Attached files
file | filename |
---|---|
8-K - FORM 8-K - STERLING CONSTRUCTION CO INC | h68920e8vk.htm |
EX-2.1 - EX-2.1 - STERLING CONSTRUCTION CO INC | h68920exv2w1.htm |
EX-23.2 - EX-23.2 - STERLING CONSTRUCTION CO INC | h68920exv23w2.htm |
EX-99.4 - EX-99.4 - STERLING CONSTRUCTION CO INC | h68920exv99w4.htm |
EX-99.1 - EX-99.1 - STERLING CONSTRUCTION CO INC | h68920exv99w1.htm |
EX-99.3 - EX-99.3 - STERLING CONSTRUCTION CO INC | h68920exv99w3.htm |
EX-23.1 - EX-23.1 - STERLING CONSTRUCTION CO INC | h68920exv23w1.htm |
EX-99.5 - EX-99.5 - STERLING CONSTRUCTION CO INC | h68920exv99w5.htm |
Exhibit
99.2
SHELLEY &
COMPANY
Certified Public Accountants
11576 South State, Suite 1102
Draper, Utah 84020
Tel (801) 565-1547
Fax (801) 565-4709
Certified Public Accountants
11576 South State, Suite 1102
Draper, Utah 84020
Tel (801) 565-1547
Fax (801) 565-4709
INDEPENDENT
AUDITORS REPORT
To the Board of Directors and Stockholders of
Ralph L. Wadsworth Construction Company, Inc.
Draper, Utah
I have audited the comparative balance sheets of Ralph L.
Wadsworth Construction Company, Inc. (A Utah Corporation) as of
December 31, 2008 and 2007, and the comparative statements
of income, retained earnings, and cash flows for the years ended
December 31, 2008, 2007 and 2006. These financial
statements are the responsibility of the Companys
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audits in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Ralph L. Wadsworth Construction Company, Inc. as of
December 31, 2008 and 2007, and the results of its
operations and its comparative cash flows for the years ended
December 31, 2008, 2007 and 2006 in conformity with
generally accepted accounting principles, generally accepted in
the United States of America.
/s/ Shelley & Company
Shelley & Company
Draper, Utah 84020
March 7, 2009
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
DECEMBER
31, 2008 AND 2007
December 31, |
December 31, |
|||||||
2008 | 2007 | |||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 25,145,408 | $ | 21,775,408 | ||||
Accounts receivable:
|
||||||||
Trade
|
12,077,899 | 10,710,599 | ||||||
Retainage
|
5,415,928 | 4,047,792 | ||||||
Employees
|
32,246 | |||||||
TOTAL ACCOUNTS RECEIVABLE
|
17,493,827 | 14,790,637 | ||||||
Inventory at cost
|
60,853 | |||||||
Marketable securities held for sale
|
13,672,808 | 4,665,650 | ||||||
Deposits refundable
|
147,840 | 176,490 | ||||||
Prepaid expenses
|
82,230 | 135,623 | ||||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
314,833 | 683,776 | ||||||
TOTAL CURRENT ASSETS
|
56,917,799 | 42,227,584 | ||||||
PROPERTY AND EQUIPMENT AT COST
|
||||||||
Construction equipment
|
10,374,699 | 7,485,266 | ||||||
Transportation equipment
|
3,294,106 | 2,450,025 | ||||||
Office equipment
|
877,018 | 736,408 | ||||||
Land
|
266,501 | 266,501 | ||||||
Leasehold improvement
|
386,426 | 308,433 | ||||||
TOTAL
|
15,198,750 | 11,246,633 | ||||||
Less: Accumulated depreciation
|
5,142,104 | 4,655,004 | ||||||
NET PROPERTY AND EQUIPMENT
|
10,056,646 | 6,591,629 | ||||||
OTHER ASSETS Deposits
|
2,766 | 18,515 | ||||||
TOTAL ASSETS
|
$ | 66,977,211 | $ | 48,837,728 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable Including retainage of $2,980,248
& $1,988,350
|
$ | 10,723,817 | $ | 8,295,134 | ||||
Accrued wages payable
|
519,403 | 332,970 | ||||||
Accrued taxes payable
|
143,343 | 62,736 | ||||||
Pension & profit sharing payable
|
25,828 | 24,853 | ||||||
Note stockholder
|
30,076 | |||||||
Accrued warranty
|
500,000 | |||||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
14,212,949 | 13,552,527 | ||||||
Current portion of long-term debt
|
