Exhibit 99.1
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Crest Marine, LLC
December 31, 2017 and 2016 (Restated)
CONTENTS
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS | 3 |
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FINANCIAL STATEMENTS |
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BALANCE SHEETS | 4 |
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STATEMENTS OF EARNINGS | 5 |
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STATEMENTS OF MEMBERS’ EQUITY | 6 |
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STATEMENTS OF CASH FLOWS | 7 |
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NOTES TO FINANCIAL STATEMENTS | 8 – 13 |
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SUPPLEMENTAL INFORMATION |
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COST OF SALES | 15 |
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OPERATING EXPENSES | 16 |
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DAVISON & ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS |
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Members
Crest Marine LLC
We have audited the accompanying balance sheets of Crest Marine, LLC (a Michigan limited liability company) as of December 31, 2017 and 2016 and the related statements of earnings, members’ equity and cash flows, and the supplemental information presented herein for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the accounting principles used and significant estimates made by management. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 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, the financial statements referred to above present fairly, in all material respects, the financial position of Crest Marine, LLC as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As more fully described in Note F, Crest Marine, LLC improperly recognized assets and liabilities during the years ended December 31, 2017 and 2016. Crest Marine, L LC has restated its 2017 and 2016 financial statements for the correction of these misstatements. Our opinions on the 2017 and 2016 financial statements are not modified with respect to this matter.
Troy, Michigan
February 23, 2018, except as to Note F, which is October 18, 2018
3250 West Big Beaver, Suite 540 Troy Michigan 48084
Tel (248) 643-0026 Fax (248) 643-0035 E-Mail: gary@davisonandassoc.com
Crest Marine, LLC
BALANCE SHEETS
December 31, (Restated)
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| 2017 |
| 2016 | ||
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| (Restated) |
| (Restated) | ||
ASSETS (note C) |
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CURRENT ASSETS |
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Cash in bank (note A2) |
| $ | 2,222,825 |
| $ | 1,122,123 |
Accounts receivable |
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Trade (note A3) |
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| 3,388,223 |
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| 3,552,410 |
Inventories (note A4), less reserve for obsolete inventory of $211,400 in 2017 and $173,000 in 2016 |
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| 7,829,181 |
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| 5,909,476 |
Prepaid expenses |
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| 103,309 |
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| 97,640 |
Total current assets |
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| 13,543,538 |
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| 10,681,649 |
PROPERTY AND EQUIPMENT - AT COST (note A5) |
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Leasehold improvements |
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| 826,774 |
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| 193,226 |
Machinery and equipment |
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| 2,389,915 |
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| 1,824,415 |
Computer software |
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| 47,956 |
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| 47,956 |
Vehicles |
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| 527,950 |
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| 309,748 |
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| 3,792,595 |
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| 2,375,345 |
Less accumulated depreciation |
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| 1,626,775 |
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| 1,237,979 |
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| 2,165,820 |
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| 1,137,366 |
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| $ | 15,709,358 |
| $ | 11,819,015 |
LIABILITIES |
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CURRENT LIABILITIES |
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Current portion of long-term debt |
| $ | 447,601 |
| $ | 238,164 |
Accounts payable |
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Trade |
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| 2,910,471 |
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| 2,309,413 |
Related parties (note B) |
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| 133,850 |
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| 48,243 |
Accrued liabilities |
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Warranty (note A6) |
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| 88,824 |
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| 176,548 |
Repurchased boats (note D) |
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| 35,000 |
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| 36,572 |
Other liabilities |
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| 592,087 |
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| 576,561 |
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| 715,911 |
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| 789,681 |
Total current liabilities |
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| 4,207,833 |
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| 3,385,501 |
LONG TERM DEBT, LESS CURRENT PORTION (note C) |
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| 175,401 |
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| 300,350 |
COMMITMENTS (note D) |
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| — |
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| — |
CONTINGENCIES (note E) |
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| — |
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| — |
MEMBERS' EQUITY |
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| 11,326,124 |
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| 8,133,164 |
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| $ | 15,709,358 |
| $ | 11,819,015 |
The accompanying notes are an integral part of these statements.
