EXHIBIT 10.14
[NORTHWEST IOWA COMMUNITY COLLEGE LETTERHEAD]
July 19, 2005
Xxxxx Xxxxxxx
American Pallet Leasing, Inc
0000 Xxxxx Xxx
Xxxx Xxxxxx, XX 00000
Dear Xxxxx,
Enclosed is your copy of the First Amendment to your Preliminary Agreement.
Please file this with your original agreement. Please note that this extends
your deadline to August 1, 2006. We will need to proceed with the final
agreement prior to July 1, 2006.
If you have any questions, please let me know.
Thank you
Sincerely
/s/ Xxxxx Xxxxxxxxxxx
---------------------
Xxxxx Xxxxxxxxxxx
Business & Industry
WG/ls
Encl
FIRST AMENDMENT TO PRELIMINARY INDUSTRIAL
NEW JOBS TRAINING AGREEMENT
This First Amendment to Preliminary Industrial New Jobs Training
Agreement (the "First Amendment") between Northwest Iowa Community College (the
"Community College") and American Pallet Leasing, Inc. (the "Employer"):
WITNESSETH:
WHEREAS, the Community College and the Employer have heretofore entered
into a Preliminary Industrial New Jobs Training Agreement (the "Original
Agreement") dated as of September 20, 2004; and
WHEREAS, the parties desire to amend the Original Agreement to provide
that the deadline in Section 3.4 of the Preliminary Industrial New Jobs Training
Agreement regarding the date by which the Community College and the Employer
agree to enter into a permanent training agreement, be extended from August 1,
2005 to August 1, 2006.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
REPRESENTATIONS AND AGREEMENTS HEREINAFTER CONTAINED, THE PARTIES AGREE AS
FOLLOWS:
Section I. That Section 3.4 of the Original Agreement hereby is amended
to read as follows:
"Section 3.4. All commitments of the Community College and the
Employer under this Preliminary Agreement are subject to the condition
that mutually agreeable terms of a permanent training agreement shall
be reached on or before August 1, 2006. It is understood and agreed
that if such final agreement is not reached, neither the Community
College or the Employer shall be obligated to proceed with a training
program. It is further understood and agreed that the decision to enter
into a permanent training agreement is the sole province of the
Community College and that the College may, in its sole discretion,
determine not to proceed with the Project or enter into a permanent
training agreement. It is further understood and agreed that the
permanent training agreement when mutually agreed to and executed shall
replace this Preliminary Agreement and shall constitute the entire
agreement between the Employer and the Community College."
-1-
Section 2. That the Original Agreement shall be ratified, confirmed and
adopted by the Community College and the Employer as amended by this First
Amendment.
IN WITNESS WHEREOF, the Community College and the Employer have caused
this First Amendment to be duly executed in their respective names this 18th day
of July, 2005.
/s/ Xxxxx (illegible initial) Xxxxxx
------------------------------------
President
ATTEST:
/s/ Xxxxxxx Xxxxxx
---------------------
Secretary
American Pallet Leasing, Inc.
By: /s/ Xxxxx Xxxxxxx
---------------------
ATTEST:
/s/ Xxxxx Xxxxxxx
---------------------
-2-
STATE OF IOWA )
) SS
COUNTY OF SIOUX )
On this 18th day of July, 2005, before me, a Notary Public in and for
the State of Iowa personally appeared Xxxxx Xxxxxx and Xxxxxxx Xxxxxx, to me
personally known, who, being by me duly sworn, did say that they are the
President of the Board of Directors and the Secretary, respectively, of
Northwest Iowa Community College, Sheldon, Iowa, that the foregoing First
Amendment to the Preliminary Industrial New Jobs Training Agreement were signed
by authority of the Board; and Xxxxx Xxxxxx and Xxxxxxx Xxxxxx, as such
officers, acknowledged the execution of said instruments to be the voluntary act
and deed of said Community College by it and by them voluntarily executed.
Given under my hand and seal of office, this 18th day of July, 2005.
XXXXXXX X. XXXXXXX
Commission Number 728618 /s/ Xxxxxxx X. Xxxxxxx
MY COMMISSION EXPIRES ----------------------
MAY 24, 2007 Notary Public
(SEAL)
STATE OF IOWA )
) SS
COUNTY OF SIOUX )
On this 12th day of July, 2005, before me, a Notary Public in and for
the State of Iowa, personally appeared Xxx Xxxxxxx and Xxxxx Xxxxxxx, to me
personally known, who, being by me duly sworn, did say that they are the
Director/Treasurer and the General Manager, respectively, of American Pallet
Leasing, Inc, a C corporation; that the foregoing First Amendment to the
Preliminary Industrial New Jobs Training Agreement were signed on behalf of said
corporation by authority of its Board of Directors; and Xxx Xxxxxxx and Xxxxx
Xxxxxxx, as such officers, acknowledged the execution of said instrument to be
the voluntary act and deed of said corporation by it and by them voluntarily
executed.
