Table 1 Westinghouse Electric Corporation

1990 1993 1995

Debt % Capital 19% 64% 84%
Times Interest 2.7 1.5 1.2
Senior Debt Rating A2 Bal Bat
Share Price $24-$39 $13-$17 $12-$18
Dow-Jones Industrials 2634 3754 5117
Table 2 Proposed Buyout Financing

Source $ in Millions
Term loans $260
Senior subordinated notes 165
Equity 160
Total $585
Transaction costs 20
Net to Westinghouse $565
Table 3 1995 Sales and Market Share by Product Category

Office systems $3.3 10.7% 67%

Seating 2.3 2.1 9
Files and storage 1.4 2.0 5
Desks and casegoods 1.4 1.5 4
Tables 0.7 1.1 1
Other 0.3 N/A 14
$9.4 100%
Exhibit 1 Dressen, Inc. ($ in millions)

Second Half
1991 1992 1993 1994 1995 1994
Net sales $671 $577 $508 $563 $621 $313
Cost of goods 471 426 386 410 418
Gross profit 200 151 122 153 203
Selling, general & administrative 170 158 154 167 138
EBIT 30 -7 -32 -14 65 1
Interest expense 3 3 1
Restructuring a 6 29 -
Corporate expense b 5 6 10
Other income (expense) 2 0 (2)
Income before tax -44 -52 52
Taxes 4 8 23
Net income -40 -60 29

Percent of Sales
Cost of goods 70.2% 73.9% 76.0% 72.8% 67.3%
Selling, general & administrative 25.3 27.2 30.4 29.7 22.3
EBIT 4.5 (1.1) (6.4) (2.5) 10.4 0.3%

a Nonrecruiting restructuring provision.

b Westinghouse Electric corporate expense allocated to Dressen Inc. on a percent of sales basis

1994 1995 1995

Assets
Cash $5 $2 $0
Accounts receivable a 109 115 115
Inventories b 67 60 60
Deferred taxes 19 18 0
Other 9 8 8
Total current 209 203 183
Plant and equipment 201 164 164
Goodwill 247 241 340
Prepaid pension 44 45 0
Other c 4 4 18
Total $705 $657 $705
Liabilities and Investment
Bank loans $23 $2 $0
Current maturities, debt 3 3 5
Accounts payable 53 46 46
Taxes payable 1 14 0
Accrued restructuring costs 58 11 0
Other` 48 44 44
Total current 186 120 95
Long-term debt 10 - 420
Deferred income taxes 22 29 0
Post-retirement benefits 20 21 24
Other liabilities 9 6 6
Parent company investment 458 481 160 (equity)
Total $705 $657 $705

a Net of allowance for doubtful accounts of $5.7 million and $5.8 million at December 31, 1994
and December 31, 1995, respectively.
b inventories at December 31, 1995 included raw materials, $38.7 million; work in progress, $8.7
million, finished goods, $13.3 million; other, $1.6 million; less a $2.7 million valuation reserve.
c Other current liabilities in 1995 included a $19.50 million; accrued product
warranty, $6.8 million; accrued insurance, $2.0 million; worker compensation, $3.3 million.
Second Half
1995
$323

39

12.1%
Exhibit 3 Specific Cost Reductions
North American Cost Reduction
Transportation-$2.5 million
•Reduce less than truckload "LTL" Calibre file shipments. $0.9
•Reduce premium freight costs by improved on-time shipment. 0.6
•Optimize truckloads of Morrison Pedestals and Reuters Overheads. 0.4
•Load factor improvements by consolidating Equity Shipments. 0.3
•Other 0.3
Labor-$5.5 million
•Eliminate an average of 160 temporary workers at the East Greenville and Muskegon plants $3.2
•Capital Automation: 0.5
Calibre redesign
Automatic Upholstering Bulldog and Parachute 0.4
Grand Rapids Automatic Panel Hardware Assembly 0.4
Toronto new Homag line 0.1
•Muskegon consolidation of Western Plant into Estes Plant. 0.4
•Toronto Screen Plant re-layout & other process improvements 0.1
•Other 0.4
Materials-$7.8 million
•Roll forming. parts in-house [slotted standards, ribs, Calibre panels, etc.]. $1.4
•Purchase price improvements [seating parts, Morrison components, etc.]. 1.2
•Material usage reduction through improved materials planning. 1.1
•Reff System redesign [work surfaces, task lights, components, etc.]. 0.8
•Seating redesigns [molded arm pads, chair controls, visitor chair, etc.]. 0.8
•Material substitution [kiosk plastic doors, thinner work surfaces, etc.]. 0.7
In-bound freight savings from improved vendor shipment scheduling 0.4
•Other 1.4
Factory Expense-$4.0 million
•Hourly indirect reduction of 60 people [East Greenville and Muskegon]. $1.8
•Muskegon Plant consolidation of Western into Estes. 0.8
•Improved plant usage [powder coating, eliminate panel priming, etc.]. 0.5
•Better fuel and utilities management [East Greenville and Muskegon]. 0.4
•Toronto packaging reduction [stretch and blanket wrap]. 0.3
•Other 0.2
Product Development-$1.6 million
•Eliminate 17 positions. $0.8
•Efficient use of developmental materials. 0.4
•Reduced temporary help. 0.2
•Other 0.2
Manufacturing, Managed & Fixed-$5.3 million
•Eliminate 74 positions. $3.7
•Reduced hourly overtime premium. 0.5
•Reduced consultant services. 0.4
•Reduced telephone and office supply usage. 0.4
•Other 0.3
Marketing-$1.8 million
•Eliminate 19 positions. $0.9
• Improved advertising. 0.3
•Improved brochure printing. 0.3
•Other 0.3

