ABCDEFGHIJKLMNOPQRSTUVWXYZAAABACADAEAFAGAHAIAJAKALAMANAOAP
1
Discounted Cash Flow Analysis
2
3
4
5
6
7
8
9
( In Millions of USD )
10
Income StatementHistoricalProjectedChoose a ScenarioBaseâ–¾Sensitivity Analysis (Base Case)
11
12
FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024FY 2025FY 2026FY 2027FY 2028FY 2029FY 2030Perpetuity Growth Rate
13
Weighted Average Cost of Capital (WACC)Discount Rate
(WACC)		8.0-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%
14
Total Revenue64.580.3131.3117.1123.4140.4159.7178.2198.9218.0238.5254.4267.05.0%$11.7$12.2$12.8$13.5$14.4$15.4$16.7$18.3$20.3$23.0$26.8
15
Revenue Growth-24.6%63.5%-10.8%5.4%13.7%13.7%11.6%11.6%9.6%9.4%6.6%5.0%Cost of EquityPre-Tax Cost of Debt5.3%5.5%$10.8$11.3$11.8$12.4$13.1$13.9$14.9$16.1$17.7$19.6$22.2
16
Risk-Free RateTax Rate28.5%6.0%$10.1$10.5$10.9$11.4$12.0$12.7$13.5$14.4$15.6$17.1$19.0
17
Ventilator Rentals, non-invasive and invasive57.969.178.383.895.8109.4125.0140.3157.4173.4191.0204.5215.1Equity Risk Premium Cost of Debt3.8%6.5%$9.5$9.8$10.2$10.6$11.1$11.6$12.3$13.1$14.0$15.1$16.5
18
% of Total Revenue89.8%86.0%59.6%71.6%77.6%78.0%78.3%78.7%79.1%79.5%80.1%80.4%80.6%Company Beta (Levered)Total Debt5.87.0%$8.9$9.2$9.5$9.9$10.3$10.8$11.3$11.9$12.7$13.5$14.6
19
Industry Average Beta (Unlevered)Total Equity213.67.5%$8.4$8.7$8.9$9.2$9.6$10.0$10.4$10.9$11.5$12.3$13.1
20
Durable medical equipment rentals 2.75.49.913.815.517.419.421.323.325.026.728.029.28.0%$8.0$8.2$8.4$8.7$9.0$9.3$9.7$10.1$10.6$11.2$11.9
21
% of Total Revenue4.2%6.7%7.5%11.8%7.0%12.4%12.2%12.0%11.7%11.4%11.2%11.0%10.9%Cost of Capital10.3%8.5%$7.5$7.7$7.9$8.2$8.4$8.7$9.0$9.4$9.8$10.3$10.9
22
9.0%$7.2$7.3$7.5$7.7$7.9$8.2$8.5$8.8$9.1$9.5$10.0
23
Equipment Sales2.84.47.48.89.811.012.313.514.815.816.917.718.59.5%$6.8$7.0$7.1$7.3$7.5$7.7$8.0$8.2$8.5$8.9$9.2
24
% of Total Revenue4.4%5.5%5.6%7.5%8.0%7.8%7.7%7.6%7.4%7.2%7.1%7.0%6.9%10.0%$6.5$6.6$6.8$6.9$7.1$7.3$7.5$7.7$8.0$8.3$8.6
25
Terminal Value- Perpetuity Growth Method10.5%$6.2$6.3$6.5$6.6$6.8$6.9$7.1$7.3$7.5$7.8$8.0
26
Service Revenues1.01.41.42.02.32.62.93.13.43.73.94.14.311.0%$6.0$6.1$6.2$6.3$6.4$6.6$6.7$6.9$7.1$7.3$7.6
27
% of Total Revenue1.5%1.8%1.1%1.7%1.9%1.8%1.8%1.8%1.7%1.7%1.7%1.6%1.6%Perpetuity Growth Rate (Base)2.0%11.5%$5.7$5.8$5.9$6.0$6.1$6.3$6.4$6.6$6.7$6.9$7.1
28
Perpetuity Growth Rate (Bull)3.0%12.0%$5.5$5.6$5.7$5.8$5.9$6.0$6.1$6.2$6.4$6.6$6.7
29
Covid response sales and services0.00.034.48.60.00.00.00.00.00.00.00.00.0Perpetuity Growth Rate (Bear)0.0%12.5%$5.3$5.4$5.4$5.5$5.6$5.7$5.8$6.0$6.1$6.2$6.4
30
% of Total Revenue0.0%0.0%26.2%7.3%---------13.0%$5.1$5.2$5.2$5.3$5.4$5.5$5.6$5.7$5.8$5.9$6.1
31
Baseline Terminal Value 403.113.5%$4.9$5.0$5.0$5.1$5.2$5.3$5.4$5.5$5.6$5.7$5.8
32
Cost of Goods Sold 16.724.351.243.740.746.352.760.665.671.978.786.590.8Present Terminal Value167.4
33
% of Total Revenue25.9%30.2%39.0%37.3%33.0%33.0%33.0%34.0%33.0%33.0%33.0%34.0%34.0%Sum of Present Value of Cash Flows119.0
34
Implied Enterprise Value$286.5
35
Gross Profit47.856.180.173.482.794.0107.0117.6133.3146.1159.8167.9176.2
36
Gross Margin74.1%69.8%61.0%62.7%67.0%67.0%67.0%66.0%67.0%67.0%67.0%66.0%66.0%(+) Cash and Cash Equivalents 28.4
37
(+) Equity Investments 2.2
38