Given under my hand and seal of office, this 12th day of July, 2005.
/s/ Xxxx X. Xxxxxxxxx
----------------------------
Notary Public
(SEAL)
XXXX X. XXXXXXXXX
Commission Number 121588
MY COMMISSION EXPIRES
MAY 12, 2006
-3-
American Pallet Leasing
0000 Xxxxx Xxx.
Rock Valley, IA 51247
000-000-0000
Attn: Xxxxx Xxxxxxxxxxx
Thank you for assisting us in the extension on the job credits.
Please note that we have following some preliminary projections for production
as well as the jobs that will be required. The number of jobs is the same and
start date we are seeking the end of September of 05.
I hope that this will help you.
I can be reached at 000-000-0000 day or night.
Kindly
/s/ Xxxxx Xxxxxxx
------------------
Xxxxx Xxxxxxx
APL Business Objective for Rock Valley Facility
It is the business objective of American Pallet Leasing to utilize the Rock
Valley facility for the production of a Hybrid (Steel/Wood) pallet and an all
steel pallet to be utilized in the material handling market.
Rock Valley is to be the home of the steel manufacturing because of the
extensive availability to a workforce knowledgeable about steel fabricating.
Rock Valley will serve as the manufacturing facility for the entire Mid West for
American Pallet Leasing in the production of steel and steel/wood pallets.
The target market for the pallets manufactured in Rock Valley will be the
greater Chicago market, St Louis market and the Midwest meat processing
companies. The pallets will be produced in Rock Valley and sold to a lease
company and will be leased out to utilizing parties. Once cash flow is available
to warrant American Pallet Leasing's own lease program, American Pallet Leasing
will buy back the pallets and continue the program on it's own.
The Rock Valley facility will utilize high tech robotics in its production to
take advantage of lower costs and higher efficiencies. Job creation and growth
are an important part of American Pallet Leasings commitment to Rock Valley.
YEAR ONE
Project address: EAGLE AVENUE/WESTVIEW BUSINESS PARK
Is the Business actively considering locations outside of Iowa? X Yes If yes,
where and what assistance is being offered?
LOCATIONS CONSIDERED IN ILLINOIS, SOUTH CAROLINA, OKLAHOMA, TEXAS, NEBRASKA,
MINNESOTA, OHIO
List the jobs that will be retained and/or created as the result of this
project. For retained jobs, include the CURRENT wage rate. For jobs to be
created, including the STARTING wage rate.
----------------------------------------------------------------------------------------------------------
Job Title Skills, Education, or Number of Retained (R) or Starting or Current
Experience Required Jobs Created (C) Wage Rate
----------------------------------------------------------------------------------------------------------
Plant manager Manager experience 1 C $25.00
----------------------------------------------------------------------------------------------------------
Xxxxxx Experience-tech/college 4 C $15.00
----------------------------------------------------------------------------------------------------------
Forklift operator Training 2 C $11.00
----------------------------------------------------------------------------------------------------------
Robotic welder Experience-2 year tech 18 C $15.00
----------------------------------------------------------------------------------------------------------
Welding assistant Experience-2 year tech 4 C $10.80
----------------------------------------------------------------------------------------------------------
Sheet operator Experience-2 year tech 2 C $10.80
----------------------------------------------------------------------------------------------------------
Tube xxxxxx Experience-2 year tech 8 C $10.80
----------------------------------------------------------------------------------------------------------
Paint booth Experience-2 year tech 3 C $10.80
----------------------------------------------------------------------------------------------------------
Portable Welders College/tech 4 C $12.00
----------------------------------------------------------------------------------------------------------
Maintenance/set-up Experience-college tech 4 C $13.00
----------------------------------------------------------------------------------------------------------
Computer programmer Experience-college tech 1 C $15.00
----------------------------------------------------------------------------------------------------------
CAD operator Experience-college tech 1 C $16.00
----------------------------------------------------------------------------------------------------------
Bookkeeper Training 1 C $10.80
----------------------------------------------------------------------------------------------------------
Secretary/clerk Training 1 C $10.50
----------------------------------------------------------------------------------------------------------
Assembly/production 8 C $10.50
----------------------------------------------------------------------------------------------------------
Regional manager College-experience 1 C $35.00
----------------------------------------------------------------------------------------------------------
Office assistant 2 year college 1 C $12.50
----------------------------------------------------------------------------------------------------------
Total Number of Retained Jobs:
Total Number of Created Jobs: 63 Over what time frame will these jobs be
created? 1st year
Sept 05 1PM 1A 1OA
Oct 05 1FA WBW 2TB 2FW 2AP
Nov 05 3RW 2WA 15O 2PW 1RM
Dec 05 2F 1SO 3RW 1WA 2TB 1M
Jan 06 1FO 1SO 1CP 1CAD 2AP
Feb 06 3RW 1WA IM
Mar 06 2F 2TB 2AP
Apr 06 3RW 1WA 1M
May 06 2AP
Jun 06 2TB 3RW 1WA
July 06
Aug 06 3RW
YEAR TWO
Project address: EAGLE AVENUE/WESTVIEW BUSINESS PARK
Is the Business actively considering locations outside of Iowa? X Yes If yes,
where and what assistance is being offered?
