1. MBA Investment Bankers, LLC
Jin Guo, Michael Bagnoli, Thomas Lee, Devisharan Mishra
Presentation to the board of:
Khakis ’R US

2.  About Us:
• MBA Investment Bankers LLC is a leading global financial advisory
and investment banking firm. We combine market expertise and
analytical skills to help clients make sound decisions. Our
specialties are in the areas of valuation, M&A and transactions,
restructuring, alternative assets, disputes and taxation
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sterling
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# 1
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transactions
under $1 billion
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Opinion Advisor
in US
CEO, Lee Wakeman

3.  Current Standing Briefing
 Valuation
 Decision: Sell or not?
 Alternative to Exiting
 Refinancing/Recapitalization
 Acquisition of “About Boots”
 Summary Overview
 Recommendation/Conclusion
Presentation Summary

4.  Khakis ‘R Us is a publicly traded men’s casual retailer
 Strong balance sheet and operating performance
 2013 Estimated financials:
• Revenue: $500 mm
• EBITDA: $30 mm
• Cash reserves: $20 mm
• Debt outstanding: $50 mm
 Quarterly Dividend of $0.03 per share, 1% dividend yield
Current Standing I

5.  Languishing stock price (around $12 per share)
 Competitors are: much larger, growing faster, have higher margins
• Khakis’ stock has consistently traded at a lower multiple than
competitor’s
 CEO, Millie Pleater, is close to retirement and a successor should be
named soon to ensure the companies continued success
 NYC Capital has entered a standing bid of $20 per share for Khakis with
a 67% premium over current market share price
Current Standing II

6.  Discounted Cash Flow
Projections & Assumptions
Sensitivity Analysis
 Comparable Companies
 Precedent Transaction
 Valuation Summary
Valuation

7. Discounted Cash Flow Analysis
Sales Estimation
 Management believes sales could climb in
coming years
Driven by economic recovery and the
introduction of the South East line
 Growth Trend
 In 2013 sales declined 4.6%
 In 2014 sales grow 5% and hold constant at
6% for three years
 In 2018 sales growth tapers to 4% Pa
 Afterward, in line with assumption of
3.0% perpetual economic growth
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2011 2012 2013 2014 2015 2016 2017 2018
Growth Rate & Sales Projection
Sales Growth Rate
Exhibit 4

8. Discounted Cash Flow Analysis
Profit Margin
 Management believes profit margin could
improve in coming years
 Mainly driven by increase in gross
margin due to the branding premium
 Margin Trend
 Gross margin increases from 18.84% in
2012 to over 22.50% in 2016 and holds
constant
 In the next five years, the operating
expense stays around 17%
 From 2014 to 2018, the CAGR of EBIT is
30.87%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2011 2012 2013 2014 2015 2016 2017 2018
Margin Projection
Gross Margin EBIT Margin Operating Expense Ratio

9. Discounted Cash Flow Analysis
Free Cash Flow
 Adjustment from EBIT to FCF
 Tax payment (40%)
 Depreciation & amortization
 Capital expenditure
 Stock based compensation
 Change in net working capital
(2.54% of Sales)
 From 2014 to 2018, the CAGR of free cash
flow is 21.62%
 The reinvestment of cash flow stays constant
$(10,000)
$(5,000)
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2011 2012 2013 2014 2015 2016 2017 2018
Free Cash Flow
Free Cash Flow Less: Capital Expenditures

10. 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
Leverage Level (Debt/Equity)
Discounted Cash Flow Analysis
Risk & Cost of Capital
 Market Risk Premium = MRP = 5.75%
 Risk Free Rate = Rf = 5.66%
 Debt = $50mm; Equity = $ 120mm
 Mean industry βUL = 1.32
 Khakis’ βL = 1.65
1.32 * (1 + (1 - TC) * Debt / Equity )
 re = 15.16% = 1.65 * MRP + Rf
 rd = 3.30%
 TC = 40.00%
 Weighted Averaged Cost of Capital =
13.63%
15.16% * E/V + 3.30% * (1 – 40%)
7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0%
Industry Range of WACC