1,290,010 | 738,966 | ||||||
TOTAL CURRENT LIABILITIES
|
27,445,426 | 23,007,186 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Contracts payable
|
5,117,393 | 1,861,593 | ||||||
Less: Current portion shown above
|
1,290,011 | 738,966 | ||||||
NET LONG-TERM LIABILITIES
|
3,827,382 | 1,122,627 | ||||||
TOTAL LIABILITIES
|
31,272,808 | 24,129,813 | ||||||
STOCKHOLDERS EQUITY
|
||||||||
Common stock $1 par value; 50,000 shares
authorized;5,000 shares issued and outstanding
|
5,000 | 5,000 | ||||||
Less: 452 shares treasury stock at cost
|
275,634 | 275,634 | ||||||
Unrealized holding gains (loss) on securities
|
(278,032 | ) | 191 194 | |||||
Retained earnings
|
36,253,069 | 24,787,355 | ||||||
TOTAL STOCKHOLDERS EQUITY
|
35,704,403 | 24,707,915 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
|
$ | 66,977,211 | $ | 48,837,728 | ||||
The accompanying notes are an integral part of these financial
statements.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
FOR
THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006
2008 | 2007 | 2006 | ||||||||||
Amount | Amount | Amount | ||||||||||
CONSTRUCTION REVENUE
|
$ | 126,121,531 | $ | 92,226,668 | $ | 91,350,056 | ||||||
CONSTRUCTION COSTS
|
100,485,619 | 76,438,503 | 70,688,857 | |||||||||
GROSS PROFIT
|
25,635,912 | 15,788,165 | 20,661,199 | |||||||||
GENERAL & ADMINISTRATIVE EXPENSE
|
5,041,429 | 5,882,326 | 3,474,381 | |||||||||
INCOME FROM OPERATIONS
|
20,594,483 | 9,905,839 | 17,186,818 | |||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||
Equipment usage income
|
164,101 | 40,697 | 134,525 | |||||||||
Service agreement income
|
158,323 | |||||||||||
Interest & dividend income
|
1,135,073 | 1,238,950 | 891,050 | |||||||||
Interest expense
|
(120,047 | ) | (25,145 | ) | (31,307 | ) | ||||||
Miscellaneous income
|
71,772 | 72,369 | 82,366 | |||||||||
Fort Union LLC-rental
|
17,302 | 46,229 | ||||||||||
Gain(loss) on sale of assets
|
419,746 | 141,921 | (46,623 | ) | ||||||||
Gain(loss) on sale of investments
|
(690,303 | ) | 254,841 | 3,049 | ||||||||
TOTAL OTHER INCOME EXPENSE
|
980,342 | 1,740,935 | 1,237,612 | |||||||||
NET INCOME
|
$ | 21,574,825 | $ | 11,646,774 | $ | 18,424,430 | ||||||
The accompanying notes are an integral part of these financial
statements.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
FOR
THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006
RETAINED EARNINGS January 1, 2006
|
$ | 12,239,359 | ||
Add: Net income for the Year Ended December 31, 2006
|
18,424,430 | |||
Less: Dividends paid
|
4,579,688 | |||
RETAINED EARNINGS January 1, 2007
|
$ | 26,084,101 | ||
Add: Net income for the Year Ended December 31, 2007
|
11,646,774 | |||
Less: Dividends paid
|
12,943,520 | |||
RETAINED EARNINGS December 31, 2007
|
24,787,355 | |||
Add: Net income for the Year Ended December 31, 2008
|
21,574,825 | |||
Less: Dividends paid
|
10,109,111 | |||
RETAINED EARNINGS December 31, 2008
|
$ | 36,253,069 | ||
The accompanying notes are an integral part of these financial
statements.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
FOR
THE YEAR ENDED DECEMBER 31, 2008, 2007 AND 2006
December 31, |
December 31, |
December 31, |
||||||||||
2008 | 2007 | 2006 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net Income
|
$ | 21,574,825 | $ | 11,646,774 | $ | 18,424,430 | ||||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||||||
Depreciation
|
1,740,348 | 1,191,511 | 959,403 | |||||||||
Loss(Gain) on sale of:
|
||||||||||||
Equipment
|
(419,746 | ) | (141,921 | ) | 46,623 | |||||||
Investments
|
690,303 | (254,841 | ) | (3,049 | ) | |||||||
(Increase) Decrease in:
|
||||||||||||
Accounts receivable
|
