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Home My WebLink About830615.tiff RESOLUTION RE: INDUCEMENT RESOLUTION FOR ECONOMY PARTNERS AND ECONOMY LUMBER AND HARDWARE CO. , INC. WHEREAS, Weld County, Colorado (the County) , acting through its Board of County Commissioners (the Board) , is authorized by the provisions of part 1 of article 3 of title 29, Colorado Revised Statutes 1973, as amended (the Act) , to finance, acquire, own, lease, improve and dispose of properties for the purpose of promoting the public health, welfare, safety, convenience and prosperity, promoting and developing trade or other economic activity, inducing com- mercial and business enterprises to locate, expand, or remain in the County and the State of Colorado in order to mitigate the serious threat of extensive unemployment, and to secure and maintain a balanced and stable economy for the County and the State of Colorado; and the County is further authorized thereby to issue revenue bonds for the purpose of defraying the costs of financing, acquiring, improving and equipping such facilities; and WHEREAS, Economy Partners, a Colorado partnership, and Economy Lumber and Hardware Co. , Inc . , a Colorado corpo- ration (collectively, the Company) have proposed to expand, acquire, construct, improve, equip and operate a facility for lumber and hardware sales, together with all necessary and appurtenant real and personal properties (the Project) , located within the County; and WHEREAS, the Company and Bond Counsel have repre- sented to the County that the Project will be designed to qualify as a "project" within the meaning of the Act; and WHEREAS, the County considers: that the financing of the Project will induce the Company to locate and expand the Project in the County, thereby adding to the trade and economic activity and commercial and business development in the County and helping secure and maintain a balanced and 830615 stable economy in the County; that the Project will provide increased business and commercial facilities in the County; and that the Project will provided increased employment opportunities within the County; all of which will promote the public health, welfare and safety of the County and its citizens; and WHEREAS, a Notice of Public Hearing concerning the proposed Bonds and the location and nature of the Project has been published in , a newspaper of general circulation in the County, in its issue dated 1983; and WHEREAS, prior to the issuance of the Bonds the County will consider and approve by resolution the final details of all Bonds to be issued and will authorize and approve, subject to the conditions of this Resolution, all acts and the execution of all documents and instruments necessary or desirable in connection with the issuance thereof; and WHEREAS, no public official of the County who has exercised or will exercise any discretionary function on behalf of the County with respect to the financing of the Project is a director, President, general manager or similar executive officer or owns or controls directly or indirectly a substantial interest in the Company or has other conflicts of interest relating to the financing of the Project. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OR WELD COUNTY, COLORADO THAT: 1 . The Board hereby finds, intends and declares that this Resolution shall constitute its official binding commitment to issue the Bonds, subject to the terms hereof and thereof, and that the adoption of this Resolution is and constitutes the taking of affirmative official action by the County, acting by and through the Board, toward the issuance of the Bonds. -2- 2 . In order to insure the completion of the Project and the public benefit which is expected from the operation thereof, the County will from time to time issue the Bonds in one or more series pursuant to the provisions of the Act in a principal amount necessary to pay the cost of financing the Project, together with the costs incident to the authorization, issuance and sale of the Bonds, which Bonds will not exceed in aggregate principal amount the sum of $750, 000. 3 . The Bonds shall bear such interest rates, be in such denominations, bear such dates, mature at such dates, be in such form, carry such registration privileges, be executed in such manner, be payable at such place and be subject to such terms of redemption consistent with the Act as shall be authorized and approved by subsequent resolution of the Board adopted prior to the issuance of the Bonds. 4. Any mortgage, trust indenture, deed of trust, lease, sublease, installment purchase agreement, loan agree- ment, security agreement, rental agreement, option to pur- chase, or other agreement or security device, or any combi- nation thereof, entered into in connection with the financ- ing of the Project ( the Financing Agreements) and any other documents relating to the Project and the Bonds shall also be authorized and approved prior to the issuance of the Bonds . 5 . For purposes of the authorization, issuance and sale of the Bonds, "the Company" shall include any company which is affiliated with, related to or a subsidiary of Economy Partners or the partners thereof, or Economy Lumber and Hardware Co. , Inc . 6 . The entire cost of financing the Project will be paid from the proceeds of the sale of the Bonds or from other Company funds. The Bonds, notes or other obligations -3- and interest thereon will not be general obligations of the County. Neither shall the Bonds, notes or other obligations and interest thereon, if any, constitute the debt or indebt- edness of the County within the meaning of any provision or limitation of the Constitution or statutes of the State of Colorado or the Home Rule Charter of the County, nor give rise to a pecuniary liability of the County, or a charge against its general credit or taxing powers . The Bonds, notes or other obligations and interest thereon shall be payable solely from and secured by a pledge of the revenues derived from and payable pursuant to the Financing Agree- ments. 7 . Nothing contained in this Resolution shall constitute a debt or indebtedness of the County within the meaning of the Constitution or statutes of the State of Colorado or the Home Rule Charter of the County, nor give the rise to a pecuniary liability of the County or a charge against its general credit or taxing powers. No costs are to be borne by the County in connection with the issuance of the Bonds . 8. Nothing contained herein shall be deemed to be approval of subsequent or further documents submitted to the Board for review. Separate approval of those documents by the Board is necessary to complete this Bond issue. The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the _:day of idaa croft , A. D. , 1983 . BOARD OF COUNTY COMMISSIONERS WELD COUNTY, COLORADO chairman -4- cl ,4-2-,J . �2,16,2L 1,: i P roL/T em �.+wvkart n' i `' o r ti �„1 Commissioner ssioner WELD COUNTY CLERK AND RECORDER AND CLERK TO THE BOARD Commissioner By: J \� • \ \ De uty County Cl k o mi Toner APPROVErS TO FORM:C-------TV6*-1s-v.-7 45:: 9;e7--,de.414P County Attorney DATE PRESENTED: /2 - 2 � -0,1 -5- Affidavit of Publication STATE OF COLORADO ss. County of Weld, 1, _ Lynne S. Adriansen of said County of Weld, being duly sworn, say that I am t an advertising clerk of THE GREELEY DAILY TRIBUNE, and THE GREELEY REPUBLICAN ac r that the same is a daily newspaper of general circulation and printed and published in the City of ern t' t1. Greeley, in said county and state; that the notice or e e advertisement, of which the annexed is a true copy, has Rad t.ug*Or saw been published in said daily newspaper for consecutive (days) (Iaeeks;t; that the notice was published in the to cement Revenue a Move regular and entire issue of every number of said Saw.;.DVTWM S to Article Y rlee MA CAS, 19714 In a newspaper during the period and time of publication of �enn� said notice, and in the newspaper proper and not in a ors q to la'eYgelte,. liMittgw e quy elel supplement thereof; that the first publication of said iel " t notice was contained in the issue of said newspaper w w. bearing date y on ec r.cIRtW te �+ P Fourteenth CeRC day of December A.D. 19 8 M lb meld and the last publication thereof; in the issue of said teq�eid M air newspaper bearing date the ceeenti.i«IieterMia lele Fourteenth '. SAWS COAmew. Ails day of December A.D. 19 83 that said The Greeley Daily Tribune and The Greeley eat I^ee�tee Republican, has been published continuously and e �, y. a riunill see uninterruptedly during the period of at least six werssagnitz'w- months next prior to the first issue thereof contained 're to t"'t1 elm • said notice or advertisement above referred to; that said t eOe newspaper has been admitted to the United States mails as second-class matter under the provisions of the yirro roster saw t,y� Act of March 3, 1879, or any amendments