GIBRALTAR INDUSTRIES, INC. - FORM 8-K/A - EX-99.2 - August 25, 2015

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EX-99.4 - EX-99.4 - GIBRALTAR INDUSTRIES, INC.ex-994.htm
EX-99.5 - EX-99.5 - GIBRALTAR INDUSTRIES, INC.ex-995.htm
EX-99.3 - EX-99.3 - GIBRALTAR INDUSTRIES, INC.ex-993.htm

Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Audited Combined Financial Statements




INDEPENDENT AUDITORS’ REPORT


Shareholder and Member
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates:

Report on the Financial Statements
We have audited the accompanying combined financial statements of Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates (the “Company”), which comprise the combined balance sheets as of December 31, 2014 and 2013, and the related combined statements of income, comprehensive income, changes in stockholder’s equity and cash flows for the years then ended, and the related notes to the combined financial statements.

Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these combined financial statements based on our audits. We did not audit the 2014 financial statements of Renusol GmbH, a wholly owned subsidiary of RBI Solar, Inc., which statements reflect total assets of $5,567,138 as of December 31, 2014, and total revenues of $8,474,414 for the period from acquisition, June 3, 2014, to December 31, 2014. Those statements, which were prepared in accordance with §317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW), were audited by other auditors, whose report has been furnished to us. We have applied audit procedures on the conversion adjustments to the financial statements of Renusol GmbH, which conform those financial statements to accounting principles generally accepted in the United States of America. Our opinion, insofar as it relates to amounts included for Renusol GmbH as of December 31, 2014, and for the period from acquisition, June 3, 2014, to December 31, 2014, prior to these conversion adjustments, is based solely on the report of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.



Exhibit 99.2


An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, based on our audits and the report of the other auditors, the combined financial statements referred to above present fairly, in all material respects, the financial position of Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Combining Information
Our audits were conducted for the purpose of forming an opinion on the combined financial statements as a whole. The supplementary information is presented for purposes of additional analysis of the combined financial statements rather than to present the financial position, results of operations, and cash flows of the individual companies, and it is not a required part of the combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The combining information has been subjected to the auditing procedures applied in the audit of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, which insofar as it relates to Renusol GmbH, is based on the report of other auditors, the combining information is fairly stated in all material respects in relation to the combined financial statements as a whole.

/s/ Clark, Schaefer, Hackett & Co.

Cincinnati, Ohio

April 10, 2015



Exhibit 99.2



Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
Combined Balance Sheets
 
 
December 31, 2014 and 2013
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
2013
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
5,317,379
 
 
5,550,026

 
 
Accounts receivable - trade
 
 
 
 
 
 
 
 
net of allowance for doubtful accounts
 
29,937,323
 
 
13,345,910

 
 
Accounts receivable - affiliates and others
 
1,310,551
 
 
132,113

 
 
Note receivable, current - affiliate
 
116,084
 
 
108,635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
36,681,337
 

19,136,684


 
Costs and estimated earnings in excess
 
 
 
 
 
 
 
 
of billings on uncompleted contracts
 
6,635,898
 
 
4,294,592

 
 
Inventory
 
5,354,535
 
 
2,344,155

 
 
Prepaid expenses
 
2,656,561
 
 
1,629,648

 
 
 
 
 
 
 
 
 
 
 
Total current assets
 
 
51,328,331
 
 
27,405,079


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment - at cost
 
18,030,264
 
 
12,689,448

 
 
Less accumulated depreciation
 
9,050,611
 
 
5,522,103

 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
 
8,979,653
 
 
7,167,345

 
 
 
 
 
 
 
 
 
 
 
Note receivable, long term - affiliate
 
1,402,826
 
 
1,596,636

 
 
Other assets
 
16,969
 
 
23,738

 
 
 
 
 
 
 
 
 
 
 
Total assets
$
 
61,727,779
 
 
36,192,798

 
 


See accompanying notes to the combined financial statements.














Exhibit 99.2



Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
Combined Balance Sheets (Continued)
 
 
December 31, 2014 and 2013
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 
 
 
 
 
 
 
 
 
 
2014
 
 
2013
 
Current liabilities:
 
 
 
 
 
 
 
 
Line of credit
$
6,500,000
 
 
 
-

 
 
Accounts payable
 
 
9,762,350

 
 
5,303,728

 
 
Accounts payable - affiliates and others
 
-
 
 
 
11,308

 
 
Customer deposits
 
3,723,238
 
 
 
2,241,493

 
 
Accrued liabilities:
 
 
 
 
 
 
 
Wages, bonuses and sales commissions
 
 
3,082,704

 
 
1,398,856

 
 
Sales, payroll, workers' compensation
 
 
 
 
 
 
 
 
     and other taxes
 
 
1,537,235

 
 
281,722

 
 
Personal property, real estate taxes and other taxes
 
 
1,529,582

 
 
486,050

 
 
Other
 
 
378,683

 
 
25,000

 
 
Billings in excess of costs and estimated
 
 
 
 
 
 
 
 
earnings on uncompleted contracts
 
 
16,321,317

 
 
15,329,675

 
 
 
 
 
 
 
 
 
 
 
Total current liabilities
 
 
42,835,109

 
 
25,077,832

 
 
 
 
 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
 
Other accrued liabilities
 
1,405,706
 
 
 
257,370

 
 
 
 
 
 
 
 
 
 
 
Stockholder's equity:
 
 
 
 
 
 
 
 
Common stock
 
30,323
 
 
 
30,323

 
 
Additional paid in capital
 
8,221,804
 
 
 
6,815,804

 
 
Retained earnings
 
9,466,414
 
 
 
3,848,001

 
 
Accumulated other comprehensive income(loss)
 
(231,577
)
 
 
163,468

 
 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
 
 
17,486,964

 
 
10,857,596

 
 
 
 
 
 
 
 
 
 
 
Total liabilities and stockholder's equity
$
61,727,779
 
 
 
36,192,798
 


See accompanying notes to the combined financial statements.
















