HomeMy WebLinkAbout00-228 Resolution No. 00-228
RESOLUTION
AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT
(1925 Holmes Road Project)
WHEREAS, the City of Elgin, Illinois (the "Issuer" ) is
authorized under its home rule powers, as set forth in the
1970 Constitution of the State of Illinois, Article VII ,
Section 6, and the provisions of an ordinance adopted on
February 13 , 1980, as from time to time supplemented and
amended (the "Act" ) , to issue industrial revenue bonds for the
purpose of financing, in whole or in part, the cost of the
acquisition, purchase, construction, reconstruction,
improvement, betterment or extension of any industrial project ;
WHEREAS, Bryan Real and Kurt Kresmery, as majority owners
of a to-be-formed Illinois partnership (the "Borrower" ) wish
to finance the acquisition, rehabilitation and expansion of an
approximately 118 , 000 square foot existing facility located at
1925 Holmes Road in Elgin, Illinois, approximately 64% of
which facility will be occupied by Food Concept Developers,
Inc . ( "FCD" ) and used by FCD in the manufacturing of coffee
products (the "Project" ) , and wish to have the Issuer issue
its industrial revenue bonds to finance the acquisition,
rehabilitation, expansion and equipping of such facilities; and
WHEREAS, a Memorandum of Agreement (the "Agreement" ) has
been presented to the Issuer under the terms of which the
Issuer agrees, subject to the provisions of such Agreement, to
issue its industrial revenue bonds to finance the Project .
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, as follows :
Section 1 . The form, terms and provisions of the
Agreement presented to this meeting are hereby approved.
Section 2 . That the Mayor of the Issuer is hereby
authorized to execute, and the City Clerk of the Issuer is
hereby authorized to attest to the Agreement with the Borrower
in substantially the form of such agreement appended to this
Resolution as Exhibit A.
Section 3 . That the officers and employees of the Issuer
are hereby authorized to take such further action as is
necessary to carry out the intent and purposes of the
Agreement as executed and to issue not to exceed $4 , 000, 000 of
its industrial revenue bonds upon the terms and conditions
stated in such Agreement for the purpose of defraying the cost
of the Project and that the same is declared to be for a
public purpose .
Section 4 . The Issuer hereby declares its intent to
assist the Borrower under Treasury Regulations Section 1 . 150-2
to reimburse any expenditures made on costs of the Project
prior to the issuance of the Bonds with proceeds of the Bonds .
Section 5 . All ordinances, resolutions, orders and parts
thereof in conflict herewith are hereby superseded to the
extent of such conflict .
Section 6 . If any section, paragraph, clause or
provision of this Resolution shall be held invalid, the
invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this
Resolution.
Section 7 . This Resolution shall be in full force and
effect upon its passage and approval .
s/ Ed Schock
Ed Schock, Mayor
Presented: October 11, 2000
Adopted: October 11, 2000
Omnibus Vote : Yeas 5 Nays 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
EXHIBIT A
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT is among the City of Elgin, Illinois (the
"Issuer"), and Bryan Real and Kurt Kresmery, as majority owners of a to-be-formed Illinois
partnership (the "Borrower").
1. Preliminary Statement. Among the matters of mutual inducement which have
resulted in this Agreement are the following:
(a) The Issuer is authorized under its home rule powers, as set forth in the 1970
Constitution of the State of Illinois, Article VII, Section 6, and the provisions of an
Ordinance adopted on February 13, 1980,as from time to time supplemented and amended
(the "Act"), to issue industrial revenue bonds for the purpose of financing, in whole or in
part, the cost of the acquisition, purchase, construction, reconstruction, improvement,
betterment or extension of any industrial project and to enter into a loan agreement with the
Borrower pursuant to which the proceeds of such industrial revenue bonds may be lent to the
Borrower to finance the costs of the acquisition, rehabilitation and equipping of such an
industrial project.