4
Crest Marine, LLC
STATEMENTS OF EARNINGS
Years ended December 31, (Restated)
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| 2017 |
| 2016 |
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| (Restated) |
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| Percent of |
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| Percent of |
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| Amount |
| net sales |
| Amount |
| net sales |
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Net sales |
| $ | 65,399,275 |
| 100.0 | % | $ | 53,858,951 |
| 100.0 | % |
Cost of sales |
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| 52,909,092 |
| 80.9 |
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| 43,339,850 |
| 80.5 |
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Gross profit |
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| 12,490,183 |
| 19.1 |
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| 10,519,101 |
| 19.5 |
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Operating expenses |
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| 7,764,026 |
| 11.9 |
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| 6,723,524 |
| 12.5 |
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Operating profit |
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| 4,726,157 |
| 7.2 |
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| 3,795,577 |
| 7.0 |
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Other expense |
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Interest expense |
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| 21,274 |
| — |
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| 35,958 |
| — |
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NET EARNINGS |
| $ | 4,704,883 |
| 7.2 | % | $ | 3,759,619 |
| 7.0 | % |
The accompanying notes are an integral part of these statements.
5
Crest Marine, LLC
STATEMENTS OF MEMBERS' EQUITY
Years ended December 31, (Restated)
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| 2017 |
| 2016 | ||
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| (Restated) |
| (Restated) | ||
Members' equity at beginning of year |
| $ | 8,133,164 |
| $ | 6,062,833 |
Prior period adjustment (note F) |
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| — |
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| (291,957) |
Net earnings for the year |
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| 4,704,883 |
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| 3,759,619 |
Distributions |
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| (1,511,923) |
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| (1,397,331) |
Members' equity at end of year |
| $ | 11,326,124 |
| $ | 8,133,164 |
The accompanying notes are an integral part of these statements.
6
Crest Marine, LLC
STATEMENTS OF CASH FLOWS
Years ended December 31, (Restated)
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| 2017 |
| 2016 | |||||
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| (Restated) |
| (Restated) | |||||
Cash flows from operating activities |
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Cash received from customers |
| $ | 65,563,462 |
| $ | 52,528,894 | |||
Cash paid to suppliers and employees |
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| (61,682,408) |
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| (50,767,565) | |||
Interest paid |
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| (21,274) |
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| (35,958) | |||
Net cash provided by operating activities |
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| 3,859,780 |
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| 1,725,371 | |||
Cash flows from investing activities |
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Purchase of property and equipment |
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| (1,417,250) |
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| (753,294) | |||
Net payments from related parties |
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| 85,607 |
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| 93,302 | |||
Net cash used in investing activities |
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| (1,331,643) |
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| (659,992) | |||
Cash flows from financing activities |
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Long-term debt incurred |
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| 258,750 |
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| 50,660 | |||
Payments on long-term debt |
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| (174,262) |
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| (182,445) | |||
Distributions |
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| (1,511,923) |
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| (1,397,331) | |||
Net cash used in financing activities |
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| (1,427,435) |
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| (1,529,116) | |||
Net increase (decrease) in cash |
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| 1,100,702 |
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| (463,737) | |||
Cash at beginning of year |
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| 1,122,123 |
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| 1,585,860 | |||
Cash at end of year |
| $ | 2,222,825 |
| $ | 1,122,123 | |||
Reconciliation of net earnings to net cash provided by operating activities |
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Net Earnings |
| $ | 4,704,883 |
| $ | 3,759,619 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities |
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Depreciation |
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| 388,796 |
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| 253,230 | |||
(Increase) decrease in assets: |
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Accounts receivable |
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| 164,187 |
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| (1,330,057) | |||
Inventories |
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| (1,919,705) |
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| (632,256) | |||
Prepaid expenses |
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| (5,669) |
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| (19,419) | |||
Increase (decrease) in liabilities: |
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Accounts payable |
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| 601,058 |
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| (354,032) | |||
Accrued liabilities |
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| (73,770) |
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| 48,286 | |||
Total adjustments |
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| (845,103) |
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| (2,034,248) | |||
Net cash provided by operating activities |
| $ | 3,859,780 |
| $ | 1,725,371 |
The accompanying notes are an integral part of these statements.
7
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016 (Restated)
NOTE A – SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.
1.Business Activity and Revenue Recognition
The Company’s principal business activity is the manufacturing and sale of pontoon boats to retailers throughout the United States.
The Company’s revenue is derived primarily from the sale of boats, marine parts, and accessories. Revenue is recognized in accordance with the terms of the sale, primarily upon shipment to customers, once the sales price is fixed or determinable and collectability is reasonably assured.