(2,735,436 | ) | 159,413 | (681,284 | ) | |||||||
Accounts receivable other
|
32,246 | (32,002 | ) | 2,938 | ||||||||
Notes receivable related
|
3,745,975 | (1,144,651 | ) | |||||||||
Accrued interest receivable
|
(104,537 | ) | ||||||||||
Note receivable
|
125,000 | |||||||||||
Inventory
|
(60,853 | ) | 1,788 | 32,460 | ||||||||
Refundable deposits
|
28,650 | 316,972 | (493,462 | ) | ||||||||
Prepaid expenses
|
53,393 | (29,894 | ) | 4,207 | ||||||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
368,943 | (303,655 | ) | 27,127 | ||||||||
(Decrease) Increase in:
|
||||||||||||
Accounts payable
|
2,428,683 | (321,093 | ) | 144,561 | ||||||||
Accrued wages payable
|
186,433 | 101,394 | (34,075 | ) | ||||||||
Accrued taxes payable
|
80,607 | (16,467 | ) | 3,212 | ||||||||
Accrued pension payable
|
975 | 12,586 | (2,659 | ) | ||||||||
Stockholder note payable
|
30,076 | (21,371 | ) | |||||||||
Accrued warranty
|
500,000 | |||||||||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
660,422 | 6,182,147 | (4,781,481 | ) | ||||||||
NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES
|
25,159,869 | 22,258,687 | 12,503,392 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase marketable securities
|
(13,051,614 | ) | (12,519,218 | ) | ||||||||
Purchase of fixed assets
|
(5,344,586 | ) | (2,953,985 | ) | (2,263,394 | ) | ||||||
Proceeds from sales of investments
|
2,884,926 | 8,757,770 | 3,200,663 | |||||||||
(Increase) decrease in deposits
|
15,749 | 3,811 | 71,427 | |||||||||
Proceeds from sale of equipment
|
558,967 | 168,693 | 12,987 | |||||||||
NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES
|
(14,936,558 | ) | 5,976,289 | (11,497,535 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Dividends paid
|
(10,109,111 | ) | (11,960,188 | ) | (4,579,688 | ) | ||||||
Increase in long-term liabilities
|
4,426,430 | 1,694,988 | ||||||||||
Repayment of long-term liabilities
|
(1,170,630 | ) | (899,748 | ) | (252,876 | ) | ||||||
NET CASH PROVIDED BY (APPLIED TO) FINANCING ACTIVITIES
|
(6,853,311 | ) | (11,164,948 | ) | (4,832,564 | ) | ||||||
NET INCREASE (DECREASE) IN CASH
|
3,370,000 | 17,070,028 | (3,826,707 | ) | ||||||||
CASH AT BEGINNING OF YEAR
|
21,775,408 | 4,705,380 | 8,532,087 | |||||||||
CASH AT END OF YEAR
|
$ | 25,145,408 | $ | 21,775,408 | $ | 4,705,380 | ||||||
Supplemental Schedules:
|
||||||||||||
Interest paid
|
$ | 120,047 | $ | 25,145 | $ | 31,307 | ||||||
Non-cash property distribution
|
$ | | $ | 983,332 | $ | |
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
FOR
THE YEAR ENDED DECEMBER 31, 2008, 2007 AND 2006
December 31, |
December 31, |
December 31, |
||||||||||
2008 | 2007 | 2006 | ||||||||||
NET INCOME
|
21,574,825 | 11,646,774 | 18,424,430 | |||||||||
OTHER COMPREHENSIVE INCOME
|
||||||||||||
Unrealized holding gain (loss) on available-for-sale-securities
|
(469,226 | ) | (109,453 | ) | 326,742 | |||||||
COMPREHENSIVE INCOME
|
$ | 21,105,599 | $ | 11,537,321 | $ | 18,751,172 | ||||||
The accompanying notes are an integral part of these financial
statements.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
DECEMBER
31, 2008
NOTE A | ACCOUNTING POLICIES |
Companys
Activities and Operating Cycles
The Companys expertise is in heavy highway and bridge
construction for both public and private clients-throughout the
intermountain west. Other areas of expertise include
design-build, concrete paving, pile-driving and shoring, steel
erection, commercial & industrial building
construction and water tank construction. The work is performed
under fixed contracts and unit price contracts modified by
incentive and penalty provisions. Contract length varies from 3
to 30 months.