(b) The Borrower wishes to obtain satisfactory assurance from the Issuer that the
proceeds of the sale of such industrial revenue bonds of the Issuer will be made available to
it to finance the costs of acquisition, rehabilitation, expansion and equipping of an
approximately 118,000 square foot existing facility located at 1925 Holmes Road in Elgin,
Illinois,approximately 64%of which facility will be occupied by Food Concept Developers,
Inc. ("FCD") and used by FCD in the manufacturing of coffee products (the "Project").
(c) Subject to the conditions contained herein and to the due compliance with all
requirements of law,the Issuer,by virtue of such statutory authority as may now or hereafter
be conferred by the Act,will issue and sell its industrial revenue bonds in an amount not to
exceed $4,000,000 (the "Bonds")to finance the costs of the Project.
(d) The Borrower has presented the Issuer with evidence of its intention to
reimburse itself for expenditures relating to the Project which it may pay from funds which
are not proceeds of the Bonds.
(e) The Bonds shall be limited obligations of the Issuer payable solely and only
out of the revenues and receipts derived from the trust estate established under a loan
agreement, indenture of trust, bond purchase agreement, or any similar document pursuant
to which the Bonds are issued; the Project shall be financed by means of a loan of the
proceeds of the Bonds to the Borrower, and the Borrower shall agree to make payments in
an amount sufficient to pay the principal and purchase price of, and premium, if any, and
interest on, and expenses of,the Bonds. No holder of any of the Bonds shall have the right
to compel any exercise of the taxing power of the Issuer, and the Bonds shall not constitute
an indebtedness or a loan of credit of the Issuer within the meaning of any constitutional or
statutory provision.
A-1
2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the
Issuer agrees as follows:
(a) That it will authorize the issuance and sale of the Bonds pursuant to the terms
of the Act as then in force.
(b) That it will,at the proper time and subject in all respects to the prior advice,
consent and approval of the Borrower, adopt or cause to be adopted, such proceedings and
authorize the execution of such documents as may be necessary and advisable for the
authorization, issuance, and sale of the Bonds as aforesaid, and that it will enter into a loan
agreement whereby the Borrower will pay to or on behalf of the Issuer such sums as shall be
sufficient to pay the principal and interest and redemption premium,if any,and expenses on
the Bonds as and when the same shall become due and payable.
(c) The Issuer hereby declares its intent to assist the Borrower under Treasury
Regulations Section 1.150-2 to reimburse any expenditures made on costs of the Project prior
to the issuance of the Bonds with proceeds of the Bonds.
3. Undertakings on the Part of the Borrower. Subject to the conditions above stated,the
Borrower agrees as follows:
(a) That it will use all reasonable efforts to find one or more purchasers for the
Bonds.
(b) That contemporaneously with the delivery of the Bonds it will enter into a
loan agreement with the Issuer under the terms of which the Borrower will obligate itself to
pay to the Issuer sums sufficient in the aggregate to pay the principal of and interest and
redemption premium,if any,and expenses on the Bonds as and when the same shall become
due and payable.
4. General Provisions.
(a) All commitments of the Issuer under Paragraph 2 hereof and of the Borrower
under Paragraph 3 hereof are subject to the condition that on or before December 1,2001 (or
such other date as shall be mutually satisfactory to the Issuer and the Borrower), the Issuer
and the Borrower shall have agreed to mutually acceptable terms and conditions of the loan
agreement and of the Bonds and other instruments or proceedings relating to the Bonds. The
decision not to approve or agree to any term or condition of any document or not to take any
action prior to issuance of the Bonds shall rest solely within the complete discretion of the
parties to this Agreement.
(b) If the events set forth in (a) of this Paragraph 4 do not take place within the
time set forth or any extension thereof and the Bonds in an amount not exceeding the amount
stated above are not sold within such time, the Borrower agrees that it will reimburse the
Issuer for all reasonable and necessary direct out-of-pocket expenses which the Issuer may
incur at the Borrower's request or as a result of or arising out of this Agreement including but
A-2
not limited to the payment of attorney and other consultant fees arising from the execution
of this Agreement and the performance by the Issuer of its obligations hereunder, and this
Agreement shall thereupon terminate.