LOCATIONS CONSIDERED IN ILLINOIS, SOUTH CAROLINA, OKLAHOMA, TEXAS, NEBRASKA,
MINNESOTA, OHIO
List the jobs that will be retained and/or created as the result of this
project. For retained jobs, include the CURRENT wage rate. For jobs to be
created, including the STARTING wage rate.
--------------------------------------------------------------------------------------------------------------
Job Title Skills, Education, or Number of Retained (R) or Starting or Current
Experience Required Jobs Created (C) Wage Rate
--------------------------------------------------------------------------------------------------------------
Xxxxxx Experience-tech/college 2 C $15.00
--------------------------------------------------------------------------------------------------------------
Forklift operator Training 2 C $11.00
--------------------------------------------------------------------------------------------------------------
Robotic welder Experience-2 year tech 12 C $15.00
--------------------------------------------------------------------------------------------------------------
Welding assistant Experience-2 year tech 4 C $10.80
--------------------------------------------------------------------------------------------------------------
Sheet operator Experience-2 year tech 2 C $10.80
--------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxx Experience-2 year tech 8 C $10.80
--------------------------------------------------------------------------------------------------------------
Paint Booth Experience-2 year tech 8 C $10.80
--------------------------------------------------------------------------------------------------------------
Portable Welders College/tech 4 C $12.00
--------------------------------------------------------------------------------------------------------------
Maintenance/set-up Experience-college tech 5 C $13.00
--------------------------------------------------------------------------------------------------------------
Computer programmer Experience-college tech 1 C $15.00
--------------------------------------------------------------------------------------------------------------
CAD operator Experience-college tech 1 C $16.00
--------------------------------------------------------------------------------------------------------------
Assembly/production 4 C $10.50
--------------------------------------------------------------------------------------------------------------
Secretary/clerk Training 1 C $10.50
--------------------------------------------------------------------------------------------------------------
Total Number of Retained Jobs: 63
Total Number of Created Jobs: 42 Over what time frame will these jobs be
created? 2nd year
YEAR THREE
Project address: EAGLE AVENUE/WESTVIEW BUSINESS PARK
Is the Business actively considering locations outside of Iowa? X Yes If yes,
where and what assistance is being offered?
LOCATIONS CONSIDERED IN ILLINOIS, SOUTH CAROLINA, OKLAHOMA, TEXAS, NEBRASKA,
MINNESOTA, OHIO
List the jobs that will be retained and/or created as the result of this
project. For retained jobs, include the CURRENT wage rate. For jobs to be
created, including the STARTING wage rate.