Exhibit 99.2




Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
Combined Statements of Income
 
 
 
Years Ended December 31, 2014 and 2013
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
 
 
 
 
 
 
 
Revenues
$
163,927,134
 
 
88,790,481

 
 
 
 
 
 
 
Cost of revenues
 
122,699,307
 
 
68,443,887

 
 
 
 
 
 
 
 
Gross profit
 
41,227,827
 
 
20,346,594
 
 
 
 
 
 
 
Selling expenses
 
11,179,718
 
 
6,319,643

 
Administrative expenses
 
9,766,606
 
 
5,677,870

 
Discretionary compensation
 
4,419,624
 
 
2,325,560

 
 
 
 
 
 
 
 
Income from operations
 
 
15,861,879
 
 
6,023,521

 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Interest expense
 
(77,859)
 
-

 
Gain (loss) on disposition of equipment
 
(36,547)
 
2,713

 
Other income (Note 14)
 
931,353
 
 
164,290

 
 
 
 
 
 
 
 
 
Total other income from operations
 
 
816,947
 
 
167,003

 
 
 
 
 
 
 
 
Income before taxes from operations
 
 
16,678,826
 
 
6,190,524

 
 
 
 
 
 
 
 
 
Income tax expense
 
676,653
 
 
86,205

 
 
 
 
 
 
 
 
 
Net income
$
 
16,002,173
 
 
6,104,319

 


See accompanying notes to the combined financial statements.




















Exhibit 99.2


Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
Combined Statements of Comprehensive Income
 
 
Years Ended December 31, 2014 and 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
2013
 
 
 
 
 
 
 
 
 
Net Income
$
16,002,173
 
6,104,319
 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
(395,045)
21,268
 
 
 
 
 
 
 
 
 
Comprehensive income
$
 
15,607,128
 
 
6,125,587
 


See accompanying notes to the combined financial statements.





Exhibit 99.2


Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Combined Statements of Changes in Stockholder's Equity
Years Ended December 31, 2014 and 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
Additional
 
 
 
other
 
 
 
 
Common
 
paid in
 
Retained
 
comprehensive
 
 
 
 
stock
 
capital
 
Earnings
 
income (loss)
 
Total
Balance, December 31, 2012
$
30,323
 
3,193,804
 
3,543,470
 
142,200
 
6,909,797
 
 
 
 
 
 
 
 
 
 
 
Net income
 
-
 
-
 
6,104,319
 
-
 
6,104,319
 
 
 
 
 
 
 
 
 
 
 
Capital contributions
 
-
 
3,622,000
 
-
 
-
 
3,622,000
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income
 
-
 
-
 
-
 
21,268
 
21,268
 
 
 
 
 
 
 
 
 
 
 
Dividends
 
-
 
-
 
(5,799,788)
 
-
 
(5,799,788)
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2013
$
30,323
 
6,815,804
 
3,848,001
 
163,468
 
10,857,596
 
 
 
 
 
 
 
 
 
 
 
Net income
 
-
 
-
 
16,002,173
 
-
 
16,002,173
 
 
 
 
 
 
 
 
 
 
 
Capital contributions
 
-
 
1,406,000
 
-
 
-
 
1,406,000
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income
 
-
 
-
 
-
 
(395,045)
 
(395,045)
 
 
 
 
 
 
 
 
 
 
 
Dividends
 
-
 
-
 
(10,383,760)
 
-
 
(10,383,760)
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2014
$
30,323
 
8,221,804
 
9,466,414
 
(231,577)
 
17,486,964


See accompanying notes to the combined financial statements.








Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
Combined Statements of Cash Flows
 
Years Ended December 31, 2014 and 2013
 
 
 
 
 
 
 
 
2014

 
2013

Cash flows from operating activities:
 
 
 
 
 
Net income
$
 
16,002,173

 
6,104,319

Adjustments to reconcile net income to net cash
 
 
 
 
 
provided by operating activities:
 
 
 
 
 
Depreciation
 
 
1,615,077

 
968,960

Bad debt expense
 
 
204,240

 
148,206

LIFO reserve
 
 
24,364

 
(35,764)

Inventory obsolescence
 
 
245,000

 
—

(Gain) loss on disposition of equipment
 
 
36,547

 
(2,713)

Gain on bargain purchase (Note 14)
 
 
(569,970)

 
—

Increase (decrease) due to changes in assets
 
 
 
 
 
and liabilities, net of acquisition:
 
 
 
 
 
Accounts receivable
 
 
(15,159,503)

 
(3,641,265)

Inventory
 
 
(1,078,386)

 
(520,278)

Prepaid expenses and other assets
 
 
(652,835)

 
38,391

Costs and estimated earnings in excess of
 
 
 
 
 
billings on uncompleted contracts
 
 
(2,341,306)

 
(1,841,684)

Accounts payable
 
 
3,543,366

 
2,179,471

Billings in excess of costs and estimated
 
 
 
 
 
earnings on uncompleted contracts
 
 
991,642

 
1,866,598

Customer deposits
 
 
1,481,745

 
1,093,628

Accrued liabilities
 
 
3,192,164

 
964,007

Proceeds from sale of trading investments
 
 
—

 
5,535,938

Purchases of trading investments
 
 
—

 
(3,968,973)

Net cash provided by operating
 
 
7,534,318

 
8,888,841

 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
Additions to property, plant and equipment
 
 
(3,029,703)

 
(4,380,275)

Proceeds from disposition of equipment
 
 
410,944

 
17,133

Business combination (Note 14)
 
 
(2,461,762)

 
—

Net cash used in investing activities
 
 
(5,080,521)

 
(4,363,142)

 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
Payments received on notes receivable
 
 
186,361

 
104,965

Net change in line of credit
 
 
6,500,000

 
—

Capital contributions
 
 
1,406,000

 
3,622,000

Dividends paid
 
 
(10,383,760
)
 
(5,799,788)

Net cash used in financing activities
 
 
(2,291,399)

 
(2,072,823)

 
 
 
 
 
 
Foreign currency translation adjustment
 
 
(395,045)

 
21,268

 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
 
(232,647)

 
2,474,144

 
 
 
 
 
 
Cash and cash equivalents at beginning of year
 
 
5,550,026

 
3,075,882

 
 
 
 
 
 
Cash and cash equivalents at end of year
$
 
5,317,379

 
5,550,026

See accompanying notes to the combined financial statements.