thereof; and ;,the etst tea*Mrt �nirer that said newspaper is a daily newspaper duly qualified -" evetto3meni+Re-' for publishing legal notices and advertisements within Al nt.d pan'.,under}M tMr the meaning of the laws of the State of Colorado. willeq Rn tunity lee. =It:VISTA r. December 14,1985 *a Otialierr Total Charge : 1324.65 iti 1144 , -tie: �/ i.,A rrr112 3 (t c# 1.tm y -mi) bA w Advertising Clerk Subscribed and sworn to before me this 14 , day of December A.D. 19 83 W CQmtutsswn Expos Jan. 14, 1986 M omp s lssi n expire . _G cc I* y Public AFFIDAVIT OF PUBLICATION LONGMONT DAILY TIMES-CALL State of Colorado ) County of Boulder ) ss I, Roger L. Morris do solemnly swear that the LONGMONT DAILY TIMES-CALL is a daily newspaper printed, in whole or in part, and published in the City of Longmont, County of Boulder, State of Colorado, wuocduNTY NOTICEOF'gag NEARING and which has general circulation therein and in parts of Boulder ,° INDUSTRIAL EIEMLOFNENP. and Weld Counties; that said newspaper has been continuously Ecwlmis. and uninterruptedly published for a period of more than six months - H E Docketpublic NOTICE IS HEREBY GIVEN that a public next prior to the first publication of the annexed legal notice -0ou W Coommm Minfoaers i(m pBBoaard)wil l of advertisement, that said newspaper has been admitted to the a'naa on Wednesday, December z1, tMg„onino-&ono erS a lokap United States mails as second-class matter under theprovisions eapticatla by ip,andlY arsra Otter recto Partnership,and.Economy Lumber of the Act of March 3, 1879, or any amendments thereof, and and core Co.,fh.,e Colorado bon Keatonato4ll(collective.,1M ruabl an a for that said newspaper is a daily newspaper duly qualified for publishing DemenabYthef aadi(the Boma). aunt Retanw Bone a a,C R.S.19, ,in legal notices and advertisements within the meaning of the laws ens rgate min eineuM.s.t to o ex- en aggregate mind*.puspoe hitroing of the State of Colorado; that copies of each number of said m cOmayy1to the a•otreww- struct Nnprove,.,n W0 opperate a It newspaper, in which said notice or advertisement was published, eintyfo+wmberandRwweaaleattha • were transmitted by mail or carrier to each of the subscribers cent within Weldof Greely locasoutheast ted stlof cent to pn City of Greeley es,with of the Caeany akdre s bein with Oath h of said newspaper, according to the accustomed mode of business Project street aaa.eh being CO in this office. Sv»t,Road,Greeley}Colorado last.At 'inn;nearing the Board of County Corn mkslonsreylgaon tlin alefestiOn by That the annexed legal notice or advertisement was published the CompayaorlhnSfero adopt ares- olution buipapnd Its WS.to Issue Mid Banda for the pureaea or financing the in the regular and entire editions of said daily newspaper btx*Xc]11 denitall to Nro roeot public hewing ng. iNhteWSG public Comae _ white has in tg e roan, Oret flo r Weld aionaa nedht d room,Me floor,Waif Week X)lxXAexiexo()da4'X0QzXettxNtexlg(for theperiod of • County reentalCMr_aanar: BB 1Nn 1 Street.Greeley,Cokndv.Anyone dead ing tea speak conpature the proposed' theaboate or the nature and location of theebay.deenn place.lwee may appear consecutive insertions; and that the first publication of said notice at said Ine and pieta:Written comm.. nbatbnAn retrench*Ole matter will alms be rocel,. by taaioaro... •Capin of the application for industrial was in the issue of said newspaper dated .Il.e.ee.[ati.er....14.e..., • IntheomentRevenaeandaaraonMe b the Office.of the Om to,atted on e County r.Weld alonee keanter on the third Poor.Weld Coupg Centennkl Can 19 83 , and that the last publication of said notice was in ter.g15 10th Street,Greeley,gpxAdo and they be inspected:Miring regular banana s hours. Following toe close the public hearing, the issue of said newspaper dated De tier 141 19 83 the consider Clos of eau lit Commissioners wilt //�� '/� consider whether or not to proceed with r/J //q III the Revenue Bon d kduao4l Gavelopmant. AT+ / L/ eissuance All interested parties under the law will Assist l 00 aftoroad an opportunity lobs heardat Business Manager This noottice given end Oubiallad by order of the Board of County Commiwlonere, •141 tl Weld County,Colored.. Subscribed and sworn to before me this day of 'DATED:December 5,BOARD OF COUNTY ' 45CMMISSIONERB T1 0 / BY:MARRERYN NAANN FEUERSTEIN. AIR.G.a.m.L ar , 19....83.... WELD COUNTYYCLEaA1 ERECO ERR' COUNTYCOaryMMISSIONER$ My Commission Expires Published an the BY: rimes-aii Long 1°76+ ��'J/�/// mont.Colo.Dec.14.1* f� FEE 5 .1.6.49 ty ron,.. , r,,,, s LC . 1-!300-02 WELD COUNTY NOTICE OF PUBLIC HEARING INDUSTRIAL DEVELOPMENT REVENUE BONDS ECONOMY LUMBER AND HARDWARE Docket #83-81 NOTICE IS HEREBY GIVEN that a public hearing before the Weld County Board of County Commissioners (the Board) will be held on Wednesday, Deceni,er21, 1983, at 10 : 00 o' clock a.m. , concerning an application by Economy Partners, a Colorado Partnership, and Economy Lumber and Hardware Co. , Inc. , a Colorado corporation (colletively, the Company) for issuance by the Board of Industrial Development Revenue Bonds (the Bonds) , pursuant to Article 3, Title 29 , C.R.S. 1973, in an aggregate principal amount not to exceed $750, 000 for the purpose of enabling the Company to expand, acquire, construct, improve, equip and operate a facility for lumber and hardware sales (the Project) within Weld County located adjacent to the City of Greeley southeast of the Company' s exist- ing facilities, with the Project street address being 400 26th Street Road, Greeley, Colorado 80631. At this hearing the Board of County Commissioners will consider an application by the Com- pany for the Board to adopt a resolution indicating its intent to issue said Bonds for the purpose of financing the Project and to approve other matters incidental to the Project. Said public hearing will be held in the Weld County Commissioners hearing room, first floor, Weld County Centennial Center, 915 10th Street, Greeley, Colorado. Anyone desiring to speak con- cerning the proposed bond issue or the nature and location of the above-described facilities may appear at said time and place. Written communication in reference to this matter will also be received by this Board. Copies of the application for Industrial Development Revenue Bonds are on file in the Office of the Clerk to the Board of County Commissioners located on the third floor, Weld County Cen- tennial Center, 915 10th Street, Greeley, Colorado and may be in- spected during regular business hours. Following the close of the public hearing, the Board of County Commissioners will consider whether or not to proceed with the issuance of Industrial Development Revenue Bonds. All interested parties under the law will be afforded an oppor- tunity to be heard at said hearing. This notice given and published by order of the Board of County Commissioners, Weld County, Colorado. DATED: December 5, 1983 THE BOARD OF COUNTY COMMISSIONERS BY: MARY ANN FEUERSTEIN WELD COUNTY CLERK AND RECORDER AND CLERK TO THE BOARD OF COUNTY COMMISSIONERS BY: Mary Reiff, Deputy PUBLISHED: December 8 , 1983 in the LaSalle Leader 1 DATE : Decemb 5 , 1983 i'O: The Board of County Commissioners Weld County, Colorado ROM: Clerk to the Board Office commissioners: If you have no objections, we have tentatively set the rollowing hearing for the 21st day of December, 1983, at 10 : 00 a.m. Docket No. 83-81 - Industrial Development Revenue Bonds-Economy Lumber and Hardware OFFICE OF THE CLERK TO THE BOARD BY: ???9/ X1-.1 Deputy The above mentioned hearing date and hearing time may be scheduled on the agenda as stated above. BOARD OF COUNTY COMMISSIONERS WELD �COUNTY, COLORADO // w IntratiVestO Banks IntraWest Bank of Greeley, N.A. Post Office Box 1058 Greeley, Colorado 80632 r,,,,,,, ,, ,,, ,, r---^•ter.