(c) The closing of the Bonds in regard to the Project is subject to the possession
by the Issuer or the receipt by the Issuer of sufficient volume cap allocation from the State
of Illinois or otherwise pursuant to the Illinois Private Activity Bond Allocation Act (30
ILCS 345/1 through 345/9 (1998 State Bar Edition)), as supplemented and amended. In
addition, the Issuer agrees to apply $2,600,000 of its 2001 volume cap allocation to the
issuance of the Bonds.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their
officers thereunto duly authorized as of the day of October, 2000
CITY OF ELGIN, ILLINOIS
Mayor
(SEAL)
ATTEST: f
43, 649 kt-.41/: 041412-cA,z-4-.—
City Clerk
By
Bryan Rear.--
BY tC,...4-c6er.04.4.i_
Kurt Kresmery
13065.2
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t
.
STATE OF ILLINOIS ) 1
)
COUNTIES OF KANE )
AND COOK )
I,the undersigned,do hereby certify that I am the duly qualified and elected Clerk of the City
of Elgin, in the Counties and State aforesaid; and as such Clerk, I am the keeper of the official
journal, records and files of the City Council of said City.
I do further certify that the attached and foregoing is a full, true and correct copy of;
RESOLUTION NO. 0 0-2 28
A RESOLUTION AUTHORIZING THE EXECUTION OF A
MEMORANDUM OF AGREEMENT (1925 HOLMES ROAD
PROJECT)
Passed and Approved: October 11,2000
as passed by the City Council of the City of Elgin,at a legally convened meeting in the City of Elgin.
IN WITNESS WHEREOF, I have hereunto affixed my official
signature and the corporate seal of said City of Elgin, Kane and Cook Counties, Illinois this 11 th
day of October, 2000.
-vole04,4 * gel
C-1,1----(1 /7 (.-12._-e-(..e.,--
,' 1 '' .,. Y, 4 'a; ; City Clerk
(CITY SEAL) `
s � .
Resolution No. 00-228
RESOLUTION
AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT
(1925 Holmes Road Project)
WHEREAS, the City of Elgin, Illinois (the "Issuer" ) is
authorized under its home rule powers, as set forth in the
1970 Constitution of the State of Illinois, Article VII ,
Section 6, and the provisions of an ordinance adopted on
February 13 , 1980, as from time to time supplemented and
amended (the "Act" ) , to issue industrial revenue bonds for the
purpose of financing, in whole or in part, the cost of the
acquisition, purchase, construction, reconstruction,
improvement, betterment or extension of any industrial project;
WHEREAS, Bryan Real and Kurt Kresmery, as majority owners
of a to-be-formed Illinois partnership (the "Borrower" ) wish
to finance the acquisition, rehabilitation and expansion of an
approximately 118 , 000 square foot existing facility located at
1925 Holmes Road in Elgin, Illinois, approximately 64% of
which facility will be occupied by Food Concept Developers,
Inc . ( "FCD" ) and used by FCD in the manufacturing of coffee
products (the "Project" ) , and wish to have the Issuer issue
its industrial revenue bonds to finance the acquisition,
rehabilitation, expansion and equipping of such facilities; and
WHEREAS, a Memorandum of Agreement (the "Agreement" ) has
been presented to the Issuer under the terms of which the
Issuer agrees, subject to the provisions of such Agreement, to
issue its industrial revenue bonds to finance the Project .
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, as follows :
Section 1 . The form, terms and provisions of the
Agreement presented to this meeting are hereby approved.
Section 2 . That the Mayor of the Issuer is hereby
authorized to execute, and the City Clerk of the Issuer is
hereby authorized to attest to the Agreement with the Borrower
in substantially the form of such agreement appended to this
Resolution as Exhibit A.
Section 3 . That the officers and employees of the Issuer
are hereby authorized to take such further action as is
necessary to carry out the intent and purposes of the
Agreement as executed and to issue not to exceed $4 , 000 , 000 of
its industrial revenue bonds upon the terms and conditions
stated in such Agreement for the purpose of defraying the cost
of the Project and that the same is declared to be for a
public purpose .
