Exhibit 99.2

 

 

Foremost Fabricators, LLC

 
   

Condensed balance sheets (Unaudited)

2

Condensed statements of income (Unaudited)

3

Condensed statements of cash flows (Unaudited)

4

Notes to condensed financial statements (Unaudited)

5-8

 

 

 

 

Foremost Fabricators, LLC

(A Limited Liability Company)

 

Condensed Balance Sheets

March 31, 2014 (Unaudited) and December 31, 2013

 

   

March 31,

   

December 31,

 
   

2014

   

2013

 
                 

ASSETS

               
                 

Current Assets

               

Cash

  $ 20,621     $ 14,878  

Trade receivables

    3,869,059       857,312  

Inventories

    11,904,022       13,983,524  

Prepaid expenses

    42,508       15,353  
                 

Total current assets

    15,836,210       14,871,067  
                 

Leasehold Improvements and Equipment, at depreciated cost

    4,433,116       4,213,070  
                 

Other Assets

               

Deposits

    59,020       43,120  
                 
    $ 20,328,346     $ 19,127,257  

LIABILITIES AND MEMBERS' EQUITY

               
                 

Current Liabilities

               

Notes payable, bank

  $ 4,994,000     $ 5,350,000  

Current maturities of long-term debt

    250,000       250,000  

Accounts payable

    2,682,235       2,621,704  

Accrued expenses

    996,030       666,309  
                 

Total current liabilities

    8,922,265       8,888,013  
                 

Members' Equity

    11,406,081       10,239,244  
                 
    $ 20,328,346     $ 19,127,257  

 

See Notes to Condensed Financial Statements.

 

 
2

 

 

Foremost Fabricators, LLC

(A Limited Liability Company)

 

Condensed Statements of Income (Unaudited)

Three Months Ended March 31, 2014 and 2013 

 

   

March 31,

   

March 31,

 
   

2014

   

2013

 
                 

Revenues:

               

Product sales

  $ 18,809,591     $ 18,818,211  
                 

Other income

    30,002       11,595  
                 

Total revenue

    18,839,593       18,829,806  
                 

Cost of goods sold

    15,983,115       16,620,437  
                 

Gross profit

    2,856,478       2,209,369  
                 

Operating expenses:

               

Selling and delivery

    293,729       350,318  

General and administrative

    862,217       748,828  
      1,155,946       1,099,146  
                 

Operating income

    1,700,532       1,110,223  
                 

Nonoperating expense:

               

Interest expense

    (58,695 )     (53,018 )
                 

Net income

  $ 1,641,837     $ 1,057,205  

 

See Notes to Condensed Financial Statements.

 

 
3

 

 

Foremost Fabricators, LLC

(A Limited Liability Company)

 

Condensed Statements of Cash Flows (Unaudited)

Three Months Ended March 31, 2014 and 2013  

 

   

March 31,

   

March 31,

 
   

2014

   

2013

 

Cash Flows From Operating Activities

               

Net income

  $ 1,641,837     $ 1,057,205  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation

    113,310       86,400  

Change in assets and liabilities:

               

(Increase) decrease in:

               

Trade receivables

    (3,011,747 )     (2,308,338 )

Inventories

    2,079,502       2,337,303  

Prepaid expenses

    (27,155 )     51,287  

Other assets

    (15,900 )     3,200  

Increase (decrease) in:

               

Accounts payable

    60,531       (541,100 )

Accrued expenses

    329,721       340,236  

Net cash provided by operating activities

    1,170,099       1,026,193  
                 

Cash Flows From Investing Activities

               

Purchase of leasehold improvements and equipment

    (333,356 )     (239,459 )

Net cash (used in) investing activities

    (333,356 )     (239,459 )
                 

Cash Flows From Financing Activities

               

Net (payments) on line of credit, bank

    (356,000 )     (291,000 )

Distributions

    (475,000 )     (471,982 )

Net cash (used in) financing activities

    (831,000 )     (762,982 )

Increase in cash

    5,743       23,752  
                 

Cash, beginning

    14,878       21,900  
                 

Cash, ending

  $ 20,621     $ 45,652  

 

See Notes to Condensed Financial Statements.

 

 
4

 

 

Foremost Fabricators, LLC

 

Notes To Condensed Financial Statements

 


 

Note 1.     Nature of Business, Subsequent Event and Significant Accounting Policies

 

Nature of business and subsequent event:

 

The Company is engaged in the fabrication and sale of aluminum sheet products and the sale of fiberglass sheet materials to the recreational vehicle industry. The Company sells its products to customers throughout the United States, generally on terms of 30 days.

 

On June 27, 2014, the Company sold substantially all of its assets to an unrelated party.