----------------------------------------------------------------------------------------------------------
Job Title Skills, Education, or Number of Retained (R) or Starting or Current
Experience Required Jobs Created (C) Wage Rate
----------------------------------------------------------------------------------------------------------
Xxxxxx Experience-tech/college 2 C $15.00
----------------------------------------------------------------------------------------------------------
Forklift operator Training 2 C $11.00
----------------------------------------------------------------------------------------------------------
Robotic welder Experience-2 year tech 12 C $15.00
----------------------------------------------------------------------------------------------------------
Welding assistant Experience-2 year tech 4 C $10.80
----------------------------------------------------------------------------------------------------------
Sheet operator Experience-2 year tech 2 C $10.80
----------------------------------------------------------------------------------------------------------
Tube xxxxxx Experience-2 year tech 8 C $10.80
----------------------------------------------------------------------------------------------------------
Paint booth Experience-2 year tech 8 C $10.80
----------------------------------------------------------------------------------------------------------
Portable welders College/tech 4 C $12.00
----------------------------------------------------------------------------------------------------------
Maintenance/set-up Experience-college tech 5 C $13.00
----------------------------------------------------------------------------------------------------------
Computer programmer Experience-college tech 1 C $15.00
----------------------------------------------------------------------------------------------------------
CAD operator Experience-college tech 1 C $16.00
----------------------------------------------------------------------------------------------------------
Assembly/production 3 C $10.50
----------------------------------------------------------------------------------------------------------
General office Training 1 C $10.50
----------------------------------------------------------------------------------------------------------
Total Number of Retained Jobs: 115
Total Number of Created Jobs: 51 Over what time frame will these jobs be
created? 3rd year
APL AMERICAN
PALLET LEASING, INC. APPENDIX VI
-----------------------------------------------------------------------------------------------------
Month Month Month Month Month Month Month
Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06
Projected Projected Projected Projected Projected Projected Projected
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
Revenue
Sale of Wood Pallets $ 280,907 $ 296,459 $ 375,127 $ 337,516 $ 354,390 $ 396,638 $ 803,256
Leased Steel Pallets -- -- -- -- -- -- --
----------------------------------------------------------------------------------------------
Total Revenue $ 280,907 $ 298,459 $ 315,121 $ 337,516 $ 364,390 $ 396,638 $ 803,256
----------------------------------------------------------------------------------------------
Less COGS - Wood (149,112) (157,367) (167,274) (179,787) (193,427) (210,545) (426,387)
----------------------------------------------------------------------------------------------
Gross Margin $ 131,795 $ 139,097 $ 147,847 $ 158,355 $ 170,963 $ 186,093 $ 376,869
----------------------------------------------------------------------------------------------
75% 47% 47% 47% 47% 47% 87%
Operating Expenses
General & Administrative
Salary & Wages $ (19,500) $ (19,500) $ (19,500) $ (19,500) $ (19,500) $ (19,500) $ (19,500)
Rent & Other Occupancy (1,250) (1,250) (1,250) (1,250) (1,250) (1,250) (1,250)
Travel & Entertainment (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000)
Other Misc. Expenses (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (1,500)
Commissions -- -- -- -- -- -- --
Amortization of Steel Pallets -- -- -- -- -- -- --
Plant Labor Costs
Salary & Wages (29,335) (30,383) (31,641) (33,151) (34,562) (37,136) (74,944)
Payroll Burden (5,867) (6,077) (6,328) (6,630) (6,002) (7,427) (14,989)
Plant Occupancy Costs
Utilities (1,500) (1,500) (1,500) (1,500) (1,500) (1,500) (3,000)
Telephone (350) (350) (350) (350) (350) (350) (700)
R&M (750) (750) (750) (750) (750) (750) (1,500)
