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HomeMy WebLinkAboutIowa Department of Economic Development-Grant Applictaion-11.20.2006 rtiv,/:9; oa6.'/tv; 3 I 0• Michael T. Blouin, Director 1Y C hanging Iowa Department of Economic Development Application for Financial Assistance Section A — Applicant & Project Information Business Development Division Iowa Department of Economic Development 200 East Grand Avenue Des Moines, Iowa 50309 www.iowalifechanging.com 3/17/2006 Section A—Applicant&Project Information 1 Instructions 1. All applicants shall complete Section A of the Application for Financial Assistance and attach only those section(s)for the program(s)to which the applicant is applying. Program Download and Complete Community Economic Bettermeant Account(CEBA) Section B Enterprise Zone Program(EZ) Section C High Quality Job Creation Program (HQJC) Section D Entrepreneurial Ventures Assistance Program(EVA) Section E Value Added Agricultural Products& Processes Financial Assistance Program(VAAPFAP) Section F Economic Development Set-Aside Program (EDSA) Section G 2. Please visit the IDED Web site, http://www.iowalifechanging.com/applications/bus dev/index.html or contact IDED at(515) 242-4819 to see if this version of the application is still current. 3. Before filling out this application form, please read all applicable sections of the 2005 Iowa Code and Iowa Administrative Code(rules). http://www4.1egis.state.ia.us/IAChtml/261.htm 4. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format, questions, or wording of questions presented in this application, will render the application invalid and if will not be accepted. 5. Complete the applicable sections of the application fully; if questions are left unanswered or required attachments are not submitted, an explanation must be included. 6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation. 7. Any inaccurate information of a significant nature may disqualify the application from consideration. 8. Upon completion of the application, please submit the following to the Business Finance Team at IDED: • The original,signed application form and all required attachments • One copy of the application form and all required attachments from which additional copies can easily be made. If electronic copies of the application and required attachments are available, please e-mail these documents to businessfinance@iowalifechanging.com in addition to submitting the original plus one copy. Business Finance Team Iowa Department of Economic Development 200 East Grand Avenue Des Moines IA 50309 Application Due Dates IDED Board Meeting Application Due Date April 20, 2006 March 27, 2006 May 18, 2006 April 24,2006 June 15, 2006 May 22, 2006 July 20, 2006 June 26, 2006 August 17, 2006 July 24, 2006 September 21, 2006 August 28, 2006 October 19, 2006 September 25, 2006 November 16, 2006 October 23, 2006 December 21, 2006 November 27, 2006 *EVA applications will be acted upon every other month starting in March. Section A—Applicant&Project Information 2 Public Records Policies Information Submitted to IDED. The Iowa Department of Economic Development(IDED) is subject to the Open Records law (Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the Open Records law. All public records are available for public inspection. Some public records are considered confidential and will not be disclosed to the public unless ordered by a court,the lawful custodian of the record, or by another person duly authorized to release the information. Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public disclosure: • Tax Records • Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department • Payroll Registers • Business Financial Statements and Projections • Personal Financial Statements Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7. Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently applicable to business information submitted to IDED: • Trade secrets [Iowa Code§22.7(3)] • Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose. [Iowa Code§22.7(6)] • Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code§22.7(8)] • Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were made available for general public examination. [Iowa Code§22.7(18)] Information supplied to IDED as part of this application that is material to the application and/or the state program to which the applicant is applying including, but not limited to the number and type of jobs to be created,wages for those jobs, employee benefit information, and project budget, are considered open records and will not be treated as confidential. Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public records are available from the Department upon request or at http:l/www.iowalifechanqinq.com/downloads/chap169openrecords.doc. Section A—Applicant&Project Information 3 Applicant Information 1. Name of Business: Advanced Heat Treat Corp. Address: 2825 MidPort Blvd. City, State&Zip Code: Waterloo, IA 50703 Contact Person: Gary L. Sharp Title: President/CEO Phone: 319-232-5221 Fax: 319-232-4952 Email: sharpg@ion-nitriding.com 2. SIC or NAICS Code: 332811 3. Federal ID Number: 42-1171269 Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes X No If yes, please also provide that tax ID number: 4. Is the contact person listed above authorized to obligate the Business? X Yes ❑No If no, please provide the name and title of a company officer authorized to obligate the Business: 5. If the application was prepared by someone other than the contact person listed above, please complete the following: Name: Connie Merron Title: Controller Organization: Advanced Heat Treat Corp. Address: 2825 MidPort Blvd. City, State, &ZIP Code: Waterloo, IA 50703 Phone: 319-232-5221 Fax: 319-232-4952 Email: acctng@ion-nitriding.com Sponsor Information Please review the following table to determine who needs to sponsor this application. Depending on the programs being applied for, more than one sponsor may be necessary. Program Acceptable Sponsor CEBA City or County or Community College in which the Project Site is Located EZ Local Enterprise Zone Commission HQJC City or County in which the Project Site is Located EVA City or County in which the Project Site is Located; Local Development Entity;John Pappajohn Entrepreneurial Center;a Small Business Development Center;Business Accelerator;or similar entity VAAPFAP City or County in which the Project Site is Located or Local Development Entity EDSA City or County in which the Project Site is Located 1. Sponsor Organization: City of Waterloo Address: 715 Mulberry Street City, State&ZIP Code: Waterloo, IA 50703 Phone: 319-291-4366 Fax: 319-291-4262 E-mail: 2. If IDED needs to contact the sponsor organization with questions, should we contact the person listed above? n Yes X No, please contact the following person: Name: Linda Laylin Title: Director of Business Services Greater Cedar Valley Alliance Address: 10 West Fourth Street, Suite 310 City, State&ZIP Code: Waterloo, IA 50701 Phone: 319-232-1156 Fax: 319-232-1829 E-mail: laylin@cedarvalleyalliance.com If necessary, please list information on additional sponsors in an attachment. Section A—Applicant&Project Information 4 If necessary, please list information on additional sponsors in an attachment. Certification&Release of Information I hereby give permission to the Iowa Department of Economic Development(IDED)to research the Business'history, make credit checks,contact the Business'financial institutions, insurance carriers,and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IDED state tax information pertinent to the Business'state income tax,sales and use tax,and state tax credits claimed. I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law(Iowa Code, Chapter 22). I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is secured. (High Quality Job Creation Program applications may be submitted up to 12 months following the completion of the project.) I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am aware that financial assistance is not available until an agreement is executed within a reasonable time period following approval. I hereby certify that all representations,warranties,or statements made or furnished to IDED in connection with this application are true and correct in all material respect. I understand that it is a criminal violation under Iowa law to engage in deception and knowingly make,or cause to be made,directly or indirectly,a false statement in writing for the purpose of procuring economic development assistance from a state agency or subdivision. For the ess: Gam- _,7v/(100 06 Sig re Date Gary L. Sharp, President/CEO Name and Title(typed or printed) For the Sponsor(s): Signature � Date ►�-� I-kt r It Yha_ d Name and Title(typed of rinted) Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.) Signature Date Name and Title(typed or printed) IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in connection with this application is incorrect:, false, misleading or erroneous in any material respect. If assistance has already been provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover incentives and assistance awarded to the Business. Section A—Applicant&Project Information 5 Project Information 1. Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. Advanced Heat Treat Corp. was established in 1981 with a philosophy that if the business was to be successful it needed to provide their customers with a quality product, in a timely fashion and remain committed to our employees. That philosophy has continued to help Advanced Heat Treat Corp. to grow over the years. Several expansions and additions were made to the original building at 2839 Burton Avenue, by adding additional manufacturing space and offices in 1988 and expanding the manufacturing facility again in 1992. In 1999, the original fac lity at 2839 Burton once again was being stretched to maximum capacity. The plan was to close the Burton location and move everything and everyone to a new facility being built at the Mid Port Industrial Park. However, customer needs were considered and an opportunity was presented to expand into conventional heat treat, thus creating additional revenue and jobs. So, instead of closing the doors at 2839 Burton Avenue, that facility expanded into the conventional heat treat services and now employees 43 (38 full and 5 part time) people at the facility. Once again Advanced Heat Treat Corp. is faced with growing pains, trying to meet customer needs and continuing to develop growth opportunity for its employees. Because of customer demands a fourth facility is under construction in Cullman, Alabama. Also the original facility at 2839 Burton Avenue cannot continue to support their customer needs or grow the conventional sales because of the lack of space. Today Advanced Heat Treat Corp. has over 120 employees (Waterloo Burton facility 43, MidPort facility 56 and Michigan 24) with annual gross sales of over 13 million. In the fall of 2006 Advanced Heat Treat Corp. celebrated 25 years of being in business. NEVER in those 25 years has there been an employee lay off. Employee satisfaction is monitored closely and we currently have a turnover percentage of 1.72% in Iowa and 2.79% in Michigan. AHT has had NO LOST TIME accidents. Our average unscheduled absenteeism rate is 1.84%. We also invest time and money into our training program and currently average 2 hours per employee per month in formal documented training. All of our benchmarking indicates that we are above the industry Best of the Best. Advanced Heat Treat Ccrp.'s primary service is UltraGlow® Ion Nitriding, a surface hardening process, and is done in our Iowa and Michigan facilities. In our Burton Avenue facility we offer conventional heat treating which consists of the following processes: Carburizing, Carbonitriding, Quench &Temper, Stress Relieving, Cold Treatment, Annealing & Duplex Hardening. The new Alabama facility will offer UltraGlow® Ion Nitriding only. Advanced Heat Treat Corp. serves a wide variety of markets including automotive, appliance, aerospace, forging, and agriculture and continuously looks for new markets to service. 2. Business Structure: Cooperative ❑ Corporation = Limited Liability Company I l Not for Profit fl Partnership X S-Corporation ❑ Sole Proprietorship State of Incorporation: IA 3. Identify the Business'owners. Gary L. Sharp Does a woman, minority, or person with a disability own the Business? LJ Yes X No Section A—Applicant&Project Information 6 If yes, is the business certified as a Targeted Small Business? ❑ Yes n No 4. List the Business' Iowa Locations and the Current Number of Employees at each Location. Waterloo, IA Burton Avenue 38 MidPort Blvd. 56 5. What is the Business'worldwide employment? (Please include employees of parent company, subsidiaries, and other affiliated entities in this figure.) Waterloo, IA Burton Avenue 38 Mid Port Blvd. 56 Monroe, MI 24 Cullman,AL 2 6. Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) An addition at 2839 Burton Avenue would add 23,000 square feet of manufacturing space to the existing building. Advanced Heat Treat Corp. is unable to continue to grow the conventional side of the business because of lack of space. With this additional floor space,Advanced Heat Treat Corp. is looking at three additional furnaces with room for future growth. The equipment to be installed will add capability to process larger parts and parts with different specifications. These added services will bring work from outside our geographic area and help support current local customers that have to send parts outside the state for heat- treating services. Market research is being done to add some additional heat-treating services like pit hardening, black oxide or vacuum heat treat. Additional investigation is being done to put in a straightening operation. Again these new technologies will bring work from outside our geographical area,support local businesses and continue to diversify the customer and product base. Adding new heat-treating services also provides more growth opportunities for our employees. The expansion will also provide two additional docks,currently there is only one loading dock,which creates congestion for truck traffic. There will be more employee facilities both in the shop and office areas, including a locker room and restrooms 7. Project Address(Street Address, City, and County): 2839 Burton Avenue Waterloo, IA 50703 8. Type of Business Project: El Startup X Expansion of Iowa Company n New Location in Iowa I I Relocation from another State 9. Please identify the management at the project location and his/her/their experience. Gary L. Sharp, President/CEO owns 100%of the business. Gary is one of 12 original investors. Prior to working full time at Advanced Heat Treat Corp., Gary worked for John Deere. However, in 1986 he decided to work at developing the business full time and quite John Deere. Gary's entrepreneurial skills have lead the company for the last 25 years. Section A—Applicant&Project Information 7 Jeff Thompson,VP of Operations manages the Burton facility. Jeff has 18 years experience in heat-treating and management. He has been instrumental in growing the customer base and profitability at the Burton facility. 