Exhibit 99.2



Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Combined Statements of Cash Flows (Continued)
Years Ended December 31, 2014 and 2013
 
 
 
 
 
 
 
 
2014
 
 
2013
Supplemental disclosure of cash transactions:
 
 
 
 
 
Taxes paid
$
168,241
 
 
86,205
 
 
 
 
 
 
Interest paid
$
77,859
 
 
-


See accompanying notes to the combined financial statements.





Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of business
The combined companies (“Company”) design, manufacture, install and maintain greenhouses, garden centers, conservatories, solar panel mounting systems and related products. The Company’s customers include retailers, commercial growers, general contractors, horticultural distributors and institutions. The customers are located globally. The greenhouse segment of the Company accounts for approximately $57 million and $47 million of net sales in 2014 and 2013, respectively. The solar segment of the Company accounts for approximately $107 million and $41 million of net sales in 2014 and 2013, respectively.

Principles of combination
The combined financial statements include the accounts of Rough Brothers Manufacturing, Inc. and subsidiaries, RBI Solar, Inc. and subsidiaries, and Delta T Solutions Inc. All material intercompany accounts and transactions have been eliminated.

Rough Brothers Manufacturing, Inc. (“RBM”) and subsidiaries include the consolidated accounts of Rough Brothers Manufacturing, Inc. and its wholly owned subsidiaries, Rough Brothers, Inc. (“RBI”) and its subsidiary Rough Brothers Construction Inc., and Rough Brothers Asia, LLC and its subsidiary Rough Brothers Greenhouse Manufacturing (Shanghai) Co., Ltd (“RBGM”). All material intercompany accounts and transactions have been eliminated.

RBI Solar, Inc. and subsidiaries include the consolidated accounts of RBI Solar, Inc. and its wholly owned subsidiary RBI International, LLC and its subsidiary RBI Solar KK (Japan), and its wholly owned subsidiary Renusol GmbH (“RSE”) and its subsidiary Renusol America, Inc. (“RSA”), which were acquired June 3, 2014 (Note 14). Accordingly, the accompanying combined financial statements include the consolidated accounts of Renusol GmbH and its subsidiary Renusol America, Inc. and the results of their consolidated operations from the date of acquisition forward. All material intercompany accounts and transactions have been eliminated.

The companies included in the combined financial statements are under common ownership and management.

Cash and cash equivalents
The Company considers all cash instruments with an original maturity of 90 days or less to be cash and cash equivalents. The companies have pooled cash accounts.

Accounts receivable
The Company carries its accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a history of collections and current credit conditions. To reduce the credit risk associated with significant accounts receivable, the Company performs ongoing credit evaluations of its customers’ financial condition. The allowance for doubtful accounts was $217,608 and $225,590 at December 31, 2014 and 2013, respectively.

Accounts receivable included retentions on contracts of $1,928,548 and $1,038,051 at December 31, 2014 and 2013, respectively.



Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

Revenues and cost recognition
Revenues from contracts are recognized on the percentage-of -completion method, measured by comparing costs incurred to date to estimated total costs to be incurred. This method is used because management considers costs to be the best available measure of progress on these contracts. Revenue on projects of a short term or purchase order nature are recognized as completed.

Contract costs include all direct costs related to contract performance. Selling and administrative expenses are charged to operations as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Because of inherent uncertainties in estimating costs, it is reasonably possible that changes in performance could result in revisions to cost and income, which are recognized in the period when the revisions are determined.

The Company received $500,000 in 2000 for a separately stated extended warranty on a contract which was recorded as deferred revenue and is recognized in income on a straight -line basis over the warranty period. Income recognized in other income on this warranty was $25,000 in 2014 and 2013.

Inventory
Inventory for RBM is stated at the lower of cost or market. Cost for RBM is determined by the last-in, first-out (LIFO) method. If the first-in, first-out (FIFO) method had been used, net income would have been approximately $16,032,000 and $6,069,000 for the years ended December 31, 2014 and 2013, respectively. For companies other than RBM, cost is determined on a first-in, first-out (FIFO) basis.

 
2014
 
2013
Inventory at cost
$
3,183,222

 
2,506,090

LIFO reserve
(421,896
)
 
(397,532
)
Total inventory at LIFO
2,761,326

 
2,108,558

Inventory carried at FIFO
2,593,209

 
235,597

 
 
 
 
Total inventory
$
5,354,535

 
2,344,155


The companies in the roof mount solar panel mounting systems division (RSE and RSA) have provided a reserve for obsolescence, slow moving or obsolete parts of approximately $245,000 at December 31, 2014. No reserve for obsolescence, slow moving or obsolete parts has been made for inventory for the year ended December 31, 2013.

Property, plant and equipment
Property, plant and equipment are recorded at cost. Major repairs and betterments are capitalized if it extends the life of the asset. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Estimated useful lives are as follows:

Machinery and equipment
5 to 7 years
Dies
3 years
Transportation equipment
5 years
Office equipment
3 to 10 years



Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

Income taxes
Rough Brothers Manufacturing, Inc. along with Delta T Solutions, Inc. and RBI Solar, Inc. have elected to be taxed as an S corporation. In lieu of corporate income taxes, the stockholder of an S corporation is taxed on their proportionate share of the Company’s taxable income. These entities are assessed local taxes at the corporate level.

Rough Brothers, Inc. and its subsidiary Rough Brother Construction, Inc. (C corporations) file a consolidated return. Income tax expense related to these two companies is included in the tax expense. Any deferred tax asset attributable to Chinese income taxes has been fully reserved. Such amount is immaterial to the combined financial statements as a whole.

RBGM is a foreign corporation subject to taxation in China. There were net operating loss carry-forward amounts sufficient not to incur taxes in China. Any deferred tax asset attributable to Chinese income taxes has been fully reserved. Such amount is immaterial to the combined financial statements as a whole. Its income and loss is included in that of the Company for U.S. income tax purposes as a pass-through entity.