2.Cash and Cash Equivalents
Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of one year or less. The company places its temporary cash investments with high credit quality financial institutions. At times these investments are not entirely FDIC insured; however, the company does not believe it is exposed to any significant credit risk on cash and cash equivalents. At December 31, 2017 and 2016, there was $1,972,825 and $872,123 of cash that was not FDIC insured.
3.Receivables and Concentration of Credit Risk
The Company considers its receivables to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. At December 31, 2017, the accounts receivable from two customers in the boat financing industry totaled $2,373,283. At December 31, 2016, the accounts receivable from two customers in the boat financing industry totaled $1,691,086. The company does not generally require collateral on its accounts receivable.
4.Inventories
Inventories are valued at the lower of cost or market and are shown net of an inventory allowance on the balance sheet. Inventory cost includes material, labor, and manufacturing overhead and is determined based on the first-in, first-out (FIFO) method. Provisions are made as necessary to reduce inventory amounts to their net realizable value or to provide for obsolete products.
Inventory consists of the following for the years ended December 31:
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| 2017 |
| 2016 | ||
Raw materials |
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Motors |
| $ | 1,551,203 |
| $ | 1,276,553 |
Boat components |
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| 4,306,257 |
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| 3,521,331 |
Finished goods |
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| 2,183,121 |
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| 1,284,592 |
Obsolescence reserve |
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| (211,400) |
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| (173,000) |
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| $ | 7,829,181 |
| $ | 5,909,476 |
8
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS — CONTINUED
December 31, 2017 and 2016 (Restated)
Activity in the obsolescence reserve was as follows for the years ended December 31:
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| 2017 |
| 2016 | ||
Beginning balance |
| $ | 173,000 |
| $ | 160,965 |
Charged to cost and expenses |
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| 38,400 |
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| 12,035 |
Ending balance |
| $ | 211,400 |
| $ | 173,000 |
5.Depreciation and Amortization
Depreciation and amortization is provided for in amounts sufficient to relate the cost of property and equipment to operations over their estimated service lives using the straight-line and accelerated methods.
6.Product Warranties
The Company provides a warranty with each manufactured boat sold. There exists a possible loss as a result of future warranty service claims. The Company records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimates of the level of future claims, and are subject to adjustment as actual claims are determined or as changes in the obligations become reasonably estimable. Warranty expense for the year ended December 31, 2017 and 2016 was $158,147 and $221,934, respectively.
Activity in the product warranty reserve was as follows for the years ended December 31:
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| 2017 |
| 2016 | ||
Beginning balance |
| $ | 176,548 |
| $ | 164,668 |
Accrued for warranties issued |
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| 216,515 |
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| 177,263 |
Warranty claims paid |
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| (304,239) |
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| (165,383) |
Ending balance |
| $ | 88,824 |
| $ | 176,548 |
7.Accounting Estimates
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements.
8.Advertising
Advertising costs are charged to operations when incurred. Advertising expense for the years ended December 31, 2017 and 2016 was $310,610 and $369,407, respectively.
9.Income Taxes
The Company is treated as a partnership for income tax purposes; therefore, the profit or loss of Crest Marine LLC is included in the income tax returns of the Members. Accordingly, no recognition has been given to income taxes in the accompanying statements. As of December 31, 2017, the tax returns for the years ended December 31, 2016, 2015, and 2014 are open for audit by the taxing authorities.
9
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS — CONTINUED
December 31, 2017 and 2016 (Restated)
NOTE B – RELATED PARTY TRANSACTIONS
The accounts receivable (payable) with related parties at years ended December 31 are as follows:
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| 2017 |
| 2016 | ||
Affiliates |
| $ | (146,824) |
| $ | (61,217) |
Member |
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| 12,974 |
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| 12,974 |
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| $ | (133,850) |
| $ | (48,243) |
The accounts receivable (payable) with affiliates is with limited liability companies related through common ownership. The related party accounts are non-interest bearing, unsecured and without specific payment terms; however, management anticipates the balance to be paid within the next year.
The following is a summary of the activity on the accounts for the years ended December 31:
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| 2017 |
| 2016 | ||
Beginning balance |
| $ | (48,243) |
| $ | 45,059 |
Rent charged by affiliate |
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| (205,235) |
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| (155,235) |
Administrative fee |
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| 60,000 |
|
| — |
Expenses paid on behalf of affiliates |
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| 59,628 |
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| 61,933 |
Ending balance |
| $ | (133,850) |
| $ | (48,243) |
In addition, the Company purchases materials and tooling supplies from one of the affiliates related through common ownership. The expense charged to operations for these materials and tooling supplies for the years ended December 31, 2017 and 2016 was $2,788,743 and $1,719,723, respectively. For the year ended December 31, 2017, the company received $60,000 for an administrative fee from this affiliate.
