General Information

Company Name Gasparro Corp.

Ticker JDG
Stock Exchange Nasdaq
Fiscal Year Ending Dec-31
Moody's Corporate Rating Ba2
S&P Corporate Rating BB
Predicted Beta 1.3
Marginal Tax Rate 25.00%

Options/Warrants
Tranche Number of Shares Exercise Price
Tranche 1 1.25 10
Tranche 2 1 30
Tranche 3 0.5 40
Tranche 4 0.25 60
TOTAL 3

Fully diluted shares outstanding

Basic Outstanding Shares 98.5
Plus: Shares from In-the-money Options 2.75
Less: Shares Repurchased -1.25
Net new shares from the options/warrants 1.50
Plus: Shares from Convertible Securities 0
Fully diluted shares outstanding 100.00
(shares in millions)
Assumptions
Current Share Price ₹50.00
Basic Shares Outstanding 98.5

In-the-Money Shares Proceeds

1.25 12.5
1 30
0.5 20
0 0
2.75 62.5
($ in millions, except per share data)
Assumptions
Current Share Price 50
52-week High Price 62.5 80%
52-week Low Price 40 125%
Dividend Per Share (MRQ) 0.25

Balance Sheet Data 2018A 9/30/2019

Cash and Cash Equivalents 75 100
Accounts Receivable 625 650
Inventories 730 750
Prepaids and Other Current Assets 225 250
Total Current Assets 1655 1750

Property, Plant and Equipment (Net) 1970 2000

Goodwill and Intangible Assets 775 800
Other Assets 425 450
Total Assets 4825 5000

Accounts Payable 275 300

Accrued Liabilities 450 475
Other Current Liabilities 125 150
Total Current Liabilities 850 925

Total Debt 1875 1850

Other Long-Term Liabilities 500 500
Total Liabilities 3225 3275

Noncontrolling Interest 0 0
Preferred Stock 0 0
Shareholders' Equity 1600 1725
Total Liabilities and Equity 4825 5000

Balance Check 0 0
Fully diluted shares outstanding 100.00
Equity Value 5000

Plus: Total Debt 1850

Plus: Preferred Stock 0
Plus: Non-Controlling Interest 0
Less: Cash and Cash Equivalents -100
Enterprise Value 6750
Non-recurring Items:
$25.0 million pre-tax gain on the sale of a non-core business in Q4 2018 - 1Oct2018 to 31Dec2018
$30.0 million pre-tax inventory valuation charge in Q2 2019 related to product obsolescence - 1Apr2019 to 30Jun2019
$15.0 million pre-tax restructuring charge in Q3 2019 related to severance costs - 1Jul2019-30Sep2019

($ in millions, except per share data)

Reported Income Statement
Prior Current
Fiscal Year Ending December 31, Stub Stub
2016A 2017A 2018A 9/30/2018 9/30/2019
Sales 3,750.00 4,150.00 4,500.00 3,375.00 3,600.00
COGS (incl. D&A) 2,450.00 2,700.00 2,925.00 2,200.00 2,350.00
Gross Profit 1,300.00 1,450.00 1,575.00 1,175.00 1,250.00
SG&A 750 830 900 675 720
Other Expense / (Income) 0.00 0.00 0.00 0.00 0.00
EBIT 550.00 620.00 675.00 500.00 530.00
Interest Expense 110 105 102 75 73
Pre-tax Income 440.00 515.00 573.00 425.00 457.00
Income Taxes 110 128.8 143.3 106.3 114.3
Noncontrolling Interest 0.00 0.00 0.00 0.00 0.00
Preferred Dividends 0 0 0 0 0
Net Income 330.00 386.20 429.70 318.70 342.70
Effective Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%

Weighted Avg. Diluted Shares 100 100 100 100 100

Diluted EPS 3.30 3.86 4.30 3.19 3.43
Assuming Year Closing 31st December
Reported Net Income 330.00 386.20 429.70 318.70 342.70
Non-Recurring Items in COGS 30
Other Non-Recurring Items -25 15
Non-operating Non-rec. Items
Tax Adjustments 0 0 6.25 0 -11.25
Adjusted Net Income 330.00 386.20 410.95 318.70 376.45
Adjusted Diluted EPS 3.30 3.86 4.11 3.19 3.76
Adjusted EBIT 550.00 620.00 650.00 500.00 575.00
Adjusted EBITDA 705.00 785.00 825.00 625.00 700.00