Pallet Selling Expenses
Shipping/Delivery/Trans (33,709) (35,575) (37,815) (40,502) (43,727) (47,587) (96,391)
----------------------------------------------------------------------------------------------
Total Operating Expenses $ (98,761) $(101,885) $(105,634) $(110,133) $(115,531) $(122,010) $(218,774)
Projected Pre-Tax Earnings $ 33,034 $ 37,207 $ 42,214 $ 48,222 $ 55,432 $ 64,084 $ 158,095
Estimated Income Taxes (4,955) (5,581) (6,332) (7,233) (13,858) (16,021) (53,732)
----------------------------------------------------------------------------------------------
Projected Net Earnings $ 26,079 $ 31,626 $ 35,882 $ 49,989 $ 41,574 $ 48,063 $ 104,343
==============================================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 1 1 1 1 1 1 2
Wood Pallets Sold This Month 41,337 49,958 53,703 56,877 61,405 66,840 135,361
Steel Pallets on Lease This Month -- -- -- -- -- -- --
Month Month Month Month
Apr 06 May 06 Jun 06 Jul 06
Projected Projected Projected Projected
Month 8 Month 9 Month 10 Month 11
Revenue
Sale of Wood Pallets $ 849,694 $ 505,419 $ 930,985 $ 938,905
Leased Steel Pallets 65,000 130,000 195,000 260,000
-------------------------------------------------
Total Revenue $ 914,694 $1,035,419 $1,133,985 $1,198,985
-------------------------------------------------
Less COGS - Wood (451,037) (480,618) (498,435) (498,435)
-------------------------------------------------
Gross Margin $ 463,656 $ 554,802 $ 635,550 $ 766,550
-------------------------------------------------
51% 59% 56% 52%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000)
Commissions (5,000) (5,000) (5,000) (5,000)
Amortization of Steel Pallets (2,912) (5,824) (8,735) (11,647)
Plant Labor Costs
Salary & Wages (78,075) (81,837) (34,083) (84,093)
Payroll Burden (15,615) (16,366) (16,819) (16,819)
Plant Occupancy Costs
Utilities (3,000) (3,000) (3,000) (3,000)
Telephone (700) (700) (700) (700)
R&M (1,500) (1,500) (1,500) (1,500)
Pallet Selling Expenses
Shipping/Delivery/Trans (101,963) (108,650) (112,678) (112,678)
-------------------------------------------------
Total Operating Expenses $(263,265) $(277,371) $(287,026) $(289,937)
Projected Pre-Tax Earnings $ 200,392 $ 277,431 $ 348,524 $ 410,612
Estimated Income Taxes (68,133) (94,326) (118,498) (139,608)
-------------------------------------------------
Projected Net Earnings $ 132,259 $ 183,104 $ 230,036 $ 271,004
=================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 2 2 2 2
Wood Pallets Sold This Month 143,186 152,577 158,233 158,233
Steel Pallets on Lease This Month 10,000 20,000 30,000 40,000
--------------------------------------------------------------------------------
Confidential Information Memorandum, Page 4
APL AMERICAN
PALLET LEASING, INC. APPENDIX VI
-----------------------------------------------------------------------------------------------------
Month Month Month Month Month Month Month
Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07
Projected Projected Projected Projected Projected Projected Projected
Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19
Revenue
Sale of Wood Pallets $1,308,904 $1,306,904 $1,306,904 $1,306,904 $1,306,904 $1,306,904 $1,674,823
Leased Steel Pallets 390,000 481,000 572,000 583,000 754,000 845,000 936,000
----------------------------------------------------------------------------------------------
Total Revenue $1,696,904 $1,787,904 $1,878,904 $1,969,904 $2,060,904 $2,151,904 $2,610,823
----------------------------------------------------------------------------------------------
Less COGS - Wood (650,705) (693,735) (693,735) (693,735) (693,735) (693,735) (889,035)
----------------------------------------------------------------------------------------------
Gross Margin $1,003,169 $1,094,169 $1,185,169 $1,216,169 $1,367,169 $1,458,169 $1,721,788
----------------------------------------------------------------------------------------------
59% 61% ?% ?% ?% ?% ?%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Commissions (5,000) (7,000) (7,000) (7,000) (7,000) (7,000) (7,000)
Amortization of Steel Pallets (17,471) (21,547) (25,624) (29,700) (33,777) (37,853) (41,530)
Plant Labor Costs
Salary & Wages (119,293) (119,293) (119,293) (119,293) (119,293) (119,293) (154,493)
Payroll Burden (23,859) (23,859) (23,859) (23,859) (23,859) (23,859) (30,899)
Plant Occupancy Costs
Utilities (4,500) (4,500) (4,500) (4,500) (4,500) (4,500) (6,000)