Exhibit 3 (continued)

Sales & Distribution-$5.8 million

• Reduced rents [office & showroom eliminations and consolidations]. $1.2
•Improved Textile & Spinneybeck sample management. 0.7
• Reduced business policy concessions. 0.4
• Reduced telephone, messenger, and supplies expense. 0.7
• Reduced customer relations/accommodations expense. 0.3
• Improved travel management. 0.4
•Reduced office and showroom refurbishments. 0.4
• Improved mock-up management. 0.4
• More effective recruiting. 0.4
•Other 0.9
General & Administrative-$7.6 million
• Eliminated 110 positions. $3.6
• Reduced consulting expenses. 0.5
• Consolidated computing centers and contracts. 0.5
• Redirected training efforts. 0.4
• Other 2.6

European Cost Reductions1

Cost of Goods Sold-$9.7 million
• Closed Legnano factory. $2.2
• Materials cost savings program. 1.8
• Reduced warehousing costs. 1.0
• Improved transportation through direct and consolidated shipments. 1.0
• Eliminated 17 positions at Foligno. 1.0
• Eliminated 9 product development positions. 0.6
• Eliminated 3 positions at Graffignana. 0.2
• Other 1.9
Marketing-$2.5 million
•Efficient use of marketing materials. $1.6
• Eliminate 4 positions and consolidate marketing. 0.5
•Other 0.4
Sales & Distribution-$8.5 million
• Eliminate 55 positions including nonproductive sellers. $2.5
• Eliminate and reduce showrooms and offices. 1.5
• Improved management of travel. 1.0
•Commissions based on profitability. 0.5
• Reduced telephones and office supplies. 0.5
• Reduced professional and recruiting fees. 0.3
•Reduced mock-up expenses. 0.3
•Other 1.9
General & Administrative-$.9 million
•Eliminated 12 centralized support positions $0.6
• Reduced consulting services. 0.2
•Other 0.1

1 Europe had lost $13.7 million and $19.9 million in 1993 and 1994, respectively, on sales of $71.3 million (1993) and $62.9
million (1994).
Exhibit 4 (continued)
Five Year Average (1995 highlighted in yellow)

Herman Miller HON Industries Kimball

Profitability
Percent of Sales:
Cost of goods 65.3% 66.1% 68.4% 70.0% 71.1% 71.9%
Sell, Gen'l, Admin. 29.5% 26.7% 22.6% 22.6% 22.0% 20.9%
Operating profit 5.2% 7.1% 9.0% 7.5% 7.0% 7.2%
Return on capital 9.0% 13.5% 18.9% 16.1% 12.9% 13.9%

Asset Management
Collection Period 50 48 39 36 43 46
Days Inventory 36 28 26 21 53 49
Net Property, Plant 38% 32% 31% 34% 29% 26%
as % Cost of Goods }
Sales/total assets 1.75 1.85 2.25 2.26 2.10 2.15

Leverage
Accts.pay. % cost goods 7% 7% 6% 7% 7% 8%
Total liabilities % total
Assets (net excess cash 38% 56% 47% 47% 6% 25%

a Goodwill excluded from total assets

995 highlighted in yellow)

