fiscal Years Ending December 31,

2001 2002 2003 2004 (E) 2005 (P)Net Sales $50,000.0 $60,000.0 $72,000.0 $90,000.0 $108,000.0

Cost of Goods Sold 30,000.0 36,000.0 43,200.0 54,000.0 64,800.0

Gross Profit 20,000.0 24,000.0 28,800.0 36,000.0 43,200.0

Selling, General & Administrative 12,500.0 15,000.0 18,000.0 22,500.0 27,000.0

S,G&A Adjustments

Above Market Compensation (150.0) (200.0) (200.0) (200.0) 0.0Owner's Pequisites (50.0) (50.0) (50.0) (50.0) 0.0Acquisition Costs 0.0 (400.0) 0.0 0.0 0.0Non-Recurring Expenses 0.0 0.0 (250.0) 0.0 0.0

Adjusted Selling, General & Administrative 12,300.0 14,350.0 17,500.0 22,250.0 27,000.0

Adjusted Operating Income $7,700.0 $9,650.0 $11,300.0 $13,750.0 $16,200.0

8

Public Companies

($ in millions)

LTM Valuation Multiples

Revenue EBITDA EBIT Revenue EBITDA EBIT

CSS Industries Inc. (CSS) $541.0 $65.0 $50.8 0.8x 6.8x 8.7xJarden Corp. (JAH) 587.4 108.3 93.3 2.1x 11.3x 13.1xNew England Business Service Inc. (NEB) 633.9 84.4 54.1 0.9x 6.9x 10.7xNext Inc. (NXTI) 20.9 1.3 0.9 1.3x NM NM Tupperware Corp. (TUP) 1,174.8 142.0 89.4 1.2x 9.5x 15.2x

Mean 1.2x 8.6x 11.9x

Median 1.2x 8.2x 11.9x

Mean Median

Less: Size Discount of 35.0% 5.6x 5.3x

Plus: Change of Control Premium of 32.0% 7.4x 7.0x

Company Name

9

Comparable Transactions($ in millions)

LTM Valuation Multiples

Revenue EBITDA EBIT Revenue EBITDA EBIT

28-Jan-04 Imperial PlasTech Petzetakis Manufactures plastic pipe for the construction, oil and gas, industrial markets

NA NA NA NA NA NA NA

20-Oct-03 Landis Plastics Inc. (1) Berry Plastics (Goldman Sachs) Manufactures injection molded and thermoformed plastic packaging for dairy and other food products

$228.0 NA NA NA NA 6.3x NA

1-Oct-03 W.L. Plastics, LLC PW Poly and Merit Capital Manufactures high-density polyethylene pipe $17.6 $19.0 NA NA 0.9x NA NA

10-Sep-03 Quail Piping Products J-M Manufacturing Two HDPE pipe plants located in Magnolia, Arkansas and Kingman, Arizona

NA NA NA NA NA NA NA

25-Aug-03 Performance Plastics Products Inc. Edlon Inc. Manufactures plastic lined pipe products in the United States, Mexico and Canada

NA NA NA NA NA NA NA

26-Jun-03 Dura-Line Corp of Emerson Electric Co. (2)

Sun Capital Partners Inc. Manufactures high-density polyethylene pipe, duct, and conduit products

$6.0 $54.7 NA ($9.3) 0.1x NA NM

10-Mar-03 Uponor ETI Co. of Uponor Oyj (3) PW Eagle Inc. Manufactures plastic water and sewer pipe systems

$27.3 $89.5 $7.2 $2.7 0.3x 3.8x 10.2x

28-May-02 Berry Plastics Corp Goldman Sachs Group Inc Manufactures and markets plastic containers, aerosol overcaps, drink cups, and house ware products

$1,377.4 $468.6 $106.2 $55.9 2.9x 13.0x 24.7x

16-Aug-01 Triple S Plastics Inc Eimo Oyj Manufactures thermoplastic components for automotive, consumer, medical, and telecommunications markets