RBI Solar, KK a foreign corporation subject to taxation in accordance with the tax provisions of the country of Japan. In accordance with the Japanese tax provisions, income repatriated to the United States is taxable to the parent company only upon receipt of dividends. In 2014 and 2013, it incurred losses for which a deferred tax asset has been recognized, however, it has been fully reserved due to the startup nature of the business. The amount would be immaterial to the combined financial statements as a whole.

Renusol GmbH is a foreign corporation subject to taxation in accordance with the tax provisions of the country of Germany. In accordance with German tax provisions, income repatriated to the United States is taxable to the parent company only upon receipt of dividends. For the period ended December 31, 2014, Renusol GmbH sustained a loss for which any tax effect was immaterial to the combined financial statements.

Renusol America, Inc., a C Corporation, files its income tax return in accordance with Federal income tax provisions of the Internal Revenue Code. Renusol America, Inc. has incurred net operating losses for which a deferred tax asset has been recognized, however, it has been fully reserved due to its current history of tax losses and the uncertainty surrounding its ability to use these losses. The amount would be immaterial to the combined financial statements as a whole.

The Company’s policy, generally, is to make distributions to its stockholder at least sufficient to pay the individual tax liabilities related to their share of the Company’s taxable income.

Uncertain tax positions
Uncertainty in income taxes is accounted for in accordance with accounting principles generally accepted in the United States of America, which clarify the accounting and recognition for income tax positions taken or expected to be taken in the income tax returns. The Company’s income tax filings are subject to audit by various taxing authorities, with open audit periods of 2011–2013. The Company’s policy with regard to interest and penalty is to recognize interest through interest expense and penalties through other expense. In evaluating the Company’s tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes their estimates are appropriate based on current facts and circumstances.




Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

Foreign currency transactions and translations
The functional currency of the Chinese operations is the Chinese yuan. Gains and losses in translation of the Chinese yuan to U.S. dollars are included as a separate component of stockholder’s equity under accumulated other comprehensive income. Gains and losses due to monetary transactions are recorded in the income statement in the period of the transaction.

The functional currency of the Japanese operations is the Japanese yen. Gains and losses in translation of the Japanese yen to U.S. dollars are included as a separate component of stockholder’s equity under accumulated other comprehensive income. Gains and losses due to monetary transactions are recorded in the income statement in the period of the transaction.

The functional currency of the German operations is the Euro. Gains and losses in translation of the Euro to U.S. Dollars are included as a separate component of stockholder’s equity under accumulated other comprehensive income. Gains and losses due to monetary transactions are recorded in the income statement in the period of the transaction.

Estimates
Management uses estimates and assumptions in preparing financial statements in conformity with accounting principles generally accepted in the Unites States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accordingly, actual results could differ from those estimates.

Shipping and handling costs
The Company’s shipping and handling costs are included in cost of revenues for all periods presented.

Advertising
The Company expenses advertising and marketing costs when the advertisement or event occurs. Advertising expense was $2,255,806 and $1,125,989 in 2014 and 2013, respectively.

Common control leasing arrangements
The Company has decided to early- adopt the provisions of the Accounting Standards Update (“ASU”) 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements and has not consolidated the financial statements of four of the Company’s real estate variable interest entities (5513 Vine, LLC, RBI Temecula Properties, LLC and RBI Techsolve Property, LLC) in the accompanying combined financial statements (Note 13).

Subsequent event
The Company evaluates events and transactions occurring subsequent to the date of the combined financial statements for matters requiring recognition or disclosure in the combined financial statements. The accompanying combined financial statements consider events through April 10, 2015, the date on which the combined financial statements were available to be issued.






Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:
 
 
2014

 
2013

Cost incurred on uncompleted contracts
$
67,086,910

 
69,998,712

Estimated earnings
 
11,363,673

 
11,584,107

 
 
78,450,583

 
81,582,819

Less billings to date
 
(88,136,002
)
 
(92,617,902
)
 
$
(9,685,419
)
 
(11,035,083
)

Amounts are included in the consolidated balance sheet under the following classifications:
 
 
2014

 
2013

Costs in excess of billings
$
6,635,898

 
4,294,592

Billings in excess of costs
 
(16,321,317
)
 
(15,329,675
)
 
$
(9,685,419
)
 
(11,035,083
)

The estimated contract revenue, estimated costs and gross profit related to work to be performed on contracts in progress approximated $56 million, $42 million, and $14 million, respectively, at December 31, 2014, and $34 million, $29 million, and $5 million, respectively, at December 31, 2013.

3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment at December 31, consisted of the following:
 
 
2014

 
2013

Machinery and equipment
$
15,125,961

 
10,966,828

Dies
 
512,674

 
471,283

Transportation equipment
 
205,244

 
205,527

Office equipment
 
2,186,385

 
1,045,810

 
 
18,030,264

 
12,689,448

Less accumulated depreciation
 
(9,050,611
)
 
(5,522,103
)
 
$
8,979,653

 
7,167,345


4. BANK LINE OF CREDIT:

The Company had access to a line of credit totaling $20,000,000 at December 31, 2014. Availability on the line of credit is subject to a borrowing base formula (limited to $15,000,000 at December 31, 2014). The line bears interest equal to 2.5% in excess of 30 day LIBOR rate (2.75% at December 31, 2014) and matures August 31, 2015. The line is collateralized by all Company tangible and intangible personal property. The Company had $6,500,000 outstanding at December 31, 2014 and no borrowings at December 31, 2013. Borrowings under the line are subject to certain financial covenants. At December 31, 2014, the Company was in compliance with all of its covenants.



Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

5. PRODUCT WARRANTY COSTS:

The Company accrues estimated future warranty obligations and recognizes income on an extended warranty sold. Accrued warranty costs are included in other accrued liabilities within the combined balance sheets at December 31, 2014 and 2013.

