Exhibit Nutrition

Transcription

1 Exhibit 1 Summary of Valuation Conclusion Controlling and Marketable Basis of (1,000's): Method Value Weight Total Earnings Capitalization Method $72, % $36,400 Private Company Transaction Method 71, % 35,650 Weighted Average Value (Rounded) $72,000

2 Exhibit 2 Estimated 2018 Income Statement Actual Estimated Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 $8,486 $7,783 $6,647 $6,702 $5,890 $6,717 $4,829 $3,804 $6,000 $6,000 $6,000 $6,000 $74,858 Returns (97) Discounts (3,047) Gift Card Net 8,486 7,783 6,647 6,702 5,890 6,717 4,829 3,804 6,000 6,000 6,000 6,000 71,784 Purchases 2, ,548 1, ,216 1,681 1,470 1,500 1,500 1,500 1,500 19, % 2.0% 38.3% 21.3% 10.3% 47.9% 34.8% 38.6% 25.0% 25.0% 25.0% 25.0% 27.6% Gross Profit 5,805 7,628 4,099 5,272 5,285 3,501 3,148 2,334 4,500 4,500 4,500 4,500 51,998 Operating Expenses Rent 2,620 2,620 2,620 2,620 2,620 2,620 2,620 2,620 2,620 2,620 2,620 2,620 31,440 Electricity ,662 Payroll ,825 Internet ,020 Insurance Miscellaneous Total Operating Expenses 2,888 2,908 2,905 2,933 2,958 3,498 3,405 3,186 3,418 2,918 2,908 2,898 36,823 Operating Profit/EBIT $2,917 $4,720 $1,194 $2,339 $2,327 $3 ($257) ($852) $1,082 $1,582 $1,592 $1,602 $15,175

3 Exhibit 3 Projected Cash Flows Fiscal Year Ending December 31, Total Revenue $71, % $82, % $90, % $95, % $100, % Revenue Growth N/A 15.0% 10.0% 5.0% 5.0% Cost of Goods Sold 19, % 20, % 22, % 23, % 25, % Gross Profit 51, % 61, % 68, % 71, % 75, % Total Operating Expenses 36, % 42, % 46, % 48, % 51, % Operating Profit (EBIT) $15, % $19, % $21, % $22, % $24, %

4 Exhibit 4 Earnings Capitalization Method Operating Profit/EBIT (2018) $15,175 Tax 28.0% 4,249 After-Tax Earnings 10,926 WACC 18.00% Long-Term Growth Rate 3.00% Cap Rate 15.0% Value Indication 72,838 Less: Interest-Bearing Debt - Indicated Equity Value, Controlling and Marketable $72,838

5 Exhibit 5 Market Approach - Private Company Transaction Method Operating Result X Multiple X PV Factor = Value Indication X Weights = Total Value Indication 2018 Projected Revenue $71, $67, % $16,980 EBIT 15, , % 17, Projected Revenue $82, $66, % $16,548 EBIT 19, , % 19,777 Market Value of Invested Capital $71,253 Less: Interest-Bearing Debt - Indicated Equity Value, Controlling and Marketable $71,300