$30.5 $155.2 $15.0 $9.1 0.2x 2.0x 3.4x

11-Dec-00 Ameriduct Worldwide Inc. Lamson & Sessions Co. Manufactures high-density polyethylene pipe, duct, and conduit products

$65.0 $41.0 $8.0 NA 1.6x 8.2x NA

25-Sep-00 Pyramid Industries Inc. Lamson & Sessions Co. Manufactures custom fiber optic conduit systems

$51.9 $50.8 $8.8 NA 1.0x 5.9x NA

(1) EBITDA multiple based on Plastics News release dated October 20, 2003.

(2) Estimated using the 9 months ended June 30, 2003 based on EMR Form 10-Q dated August 12, 2003.

(3) Based on information provided by PWEI Form 8-K/A dated May 29, 2003 and PWEI Form 10-Q dated November 14, 2003.

Mean 1.0x 6.5x 12.7x

Median 0.9x 6.1x 10.2x

Target Business DescriptionEnterprise

ValueAnnounced

DateTarget Acquiror

10

Discounted Cash Flows

Adjustments toOperating Income

Plus: Owner PerquisitesPlus: One-time ExpensesPlus: SynergiesPlus: DepreciationLess: Change in Working CapitalLess: CapEx

Free Cash Flow

+

Adjustments toInternal Financial Statements Operating IncomeRevenues

Less: Cost of Goods SoldGross Margin

Less: Selling, General & AdministrativeOperating Income

Less: TaxesNet Income

Calculate Adjusted Free Cash Flow**

** Debt-Free Analysis

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Discounted Cash Flows($ in thousands)

Free Cash Flow Calculation

Projected Fiscal Years Ending December 31,

2004 2005 2006 2007 2008

EBIT $3,686 $4,162 $4,649 $5,179 $5,755

Marginal Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%

Tax-affected EBIT $2,212 $2,497 $2,790 $3,107 $3,453

Depreciation & Amortization 660 619 610 606 608

Decrease (Increase) in Working Capital (250) (274) (302) (332) (365)

Capital Expenditures (150) (500) (500) (500) (500)

Free Cash Flow $2,472 $2,342 $2,598 $2,882 $3,196

Discounted Cash Flow Valuation

Present Value

Cash Terminal

Flows Value

5.5 x $7,864 $14,065 $21,929 $17,653

20.0% 6.0 7,864 15,344 23,208 $4,276 $0 18,932

6.5 7,864 16,623 24,486 20,210

5.5 x $8,340 $15,627 $23,967 $19,691

17.5% 6.0 8,340 17,047 25,387 $4,276 $0 21,111

6.5 8,340 18,468 26,808 22,532

5.5 x $8,865 $17,401 $26,266 $21,990

15.0% 6.0 8,865 18,983 27,848 $4,276 $0 23,571

6.5 8,865 20,564 29,430 25,153

Plus: CashEquity Value

Discount RateEBITDA Terminal

MultipleEnterprise Value Less: Debt

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Leveraged Buyout

Senior Debt Financing– Senior debt to cash flow of 2.5 – 3.5x

– Total debt to cash flow of 3.5 – 4.5x

Mezzanine Financing– Seek total return of 18% – 22%

– With or without equity participation

Private Equity Contribution– Attention paid to underperforming portfolio companies

– Eager to make new investments

– Being pushed to invest up to 35% in equity

– Return expectations lowered to 20+%

13

Valuation Summary

($ in thousands)