The following table is a reconciliation of these product warranty costs and income recognized:

 
 
2014
 
2013
Balance at beginning of year
$
282,370

 
307,370

Addition through acquisition (Note 14)
 
921,231

 
-

Provision for warranty cost
 
252,105

 
-

Warranty revenue recognized
 
(25,000
)
 
(25,000
)
Balance at end of year
$
1,430,706

 
282,370


In addition, the Company provides for warranty contingencies for long-term projects as part of its work in process calculations. Those amounts are included in billings in excess of costs.

6.    STOCKHOLDER’S EQUITY:

 
 
 
Issued and
Stated

 
Rough Brothers
Par
Authorized
Outstanding
Value

 
 
 
 
 
 
Manufacturing Inc.
No par
750 Shares
20 Shares
$
29,823

 
RBI Solar, Inc.
No par
1,500 Shares
1,500 Shares
500

 
Delta T Solutions Inc.
No par
10,000 Shares
1,000 Shares
-

 
 
 
 
 
$
30,323

 

7.    DISCRETIONARY COMPENSATION:

Discretionary compensation consists of profit sharing bonuses and 401(k) matching contributions given to employees.

8.    RETIREMENT PLAN:

The Company has a 401(k) plan for the benefit of all eligible employees. At its discretion, the Company may make several types of contributions to the Plan. Participants may make voluntary contributions to the plan up to the lesser of 90% of compensation (as defined by the plan) or the maximum allowed by the IRS. The Company’s contribution charged to operations was $35,762 and $31,108 in 2014 and 2013, respectively.




Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

9.    LEASE COMMITMENTS:

The Company leases office and warehouse facilities under various operating leases. Total rent expense was approximately $912,000 and $535,000 in 2014 and 2013, respectively. Included in rent expense for both 2014 and 2013 is $206,512 and 200,644, respectively, for office and warehouse facilities leased from parties related through common control (Notes 10 and 13). Also included in rent expense for 2014 and 2013 is approximately $488,000 and $142,000, respectively, for operating leases for foreign manufacturing facilities.

As of December 31, 2014, future minimum lease payments, including amounts due to related parties, approximate:

2015
$
1,409,000
2016
 
1,013,000
2017
 
912,000
2018
 
789,000
2019
 
765,000
Thereafter
 
3,827,000
 
$
8,715,000

10. TRANSACTIONS WITH RELATED PARTIES:

ProtekPark, Inc. (ProtekPark)
ProtekPark designed and constructs covered parking structures. The Company had $ 7,113 receivable from and $6,488 payable to ProtekPark as of December 31, 2013. The Company had sales to ProtekPark of $5,417, purchased design services in the amount of 23,882, and received management fees from ProtekPark of $216,000 in 2013. There were no transactions with ProtekPark in 2014.

RBI Series of Fortress Insurance, LLC
RBI Series of Fortress Insurance, LLC is a captive insurance company formed in 2012 and is related to the Company through common ownership. The Company paid insurance premiums of $1,197,758 and $1,199,718 in 2014 and 2013, respectively to RBI Series of Fortress Insurance, LLC. At December 31, 2014 and 2013, the Company has approximately $1.2 million in prepaid insurance.

Real Estate Variable Interest Entities (Note 13)
 
 
 
2014

2013

Rent paid by the Company to VIE’s
$
206,512

200,644

Accounts receivable from VIE’s
638,665

125,000

Accounts payable to VIE’s
(5,195
)
(4,820
)
Note receivable from VIE’s
1,518,910

1,705,271

Interest income received from VIE’s
80,486

66,400

Operating expenses paid by the Company to VIE’s
-

256,100





Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

11. CONCENTRATIONS OF CREDIT RISK:

Cash
The Company has cash balances in a high credit quality financial institution. At times balances in these accounts may exceed the FDIC insurance limits. Accounts at the institution are insured by the Federal Deposit Insurance Corporation up to $250,000. As of December 31, 2014 the Company had funds on deposit in excess of insured amounts. The Company also has approximately $2,600,000 (in US dollars) in foreign bank accounts as of December 31, 2014. The Company believes it is not exposed to any significant credit risk of loss in cash.

Foreign operations
In 2006, the Company commenced manufacturing operations in China. The Company had assets of approximately $5,394,000 and $3,454,000 located in China at December 31, 2014 and 2013. The Chinese operations had net income of approximately $230,000 and $46,000 in 2014 and 2013, respectively.

In 2013, the Company formed RBI International LLC (an Ohio company) to own a newly created foreign subsidiary, RBI Solar KK, for its operations in Japan. The Company had assets of approximately $2,491,000 and $395,000 at December 31, 2014 and December 31, 2013, respectively. The Japanese operations had a net loss of approximately $772,000 and $303,000 in 2014 and 2013, respectively.

In 2014, the Company purchased Renusol GmbH (Note 14). The Company had assets of approximately $5,567,000 located in Germany at December 31, 2014. The German operations had a net income of approximately $74,000 since the date of acquisition through December 31, 2014.

Major customers
The Company sells to large national chain organizations, corporations and privately held businesses. The Company had one customer that represented 13% of total revenues for the year ended December 31, 2013, and one customer that represented 14% of accounts receivable at December 31, 2013. The loss of this customer could adversely affect the operations of the Company.

12. LITIGATION:

The Company is involved in legal proceedings, claims, and litigation arising in the ordinary course of business. Management considers the possibility of an unfavorable outcome to be remote and it is not possible at the present time to estimate the range of potential loss, if any, which might result from these actions. Therefore, no provision for any liability that may result has been made in the combined financial statements.













Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

13. VARIABLE INTEREST ENTITIES:

In accordance with accounting principles generally accepted in the United States of America, management has determined 5513 Vine, LLC, RBI Temecula Properties, LLC, and RBI Techsolve Property, LLC, real estate entities related to the Company through common ownership, are variable interest entities, and the Company is the primary beneficiary. The Company elected to not consolidate the financial position and results of operations of these variable interest entities under ASU 2014-07 in order to more clearly reflect the financial performance and operating results of the Company only. Total assets, liabilities, equities at December 31, 2014 and 2013, and net income (loss) for the years ended December 31, 2014 and 2013 are as follows:

 
2014

 
2013
 
Unaudited

 
Unaudited
5513 Vine, LLC
 
 
 
Total assets
$
1,672,089

 
1,808,088
Total liabilities
1,518,910

 
1,705,271
Total equities
153,179

 
102,817
Net income
50,362

 
43,992
 
 
 
 
RBI Temecula Properties, LLC
 
 
 
Total assets
$
5,110,273

 
-
Total liabilities
3,941,197

 
-
Total equities
1,169,076

 
-
Net loss
(1,193,154
)
 
-
 
 
 
 
RBI Techsolve Property, LLC
 
 
 
Total assets
$
3,531,389

 
-
Total liabilities
17,579

 
-
Total equities
3,513,810

 
-
Net loss
(7,935
)
 
-



















Exhibit 99.2

Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
Notes to the Combined Financial Statements
Years Ended December 31, 2014 and 2013

14. BUSINESS COMBINATION

In June 2014 RBI Solar, Inc. acquired all of the outstanding stock of Renusol GMBH, an unrelated third party, for cash of approximately $3,900,000. Renusol GMBH is located in Germany, and has a wholly owned subsidiary, Renusol America in Atlanta, Georgia (collectively “Renusol”). Renusol designs and installs roof mount solar panel mounting systems. The acquisition allows RBI Solar, Inc. to expand its existing offerings to its customers.

A summary of the purchase of Renusol follows:

Current assets
$
6,582,517

Long term assets
1,068,858

 
 
Total assets
7,651,375

 
 
Less liabilities assumed
3,196,696

Gain on purchase of company
569,970

 
 
Cash paid
$
3,884,709


Included in current assets on the date of acquisition was $1,422,947 in cash, that, when offset with cash paid, resulted in a net cash acquisition price of $2,461,762. The $569,970 gain on purchase is reported as other income in the accompanying 2014 combined statement of income.




Exhibit 99.2

 
 
 
 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
 
 
 
Combining Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
 
 
Assets
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
Renusol
Renusol
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
GmbH
America, Inc.
Eliminations

Consolidated

Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,827,450

(26,455
)
944,471

64,904

502,938

920,584

702,139

381,348

-

5,317,379

Accounts receivable - trade
 
 
 
 
 
 
 
 
 
 


net of allowance for doubtful accounts
 
—

6,781,771

320,058

193,947

20,470,886

599,447

1,271,343

299,871

-

29,937,323

Accounts receivable - intercompany
 
4,368,583

1,158,763

—

64,587

1,596,025

—

365,640

—

(7,553,598
)
—

Accounts receivable - affiliates and others
 
733,218

—

176,595

4,868

—

193,371

202,499

—

-

1,310,551

Note receivable, current - affiliate
 
116,084

—

—

—

—

—

—

—

-

116,084

 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,045,335

7,914,079

1,441,124

328,306

22,569,849

1,713,402

2,541,621

681,219

(7,553,598
)
36,681,337

 
 
 
 
 
 
 
 
 
 
 
 
Costs and estimated earnings in excess
 
 
 
 
 
 
 
 
 
 
 
of billings on uncompleted contracts
 
—

1,409,978

2,901,490

169,853

1,812,477

342,100

—

—

—

6,635,898

Inventory
 
2,761,326

—

85,222

238,899

—

—

1,669,604

599,484

—

5,354,535

Prepaid expenses
 
888,595

33,991

742,622

966

612,487

31,213

312,537

34,150

—

2,656,561

 
 
 
 
 
 
 
 
 
 
 
 
Total current assets
 
10,695,256

9,358,048

5,170,458

738,024

24,994,813

2,086,715

4,523,762

1,314,853

(7,553,598
)
51,328,331

 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment - at cost
 
8,555,156

29,272

659,202

54,188

5,001,118

435,076

3,016,651

279,601

—

18,030,264

Less accumulated depreciation
 
4,970,654

29,272

451,725

46,829

1,174,808

30,656

2,241,621

105,046

—

9,050,611

 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
3,584,502

—

207,477

7,359

3,826,310

404,420

775,030

174,555

—

8,979,653

 
 
 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
 
2,047,882

—

—

—

3,088,572

—

268,346

—

(5,404,800
)
—

Note receivable, long term - affiliate
 
1,402,826

—

—

—

—

—

—

—

—

1,402,826

Other assets
 
1,000

—

15,969

—

—

—

—

—

—

16,969

 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
17,731,466

9,358,048

5,393,904

745,383

31,909,695

2,491,135

5,567,138

1,489,408

(12,958,398
)
61,727,779











Exhibit 99.2


 
 
 
 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
 
 
 
Combining Balance Sheet (Continued)
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
Renusol
Renusol
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
GmbH
America, Inc.
Eliminations

Consolidated

Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Line of credit
$
6,500,000

—

—

—

—

—

—

—

—

6,500,000

Accounts payable
 
6,345,744

584,347

237,423

192,863

1,384,374

376,454

336,891

304,254

—

9,762,350

Accounts payable - intercompany
 
1,094,665

152,757

—

391,967

3,952,544

1,582,906

—

378,759

(7,553,598
)
—

Customer deposits
 
—

31,147

3,222,769

2,366

100,764

—

25,270

340,922

—

3,723,238

Accrued liabilities:
 
 
 
 
 
 
 
 
 
 


Wages, bonuses and sales commissions
 
969,687

1,090,916

100,011

20,597

467,117

84,386

268,334

81,656

—

3,082,704

Sales, payroll, workers' compensation
 
 
 
 
 
 
 
 
 
 


and other taxes
 
158,256

213,855

—

2,079

704,605

230,479

225,576

2,385

—

1,537,235

Personal property, real estate taxes and other taxes
 
479,877

44,484

—

6,693

952,989

—

45,539

—

—

1,529,582

Other
 
—

25,000

—

—

—

—

353,683

—

—

378,683

Billings in excess of costs and estimated
 
 
 
 
 
 
 
 
 
 


earnings on uncompleted contracts
 
—

6,208,217

443,515

119,680

8,821,136

728,769

—

—

—

16,321,317

 
 
 
 
 
 
 
 
 
 
 
 
