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Discounted Cash Flow (DCF) Analysis Unlevered


The Michaels Companies Inc.

The Michaels Companies Inc. (MIK)

Consumer Cyclical

Operating Data

Year
A/P
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 4,569.794,737.964,912.795,197.245,361.995,271.915,426.385,585.375,749.025,917.47
Revenue (%)
EBITDA 699.64660.47826.33823.76853.63688.51822.10846.18870.98896.50
EBITDA (%)
EBIT 593.62549.60711.37707.86734.59564.09697.29717.72738.75760.39
EBIT (%)
Depreciation 106.02110.87114.96115.90119.04124.42124.81128.46132.23136.10
Depreciation (%)

Balance Sheet Data

Year
A/P
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 239.00378.09409.24298.84425.74245.67360.85371.43382.31393.51
Total Cash (%)
Account Receivables --9.3323.3926.2757.4629.8530.7231.6232.55
Account Receivables (%)
Inventories 901.16958.021,002.701,127.801,123.341,108.681,121.631,154.501,188.321,223.14
Inventories (%)
Accounts Payable 367.87447.26457.87517.13483.12485.02497.06511.62526.61542.04
Accounts Payable (%)
Capital Expenditure -111.96-137.87-123.80-114.34-127.62-145.50-137.83-141.87-146.03-150.30
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 5.62
Diluted Shares Outstanding 171.38
Cost of Debt
Tax Rate 23.38
After-tax Cost of Debt -1.12
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.46
Total Debt 2,681.00
Total Equity 963.14
Total Capital 3,644.14
Debt Weighting 73.57
Equity Weighting 26.43
Wacc

Build Up Free Cash

Year
A/P
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 4,569.794,737.964,912.795,197.245,361.995,271.915,426.385,585.375,749.025,917.47
EBITDA 699.64660.47826.33823.76853.63688.51822.10846.18870.98896.50
EBIT 593.62549.60711.37707.86734.59564.09697.29717.72738.75760.39
Tax Rate 35.83%38.07%36.57%35.00%35.53%23.38%34.06%34.06%34.06%34.06%
EBIAT 380.94340.37451.24460.12473.56432.21459.77473.24487.11501.38
Depreciation 106.02110.87114.96115.90119.04124.42124.81128.46132.23136.10
Accounts Receivable ----14.05-2.89-31.1927.62-0.87-0.90-0.93
Inventories --56.85-44.69-125.104.4614.65-12.95-32.86-33.83-34.82
Accounts Payable -79.4010.6159.25-34.011.9012.0414.5614.9915.43
Capital Expenditure -25.91-14.07-9.4613.2817.89-7.674.044.164.28
UFCF 486.96499.69518.05486.65573.44559.88603.61586.57603.76621.45
WACC
PV UFCF 570.25523.53509.08495.04
SUM PV UFCF -

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.85
Free cash flow (t + 1) 643.54
Terminal Value 34,786.14
Present Value of Terminal Value 26,178.93

Intrinsic Value

Enterprise Value -
Net Debt 2,435.33
Equity Value -
Shares Outstanding 171.38
Equity Value Per Share -