«r. (303) 352-1651 ai 9198 yyi. January 5, 1984 ,;TTTL-, coo. Donald W. Warden Director of Finance and Administration Weld County P.O. Box 758 Greeley, CO 80632 RE: LOAN AGREEMENT BETWEEN AND AMONG WELD COUNTY, COLORADO, AND ECONOMY LUMBER AND INTRAWEST BANK OF GREELEY, N.A Dear Mr. Warden: Page 37 of this loan agreement calls for information to be supplied to the Bank's address. Please fill in "Attention: Real Estate t Department". Res Vf lly f / D. . owell Vice President DLH:ljk mEmoRAnDum WilkTo The Board of County Commissioners0am December 20, 83vj COLORADO From Don Warden, Director, Finance and Administration \.41 Industrial Revenue Bond for Economy Lumber subiao,. This is to advise you that the application for Economy Lumber has been reviewed and complies with all the requirement of Ordinance 69—A. All the documents to be presented to you during the hearing process on December 21, 1983 have been reviewed by myself and Mr. David and neither one of us find any problems with the documents. From the staff's evaluation there is no problem with the approval since it meets all the legal, financial and planning criteria. Copies of the notice of the hearing were sent to all lumber and hardware enterprises in Weld County advising them of the hearing and the fact that they could voice any objections to the issuance of the Industrial Revenue Bonds during the hearing process. To date, I have not received any comments back from any of the competitors. The ultimate approval of the Board is a policy issue and staff simply advises you that all the criteria of the Board has been meet. First Interstate Bank of Denver, N.A. r 633 Seventeenth Street Denver, Colorado 80270 Walter C. Kane Interstate 303 293-5307 Vice President Bank November 23 , 1983 Board of County Commissioners Weld County Courthouse Box C Greeley CO 80632 Gentlemen: First Interstate Bank of Denver (the "Bank") has been retained to assist Economy Lumber and Hardware Company ( the "Company") in arranging the financing for a new commercial facility to be located in Weld County adjacent to the City of Greeley. The Company proposes to finance the project through the use of industrial development bonds pursuant to the County and Municipality Revenue Act (Colorado revised statutes , ANN. 29-3-101 , et. seq. ( 1963) . The Bank , on behalf of Economy Lumber and Hardware Company hereby requests Weld County to issue pursuant to the Act , its industrial development revenue bonds in an aggregate principal amount not to exceed $750 , 000 to finance this project. Attached with this letter is the information required for submission in accordance with the County ' s ordinance number 69-A setting forth the processing procedure for industrial development bond applications . Also enclosed with this letter is an application fee of $500 .00 as required by the County ' s ordinance . I believe the information presented herein completely explains the project location , details of the financing structure , the economic benefit to Weld County , and the current financial condition of Economy Lumber and Hardware Company. I look forward to the opportunity to review this matter with members of the Board of Commissioners in order that we might consummate this transaction at the earliest practical date. Respectfully submitted , LUG 6 Walter C . Kane Vice President WCK :glh Attacts 4,9 The Official Bank of the 1984 Olympics 0uy4 S W INDEX APPLICATION FOR INDUSTRIAL DEVELOPMENT BONDS WELD COUNTY ECONOMY LUMBER AND HARDWARE PROJECT $750 , 000 I . Opinion of Bond Counsel that the proposal is within the intent and meaning of the Colorado Development Revenue Bond Act. II . Statement from First Interstate Bank of Denver on the Private Placement of the issue. III . Description of the Project and Cost Breakdown. IV. History of the Applicant a) Financial History 1978-1982 b) Report from the applicants principal banker c) Dunn and Bradstreet Report d ) Listing of Major Customers e) Company Management and Stockholders V. Economic Benefits of the Project VI . Five Year Pro Forma Financial Projections VII . 1982 Audited Financial Statement HOLME ROBERTS & OWEN ATTORNEYS AT LAW 102 NORTH CASCADE AVENUE 1700 BROADWAY COLORADO SPRINGS,CO.80903 TELEPHONE(303)473-3800 DENVER,COLORADO 80290 TELEPHONE(303)861-7000 TELEX 45-4460 50 SOUTH MAIN STREET SALT LAKE CITY,UT.84144 TELEPHONE(801)521 5800 November 28 , 1983 Board of County Commissioners Weld County, Colorado Greeley, Colorado 80632 Re: Industrial Development Revenue Bonds (Economy Lumber & Hardware Project) $750, 000 Members of the Board: This letter is given to provide our position as bond counsel with respect to the applicability of the Colorado County and Municipality Development Revenue Bond Act, part 1, article 3 , title 29, Colorado Revised Statutes 1973, as amended (the Act) to the development by Economy Partners, a Colorado partnership, and Economy Lumber & Hardware Co. , Inc. , a Colorado corporation, of expanded lumber and hardware sales facilities within Weld County (the Facilities) . It has been represented to us that the completed Facilities will result in increased employment opportunities in the area as well as increased property tax revenues. The Act, at Section 102, states that it is the intent of the Colorado General Assembly by the passage of the Act to authorize counties to finance properties to the end that Colorado counties may be able to promote industry and to develop trade or other economic activity by inducing profit or non-profit corporations and commercial or business enterprises to locate, expand, or remain in Colorado, to mitigate the serious threat of extensive unemployment in parts of Colorado and to secure and maintain a balanced and stable economy in all parts of Colo- rado. The Act further provides a definition of "Project" at Section 103 (10) as follows : " (10) 'Project' means any land, building or other improvement and all real or personal properties, and any undivided or other inter- est in any of the foregoing, except inventor- ies, raw materials, and other working capital, whether or not in existence, suitable or used for or in connection with any of the following: Board of County Commissioners November 28 , 1983 Page Two (a) Manufacturing, industrial, commercial , agricultural or business enterprises . . . . Based upon the foregoing information concerning the subject Facilities and our interpretation of the legislative intent of the Act, it is the opinion of this firm that the Facilities do fall within the intent and meaning of the Act and that the Facilities as described come within the defini- tion of "Project" as defined by the Act. This preliminary approval is not to be taken as final approval of the details of any future financing pursuant to the Colorado and Federal laws and regulations relating to industrial development bonds. That approval will require further review of the specific financing in question and its related documents. HOLME ROBERTS & OWEN n‘s d°42 Ro ert A. Backus RAB:bjh First Interstate Bank First of Denver, N.A. 633 Seventeenth Street Denver,aInterstate 03 293 5307Color ado 80270 Wet Presidenter 1e Bank Exhibit II . November 23 , 1983 Board of County Commissioners Weld County Courthouse Box C Greeley CO 80632 Gentlemen : This letter is submitted in accordance with your industrial devlopment bond application requirements wherein evidence is to be supplied to the County that any proposed industrial bond issue can be sold to an experienced investor . Our Bank has been retained by Economy Lumber and Hardware Company to arrange a private placement of the proposed $750 ,000 industrial development bond issue. It is the intention of our Bank to secure this bond issue with an irrevocable letter of credit for the benefit of investors in the bonds . With the Bank ' s letter of credit on this issue, we are confident that the issue will be privately placed with a select group of institutional investors . We are prepared to proceed with the placement and closing of this issue immediately upon approval by the County of the inducement resolution . Yours truly,/ / Walter a. Kane Vice President WCK :glh 4 e° en The Official Bank of the 1984 Olympics �I DESCRIPTION OF THE PROJECT AND COST BREAKDOWN Site Given the growth of the retail business of the Company at its Greeley location, Economy Lumber is seeking development revenue bond financing to build new facilities to permit the expansion of its current operations and the provision of better service to its existing and future clients . The site for the proposed facilities consists of 10 .9 acres and is located in Weld County adjacent to the City of Greeley. Just southeast of the Company' s existing operation , the site will permit continued access by the Company' s customers . The street address of the site will be 400 26th Street Road , Greeley, Colorado 80631 . Transportation access to the site is excellent as it is situated just to the north and west of the junction of two major highways , U.S . 