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HomeMy WebLinkAboutAudited Financial Statements · 1 r'~\ Audited Fil1ancial Statements ~r-- Team Contracting, LLC Decenlber 31, 2004 arid 2003 .:--.. ,t J MEL.HISER ENDRES TuCKER . CERTIFIED PUBL.IC ACCOUNTANTS . PROF"ESSIONAL. CORPORATION I- -. -, .... ;'" '-,' ., '..:.,;"". ,:.:.- ~'_'.'_._' '. -;,'___, '_.' ,.' "'C', .'.,".: .,C",;" < '1 1 ",.--.:---. r ~.~. i i i ~. I ~. t '-... J TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana FINANCIAL STATEMENTS December 3 I, 2004 and 2003 CONTENTS Title INDEPENDENT AUDITOR'S REPORT. . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BALANCE SHEETS . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ST A TEMENTS OF MEMBERS' EQUITY ...'............................. Page 3 4-5 6 STATEMENTS OF INCOME. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7-8 STATEMENTS OF CASH FLOWS . . . . , . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . , . . 9-10 NOTES TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . 11-17 PUBL.IC ACCOUNTANTS . PROf'"E5510NAL. CORPORATION . '" I ! r----\ i '~.~ r---- i J NORMAN L. MELHISER, CPA TOM R. TUCKER. CPA .JOSEPH L. BROWN, CPA MARC .J. MCCORMICK, CPA DOUGLAS A. YORK, CPA TERRY L. GRAHAM, CPA W. ISSAC ORWICK, CPA MELHISER ENDRES TUCKER EDWARD D. ENDRES, CPA (1943 - 1997) CPA's P.C. WWW.METCPA.COM INDEPENDENT AUDITOR'S REPORT February 14, 2005 Board of Directors TEAM CONTR.\CTING, LLC 3151 Development \Vay Sellersburg, Indiana 47172 We have audited the accompanying balance sheets of TEAM CONTRACTING, LLC as of December 31, 2004 and 2003, and the related statements of income, members' equity, and cash flows for the years then ended. These finan~ial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits, We conducted our audits in accordance wi~h auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation, We believe that our audits provide a reasonable basis f6r our opinion. In our opinion, the financial statements refefI"ed to above present fairly, in all material respects. the financial position of TEAM CONTRACTING, LLC as of December 31,2004 and 2003, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. MELHISER E~'DRES TUCKER ~ QSl. -"."' ~ Sh.<L T. ()~__ 301 EAST ELM 5TREE..T.' NE..W.. A. L. B.A. N. Y. ' IN 47150 . PHONE: B 1 ~-945-!?2:.1l6' ..f"A)(: 1312-949-4095 ,. ..... ................................v.................................,~,....,. 699 H ILLVI EW DRIVE . .l:::CRyD'o'N.'TN4'7"r'1'2"'i"p~Hc..NEI#Bna::73's'::'3'7.'77.'"'AX:' a'l2~7:3S;S 84'$ ,,'...-v,...., ! TEA~ CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana BALANCE SHEETS December 31 2004 2003 ASSETS CURRENT ASSETS Cash S 1,118,548 S 955,243 Contracts Receivable' - Trade 712,644 1,472,026 Costs in Excess of Billings 0 98,855 TOTAL ClJRRENT ASSETS 1,831,192 2,526,124 FIXED ASSETS Furniture & Fixtures 47,321 45,210 Small Tools 90,408 83,708 Machinery & Equipment 2,611,540 2,207,441 Trucks & Autos 624,173 529,342 ~ ,r--.. Leasehold Improvements 3.447 3.447 3,376,889 2,869,148 Less Accumulated Depreciation ( I ,354,580) (1.987.037) NET FIXED ASSETS 2,022.309 882.111 TOTAL ASSETS S 3,853.501 $ 3.408.235 .--' "- See Notes to Financial Statements. -4- . PROF'E5510NAL CORPORATION '1" ___. )r--... , ' TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana BALANCE SHEETS Decem ber 3 ] 2004 2003 LIABILITIES CURRENT LIABILITIES Note Payable - Bank S; 0 $ 200,000 Current Portion of Long-Term Debt 43],474 37,764 Accounts Payable 4]6,]75 ] ,245,576 Accrued Expenses 57,978 13,984 Accounts Payable - Payroll 32,785 ]6,418 Billings in Excess of Cost 16.860 50.831 TOTAL CURRENT LIABILITIES 955,272 ] ,564,573 LONG- TERM LI/\.BILITIES Installment Loans 1,229,891 91,3]5 ~" .r---. Less Current Portion of Long-Term Debt (431,474) (37.764) TOTAL LONG-TERM LIABILITIES 798,4]7 53.551 TOTAL LIABILITIES ],753,689 ],618,124 MEMBERS' EOUITY Members' Equity 2.099,8] 2 1,790.1 11 TOTAL LIABILITIES & MEMBERS' EQUITY $ 3.853.50] $ 3.408.235 .r--.. . ~ J See Notes to Financial Statements. -5- ENDRES TUCKER . CORPORATION r-:~ TEAM CONTRACTING, LLC I .. .." 