•
1
Section 4 . The Issuer hereby declares its intent to
assist the Borrower under Treasury Regulations Section 1 . 150-2
to reimburse any expenditures made on costs of the Project
prior to the issuance of the Bonds with proceeds of the Bonds .
Section 5 . All ordinances, resolutions, orders and parts
thereof in conflict herewith are hereby superseded to the
extent of such conflict .
Section 6 . If any section, paragraph, clause or
provision of this Resolution shall be held invalid, the
invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this
Resolution.
Section 7 . This Resolution shall be in full force and
effect upon its passage and approval .
s/ Ed Schock
Ed Schock, Mayor
Presented: October 11, 2000
Adopted: October 11, 2000
Omnibus Vote : Yeas 5 Nays 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
<0OFEtc,
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City of Elgin AgendaItem No.
TEDfE�v E
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September 21, 2000 G !►� r r
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N
efrit
TO: Mayor and Member of the City Council °°'"'"'
ECONOMIC GROWTH
FROM: Joyce A. Parker, City Manager
SUBJECT: Request from Food Concepts Developers, Inc.
For the City' s 2001 Annual Industrial
Revenue Bond Authority
PURPOSE
The purpose of this memorandum is to present to the Mayor and
members of 'the City Council a request from Food Concepts
Developers, Inc. for $4 . 3 million of the year 2001 Industrial
Revenue Bond (IRB) authority.
BACKGROUND
The City has received a request regarding the availability of IRBs
for business expansion from Food Concepts Developers, Inc. The
company is requesting $8 . 4 million in IRB capacity. The City is
allocated $4 . 3 million from the State of Illinois . Funding in
excess of the City' s $4 . 3 million must be secured from other
municipalities or directly from the State of Illinois .
The proceeds from the bond sale would be used to purchase their
current facility, which is leased, located on Holmes Road and to
build an addition and to purchase new packaging equipment . The
total estimated costs of the projects are as follows : Construction
- $2, 980, 000, Equipment - $900, 000, Land - $475, 000 and Building -
$4, 275, 000 . The project is expected to be completed by February
2001 .
The company, incorporated in 1992, is engaged in manufacturing dry
specialty beverages, such as flavored hot chocolates and hot and
cold cappuccinos, which are distributed throughout the United
States and Canada . Operations are conducted from a 44, 000 square
foot facility in the City. The company sells to distributors,
grocery stores, convenience stores, drug stores, vending operators,
club stores and institutions . In 1999, one customer and one
distributor accounted for 48% and 12% of the net revenue,
respectively, and have been with the company for the past three
years .
IRB Food Concept Developers, Inc.
September 21, 2000
Page 2
The company currently has 31 full-time and two part-time employees,
as well as three managers . Four employees live in Elgin. The
company expects to create 30 new permanent full-time positions and
five new permanent part-time positions, consisting of two clerical,
29 labor, three supervisory and one managerial . The total annual 1
payroll is approximately $1 . 1 million.
Financial Analysis
The company' s financial position has been strengthening over the
past five years . As expected with a growth company, assets and
liabilities have increased rapidly. Total liabilities as a percent
of total assets has been decreasing, ranging from 158% in 1995 to
61% in 1999, indicative of a financially strengthening company.
Sales have been increasing by an average of 156% per year, while
net income has been increasing by an average of 300% per year. Net
income as a percent of sales has averaged approximately 6% over the
past five years .
In addition to the request from Food Concepts, staff has also
received a request from Fabric Images & Metal Images for $3 . 5
million in IRB capacity for the 2001 funding cycle. Following a
review of both proposals and analysis by Speer Financial, Inc. ,
staff is recommending that Food Concepts receive $2 . 6 million and
Fabric Images receive $1 . 7 million in 2001 IRB financing capacity.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
) tFINANCIAL IMPACT
,N ___
Food Concepts Developers, Inc. has paid the $2, 500 IRB application
fee . Furthermore, all costs pertaining to the IRB issuance will be
borne by Food Concepts Developers, Inc. I
Speer Financial, Inc. found Food Concepts Developers to be I
financially strong. The IRB project will enhance their business
and retain a strong corporate citizen in the City. The project
will create 35 new jobs and increases the City' s property tax by
approximately $18, 000 . Speer finds this a worthwhile project and
recommends that the City proceed with the inducement resolution.
