Bank of America Investment Banking Pitch Book
Implied Kenneth Cole Productions Per Share Reference Ranges
$25.00
$20.00
$15.00
$10.00
$5.00
Methodology
Assumptions:
$13.98
Low
$10.15
$10.15
52-Week Share
Price Range
Kenneth Cole Productions Reference Range Summary
High
$13.98
$15.85
Analyst Share
Price Target
Share Price
Target
$18.00
Cost of Equity
13.5%
$11.60
$9.40
Selected Public
Companies Analysis
2012E
Adjusted EBITDA"
$21
Selected
Multiple Range
8.0x
$14.00
7
$11.55
Selected Precedent
Transactions Analysis
7.0x
LTM 3/31/12
Adjusted EBITDA
$24
Selected
Multiple Range
9.0x
(5) Discounted to June 30, 2012 using mid-year convention. Normaland depreciation and amortization calculated as 99.7% of nermeirond 2014E capital expenditures
(6) Burdened for stock-hased compensation and adjusted for one-time expenses and impairments
Potential Tax Benefits per Share (1)
$18.80
$17.30
$13.65
Discounted Cash
Flow Analysis
2.5%
Discount Rate
11,0% - 13.0%
Perpetuity
Growth Rate
6.0x
Source: Kenneth Cole Productions management projections public fings, Wall Street research FactSet and Capital
Note: Dollars in millions, esot per share values. Per share values rownded to nearest 50.05 exoget 52-week high/lour. Based on 10.3 million dess A shares and 50 ilm class B shares outstanding, 2.5 million options outstanding
with a weighted average exercise price of $16.24 per share (strike prices ranging from $5.36-534 27 per share) and 0.5 million RSUs Calculated pursuant to the treasury stock method. Assumes all options and stock animls
outstanding vest upon change of control Calculated parent to the treasury stock method. Assumes all options and stock and attending vstupes change of control Awmes cash of $49 million as of March 31, 2012
(1) Includes potential tax benefits frowe defereed tax assets and net operating losses ("NOLS")
(2) Closing share price on February 23, 2012, the last trading day prive to announcement that Kenneth Cole submitted an initial offer to acpoire KCP for $15.00 per share.
(3) For informational purposes. Reflects 52-week high/ as of February 23, 2012, the last trading day prior to announcement that Kenneth Cole satted as initial offer to acquire KCP for $15.00 per share
(4) For informational purposes Reflects B. Riley & Co foreand share price target discounted one year at cost of opvity of 13.5%.
3.5%
Per Share
Consideration:
$15.25
KCP Unaffected
Closing Share
Price:
$13.07
Bank of America
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