31 51 Development Way Sellersburg, Indiana STATEMENTS OF MEMBERS' EQUITY BALANCE - December 31, 2002 $1,399,956 Net Income for the Year Ended December 31, 2003 3,137 Members' Draws (1,037,499) Members' Contributions 1.424.517 BALAt~CE - December 31, 2003 1,790,111 -..... ,,"'-"""" Net Income for the Year Ended December 31, 2004 725,972 Members' Draws (416.271) BALANCE - December 31, 2004 $2.099.812 - ~'\ See Notes to Financial Statements. -6- CORPORATION . -.'1 \ . r~ TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana STATEMENTS OF INCOME For the Year Ended December 31 2004 2003 CONTRACT REVENuE $ 11,616,242 $ 6,239,238 ..--...\~\ DIRECT COSTS Labor Payroll Taxes Materials Equipment Rental Equipment Fuel, Oil, Grease Mobilization Equipment Repairs & Maintenance Subcontract Other Outside Trucking Depreciation 1,722,479 1,200,837 147,698 102,858 2,498,171 1,623,982 237,421 105,110 97,335 46,747 32,163 22,158 12,828 15,690 3,800,264 1,339,098 114,000 111,457 525,424 232,847 320.486 291.498 9.508.269 5,092.282 2,107,973 1,146,956 67,640 41,882 132,017 119,440 108,775 101,800 46,875 14,558 22,039 18,068 12,939 6,216 1,350 612 29,25 t 16,579 5,778 4,642 1,878 1,435 77,637 65,629 124,693 100,179 0 12,728 43,367 11,513 300,000 201,000 41 622 ,i TOTAL DIRECT COSTS GROSS PROFIT I J OPERA TING EXPENSES Auto Expenses Insurance Employee Benefits Legal and Accounting Office Supplies Advertising & Promotion Bank Charges Interest Licenses & Permits Postage and Freight Depreciation Repairs and Maintenance Occupational Taxes Miscellaneous Rent Supplies i -- J---\ J J See Notes to Financial Statements. -7- MEL.HISER ENORES . "'1 I \ r<--'"\ " " -~.~- j 1 \ I j - -- J TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana S1 A TEMENTS OF INCOME For the Year Ended December 31 2004 2003 OPERATING EXPENSES (Continued) Radios/Pagers/Cellular Phones Utilities Meals and Entertainment Dues and Subscriptions Plan Fees and Deposits Wages Payroll Taxes 12,898 10,171 8,964 10,376 4,170 2,694 6,] ]0 2,767 2,941 3,337 350,850 38],43] 30.085 32.673 ] .390.298 ].] 60.352 717,675 (13,396) 7,474 6,283 323 0 500 10.250 8.297 16.533 $ 725.972 $ 3.137 TOTAL OPERATING EXPENSES NET INCOME (LOSS) BEFORE OTHER INCOME OTHER INCOME Interest Income Other Income Gain on Sale of Assets TOTAL OTHER INCOME NET INCOME See Notes to Financial Statements. -8- CORPORATION . -'-1 . ! .~. --.." ".-.,\ -...... ,-~ \..-'i.-, J TEA.M CONTRACTING, LLC 3] 5] Development Way Sellersburg, Indiana STATEMENTS OF CASH FLOWS For the Year Ended December 31 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers $ 12,440,831 $ 5,337,774 Interest Received 7,474 6.283 12,448,305 5,344,057 Cash Paid to Suppliers (1 1,260,227) (5,290,100) Interest Paid (9.257) (16.579) NET CASH PROVIDED BY OPERA. TING ACT~VITIES 1,178,821 37,378 CASH FLOWS FROM f1'.;\!ESTING ACTIVITIES I Capital Expenditures (314,647) (266,930) Sale of Assets 500 ]2.000 i NET CASH USED BY INVESTING ACTIVITI:SS (314,147) (254,930) CASH FLOWS FROM FINANCING ACTIVITIES I Principal Payments on Loans (406,443) (252,843) Distributions to Members (416,271) (1,037,501) Loan Proceeds 121,345 58,022 Contributions from Members 0 1.424.517 NET CASH PROVIDED BY FINANCING ACT~VITIES (701,369) 192,195 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 163,305 (25,357) CASH A.l\TD CASH EQUIVALENTS AT BEGINNING OF YEAR 955.243 980.600 CASH ANTI CASH EQUIVALENTS AT E1\TD OF YEAR $ 1.1 18.548 $ 955.243 SUPPLEMENTAL DISCLOSURES Non-cash investing and financing transaction: Capital Expenditures $ (1,223,673) Loan Proceeds 1,223,673 See Notes to Financial Statements. -9- PROF"ESSIONAL CORPORATION ~ .._~ j ~...