The Internal Revenue Code stipulates that all assessments related
to the IRB process must be completed prior to the end of the
calendar year.
IRB Food Concept Developers, Inc.
September 21, 2000
Page 3
LEGAL IMPACT
ALTERNATIVES
1 . Authorize Food Concepts Developers, Inc. to use $4 . 3 million
of the City' s 2001 IRB capacity.
2 . Authorize Food Concepts Developers, Inc. to use $2 . 6 million
of the City' s 2001 IRB capacity.
3 . Deny the request by Food Concepts Developers, Inc. to utilize
$4 . 3 million of the City' s 2001 IRB capacity.
RECOMMENDATION
It is recommended that an inducement resolution be adopted for Food
Concepts Developers, Inc. in the amount of $2 . 6 million in
Industrial Revenue Bonds and that the City of Elgin Fiscal Services
Manager be authorized to conduct the TEFRA public hearing at an
appropriate time and place.
R ectfully submitt ,
)4114--"- a
Joyce A. Parker
City Manager
amp
. . .
Fro--4 PUBLIC FINANCE CONSULTANTS SINCE 1954
SPEER FINANCIAL
KEVIN W.\4cCANNA DAVID F.PHILLIPS LARRY, INC.P.BURGER DANIEL D.FORBES BARBARA L.CHEVALIER
PRESIDENT SR.VICE PRI:5I UI;N'I'
VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT
September 6, 2000
The Honorable Ed Schock and
Members of the City Council
City of Elgin
150 Dexter Court
Elgin, Illinois 60120
Dear Mayor and City Council:
Pursuant to the request of the City of Elgin (the"City"), Speer Financial, Inc. has reviewed the
industrial bond application, and supporting documentation including financial reviews, of Food
Concepts Developers, Inc. (the "Company"). The financial reviews are completed on the accrual
basis of accounting on a calendar year basis and are prepared by Remer &Associates, C.P.A.'s.
The Company is applying for City approval of$8,400,000 industrial revenue bonds. The
purchaser/bond placement agent is expected to be Harris Trust and Savings Bank. Bond counsel
has not been determined. Proceeds will be used to purchase the facility it currently rents on
Holmes Drive and to build an addition to it, and to purchase new packaging equipment. The total
estimated costs of the project are as follows: Construction $2,980,000;Equipment$900,000;
Land$475,000; and Building $4,275,000. The project is expected to be completed by February
2001.
The Company, incorporated in 1992, is engaged in manufacturing dry specialty beverages, such
as flavored hot chocolates and hot and cold cappuccinos,which are distributed throughout the
United States and Canada. Operations are conducted from a 44,000 square foot facility in the
City. The Company sells to distributors, grocery stores, convenience stores, drug stores, vending
operators, club stores and institutions. In 1999,one customer and one distributor accounted for
48%and 12%of the net revenue respectively and have been with the Company for the past three
years.
The Company currently has 31 full-time and 2 part-time employees, as well as 3 managers. Four
employees live in Elgin. The Company expects to create 30 new permanent full-time positions
and 5 new permanent part-time positions; consisting of 2 clerical, 29 labor, 3 supervisory and 1
managerial. The total annual payroll is approximately$1,100,000.
Financial Analysis
As the accompanying tables indicate,the Company's financial position has been strengthening
over the past five years. As expected with a growth company, assets and liabilities have
increased rapidly. However,total liabilities as a percent of total assets has been decreasing,
ranging from 158%in 1995 to 61%in 1999, indicative of a financially strengthening company.
Sales have been increasing by an average of 156%per year,while net income has been increasing
by an average of 300%per year. Net income as a percent of sales has averaged approximately
6%over the past five years.