11. Discounted Cash Flow Analysis
Valuation Range & Sensitivity Test
DCF Model Summary
Terminal Value ( Growth @ 3%) 3.00%
WACC 13.63%
Present value of Cash Flow 48,814
Present value of Terminal Value 86,945
Enterprice Value 135,759
-Debt Value (50,544)
+Cash 19,812
Equity Value $105,027
Shares Outstanding (in thousands) 10,000
Fair Value Per Share $10.50
Projected Growth Rate (2014-2018)
EBIT
Margin
$10.50 3.50% 4.00% 4.50% 5.0% 6.00%
2.50% 2.60 2.61 2.61 2.61 2.61
3.00% 5.38 5.40 5.41 5.43 5.46
3.90% 10.39 10.42 10.46 $10.50 10.58
4.50% 13.72 13.78 13.83 13.89 14.00
5.00% 16.50 16.57 16.64 16.71 16.84

12. Comparable Companies
Interpretation
 Industry average EV/Revenue is 0.7x
 Khakis’ is only 0.3x
 The industrial average of EV/EBITDA is 8.6x
 Khakis is only 4.8x
 Lower earnings in 2013 have lead to a High
P/E Ratio for Khakis
 This indicates the market thinks the
decline in sales is temporary
 Reasons for Khakis lower EV multiples:
 Smallest company
 Lower growth
 Smaller margins
Company
2 year
Growth
rate
2012A 2013E
Enterprise
Value
EBITDA
Margin
EV/
Revenue
EV/
EBITDA P/E
Comparable 4 7152.4 4.70% 6.70% 0.6x 9.5x 19.1x
Comparable 9 5443.4 9.30% 8.30% 0.5x 5.7x 11.7x
Comparable 1 4172.6 9.30% 6.00% 0.5x 8.5x 16.5x
Comparable 5 4063.9 -11.40% 6.80% 0.5x 7.7x 22.0x
Comparable 6 2318 12.70% 14.40% 1.5x 10.3x 17.0x
Comparable 2 1783.1 6.60% 4.10% 0.3x 7.0x 17.3x
Comparable 7 1672.3 15.10% 10.40% 0.8x 7.8x 15.5x
Comparable 8 250.6 14.80% 6.90% 0.8x 11.7x 16.3x
Comparable 3 217.5 4.50% 6.10% 0.5x 8.1x neg
Khakis 'R Us
143.1 -6.30% 5.30% 0.3x 4.8x 19.4x
Exhibit 6

13. 11413.5 11153.9
8185
7713
6206.4
2071.3
1566
558.354 441 312.8
0
2000
4000
6000
8000
10000
12000
Comp 9 Comp 4 Comp 1 Comp 5 Comp 2 Comp 7 Comp 6 Khakis Comp 3 Comp 8
Revenue
7,810.3
4,779.9
3,604.6 3,509.1
2,051.6 1,763.7 1,566.0
252.7 120.0 108.3
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
Comp 4 Comp 5 Comp 9 Comp 1 Comp 6 Comp 2 Comp 7 Comp 8 Khakis
'R Us
Comp 3
Market Cap.
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
Comp 4 Comp 9 Comp 1 Comp 5 Comp 6 Comp 2 Comp 7 Comp 8 Comp 3 Khakis
'R Us
Enterprise Value
Comparable Companies
15.1% 14.8%
12.7%
9.3% 9.3%
6.6%
4.7% 4.5%
(6.3%)
(11.4%)
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
Comp 7 Comp 8 Comp 6 Comp 1 Comp 9 Comp 2 Comp 4 Comp 3 Khakis
'R Us
Comp 5
Sales Growth Rate Over 2 years

