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SIGHT RESOURCE CORPORATION
Overview
Sight Resource Corporation (“Sight” or the “Company”) provides a complete range of primary
eye care products and services through integrated networks of opticians, optometrists, and
ophthalmologists. The Company operates 88 eye care centers in seven states, a centralized
optical laboratory and distribution center, and ten laser vision correction centers which have been
established in association with leading hospitals, ambulatory surgery centers and
ophthalmologists. Sight’s business objective is to acquire and consolidate companies in the
highly-fragmented primary eye care market, which totaled more than $15 billion in 1996. Sight’s
common stock is publicly traded (NASDAQ: VISN, closing price on 10/9/97 $5 3/8).
Summary Financial Information ($000’s)
1994
$529
1995
$18,240
N.M.
1996
$29,987
64.4%
EBITDA
(1,963)
Margin
N.M.
(Excludes one-time charges)
(3,484)
(19.1%)
(1,258)
(4.2%)
Revenues
Growth Rate
Based upon management’s financial projections for the Company’s existing business and
planned acquisitions, anticipated annual equity returns to Carlyle’s investors exceed 30%. The
primary variables inherent in these projections are (i) the Company’s ability to complete the
number of acquisitions at the stated prices; and (ii) the Company’s ability to achieve cost savings
via consolidation of acquired properties.
The Transaction
Carlyle will invest approximately $5.1 million in the Company to acquire Series B Convertible
Preferred Stock, convertible into 1,452,119 shares of common stock based upon a $3.50 per
share conversion price (the “Preferred Stock”). In addition, Carlyle will receive warrants to
purchase 290,424 shares of common stock at an exercise price of $7.00 per share. Together, the
Preferred Stock and these warrants represent 19.9% of the Company’s 8,756,500 issued and
outstanding shares of common stock.
Carlyle also will receive “mirror” warrants to purchase 842,294 shares of common stock with
terms that match those of the Company’s existing options and warrants. These “mirror” warrants
represent 19.9% of the Company’s existing options and warrants, carry exercise prices ranging
from $4.63 to $9.90 per share, and must be exercised when the existing options and warrants are
exercised. Such exercises, if and when they occur, would require Carlyle to invest an additional
$5.2 million in the Company.
Carlyle Venture Partners
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SIGHT RESOURCE CORPORATION
Investment Considerations

Consolidation Opportunity: More than 60% of primary eye care services are provided by
independent businesses that lack the scale to compete effectively, while in 1995, the largest
ten retail chains accounted for less than 18% of total industry revenues.

Managed Care: Managed care plans have traditionally competed to enroll members by
offering coverage excluded from traditional fee-for-service health plans. Since primary eye
care is one of the least expensive and most desired benefits, it is likely to become a standard
feature in more health plans, particularly those aimed at elderly patients. Managed care
organizations are likely to contract with regional provider networks such as Sight to
implement such new coverages efficiently.

Network of In-house Optometrists: The Company employs a network of optometrists who
work exclusively in its facilities. Optometrists treat 65% of eye care patients, including a
disproportionate number of those who patronize retail eyewear centers. This network of inhouse ODs facilitates the bundling of exams and eyewear benefits in managed care contracts.

Management Strength: Sight’s senior management team, led by Bill McLendon (CEO) and
Steve Blinn (COO), has years of industry and functional experience in companies such as
Summit, Lenscrafters, Pearle, and Proctor & Gamble. Prior to closing, the Company intends
to hire an experienced COO/ President to focus exclusively on operational issues.
Identified Risks
 Capitation: The Company expects to enter into a number of capitated contracts with
managed care payors, under which Sight assumes all or part of the financial risk for the
delivery of primary eye care to a defined patient population. Such contracts expose the
Company to the risk of variable utilization and cost levels with fixed revenue levels. To
reduce this risk, the Company will seek to adopt a conservative approach to calculating
capitation rates, ensure its ability to sell enhanced products and (when needed) contract with
providers on a shared-risk basis.

Referrals: Sight does not rely substantially on external referral sources, as its in-house
network of optometrists are the primary source of new patient traffic. Accordingly,
management believes that the Company has little exposure to referral regulatory issues.

Competition for Acquisitions: Both of the other major participants in the primary eye care
industry, Lenscrafters and Pearle (now a subsidiary of Cole National Corp.) are pursuing
acquisition strategies. While the highly fragmented nature of the primary eye care industry
has provided numerous acquisition opportunities, future competition may at a minimum
increase pricing and require increased effort to win acquisitions.
For additional information, please contact Mitch Reese, Brian Bailey, Ryan Schwarz or Brooke
Coburn at (202) 347-2626.
Carlyle Venture Partners
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