The$8,400,000 of bonds are to be amortized over 20 years. The bonds will pay interest at a
floating rate. Annual debt service at an average rate of 6.0%is approximately$730,000. As of
SUITE 4100.ONE NORTH LASALLE STREET•CHICAGO,ILLINOIS 60602•(312)346-3700•FAX(312)346-8833
SUITE 500.531 COMMERCIAL STREET•WATERLOO,IOWA 50701 •(319)291-2077•FAX(319)291-6787
SPEER FINANCIAL, INC.
the December 31, 1999 financial review,the Company currently has outstanding $1,051,416 in
long term debt, which is expected to be paid off by December 31, 2004. Based on 1999 net
income, adjusted for depreciation and outstanding debt, debt service coverage is approximately
2.40x. The bonds are expected to be secured by a letter of credit issued by Harris Trust and
Savings Bank.
Conclusion
In summary,we find the Company,based on its financial reviews,to be financially strong. The
IRB project will enhance their business, retain a strong corporate citizen, create approximately 35
new jobs and increase the City's property taxes by approximately$18,000. We find this a
worthwhile project and recommend that the City proceed with the inducement resolution. We
would be pleased to discuss this with you.
Sincer ly,
Kevin W. McCanna
President
KWM/wjk
Enclosure
R FINANCIAL,, INC.
Food Concepts Developers,Inc.
Historical Balance Sheets
Financial Reviews as of December 31
1995 1996 1997 1998 1999
ASSETS:
Current Assets:
Cash $ 9,742 $ 25,633 $ 52,695 $ 69,431 $ 95,792
Accounts Receivable 118,179 463,272 1,224,752 1,338,189 1,049,113
Notes Receivable - - 21,400
Other Receivables - - 14,966 66,115 -
Employee Receivables - - 3,570 1,362 -
Inventory 76,476 169,566 214,674 428,090 475,852
Packaging Supplies 11,205 56,200 125,052 188,269 204,053
Prepaid Expenses 5,900 - - - 4,895
Equipment Deposit - - 27,390 - 129,247
Total Current Assets $ 221,502 $ 714,671 $1,663,099 $2,091,456 $1,980,352
Property,Plant and Equipment:
Machinery and Equipment $ 120,167 $ 244,051 $ 474,048 $1,077,391 $1,821,661
Vehicle - 10,080 10,080 11,996 11,996
Furniture and Fixtures 700 1,355 2,755 8,783 16,045
Less:Accumulated Depreciation (74,965) (130,500) (226,156) (432,386) (804,201)
Total Property,Plant and Equipment $ 45,902 $ 124,986 $ 260,727 $ 665,784 $1,045,501
Other Assets:
Note Receivable $ - $ - $ - $ - $ 300,000
Security Deposit - 8,820 7,083 20,000 15,000 1
Total Other Assets $ - $ 8,820 $ 7,083 $ 20,000 $ 315,000
Total Assets $ 267,404 $ 848,477 $1,930,909 $2,777,240 $3,340,853
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current Liabilities:
Accounts Payable $ 23,968 $ 413,676 $1,017,454 $ 534,599 $ 530,556
Current Portion of Long Term Debt 83,000 200,887 491,891 804,202 366,464
Dividends Payable - - - 345,000 400,000
Accrued Insurance 3,598 - - - -
Accrued Payroll 1,100 2,600 10,000 15,000 23,000