Telephone (1,050) (1,050) (1,050) (1,050) (1,050) (1,050) (1,400)
R&M (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (3,000)
Pallet Selling Expenses
Shipping/Delivery/Trans (156,828) (156,828) (156,828) (156,828) (156,828) (156,828) (200,979)
----------------------------------------------------------------------------------------------
Total Operating Expenses $(384,751) $(390,828) $ (394,904) $ (398,981) $ (403,057) $ (407,134) $ (500,201)
Projected Pre-Tax Earnings $ 618,417 $ 703,341 $ 790,264 $ 877,188 $ 964,111 $1,051,035 $1,221,587
Estimated Income Taxes (210,262) (239,136) (268,690) (298,244) (327,798) (357,352) (415,340)
----------------------------------------------------------------------------------------------
Projected Net Earnings $ 408,155 $ 464,205 $ 521,574 $ 578,944 $ 636,313 $ 693,583 $ 806,247
==============================================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 3 3 3 3 3 3 4
Wood Pallets Sold This Month 220,233 220,233 220,233 220,233 220,233 220,233 282,233
Steel Pallets on Lease This Month 60,000 74,000 88,000 102,000 116,000 130,000 144,000
Month Month Month Month
Mar 07 Apr 07 May 07 Jun 07
Projected Projected Projected Projected
Month 20 Month 21 Month 22 Month 23
Revenue
Sale of Wood Pallets $1,674,823 $1,674,823 $1,674,823 $1,674,823
Leased Steel Pallets 1,054,300 1,172,800 1,290,900 1,409,200
-------------------------------------------------
Total Revenue $2,729,123 $2,647,423 $2,965,723 $3,084,023
-------------------------------------------------
Less COGS - Wood (889,035) (889,035) (889,035) (889,035)
-------------------------------------------------
Gross Margin $1,840,088 $1,958,388 $2,076,688 $2,194,988
-------------------------------------------------
?% ?% ?% ?%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000)
Commissions (9,100) (9,100) (9,100) (9,100)
Amortization of Steel Pallets (47,229) (57,529) (57,828) (63,128)
Plant Labor Costs
Salary & Wages (154,493) (154,493) (154,493) (154,493)
Payroll Burden (30,899) (30,899) (30,899) (30,899)
Plant Occupancy Costs
Utilities (6,000) (6,000) (6,000) (6,000)
Telephone (1,400) (1,400) (1,400) (1,400)
R&M (3,000) (3,000) (3,000) (3,000)
Pallet Selling Expenses
Shipping/Delivery/Trans (200,979) (200,979) (200,979) (200,979)
-------------------------------------------------
Total Operating Expenses $ (507,600) $ (512,900) $ (518,199) $ (523,499)
Projected Pre-Tax Earnings $1,332,487 $1,445,488 $1,558,488 $1,671,489
Estimated Income Taxes (453,046) (491,456) (529,886) (568,305)
-------------------------------------------------
Projected Net Earnings $ 879,442 $ 954,022 $1,023,602 $1,103,183
=================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 4 4 4 4
Wood Pallets Sold This Month 282,233 282,233 282,233 282,233
Steel Pallets on Lease This Month 162,200 180,400 198,600 216,800
--------------------------------------------------------------------------------
Confidential Information Memorandum, Page 5
APL AMERICAN
PALLET LEASING, INC. APPENDIX VI
-----------------------------------------------------------------------------------------------------
Month Month Month Month Month Month
Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07
Projected Projected Projected Projected Projected Projected
Month 24 Month 25 Month 26 Month 27 Month 28 Month 29
Revenue
Sale of Wood Pallets $ 2,042,742 $ 2,042,742 $ 2,042,742 $ 2,042,742 $ 2,042,742 $ 2,042,742
Leased Steel Pallets 1,045,800 1,787,760 1,929,720 2,071,680 2,213,540 2,385,600
-----------------------------------------------------------------------------------
Total Revenue $ 3,688,542 $ 3,830,507 $ 3,972,462 $ 4,111,422 $ 4,256,382 $ 4,398,342
-----------------------------------------------------------------------------------
Less COGS - Wood (1,084,335) (1,084,335) (1,084,335) (1,084,335) (1,084,335) (1,084,335)
-----------------------------------------------------------------------------------
Gross Margin $ 2,604,207 $ 2,746,167 $ 2,888,127 $ 3,030,087 $ 3,172,047 $ 3,314,007
-----------------------------------------------------------------------------------
27% 72% 73% 74% 75% 75%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000)$ (39,000) $ (39,000)$ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Commissions (9,100) (10,920) (10,920) (10,920) (10,920) (10,920)
Amortization of Steel Pallets (73,727) (80,088) (86,416) (92,805) (92,164) (105,524)