85 and 34, and is bounded by 6th Avenue along its western boundary. Entrances to the new facilities will be provided both from 25th Street and 26th Street Road. The site also presently has installed 700 feet of railroad siding and a concrete unloading dock to utilize the Union Pacific Railroad tracks running along its eastern boundary, a necessary transportation service in the lumber business . The site is generally level and present drainage is good ; very little grading will be required. Utilities are in place at the site . Power is provided by Home Light and Power Company , gas by Greeley Gas Company, and water and sewer by the City of Greeley. The site is already owned by the Company and therefore its cost is not included in the requested development revenue bond amount . Weld County has zoned the site I-3 which permits all activities in which the Company will be engaged. Construction On the site, the Company proposes to build an engineered steel building as the principal building. The building will be 120 ' by 220 ' , or 25 ,400 square feet. Of this , approximately 15 ,000 square feet will be a finished store and office area for the sale of hardware, kitchen cabinets , doors , windows , and other finished building material items . This portion of the building will have an attractively finished store front , heat , and air conditioning . The balance of 11 ,400 square feet will be dry storage for plywood, wall board, moldings , nails , etc . The balance of building construction on the site will consist of refurbishing 18 ,000 square feet of warehouse building presently in place at the location , the relocation of a 3 , 000 square feet building from the north to the west side of the site, and the construction of one finished lumber shed, approximately 36 by 100 feet of wood frame with corrugated iron on the roof and end walls only. A site plan is enclosed showing the access , location of buildings , and the ample on-site parking available for the project. Project Cost Total costs for the new facilities are approximately $1 , 106 ,250 , including $356 , 250 for the current value of the land . Of this total , $750,000 is being requested in development revenue bond financing from the County. The use of these bond proceeds will be as follows : Construction of New Store and Warehouse $516 , 000 Construction of a Shed and Remodeling 50 , 000 of Buildings on the Site Purchase of Existing 8 , 800 Square Foot 105 ,000 Warehouse Paving, grading , and fences , etc . 50 ,000 /21 , OOt Cost of Issuance 29,000 Total Bond Issue $730 , 000 Projct Ownership The Company proposes to utilize an existing partnership to own the new facilities and lease them to the Company, a common real estate practice widely used today by companies seeking optimum tax benefits . The partnership consists of members of the Stookesberry family and Mr . Robert Day , Executive Vice President of the Company. It is anticipated that a seven year bond would be issued for the project . The bond would be secured by a deed of trust on the property, an assignment of the Company lease , the Company' s corporate guarantee , and an irrevocable bank letter of credit from First Interstate Bank of Denver . A 5 year pro forma on the project , demonstrating the Company ' s capacity to meet debt service, and changed operating costs resulting from the bond financed facilities is presented in a later section of this application. -2- HISTORY OF THE APPLICANT Economy Lumber & Hardware Company, Inc . is a privately held , Colorado corporation. Founded in 1948 by L.A. Stookesberry and currently owned and managed by the Stookesberry family, the Company has been a solid member of the Colorado business community for over 35 years . The Company sells lumber to both the wholesale and retail markets and currently operates through yards in Greeley , Denver , and Pueblo. During its 1982 fiscal year , the Company had total sales at these locations of $10 ,600 , 000 . The Company' s operation in Weld County is a retail lumber yard located in Southeast Greeley at 2508 6th Avenue . Greeley Economy Lumber Company, Inc. is a wholly owned subsidiary of Economy Lumber and has been in business at this location for almost 10 years . It currently employs twenty-five employees and has an annual sales volume of approximately $4, 000 , 000 . The split in Economy' s market , which is approximately 40% wholesale and 60% retail has provided the Company considerable stability relative to other housing related industries . In terms of retail sales , the Company ' s main market is in consumer remodeling. It is anticipated that home improvement expenditures will grow at a compound annual rate of 12 .4% throughout this decade . The uncertain state of the economy coupled with the price of mortgage money , has discouraged home buying and led many people to expand or remodel existing homes. An increasing number of "do-it-yourself" home owners have also been a major factor in the growth of the home improvement industry . The Company has been less effected by the slump in their wholesale lumber business than the typical lumber yard , due to their diversification into the consumer remodeling market as well as the "do-it-yourself" sector of the retail market. A summary of the firms financial history for the period 1978-1982 is included following this introduction. -3- Ekarmy Ji.*w.r &Hardware Co., Inc. Uxpal Uxqual Urqual Unqual thqual Alder cat &Co. Dec31 Dec.31 Dec31 Ikc.31 Ikc31 (21 11/18/83 (thousands) YEAR: 1978 1978 1979 1979 1980 1980 1981 1981 1982 1982 MALE SHEET INPUTS ASS $ %TOT $ %TOT $ %TOT $ %TCT $ %TOT L 102 1.91 160 2.75 267 5.23 99 1.85 285 5.29 Ar*.urs Receivable-T ade 723 13.52 799 13.74 673 13.19 720 13.45 770 14.30 (Bed Debt Reserve) (-) 95- 1.78- 90- 1.55- 74- 1.45- 87- 1.63- 119- 2.21- Total Accounts Receivable-Net 628 11.74 709 12.19 599 11.74 633 11.83 651 12.09 Mortgage Dotes Receivable-Current 10 0.19 13 0.22 0 0.00 0 0.00 55 1.02 Inuatcries 2,953 55.22 3,032 52.14 2,763 54.16 2,824 52.77 2,702 50.19 Total Jnuatay 2,953 55.22 3,032 52.14 2,763 54.16 2,824 52.77 2,702 50.19 Prwsid F4e2ses 57 1.07 74 1.27 69 135 52 0.97 53 0.98 Prepaid Intone Taxes 0 0.00 89 1.53 0 0.00 105 1.96 24 0.45 TOTAL(URE T ASSNS 3,750 70.12 4,077 70.11 3,698 72.48 3,713 69.38 3,770 70.02 Fbtes Reatto-nrret 117 2.19 100 1.72 55 1.08 55 1.03 0 0.00 The Fran Officers / Itployees 11 0.21 4 0.07 17 0.33 48 0.90 68 1.26 Land 506 9.46 588 10.11 533 10.45 533 9.96 533 9.90 BuildirEs & laproverents 741 13.86 861 14.81 674 13.21 764 14.28 796 14.78 Furniture&Fixtures 657 12.28 792 13.62 776 15.21 1,023 19.11 1,193 22.16 leasehold lurtw ne is 65 1.22 65 1.12 69 1.35 69 1.29 69 1.28 G. ,Find Assets 1,969 36.82 2,306 39.66 2,052 40.22 2,389 44.64 2,591 48.12 (Ammtlatad lreriatirn) (-) 637- 11.91- 7%- 13.00- 821- 16.09- 950- 17.75- 1,157- 21.49- Total Find Assets-Net 1,332 24.91 1,550 26.66 1,231 24.13 1,439 26.89 1,434 26.63 Real Property 41 0.77 41 0.71 42 0.82 42 0.78 41 0.76 Cash Value-Life Insurance 71 133 21 0.36 40 0.78 39 0.73 59 1.10 Deferred Lease Costs 15 0.28 12 0.21 9 0.18 6 0.11 3 0.06 Other Assets 11 0.21 10 0.17 10 0.20 10 0.19 9 0.17 TOTAL ASS 5,348 100.00 5,815 100.00 5,102 100.00 5,352 100.00 5,384 100.00 -4- Emmy Juke- &Hardiore Co., Inc. Urqual rival Thp,al Ltqual liqual Meat Gait &Co. Dec.31 Dec.31 Dsc.31 Dec.31 Dec.31 CM 11/18/83 (ttrusa ds) WAR: 1978 1978 1979 1979 1980 198D 1%1 1981 1982 1982 BATANIE ..F1EEE r TAB1 ECI Suam Wit $ %TX $ %1Uf $ %TUC $ nor $ %TOT Notes Payable S/T�k 250 4.67 0 0.00 0 0.00 0 0.00 0 0.00 Qa.at Maturities-LID 174 3.25 341 5.86 143 2.80 91 1.70 3g 0.71 Arm•+*s Payable-Trade 502 939 913 15.70 484 9.49 626 11.70 5)3 9.34 Amouds Payable-Other 43 0.80 9 0.15 V 0.53 11 0.21 12 0.22 Gkges/Salaries Payable 197 3.68 64 1.10 V 0.53 37 0.69 51 0.95 Intent Payable 9 0.17 19 033 11 0.22 10 0.19 12 0.22 Property, Payroll &Oder Taxes 49 0.92 55 0.95 50 0.98 51 0.95 55 1.02 HTpl. Stk. Geneship Plan Contrib. 0 0.00 107 1.84 103 2.02 148 2.77 136 2.53 Total Accrued Liabilities 255 4.77 245 4.21 191 3.74 246 4.60 254 4.72 Im®e Tares Payable 161 3.01 0 0.00 74 1.45 0 0.00 0 0.00 'RCJDL( RRENT LIABI 1,385 25.90 1,508 25.93 919 18.01 974 18.20 837 14.99 Iag Tam Dsbt 627 11.72 717 12.33 V1 5.31 135 3.83 163 3.0:3 lkfered Income Taxes -Mind 5 0.09 3 0.05 0 0.00 0 0.00 0 0.00 1 efl7eferred Irene Tames -J1e to pjc Qi 7 0.13 7 0.12 0 0.00 0 0.00 0 0.00 TUXAL TJAAT U'ThS 2,024 37.85 2,235 38.44 1,190 23.32 1,179 22.03 970 18.02 Preferred Stark 1,266 23.67 1,266 21.77 1,286 25.21 1,304 24.36 1,324 24.59 Gamut Stark 12 0.22 12 0.21 12 0.24 13 0.24 14 0.26 Paid In Capital 0 0.00 0 0.00 85 1.67 177 3.31 285 5.29 R bad Earnings 2,016 38.26 2,302 39.59 2,529 49.57 2,679 50.06 2,791 51.84 TOTAL AEC 4u0It 3,324 62.15 3,580 61.% 3,912 76.68 4,173 77.97 4,414 81.98 1UQ.L LIABILIIIES E.tC FROM 5,348 100.00 5,815 100.00 5,102 100.00 5,352 100.00 5,384 100.00 Tereible Nat Forth 3,324 62.15 3,580 61.% 3,912 76.68 4,173 77.97 4,414 81.98 Raidrg Capirrl 2,365 44.22 2,%9 44.18 2,779 54.47 2,739 51.18 2,963 55.03 -5- Emmy Jiuhar &Hardware Co., hr. Uqual Uqual Uqual Uqual Thep' Alexander &at &Co. t c31 Dec31 Dec31 Dec31 Dec31 CM 1]/18/83 (ttnuseods) SUR: 1978 1978 1979 1979 1980 198) 1981 1981 1582 1982 Wit SrAmflE INF01S #of MS: 12 X Rev 12 %Rev 12 %Rev 12 %Rev 12 % Rev Sales 13,024 99.98 14,087 100.00 10,699 100.00 11,632 100.00 10,630 100.00 Rental Tmme 2 0.02 0 0.00 0 0.00 0 0:00 0 0.00 Net Reines 13,026 100.00 14,087 100.00 10,699 100.00 11,632 100.00 10,630 100.00 Cost of Coeds Sold 9,359 71.85 10,401 73.83 7,410 69.26 8,352 71.80 7,337 69.02 ass moon 3,667 28.15 3,686 26.17 3,289 30.74 3,280 28.20 3,293 30.98 Operating Expense 2,621 20.12 3,092 21.95 2,840 26.54 2,883 24.79 2,899 27.27 lease/S®t Expose 14 0.11 14 0.10 15 0.14 16 0.14 16 0.15 Repreciaticn&amrtizatirn 112 0.86 146 1.04 144 1.35 173 1.49 225 2.12 (flBAT1M MEM 920 7.06 434 3.08 290 2.71 208 1.79 153 1/44 (Interest. Expanse) (-) 126- 0.97- 147- 1.04- 105- 0.99- 60- 0.52- 60- 0.56- Intexest 'non 30 0.23 39 0.28 37 035 37 032 34 0.32 Cain cn ca1P of Assets &Rental Prop 37 0.28 0 0.00 117 1.09 0 0.00 0 0.00 Otter moons 20 0.15 104 0.74 25 0.23 32 0.28 23 0.22 (loss on RATA of Assets) (-) 0 0.00 1- 0.01- 0 0.00 6- 0.05- 0 0.00 ERCEITEEECRETAXES 881 6.76 429 3.05 363 3.39 211 1.81 150 1.41 Current Taxes 394 3.02 175 1.24 145 1.36 61 0.52 38 0.36 Marred Taxes 5- 0.04- 2- 0.01- 9- 0.08- 0 0.00 0 0.00 Raiff BEIEREEKDRAORDDIW]flS 492 3.78 2% 1.82 227 2.12 150 1.29 112 1.05 NET maim 492 3.78 2% 1.82 227 2.12 15) 1.29 112 1.05 Ptelesial Stodc lime to MCP 0 0.00 0 0.00 20 0.19 18 0.15 20 0.19 Gin Stock Issue to ESCP 0 0.00 0 0.00 1 0.01 1 0.01 1 0.01 Ad 'borer Paid In Capital to ESOP 0 0.00 0 0.00 84 0.79 92 0.79 108 1.02 WW1 IN Nrr 4TI0H 492 3.78 256 1.82 332 3.10 261 2.24 241 2.27 -6- Economy Lumber & Hardware Co . , Inc . Unqual Unqual Unqual Unqual Unqual Alexander Grant & Co . Dec .31 Dec . 