Steelcase Dressen

69.7% 68.1% 72.0% 67.3%

24.7% 24.3% 27.0% 22.3%
5.6% 7.6% 1.0% 9.3%
4.9% 7.1% NM

NA 45 68 66
NA 35 58 54
NA 43% 46% 39%

NA 1.14 1.30 1.49 a

NA 7% 11% 11%

NA% 26% 31% 28%

Exhibit 5 Selected Capital Market Information

1. Financial Leverage, Debt Ratings, and Bond Yields

Corporate Bonds Rated
AAA AA A BBB
Debt as % total capital 31% 34% 39% 44%
Total liabilities as % total assets 60% 63% 67% 68%
Times interest earned 9.6 6.8 4.6 3.5
Bond yields at 12/1995 6.82% 6.99% 7.13% 7.49%
Number of firms 29 112 357 349

Source: Compustat

Financial Leverage Across Sectors

Debt as % Total Liabilities Times Interest
Balance Sheet Capital % Total Assets (EBIT - interest)
S&P Industrials 36% 69% 5.0
Consumer Staples 39% 69% 5.4
Technology Sector 22% 60% 9.9
Bio-technology Sector 10% 31% NM

Office Equipment Manufacturers

Debt as % Total Liabilities
Balance Sheet Capital % Total Assets Times Interest
Herman Miller 33% 56% 6.7
HON Industries 22% 46% 19.0
Kimball International 0% 25% NM
Knape & Vogt Manufact. 35% 46% 6.0
Steelcase 0% 26% NM
Tab Products 32% 51% 2.1
Virco Manufacturing 40% 53% 3.7

Exhibit 5 (continued) Selected capital Market Information

III. Market Valuations

Enterprise Value as Multiple 1

Sales EBIAT EBITDA P.E.R 2
Herman Miller 0.58 14.6 7.0 13.1
HON Industries 0.71 10.2 5.7 9.6
Kimball International 0.57 13.2 6.3 11.8
Knape & Vogt Manufact. 0.52 10.0 5.2 8.7
Tab Products 0.32 13.7 7.7 11.0
Virco Manufacturing 0.38 12.1 6.3 11.1
Average 0.51 12.3 6.4 10.9
Value Line Industrials 13.8 6.3 13.5
S&P Industrials 15.9
Dow Jones Industrials 14.5

1 Enterprise value = market value of debt + market value of equity.

2 Price/earnings ratio = market value of stock divided by eps.
 BB B
55% 75%
71% 84%
2.1 1.0
8.45% 9.99%
280 241

Equity Asset
Beta Beta 3
0.95 0.77
0.90 0.82
0.75 0.75
NA NA
0.85 0.52
NA NA
0.72
Exhibit 6 Financial Forecasts Based on Management ($ in millions)

1996 1997 1998 1999 2000

Revenues $658 $698 $740 $784 $804
Cost of goods 434 454 474 502 514
Gross profit 224 244 266 282 290
Selling, general & admin. 145 146 155 165 169
Amortization of goodwill 9 8 9 8 9
EBIT 70 90 102 109 112
Interest expense 41 39 34 28 24
Income before taxes 29 51 68 81 88
Tax @ 41% 12 21 29 34 37
Net income $17 $30 $39 $47 $51

EBITDA $100 $118 $132 $139 $142

EBITDA/lnterest 2.4 3.0 3.9 5.0 5.9

Percent of Revenues:
Gross profit 34% 35% 36% 36% 36%
Selling, general & admin. 22% 21% 21% 21% 21%
EBIT 12% 14% 15% 15% 15%

Historical Performance vs. Management Forecasts

1995 Performance Dressen Forecasts
Competitors Dressen 1996 2000
Percent of Sales
Cost of Goods 69.0% 67.3% 66.0% 64.0%
Sell, Gen'l, Admin. 23.6% 22.3% 22.0% 21.0%
Operating Profit 7.4% 9.3% 12.0% 15.0%
Collection Period 44 66 67 57
Days Inventory 33 54 55 52
Net Prop. Plant & Equip.
% Cost Sales 34% 39% 38% 35%

Exhibit 6 (continued) Financial Forecasts Based on Management ($ in millions)

Cash Flow 1996 1997 1998 1999 2000

EBIAT $41 $52 $59 $64 $65
Depreciation 21 21 21 21 22
Amortization 9 8 9 8 9
Increase in:
Net working capital 3 (4) 4 1 (1)
Deferred taxes 3 6 6 7 0
Cash from operating activiti 77 83 99 101 95
Capital expenditures (22) (24) (24) (25) (27)
Miscellaneous cash flows 1 2 2 1 2
Cash avail. for debt service $56 $61 $77 $77 $70
Debt Service
Term loan
Interest after tax $12 $11 $9 $7 $3
Principal repayment 29 36 44 55 50
Subordinated debt
Interest after tax 11 11 11 11 11
Principal repayment 0 0 0 0 0
Net debt service $52 $58 $64 $73 $64
Increase in cash 4 3 13 4 6
Beginning cash 0 4 7 20 24
Ending cash $4 $7 $20 $24 $30

