HANSSON PRIVATE LABEL

Operating Results: 2003 2004 2005 2006 2007

Revenue $503.4 $543.7 $587.2 $636.1 $680.7
Less: Cost of Goods Sold 405.2 432.3 496.2 513.4 558.2
Gross Profit 98.2 111.4 91.0 122.7 122.5
Less: Selling, General & Administrative 37.8 44.6 45.8 51.5 49.0
EBITDA 60.4 66.8 45.2 71.2 73.5
Less: Depreciation 6.8 6.2 6.0 5.9 6.1
EBIT 53.6 60.6 39.2 65.3 67.4
Less: Interest Expense 5.5 5.8 5.9 5.3 3.3
EBT 48.1 54.8 33.3 60.0 64.1
Less: Taxes 19.2 22.0 13.3 24.0 25.6
Net Income $28.9 $32.8 $20.0 $36.0 $38.5

Margins:
Revenue Growth NA 8.0% 8.0% 8.3% 7.0%
Gross Margin 19.5% 20.5% 15.5% 19.3% 18.0%
Selling, General & Administrative/Revenue 7.5% 8.2% 7.8% 8.1% 7.2%
EBITDA Margin 12.0% 12.3% 7.7% 11.2% 10.8%
EBIT Margin 10.6% 11.1% 6.7% 10.3% 9.9%
Net Income Margin 5.7% 6.0% 3.4% 5.7% 5.7%
Effective Tax Rate 39.9% 40.1% 39.9% 40.0% 39.9%
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Income Statement
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HANSSON PRIVATE LABEL

Assets: 2003 2004 2005 2006 2007

Cash & Cash Equivalents $4.3 $5.1 $4.8 $7.8 $5.0
Accounts Receivable 62.1 70.1 78.8 87.1 93.3
Inventory 57.7 58.0 61.2 61.9 67.3
Total Current Assets 124.1 133.2 144.8 156.8 165.6

Property, Plant & Equipment 201.4 202.9 203.1 202.3 204.4

Other Non-Current Assets 12.3 12.1 11.8 12.5 10.8
Total Assets $337.8 $348.2 $359.7 $371.6 $380.8

Liabilities & Owners' Equity:

Accounts Payable & Accrued Liabilities $42.2 $45.0 $51.6 $53.4 $58.1

Long-Term Debt 91.6 82.8 73.8 65.8 54.8

Owners' Equity 204.0 220.4 234.3 252.4 267.9

Total Liabilities & Owners' Equity $337.8 $348.2 $359.7 $371.6 $380.8

Net Working Capital:

Accounts Receivable 62.1 70.1 78.8 87.1 93.3
Plus: Inventory 57.7 58.0 61.2 61.9 67.3
Less: Accounts Payable & Accrued Expenses 42.2 45.0 51.6 53.4 58.1
Net Working Capital 77.6 83.1 88.4 95.6 102.5

Net Working Capital/Revenue 15.4% 15.3% 15.1% 15.0% 15.1%

Days Sales Outstanding 44.4x 46.4x 48.3x 49.3x 49.3x

Days Sales Inventory 41.3x 38.4x 37.5x 35.0x 35.6x
Days Payable Outstanding (1) 34.3x 34.0x 34.3x 34.0x 34.4x
Cash-to-Cash 51.4x 50.8x 51.6x 50.3x 50.5x

(1) Based on total operating expenses excluding depreciation.

