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Logistics and Trucking Business with $2.1M in Assets

CASH FLOW
$320,572

Specifications

  • Price
    $3,400,000

  • Revenue
    $2,746,837

  • Cash Flow
    $320,572

  • Equipment
    $2,154,300

  • Inventory
    $68,100

  • Down Payment
    15%

  • Location
    Northeast Nebraska

  • Reason for Sale
    Retirement planning

  • Service Area
    48 states

With 35 employed drivers along with 20 other subcontracted drivers this hauling business is ready for its next load; boasting over $2 Million in Assets which includes brands such as Wilson, Merritt, International, Navistar, Arcos, Brenner, Timpte, and Transcraft are all included in the Purchase Price. With a diversified Sales of $3,506,457 in 2016 there are services of cattle, gluten, packing plants, grain, and wrecker services. Livestock and grain hauling is the main focus of this business however they are providing a range of services to allow diversification.

Servicing a concentration of Iowa and Nebraska they are also hauling coast to coast to 48 states. Truck transportation comprises almost 70% of all goods transporting in the United States.  Currently operating out of the middle of the Heartland, this trucking company owns trailers of every size, from tandems to triples and seven axle combinations. Twelve live bottom trailers run 7 days a week, transporting grain, gluten and rock. Income derived from 33% cattle hauling and 67% feed transport.  

Business Highlights

Established since 2001 in Nebraska and hauling coast to coast to 48 states
Assets include brands such as: Wilson, Merritt, International, Navistar, Arcos, Brenner, Timpte and Transcraft
Income split is 33% cattle hauling and 67% agricultural products
Diversified Income Streams:
o Cattle Loads: $510,090
o Packing Plants: $487,985
o Grain Hauling: $37,080
o Wrecker Service: $149,536
o Gluten Loads: $1,271,920
o Misc.: $290,226
Staff of 2 Office Administrators responsible for AR, AP, and Scheduling; 30-40 W2 Drivers, 30 1099 Drivers
Seller is seeking to retire in the years to come, but the Seller is willing to stay on and transition for 42 weeks/year for 3 years [if desired by Buyer]

Financial Highlights

·         2016 Gross Sales of $3,506,457

·         2016 Cash Flow of $320,572

·         Assets valued at $2,154,300

o   17 Livestock Trailers

o   26 Tractor Trailers

o   4 Trucks

o   6 Tankers

o   1 Boom Truck

o   9 Gluten Trailers

o   2 Flatbed Trailers

o   3 Grain Hopper Trailers

o   Wrecker Equipment

o   Furniture & Fixtures

o   Shop Equipment

o   Truck Wash  

·         Accounts Receivable of $69,562

·         Full Working Inventory of $68,100

·         Profit Margin of 11%

Please note – 2016 was one of the worst years in agriculture since the 1970s.  However, the first quarter of 2017 is already showing improvements over 2016 and is predicted to outpace it.

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnTax ReturnTax ReturnTax ReturnTax ReturnNotes
2016201520142013201220112010
GROSS SALES$3,506,457$4,112,537$4,550,730$4,368,710$5,440,136$5,187,827$3,874,817
% Change Over Prev. Year-14.74 %-9.63 %4.17 %-19.69 %4.86 %33.89 %
Net Income Shown on Financial Statement$-79,260$8,603$131,541$-37,211$89,586$44,427$-90,167
ADDBACKS
Compensation to Owner$59,098$57,060$52,000$110,000$110,000$109,308$104,000Owner's W2 Wages
11% Tax on total W2 Salaries$6,501$6,277$5,720$12,100$12,100$12,024$11,440
Depreciation$12,683$11,081$9,569$12,041$17,489$15,806$19,218Non-Cash Item
Interest$1,369$3,807$7,074$11,901$2,800$9,932$2,412Non-onward going expense
Vaughn Beed LLC$0$0$0$0$0$0$50,931Non-onward going expense
Equipment Rental$216,484$222,424$259,536$293,158$277,267$370,921$356,127See P & L for detail (non-onward going expense)
Real Estate Rent to KVCB$138,600$166,245$171,031$161,630$170,099$150,877$172,382See P & L for detail (non-onward going expense)
Proposed Rent of $42,000/year$-42,000$-42,000$-42,000$-42,000$-42,000$-42,000$-42,000
Owner's Health Insurance$7,097$5,059$5,882$0$0$0$0
Extraordinary Fuel$0$135,000$0$0$0$0$0Paid in advance in 2015 for 2016
Employee Benefit Plan$0$0$0$0$37,564$42,574$0
Owner's Pension$0$0$0$0$21,358$21,443$0
TOTAL ADDBACKS$399,832$564,953$468,812$558,830$606,677$690,885$674,510
Seller's Cash Flow = Total Addbacks + Net Income$320,572$573,556$600,353$521,619$696,263$735,312$584,343
Profit Margin9.14 %13.94 %13.19 %11.93 %12.80 %14.17 %15.08 %

 

  • Average sales of $4,434,459
  • Average cash flow of $556,717
  • Base line sales of $4,473,297
  • Base line cash flow of $527,942

Agriculture Industry Outlook

  • 2016 was one of the worst years in agriculture since the 1970s
  • 2017 is already showing improved numbers and is predicted to outpace 2016
  • During 2016, cattle numbers were 60% of normal in the county
    • Normally there are 400,000 head
    • With decreased cattle there was a decrease in sales as there were less cattle to haul
  • Despite a downturn in the ag sector during 2016, this company was still able to complete nearly $3M in sales

Upcoming Contracts & Growth Opportunities

  • Currently bidding on a $1,560,000 contract
    • $30,000/week with a grain hauling company that could add $1,400,000+ in sales
  • There are several other that a new owner could go after since 2017 is already showing an uptick in growth for the ag sector
  • With the seller providing up to 3 years of transition, growth will be very attainable
    • His current relationships and reputation with feed plants and feedlots would be an asset to increase inside and outside sales
      • Dedicated person to build on existing relationships and provide all services to current clientele
    • Add technicians to help with logistics
      • Better customer service creates better customer relationships

Valuation

This business was valued by a third party, who appraised it at $4,600,000, and was found by financial data and industry standards.  The business was appraised as follows:

            Physical Assets, Book Value $30,179

            Physical Assets, Additional Market Value $2,124,121

            Total Physical Assets $2,154,300

 

            Assignment of Enterprise Goodwill Value $1,925,676

            Assignment of Professional Goodwill Value $520,021

            Total Goodwill Value $2,445,700

 

            Total Value $4,600,000

 

The equipment was valued by a third-party appraiser, who valued the equipment on methods of Cost Approach and Market Data Approach. 

           

            Fair Market Value $2,154,300

            Orderly Liquidation Value $1,508,400

Purchase Price:

$3,400,000

$
%
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Years
%

Bank Loan Needed: $

Years
%
$
$
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$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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