Butler Lumber Company

BUTLER LUMBER COMPANY

EXHIBIT 1
Operating Expenses for Years Ending December 31, 1988-1990, and
for First Quarter 1991 (thousands of dollars)
1988
Net sales
Cost of goods sold:
Beginning inventory
Purchases

1989

1990

1st Qtr
1991

$1,697

$2,013

$2,694

$718

$183
$1,278
$1,461
Ending inventory
$239
Total cost of goods sold
$1,222
Gross Profit
$475
Operating expenses
$425
Interest expense
$13
Net income before income taxes
$37
Provision for income taxes
$6
Net income
$31

$239
$1,524
$1,763
$326
$1,437
$576
$515
$20
$41
$7
$34

$326
$2,042
$2,368
$418
$1,950
$744
$658
$33
$53
$9
$44

$418
$660
$1,078
$556
$522
$196
$175
$10
$11
$2
$9

a. In the first quarter of 1990 sales were $698,000 and net income was $7,000.
b. Operating expenses include a cash salary for Mr. Butler of $75,000 in 1988, $85,000
in 1989, $95,000 in 1990, and $22,000 in the first quarter of 1991. Mr. Butler also
received some of the perquisites commonly taken by owners of privately held
businesses.

Memo items
Purchases to sales
Cogs to sales
Operating expenses/sales

75.3%
72.0%
25.0%

75.7%
71.4%
25.6%

75.8%
72.4%
24.4%

Butler Lumber Company

BUTLER LUMBER COMPANY

EXHIBIT 2
Balance Sheets at December 31, 1988-1990, and March 31, 1991 (thousands of dollars)
1st Qrtr
1988
1989
1990
1991
Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total assets

$58
$171
$239
$468
$126
$594

$49
$222
$325
$596
$140
$736

$41
$317
$418
$776
$157
$933

$31
$345
$556
$932
$162
$1,094

Notes payable, bank

Notes payable, Mr. Stark
Notes payable, trade
Accounts payable
Accrued expenses
Long-term debt, current portion
Current liabilities
Long-term debt
Total liabilities
Net worth
Total liabilities & net worth

$0
$105
$0
$124
$24
$7
$260
$64
$324
$270
$594

$146
$0
$0
$192
$30
$7
$375
$57
$432
$304
$736

$233
$0
$0
$256
$39
$7
$535
$50
$585
$348
$933

$247
$0
$157
$243
$36
$7
$690
$47
$737
$357
$1,094

Working capital
Nonfinancial working capital

$208
$262

$221
$325

$241
$440

$242
$465

Cash/sales
AR/sales
Net property/sales
Accrued exp/sales

3.4%
10.1%
7.4%
1.4%

2.4%
11.0%
7.0%
1.5%

1.5%
11.8%
5.8%
1.4%

Memo items

BUTLER LUMBER COMPANY

1988

1989

1990

Average

Percent of sales
Purchases
Cost of goods sold
Operating expenses
Cash
Accounts receivable
Inventory
Fixed assets (net)
Total assets

75.3%
72.0%
25.0%
3.4%
10.1%
14.1%
7.4%
35.0%

75.7%
71.4%
25.6%
2.4%
11.0%
16.1%
7.0%
36.6%

75.8%
72.4%
24.4%
1.5%
11.8%
15.5%
5.8%
34.6%

75.6%
71.9%
25.0%
2.5%
11.0%
15.2%
6.7%
35.4%

Percent of total assets

Current liabilities
Long-term liabilities
Equity

43.8%
10.8%
45.5%

51.0%
7.7%
41.3%

57.3%
5.4%
37.3%

50.7%
8.0%
41.4%

Current ratio
Return on sales (margin)
Return on assets
Return on equity

1.80
1.8%
5.2%
11.5%

1.59
1.7%
4.6%
11.2%

1.45
1.6%
4.7%
12.6%

1.61
1.7%
4.9%
11.8%

1.83%
2.86

1.69%
2.74
2.73
1.00
12.59%
18.62%
23.91%

1.63%
2.89
3.07
1.00
14.47%
33.83%
26.77%

Sustainable Growth:
Margin
Asset Turnover
Leverage (using bop equity)
Retention ratio
G-star
Actual Growth (Sales)
Actual Growth (Assets)

Butler Lumber Company

BUTLER LUMBER COMPANY

Sources and Uses of Funds, 1988 - 1990, (thousands of dollars)
1988 to 1989 1989 to 1990
Sources of Funds:
Retained Earnings
$34
$44
Decrease in Cash Account
$9
$8
Increase in Trade Payables
$68
$64
Increase in Accrued Expenses
$6
$9
Bank Borrowing
$146
$87
Total Sources
$263
$212
Uses of Funds:
Increase in Accounts Receivable
Increase in Inventory
Increase in Fixed Asset Account
Buyout of Mr. Stark
Decrease in Long Term Debt
Total Uses

$51
$86
$14
$105
$7
$263

$95
$93
$17
$0
$7
$212

1988 to 1990
$78
$17
$132
$15
$233
$475

16.4%
3.6%
27.8%
3.2%
49.1%
100.0%

$146
$179
$31
$105
$14
$475

30.7%
37.7%
6.5%
22.1%
2.9%
100.0%

Butler Lumber Company

BUTLER LUMBER COMPANY

Sources and Uses of Funds, 1988 - 1990, (thousands of dollars)
1988 to 1989 1989 to 1990 1988 to 1990
Cash From Operations:
Retained Earnings (=WC from Operations)
$34
$44
$78
Less:
Change in Nonfinancial working capital
$63
$115
$178
Equals:
Cash from Operations
($29)
($71)
($100)
Sources of Cash:
From Operations
From Short term Bank Loans
Total Sources of Cash
Uses of Cash:
For Buyout of Mr. Stark
For Fixed Assets
For LTD Paydown
Total Uses of Cash
Change in Cash Holding:
Change in cash (check)

($29)
$146
$117

($71)
$87
$16

($100)
$233
$133

$105
$14
$7
$126
($9)

$0
$17
$7
$24
($8)

$105
$31
$14
$150
($17)

($9)

($8)

BUTLER LUMBER COMPANY

Projected income statement for 1991 (thousands of dollars)

1991
Net sales
Cost of goods sold:
Beginning inventory
Purchases

3,600
$418
$2,736
$3,154
$562
$2,592
$1,008
$900
$108
$42
$53
$97
$21
$76

Ending inventory
Total cost of goods sold
Gross Profit
Operating expenses
Operating Profit
Purchase Discounts*
Interest expense**
Net income before income taxes
Provision for income taxes
Net income

Value
$ 3,600

76%

72%
25%
2%
10.50%
34%

*Assume purchase discounts of 2% taken on all purchases after April 1, 1991.

**10.5% on the average outstanding balance.

Projected balance sheet for December 31, 1991 (thousands of dollars)

1991
Assets:
Cash
$54
Accounts recievable, net (12% of sales)
$432
Inventory
$562
Current Assets
$1,048
Property, net
$216
Total Assets
$1,264
Liabilities:
Accounts payable
Accrued expenses
Long-term debt, current portion
Bank note payable (plug)
Current Liabilities
Long-term debt
Total Liabilities
Net worth
Total Liabilities plus net worth

Asset - (TL+NW except for Bank note)

$75
$54
7
$661
$797
$43
$840
$424
$1,264

$661

1.50%
12%

6%

10
1.50%
$
7

UTLER LUMBER COMPANY

ROA
ROE
ROBE

5.99%
17.87%
21.76%