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Balance Sheet
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HANSSON PRIVATE LABEL

Cash From Operations: 2003 2004 2005 2006 2007

Net Income $28.9 $32.8 $20.0 $36.0 $38.5
Plus: Depreciation 6.8 6.2 6.0 5.9 6.1
Less: Increase in Accounts Receivable 3.1 8.0 8.7 8.3 6.2
Less: Increase in Inventory 0.5 0.3 3.2 0.7 5.4
Plus: Increase in Accounts Payable 0.3 2.8 6.6 1.8 4.7
Total Cash From Operations $32.4 $33.5 $20.7 $34.7 $37.7

Cash From Investing:

Capital Expenditures $7.3 $7.7 $6.2 $5.1 $8.2
Plus: Increases in Other Non-Current Assets 0.5 (0.2) (0.3) 0.7 (1.7)
Total Cash Used in Investing $7.8 $7.5 $5.9 $5.8 $6.5

Cash From Financing:

Repayment of Debt $8.0 $8.8 $9.0 $8.0 $11.0
Plus: Dividend Payments 14.4 16.4 6.1 17.9 23.0
Cash Used in Financing $22.4 $25.2 $15.1 $25.9 $34.0

Total Cash Generated $2.2 $0.8 ($0.3) $3.0 ($2.8)

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Cash Flow
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HANSSON
ho PRIVATE LABEL Compa

Market Net Enterprise Equity Net Book

Company: Value Debt Value Beta Revenue EBITDA EBIT Income Value
Cathleen Sinclair 298.9 1,329.6 1,628.5 2.22 1,346.8 255.3 163.4 21.5 (1,112.8)
General Health & Beauty 319.3 63.1 382.4 1.95 446.1 61.9 51.9 23.8 204.2
Women's Care Company 498.6 55.3 553.9 1.14 397.3 52.7 49.3 77.0 43.7
Skin Care Enterprises 1,204.2 371.9 1,576.1 1.35 1,247.6 155.8 125.4 65.3 316.2

Company: EBITDA EBIT Earnings Revenue EBITDA EBIT P/E P/B

Cathleen Sinclair 19.0% 12.1% 1.6% 1.2x 6.4x 10.0x 13.9x NM
General Health & Beauty 13.9% 11.6% 5.3% 0.9x 6.2x 7.4x 13.4x 1.6x
Women's Care Company 13.3% 12.4% 19.4% 1.4x 10.5x 11.2x 6.5x 11.4x
Skin Care Enterprises 12.5% 10.1% 5.2% 1.3x 10.1x 12.6x 18.4x 3.8x
Average 14.6% 11.6% 7.9% 1.2x 8.3x 10.3x 13.1x 5.6x
Harvard
Comparable Companies
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HANSSON PRIVATE LABEL Weighted Averag

Debt/ Debt/ Equity Debt Asset

Company: Value Equity Beta Beta Beta
Cathleen Sinclair 81.6% 444.9% 2.22 0.25 0.79
General Health & Beauty 16.5% 19.8% 1.95 0.00 1.74
Women's Care Company 10.0% 11.1% 1.14 0.00 1.07
Skin Care Enterprises 23.6% 30.9% 1.35 0.00 1.14
Average 32.9% 49.1% 1.67 0.06 1.18

Dbet/ Debt/ Asset Equity Cost of Cost of Assumptions:

Value Equity Beta Beta Equity Debt WACC 10-Year Treasury 3.75%
0.0% 0.0% 1.18 1.18 9.67% 7.75% 9.67% Market Risk Premium 5.00%
5.0% 5.3% 1.18 1.22 9.86% 7.75% 9.60%
10.0% 11.1% 1.18 1.26 10.07% 7.75% 9.53% Tax Rate 40.0%
15.0% 17.6% 1.18 1.31 10.30% 7.75% 9.45%
20.0% 25.0% 1.18 1.36 10.56% 7.75% 9.38% Est. Hansson EBITDA Multiple 7.0x
25.0% 33.3% 1.18 1.42 10.86% 7.75% 9.31% Est. Hansson Enterprise Value 514.5

Existing Net Debt 49.8

Plus: New Expansion Debt 57.8
Total Estimated Debt 107.6

Existing D/V 9.7%

Estimated New D/V 20.9%

Assumed Debt Beta 0.00

Estimated Cost of Debt 7.75%
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ghted Average Cost of Capital
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HANSSON PRIVATE LABEL