Corporate Income Tax-State - - - 5,000 15,000
Sales Tax Payable - - - - 22,121
Total Current Liabilities $ 111,666 $ 617,163 $1,519,345 $1,703,801 $1,357,141
Long Term Liabilities:
Note Payable-B.Real $ 48,159 $ 13,880 $ 15,059 $ 16,340 $ 17,728
Due to A.Habighurst 211,890 211,590 211,590 211,590 188,640
Note Payable-T.Roberts 49,600 49,600 49,600 49,600 44,600
Note Payable-American National Bank 83,000 - - - -
Note Payable-Center Point Financial - - - - 38,960
Note Payable-Citibank - 244,766 546,597 1,022,499 -
Note Payable-First Sierra Financial - - - - 126,221
Note Payable-Harris Bank - - - - 335,808
Note Payable-Keystone Leasing - - - - 99,143
Note Payable-Lexington Capital - - 56,666 44,875 -
Note Payable-Marlin Leasing Corp - - - - 40,078
Note Payable-Northland Financial - - - - 77,547
Note Payable-Old 2nd National - - - 26,120 82,691
Less:Current Portion (83,000) (200,887) (491,891) (804,202) (366,464)
Total Long Term Liabilities $ 309,649 $ 318,949 $ 387,621 $ 566,822 $ 684,952
Total Liabilities $ 421,315 $ 936,112 $1,906,966 $2,270,623 $2,042,093
Stockholder's Equity:
Common Stock,No Par Value;
1,000 Shares Authorized;
1,000 Shares Issued and Outstanding $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Retained Earnings(Deficit) (154,421) (88,145) 23,433 506,107 1,298,250
Less:Cost of Treasury Stock (490) (490) (490) (490) (490)
Total Stockholder's Equity $(153,911) $ (87,635) $ 23,943 $ 506,617 $1,298,760
Total Liabilities and Stockholder's Equity $ 267,404 $ 848,477 $1,930,909 $2,777,240 $3,340,853
SPEER FINANCIAL, INC.
Food Concepts Devlopers,Inc.
Historical Income Statements
Financial Reviews for the Year Ending December 31
1995 1996 1997 1998 1999
Sales $ 435,076 $ 1,962,155 $ 4,899,028 $ 8,787,255 $ 12,805,695
Cost of Sales:
Cost of Sales-Ingredients $ 203,233 $ 1,023,259 $ 2,598,957 $ 3,443,192 $ 4,848,266
Labor-Packaging and Mixing 21,633 140,987 349,830 428,282 569,887
Overhead 123,264 422,496 852,457 1,436,958 2,079,771
Total Cost of Sales $ 348,130 $ 1,586,742 $ 3,801,244 $ 5,308,432 $ 7,497,924
Gross Profit $ 86,946 $ 375,413 $ 1,097,784 $ 3,478,823 $ 5,307,771
Selling,General and
Administrative Expenses $ 66,955 $ 295,883 $ 922,618 $ 2,370,150 $ 3,770,113
Income from Operations $ 19,991 $ 79,530 $ 175,166 $ 1,108,673 $ 1,537,658
Other Income(Expense):
Interest Income $ - $ - $ - $ 946 $ 7,
533
Interest Expense-Transcap - - - (144,259)
Interest Expense-Other (6,542) (13,256) (63,589) (92,440) (142,356)
Gain on Sale of Asset - - - 3,061 4,181
Total Other Income(Expense) $ (6,542) $ (13,256) $ (63,589) $ (232,692) $ (130,642)
Income Before Taxes $ 13,449 $ 66,274 $ 111,577 $ 875,981 $ 1,407,016
Income Taxes $ - $ - $ - $ 5,000 $ 14,876
Net Income $ 13,449 $ 66,274 $ 111,577 $ 870,981 $ 1,392,140
SPEER FINANCIAL, INC.
Food Concepts Developers,Inc.