6 Exhibit 6 M&A Transaction Data - DealStats Business Description Sale Date Net MVIC Price MVIC to MVIC to EBITDA MVIC to EBIT GP to EBIT to 1 Supplement Retail Store 03/28/2018 $480,893 $414, NA 3.0% 2 Online Supplement Store 03/16/2018 $817,935 $903, % 28.0% 3 Vitamin and Nutrition Store Retail 05/26/2017 $1,355,537 $405, % 11.0% 4 Retail Health Products 04/14/2016 $775,729 $280, NA 27.0% 5 Sports Nutrition, Vitamins, Supplements, and Diet/Wellness Retail Store 03/08/2016 $501,460 $275, % 12.0% 6 Retail Health Foods and Vitamin Store 01/25/2016 $619,512 $369, % 15.0% 7 Online Retail Store Selling Vitamins and Supplements 05/15/2015 $1,095,906 $1,160, % 15.0% 8 Retail Health Products 07/28/2014 $1,058,245 $680, % 21.0% 9 Retail Health and Wellness Store 09/18/2013 $592,181 $132, % 4.0% 10 Online of Nutritional Supplements and Vitamins 05/01/2013 $969,824 $945, % 12.0% 11 Online of Nutritional Supplements 04/10/2013 $765,501 $325, % 7.0% 12 Nutrition Shop 06/30/2012 $460,110 $300, % 20.0% 13 Retail Health Products 12/19/2011 $143,001 $39, % 7.0% 14 Sports Nutrition Retail 12/10/2011 $297,166 $100, % 9.0% 15 Retail Health Food Store 10/31/2011 $238,792 $125, % 21.0% 16 Health Food Store 07/28/2011 $621,804 $82, % 2.0% 17 Retail Vitamin and Health Products 07/15/2011 $220,292 $50, NA NA 38.0% -6.0% 18 Vitamin and Health Food Store 07/30/2010 $432,808 $200, NMF NMF 48.0% 0.0% 19 Retail Health Products 03/21/2010 $285,000 $110, % 23.0% 20 Supplement, Health Food, and Vitamin Shop - Franchise 03/25/2009 $270,562 $35, % 6.0% 21 Health and Natural Food Store 01/26/2009 $3,435,797 $689, % 11.0% 22 Health Food Store 11/24/2008 $380,204 $269, % 17.0% 23 Mall-Based Health Food Retailer 01/24/2008 $201,974 $99, % 10.0% 24 Nutrition and Health Store with Sports Supplements 08/27/2007 $380,440 $227, % 8.0% 25 Nutrition and Health Store with Sports Supplements 12/15/2006 $490,603 $210, NMF NMF 48.0% 1.0% 26 Vitamin and Dietary Supplements Retail Store 09/01/2006 $393,475 $195, % 19.0% 27 Nutrition and Health Store with Sports Supplements 07/10/2006 $318,136 $160, NA NA 48.0% -2.0% 28 Retailer of Health Food Products - Franchise 01/12/2006 $201,736 $390, % 25.0% 29 Vitamin and Health Food Retailer - Franchise 01/01/2006 $214,861 $50, NA NA 41.0% -21.0% 30 Sells Branded Nutritional Supplements and Other Lifestyle Products 12/05/2005 $9,955,326 $8,667, NA NA 53.0% -10.0% 31 Vitamin Store 11/14/2005 $432,000 $112, NA NA NA NA 32 Vitamins and Health Food 09/10/2004 $638,112 $350, % 33.0% 33 Retailer and Wholesaler of Vitamins and Supplements (Also Sells Franchise Rights) 08/17/2004 $4,254,100 $4,110, % 9.0% 34 Health and Nutrition Store 12/01/2003 $626,038 $309, NA NA 47.0% -3.0% 35 Vitamin Retailer 09/12/2003 $790,000 $242, % 22.0% 36 Retail Health Food Store with Vitamins and Supplements 08/14/2003 $313,749 $121, % 3.0% Average % 10.3% Median % 10.0% Low % -21.0% High % 33.0% First Quartile % 3.0%

7 Exhibit 7 Weighted Average Cost of Capital - Build-Up Rate on BAA Corporate Bonds 4.78% Rate on Government Bond Yield 20 Year Treasury Bond Yield 2.95% Source: Federal Reserve Statistical Release August 31, 2018 State & Federal Tax Rates California 8.84% Federal 21.00% Effective Tax Rate [(1-State Rate) x Federal Rate + State Rate] 28.00% Cost of Equity Capital (CEC) Rate on Government Bond Yield 20 Year Treasury Bond Yield (RF) % Equity Risk Premium (ERP) % Size Risk Premium (SRP) % Industry Specific Risk Premium (IRP) % Company Specific Risk Premium (CRP) % Cost of Equity Capital (RF+ERP+SRP+IRP+CRP) 17.59% Cost of Debt Capital (CDC) Weighted Average Cost of Capital (WACC) Rate on BAA Corporate Bonds % Debt Premium 1.00% Cost of Debt Capital 5.78% Equity as a Percentage of Capital (E) % Debt as a Percentage of Capital (D) % Tax Rate (T) 28.00% Weighted Cost of Equity: (E)(CEC) 17.59% Weighted Cost of Debt: (D)(CDC)(1-T) 0.00% Weighted Average Cost of Capital (WACC) 18.00% The 20 year, nominal risk free note based on information from the Federal Reserve as of the Valuation Date. The ERP is based on the Duff & Phelps 2018 Edition Yearbook. The SRP for the 10th decile of companies within a market capitalization range of $1,139,000 and $253,761,000 per Duff & Phelps Valuation Edition 2018 Yearbook. The IRP is based on Duff & Phelps Valuation Edition 2018 Yearbook. The CRP isbased on the company's specific investment risk compared to that of those included in the lowest decile of the S&P 500, to compensate for increased company-specific risk, due to differences such as size, investor liquidity, non-diversified products and customers, technology, and market risk. 6 Moody's Corporate BAA Rated Bond rating per the Federal Reserve as of the Valuation Date. 7 Based on the company's capital structure as well as similar companies operating within the same industry and similar size.