Cash Flow Statement Data

Prior Current
Fiscal Year Ending December 31, Stub Stub
2016A 2017A 2018A 9/30/2018 9/30/2019
Cash From Operations 400 450 500 360 380
Capital Expenditures 170 185 200 150 155
% sales 4.53% 4.46% 4.44% 4.44% 4.31%
Free Cash Flow 230 265 300 210 225
% margin 6.13% 6.39% 6.67% 6.22% 6.25%
FCF / Share 2.30 2.65 3.00 2.10 2.25

Depreciation & Amortization 155 165 175 125 125

% sales 4.13% 3.98% 3.89% 3.70% 3.47%

Calculate: 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎

Adjusted LTM gross profit 1,680.00 Step 18 −𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))
Adjusted LTM EBIT 725.00 Step 19
Adjusted LTM EBITDA 900.00 Step 20
Adjusted Net Income 468.70 Step 21 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐸𝑞𝑢𝑖𝑡𝑦= (𝐿𝑇𝑀
𝐼𝑛𝑐𝑜𝑚𝑒)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′
LTM Return on Average Invested Capital 21.09% Step 22
LTM Return on Average Equity 28.19% Step 23
LTM Return on Average Assets 9.54% Step 24 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑠𝑠𝑒𝑡𝑠= (𝐿𝑇𝑀
LTM Implied Annual Dividend Per Share 2.00% Step 25 𝐼𝑛𝑐𝑜𝑚𝑒)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠))
Debt-to-Total Capitalisation 51.75% Step 26
Total Debt-to-EBITDA 2.06 Step 27
Net Debt-to-EBITDA 1.94 Step 28 𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙𝑖𝑠𝑎𝑡𝑖𝑜𝑛=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡+
EBITDA-to-Interest Expense 9.00 Step 29
(EBITDA - Capex)-to-Interest Expense 6.95 Step 30
EBIT-to-Interest Expense 7.25 Step 31
𝑁𝑒𝑡 𝐷𝑒𝑏𝑡=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶
19 to 30Jun2019

LTM
9/30/2019 CAGR
4,725.00 9.54% 4929.503
3,075.00
1,650.00 Step 1
945
0.00
705.00 Step 2
100
605.00 Step 3
151.3
0.00
0
453.70 Step 4
25.00%

100
4.54 Step 5

453.70
30 Step 9
-10 Step 6-7-8

-5 Step 10
468.70 Step 11
4.69 Step 12
725.00
900.00

LTM
9/30/2019
520
205
4.34% Step 13
 315 Step 14
6.67% Step 15
3.15 Step 16

175
3.70% Step 17

𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎𝑙= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝐸𝐵𝐼𝑇)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ

𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))

𝑣𝑒𝑟𝑎𝑔𝑒 𝐸𝑞𝑢𝑖𝑡𝑦= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑁𝑒𝑡

𝑣𝑒𝑟𝑎𝑔𝑒 (𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))

𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑠𝑠𝑒𝑡𝑠= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑁𝑒𝑡

𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠))

𝑎𝑙𝑖𝑠𝑎𝑡𝑖𝑜𝑛=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡+𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶𝑎𝑠ℎ 𝐸𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠

 1 2
LTM NFY NFY+1
9/30/2019 2019E 2020E
EV/Sales 1.4 1.4 1.3
Metric (Sales) 4725 5000.00 5350.00
EV/EBITDA 7.5 7.1 6.6
Metric (EBITDA) 900 950 1025
EV/EBIT 9.3 8.8 8.2
Metric (EBIT) 725 765 825
P/E 10.7 9.8 9.1
Metric (EPS) 4.69 5.1 5.5
FCF Yield (FCF/Equity Value) 6.3% 7.5% 8.3%
Metric (FCF) 315 375 415

Growth Rates
Sales EBITDA FCF
Historical
1-year ('17 to '18) 8.43% 5.10% 13.21%
2-year CAGR ('16 to '18) 9.54% 8.18% 14.21%
Estimated
1-year ('18 to '19E) 11.11% 15.15% 25.00%
2-year CAGR ('18 to '20E) 9.04% 11.46% 17.62%

($ in millions, except per share data)