31 Dec . 31 Dec . 31 Dec . 31 CPH 11/ 18/83 (thousands ) YEAR : 1978 1979 1980 1981 1982 -NANCIAL RATIOS PROFITABILITY AND GROWTH : Gross Margin % 28 . 15 26 . 17 30.74 28 . 20 30 .98 Net Margin % 3 .78 1 .82 2 . 12 1 .29 1 . 05 Return on Assets % 9 .20 ' 4.40 4.45 2 .80 2 .08 Return on Net Worth % 14.80 7 . 15 5 .80 3 .59 2 . 54 Net Sales Growth % 8 . 15 -24. 05 8 .72 -8 .61 Net Income Growth % —47 .97 —11 .33 —33 .92 —25.33 Total Assets Growth % 8 .73 —12.26 4. 90 0 .60 Total Liabilities Growth % 10 .42 —46 .76 —0 . 92 —17 .73 Net Worth Growth % 7 .70 9 . 27 6 .67 5 . 78 TURNOVER AND EFFICIENCY : Total Assets/Net Sales % 41 .06 41 .28 47 .69 46 .01 50 .65 Gross Plant /Net Sales % 15. 12 16 .37 19. 18 20 . 54 24. 37 SG & A Expense/Net Sales % 20 .23 22.05 26 .68 24.92 27 .42 Receivables in Days 18 19 20 20 24 Inventory in Days 115 106 136 123 134 Payables in Days 21 32 25 28 26 FINANCIAL CONDITION : L _ rent Ratio 2 .71 2 .70 4. 02 3 .81 4. 67 Quick Ratio 0 . 53 0 . 58 0 .94 0 .75 1 . 23 Working Capital 2365 2569 2779 2739 2963 Debt /Tangible Net Worth 0 .61 0 .62 0 .30 0 . 28 0 . 22 Senior Liab/Tang Net Worth+Sub Debt 0 .61 0 .62 0 .30 0 . 28 0 . 22 -7- Economy Lumber & Hardware Cc Inc . Unqual Unqual 'nqual Unqual Unqual Alexander Grant & Co . Dec .31 Dec .31 Jec .31 Dec .31 Dec . 31 CPR 11/ 18/83 (thousands ) YEAR : 1979 1980 1981 1982 CASHFLOW es - Net 14087 10699 11632 10630 Change in Receivables -84 123 -34 -73 Cash from Sales 14003 10822 11598 10557 Cost of Goods Sold -10401 -7410 -8352 -7337 Change in Inventories -79 269 -61 122 Change in Payables 377 -411 126 -122 Cash Production Costs -10103 -7552 -8287 -7337 Gross Cash Margins 3900 3270 3311 3220 SG & A Expense -3106 -2855 -2899 -2915 Change in Prepaids -17 5 17 -1 Change in Accruals -10 -54 55 8 Cash Operating Expense -3133 -2904 -2827 -2908 Cash after Operations 767 366 484 312 Miscellaneous Cash Income 131 277 -69 157 Income Taxes Paid -336 -65 -135 -38 Net Cash after Operations 562 578 280 431 ' erest Expense -147 -106 -60 -60 Dividends Paid 0 0 0 0 Financing Costs -147 -106 -60 -60 Net Cash Income 415 472 220 371 Current Portion Long Term Debt -174 -341 -143 -91 Cash after Debt Amortization 241 131 77 280 Capital Expenditures -364 175 -381 -220 Long Term Investments 0 -1 0 1 Financing Surplus/ (Requirements ) -123 305 -304 61 Change in Short Term Debt -250 0 0 0 Change in Long Term Debt 431 -303 25 -4 Change in Equity 0 105 111 129 Total External Financing 181 -198 136 125 Cash after Financing 58 107 -168 186 ACTUAL CHANGE IN CASH 58 107 -168 186 ASH RATIOS Cash Margin Ratio 0 . 28 0 .31 0 . 28 0 . 30 Cash Coverage Ratio 1 .75 1 .29 1 .38 2 .85 -8- First Interstate Bank First of Denver, N.A. Sev enteenth Sevenn teenth Street Denver. Colorado 80270 Walter C. Kane Interstate 303 293-5307 Vice President Bank November 25 , 1983 Weld County Commissioners Weld County Councilmen Greeley CO 80632 Gentlemen: This statement is supplied to you in accordance with the County ' s industrial development bond issue procedure , wherein a report is required from the applicant ' s principal banker concerning this financial condition of the applicant. First Interstate Bank of Denver has served as the principal banker for the Company since 1950 . Economy Lumber is a financially sound and well managed corporation . Annual audits by an outside nationally recognized certified public accounting firm demonstrate that the Company maintains a good inventory and receivables control system and has consistently maintained an excellent payment record. In recent years it has expanded its fixed assets without deteriorating its working capital position. The Company' s financial statements reflect a strong position with debt in satisfactory relation to worth and strong working capital . This financial strength of the Company is shared-in by its employees . Effective January 1 , 1979 , the Company established an employee stock ownership plan . Under the plan , the employer contributes cash or company stock to a trust for employees. Employees are eligible to participate after one year of service to the Company. The Bank considers Economy Lumber a most valued customer and is completely confident in the Company ' s ability to repay this indebtedness . Yo rs ttrulyy; 7 / Walter C! Kane Vice President -9- _-zsr,A '41 tam _ The Official Bank of the 1984 Olympics 1111111 ; creek, ECONOMY LUMBER & HARDWARE, INC. OFFICE AND YARD 2508 6th AVENUE TELEPHONE(303) 356-9000 GREELEY, COLORADO 80631 GREELEY ECONOMY LUMBER & HARDWARE, INC. TOP FIFTEEN CUSTOMER LIST 1 . George Fell Volume: $232 ,687 4126 21st Street Road Greeley, Colorado 80634 2. Lockhart Construction Volume: $174 ,580 Doug Lockhart 1207 42nd Avenue Greeley, Colorado 80631 3. R. K. H. Constructors, Inc. Volume: $78 , 402 Dick Humphries 1701 23rd Avenue, Suite B. Greeley, Colorado 80631 4. Reliant Homes, Inc. Volume: $71, 903 P. O. Box 519 Greeley, Colorado 80631 5. J. R. Roofing Volume: $69, 369 1624 Highway 34 East Greeley, Colorado 80631 6 . John R. Keyser, Contractor Volume: $64 ,142 3819 West 12th Street Drive Greeley, Colorado 80634 7. AD-JAC Construction Company Volume: $62, 304 Terry Jaccaud 4213 West 8th Street Greeley, Colorado 80634 8 . T. B. Construction Volume: $48,922 Tony Bell 4035 14th Street Greeley, Colorado 80632 9. Steve Royer Construction Volume: $42 ,107 16359 Longs Peak Road Greeley, Colorado 80631 10. GRA-CON Corporation Volume: $40 , 361 -10- "COLORADO'S BUILDING MATERIAL CENTERS" P. 0. Box 869 Loveland, Colorado 80539 11. Colorado Sun Homes, Inc. Volume: $36, 536 Ray Nelson 949 50th Avenue Greeley, Colorado 80634 12. Yankee Builders Volume: $36,500 Robert Smith 2603 25th Avenue Greeley, Colorado 80631 13 . Quality Construction Volume: $34, 999 Eric Danielson 520 22nd Street Greeley, Colorado 80631 14 . JAN-L Construction Volume: $29,321 Loyal Gallatin 4619 West 5th Street Greeley, Colorado 80634 15. Roche Constructers Volume: $29 ,240 2424 6th Avenue Greeley, Colorado 80631 -11- COMPANY MANAGEMENT AND STOCKHOLDERS All stock in the Company is held by L.A. Stookesberry and other members of the Stookesberry family. Management of the firm is handled by Mr . L.A. Stookesberry, president , Robert Day as executive vice-president, and Mr . Stookesberry ' s four sons . L.A. Stookesberry was born in 1914. From 1935 to 1943 he was employed in the lumber business in Des Moines , Iowa . From 1944 to 1947 he worked at Derby Lumber & Supply in Derby, Colorado. In 1948 he founded Economy Lumber . Robert Day was born in 1932 . He graduated from Colorado Southern State College in 1956 and from 1956- 1965 was employed by Colorado Building Materials Center , Inc. From 1965 to the present , he has been employed by Economy Lumber as executive vice-president , he has been employed by Economy Lumber as executive vice-president and general manager of the Company 's Pueblo operations . David Stookesberry was born in 1947 and is the son of L.A. Stookesberry . He has been employed with the Company since completion of his education. He is a vice president and manages the Greeley store. Robert Stookesberry was born in 1942 . Son of L.A. Stookesberry , he has been active in the Company since 1964 . He is a vice president and is in charge of advertising and contractor sales in Denver . James Stookesberry was born in 1940 and is the son of L.A. Stookesberry. He graduated from the University of Denver in 1968 and from that time until 1972 was employed by Ernst & Ernst, a CPA firm in Denver . He left them to join the Company in 1972. He is the Company' s treasurer and financial manager . James Seccombe Jr . is an attorney and is legal counsel to the Company. He is also the secretary of the Corporation. Steven Stookesberry was born in 1953 and is the son of L.A. Stookesberry . He graduated with a degree in business administration from Arizona University in 1974 . He is a vice-president and currently manages the Denver retail store. -12- • ECONOMIC