Butler Lumber Company
CLARKSON LUMBER COMPANY Exhibit 1: Operating Expenses for Years Ending December December 31, 1993-1995, and for First Quarter 1996 (thousands of dollars)
1993 Net sales Cost of goods sold: Beginning inventory Purchases Ending inventory Total cost of goods sold Gross Profit Operating expenses Interest expense Net income before income taxe Provision for income taxes Net income See notes to case exhibit 1.
1994
1995
1st Qtr 1996
$2,92 1
$3,4 77
$4, 519
$1 ,062
$33 0
$3 37
$ 432
$587
$2,20 9
$2,7 29
$3, 579
$819
$2,53 9
$3,0 66
$4, 011
$1 ,406
$33 7
$4 32
$ 587
$607
$2,20 2
$2,6 34
$3, 424
$799
$71 9
$8 43
$1, 095
$263
$62 2
$7 17
$ 940
$244
$2 3
$ 42
$56
$13
$7 4
$ 84
$99
$6
$1 4
$ 16
$22
$1
$6 0
$ 68
$77
$5
Butler Lumber Company
CLARKSON LUMBER COMPANY Ex. 2: Balance Sheets at December 31, 1993-95, and March 31, 1996 (thousands of dollars)
1993 Cash Accounts receivable, net Inventory Current assets Property, net Total assets Notes payable, bank Notes payable, Holtz (current) Notes payable, trade Accounts payable Accrued expenses Term loan, current portion Current liabilities Term loan Note payable, Mr. Holtz Total liabilities Net worth Total liabilities & net worth See notes to case exhibit 2.
1994
1st Qrtr 1996
1995
$43
$52
$56
$53
$306
$411
$606
$583
$337
$432
$587
$607
$686
$895
$1,249
$1,243
$233
$262
$388
$384
$919
$1,157
$1,637
$1,627
$0
$60
$390
$399
$0
$100
$100
$100
$0
$0
$127
$123
$213
$340
$376
$364
$42
$45
$75
$67
$20
$20
$20
$20
$275
$565
$1,088
$1,073
$140
$120
$100
$100
$0
$100
$0
$0
$415
$785
$1,188
$1,173
$504
$372
$449
$454
$919
$1,157
$1,637
$1,627
CLARKSON LUMBER COMPANY Selected statistics: 1993 through 1995 1993 Percent of sales Purchases Cost of goods sold Operating expenses Cash Accounts receivable Inventory Fixed assets (net) Total assets Percent of total assets Current liabilities Long-term liabilities Equity
Current ratio Return on sales Return on assets Return on equity
1994
1995
Average
75.6%
78.5%
79.2%
77.8%
75.4%
75.8%
75.8%
75.6%
21.3%
20.6%
20.8%
20.9%
1.5%
1.5%
1.2%
1.4%
10.5%
11.8%
13.4%
11.9%
11.5%
12.4%
13.0%
12.3%
8.0%
7.5%
8.6%
8.0%
31.5%
33.3%
36.2%
33.7%
29.9%
48.8%
66.5%
48.4%
15.2%
19.0%
6.1%
13.5%
54.8%
32.2%
27.4%
38.1%
2.49
1.58
1.15
1.74
2.1%
2.0%
1.7%
1.9%
6.5% 11.9%
5.9% 18.3%
4.7% 17.1%
5.7% 15.8%
CLARKSON LUMBER COMPANY Sources and Uses of Funds, 1993 - 1995, (thousands of dollars)
Sources of Funds: Retained Earnings Increase in Trade Payables Increase in Accrued Expenses Increase in Bank notes payable Total Sources Uses of Funds: Increase in Cash Account Increase in Accounts Receivable Increase in Inventory Increase in Fixed Asset Account Buyout of Mr. Holtz Decrease in Long Term Debt Total Uses
1993 to 1994
1994 to 1995
1993 to 1995
$68
$77
$145
16.9%
$127
$163
$290
33.8%
$3
$30
$33
3.8%
$60
$330
$390
45.5%
$258
$600
$858
100.0%
$9
$4
$13
1.5%
$105
$195
$300
35.0%
$95
$155
$250
29.1%
$29
$126
$155
18.1%
$0
$100
$100
11.7%
$20
$20
$40
4.7%
$258
$600
$858
100.0%
CLARKSON LUMBER COMPANY Cash from Operations, 1993 - 1995, (thousands of dollars)
Cash From Operations: Retained Earnings (=WC from Operations) Less: Change in Accounts Receivable Change in Inventory Plus: Change in Trade Payables Change in Accrued Expenses Equals: Cash from Operations Sources of Cash: From Operations From Bank Loans Total Sources of Cash Uses of Cash: For Fixed Assets For LTD Paydown For Paydown of buyout debt Total Uses of Cash
Change in Cash Holding:
1993 to 1994
1994 to 1995
1993 to 1995
$68
$77
$145
$105
$195
$300
$95
$155
$250
$127
$163
$290
$3
$30
$33
($2)
($80)
($82)
($2)
($80)
($82)
$60
$330
$390
$58
$250
$308
$29
$126
$155
$20
$20
$40
$100
$100
$49
$246
$295
$9
$4
$13
CLARKSON LUMBER COMPANY Cash to cash cycle (dollars)
1993 Average Daily Sales Average Collection Period: (AR Days) Inventory Turnover Average Daily Purchases Days of Inventory Days of Payables (Trade Notes and Accounts) Days Cash to Cash:
1995
Change from 1993 to 1995
$8,003
$12,381
$4,378
38.2
48.9
10.7
6.5
5.8
$6,052
$9,805
$3,753
(0.7)
55.7
59.9
4.2
35.2
51.3
16.1
58.7
57.5
(1.2)
Increase in AR due to Increased Average Collection Period: Increased Sales:
$306,000
$606,000
Increase in Inventory due to Reduced Inventory Turnover: Increased Sales:
$337,000
Increase in Payables due to Slower Payment: Increased Purchases:
$213,000
Increase in Net Working Assets due to Reduced Activity Ratios: Increased Operating Activity:
$430,000
$300,000 $85,707 $214,293
$587,000
$250,000 $25,303 $224,697
$503,000
$290,000 $97,457 $192,543
$690,000
$260,000 $13,553 $246,447
CLARKSON LUMBER COMPANY Projected income statement for 1996 ( thousands of dollars) 1996 Net sales Cost of goods sold: Beginning inventory Purchases (77.8% of sales)
$5,500 $587 $4,279 $4,866
Ending inventory Total cost of goods sold (75.6% of sales) Gross Profit Operating expenses (20.9% of sales) Operating Profit Purchase Discounts* Interest expense** Net income before income taxes Provision for income taxes Net income
$708 $4,158 $1,342 $1,150 $193 $69 $91 $171 $46 $125
*Assume purchase discounts of 2% taken on all purchases after April 1, 1991. **11% on the average outstanding balance.
Projected balance sheet for December 31, 1996 (thousands of dollars) 1996 Assets: Cash (1.4% of sales) Accounts recievable, net (11.9% of sales) Inventory Current Assets Property, net (dollar amount) Total Assets Liabilities: Accounts payable (10 days of purchases) Accrued expenses (1.5% of sales) Long-term debt, current portion Bank note payable (plug) Current Liabilities Long-term debt Total Liabilities Net worth Total Liabilities plus net worth
Balance (Assets - Liabilities plus net worth)
$77 $655 $708 $1,440 $410 $1,850
$117 $83 $20 $976 $1,196 $80 $1,276 $574 $1,850 $0