Percent Cost of
Cost Components: Amount Est. Life Depr' Maintenance Maintenance
Facility Expansion $10,000 20yrs. 500 5.0% 500
Manufacturing Equipment 20,000 10yrs. 2,000 5.0% 1,000
Packaging Equipment 15,000 10yrs. 1,500 5.0% 750
Working Capital (1) 12,817 0 0.0% 0
Total Investment 57,817 4,000 2,250

(1) The increase in working capital is not expected to ocurr upfront

at the time of the initial investment. It is assumed to take place
throughout the year, and should be considered as part of the
2009 cash flows.
Note: working capital is defined as accounts receivable plus inventory
less accounts payable and accrued expenses. At the end of the
project, working capital will be returned in an amount equal to
accounts receivable less accounts payable.
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Investment
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HANSSON PRIVATE LABEL Operating A
Operating Assumptions

Revenue Projection: 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Capacity (000's) 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000
Capacity Utilization 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 85.0% 85.0% 85.0%
Unit Volume 48,000 52,000 56,000 60,000 64,000 68,000 68,000 68,000 68,000
Selling Price Per Unit - Growing at 2.0% 1.77 1.81 1.84 1.88 1.92 1.95 1.99 2.03 2.07
Revenue 84,960 93,881 103,124 112,700 122,618 132,887 135,545 138,256 141,021

Production Costs:
Raw Materials Per Unit Growing at 1.0% 0.94 0.95 0.96 0.97 0.98 0.99 1.00 1.01 1.02
Manufacturing Overhead Growing at 3.0% 3,920 4,038 4,159 4,283 4,412 4,544 4,681 4,821 4,966
Maintenance Expense Growing at 3.0% 2,250 2,318 2,387 2,459 2,532 2,608 2,687 2,767 2,850

Salaried Labor Cost:

Managers 4 4 6 6 8 8 8 8 8
Average Annual Fully Loaded Cost 3.5% 160.0 165.6 171.4 177.4 183.6 190.0 196.7 203.6 210.7
Total Salaried Labor Cost 640.0 662.4 1,028.4 1,064.4 1,468.8 1,520.2 1,573.4 1,628.5 1,685.5

Hourly Labor Cost:

Average Fully Loaded Hourly Cost 3.5% 20.00 20.70 21.42 22.17 22.95 23.75 24.59 25.45 26.34
Hours Per Year 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Cost Per Hourly Employee 40,000 41,400 42,849 44,349 45,901 47,507 49,170 50,891 52,672
Number of Hourly Workers 450 473 509 545 582 618 618 618 618
Total Hourly Labor Cost (000's) 18,000.0 19,570.9 21,814.0 24,190.2 26,706.0 29,368.2 30,396.1 31,460.0 32,561.1

Total Labor Cost 18,640.0 20,233.3 22,842.4 25,254.6 28,174.8 30,888.5 31,969.6 33,088.5 34,246.6

Selling, General & Administrative/Revenue 7.8% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8%

Working Capital Assumptions (1):

Days Sales Outstanding 47.6x 47.6x 47.6x 47.6x 47.6x 47.6x 47.6x 47.6x 47.6x
Days Sales Inventory 37.6x 37.6x 37.6x 37.6x 37.6x 37.6x 37.6x 37.6x 37.6x
Days Payable Outstanding 34.2x 34.2x 34.2x 34.2x 34.2x 34.2x 34.2x 34.2x 34.2x

(1) Based on historical averages.

Hourly Labor Cost Per Unit 0.38 0.38 0.39 0.40 0.42 0.43 0.45 0.46 0.48

Units Per Total Labor Hours 0.05 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06
Harvard Busi
Operating Assumptions

2018
80,000
85.0%
68,000
2.12
143,841

1.03
5,115
2,936

8
218.1
1,744.5

27.26
2,000
54,516
618
33,700.7

35,445.2

7.8%

47.6x
37.6x
34.2x

0.50

0.06
Harvard Business Publishing