NOTE C – LONG-TERM DEBT
Long-term debt consists of a note payable to a bank in monthly principal payments of $8,928 plus interest at 4.25% with final payment April 2020. The note is collateralized by substantially all assets of the company and by real estate held by a company related through common ownership. The agreement with the bank contains covenants which, among other things, require a minimum net worth and debt coverage ratio. At December 31, 2017 and 2016, there was $258,823 and $365,957 outstanding on this loan, respectively.
The Company has available a bank draw down line of credit loan which provides for borrowings up to $250,000 for purchase of business property and equipment. This is a multiple advance note with final payment due in September 2017. Advances on the note bear interest at 1% over the bank’s prime rate with a minimum rate of 4.5% (total rate of 4.75% at December 31, 2016). The note is payable in monthly installments of $5,708, which includes principal and interest. The note is collateralized by substantially all assets of the company. The note contains covenants which, among other things, require a minimum net worth and debt service coverage ratio. At December 31, 2016, there was $46,062 outstanding on this line of credit loan.
The Company has available a bank draw down line of credit loan which provides for borrowings up to $500,000 for purchase of business property and equipment. Advances on the note bear interest at the bank’s prime rate (4.5% at December 31, 2017) and is collateralized by substantially all assets of the company. At December 31, 2017 and 2016, there was $322,570 and $63,820 outstanding on this line of credit, respectively.
10
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS — CONTINUED
December 31, 2017 and 2016 (Restated)
The Company also has notes payable to the bank which provided borrowings for the purchase of company vehicles. Monthly installments of $1,863 are required through October 2020 at interest rates varying from 2.29% to 2.99%. The notes are collateralized by vehicles with a cost of $114,941. At December 31, 2017 and 2016, there was $41,609 and $62,676 outstanding on these bank notes, respectively.
The following is a schedule, by years, of the principal payments required for long-term debt:
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Years ending December 31, |
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2018 |
| $ | 447,601 |
2019 |
|
| 120,075 |
2020 |
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| 55,326 |
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| $ | 623,002 |
NOTE D – COMMITMENT
The Company conducts its operations in facilities leased from a company related through common ownership (note B). The facility is leased under an operating lease on a month to month basis which provides for monthly payments of $17,103 per month, plus payment by the company of real estate taxes, operating and maintenance expenses. Rent expense charged to operations for the years ended December 31, 2017 and 2016 was $205,235 and $155,235, respectively.
In connection with its dealers’ wholesale floor-plan financing of boats, the Company has entered into repurchase agreements with various lending institutions. The repurchase commitment is on an individual unit basis with a term from the date it is financed by the lending institution through payment date by the dealer, generally not exceeding three years. Such agreements are customary in the industry and the Company’s exposure to loss under such agreements is limited by contractual caps and the resale value of the inventory which is required to be repurchased. The company records an accrual for estimated future repurchase commitments based on historical experience of amount of boats repurchased and losses experienced.
Activity in the repurchase boats reserve was as follows for the years ended December 31:
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| 2017 |
| 2016 | ||
Beginning balance |
| $ | 36,572 |
| $ | 70,068 |
Repurchased boat sales |
|
| 407,613 |
|
| 240,731 |
Repurchased boat costs |
|
| (446,878) |
|
| (305,174) |
Provision |
|
| 37,693 |
|
| 30,947 |
Ending balance |
| $ | 35,000 |
| $ | 36,572 |
NOTE E – CONTINGENCIES
At December 31, 2017 and 2016, the company had a third party guarantee outstanding of approximately $127,692 and $180,578, respectively. The guarantee is the liability of the company related through common ownership that owns the building in which the company conducts its operations. No loss is anticipated as a result of the guarantee.