Cash
and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks
and all highly liquid investments with a maturity of three
months or less at the time of purchase.
Marketable
Securities Held For Sale
All Marketable Securities are stated at market value. By policy,
the Company invests primarily in high-grade marketable
securities. All marketable securities are defined as trading
securities . The Company used the first in, first out (FIFO)
Method of determining cost for realized gains or losses. The
total amount of $13,672,808 and $4,665,650 is presented as a
current asset in 2008 and 2007 respectfully. The fair market
value of assets is determined by outside valuation. Unrealized
holding gains (loss) on securities of $(278,032) and $191,194
are shown as a separate line item of stockholders equity
as of December 31, 2008 and 2007 respectively.
Fixed
Assets and Depreciation
Fixed assets are carried at cost. Maintenance repairs and minor
renewals are charged against earnings when incurred. Additions
and major renewals are capitalized.
The cost and accumulated depreciation of assets sold or retired
are removed from the respective accounts and any gain or loss is
reflected in earnings.
The company uses straight line depreciation with the following
useful lives:
Estimated |
||
Assets
|
Useful Lives | |
Office equipment
|
3-7 Years | |
Transportation equipment
|
3-5 Years | |
Construction equipment
|
3-7 Years | |
Leasehold improvements
|
15 Years | |
Rental real estate
|
391/2 Years |
Depreciation expense for the years ended December 31, 2008,
2007 and 2006 was as follows:
2008 | 2007 | 2006 | ||||||||||
STRAIGHT LINE
|
$ | 1,740,348 | $ | 1,191,511 | $ | 959,403 | ||||||
TOTAL
|
$ | 1,740,348 | $ | 1,191,511 | $ | 959,403 | ||||||
The Company has instigated a depreciation allocation program to
allocate depreciation to various jobs based on equipment usage
applied on an equipment usage rate previously. During 2008, 2007
and 2006 the Company applied $1,510,843, $978,846 and $820,637
in depreciation to jobs in progress.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
The Company instigated a maintenance allocation program to
allocate maintenance and shop costs to various jobs based on
fair value equipment usage. The Company applied in total
$3,789,969, $3,281,705 and $3,102,765 in maintenance and
depreciation to jobs in progress in 2008, 2007 and 2006.
Inventory
The Company has an inventory of construction materials. The
inventory is carried at cost and consists of the following as of
December 31, 2008 and 2007:
2008 | 2007 | |||||||
Construction materials
|
$ | 60,853 | $ | -0- | ||||
TOTAL
|
$ | 60,853 | $ | -0- | ||||
Prepaid
Expenses
The Company has recognized as prepaid expenses the following
items:
2008 | 2007 | |||||||
Prepaid insurance
|
$ | 82,230 | $ | 135,623 | ||||
$ | 82,230 | $ | 135,623 | |||||
Managements
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Warranty
Costs
The Company has accrued a provision for estimated warranty costs
for projects that specify a warranty provision in the contract.
The warranty provision is based on the total estimated warranty
costs specified in certain project contracts, multiplied by a
warranty experienced probability rate determined by the
Companys warranty claim history. For the year ended
December 31, 2008 the Company accrued $500,000 in warranty
expenses to various jobs.
Income
Taxes
The Company has elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code. The company will not
incur federal or state income taxes, instead its earnings
and losses will be included in the stockholders personal
income tax returns and will be taxed based on the
stockholders personal tax strategies.