Total current liabilities
 
15,548,229

8,350,723

4,003,718

736,245

16,383,529

3,002,994

1,255,293

1,107,976

(7,553,598
)
42,835,109

 
 
 
 
 
 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
Other accrued liabilities
 
—

191,668

—

—

—

—

1,100,952

113,086

—

1,405,706

 
 
 
 
 
 
 
 
 
 
 
 
Stockholder's equity:
 
 
 
 
 
 
 
 
 
 


Common stock
 
29,823

850

—

—

500

16,278

34,102

—

(51,230
)
30,323

Additional paid in capital
 
2,692,304

361,870

2,000,000

50,000

5,479,500

540,550

3,850,607

619,944

(7,372,971
)
8,221,804

Retained earnings (deficit)
 
(538,890
)
452,937

(767,775
)
(40,862
)
10,046,166

(1,075,183
)
(277,782
)
(351,598
)
2,019,401

9,466,414

Accumulated other comprehensive income (loss)
 
—

—

157,961

—

—

6,496

(396,034
)
—

—

(231,577
)
 
 
 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
 
2,183,237

815,657

1,390,186

9,138

15,526,166

(511,859
)
3,210,893

268,346

(5,404,800
)
17,486,964

 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and stockholder's equity
$
17,731,466

9,358,048

5,393,904

745,383

31,909,695

2,491,135

5,567,138

1,489,408

(12,958,398
)
61,727,779








Exhibit 99.2


 
 
 
 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
 
 
 
Combining Statement of Income
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2014
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
 
 
 
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
Renusol
Renusol
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
GmbH
America, Inc.
Eliminations

Consolidated

 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
30,945,982

52,691,381

6,346,289

2,818,843

94,577,256

2,335,989

8,474,414

2,638,252

(36,901,272
)
163,927,134

 
 
 
 
 
 
 
 
 
 
 


Cost of revenue
 
22,743,152

46,532,947

5,240,927

2,246,860

72,355,984

2,082,942

5,323,315

1,857,421

(35,684,241
)
122,699,307

 
 
 
 
 
 
 
 
 
 
 


Gross profit
 
8,202,830

6,158,434

1,105,362

571,983

22,221,272

253,047

3,151,099

780,831

(1,217,031
)
41,227,827

 
 
 
 
 
 
 
 
 
 
 


Selling expenses
 
20,000

416,951

505,568

424,559

5,176,991

849,579

541,158

231,717

3,013,195

11,179,718

Administrative expenses
 
4,046,535

3,828,459

374,029

135,549

3,440,669

157,698

3,025,761

799,084

(6,041,178
)
9,766,606

Discretionary compensation
 
1,618,367

1,786,566

—

1,500

1,013,191

—

—

—

—

4,419,624

 
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
2,517,928

126,458

225,765

10,375

12,590,421

(754,230
)
(415,820
)
(249,970
)
1,810,952

15,861,879

 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 




















Income (loss) from subsidiaries
 
299,168

—

—

—

(1,050,086
)
—

(351,598
)
—

1,102,516

—

Interest expense
 
(71,897
)
—

—

(10,343
)
—

—

(15,097
)
(96,783
)
116,261

(77,859
)
Gain (loss) on disposition of equipment
 
500

—

—

—

(32,874
)
—

—

(4,173
)
—

(36,547
)
Other income (expense)
 
2,142,911

35,876

3,995

5,788

2

(14,782
)
684,633

143

(1,927,213
)
931,353

 
 
 
 
 
 
 
 
 
 
 
 
Total other income (expense) from operations
 
2,370,682

35,876

3,995

(4,555
)
(1,082,958
)
(14,782
)
317,938

(100,813
)
(708,436
)
816,947

 
 
 
 
 
 
 
 
 
 
 


Income before taxes from operations
 
4,888,610

162,334

229,760

5,820

11,507,463

(769,012
)
(97,882
)
(350,783
)
1,102,516

16,678,826

 
 
 
 
 
 
 
 
 
 
 


Income tax expense
 
44,037

92,926

—

360

355,323

3,292

179,900

815

—

676,653

 
 




















Net income
$
4,844,573

69,408

229,760

5,460

11,152,140

(772,304
)
(277,782
)
(351,598
)
1,102,516

16,002,173











Exhibit 99.2


 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
 
Combining Balance Sheet
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
Assets
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
Eliminations

Consolidated

Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
(1,504,105
)
2,783,608

1,067,179

80,092

2,919,182

204,070

—

5,550,026

Accounts receivable - trade
 
 
 
 
 
 
 
 


net of allowance for doubtful accounts
 
—

7,425,617

—

257,455

5,648,216

14,622

—

13,345,910

Accounts receivable - intercompany
 
2,226,523

—

—

5,219

131,750

—

(2,363,492
)
—

Accounts receivable - affiliates and others
 
130,734

1,379

189,158

—

—

—

—

132,113

Note receivable, current - affiliate
 
108,635

—

—

—

—

—

—

108,635

 
 
 
 
 
 
 
 
 
 
 
 
961,787

10,210,604

1,256,337

342,766

8,699,148

218,692

(2,363,492
)
19,136,684

 
 
 
 
 
 
 
 
 
 
Costs and estimated earnings in excess
 
 
 
 
 
 
 
 
 
of billings on uncompleted contracts
 
—

1,474,362

1,950,159

98,561

771,510

—

—

4,294,592

Inventory
 
2,108,558

—

—

235,597

—

—

—

2,344,155

Prepaid expenses
 
701,302

2,862

18,508

4,521

694,112

19,185

—

1,629,648

 
 
 
 
 
 
 
 
 
 
Total current assets
 
3,771,647

11,687,828

3,225,004

681,445

10,164,770

237,877

(2,363,492
)
27,405,079

 
 
 
 
 
 
 
 
 
 