EBITDA Multiple Range Enterprise Value Range

Low High Low High

Comparable Public Companies Analysis 7.0x - 7.4x $24,719 - $25,991

Comparable Transactions Analysis 6.5x 7.2x $22,825 $25,283

Discounted Cash Flows Analysis 6.8x - 7.6x $23,967 - $26,808

Leveraged Buyout Analysis 6.0x - 6.3x $21,000 - $22,000

ENTERPRISE VALUE RANGE $22,000 $26,000

Company Implied

Statistic Multiple Range

2003 Actual Low High

Net Sales $20,723 1.1 x - 1.3 x

EBITDA 3,511 6.3 x - 7.4 x

TTM at June 30, 2004

Net Sales $20,010 1.1 x 1.3 x

EBITDA $3,308 6.7 x 7.9 x

2004 Estimated

Net Sales $22,804 1.0 x - 1.1 x

EBITDA 4,346 5.1 x - 6.0 x

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Reasons for Differing Multiples

Growth opportunities

Strength of management team

Market position

Strength of distribution channels

Industry outlook

Proprietaries, patents, know-how

Customer diversity and tenure

Technical capabilities

Reputation and goodwill

Barriers to entry

Size Historical revenue growth Margins relative to peers Potential synergies Earnings history Asset utilization Asset intensity Excess capacity Cash conversion cycle CAPEX requirements

Financial Intangible

Perceived Ability to Generate Future Cash Flow

15

Beauty is in Eye of Beholder

Buyer A

Buyer B

Buyer C

Buyer D

Buyer E

Buyer F

Buyer G

Buyer H

Buyer I

Buyer J

$0 $10 $20 $30 $40 $50 $60 $70Interested Party Winning Bidder

Final Purchase Price$67 Million

ACTUAL TRANSACTIONPlastic Processor

Initial Indications of Interest

16

Historical Deal Multiples

Source: Mergerstat

7.5x8.3x 8.6x 8.9x

9.5x10.8x 10.7x

9.9x

8.4x 8.1x 7.5x 8.0x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

EBITDA

17

Multiples by Deal Size

8.4

10.010.7

14.4

11.6

4.2

6.3

7.6

8.98.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

<$25 $25-$100 $100-$250 $250-$1,000 >$1,000Transaction Size

Mu

ltipl

e

EBIT EBITDA

Source: US Bancorp Piper Jaffray

18

Billow Butler & Company

Billow Butler & Company, L.L.C.Billow Butler & Company, L.L.C. is an investment bank dedicated to advising middle market business owners on the sale of their companies. With backgrounds at leading investment and commercial banks, law firms and financial consulting firms, our professionals bring a level of expertise, integrity and professionalism to the middle market that is traditionally only available to owners of larger companies. Our clients are located across the U.S. and typically own companies valued up to $100 million. They are entrepreneurs and private equity groups that intend to sell an entire company or they are larger, public companies that desire to divest a division. But, no matter their size, location or ownership, our clients engage us with a common goal in mind - maximize net proceeds, to ensure transaction closure and achieve the best possible terms with confidentiality, speed and minimal burden on themselves and their corporate staff. Since its inception in 1997, Billow Butler & Company has successfully closed over 25 transactions.

Darrell M. ButlerManaging Director

Mr. Butler has been involved in mergers and acquisitions for more than 13 years, participating in more than 100 transaction assignments ranging in value from $3 million to $200 million. Mr. Butler has spoken before members of the Institute of Management Accountants, the Chicago Bar Association and industry trade associations on topics involving corporate finance and deal-making.

Prior to co-founding Billow Butler & Company, he was an accomplished associate/vice president at a leading national investment bank, where he was formally recognized as Top Associate for leading the company in deals closed and fees generated. Mr. Butler spent more than seven years at Arthur Andersen as a financial consultant to Fortune 1000 clients. In addition to earning consistently outstanding marks during his tenure at Andersen, he is proud to have received the Sequoia Award for mentoring in support and development of his staff. He is currently the treasurer of a not-for-profit educational corporation and previously served six years as treasurer of a $1.2 million not-for-profit corporation.

Mr. Butler holds an M.B.A. in Financial Management and Strategy from The University of Chicago Graduate School of Business and a B.S. in Finance, with honors, from the University of Illinois-Urbana/Champaign.