COMPILATION OF HVAC DEALERSHIPS

PROFIT STATEMENT FOR 1995-1998

COMPILATION OF HVAC DEALERSHIPS (SIC 1711). See Notes Below.

Prepared By: James R. Leichter – Revised 08/24/98

CHART OF ACCOUNT NAMES	YEAR TO DATE	% OF SALES	YOUR ACTUAL	% OF SALES	NOTES

SALES
Installation MESO	454,345.75	49
Installation Labor	101,995.99	11
Service MESO	194,719.61	21
Service Labor	129,813.07	14
Agreement MESO	27,817.09	3
Agreement Labor	18,544.71	2

TOTAL SALES	927,236.22	100%

DIRECT COSTS
Installation MESO	277,150.90	29
Installation Labor	49,978.23	4.9
Service MESO	81,782.23	8.8
Service Labor	49,328.96	4.9
Agreement MESO	14,743.05	1.5
Agreement Labor	9,086.90	.9

TOTAL DIRECT COSTS	482,070.07	51
GROSS PROFIT	445,166.15	49

G&A (OVERHEAD)
Advertising & Marketing	19,471.96	2.10
Auto & Truck Gas/Oil	12,054.07	1.30
Auto & Truck Repairs	7,510.61	.81
Bad Debt	8,716.02	.94
Bank Charges & Credit Card Fees	1,947.20	.21
Communications	13,908.55	1.5
Customer Relations	8,345.12	.90
Data Processing	8,437.85	.91
Dues, Subscriptions, License Fees	1,947.20	.21
Freight & Postage	2,967.16	.32
Insurance – Auto & Truck	8,530.58	.92
Insurance – Building & Equipment	3,059.88	.33
Insurance – General Liability	5,656.14	.61
Insurance - Health	4,636.19	.50			Includes firms with zero $
Insurance – Workman’s Comp.	7,881.51	.85
Legal & Professional	7,603.34	.82
Interest Expenses	9,272.37	1.00
Miscellaneous	15,908.13	1.71
Office Supplies	4,728.91	.51
Profit Sharing Plan	18,637.44	2.01
Rent & Garbage	5,377.97	.58
Repair & Maintenance	1,019.96	.11
Salaries - Management	37,089.45	4.00
Salaries - Office	27,817.09	3.00
Salaries – Officer	64,906.54	7.00
Taxes – Payroll	12,465.31	1.15
Tools – Hand	5,563.41	.60
Training & Education	11,961.34	1.29
Travel & Entertainment	1,761.74	.19
Unapplied Labor	10,199.59	1.10
Uniforms	1,390.85	.15
Utilities	1,112.98	.12
Vacation/Holiday/Sick	463.61	.05
TOTAL G&A EXPENSES	352,350.07	38*

OTHER INCOME\EXPENSES
Gain On Sale Of Truck	500.00	.5
Miscellaneous Income <loss>	843.25	.9
Discounts Earned	587.91	.5
NET PROFIT BEFORE TAXES	94,747.24	10.21*

OTHER INFORMATION

Labor Overhead burden: $1.77 (break-even multiplier = 2.77)
MESO Overhead Burden: $0.43 (break-even multiplier = 1.43)
Average number of employees (not including owner (s)): 9
Average number of office personnel (not including owner (s)): 2
Average number of fulltime management and/or sales: 1.2
Average number of service trucks: 2.58
Average number of installation trucks: 2.4

IMPORTANT NOTES: This Profit Statement is a compilation (average) of approximately twenty HVAC dealerships, and other sources, with sales ranging from $700,000.00 to 1,400,000.00 in sales. Only the top 20% net profit earners were used to create this work. Note: The national net profit average is a paltry 2.6%.

Profit and Loss Statements were collected from 1995 through 1998 and only accepted from known sources. Profit and Loss Statements with questionable accuracy and completeness were not used. All Profit Statements are not structured the same (where income and expenses are placed in a chart of accounts) and few companies utilize the same chart of accounts. All of the companies represented were on an Accrual Basis of accounting but the degree of compliance with Generally Accepted Accounting Principals (known as GAPP) cannot be guaranteed or measured. For this reason, certain extrapolations were made with regard to what account to place certain entries in – among other things. However, these “educated guesses” should not have a material effect on the suitability of this report.

*Before Taxes & Depreciation. Due to wide variances in how depreciation is handled, this account was not included.

We Make Absolutely No Guarantees or Warranties, Of Any Kind, (Expressed or Implied), As To The Suitability or Accuracy of This Document

PROFIT STATEMENT FOR 1995-1998