Property, plant and equipment - at cost
 
7,509,546

29,272

642,328

54,188

4,291,963

162,151

—

12,689,448

Less accumulated depreciation
 
4,365,622

29,272

436,103

40,962

645,077

5,067

—

5,522,103

 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
3,143,924

—

206,225

13,226

3,646,886

157,084

—

7,167,345

 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
 
1,748,714

—

—

—

253,949

—

(2,002,663
)
—

Note receivable, long term - affiliate
 
1,596,636

—

—

—

—

—

—

1,596,636

Other assets
 
1,000

—

22,738

—

—

—

—

23,738

 
 
 
 
 
 
 
 
 
 
Total assets
$
10,261,921

11,687,828

3,453,967

694,671

14,065,605

394,961

(4,366,155
)
36,192,798










Exhibit 99.2


 
 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
 
Combining Balance Sheet (Continued)
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
Liabilities and Stockholder's Equity
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
Eliminations

Consolidated

Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
4,337,001

360,009

50,749

196,745

346,280

12,944

—

5,303,728

Accounts payable - intercompany
 
5,219

1,216,575

—

299,097

710,851

131,750

(2,363,492
)
—

Accounts payable - affiliated and others
 
4,820

—

—

—

6,488

—

—

11,308

Customer deposits
 
—

313,836

1,920,873

4,086

2,698

—

—

2,241,493

Accrued liabilities:
 
 
 
 
 
 
 
 
 
Wages, bonuses and sales commissions
 
498,463

567,015

84,016

17,262

216,524

15,576

—

1,398,856

Sales, payroll, workers' compensation
 
 
 
 
 
 
 
 
 
and other taxes
 
38,068

193,577

—

5,163

44,914

—

—

281,722

Personal property, real estate taxes and other taxes
 
97,079

140,319

34,696

759

213,197

—

—

486,050

Other
 
—

25,000

—

—

—

—

—

25,000

Billings in excess of costs and estimated
 
 
 
 
 
 
 
 
 
earnings on uncompleted contracts
 
—

7,867,878

178,442

167,881

7,115,474

—

—

15,329,675

 
 
 
 
 
 
 
 
 
 
Total current liabilities
 
4,980,650

10,684,209

2,268,776

690,993

8,656,426

160,270

(2,363,492
)
25,077,832

 
 
 
 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
 
 
 
Other accrued liabilities
 
—

257,370

—

—

—

—

—

257,370

 
 
 
 
 
 
 
 
 
 
Stockholder's equity:
 
 
 
 
 
 
 
 
 
Common stock
 
29,823

850

—

—

500

16,278

(17,128
)
30,323

Additional paid in capital
 
2,448,304

361,870

2,000,000

50,000

4,317,500

540,550

(2,902,420
)
6,815,804

Retained earnings (deficit)
 
2,803,144

383,529

(997,535
)
(46,322
)
1,091,179

(302,879
)
916,885

3,848,001

Accumulated other comprehensive income (loss)
 
—

—

182,726

—

—

(19,258
)
—

163,468

 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
 
5,281,271

746,249

1,185,191

3,678

5,409,179

234,691

(2,002,663
)
10,857,596

 
 
 
 
 
 
 
 
 
 
Total liabilities and stockholder's equity
$
10,261,921

11,687,828

3,453,967

694,671

14,065,605

394,961

(4,366,155
)
36,192,798









Exhibit 99.2


 
 
 
 
 
Rough Brothers Manufacturing, Inc. and Subsidiaries and Affiliates
 
 
 
 
 
 
 
Combining Statement of Income
 
 
 
 
 
 
 
 
Year ended December 31, 2013
 
 
 
 
 
Rough Brothers
 
 
 
 
 
 
 
Rough
Rough
Greenhouse
 
 
 
 
 
 
 
Brothers
Brothers, Inc.
Manufacturing
Delta T
 
 
 
 
 
Manufacturing,
and
(Shanghai)
Solutions,
RBI
RBI Solar
 
 
 
 
Inc.
Subsidiary
Co., Ltd.
Inc.
Solar, Inc.
KK
Eliminations

Consolidated

 
 
 
 
 
 
 
 
 
 
Revenues
$
26,113,157

43,916,432

3,511,669

2,340,545

41,339,342

—

(28,430,664
)
88,790,481

 
 
 
 
 
 
 
 
 
 
Cost of revenue
 
20,290,066

38,568,417

2,635,685

1,977,765

33,349,854

22,729

(28,400,629
)
68,443,887

 
 
 
 
 
 
 
 
 
 
Gross profit
 
5,823,091

5,348,015

875,984

362,780

7,989,488

(22,729
)
(30,035
)
20,346,594

 
 
 
 
 
 
 
 
 
 
Selling expenses
 
157,812

3,462,176

436,123

431,543

2,069,967

3,197

(241,175
)
6,319,643

Administrative expenses
 
3,385,387

679,280

395,126

131,719

1,718,471

276,416

(908,529
)
5,677,870

Discretionary compensation
 
828,886

1,095,784

—

1,993

398,897

—

—

2,325,560

 
 
 
 
 
 
 
 
 
 
Income from operations
 
1,451,006

110,775

44,735

(202,475
)
3,802,153

(302,342
)
1,119,669

6,023,521

 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Income from subsidiaries
 
178,626

—

—

—

(302,879
)
—

124,253

—

Interest expense
 
(9,198
)
—

—

(9,503
)
—

—

18,701

—

Gain on disposition of equipment
 
2,713

—

—

—

—

—

—

2,713

Other income
 
1,379,874

35,214

1,408

2,789

(116,385
)
(240
)
(1,138,370
)
164,290

 
 
 
 
 
 
 
 
 
 
Total other income from operations
 
1,552,015

35,214

1,408

(6,714
)
(419,264
)
(240
)
(995,416
)
167,003

 
 
 
 
 
 
 
 
 
 
Income before taxes from operations
 
3,003,021

145,989

46,143

(209,189
)
3,382,889

(302,582
)
124,253

6,190,524

 
 
 
 
 
 
 
 
 
 
Income tax expense
 
61,306

13,506

—

1,433

9,663

297

—

86,205

 
 
 
 
 
 
 
 
 
 
Net income
$
2,941,715

132,483

46,143

(210,622
)
3,373,226

(302,879
)
124,253

6,104,319




GIBRALTAR INDUSTRIES, INC. Reports