-.. I TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, lndiana STATEMENTS OF CASH FLOWS For the Year Ended December 3 1 2004 2003 RECONCILIA TION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIESl Net Income $ 725,972 $ 3,137 ~'r-, Adjustments to Reconcile Net Income To Net Cash Provided by Operations: Depreciation Sale of Assets (Increase) Decrease in Receivables (Increase) Decrease in Costs and Estimated E'ilrnings In Excess of Billings on Uncompleted Contracts Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Wages Increase (Decrease) in Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Increase (Decrease) in Accrued Expenses 398,123 357,127 (500) (10,250) 759,382 (887,698) 98,855 (15,463) (829,401) 651,933 16,367 (8,847) (33,971) 1,698 43,994 (54,259) 452.849 34.241 Net Adjustments NET CASH PROVIDED BY OPERATING ACTIVITIES s 1.178.82 1 $ 37.378 ~ See Notes to Financial Statements. -10- J , . , ; ~~" i TEAM CONTRACTING, LLC 3151 peve]opment \Vay Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS December 31,2004 and 2003 NOTE A - GENERAL INFORM A TION Nature of Operation The Company was organized as a limited liability company on June 27, 1995. The Company is engaged primarily in commercial construction for business and municipalities in Kentucky and Southern Indiana. Income Taxes The LLC with the consent of its, members, has elected under the Internal Revenue Code to be taxed as a partnership. In lieu of partnership income taxes, the members are taxed individually on their proportionate share of the LLC's taxable income. Therefore, no liability or expense for federal income taxes has been included in the financial statements. '~'\~"\ NOTE B - SIGNIFICANT ACCOUNTING POLICIES Method of Accountin2: Profits on long-term projects are being recorded on the basis ofthe Company's estimates of the percentage of completion of individual projects. Under this method, the Company records that percentage of estimated total income on each project that incurred costs to date bear to estimated total costs, after giving effect to estimates of costs to complete based upon most recent information. This method does not alter the use of the basic accrual method as the over-all method of accounting. As the long-term projects extend over one or more years, revision in cost and profit estimates during the course of the work are reflected in the accounting period in which the facts requiring the revision become knovv'n. Profits on short-term commerci'ill work are recorded upon the substantial completion of each project. The Company's records are maintained using the accrual method of accounting which recognizes revenue when earned, and costs when incurred, rather than when collected or paid. This method results in proper matching of income and expenses to determine income or loss for ,a specific period of time. - ;~ The asset, "Costs and estimated ~arnings in excess of billings on uncompleted contracts," represents revenues recognized in excess of amounts billed. The liability, "Billings in excess of costs and estimated e~ings on uncompleted contracts," represents billings in excess of revenues recognized. -11- J MELHISER ENDRES TUCKER CERTIFIED PUBLIC ACCOUNTANTS . PROFESSIONAL CORPORATION J'~ ~.:.o.,~ "...,", :0 '.,.,- /:'-'j{'i..../'....i :\rj;;'J:~-:;'.<.:;:f,,~ (f,.;";:<~;'~\,,'*.~~*tS5;:i~~.;:!,.