NOTE F – RESTATEMENT OF FINANCIAL STATEMENTS
The Company is restating its financial statements for the years ended December 31, 2017 and 2016 to correct various account balances as summarized below. The restatements are being made in accordance with ASC 250
11
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS — CONTINUED
December 31, 2017 and 2016 (Restated)
“Accounting Changes and Error Corrections”. The effects of the adjustments on the Company’s previously issued financial statements are summarized as follows:
Balance sheet as of December 31, 2017:
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| Previously |
| Increase |
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| |||
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| Reported |
| (Decrease) |
| Restated | |||
Accounts receivable |
| $ | 3,258,069 |
| $ | 130,154 |
| $ | 3,388,223 |
Inventory |
|
| 7,940,581 |
|
| (111,400) |
|
| 7,829,181 |
Accounts payable |
|
| 2,749,762 |
|
| 160,709 |
|
| 2,910,471 |
Warranty liability |
|
| — |
|
| 88,824 |
|
| 88,824 |
Repurchased boats liability |
|
| — |
|
| 35,000 |
|
| 35,000 |
Members’ equity |
|
| 11,591,903 |
|
| (265,779) |
|
| 11,326,124 |
Income statement year ended December 31, 2017:
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| Previously |
| Increase |
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| |||
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| Reported |
| (Decrease) |
| Restated | |||
Sales |
| $ | 65,883,110 |
| $ | (483,835) |
| $ | 65,399,275 |
Materials and supplies |
|
| 43,753,849 |
|
| (428,478) |
|
| 43,325,371 |
Interest free program |
|
| 1,016,072 |
|
| (19,498) |
|
| 996,574 |
Warranty expense |
|
| 245,871 |
|
| (87,724) |
|
| 158,147 |
Boat shows |
|
| 597,970 |
|
| 63,425 |
|
| 661,395 |
Balance sheet as of December 31, 2016:
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| Previously |
| Increase |
|
| |||
|
| Reported |
| (Decrease) |
| Restated | |||
Accounts receivable |
| $ | 3,371,151 |
| $ | 181,259 |
| $ | 3,552,410 |
Inventory |
|
| 6,002,476 |
|
| (93,000) |
|
| 5,909,476 |
Accounts payable |
|
| 2,180,055 |
|
| 129,358 |
|
| 2,309,413 |
Warranty liability |
|
| — |
|
| 176,548 |
|
| 176,548 |
Repurchased boats liability |
|
| — |
|
| 36,572 |
|
| 36,572 |
Members’ equity |
|
| 8,387,383 |
|
| (254,219) |
|
| 8,133,164 |
Income statement year ended December 31, 2016:
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|
|
| Previously |
| Increase |
|
| |||
|
| Reported |
| (Decrease) |
| Restated | |||
Sales |
| $ | 54,102,632 |
| $ | (243,681) |
| $ | 53,858,951 |
Materials and supplies |
|
| 36,205,991 |
|
| (278,173) |
|
| 35,927,818 |
Interest free program |
|
| 672,020 |
|
| 456 |
|
| 672,476 |
Warranty expense |
|
| 210,054 |
|
| 11,880 |
|
| 221,934 |
Boat shows |
|
| 544,983 |
|
| (15,582) |
|
| 529,401 |
The company reevaluated the methodology originally used to estimate the liabilities and receivables associated with warranty, repurchase boat agreements, obsolete inventory, and customer and vendor rebates.
12
Crest Marine, LLC
NOTES TO FINANCIAL STATEMENTS — CONTINUED
December 31, 2017 and 2016 (Restated)
NOTE G – SUBSEQUENT EVENTS
In preparing the financial statements, management has evaluated for potential recognition or disclosure, significant events or transactions that occurred during the period subsequent to December 31, 2017, the most recent statement of financial position presented herein, through February 23, 2018, except as to Note F, which is October 18, 2018, the date the financial statements were issued. No such significant events or transactions were identified.
