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LULU'S AUTOBAHN FUELS AND LULU'S OSTRICH RANCH
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Financial Plan Assumptions Our financial projections are based on the following assumptions: The additional upgrading the Gasoline Station and Convenience Store (C-Store) for automation will generate an increase in profits of $288,000 per year within 14 months. The new Gasoline Station and Convenience Store (C-Store) for automation will reduce costs by $59,400, thereby increasing our profit margin by 27%. Cost of Goods Sold will be reduced by 25% by taking advantage of volume discounts. A working prototype will be available by January 1999. Field testing of the product is to start by March of 1999, and is to be completed by April 1999. Initial market penetration is anticipated to be $40,000 at a margin of 100%. This is expected to increase to $50,000 by the end of Year 1 and to $300,000 by the end of Year 5. General inflation rates are assumed to be 10% per year. Financial Statements Primary Income-Related Items Year Year 1 Total Sales $288,000 % Growth Gross Profit $288,000 % Growth Income from Operations $162,000 % Growth Net Income after Taxes $109,000 % Growth Income Ratios Year Year 1 Gross Profit Margin 100% Operating Income Margin 56% Net Profit Margin 38% Return on Equity 100% Note: Data is per IMST report. Gross Profit Analysis The Gross Profit Analysis statements included in our Supporting Documents show monthly
sales revenue, cost of goods sold and gross profit values for each of our product lines
for the first year. Budget Income Statements There are three Income Statements included in our Supporting Documents Year 1 by month Break-Even Analysis The Break-Even Analysis included in our Supporting Documents indicates that the
break-even point will be reached in 12th month. Sales are projected to be $90,000 above break-even in January 2000. The contribution margin for the first year is 88%, which represents a break-even sales
volume of $72,260, and a sales volume above break-even of $95,140. Working Capital Worksheet The Working Capital Worksheet was dune for one month's of income. Sensitivity Analysis For dune for Pessimistic, Planned, and Optimistic income. IMST Projections Pages 35 to 38 reflect changes to the IMST report on income and assumptions projects
for a new Gas Station (four pumps) and C-Store (2,475 square feet) instead of a remodel of
1800 square feet and only three pumps. The IMST report is at the end of this report which include assumptions.. Capital Requirements The initial capital required is $1,000,000. We require additional investments of which
$680,000.00 of the $1,000,000 will be used for land, build a 2500 square foot Convenience
Store (C-Store) with walk in cooler, buy stock for store, and install central Air with
heat in order to increase our production capacities to meet market demand. After analyzing our working capital, we estimate our operating working capital
requirements as $30,000, $60,000, $90,000, $120,000 and $150,000 for years one through
five, respectively. We will need to borrow $30,000 to finance working capital for a period
of 5 years. The remainder will be financed through cash from operations. In order to purchase fuel equipment to up grade the Gas Station will be done through a
lease plan, an estimated total of $1,000,000 in financing is required for the next
five-year period. The level of safety is high for this type of lease in the automated fuel pumping
industry. Our confidence in achieving the attached financial projections within 100% is
high. In addition to the operation of the business, additional protection is provided by
equipment and property as collateral. Were the situation to arise where the collateral was
needed, the realizable value of the collateral would be $750,000, which reduces the amount
"at risk" to $250,000. With a projected return of $250,000, this represents a
return of 25% of the amount at risk. Use of Funds The funding proceeds will be used to: 1. Canopy by Cooks and Hall 24 ft by 183 ft- Four column with 12 ft over hang.. 2. Two Wayne V590- Each with Four Product unit hose blended, dispenser
with Wayne(Cal), each with graphics display, Wayne (Bill Acceptors), each with a Vapor
recovery ready, speaker and conduit intercom, call button, stop button, preset keypads,
and conduit for lighted valance. 3. 1-Wayne 395- 3,1 4 hose blended dispenser with Wayne (cat), with
graphics display Wayne (Bill Accentor), vapor recovery ready, speaker and conduit,
intercom call button, stop button preset key pads, conduit for lighted valance. 4. Verifone 65 key DTERM (Dual Terminal) with pin pad console and
customer display Major Oil Jobber (MOJ) . 5. Verifone help desk. 6. 8x5- 8' DW-CT double wall fiberglass multi compartment tank. 7. 12K -8 DW double wall fiberglass single compartment tank. 8. PS-12 12 Surge Suppression Modules with Uninterrupted Power Source
(UPS). 9. Eight- Sets hose, nozzles, break away, Swivels, splash guards,
spacer hose. 10. Verder Root TIS 350 Console with printer. 11. Four input probe Interface Modules. 12. Four- I MAG Probes. 13. Four- Float Kits. 14. Four- Cap and Rings. 15. Four- PLLD and Modules. 16. A Site FAX. ( A fax is sent to the fueller by the computer when
proper tank level is reached.) 17. Logo Plate on I-35 South bound (Exit 186) Note: A Autogas Regal POS System my replace the Verifone POS system
which depends on who does the financing/Leasing of the equipment. The rest of the money will be use to build a 2500 square foot Convenience Store
(C-Store) and new parking lot and driveway. Exit/Payback Strategy The financial projections indicate that exit of the leaser will be achievable in 5
years. The exit settlement will be in the form of making lease payment from fuel sold and
splitting the profit left over for 5 years then transferring equipment ownership to Lulu's
Conoco . The Fueller would receive so much per gallon sold of fuel at each site. The increase in profits generated by this investment, specifically generates (per IMST
report) 88,000 gallons of fuel per month and $40,000.00 per month from the Convenience
Store (C-Store) which will increase to 100,000 gallons for fuel and $45,000 to $50,000 per
month for Convenience Store (C-Store) on a ground up operation that will allow us to have
the funds to repay the loan in 5 years for fuel equipment and 30 years for land and store.
Conclusion Lulu's Autobahn Fuels will enjoy an established track-record of excellence with our
customers. Their expressions of satisfaction and encouragement are numerous, and we intend
to continue our advances and growth in the marketplace with more unique and effective
products. Based on the attached financial projections, we believe that this venture represents a
sound business investment. In order to start up this automated Gas Station and Convenience Store (C-Store) we are requesting a lease and loan of $1,000,000 by April 1999. |