 

Significant accounting policies:

 

Use of estimates:

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

The accompanying unaudited Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These condensed financial statements should be read in conjunction with the audited financial statements and notes for the year ended December 31, 2013. In our opinion, these Condensed Financial Statements reflect all adjustments, consisting of normal, recurring accruals, necessary to present fairly our Condensed Financial Statements for the interim periods presented herein. The consolidated results of operations for the three months ended March 31, 2014 and 2013, are not necessarily indicative of the results to be expected for the full year.

 

Long-lived assets:

 

In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. The Company concluded that there was no impairment at March 31, 2014 or 2013.

 

Revenue recognition:

 

The Company generally manufactures product based on specific orders from customers. Revenue is recognized normally upon shipment and issuance of an invoice to the customer. The expense associated with the cost of deliveries to customers for the three months ended March 31, 2014 and 2013 is approximately $225,000 and $295,000, respectively, and is included in selling and delivery expenses.

 

Subsequent events:

 

The Company has evaluated subsequent events to determine potential recognition and/or disclosure through September 11, 2014, the date the condensed financial statements were available to be issued.

 

 
5

 

 

Foremost Fabricators, LLC

 

Notes To Condensed Financial Statements

 


 

Note 2.     Inventories

 

Inventories at March 31, 2014 and December 31, 2013 consist of the following:

 

   

March 31,

   

December 31,

 
   

2014

   

2013

 
                 

Raw materials

  $ 11,516,530     $ 13,186,843  

Finished goods

    353,770       771,443  

Scrap

    33,722       25,238  
    $ 11,904,022     $ 13,983,524  

 

Note 3.     Leasehold Improvements and Equipment

 

The cost of leasehold improvements and equipment and the related accumulated depreciation at March 31, 2014 and December 31, 2013 are as follows:

 

   

March 31,

   

December 31,

 
   

2014

   

2013

 
                 

Leasehold improvements

  $ 680,991     $ 670,160  

Machinery and equipment

    5,261,665       4,939,140  

Furniture and fixtures

    229,805       229,805  

Vehicles

    50,140       50,140  
      6,222,601       5,889,245  

Less accumulated depreciation

    1,789,485       1,676,175  
    $ 4,433,116     $ 4,213,070  

 

Note 4.     Income Taxes

 

The Company, with the consent of its members, is taxed in accordance with the partnership sections of the Internal Revenue Code and a similar section of the state tax laws which provide that, in lieu of corporation income taxes, the members account for their proportionate shares of the Company's items of income, deduction, losses, and credits. Therefore, these statements do not include any provision for income taxes; however, the Company intends to pay distributions in amounts to cover the member’s income tax liabilities related to the taxable income generated by the Company.

 

 
6

 

 

Foremost Fabricators, LLC

 

Notes To Condensed Financial Statements

 


 

Note 5.     Major Customers

 

Net sales to customers comprising 10% or more of total net sales for the three months ended March 31, 2014 and 2013, and the related trade receivable balances at March 31, 2014 and December 31, 2013, are as follows:

 

   

March 31,

   

March 31,

   

March 31,

   

December 31,

 
   

2014

   

2014

   

2013

   

2013

 
   

Net

   

Trade Receiv-

   

Net

   

Trade Receiv-

 
   

Sales

   

able Balance

   

Sales

   

able Balance

 
                                 

Customer A

  $ 9,007,000     $ 1,447,000     $ 9,329,000     $ 160,000  

Customer B

    6,890,000       1,409,000       6,974,000       268,000  
    $ 15,897,000     $ 2,856,000     $ 16,303,000     $ 428,000  

 

Note 6.     Lease Agreements

 

The Company leases its operating facilities from an unrelated party under agreements which require monthly rentals of approximately $47,000 plus the payment of property taxes, insurance and normal maintenance. These agreements expire on various dates through December 2017 and provide for automatic annual renewals.

 

The Company also leases vehicles and equipment from unrelated parties under several agreements which require monthly rentals totaling approximately $12,000. The agreements expire between 2014 and 2019.

 

The net rental expense included in the statements of income for the three months ended March 31, 2014 and 2013 is approximately $200,000 and $181,000, respectively.

 

Future commitments under these agreements are as follows:

  

   

Buildings

   

Vehicles

   

Equipment

   

Total

 

Year ending December 31,

                               

2014

  $ 405,000     $ 25,000     $ 80,000     $ 510,000  

2015

    205,000       20,000       96,000       321,000  

2016

    118,000       -       88,000       206,000  

2017

    118,000       -       88,000       206,000  

2018

    -               79,000       79,000  

Thereafter

    -       -       42,000       42,000  
    $ 846,000     $ 45,000     $ 473,000     $ 1,364,000  

 

 
7

 

 

Foremost Fabricators, LLC

 

Notes To Condensed Financial Statements

 


 

Note 7.     Cash Flow Information

 

Supplemental information relative to the statements of cash flows for the three months ended March 31, 2014 and 2013 is as follows:

 

   

March 31,

2014

   

March 31,

2013

 
                 

Supplemental disclosures of cash flow information:

               

Cash payments for interest

  $ 60,361     $ 100,009  

 

 

 

8