The Company plans to pay dividends totaling $2,357,000 to
stockholders in April 2009 for payment of personal income taxes
arising from the Companys 2008 income.
Construction
Contracts
The Company has elected to report income from its long term
construction contracts by the percentage of completion method
for financial statement presentation. In managements
opinion this method fairly presents the companys results
of operations and changes in financial position. For income tax
purposes the company
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
has elected to also report on the percentage of completion
method of accounting See
Note A Income Taxes.
Earnings on long-term construction contracts are recognized on
the
percentage-of-completion
method in the ratio that costs incurred bear to total estimated
costs. Because of inherent uncertainties in estimating costs, it
is at least reasonably possible that the estimates used will
change within the near term. Earnings and costs on contracts are
subject to revision throughout the terms of the contracts, and
any required adjustments are made in the period in which
revisions become known. Provisions are made for the full amounts
of anticipated losses in the period in which they are first
determinable. Claims for additional contract revenues are
recognized to the extent of costs incurred if it is probable
that the claim will result in additional revenue and the amount
can be reliably estimated. Profit on such claims is not
recognized until the claims have been allowed. Changes in job
performance, job conditions, and estimated profitability may
result in revisions to costs and income, which are recognized in
the period in which the revisions are determined. Changes in
estimated job profitability resulting from job performance, job
conditions, contract penalty provisions, claims, change orders,
and settlements, are accounted for as changes in estimates in
the current period.
Balances billed but not paid pursuant to retainage provisions
under construction contracts generally become due upon
completion of the contracts and acceptance by the owners.
Construction contracts are normally completed within one or two
years.
Costs and estimated earnings in excess of billings on
uncompleted contracts comprise principally revenues recognized
on contracts for which billings have not been presented to the
contract owners at the balance sheet date. Such revenues are
expected to be billed and collected generally within one year.
Billings in excess of costs and estimated earnings on
uncompleted contracts comprise principally revenues for which
billings have been presented to contract owners for which a
proportionate amount of costs have yet to be expended. Such
costs are anticipated to be expended and excess billings earned
within one year.
Un-Incorporated
Joint Venture Interest
The Company as a 25% member/owner in an unincorporated limited
liability company joint venture on the I-15 NOW Design Build
project has included its 25% interest share of the
following financial information in the financial statements for
the year ended December 31, 2008, 2007 and 2006.
2008 | 2007 | 2006 | ||||||||||
Cash
|
$ | 2,507,120 | $ | 8,426,774 | $ | 5,288,915 | ||||||
Accounts Receivable
|
$ | 1,562,155 | $ | 3,049,246 | $ | 3,050,109 | ||||||
Accounts Payable
|
$ | 803,118 | $ | 1,316,669 | $ | 1,777,934 | ||||||
Billings in Excess of Cost
|
$ | 1,686,308 | $ | 7,336,891 | $ | 5,140,895 | ||||||
Earned Revenue
|
$ | 66,552,532 | $ | 42,205,632 | $ | 16,638,133 | ||||||
Earned Gross Profit
|
$ | 7,140,672 | $ | 5,486,321 | $ | 1,785,168 |
Compensated
Absences
Employees of the Company are entitled to paid vacations and sick
leave depending on job classification, length of service and
other factors. The Company has recognized $216,705 and $208,514
as a liability for vacation and sick pay that is due and payable
as of December 31, 2008 and 2007.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
401(k)
Plan
The Company has established a 401(k) plan for employees of the
corporation. The Board of Directors has elected to contribute
$384,104, $333,704 and $177,725 for the periods ended
December 31, 2008, 2007 and 2006.
Money
Purchase Pension Plan
The Company has an approved Money Purchase Pension Plan which
provides a contribution to all employees performing work on
federally funded projects requiring certified payroll. Employees
who are fully vested may withdraw the contribution from the plan
upon termination of employment or retirement. Payments to the
plan for the years ended December 31, 2008, 2007 and 2006
were $46,526, $111,388 and $119,096.
Dividends
The Board of Directors declared and paid dividends on
outstanding shares of common stock at December 31, 2008 and
2007. The Company paid $10,109,111 in 2008 and $12,943,520 in
2007.