Operating Expenses37.747.353.361.866.675.886.297.1107.4117.7128.8136.1142.9(+) Net Operating Losses0.5
39
% of Total Revenue58.5%58.9%40.6%52.8%54.0%54.0%54.0%54.5%54.0%54.0%54.0%53.5%53.5%(-) Total Debt5.8
40
(-) Non-Controlling Interests -
41
Selling, General and Administrative 34.341.452.854.958.066.075.085.595.5104.6114.5122.1128.2
42
% of Total Revenue53.2%51.5%40.2%46.9%47.0%47.0%47.0%48.0%48.0%48.0%48.0%48.0%48.0%Implied Equity Value$311.7
43
Shares Outstanding 38.9
44
Research and Development0.00.81.12.12.52.83.23.64.04.44.83.84.0Implied Share Price$8.0$8.0
45
% of Total Revenue0.0%1.1%0.8%1.8%2.0%2.0%2.0%2.0%2.0%2.0%2.0%1.5%1.5%Current Share Price$5.4$5.4
46
Premium/Discount to Current Market47.5%
47
Stock-based compensation2.73.94.95.23.74.24.85.35.05.56.06.46.7
48
% of Total Revenue4.2%4.8%3.7%4.4%3.0%3.0%3.0%3.0%2.5%2.5%2.5%2.5%2.5%
49
50
Depreciation0.60.70.80.91.21.41.60.91.01.11.21.31.3
51
% of Total Revenue0.9%0.8%0.6%0.7%1.0%1.0%1.0%0.5%0.5%0.5%0.5%0.5%0.5%Terminal Value- Valuation Multiples
52
53
Loss on disposal of property and equipment0.10.4-2.30.40.00.00.00.00.00.00.00.00.0Implied Share Price $8.0
54
% of Depreciation9.2%53.7%-285.3%52.6%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%Current Earnings per Share0.20
55
Ideal P/E Ratio39.9
56
Other expenses0.10.1-4.0-1.61.21.41.61.82.02.22.42.52.7Current P/E Ratio27.1
57
% of Total Revenue0.1%0.1%-3.0%-1.4%1.0%1.0%1.0%1.0%1.0%1.0%1.0%1.0%1.0%
58
Implied Enterprise Value$286.5
59
Operating Income (EBIT)10.18.826.811.616.018.220.820.525.928.331.031.833.4Current EBITDA22.9
60
Operating Margin 15.6%10.9%20.4%9.9%13.0%13.0%13.0%11.5%13.0%13.0%13.0%12.5%12.5%Ideal EV/EBITDA Ratio12.5
61
Current EV/EBITDA Ratio7.8
62
Interest Expense on Debt and Leases0.20.30.50.30.30.20.20.20.90.90.90.90.9
63
Implied Enterprise Value$286.5
64
Pre-Tax Income9.98.526.311.315.818.020.620.325.027.530.130.932.5Current EBIT11.6
65
Ideal EV/EBIT Ratio24.7
66
Income Tax Expense0.20.3-5.23.44.55.15.95.87.17.88.68.89.3Current EV/EBIT Ratio15.5
67
% of Total Revenue1.6%3.2%-19.7%29.9%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%
68
69
Net Income9.78.231.47.911.312.914.714.517.919.621.522.123.2
70
71
Average Basic Outstanding Shares37.937.738.739.539.539.539.539.539.539.539.539.539.5
72
73
Basic EPS0.260.220.810.200.290.330.370.370.450.500.550.560.59
74
75
76
77
78
79
80
( In Millions of USD )
81
Unlevered Cash Flow ProjectionsHistoricalProjected
82
84
FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024FY 2025FY 2026FY 2027FY 2028FY 2029FY 2030
85
86
Total Revenue 64.580.3131.3117.1123.4140.4159.7178.2198.9218.0238.5254.4267.0
87
88
Operating Income (EBIT)10.18.826.811.616.018.220.820.525.928.331.031.833.4
89
Operating Margin15.6%10.9%20.4%9.9%13.0%13.0%13.0%11.5%13.0%13.0%13.0%12.5%12.5%
90
91
(-) Taxes 2.92.57.63.34.65.25.95.87.48.18.89.19.5
92
Tax %28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%28.5%
93
94
Net Operating Profit After Tax (NOPAT)7.26.319.18.311.513.014.814.718.520.322.222.723.9
95
96
Adjustment for Non-Cash Charges
97
98
(+) Depreciation and Ammortization 3.86.410.111.311.112.614.412.513.914.215.516.517.4
99
% of Total Revenue 5.9%8.0%7.7%9.6%9.0%9.0%9.0%7.0%7.0%6.5%6.5%6.5%6.5%
100
101
Depreciation of Medical Equipment 3.25.79.310.49.911.212.811.612.913.114.315.316.0