14. 22.0x
19.4x 19.1x
17.3x 17.0x 16.5x 16.3x 15.5x
11.7x
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
Comp 5 Khakis 'R
Us
Comp 4 Comp 2 Comp 6 Comp 1 Comp 8 Comp 7 Comp 9
P/E
11.7x
10.3x
9.5x
8.6x 8.6x
7.8x 7.7x 7.1x
5.9x
5.1x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Comp 8 Comp6 Comp4 Comp1 Comp3 Comp7 Comp5 Comp2 Comp9 Khakis
'R Us
EV/EBITDA
1.5x
0.8x 0.8x
0.6x
0.5x 0.5x 0.5x 0.5x
0.3x 0.3x
0.0x
0.5x
1.0x
1.5x
2.0x
Comp 6 Comp 7 Comp 8 Comp 4 Comp 5 Comp 3 Comp 1 Comp 9 Comp 2 Khakis
'R Us
EV/Revenue 2013E
Comparable Companies
4.0
3.4
3.1
2.6
2.0
1.5 1.5
0.6 0.5
-0.1-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Comp 9 Comp 2 Comp 4 Comp 6 Comp 1 Comp 7 Comp 5 Khakis Comp 8 Comp 3
EPS

15. $26.18
$22.18
$10.45
$31.72
$24.53
$11.82
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
EV/Revenue EV/EBITDA P/E
Side by Side: Broad & Narrow Comparable
Broad
Narrow
Price Range: $14.41 - $25.77
Comparable Companies

16. Comparable Transactions
0.50x
0.55x
0.60x
0.65x
0.70x
0.75x
0.80x
0.85x
0.90x
0.95x
5.00x
5.50x
6.00x
6.50x
7.00x
7.50x
8.00x
8.50x
9.00x
2009 2009.5 2010 2010.5 2011 2011.5 2012 2012.5 2013
Sector Multiple Trend
TV/EBIT TV/Revenue
TV/EBITDA TV/Revenue
 Downward trend in multiples of Transaction Values
 EV/EBITDA decreases from 8.00x to 6.50x
 EV/Revenue decreases from 0.90x to 0.65x

17. Comparable Transactions
The analysis:
 Transactions included are from (2012 – 2013)
 The status of the men’s casual retail M&A market
more accurately reflects today’s transaction climate
 The averaged TV/Revenue is 0.69x
 The averaged TV/EBITDA is 8.6x
 9 month Premium of 1.2:
 Khakis Implied EV/Revenue is 0.4x
 Khakis Implied EV/EBITDA is 6.1x
Date
Guideline
Transaction
Transaction Transaction Value
Value Revenue EBITDA
(In millions of dollars)
2013 Transaction 1 $150.0 0.65x 6.30x
2012 Transaction 2 70.0 0.97x 7.20x
2012 Transaction 3 555.0 0.50x 8.10x
2012 Transaction 4 290.0 0.52x 5.40x
2012 Transaction 5 106.0 0.81x 6.60x
2011 Transaction 6 61.4 0.59x 9.30x
2011 Transaction 7 262.9 0.37x 7.70x
2011 Transaction 8 280.0 0.68x 7.20x
2011 Transaction 9 28.5 0.57x 8.40x
2010 Transaction 10 324.0 0.75x 5.40x
2010 Transaction 11 355.0 1.45x 7.20x
2010 Transaction 12 94.0 0.41x 12.90x
2010 Transaction 13 335.4 0.68x 6.50x
2010 Transaction 14 62.7 0.66x 6.00x
2010 Transaction 15 746.2 1.25x 4.20x
2009 Transaction 16 47.9 0.22x 11.80x
2009 Transaction 17 155.0 1.41x 7.90x
2009 Transaction 18 220.0 0.75x 6.40x
2009 Transaction 19 118.7 0.99x 8.20x
2012-2013
Average 0.69x 6.72x
75th Percentile 0.81x 7.20x
Median 0.65x 6.60x
25th Percentile 0.52x 6.30x

18. $0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Median Average
2012-2013
Valuation Range
TV/Revenue TV/EBITDA
Comparable Transactions
Inferred Stock Price Range: $16.67 - $33.78

19. Comparison of Estimated Price with Competitors
Current Bid Price: $20.00Mkt. Price : $12.00
$- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0
EV/Revenue:
EV/EBITDA:
P/E:
TV/Revenue:
TV/EBITDA:
Comparable Multiples
Discounted Cash Flow Analysis:

20. Control Premium in Previous M&A Deals
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Domestic International Last 12 Months
Control Premium Comparison
Median Mean NYC's offer

