1. 1 Precast Consulting Services, Inc. What’s My Business worth Left click to advance - Right click for controls The back arrow will return you to the website Left click to advance - Right click for controls The back arrow will return you to the website

2. 2 Precast Consulting Services, Inc. What’s My Business worth Agenda 4 What’s Precast Consulting 4 Business Valuation –Restated Earnings –Working capital values –Fixed asset values –Goodwill 4 Summary

3. 3 Precast Consulting - The Services What’s Precast Consulting We are a general management consulting firm focused only on the Precast Industry Finance –Acquisitions / dispositions –Financial benchmark analysis Sales & marketing –New product development –Margin improvement –Profitable sales growth Operations –Work group productivity improvement –Project management –Quality programs – rework reduction –Manufacturing improvements Management Professionalism for the Precast industry Contact information billray@precastconsulting.com web site www.precastconsulting.com 770-979-3711

4. 4 Precast Consulting Services, Inc. What’s My Business worth Is value like beauty, something merely in the eye of the beholder?

5. 5 Precast Consulting Services, Inc. What’s My Business worth 4 Book Value Easily taken off the books but doesn’t reflect market value 4 Liquidation value Auction value, use for a bankruptcy or forced sale 4 Replacement value Market value, Willing seller, motivated buyer –As-is, Where-is, current condition –Typically related to cost of new –Value depends on condition and supply/demand for that equipment 4 Financial values Inventory, Accounts receivable, Retainage, other current assets –Collection problems must be considered in receivables and retainage –Is it good inventory not requiring rework 4 Goodwill Going concern value –Derived from business relationships in the concern’s marketplace –Based on the earnings of the business

6. 6 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Income Statement ($000)per Books Sales $ 15,000 Cost of Goods Sold Labor & Materials 6,000 Manufacturing 1,950 Depreciation 300 Engineering 600 Other direct costs 600 Shipping 1,050 Erection costs 2,100 Total COGS$ 12,60084% Gross Margin$ 2,40016% Sales, General & Admin 1,950 Interest Expense 324 Profit before taxes 126 0.8%

7. 7 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Income Statement ($000)per BooksChangeRestated Sales $ 15,000 $ 15,000 Cost of Goods Sold Labor & Materials 6,000 6,000 Manufacturing 1,950 (324) 1,626 Depreciation 300 300 Engineering 600 600 Other direct costs 600 600 Shipping 1,050 1,050 Erection costs 2,100 2,100 Total COGS$ 12,600$ 12,276 Gross Margin$ 2,400 $ 324$ 2,724 Sales, General & Admin 1,950 (350) 1,600 Interest Expense 324 324 Profit before taxes 126 674 800

8. 8 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Balance Sheet (000) AssetsLiabilities & Equity per Books Cash 300 Current Liabilities Accounts Receivable 2,400 Trade Accounts Payable1,366 Over 90 Receivables 240 Accrued Expenses 416 Retainage 1,050 Line of Credit 720 Total Receivables $ 3,690 Inventory 416 Total Current Liabilities $ 2,522 Other current assets 15 Total Current Assets $ 4,421 Mortgage $ 1,980 Gross Fixed Assets & Land 9,000 Total Liabilities $ 4,502 Accumulated Deprec. (4,050) Net Fixed Assets $ 4,950 Deferred taxes1,500 Owner's equity $ 3,368 Total Assets $ 9,371Total Debt & Equity $ 9,371

9. 9 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Balance Sheet (000) Liabilities & Equity per BooksRestated Cash 300 300Current Liabilities Accounts Receivable 2,400 2,400Trade Accounts Payable1,366 Over 90 Receivables 240 0 Accrued Expenses 416 Retainage 1,050 525 Line of Credit 720 Total Receivables $ 3,690 Inventory 416 208 Total Current Liabilities $ 2,522 Other current assets 15 0 Total Current Assets $ 4,421 $ 3,433 Mortgage $ 1,980 Gross Fixed Assets & Land 9,000 Total Liabilities $ 4,502 Accumulated Deprec. (4,050) Net Fixed Assets (incl. Land) $ 4,950$ 5,445 Deferred taxes1,500 Owner's equity $ 3,368 Total Assets $ 9,371$ 8,878Total Debt & Equity $ 9,371

10. 10 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Restated Valuation of Business ($000) Valuation Current Assets (restated) 3,433 less Trade Accounts Payable (1,386) Less Accrued Expenses (416) Net Working Capital....................... $ 1,630.. Plant & Equipment Appraisal................ $ 5,445. Goodwill................................. $ ? Total Assets............................... $ Less Line of Credit (720) Less Mortgage (1,980) Net Value to Owner......................... $ ? 4

11. 11 Precast Consulting Services, Inc. What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Restated Valuation of Business ($000) Valuation Standard Earnings Current Assets 3,433 less Trade Accounts Payable (1,386) Less Accrued Expenses (416) Net Working Capital....................... $ 1,630 Standard earnings @ 6%$ 98 Plant & Equipment Appraisal................ $ 5,445 Standard earnings at 10% $ 545 Total standard earnings $ 642 Restated earnings$ 800 Excess earnings$ 158 Goodwill................................ $ 788 Capitalize excess earnings....X 5 (i.e.. 20%) Total Assets.............................. $ 7,864 Less Line of Credit (720) Less Mortgage (1,980) Net Value to Owner........................ $ 5,184 4

12. 12 Precast Consulting Services, Inc. What’s My Business worth - Summary 4 Assets 4 Current Assets –Accounts Receivable – must be collectable & not over 90 days old –Inventory – Must be for work under contract –Retainage – Typically heavily discounted 4 Plant & Equipment –FMV appraisal, as is - where is –Good condition & in demand, up to 75% of new –Fair condition – 40-60% of new 4 Land –Appraisal value –Typically more than book value 4 Goodwill –Excess earnings capitalized

13. 13 Precast Consulting Services, Inc. What’s My Business worth - Summary 4 Goodwill 4 Standard earnings by asset –Net working capital – 5-6% –Fixed assets – 10-15% 4 Restated Income –Include manufacturing efficiencies achievable by the buyer –Exclude nepotism & patronage positions –Exclude accelerated write-offs driven by tax considerations 4 Goodwill values –Use restated income – average for several years –Compute excess earnings above standard earnings –Capitalize excess earnings at 20-25%

14. 14 Precast Consulting Services, Inc. What’s My Business worth 4 What can Precast Consulting do? 4 Dispositions –Business valuation –Deal analysis –Expert working for you 4 Acquisitions –Valuation and appraisal –Deal analysis –Financing –Due diligence investigations 4 Not a broker –Consulting role, without commission or placement fees –No listing agreement

15. 15 Precast Consulting Services, Inc. What’s My Business worth