Assets 1996 1997 1998 1999 2000

Cash $7 $7 $7 $8 $8
Accounts receivable 117 122 122 122 126
Inventory 63 66 67 71 73
Prepaid 9 9 9 9 9
Total current 196 203 205 211 216
Net fixed assets 165 168 171 175 180
Goodwill 331 323 314 306 297
Other 16 14 12 11 9
Total $708 $709 $702 $703 $702

Liabilities & Equity

Accounts payable $52 $54 $57 $60 $62
Other current 46 48 50 52 54
Term loan 231 195 151 96 46
Subordinated debt 165 165 165 165 165
Deferred taxes 3 9 15 22 22
Other liabilities 30 30 30 30 30
Equity 178 208 247 294 345
Financing need (Excess ca 3 0 (13) (16) (22)
Total $708 $709 $702 $703 $702

Total Debt/EBiTDA 4.0 3.0 2.3 1.8 1.3

Collection Period (days) 65 64 60 57 57

Days Inventory 53 53 52 52 52
Net Fixed Assets % Cost of 38% 37% 36% 35% 35%

Exhibit 6 (continued) Financial Forecasts Based on Performance in 1995 ($ millions)

1996 1997 1998 1999 2000

Sales $658 $698 $740 $784 $804
Cost of goods 443 470 498 528 541
Gross profit 215 228 242 256 263
Selling, general & administr 147 156 165 175 179
Amortization of goodwill 9 8 9 8 9
EBIT 59 64 68 73 75
Interest expense 41 40 38 37 37
Income before taxes 18 24 30 36 38
Taxes @ 41 % 7 10 13 15 16
Net income $11 $14 $17 $21 $22

EBITDA $89 $94 $99 $105 $109

EBITDA Interest 2.2 2.4 2.6 2.8 2.9

Historical Performance versus Forecasts Based on No Further Improvement

1995 Performance Dressen Forecasts
Competitors Dressen 1996 2000
Percent of Sales
Cost of Goods 69.0% 67.3% 67.3% 67.3%
Sell, Gen'l, Admin. 23.6% 22.3% 22.3% 22.3%
Operating Profit 7.4% 10.4% 10.4% 10.4%
Collection Period 44 66 66 66
Days Inventory 33 54 54 54
Net Prop. Plant & Equip.
% Cost Sales 34% 39% 38% 38%

Exhibit 6 (continued) Financial Forecasts Based on 1995 Performance ($ in millions)

Cash Flow 1996 1997 1998 1999 2000

EBIAT $34 $37 $39 $43 $43
Depreciation 21 21 22 24 25
Amortization 9 8 9 8 9
Increase in:
Net working capital 0 (6) (6) (7) (2)
Deferred taxes 3 6 6 7 0
Cash from operating activities
Capital expenditures (24) (31) (33) (35) (30)
Miscellaneous cash flows 1 2 2 1 2
Cash avail. for debt service $44 $37 $39 $41 $47

Debt Service
Term loan
Interest after tax 13 12 11 11 11
Principal repayment 29 36 44 55 50
Subordinated debt
Interest after tax 11 11 11 11 11
Principal repayment 0 0 0 0 0
Net debt service 53 59 66 77 72
Increase in cash (9) (22) (27) (36) (25)
Beginning cash 0 (9) (31) (58) (94)
Ending cash ($9) ($31) ($58) ($94) ($119)

Assets 1996 1997 1998 1999 2000

Cash $7 $7 $7 $8 $8
Accounts receivable 119 126 134 142 145
Inventory 65 70 74 78 80
Prepaid 9 9 9 9 9
Total current 200 212 224 237 242
Net fixed assets 168 178 189 200 206
Goodwill 331 323 314 306 297
Other 16 14 12 11 9
Total $715 $727 $739 $754 $754

Liabilities & Equity

Accounts payable $53 $56 $60 $63 $65
Other current 46 48 50 52 54
Term loan 231 195 151 96 46
Subordinated debt 165 165 165 165 165
Deferred taxes 3 9 15 22 22
Other liabilities 30 30 30 30 30
Equity 172 186 203 225 246
Financing need 15 38 65 101 126
Total $715 $727 $739 $754 $754

