EX-99 4 exhibit_c3.txt EX. (C)(3) - ALLISON STEINBERG UPDATED ANALYSIS VALUATION ANALYSIS MARKET AMERICA, INC. -------------------------------------------------------------------------------- (See Pages 4 and 5 for multiple analysis) PAGE 1 PUBLIC MARKET ANALYSIS:
Twelve Months Ended Twelve Months Ended APRIL 2001 JANUARY 30, 2002 APRIL 2001 JANUARY 30, 2002 ---------- ---------------- ---------- ---------------- Trailing EBITDA $ 25,865,993 $ 30,231,926 Stockholder's equity $ 76,100,087 $ 91,153,723 Enterprise value/EBITDA multiple 7.2 7.2 Price/book multiple 2.6 2.6 ENTERPRISE VALUE $ 186,386,067 $ 217,846,258 EQUITY VALUE $ 198,091,333 $ 237,276,502 Less: debt 1,953,414 1,968,076 WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 Plus: cash & sec. 66,813,164 77,452,118 PRICE PER SHARE: $ 10.20 $ 12.22 ------------- ------------- EQUITY VALUE $ 251,245,817 $ 293,330,300 Weighted average shares: 19,420,000 19,420,000 EBITDA $ 25,865,993 $ 30,231,926 Price per share: $ 12.94 $ 15.10 Price/EBITDA multiple 8.1 8.1 EQUITY VALUE $ 209,658,211 $ 245,046,518 WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 Trailing net income $ 20,212,394 $ 21,681,664 PRICE PER SHARE: $ 10.80 $ 12.62 Price/earnings multiple 14.5 14.5 ------------- ------------- IMPLIED VALUE OF COMPANY $ 292,881,859 $ 314,171,892 COMPARABLE ACQUISITION ANALYSIS: WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 PRICE PER SHARE: $ 15.08 $ 16.18 Twelve Months Ended APRIL 2001 JANUARY 30, 2002 ---------- ---------------- Trailing net revenues $ 138,513,706 $ 152,188,122 Trailing net revenues $ 138,513,706 $ 152,188,122 Price/revenue multiple 0.6 0.6 TIC/revenue multiple 1.06 1.06 ------------- ------------- ------------- ------------- IMPLIED VALUE OF COMPANY $ 83,825,643 $ 92,101,118 IMPLIED VALUE OF COMPANY $ 147,101,556 $ 161,623,786 WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 PRICE PER SHARE: $ 4.32 $ 4.74 PRICE PER SHARE: $ 7.57 $ 8.32
VALUATION ANALYSIS - CONTINUED MARKET AMERICA, INC. -------------------------------------------------------------------------------- PAGE 2 NET PRESENT VALUE ANALYSIS:
YEAR ENDED APRIL 30, 2002 2003 2004 2005 2006 Net income $ 19,328,362 $ 21,164,417 $ 23,624,033 $ 26,243,512 $ 29,026,592 $ 420,601,450 Terminal Value $ 19,328,362 $ 21,164,417 $ 23,624,033 $ 26,243,512 $449,628,042 EBIT * (1-t) $ 17,719,077 $ 19,100,816 $ 21,060,511 $ 23,108,648 $ 25,255,241 Depreciation 1,218,549 1,412,991 1,612,991 1,812,991 2,012,991 Capital expenditures (4,713,335) (1,000,000) (1,000,000) (1,000,000) (1,000,000) Change in non-cash work. cap. 204,271 (501,832) 549,032 563,923 606,688 ------------------------------------------------------------------------- Free Cash Flow $ 14,428,561 $ 19,011,975 $ 22,222,535 $ 