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Waffle Slow
Toasters Steamers
Irons Cookers
Case Summary
10% of $2.3 Bn US kitchen appliances
market
2003-06: Modest sales growth of 2%
Industry dollar volume growth of just 3.5%: Food
Due to competition from mass preparation
merchandisers Cooking
Pricing: Medium price points or just below
well known brands
Blaine brand: Consistently regarded well by Beverage-
customers making
Goods with smart technology features and (2%)
styling priced high to compete with Asian
imports
Distribution channel: 1)BKI => Wholesalers
=> Mass merchandisers => department
stores 2)BKI => Specialty retailers &
Catalogue companies
Small Kitchen Appliances
Standard warranty of 90 days to one year
Industry
Case Summary
Cast-iron factory for specialty coating in Minnesota, rest
outsourced to suppliers and contract manufacturers in Canada,
Mexico, China & Vietnam
1994: IPO, 62% owned by family
Strategy of acquiring appliance manufacturers and establishing
relationships with suppliers abroad
Keen on increasing presence in beverage appliances segment
85% revenue & 80% operating income from mid-tier products
EBITDA margin = 22%
Declining margins due to acquisitions, consolidation to improve
margins
BKI lost market share because of aggressive rival price
reductions
Dubinskis Concerns
Repurchase move only in conjunction with
financial policies
Timing of repurchase
Family board members reaction to possible
effects of repurchase
Balance Sheet
Assets 2004 2005 2006 2007
Cash & Cash Equivalents 67391.00 70853.00 66557.00 68554
Marketable Securities 218403.00 196763.00 164309.00 169238
Accounts Recievables 40709.00 43235.00 48780.00 50243
Inventory 47262.00 49728.00 54874.00 56520
Other Current Assets 2586.00 3871.00 5157.00 5312
Total Current Assets 376351.00 364449.00 339678.00 349869
Property,Plant and Equipment 99402.00 138546.00 174321.00 179551
Goodwill 8134.00 20439.00 38281.00 39429
Other Assets 13331.00 27394.00 39973.00 41172
Total Assets 497217.00 550829.00 592253.00 610021
Liabilities & Shareholder's Equity
Accounts Payable 26106.00 28589.00 31936.00 32894
Accrued Liabilities 22605.00 24921.00 27761.00 28594
Taxes Payable 14225.00 17196.00 16884.00 17391
Total Current Liabilities 62936.00 70706.00 76581.00 78879
Other Liabilities 1794.00 3151.00 4814.00 4958
Blaine Kitchenware
Easyliving Systems
Bunkerhill Inc.
Revenues
XQL Corp
Blaine Kitchenware
Easyliving Systems
Bunkerhill Inc.
Net Income
XQL Corp
= 0.56
Book
Number of Market Value
New Shares Value of of Debt/Equity Debt/EquityMarket
Debt Share Price Outstanding Equity Equity BookValue Value e ke WACC
343788 18.58 40547.60 753322.2 144575 2.38 0.46 0.71 12.61 10.77
After Repurchase
Assets 2006
Cash & Cash Equivalents 66557.00
Marketable Securities 164309.00
Accounts Recievables 48780.00
Inventory 54874.00
Other Current Assets 5157.00
Total Current Assets 339678.00
Property,Plant and Equipment 174321.00
Goodwill 38281.00
Other Assets 39973.00
Total Assets 592253.00
Liabilities & Shareholder's Equity
Accounts Payable 31936.00
Accrued Liabilities 27761.00
Taxes Payable 16884.00
Total Current Liabilities 76581.00
Other Liabilities 4814.00
Long term debt 343788
Deferred Taxes 22495.00
Total Liabilities 447678.00
Shareholders' Equity 144575.00
Total Liablility & Shareholders' Equity 592253.00
EBIT 63946
EBT 46838.6888