BENEFITS OF THE PROJECT Across the country , cities , and counties increasingly are realizing that the retention and expansion of their existing business community must be a primary focus of efforts to maintain and enhance their economic base . While new business attraction should not be overlooked, existing businesses are usually well-integrated into the local community, already provide needed jobs and services , and have a demonstrated track record of operations . Expanded business has many economic benefits for a community. With increased employment and sales , there is a net addition to income in the local community . New payroll dollars increase the spending power available to local merchants and the deposits of local banks. Since the business often will purchase locally some materials , utilities , and services , and overall expansion of the local economy occurs . Economy Lumber anticipates that its current $4 , 000 ,000 sales volume will increase to $6 ,000 ,000 the first year it is in its new facility. It further projects sales of approximately $10 ,000 , 000 , or more than double its existing volume in 5 years . In terms of employment, the Company expects to add ten new permanent employees bringing its total to thirty-five. During the construction period the project will create approximately 50 construction jobs with the general contractor and various building trades . Property Tax Increases The project will be subject to property taxes of Weld County , School District No. 6 , Northern Colorado Water District , Western Hills Fire District, and Ames Junior College. Based on a mill levy of 46 .430 mills for the School District , 17 .172 mills for Weld County 7 .950 mills for Western Hills , 4 . 292 mills for Ames Junior College, and 1 .0 mill for Northern Colorado Water , the following is an estimate of the annual property tax revenues for each of these taxing entities which will be generated by the project : School District No. 6 $7 , 502 .48 Weld County 2 , 744 .77 Western Hills Fire District 1 , 284 .62 Ames Junior College 693 . 53 Northern Colorado Water 161 . 59 Estimated Total Property Taxes $12 ,417 .00 -13- The property tax estimates are based on an assessed valuation figure of $161 , 587 . This figure is derived from 15% of the land plus construction costs of the project . These figures are calculated based on 1982 mill levies . Additional Benefits In addition to the job and tax benefits , another positive impact of the project will be the upgrading of a substantial business site at a very visible and well travelled intersection in Weld County , and the southern major access to Greeley. The new retail and office building, upgrading of existing buildings , new signage, paving, and fencing will substantially improve the appearance of the site at this key location , and thus the overall attractiveness of the area for future development. Further , by remaining at a location which is convenient for its customers , the project fulfills a real service need for close and easy access by businesses and residents served by the company -14- • 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 to to O O O O 0 Lb to a to 04 04 CO 0 O 0 0 0 C a' 01 a' t` n el CT CT 001 0 -O 001 0 .-+ M Cr, 01 01 .-- M LO t0 Cr .-. CV .- iPr O O 0 0 0 - r+ 0 Ol to C O O O O OM M 0 5.0 M en O O o O O to to O V CV CV N. 0 O 0 O O CO CO N. 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U- ut tR C) >1 X to C) .O C) 32 r F- X O^ C) C) C) I— i E I )O C.9 0 C) N t V u) tH •0 �-) C 0 u C) r C C) 0 C C) '.-+ U O N O C VI CO 117 0 Z C) 1--1 L/1 4-1 C) +) C I i V) if, 0- U1 O C 0 S. an J•) '0 4- X Or 0 C) 4- 0c C) 0 0 W V Y E C) 4- r t Z 0 0_ 0) >,•,- V)CO 0 C i C) to C 0 U C) C VI 0 .6 M _ CA R 5.- C) C N W CO r O C 0 It C1 0 Y 5- •r •r }) to C) 4-) i i 0 C) C Cl) C > C) CV > u) CD C) V Cl .. _C 5- 0 Z CC V O 0 0 W Cl. rr -15- COPYRIGHT 11 a&8 INC. - PROVIDED UNDER CONTRA ® , FOR THE EXCLc".JIVE USE OF SUBSCRIBER 067-000007. *IN DATE* Statement Date: DEC 31 1981 40 DUNS: 00-797-0080 DATE PRINTED SUMMARY ECONOMY LUMBER & HARDWARE CO APR 26 1983 RATING 3A1 INC +EASY BUILD WHOLESALE DIV RET LUMBER & STARTED 1948 , BUILDER'S HARDWARE PAYMENTS SEE BELOW 975 W MISSISSIPPI AVE SALES F 811,631,531 AND BRANCH(ES) OR DIVISION(S) SIC NOS. WORTH F $4,172,592 OD DENVER CO 80223 52 11 52 51 EMPLOYS 110(60 HERE) TEL: 303 744-6161 HISTORY CLEAR FINANCING SEC-UNSEC d CHIEF EXECUTIVE: L. A. STOOKESDERRY. PRES CONDITION STRONG ., SPECIAL EVENTS 11/12/82 Subject uses the tradestgle Easg Build Wholesale Div for a location at 1050 So Jason, Denver, Colorado. PAYMENTS (Amounts mag be rounded to nearest figure in prescribed ranges) REPORTED PAYING H' ;H NOW PAST SELLING LAST SALE. d RECORD CREDIT OWES DUE TERMS WITHIN 03/83 Disc 5000 2500 -0- 1 10 N30 1 Mo e Disc 2500 2500 -0- 1 Mo Ppt 7500 2500 -0- 1 Mo Ppt 1000 100 -0- 2-3 Mos wi Disc-Slow 30 5000 1000 -0- 2 10 N30 1 Mo Ppt-Slow 30 '50 -0- -0- 4-5 Mos (007) 5000 -0- -0- kr (008) 250 -0- -0- 6-12 Mos 02/83 Disc 50000 1000 2 30 N30 Disc 10000 1000 2 10 N30 It Disc 100 100 -0- 1 Mo Ppt -0- Regular terms Disc-Slow 30 7500 -0- -0- 2 10 Prox N30 - 4-5 Mos 440 Slow 70 5000 -0- -0- 6-12 Mos 01/83 Disc 7500 2500 -0- 1 Mo Disc 2500 -0- -0- 6-12 has ilia Disc 2500 -0- -0- Disc 2500 2500 -0- 1 Mo Disc 500 500 -0- 2-3 Mos 7 Disc 250 -0- -0- 1 10 N30 6- 12 Mos Disc 100 50 -0- 2 10 N30 1 Mo -.- -------- - ---• Disc-Ppt 100 -0- -0- V Ppt 40000 15000 -0- 1 No Ppt 15000 750 -0- 1 Mo PPt 10000 -0- -0- 2-3 Mos (1 ) Ppt 10000 5000 N10 Ppt 10000 -0- -0- 2 10 Prox 6-12 Mos Ppt 5000 -0- -0- 2 10 Prox `' PPt 1000 -0- -0- 6-12 Hos PPt 250 50 -0- 1 Mo • Disc-Slow 35 2500 2500 -0- 2 10 EOM 1 Mo b (032) 250 250 First sale. (033) 50 -0- -0- 6-12 Mos 11/82 Ppt 500 500 -0- 1 Mo • *O . Ppt 250 -0- -0- 4-5 Mos (036) 5'10 -0- -0- 2 10 N30 6-12 Mos J 10/82 `'pt 50 -0- -0- 6-12 Mos Ppt-Slow 15 10000 2500 2500 1 Mc Ppt-Slow 30 5000 5000 -0- 1 Mo PI 09/82 Disc 5000 50 -0- 1 13 N30 1 Mo Ppt 2500 -0- -0- N30 6-12 Mos Ppt 500 N30 y Payment experiences reflect how bills are met in relatirn to the terms granted. In some instances payment beyond terms can be the result of disputes over merchandise, skipped invoices etc. FINANCE * A FINANCIAL SPREAD SHEET OF COMPARATIVES, RATIOS. AND INDUSTRY AVERAGES * * MAY BE AVAILABLE. ORDER A DUNS FINANCIAL PROFILE VIA YOUR DUNS PRINT * S/ * TERMINAL OR LOCAL D&B OFFICE 10/22/92 Fiscal Fiscal Fiscal if Consolidated Consolidated Consolidated Dec 31 1979 Dec 31 1990 Dec 31 1981 Curr Assets 4,079,395 3,714,475 3.761,588 Curr Liabs 1.511,673 919,034 974,451 Current Ratio 2.69 4.04 3.86 Working Capital 2,567.722 2,795.441 2,797,137 b . Other Assets 1,735.124 1,387,103 1,589.980 Worth 3,567,262 3.911.732 4,172,592 Sales 14,086,422 10,698.989 11,631,531 k Net Income 255,830 227,112 • 149.850 Fiscal Consolidated statement dated DEC 31 1931: Cash $ 98,923 Accts Pay $ 637,311 Accts Rec 6811,315 Accruals 195,118 Inventors 2,824.319 Taxes 50.936 Income Tax L.T. Liab-(1yr) 91.086 ) Refunds 105.354 Prepaids 51,677 ) Curr Assets 39761,538 Curr Liabs 974,451 • Fixt & Eauip 1,439.026' L.T. Liab-Other 204,525 Other Assets 150+954 PREFERRED STOCK 1,304,046 V COMMON STOCK -13.138 ADDIT. PD.-IN CAP 176.296 RETAINED EARNINGS 2,679,112 r _ Total Assets 5,351,568 . Total 5,351,`68 From JAN 01 1981 to DEC 31 1981 sales $11,631,531; cost of goods Id sold $8,351,986; . Gross profit $3,279,545; operating expenses $3,071,743; . Operating income $207,802; other income $69,521; other expenses $66,150; net income before taxes ) $211,173; Federal income tax $61.323; net income $149.850; retained earnings at start $2+529.262. Net income $149,850; dividends none; retained earnings at end $29679.112. Fire insurance on mdse & fixt $5,000,000; . Prepared from statement(s) bw Accountant: Alexander Grant & Company. CPA's. ' ACCOUNTANTS OPINION: 'We have examined the consolidated balance sheets of Economy Lumber & Hardware Co. , Inc. (a Colorado corporation) and subsidiaries as of Doc 31 1981 and 1980, and the related ti consolidated statements of earnings, stockholders' equity and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances' . 'In our opinion, the financial statements referred to .above present fairly the consolidated financial position of Economy Lumber & Hardware Co. , Inc. and subsidiaries at Dec 31 1981 and 1980, and the consolidated results of their operations and changes in their financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis --0-- ti Accounts receivable shown net less $86,735 allowance. Fixed assets shown net less $950,112 depreciation. Contingent Debt: None indicated. • Other assets consists of cash value life insurance and notes receivable. • LONG-TERM DEBT. • Long-term debt at Dec 31 1981 is as follows: . ti 7.51 first mortgage note payable in monthly installments of $534, including interest; final payment due Jan 1983; 6,155. 