Debt Service Coverage
Net Income Total Debt
Year Ending Net Outstanding Available for Debt Service
December 31 Income(1) Debt(2) Debt Service Principal Interest Service(3) Coverage
2001 $1,767,757 $364,035 $1,403,722 $230,000 $504,000 $734,000 1.91 x
2002 1,767,757 239,213 1,528,544 240,000 490,200 730,200 2.09 x
1uui 1,767,757 67,734 1,700,023 255,000 475,800 730,800 2.33 x
2004 1,767,757 13,970 1,753,787 270,000 460,500 730,500 2.40 x
111.1z) 1,767,757 - 1,767,757 290,000 444,300 734,300 2.41 x
2006 1,767,757 - 1,767,757 305,000 426,900 731,900 2.42 x
2007 1,767,757 - 1,767,757 325,000 403,600 733,600 2.41 x
2008 1,767,757 - 1,767,757 345,000 389,100 734,100 2.41 x
2009 1,767,757 - 1,767,757 365,000 368,400 733,400 2.41 x
2010 1,767,757 - 1,767,757 385,000 346,500 731,500 2.42 x
2011 1,767,757 - 1,767,757 410,000 323,400 733,400 2.41 x
2012 1,767,757 - 1,767,757 435,000 298,800 733,800 2.41 x
2013 1,767,757 - 1,767,757 460,000 272,700 732,700 2.41 x
2014 1,767,757 - 1,767,757 485,000 245,100 730,100 2.42 x
2015 1,767,757 - 1,767,757 515,000 216,000 731,000 2.42 x
2016 1,767,757 - 1,767,757 550,030 185,100 735,100 2.40 x
2017 1,767,757 - 1,767,757 580,030 152,100 732,100 2.41 x
2018 1,767,757 - 1,767,757 615,000 117,300 732,300 2.41 x
2019 1,767,757 - 1,767,757 650,000 80,400 730,400 2.42 x
2020 1,767,757 - 1,767,757 690,000 41,400 731,400 2.42 x
Notes: (1) Net Income based on financial reviews for the year ending December 31,1999,excluding
depreciation expense of$375,617.
(2) Outstanding debt based on financial reviews for the year ending December 31,1999
consisting of principal only.
(3) Debt service based on a par amount of$8,400,000,at an annual rate of 6.0%for twenty
years and level payments.
SPEER FINANCIAL, INC.
Food Concepts Developers, Inc.
$8,400,000 Industrial Revenue Bonds
**ESTIMATED**
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest Total P+I
10/01/2000 - - - -
10/01/2001 230,000.00 6.000% 504,000.00 734,000.00
10/01/2002 240,000.00 6.000% 490,200.00 730,200.00
10/01/2003 255,000.00 6.000% 475,800.00 730,800.00
10/01/2004 270,000.00 6.000% 460,500.00 730,500.00
10/01/2005 290,000.00 6.000% 444,300.00 734,300.00
10/01/2006 305,0:0.00 6.000% 426,900.00 731,900.00
10/01/2007 325,000.00 6.000% 408,600.00 733,600.00
10101/2008 345,000.00 6.000% 389,100.00 734,100.00
10/01/2009 365,000.00 6.000% 368,400.00 733,400.00
10/01/2010 385,000.00 6.000% 346,500.00 731,500.00
10/01/2011 410,000.00 6.000% 323,400.00 733,400.00
10/01/2012 435,000.00 6.000% 298,800.00 733,800.00
10/01/2013 460,000.00 6.000% 272,700.00 732,700.00
10/01/2014 485,000.00 6.000% 245,100.00 730,100.00
10/01/2015 515,000.00 6.000% 216,000.00 731,000.00
10/01/2016 550,003.00 6.000% 185,100.00 735,100.00
10/01/2017 580,000.00 6.000% 152,100.00 732,100.00
10/01/2018 615,000.00 6.000% 117,300.00 732,300.00
10/01/2019 650,000.00 6.000% 80,400.00 730,400.00
10/01/2020 690,000.00 6.000% 41,400.00 731,400.00
Total 8,400,000.00 - 6,246,600.00 14,646,600.00
YIELD STATISTICS
Bond Year Dollars $104,110.00
Average Life 12.394 Years
Average Coupon 6.0000000%
Net Interest Cost(NIC) 6.0000000%
True Interest Cost(TIC) 6.0000000%
Bond Yield for Arbitrage Purposes 6. 000000%
All Inclusive Cost(AIC) 6.0000000%
IRS FORM 8038
Net Interest Cost 6.0000000%
Weighted Average Maturity • 12.394 Years
Speer Financial,Inc. File=Bill.sf-Food Concepts-SINGLE PURPOSE
Public Finance Consultants Since 1954 9/6/2000 9:49 AM