13
SUPPLEMENTAL INFORMATION
Crest Marine, LLC
COST OF SALES
Years ended December 31, (Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2017 |
| 2016 |
| ||||||
|
| (Restated) |
| (Restated) |
| ||||||
|
|
|
| Percent of |
|
|
| Percent of |
| ||
|
| Amount |
| net sales |
| Amount |
| net sales |
| ||
Materials and supplies |
| $ | 43,325,371 |
| 66.4 | % | $ | 35,927,818 |
| 66.7 | % |
Delivery, travel and fuel |
|
| 74,254 |
| 0.1 |
|
| 62,780 |
| 0.1 |
|
Insurance |
|
| 585,728 |
| 0.9 |
|
| 388,023 |
| 0.7 |
|
Interest free program |
|
| 996,574 |
| 1.5 |
|
| 672,476 |
| 1.2 |
|
Research and development |
|
| 149,433 |
| 0.2 |
|
| 231,403 |
| 0.4 |
|
Freight |
|
| 1,231,107 |
| 1.9 |
|
| 945,018 |
| 1.8 |
|
Depreciation |
|
| 388,796 |
| 0.6 |
|
| 253,230 |
| 0.5 |
|
Equipment maintenance |
|
| 63,287 |
| 0.1 |
|
| 66,218 |
| 0.1 |
|
Direct labor |
|
| 5,192,620 |
| 7.9 |
|
| 3,917,502 |
| 7.4 |
|
Payroll taxes |
|
| 582,941 |
| 0.9 |
|
| 494,784 |
| 0.9 |
|
Utilities |
|
| 160,834 |
| 0.2 |
|
| 158,664 |
| 0.3 |
|
Warranty expense |
|
| 158,147 |
| 0.2 |
|
| 221,934 |
| 0.4 |
|
|
| $ | 52,909,092 |
| 80.9 | % | $ | 43,339,850 |
| 80.5 | % |
15
Crest Marine, LLC
OPERATING EXPENSES
Years ended December 31, (Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2017 |
| 2016 |
| ||||||
|
| (Restated) |
| (Restated) |
| ||||||
|
|
|
|
| Percent of |
|
|
|
| Percent of |
|
|
| Amount |
| net sales |
| Amount |
| net sales |
| ||
Advertising |
| $ | 310,610 |
| 0.5 | % | $ | 369,407 |
| 0.7 | % |
Bad debt |
|
| 84,794 |
| 0.1 |
|
| — |
| — |
|
Bank fees |
|
| 21,711 |
| — |
|
| 16,081 |
| — |
|
Boat shows |
|
| 661,395 |
| 1.0 |
|
| 529,401 |
| 1.0 |
|
Commissions expense |
|
| 1,141,369 |
| 1.8 |
|
| 800,773 |
| 1.5 |
|
Consulting |
|
| 158,098 |
| 0.2 |
|
| 44,313 |
| 0.1 |
|
Contributions |
|
| 1,225 |
| — |
|
| 1,475 |
| — |
|
Dues and subscriptions |
|
| 22,503 |
| — |
|
| 21,122 |
| — |
|
Employee welfare |
|
| 122,531 |
| 0.2 |
|
| 36,975 |
| 0.1 |
|
Rent |
|
| 205,235 |
| 0.3 |
|
| 155,235 |
| 0.3 |
|
Internet |
|
| 183,116 |
| 0.3 |
|
| 178,518 |
| 0.3 |
|
Legal and accounting |
|
| 91,597 |
| 0.1 |
|
| 399,380 |
| 0.7 |
|
Maintenance - building |
|
| 85,349 |
| 0.1 |
|
| 84,697 |
| 0.2 |
|
Meals and entertainment |
|
| 12,828 |
| — |
|
| 3,616 |
| — |
|
Office supplies |
|
| 69,495 |
| 0.1 |
|
| 54,872 |
| 0.1 |
|
Payroll fees |
|
| 81,643 |
| 0.1 |
|
| 58,561 |
| 0.1 |
|
Postage and delivery |
|
| 3,581 |
| — |
|
| 2,798 |
| — |
|
Printing and reproduction |
|
| 120,152 |
| 0.2 |
|
| 145,306 |
| 0.3 |
|
Salaries |
|
| 2,574,923 |
| 4.1 |
|
| 2,167,783 |
| 4.0 |
|
Payroll taxes |
|
| 182,304 |
| 0.3 |
|
| 151,699 |
| 0.3 |
|
Sanitation |
|
| 62,672 |
| 0.1 |
|
| 50,620 |
| 0.1 |
|
Taxes - property and other |
|
| 39,966 |
| 0.1 |
|
| 15,925 |
| — |
|
Telephone |
|
| 26,534 |
| — |
|
| 33,172 |
| 0.1 |
|
Travel |
|
| 156,096 |
| 0.2 |
|
| 195,153 |
| 0.4 |
|
Truck and auto expense |
|
| 1,404,299 |
| 2.2 |
|
| 1,206,642 |
| 2.2 |
|
Administrative fee |
|
| (60,000) |
| (0.1) |
|
| — |
| — |
|
|
| $ | 7,764,026 |
| 11.9 | % | $ | 6,723,524 |
| 12.5 | % |
16