Impairment
of Long-Lived Assets
In the event that facts and circumstances indicate that property
and equipment or other assets may be impaired, an evaluation
recoverability would be performed. If an evaluation required,
the estimated future undiscounted cash flows associated with the
asset are compared to the assets carrying amount to
determine if a write-down to fair value is necessary.
NOTE B | LONG-TERM LIABILITIES |
The following summarizes the Companys long-term debt at
December 31, 2008 and 2007.
December 31 |
December 31 |
|||||||
2008 | 2007 | |||||||
7 Contracts payable secured by equipment payable in monthly
principal & interest installments of $9,439 with
interest at 0% annual rate due 2010.
|
$ | 176,051 | $ | 273,162 | ||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $16,425 with
interest at 0% annual rate due 2011.
|
$ | 459,889 | $ | |||||
5 Contracts payable secured by equipment payable in monthly
principal & interest installments of $3,424 with
interest at 0% annual rate due 2012.
|
$ | 156,305 | $ | 117,479 | ||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $9,378 with
interest at 0% annual rate due 2009.
|
$ | 112,538 | $ | 225,076 | ||||
8 Contracts payable secured by equipment payable in monthly
principal & interest installments of $5,469 with
interest at 0% annual rate due 2013.
|
$ | 279,183 | $ | |||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $7,333 with
interest at 0% annual rate due 2012.
|
$ | 293,315 | $ | |||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $4,458 with
interest at 0% annual rate due 2010.
|
$ | 80,240 | $ | 133,734 | ||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $10,073 interest
at 4.92% annual rate due 2012.
|
$ | 387,899 | $ | |||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $16,565 with
interest at 4.92% annual rate due 2012.
|
$ | 637,931 | $ | |||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $2,774 with
interest at 5.68% annual rate due 2012.
|
$ | 107,714 | $ |
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
December 31 |
December 31 |
|||||||
2008 | 2007 | |||||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $11,618 with
interest at 5.56% annual rate due 2012.
|
$ | 452,006 | $ | |||||
Contract payable secured by equipment payable in monthly
installments to reflect
1/3
principle payments in 2010 through 2012 with a variable interest
rate of 3.536% increasing to 3.965% by 2012.
|
$ | 1,309,670 | $ | |||||
Contract payable secured by equipment payable of $17,769 every
other month for 2005 then increases to $20,970 per month with
interest at 5.24%.
|
$ | $ | 244,637 | |||||
Contract payable secured by equipment payable in monthly
principal & interest installments of $20,717 with
interest at 5.9% annual rate due 2011.
|
$ | 664,652 | $ | 867,505 | ||||
TOTAL LONG-TERM LIABILITIES
|
$ | 5,117,393 | $ | 1,861,593 | ||||
LESS CURRENT PORTION
|
$ | 1,290,011 | $ | 738,966 | ||||
NET LONG-TERM LIABILITIES
|
$ | 3,827,382 | $ | 1,122,627 | ||||
The Companys long-term maturities for the next five years
are:
2008 | 2007 | |||||||||
2009
|
$ | 1,290,011 | 2008 | $ | 738,966 | |||||
2010
|
$ | 1,601,092 | 2009 | $ | 505,628 | |||||
2011
|
$ | 1,384,624 | 2010 | $ | 357,527 | |||||
2012
|
$ | 815,617 | 2011 | $ | 246,418 | |||||
2013 & after
|
$ | 26,049 | 2012 & after | $ | 13,054 | |||||
TOTAL
|
$ | 5,117,393 | TOTAL | $ | 1,861,593 | |||||
NOTE C RELATED
PARTY TRANSACTIONS
The Company rents an office building from a related party. The
building is located at 166 East 14000 South #200, Draper,
Utah. The rent for this location is $23,975 per month. The rate
will increase 3% per year. The Company rents a shop on Dannon
Way from related parties and pays $12,000 per month.