21. Exit Opportunities
 Based on discounted cash flow, we value the company@ $10.50/share
 NYC Capital is offering $20. (90.47% premium on $10.50/share, 67%
premium on current trading price -$12/share)
NYC Capital
Pros:
 $20 per share is an attractive offer
 Best interest of shareholders
Cons:
 Khakis corporate culture is independent and hasn’t previously
considered a sale
 Consolidation measures could be taken by new controlling entity,
including: Employee cutbacks and production relocation
 Deviation from prior company outlook
 This is a good premium considering past M&A deals
 Involving other bidders can potentially decrease the price of the bid
Suggestion on Including Other Bidders

22. Alternatives to Sell
• Decision: Don’t Sell, Improve
• Fiduciary Duties: the management should inform the shareholders of the offer and
gain majority’s approval
• Future Business Plan – the management should convince the market that growth &
margins will improve to make the multiple comparative with others’
• Plans & Options
• Acquisition of About Boots
• Refinancing and Recapitalization
• Anti-takeover Measures
• Flip-in Poison Pill: adding the poison pill provisions into the charter of the company
can tells NYC Capital or other potential bidders they may face difficulties
• Macaroni Defense: issuing a large number of bonds with the condition they must be
redeemed at a high price if Khakis is taken over

23. Acquisition of About Boots with $50m Debt
About Boots
• A Canadian small chain of
shoes stores
• Estimated 2013 EBITDA $10
million
• Can be acquired for $50 million
Deal Analysis
• Assume the company uses
debt to finance the deal
• EV/EBITDA multiple from 3.6
times to 4.4 times
• Achieve $40 million synergy
value from this transaction
$mm 2014 EBITDA Multiples Equity Value
Khakis 35 4.0x 140
+ About Boots 10 5.0x 50
- Cost -50
+ Tax Shield Value 20
Total 45 3.6x 160
Required Synergy Value 40
NYC's Offer 200
After Acquisition 45 4.4x 200

24. $120mm Debt Refinancing
• Refinancing will change the debt to market equity
ratio from 37.5% to 206%
• Annual interest payment will increase from $4 mm
to $13 mm, assuming an interest rate of 8%.
• If the earnings goes as the projected, interest
coverage ratio will decrease from 5.80 to 1.78
• The refinancing plan is very risky and can
potentially cause financial distress based on the
company’s current financial performance
0
5000
10000
15000
20000
25000
30000
35000
2014 2015 2016 2017 2018
Earnings
Earnings without refinance
Earnings with refinance

25.  In current standing, Khakis’ mkt. share price is $12.00
 Combining all the valuation methods, we estimate the share price range to be between
$10.50 and $12.16
 The current price falls within our projected range
 Focus needs to be on increasing the profitability of South East as decrease in the
profitability will hamper the over all performance of Khakis’
 Strategic change in management needed
 The proposal of UAB to refinance recapitalize with $120mm
 Unsustainable with high financial risk
 All things considered, the $20.00 offer by NYC Capital is extremely competitive
 Even with the acquisition of the Canadian, “About Boots” , it will be difficult to beat
this price
 Selling the company is in the best interest of shareholders at this junction
Summary

26. Disclaimer
These materials have been prepared by MBA Investment Bankers LLC (including any affiliates “MBA Investment Bankers”) for the MBA Investment Bankers client or
potential client to whom such materials are directly addressed and delivered (the “Company”) in connection with an actual or potential mandate or engagement and may
not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with MBA Investment Bankers. These materials are based on
information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by MBA Investment
Bankers. MBA Investment Bankers assumes no responsibility for independent investigation or verification of such information and has relied on such information being
complete and accurate in all respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost
savings and synergies) prepared by or reviewed with the managements of the Company and/or other potential transaction participants or obtained from public sources,
MBA Investment Bankers has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and
judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty,
express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to
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into any transaction the Company should determine, without reliance on MBA Investment Bankers, the economic risks and merits as well as the legal, tax and accounting
characterizations and consequences of any such transaction. In this regard, by accepting this presentation, the Company acknowledges that (a) MBA Investment Bankers is
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