7.51 first mortgage note payable in monthly installments of $1,068,- including interest; final payment due Jan 1983; 12,313. 9.0X first mortgage note payable in monthly installments of $2,997, including interest; final payment due Nov 1989; 200,157. 11.01 capitalized lease obligations on eeuipment purchases payable in monthly installments of $1,926, including interest; final • payment due Jul 1983; 52,077. 8-lOX unsecured notes payable to officers on demand; 24,906. Total; 295,610. Less current maturities; 91,085. Total Long-Term Debt; 204,525. On OCT 22 1982 James Stookesberry, treasurer, referred to the •• above figures. He submitted the following partial estimates dated SEP 30 1982: Cash S 100,000 Accts Pay $ 600,000 Accts Rec 700,000 Long-Term Debt 150,000 Mdse 2,800,000 He stated that sales for the 9 months ended Sep 30 1982 were down 101 compared to the same period last year. Operations for the period were conducted at a profit. Reduced sales for nine months ended Sep 30 1982 attributed to general economic conditions. For-the-Past-several years, sales had increased. Reduced sales for 1980 attributed to general economic conditions and during Apr 1980 the company sold a wholly owned subsidiary, Longmont Economy Lumber I -) Hardware, Inc. Company has put more emphasis on consumer sales on cash basis with improved cash flow. Operations for period have been profitable. Also during this period, the company purchased additional rental realty including nine acres of land, and a 12,000 square foot 1 • • ctununi uunrcn 6 nnnuwnnc y nrn _0 1700 •UG VW" • warehouse building adjacent to the company's Denver location. This fixed assets expansion has been accomplished without deterioration of $ working capital. In financing of operations, the company has a $1,250,000 short-term line of credit on a straight corporate note basis. These borrowings are on unsecured basis. The compa,.y has maintained a Sood inventory and receivables control and has all along maintained excellent payment record. The Dec 31 1981 financial statement continued to reflect a strong condition with debt in satisfactory relation to worth and strong working capital. PUBLIC FILINGS 10/22/82 A financing statement original $496196 was filed with the CO Sec of St listing subject as debtor and Whirlpool Corp, Denver, CO as secured party. Collateral is listed as specified inventory and proceeds. BANKING 10/82 Bank declines information as per existing bank. policy. HISTORY 10/22/82 • L. A. STOOKESBERRY, PRES ROBERT L. DAY, EXEC V PRES DAVID STOOKESBERRY, V PRES ROBERT R. STOOKESBERRY, V PRES STEVEN STOOKESBERRY, V PRES JAMES STOOKESBERRY, TRFAS JAMES C. SECCOMBE, JR., SEC DIRECTOR(S): . THE OFFICER(S) Incorporated Colorado Feb 9 1943. Authorized capital consists of 20,000 shares common stock, $1.00 par value and 80,000 shares preferred stock, $27 par value. At Dec 31 1981, 13,138 common shares were issued and outstanding and 48,298 shares preferred stock issued and outstanding. This company was formed as a new venture in 1948 by L. A. Stookesberry who continues as chief executive officer. All the stock in this company held by L. A. Stookesberry and other members of the Stookesberry family. ) L. A. STOOKESBERRY born 1914. 1935-1943 he was employed in the lumber business in Des Moines, Iowa. From 1944-47 Derby Lumber X • Supply, Derby, Colorado. In 1948 he began subject operation and continues. The company carries life insurance on Mr. Stookesberry in the amount of $135,000. DAY born 1932. Graduated from Colorado Southern State College in 1956 and from 1956-65 was employed by Colorado Building Materials Center Inc., and from 1965 to present has been employed by subject. He is listed as vice president and general manager of the company's L Pueblo subsidiary. DAVID STOOKESBERRY born 1947. Son of L. A. Stookesberry and has been employed with subject since completion of education. ROBERT STOOKESBERRY born 1942. Son of L. A. Stookesberry and has been active in subject since 1964, JAMES STOOKESBERRY born 1940. Graduated from the University of Denver in 1968 and from that time until 1972 was employed by Ernst R • Ernst, CPA's, Denver. He left that employ to join subject in 1972. SECCOMBE JR. Is an attorney by profession and not active in i subject on daily basis. STEVEN STOOKESBERRY born 1953. Son of L. A. 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O J. > o � z . 2 � = 4-C N o fL cl • W � W 0 O 0 .. --z...,"14.."4 .,,,,.7. ...>=_.rz.ryORj Rex .r �r.eiY..}eNtea'BN.iR l.;e:.�.-lL.F.u. .•ue. wera sawn . ..yy.y!!.1 g.• wvl.. - _ • r a a KK C•sl.%3tiY-.-:;sps•: '.'.: ..F[ }' . a ii 1 r 1 •-t:*"..L{Y 1 .. .. .:*:. yh . y;i ._ e,.* :..y M •;;;r:-' •• rt•K. . y. .s.l „ r.: .: ::. �c ,�.` •p• ,a.r��iae t��,.� .'r� .t� ',�r� ��[ju��sij .:.:;.4.: ».:5-44.-.10-,•:.:•:-»� -, �!(i;!fMµhlti4�Fiii?0�. . ,•.�MiV-4f�ie��1E,iM!�!S.X'Ti+•} �iMlt!.Nt�M!!!1^2�'iNaM.?�^;Rrlt a, ?!M:�:!/Mli&i\Z-lh•Ata FINANCIAL STATEMENTS AND AUDITORS' REPORT ECONOMY LUMBER & HARDWARE CO. , INC. AND SUBSIDIARIES December 31 , 1982 and 1981 ` 1 CONTENTS Page AUDITORS ' REPORT 3 FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS 4 CONSOLIDATED STATEMENTS OF EARNINGS 5 CONSOLIDATED STATEMENTS OF STOCKHOLDERS ' EQUITY 6 CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9 SUPPLEMENTAL INFORMATION AUDITORS ' REPORT ON SUPPLEMENTAL INFORMATION 14 CONSOLIDATING STATEMENTS OF OPERATIONS 15 c Alexander Grant 8 COMPANY MEMBER FIRM CERTIFIED PUBLIC ACCOUNTANTS GRANT THORNTON NTERNATIONAL 1 Board of Directors Economy Lumber & Hardware Co. , Inc . We have examined the consolidated balance sheets of Economy Lumber & Hardware Co. , Inc . (a Colorado corporation) and Subsidiaries as of December 31 , 1982 and 1981 , and the related consolidated statements of earnings , stockholders ' equity and changes in financial position for the years then ended. Our examinations were made in accordance with gener- ally accepted auditing standards and, accordingly , included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances . In our opinion, the financial statements referred to above present fairly the consolidated financial position of Economy Lumber & Hardware Co. , Inc. and Subsidiaries at December 31 , 1982 and 1981, and the consolidated results of their operations and changes in their financial position for the years then ended , in conformity with generally accepted accounting principles applied on a consistent basis . Denver, Colorado February 23 , 1983 1600 BROADWAY DENVER, CO 80202 (303)861-1345 Economy Lumber & I(ardwar. CONSOLIDATE December 31 , 1982 1981 ASSETS CURRENT ASSETS Cash $ 284 , 710 $ 98 ,923 Receivables Trade , less allowance for doubtful receivables of $119 , 191 in 1982 651 , 192 633 , 407 and $86 ,735 in 1981 Officer , employees and other 67 ,515 47 ,908 Current portion of mortgage note receivable ( note C) 55 ,000 Income taxes 24 ,329 105 , 354 Inventories (note A2 ) 2 ,702 ,039 2 , 824 , 319 Prepaid expenses 52 , 867 51 , 677 Total current assets 3 , 837 ,652 3 , 761 , 588 FIXED ASSETS - AT COST ( notes. A3 , B and E) Buildings and improvements 796 , 290 763 ,554 Furniture and equipment 1 , 192 ,555 1 ,023 , 493 Leasehold improvements 69 , 261 69 , 261 2,058 , 106 1 ,856 , 308 Less accumulated depreciation and amortization 1 , 157 ,347 950 , 112 900 ,759 906 , 196 Land 532 , 830 532 , 830 1 ,433 ,589 1 ,439 ,026 OTHER ASSETS (note C) 112 ,534 150 ,954 $ 5 , 383 , 775 $ 5 , 351 , 568 The accompanying notes are an integral part of these statements . a 4 • Co. , Inc . and Subsidiaries BALA^ICE SHEETS 82 and 1981 1982 1981 LIABILITIES CURRENT LIABILITIES Current maturities of long-term debt (note E) $ 37 ,670 $ 91 , 085 Accounts payable Trade 502 ,935 625 , 813 Other 12 , 018 11 , 499 Accrued liabilities Property, payroll and other taxes 54 ,767 50 ,936 Salaries , wages and vacation 51 ,664 37 ,320 Interest 12 ,076 10 , 329 Employee stock ownership plan contribution (note D) 136 , 011 147 ,469 Total current liabilities 807 , 141 974 ,451 NONCURRENT LIABILITIES ',ong-term debt , less current maturities ( note E) 162 , 759 204 , 525 COMMITMENTS AND CONTINGENCIES ( note F) _ STOCKHOLDERS ' EQUITY ( note D) Common stock - authorized , 20 , 000 shares of $1 .00 par value; issued and out- standing , 13 ,886 shares in 1982 and 13 , 138 shares in 1981 13 , 886 13 , 138 Preferred stock - voting, authorized , _ 80 ,000 shares of $27 par value; issued and outstanding , 49 ,046 shares at December 31 , 1982 and 48 ,298 shares at ' December 31 , 1981 , liquidation value of $54 per share; aggregate liquidation value exceeds par value of issued and outstanding shares by $1 ,324 , 242 in 1982 and $1 ,304 ,046 in 1981 1 ,324 ,242 1 ,304 ,046 Additional paid-in capital 284 ,816 176 ,296 1 , 622 ,944 1 ,493 ,480 Retained earnings 2 , 790 , 931 2 , 679 , 112 4 ,413 , 875 4 , 172 , 592 $ 5 , 383 , 775 $ 5 , 351 , 568 a /. Economy L mber & Hardware Co. , Inc . and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS Years ended December 31 , 1982 and 1981 t 1982 1981 Revenues Net sales $ 10 ,629 ,728 $ 11 ,631 ,531 Cost of goods sold 7 , 336 , 748 8 , 351 , 986 Gross profit 3 ,292 ,980 3 ,279 , 545 Operating expenses (notes A3 , A5 , D and F) 3 , 140 , 308 3 ,071 , 743 Operating profit 152 ,672 207 ,802 Other income (deductions) Interest income 34 ,759 36 , 873 Interest expense (60 ,275) (59 ,901 : Gain ( loss) on sales of fixed assets (95) (6 ,249 ' Sundry - net 22 , 880 32 , 648 (2 ,731) 3 , 371 Earnings before income taxes 149 ,941 211 , 173 Income taxes (notes A4 and B) 38 , 122 61 , 323 NET EARNINGS $ 111 , 819 $ 149 , 850 • graiNIS : The accompanying notes are an integral part of these statements. 