Total Debt/EBITDA 4.6 4.2 3.8 3.4 3.1

Exhibit 6 (continued) Financial Forecasts Based on Performance in 1995 ($ millions)

1996 1997 1998 1999 2000

Sales $658 $698 $740 $784 $804
Cost of goods 443 470 498 528 541
Gross profit 215 228 242 256 263
Selling, general & administr 147 156 165 175 179
Amortization of goodwill 9 8 9 8 9
EBIT 59 64 68 73 75
Interest expense 41 40 38 37 37
Income before taxes 18 24 30 36 38
Taxes @ 41 % 7 10 13 15 16
Net income $11 $14 $17 $21 $22

EBITDA $89 $94 $99 $105 $109

EBITDA Interest 2.2 2.4 2.6 2.8 2.9

Historical Performance versus Forecasts Based on No Further Improvement

1995 Performance Dressen Forecasts
Competitors Dressen 1996 2000
Percent of Sales
Cost of Goods 69.0% 67.3% 67.3% 67.3%
Sell, Gen'l, Admin. 23.6% 22.3% 22.3% 22.3%
Operating Profit 7.4% 10.4% 10.4% 10.4%
Collection Period 44 66 66 66
Days Inventory 33 54 54 54
Net Prop. Plant & Equip.
% Cost Sales 34% 39% 38% 38%

Exhibit 6 (continued) Financial Forecasts Based on 1995 Performance ($ in millions)

Cash Flow 1996 1997 1998 1999 2000

EBIAT $34 $37 $39 $43 $43
Depreciation 21 21 22 24 25
Amortization 9 8 9 8 9
Increase in:
Net working capital 0 (6) (6) (7) (2)
Deferred taxes 3 6 6 7 0
Cash from operating activities
Capital expenditures (24) (31) (33) (35) (30)
Miscellaneous cash flows 1 2 2 1 2
Cash avail. for debt service $44 $37 $39 $41 $47

Debt Service
Term loan
Interest after tax 13 12 11 11 11
 Principal repayment 29 36 44 55 50
Subordinated debt
Interest after tax 11 11 11 11 11
Principal repayment 0 0 0 0 0
Net debt service 53 59 66 77 72
Increase in cash (9) (22) (27) (36) (25)
Beginning cash 0 (9) (31) (58) (94)
Ending cash ($9) ($31) ($58) ($94) ($119)

Assets 1996 1997 1998 1999 2000

Cash $7 $7 $7 $8 $8
Accounts receivable 119 126 134 142 145
Inventory 65 70 74 78 80
Prepaid 9 9 9 9 9
Total current 200 212 224 237 242
Net fixed assets 168 178 189 200 206
Goodwill 331 323 314 306 297
Other 16 14 12 11 9
Total $715 $727 $739 $754 $754

Liabilities & Equity

Accounts payable $53 $56 $60 $63 $65
Other current 46 48 50 52 54
Term loan 231 195 151 96 46
Subordinated debt 165 165 165 165 165
Deferred taxes 3 9 15 22 22
Other liabilities 30 30 30 30 30
Equity 172 186 203 225 246
Financing need 15 38 65 101 126
Total $715 $727 $739 $754 $754

Total Debt/EBITDA 4.6 4.2 3.8 3.4 3.1

Exhibit 7 (continued) Leverage Ratios

I. Based on Management Forecasts

1996 1997 1998 1999 2000
EBIT/Interest 1.7 2.3 3.0 3.8 4.6
EBITDA/Interest 2.4 3.1 3.9 4.9 5.9
Senior Debt/EBITDA 2.3 1.7 1.1 0.7 0.3
Total Debt/EBITDA 4.0 3.0 2.3 1.8 1.3
Senior Debt/Capital 40% 34% 27% 17% 8%
Financing Need (Excess cash) $3 0 ($13) ($16) ($25)

II. Term Loan Covenants

1996-1997 1998 After 1998
EBITDA/Interest >2.0 >2.25 >2.50
Total Debt/EBITDA <4.0 <3.5 <3.5

III. Based on Continuation of 1995 Performance

1996 1997 1998 1999 2000
EBIT/Interest 1.5 1.6 1.8 2.0 2.0
EBITDAllnterest 2.2 2.4 2.6 2.8 2.9
Total Debt/EBITDA 4.6 4.2 3.8 3.4 3.1
Financing Need $9 $31 $58 $94 $119