LTM Financial Statistics
Company Sales Gross Profit EBITDA
BuyerCo 6559.60 2328.70 1443.10
Sherman Co. 5894.60 1945.20 1047.00
Pearl Corp. 4284.50 1585.30 838.70
Gasparro Corp. 4725.00 1680.00 900.00
Kumra Inc. 3186.70 922.40 665.30
Mean 4930.08 1692.32 978.82
Median 4725.00 1680.00 900.00

LTM Financial Data

Company Debt Shareholders' Equity Cash
BuyerCo 2200.00 2480.00 400.00
Sherman Co 3150.00 2359.00 649.00
Pearl Corp. 1500.00 2559.60 868.10
Gasparro Corp. 1850.00 1725.00 100.00
Kumra Inc. 891.20 2687.60 481.30

LTM Leverage Ratios

Company Debt/TotCap(%) Debt/EBITDA(x) Net Debt/EBITDA(x)
BuyerCo 47.01% 1.52 1.25
Sherman Co 57.18% 3.01 2.39
Pearl Corp. 36.95% 1.79 0.75
Gasparro Corp. 51.75% 2.06 1.94
Kumra Inc. 24.90% 1.34 0.62
Mean 43.56% 1.94 1.39
Median 47.01% 1.79 1.25
 3
NFY+2
2021E
1.2
5625.00
6.3
1075
7.8
865
8.7
5.75
9.1%
455

EPS

6.41%
11.59%

24.10%
15.69%

cial Statistics LTM Profitability Margins

EBIT Net Income Gross Profit(%) EBITDA(%)EBIT(%)Net Income(%)
1279.10 852.50 36% 22% 19% 13%
752.20 507.20 33% 18% 13% 9%
624.50 393.40 37% 20% 15% 9%
725.00 468.70 36% 19% 15% 10%
505.90 306.40 29% 21% 16% 10%
777.34 505.64 34% 20% 16% 10%
725.00 468.70 36% 20% 15% 10%

Interest Expense Capex EBITDA EBIT

142.40 196.80 1443.10 1279.10
76.00 235.80 1047.00 752.20
100.00 128.50 838.70 624.50
100.00 205.00 900.00 725.00
60.30 143.40 665.30 505.90

LTM Coverage Ratios

EBITDA/Int. Exp.(x)EBITDA-Cpx/Int.(x) EBIT/Int. Exp.(x)
10.13 8.75 8.98
13.78 10.67 9.90
8.39 7.10 6.25
9.00 6.95 7.25
11.03 8.66 8.39
10.47 8.43 8.15
10.13 8.66 8.39
Company Sales EBITDA EBIT EPS
BuyerCo 6,559.60 1,443.10 1,279.10 6.09
Sherman Co. 5,894.60 1,047.00 752.2 3.62
Pearl Corp. 4,284.50 838.7 624.5 5.21
Gasparro Corp. 4,725.00 900.00 725.00 4.69
Kumra Inc. 3,186.70 665.3 505.9 3.33

ENTERPRISE VA
Company Current Share Price Equity Value Enterprise Value LTM Sales
BuyerCo 70 9,800.00 11,600.00 1.8
Sherman Co. 40 5,600.00 8,101.00 1.4
Pearl Corp. 68.5 5,171.80 5,803.70 1.4
Gasparro Corp. 50 5000 6750 1.4
Kumra Inc. 52.5 4,851.60 5,344.60 1.7
Mean 56.2 6084.7 7519.9 1.5
Median 52.5 5171.8 6750.0 1.4

($ in millions, except per share data)

Financial Metric (LTM EBITDA) 700 700
Multiple Range
Implied Enterprise Value Range
Less: Net Debt -1500.00 -1500.00
Implied Equity Value
Fully Diluted Shares 80.00 80.00
Implied Share Price

($ in millions, except per share data)

Financial Metric (LTM Net Income) 300 300
Multiple Range
Implied Equity Value
Fully Diluted Shares 80.00 80.00
Implied Share Price
ENTERPRISE VALUE/ PRICE/
LTM EBITDLTM EBI LTM EPS
8.0 9.1 11.5
7.7 10.8 11.0
6.9 9.3 13.1
7.5 9.3 10.7
8.0 10.6 15.8
7.6 9.8 12.4
7.7 9.3 11.5