5 • Economy Lumber St Hardwar CONSOLIDATED STATEMENT Years ended Decee Common stock Number of shares Amount Balance at January 1 , 1981 12 ,452 $ 12 ,45 Stock issued to employee .stock ownership plan (note D) 686 68E Net earnings for the year ended December 31 , 1981 - Balance at December 31 , 1981 13 ,138 13 , 13£ Stock issued to employee stock ownership plan (note D) 748 744 Net earnings for the year ended December 31 , 1982 - Balance at December 31 , 1982 13 ,886 $ 13 , 881 The accompanying notes are an integral part of these statements . 6 • 7. , Inc . and Subsidiaries F °TOCKHOLDERS ' EQUITY 31 1982 and 1981 Preferred stock lumber Additional of paid-in Retained ;hares Amount capital earnings _ Total C7 ,612 $ 1 , 285 ,524 $ 84 ,494 $ 2 ,529 ,262 $ 3 ,911 , 732 686 18 ,522 91 ,802 - 111 ,010 149 , 850 149 , 850 18 ,298 1 ,304 ,046 176 ,296 2,679 , 112 4 , 172 ,592 748 20 , 196 108 ,520 - 129 ,464 111 , 819 111 , 819 19 ,046 $ 1 , 324 ,242 $ 284 , 816 $ 2 ,790 ,931 $ 4 , 413 , 875 Economy Limber & Hardware Co. , Inc. and • Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION Years ended December 31 , 1982 and 1981 • 1982 1981 Sources of working capital From operations Net earnings $ 111 ,819 $ 149 , 850 Charges to earnings not using working capital Depreciation and amortization ; (notes A3 and A5) 224 ,936 172 , 764 Loss from sales of fixed assets 95 6 , 249 Working capital provided from operations 336 ,850 328 ,863 Proceeds from sales of fixed assets 700. 2 , 572 Reduction of other assets 55 ,340 21 ,714 Stock issued to employee stock ownership plan (note D) 129 ,464 111 , 010 522 ,354 . 464 , 159 Applications of working capital Reduction of long-term debt 41 ,766 66 ,287 Purchases of fixed assets 217 , 137 385 ,773 Increase in other assets 20 ,077 20 , 403 278 ,980 472 ,463 INCREASE (DECREASE) IN • WORKING CAPITAL $ 243 , 374 $ (8 , 304 ; kit _ d The accompanying notes are an integral part of these statements . VAtii Mg 7 -" "nc _ _ �. Economy Lumber & Hardware Co. , Inc . and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (CONTINUED) Years ended December 31 , 1982 and 1981 • 1982 1981 Changes in components of working capital Increase (decrease) in current assets Cash $ 185 ,787 $( 167 ,933' Receivables 11 ,367 171 ,016 Inventories (122 , 280) 61 ,625 Prepaid expenses 1 , 190 ( 17 , 595: 76 ,064 47 , 113 ( Increase) decrease in current liabilities Current maturities of long—term debt 53 ,416 51 ,771 Accounts payable 122 ,358 (126 ,589 ' Accrued liabilities (8 ,464) (54 ,796 Income taxes - 74 , 197 167 , 310 ( 55 , 417 INCREASE (DECREASE) IN WORKING CAPITAL $ 243 ,374 $ (8 , 304 . O • The accompanying notes are an integral part of these statements. • 8 Economy Lumber & Hardware Co. , Inc . and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31 , 1982 and 1981 NOTE A - SUMMARY OF ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows : 1 . Principles of Consolidation The consolidated financial statements include the accounts of Economy Lumber & Hardware Co. , Inc . (the company) and its wholly-owned subsidiaries (Colorado corporations) , Economy Building Materials Center , Inc . , and Greeley Economy Lumber & Hardware , Inc . All material intercompany accounts and transactions have been eliminated in consolidation. 2 . Inventories Inventories are stated at the lower of cost or market ; cost is determined by the weighted average method. 3 . Depreciation and Amortization Depreciation and amortization have been provided in amounts sufficient to relate the cost of depreciable assets to oper- ations over their estimated service lives , principally on the straight-line method. 4 . Investment Tax Credits Investment tax credits are accounted for by the "flow-through" method which recognizes_.the_credits_as _redudtions of_income__. tax expense in the year utilized. • 5 . Deferred Lease Costs • Deferred lease costs, included in other assets (note C) , are being amortized on the straight-line method over the remaining life of the lease. itiik IStr "t 9 J 1 Economy L`giber & Hardware Co. , Inc . Qud Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31 , 1982 and 1981 NOTE B - FIXED ASSETS Real estate and improvements costing $431 , 500 acquired from the controlling stockholder in prior years have a basis for income tax purposes of $120 , 188 . NOTE C - OTHER ASSETS Other assets at December 31 , 1982 and 1981 are as follows : 1982 1981 Cash value of life insurance , less related loans of $190 ,633 at December 31 , 1982 and 1981 $ 58 ,691 $ 38 ,614. Mortgage notes receivable , less current portion of $55 ,000 in 1982 - 55 ,000 Deferred lease costs , less accumu- lated amortization of $27 , 105 and $23 ,948 at December 31 , 1982 and 1981 , respectively (note A5) 2 ,895 6 ,052 Rental property - at cost (notes A3 and E) 41 ,498 41 ,498 Sundry 9 , 450 9 , 790 $ 112 , 534 $ 150 ,954 NOTE D - EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST Effective January 1 , 1979 , the company established an employee stock ownership plan. The company concurrently established a trust as part of the plan. Employees are eligible to participate • after one year of service to the' company. The plan provides only for employer contributions , which are at the discretion of man- agement and subject to certain limitations . Contributions may be in cash or company stock based on fair market value as defined in the agreement . Distributions will be made from such stock, with the company having a first right of refusal to purchase any distributed stock. r 5. The company' s contribution to the plan was $118 ,009 and $147 ,469 for the years ended December 31 , 1982 and 1981 , respectively. �ff.fY� 10 Economy Lumber & Hardware Co. , Inc . and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31 , 1982 and 1981 D NOTE E - LONG-TERM DEBT Long-term debt at December 31 , 1982 and 1981 is as follows: 1982 1981 7 .5% first mortgage note payable in monthly installments of $534 , including interest ; final pay- ment due December , 1982 $ - $ 3 , 155 7.5% first mortgage note payable in monthly installments of $1 ,068 , including interest ; final payment due December , a 1982 - 12 ,313 9.0% first mortgage note payable in monthly installments of $2 ,997 , including interest ; final payment due November, 1989 181 ,449 200 , 159 11 .0% capitalized lease obligations on equipment purchases payable in monthly installments of $1 ,926 , including interest ; final payment due July, 1983 9 ,070 52 ,077 8-10% unsecured notes payable to officers on demand 9 ,910 24 ,906 200 ,429 295 ,610 Less current maturities 37 , 670 91 ,085 $ 162 ,759 $ 204 , 525 Under the above agreements , the company must make specified minimum monthly payments. The aggregate annual amount of such required payments at December 31 , 1.982 is as follows : y,::: 1983 $ 37 ,670 s:€s 1984 22 , 107 1985 24 ,207 1986 26 ,506 1987 29 ,024 1988-1989 60 ,915 $ 200 ,429 1 11 �. • Economy Lumber & Hardware Co. , Inc . and Subsidiaries • NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. (CONTINUED) December 31 , 1982 and 1981 NOTE F - COMMITMENTS The company leases certain land and buildings under agree- ments expiring in 1983 and 1986. Rental expense was $16 ,060 for the years ended December 31 , 1982 and 1981 . The minimum annual rental commitment under these leases is as follows: Minimum annual rental Years ending December 31 , 1983 $ 16 ,260 1984 18 ,460 1985 18 ,460 1986 15 ,610 1987 12 , 760 • $ 81 , 550 The company has the option to renew the lease expiring in 1 1986 for a three-year period. The lease expiring in 1983 has five-year renewal options through 2018 . This lease also pro- vides the company an option to offer to purchase the property at a price stipulated in the agreement . If the offer is refused , the lease can be terminated without penalty at the option of the company. The Board of Directors also approved a salary continuation plan for the benefit of the president , whereby in the event of his becoming disabled the company shall continue to pay his entire salary for a period of ten years or until his death. In the event of his death, the corporation shall pay 50% of his salary to his wife for a period of ten years or until her death. 'f• 12 Hello