~~s:..:::,:,,::_ :_:"~,,-,~~:,:,::;:L;;';'" ." ! ;' 4 _ -, 1 \ . r"""--' - ,r- TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS December 31, 2004 and 2003 NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued) Fixed Assets Fixed asset costs are depreciated and amortized over the expected useful life of the individual asset as required by generally accepted accounting principles. The straight- line and accelerated methods are used in calculating depreciation. Disposal of Fixed Assets The Company's policy with r~spect to retirements, sales and disposals of equipment is to remove the cost of the asset and the accumulated depreciation from the accounts. The resulting gain or loss is reported on the Statement of Income under Other Income or Expense. ,~'i Trade- In Of Fixed Assets The Company's policy with respect to trade-ins of fixed assets is to remove the cost of the asset traded and the related accumulated depreciation from the accounts. The remaining basis of the asset traded-in is added to the cost of the asset acquired. No gain or loss is recognized on trade-ins. Repair And Maintenance Expenditures are charged to operations as incurred for maintenance, repairs and renev,'als which do not materially extend the useful life of the property. Cash Equivalents For purposes of the Statement' of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Accounts Receivable The Company charges any uncollectible accounts directly to current operations. All accounts at December 31, 2004 and 2003, are thought to be collectible. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -12- J PRO,FE551 ON~LCt:l"R.!,,~RATION 1 . I r~\ ~.r-\ -- ~ J TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS December 31, 2004 and 2003 NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value of Financial Instruments Installment Loan: The fair value of the installment loan is estimated based on interest rates for the same or similar debt offered to the Company having the same or similar remaining maturities and collateral required. NOTE C - CONTRACT RECEIVABLES Contract Receivables Consist 6f: December 31 2004 2003 Amounts Billed for: Contracts Completed and In Progress Retainage $ 467,434 245.210 $ 1,211,959 260.067 Total $ 712.644 $ 1.472.026 Receivables from Metropolitan Sewer District ($323,448) and Louisville Water Company ($364,176) represent 96% of total contract receivables as of December 31, 2004. NOTE D - UNCOMPLETED CONTRACTS -13- Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows: Costs Incurred on Uncompleted Contracts Estimated Earnings to Date December 31 2004 2003 $ 3,763,517 $ 1,758,571 386.081 356.843 4,149,598 2,115,414 4.1 66.458 2.067.390 $ 06.860) $ 48.024 Billings to Date C:I':RTIFIE9Pl,lBL.Il:H~~CCllJ~T....N,J"~...' . PR9FESSIONAL CORPORATION .<.,."." .....~"1 { ~ r----?-,. --.~\ :~ > , 1 ; .J "- .~ '~ J I I TEAM CQNTRACTING, LLC 3151 Oeve1opment Way Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS December 31, 2004 and 2003 NOTE D - UNCOMPLETED CONTRACTS (Continued) Included in the accompanying balance sheet under the following captions are: Costs and Estimated Em;nings in Excess Of Billings on Uncompleted Contracts Billings in Excess of CO,sts and Estimated Earnings ?n Uncompleted Contracts NOTE E - DEPRECIATION -14- December 31 2004 2003 $ o $ 98,855 16.860 50.831 ($ 16.860) $ 48.0')4 I Depreciation was computed using straight-line method. TheMACRS system is used for income tax reporting. Because the entity is an LLC, no adjustments have been made for the tax effect of these differenc~s in depreciation methods. The Company's book and tax depreciation is as follows: Book Tax Year Ended December 31 2004 2003 $ 404.139 $ 357.127 $ 1.231.527 $ 299.099 CORPORATION ~ .r,,"--\. i ...