Plant Labor Costs
Salary & Wages (189,693) (189,693) (189,693) (189,693) (189,693) (189,693)
Payroll Burden (37,939) (37,939) (37,939) (37,939) (37,939) (37,939)
Plant Occupancy Costs
Utilities (7,500) (7,500) (7,500) (7,500) (7,500) (7,500)
Telephone (1,750) (1,750) (1,750) (1,750) (1,750) (1,750)
R&M (3,750) (3,750) (3,750) (3,750) (3,750) (3,750)
Pallet Selling Expenses
Shipping/Delivery/Trans (245,129) (245,129) (245,129) (245,129) (245,129) (245,129)
-----------------------------------------------------------------------------------
Total Operating Expenses $ (623,088) $ (631,267) $ (637,627) $ (643,986) $ (650,345) $ (656,705)
Projected Pre-Tax Earnings $ 1,981,119 $ 2,114,899 $ 2,250,500 $ 2,386,101 $ 2,521,701 $ 2,667,302
Estimated Income Taxes (673,580) (719,066) (765,170) (813,274) (857,328) (903,483)
-----------------------------------------------------------------------------------
Projected Net Earnings $ 1,307,538 $ 1,395,734 $ 1,485,330 $ 1,574,826 $ 1,664,323 $ 1,753,819
===================================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 5 5 5 5 5 5
Wood Pallets Sold This Month 344,233 344,233 344,233 344,233 344,233 344,233
Steel Pallets on Lease This Month 253,200 275,040 296,880 315,720 340,560 362,400
Month Month Month Month Month
Jan 08 Feb 08 Mar 08 Apr 08 May 08
Projected Projected Projected Projected Projected
Month 30 Month 31 Month 32 Month 33 Month 34
Revenue
Sale of Wood Pallets $ 2,410,661 $ 2,410,661 $ 2,410,661 $ 2,410,661 $ 2,410,661
Leased Steel Pallets 2,497,560 2,553,716 2,809,872 2,956,028 3,122,184
-------------------------------------------------------------------------
Total Revenue $ 4,908,221 $ 5,064,377 $ 5,220,533 $ 5,376,609 $ 5,532,845
-------------------------------------------------------------------------
Less COGS - Wood (1,279,635) (1,279,635) (1,279,635) (1,279,635) (1,279,635)
-------------------------------------------------------------------------
Gross Margin $ 3,828,566 $ 3,784,742 $ 3,940,898 $ 4,097,054 $ 4,253,210
-------------------------------------------------------------------------
74% 75% 75% 70% 79%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000) (3,000)
Commissions (10,920) (12,012) (12,012) (12,012) (12,012)
Amortization of Steel Pallets (111,883) (118,879) (125,874) (132,869) (139,865)
Plant Labor Costs
Salary & Wages (224,893) (224,893) (224,893) (224,893) (224,893)
Payroll Burden (44,979) (44,979) (44,979) (44,979) (44,979)
Plant Occupancy Costs
Utilities (9,000) (9,000) (9,000) (9,000) (9,000)
Telephone (2,100) (2,100) (2,100) (2,100) (2,100)
R&M (4,500) (4,500) (4,500) (4,500) (4,500)
Pallet Selling Expenses
Shipping/Delivery/Trans (289,279) (289,279) (289,279) (289,279) (289,279)
-------------------------------------------------------------------------
Total Operating Expenses $ (752,054) $ (760,142) $ (767,137) $ (774,132) $ (781,128)
Projected Pre-Tax Earnings $ 2,876,531 $ 3,024,600 $ 3,173,760 $ 3,322,921 $ 3,472,082
Estimated Income Taxes (978,021) (1,028,384) (1,079,079) (1,129,793) (1,180,508)
-------------------------------------------------------------------------
Projected Net Earnings $ 1,898,511 $ 1,996,236 $ 2,094,682 $ 2,193,128 $ 2,291,574
=========================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 6 6 6 6 6
Wood Pallets Sold This Month 406,233 406,233 406,233 406,233 406,233
Steel Pallets on Lease This Month 384,240 408,264 432,288 456,312 480,336
--------------------------------------------------------------------------------
Confidential Information Memorandum, Page 6
APL AMERICAN
PALLET LEASING, INC. APPENDIX VI
-----------------------------------------------------------------------------------------------------
Month Month Month Month Month Month
Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08
Projected Projected Projected Projected Projected Projected
Month 35 Month 36 Month 37 Month 38 Month 39 Month 40
Revenue
Sale of Wood Pallets $ 2,778,580 $ 2,778,580 $ 2,778,580 $ 2,778,580 $ 2,778,580 $ 2,778,580
Leased Steel Pallets 3,434,496 3,508,460 3,762,424 3,926,387 4,090,351 4,254,315
--------------------------------------------------------------------------------------
Total Revenue $ 6,213,076 $ 6,377,039 $ 6,541,003 $ 6,704,067 $ 6,866,931 $ 7,032,895
--------------------------------------------------------------------------------------
Less COGS - Wood (1,474,935) (1,474,935) (1,474,935) (1,474,935) (1,474,935) (1,474,935)