24,485,563 $ 26,874,921 $297,035,326 Terminal Value $ 14,428,561 $ 19,011,975 $ 22,222,535 $ 24,485,563 $323,910,246 Terminal multiple 7.2x trailing EBITDA 14.5x trailing net income Discount rate: 15.13% 15.13% Net present enterprise value $215,508,045 NET PRESENT EQUITY VALUE: $285,458,658 Less: debt 1,953,414 Plus: cash 66,813,164 ------------ IMPLIED EQUITY VALUE: $280,367,795 WEIGHTED AVERAGE SHARES: 19,420,000 19,420,000 PRICE PER SHARE: $ 14.44 $ 14.70
VALUATION ANALYSIS - CONTINUED MARKET AMERICA, INC. -------------------------------------------------------------------------------- PAGE 3 RANGE OF POST-MONEY COMPANY VALUES:
WEIGHTED VALUE WEIGHTING AVERAGE ----- --------- ------- COMPARABLE ACQUISITION METHOD Trailing net revenues $ 7.95 30.0% $ 2.38 PUBLIC MARKET METHOD Enterprise Value/trailing EBITDA $ 14.02 10.0% $ 1.40 Price/trailing net income $ 15.63 10.0% $ 1.56 Price/trailing net revenues $ 4.53 10.0% $ 0.45 Price/Stockholder's equity $ 11.21 10.0% $ 1.12 Price/trailing EBITDA $ 11.71 10.0% $ 1.17 ---------- AVERAGE: $ 11.42 NET PRESENT VALUE METHOD FCF $ 14.44 5.0% $ 0.72 Net income $ 14.70 10.0% $ 1.47 ---------- AVERAGE: $ 14.57 STOCK BUY-BACK METHOD $ 4.18 5.0% $ 0.21 -------- ------------------------------------- WEIGHTED AVERAGE VALUATION: $ 10.50 -------------------------------------
MULTIPLE ANALYSIS MARKET AMERICA, INC. -------------------------------------------------------------------------------- PAGE 4
MARKET ENTERPRISE TRAILING TWELVE MONTH (IN MIL) PRICE TO TRAILING TWELVE MONTHS PUBLIC COMPARABLES: CAP. (MIL) VALUE (MIL) SALES EBITDA NET INCOME SALES EBITDA NET INCOME ---------- ----------- ----- ------ ---------- ----- ------ ---------- Advantage Marketing Sys (AMM) 12.8 13.0 28.4 1.1 0.0 0.4 11.2 1,504.6 Herbalife Intl. (HERBA) 617.3 426.7 1,020.0 86.8 42.6 0.6 7.1 14.5 Mannatech (MTEX) 79.6 70.0 128.7 (0.0) (3.7) 0.6 nm nm Nature's Sunshine Products (NATR) 168.7 138.9 318.7 30.7 16.7 0.5 5.5 10.1 Nu Skin (NUS) 988.8 986.6 885.6 103.9 50.3 1.1 9.5 19.7 Reliv International (RELV) 18.0 22.7 52.9 1.8 0.3 0.3 10.1 58.5 Tupperware Corp. (TUP) 1,425.9 1,849.9 1,110.0 156.7 61.5 1.3 9.1 23.2 Usana Health Sciences (USNA) 18.5 28.2 114.3 8.3 2.2 0.2 2.2 8.4 ------------------------------------------------------------------------------------------- AVERAGE: $ 416.2 $ 442.0 $ 457.3 $ 48.7 $ 21.2 0.6 7.8 234.1 MEDIAN: $ 124.1 $ 104.4 $ 223.7 $ 19.5 $ 9.4 0.6 9.1 19.7 50%+ Insider Ownership: AVERAGE: $ 18.3 $ 25.4 $ 83.6 $ 5.0 $ 1.3 0.3 6.2 33.5 MEDIAN: $ 18.3 $ 25.4 $ 83.6 $ 5.0 $ 1.3 0.3 6.2 33.5 EXCLUDING AMM (ALL) AND RELV (NET INCOME MULT.) AVERAGE: 0.7 7.3 15.2 ------------------------------ MEDIAN: 0.6 8.1 14.5 ------------------------------ Market America (MARK.OB) $ 153.3 $ 77.8 $ 152.2 $ 30.2 $ 21.7 1.0 5.1 7.1 SOURCE: MARKET GUIDE, MULTEX INVESTOR; PRICES AS OF 4/12/02; TUP BALANCE SHEET DATA FROM 9/30/01