-., ".,,-...., ,fl' ; ..J -..r, '-, J TEAM CdNTRACTING, LLC 3151 pevelopment Way Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS Decemb~r 31, 2004 and 2003 NOTE F - CONCENTRATION OF CREDIT RISK The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers. The cash balances the Company maintains in individual banks exceeds the $ 100,000 maximum insurable by the Federal Deposit Insurance Corporation. The excess cash balances at December 31,2004 and December 31,2003 are $ 1,304,401 and $ 832,949, respectively. NOTE G - RELATED PARTY TRANSACTIONS The Company leases its office and shop facilities from Team Properties, LLC which is a separate partnership with the same ownership percentage as Team Contracting, LLC. The lease was entered into on July 31, 1997, for the term of one year, and on a month to month basis thereafter. The mopthly rental amount is $ 25,000. NOTE H - EOUIP:t\1ENT The Company leases equipment from various venders periodically. There are no formal leases for this equipment. The equipment is leased as needed. There \vere no outstanding due lease payments at December 31, 2004. ~15- MELHISER ENDRES TUCKER . PUBLIC ACCOUNTANTS . PROF"ESSIONAL CORPORATION ,... ". .a. ..:..... I , ~~ I TEAM CONTRACTING, LLC 3151 Development Way Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS December 31, 2004 and 2003 NOTE I - INSTALLMENT LOANS Lender & Monthly Interest No. Of Balance Balance Collateral Pavment Rate Payments 12/31/04 12/31/03 Case Credit Case Loader/Backhoe 1,165 0.00 24 0 10,326 Re2:iona] Bank 00 Chevrolet 1500 PU 60~ 9.145 60 0 8,512 Bank One 2001 Ford F350 801 9.00 36 0 812 2004 Chevy 3500 894 5.91 36 24,1 07 0 Ford Credit 2001 Ford F450 785 0.00 36 6,282 15,706 ~'~" 2003 Ford Truck 779 7.99 48 23,588 30,693 2004 Ford Truck 641 7.99 48 19,417 25,267 2004 Ford Truck 775 4.99 36 20,424 0 2004 Ford Truck 889 1.95 36 24,311 0 2004 Ford Truck 866 8.49 48 32,533 0 Caterpillar Financial Services Corporation 4 CAT Units 14,199 5.00 36 336,447 0 CAT Wheel Loader 2,750 5.00 36 84,620 0 8 CA T Backhoe Loaders & 4 CAT Excavators 19,726 5.00 36 658,162 0 $1.229.891 $ 91.316 The three loans obtained from ~aterpillar Financial Services Corporation are non- interest bearing loans that are s6cured by the equipment. They were discounted at an imputed interest rate of 5%. 1 -16- J CORPORATION ~.. ;. \ ~, ~r--\ J . . i TEAM CONTRACTING, LLC 3151 Development Way . Sellersburg, Indiana NOTES TO FINANCIAL STATEMENTS Decemb~r 31, 2004 and 2003 NOTE I - INSTALLMENT LOANS (Continued) Maturities of long-term debt ar~ as follows: Year Ended December 31 Amount 2005 2006 2007 2008 2009 $ 431,474 467,654 323,396 7,367 o NOTE J - RETIREMENT PLAN Effective January 1, 1997, the Company established the Team Contracting, LLC 401(k) Salary Reduction Plan and Trust. Under this plan, eligible employees are permitted to make elective deferrals of 1 % up to 15% of their compensation. The Company has agreed to contribute a discretioJ;1ary match of 25% of each employee's elective deferral amount up to the first 5% of participants' compensation. Total employer contribution expense for the year ended December 31, 2004 and 2003 was $ 15,757 and $ 13,113, respecti vely. NOTE K - LINE OF CREDIT The Company has available a total of $ 1,000,000 revolving line of credit. The available line of credit is personally guaranteed by the members and the assets of the Company. The interest rate is 1.0 percent below the prime rate and has a maturity date of July 14, 2005. At December 31, 2004 and 2003, the Company had outstanding $ 0 and $ 200,000, respectively on this line of credit. -17- MELHISER ENDRES TUCKER CERTIF"IED PUBLIC ACCOUNTANTS . PROF"ESSIONAL CORPORATION ;~~--,-.";:_.:L:;;":i;~i;.lci,,,";"'.~"