--------------------------------------------------------------------------------------
Gross Margin $ 4,738,141 $ 4,902,104 $ 5,066,068 $ 5,230,032 $ 5,393,996 $ 5,557,960
--------------------------------------------------------------------------------------
72% 77% 72% 73% 75% 70%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Commissions (12,013) (12,013) (12,013) (12,013) (12,013) (12,013)
Amortization of Steel Pallets (153,855) (161,200) (168,545) (175,890) (183,235) (190,581)
Plant Labor Costs
Salary & Wages (260,093) (260,093) (260,093) (260,093) (260,093) (260,093)
Payroll Burden (52,019) (52,019) (52,019) (52,019) (52,019) (52,019)
Plant Occupancy Costs
Utilities (10,500) (10,500) (10,500) (10,500) (10,500) (10,500)
Telephone (2,450) (2,450) (2,450) (2,450) (2,450) (2,450)
R&M (5,250) (5,250) (5,250) (5,250) (5,250) (5,250)
Pallet Selling Expenses
Shipping/Delivery/Trans (333,430) (333,430) (333,430) (333,430) (333,430) (333,430)
--------------------------------------------------------------------------------------
Total Operating Expenses $ (864,109) $ (882,054) $ (890,399) $ (906,745) $ (914,090) $ (921,435)
Projected Pre-Tax Earnings $ 3,854,032 $ 4,010,050 $ 4,166,689 $ 4,323,287 $ 4,479,906 $ 4,636,525
Estimated Income Taxes (1,310,371) (1,363,417) (1,416,667) (1,489,915) (1,523,168) (1,576,418)
--------------------------------------------------------------------------------------
Projected Net Earnings $ 2,543,861 $ 2,648,633 $ 2,750,001 $ 2,853,370 $ 2,956,738$ 13,060,106
======================================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 7 7 7 7 7 7
Wood Pallets Sold This Month 468,233 468,233 468,233 468,233 468,233 468,233
Steel Pallets on Lease This Month 528,084 553,609 578,834 604,060 629,285 654,510
Month Month Month Month Month
Dec 08 Jan 09 Feb 09 Mar 09 Apr 09
Projected Projected Projected Projected Projected
Month 41 Month 42 Month 43 Month 44 Month 45
Revenue
Sale of Wood Pallets $ 3,146,499 $ 3,146,499 $ 3,146,499 $ 3,146,499 $ 3,146,499
Leased Steel Pallets 4,418,279 4,590,441 4,762,603 4,934,765 5,106,927
----------------------------------------------------------------------
Total Revenue $ 7,564,777 $ 7,738,939 $ 7,909,101 $ 8,081,253 $ 8,253,425
----------------------------------------------------------------------
Less COGS - Wood (1,670,235) (1,670,235) (1,670,235) (1,670,235) (1,670,235)
----------------------------------------------------------------------
Gross Margin $ 5,894,542 $ 6,066,704 $ 6,238,888 $ 6,411,028 $ 6,583,190
----------------------------------------------------------------------
78% 79% 70% 79% 80%
Operating Expenses
General & Administrative
Salary & Wages $ (39,000) $ (39,000) $ (39,000) $ (39,000) $ (39,000)
Rent & Other Occupancy (2,500) (2,500) (2,500) (2,500) (2,500)
Travel & Entertainment (10,000) (10,000) (10,000) (10,000) (10,000)
Other Misc. Expenses (3,000) (3,000) (3,000) (3,000) (3,000)
Commissions (12,013) (13,243) (13,243) (13,243) (13,243)
Amortization of Steel Pallets (197,526) (205,638) (213,350) (221,063) (228,775)
Plant Labor Costs
Salary & Wages (295,293) (295,293) (295,293) (295,293) (295,293)
Payroll Burden (59,059) (59,059) (59,059) (59,059) (59,059)
Plant Occupancy Costs
Utilities (12,000) (12,000) (12,000) (12,000) (12,000)
Telephone (2,800) (2,800) (2,800) (2,800) (2,800)
R&M (6,000) (6,000) (6,000) (6,000) (6,000)
Pallet Selling Expenses
Shipping/Delivery/Trans (377,580) (377,580) (377,580) (377,580) (377,580)
----------------------------------------------------------------------
Total Operating Expenses $(1,017,770) $(1,026,113) $(1,033,825) $(1,041,538) $(1,059,250)
Projected Pre-Tax Earnings $ 4,876,772 $ 5,040,591 $ 5,205,041 $ 5,369,491 $ 5,533,940
Estimated Income Taxes (1,658,103) (1,713,801) (1,769,714) (1,825,627) (1,881,540)
----------------------------------------------------------------------
Projected Net Earnings $ 3,218,670 $ 3,326,790 $ 3,435,327 $ 3,543,664 $ 3,552,401
======================================================================
Excluding Financing 0.0% 0.0% 0.0% 0.0% 0.0%
Summary of Statistics
Number of Plants 8 8 8 8 8
Wood Pallets Sold This Month 530,233 530,233 530,233 530,233 530,233
Steel Pallets on Lease This Month 679,735 706,222 732,708 759,195 785,681
--------------------------------------------------------------------------------
Confidential Information Memorandum, Page 7