The future lease payments as of December 31, 2008 are as
follows:
2009
|
$ | 431,700 | ||
2010
|
$ | 440,311 | ||
2011
|
$ | 449,221 | ||
2012
|
$ | 458,378 | ||
2013
|
$ | 467,809 | ||
$ | 2,247,419 | |||
The Company entered into a service agreement with Wadsworth
Development Group LLC, a Utah LLC, whose members are all related
parties. The LLC is in the business of developing real property
for retail, commercial, industrial
and/or
office uses. The Company has agreed to provide furnished office
space, support staff and support equipment. All rates are based
on fair market rates or actual costs. The term of the agreement
is for one year beginning, January 1, 2005 with additional
one year options. The options have been exercised for 2007
through 2009.
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
The Company has various notes payable, as of December 31,
2008, to stockholders in the amount of $30,076 with interest at
5% per annum.
The Company has several contracts as of December 31, 2008
totaling $3,066,756 with backlog at $236,091 with related
parties. These are handled in an arms length contract at cost
and are subject to normal construction draws. Related party
contracts are as follows:
Original |
||||||||
Contract |
||||||||
Contract
|
Amount | Backlog | ||||||
The Exchange Building E
|
$ | 2,138,260 | $ | 175,051 | ||||
Exchange Site Work
|
$ | 794,703 | $ | 60,399 | ||||
Copper Ridge Site
|
$ | 133,793 | $ | 641 | ||||
$ | 3,066,756 | $ | 236,091 | |||||
NOTE D | CONTRACTS IN PROCESS |
Information with respect to contracts in process at
December 31, 2008 and 2007 are as follows:
2008 | 2007 | |||||||
Expenditures on uncompleted contracts
|
$ | 206,897,159 | $ | 145,677,763 | ||||
Estimated earnings thereon
|
46,062,848 | 27,108,066 | ||||||
252,960,007 | 172,785,829 | |||||||
Less: Billings applicable thereto
|
266,858,123 | 185,654,580 | ||||||
$ | 13,898,116 | $ | 12,868,751 | |||||
Included in the accompanying balance sheet under the following
captions:
|
||||||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
$ | 314,833 | $ | 683,776 | ||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
14,212,949 | 13,552,527 | ||||||
$ | 13,898,116 | $ | 12,868,751 | |||||
NOTE E | BACK LOG |
The following schedule summarizes changes in backlog on
contracts during the years ended December 31, 2008, 2007
and 2006. Backlog represents the amount of revenue the company
expects to realize from work to be performed on uncompleted
contracts in progress at year end and from contractual
agreements on which work has not yet begun.
2008 | 2007 | 2006 | ||||||||||
Back log balance Beginning
|
$ | 54,584,937 | $ | 104,907,975 | $ | 114,672,314 | ||||||
New contracts during the year
|
165,594,281 | 41,903,630 | 81,585,717 | |||||||||
220,179,218 | 146,811,605 | 196,258,031 | ||||||||||
Less: contract revenue earned during the year
|
126,121,531 | 92,226,668 | 91,350,056 | |||||||||
Back log balance Ending
|
$ | 94,057,687 | $ | 54,584,937 | $ | 104,907,975 | ||||||
RALPH L.
WADSWORTH CONSTRUCTION COMPANY, INC.
NOTES TO
FINANCIAL STATEMENTS (Continued)
In addition, the Company has entered into additional contracts
totaling $3,612,285 between January 1, 2009 and
March 7, 2009. The Company also has an ongoing design build
project estimated to be $52 million when approved.
NOTE F | FINANCIAL INSTRUMENTS |
Concentration
of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of temporary
cash investments and trade accounts receivables. The Company
places its temporary cash investments with financial
institutions and limits the amount of credit exposure to any one
financial institution. Concentrations of credit risk with
respect to trade receivables are limited due to the large number
of customers comprising the Companys customer base and
their dispersion across different industries and geographic
areas. As of December 31, 2008 and 2007 the Company had no
significant concentration of risk.
Concentrations
of Credit Risk Arising from Cash Deposits in Excess of Insured
Limits
The Company maintains cash balances at several financial
institutions located in Utah. Accounts at each institution are
insured by the Federal Deposit Insurance Corporation up to
$250,000 per account. The Company also has additional accounts
backed by the Full Faith & Credit of the United States
Government. At December 31, 2008 and 2007, the
Companys uninsured cash balances total $11,400,408 and
$21,675,408.