MULTIPLE ANALYSIS MARKET AMERICA, INC. -------------------------------------------------------------------------------- PAGE 5
Enterprise Value to % OWNED BY TTM TTM Trailing Twelve Months Price/ Rev. 5-Year EPS 5-Year TTM Insiders and EBITDA Net Profit Sales EBITDA Net Income Book Growth Growth ROE 5%+ Holders Margin Margin ----- ------ ---------- ---- ------ ------ --- ----------- ------ ------ Advantage Marketing Sys (AMM) 0.5 11.4 1,534.5 1.2 42.8% 0.5% 0.9% 25.0% 4.0% 0.0% Herbalife Intl. (HERBA) 0.4 4.9 10.0 2.3 10.1% -0.9% 17.7% 40.0% 8.5% 4.2% Mannatech (MTEX) 0.5 nm nm 5.0 8.3% nm -21.5% 47.0% 0.0% -2.8% Nature's Sunshine Products (NATR) 0.4 4.5 8.3 1.8 5.1% 2.9% 18.5% 50.0% 9.6% 5.2% Nu Skin (NUS) 1.1 9.5 19.6 2.6 3.1% -10.1% 13.7% 44.0% 11.7% 5.7% Reliv International (RELV) 0.4 12.7 73.6 3.1 5.4% -26.2% 5.5% 54.0% 3.4% 0.6% Tupperware Corp. (TUP) 1.7 11.8 30.1 11.2 -4.0% -17.4% 50.1% 35.0% 14.1% 5.5% Usana Health Sciences (USNA) 0.2 3.4 12.8 1.3 38.1% 7.8% 16.3% 53.0% 7.3% 1.9% ----------------------------------------------------------------------------------------------- AVERAGE: 0.7 8.3 241.3 3.6 13.6% -6.2% 12.6% 43.5% 7.3% 2.5% MEDIAN: 0.4 9.5 19.6 2.5 6.9% -0.9% 15.0% 45.5% 7.9% 3.1% 50%+ Insider Ownership: AVERAGE: 0.3 8.1 43.2 2.2 21.7% -9.2% 10.9% 53.5% 5.3% 1.3% MEDIAN: 0.3 8.1 43.2 2.2 21.7% -9.2% 10.9% 53.5% 5.3% 1.3% 0.7 7.8 16.2 3.9 ------- -------- 0.4 7.2 12.8 2.6 ------- -------- Market America (MARK.OB) 0.5 2.6 3.6 1.7 26.7% 32.2% 26.7% 83.0% 19.9% 14.2% SOURCE: MARKET GUIDE, MULTEX INVESTOR; PRICES AS OF 4/12/02
ANALYSIS OF HERBALIFE TRANSACTION MARKET AMERICA, INC. -------------------------------------------------------------------------------- (IN MILLIONS, EXCEPT PER SHARE DATA) PAGE 6
TRAILING TWELVE MONTH: TIC/TRAILING TWELVE MONTH: TIC/ TIC Sales EBITDA Net Income Book Value Sales EBITDA Net Income Book Value Class A Class B --- ----- ------ ---------- ---------- ----- ------ ---------- ---------- ------- ------- $ 685.00 $ 1,020.0 $ 86.8 $ 42.6 $ 260.9 0.67 7.89 16.08 2.63 26.7% 35.4% Price Prior to Announcement MARKET AMERICA TTM FINANCIALS $ 152.2 $ 30.2 $ 21.7 $ 91.2 $ 4.31 $ 4.31 EQUITY VALUE $ 102.2 $ 238.5 $ 348.7 $ 239.3 SHARES 19.42 19.42 19.42 19.42 PER SHARE VALUE $ 5.26 $ 12.28 $ 17.96 $ 12.32 $ 5.46 $ 5.84 ------------------------------------------------------ $ 11.96 Average of first four per share values $ 12.30 Median of first four per share values ------------------------------------------------------ ------------------------------------------------------ $ 5.65 Average of purchase price premiums ------------------------------------------------------