10. Has any part of the project started? ❑Yes X No If yes, please explain. 11. Project Budget: AMOUNT BUDGETED Use of Funds , .Cost __ Source A Source B Source C Source D Source E SourcE Land Acquisition $.. $ $ $ $ $ $ Site Preparation $ ,.:. ;:', $ $ $ $ $ $ Building Acquisition $ $ $ $ $ $ $ Building Construction $1500,000 $100,000 $ $244,000 $1,156,000 $ $ Building Remodeling $', 500,000 $ $ $ $ 500,000 $ $ Mfg.Machinery&Equip. $'750,000 ' '. $ $ $ $ 750,000 $ $ Other Machinery&Equip. $ 50,000, $ $ $ $ 50,000 $ $ Racking,Shelving,etc.' $ 35,000 $ $ $ $ 35,000 $ $ Computer Hardware $ 5,000• $ $ $ 5,000 $ $ Computer Software $ $ $ $ $ $ $ Furniture&Fixtures $ 5,000 $ $ $ _$ 5,000 $ $ Working Capital $ $ $ $ $ $ $ Research&Development $• $ $ $ $ $ $ Job Training $ 36,762 $ $36,762 $ $ $ $ $ " '; $ $ $ $ $ $ $ $ $ $ _ $ $ $ TOTAL $2,881,762 $100,000 $36,762 $244,000 $2,601,000 $ $ 'Racking, Shelving and Conveyor Equipment used in Warehouse or Distribution Center Projects Does the Business plan to lease the facility? ❑ Yes X No If yes,please provide the Annual Base Rent Payment(lease payment minus property taxes,insurance, and operating/maintenance expenses)and the length of the lease agreement. PROPOSED FINANCING Source of Funds Amount Form of Funds Rate Term Co (List tax benefits separately;not (Loan,Grant, In-Kind Donation,etc.) Include wh as a source of funds.) pay Source A: IDED $100,000 Forgivable Loan/No interest loan Source B: Other State(e.g. $ 36,762 Hawkeye Community College Job Community College,DOT,etc.) Training Source C: Local Government $244,000 , Tax Abatement—City of Waterloo Source D: Business/Bank $2,501,000 Advanced Heat Treat Corp. Source E: Other Private Sources $ Source F: $ Source G: $ Source H: $ TOTAL $2,881,762 s" Please list below any tax benefits(e.g. Investment Tax Credit,Sales Tax Refund, R&D Tax Credit,New Jobs Tax Credit, Property Tax Exemption/Abatement,etc.)that the Business expects to receive and included the estimated value of each tax benefit: Section A—Applicant&Project Information 8 12. Employee Benefits: Please identify all employee benefits provided by and paid for(in full or in part)by the Business. Employee Benefits Total Annual Cost Portion of Total Plan Provisions Provided by the (show on a per Annual Cost Paid (Include deductibles,coinsurance%,office visit Business employee basis) by the Business* co-payments,annual out-of-pocket maximums, face amounts,etc.), •4 Employee FamilyEmployee Famil Y $3,304 $9,582 $2,808 $5,749 PPO plan, $15 office visit, No Deductible, Medical/Health 80/20 in network coinsurance. Insurance Prescription:$10 tier 1, $30 tier 2, $50 tier 3. N/A N/A N/A N/A Dental Insurance Part of Medical/Health Insurance Vision Insurance N/A N/A N/A N/A Life Insurance N/A N/A N/A N/A Short Term Disability (STD) N/A N/A N/A N/A Long Term Disability (LTD) *If the business's plan is self-insured,please use the amount paid by the business for costs associated with employee and family coverage during the past three years and then,determine the business'average annual contribution per employee for that three year period. Does the Business offer a pension plan,401(k) plan, and/or retirement-plan? X Yes ❑ No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee(show average as a percentage of salary). Advanced Heat Treat Corp. has a 50%company match of the first 10%employee deferral; if an employee defers 10% then the company will make a 50% matching contribution. An example, if an employee defers 10%the company would contribute a match of 5%, if the employee defers 8%the company would contribute a 4%match,or if an employee would defer 12%the company would still continue a match of 5%. 401(k) Company Match for Iowa Plan Year 2005-06 2004-05 2UC3= 4 M 002-03 $89,999.39 $62,886.11 $64,921.03 $58,311.76 #of employees 56 43 40 36 Section A—Applicant&Project Information 9 Does the Business offer a profit-sharing plan? n Yes X No If yes, please indicate total amount paid out each year for the past three years and then,determine the average annual bonus or contribution per employee for that three year Deriod. Advanced Heat Treat Corp. does not have a formal bonus program, however,each year funds allocated during the fiscal year for ALL employee bonuses. The distributions of these funds are based on the employee performance evaluations, attendance, and their company contributions. Even in the lean economic years,the company has acknowledged their employees with a bonus, recognizing that the employees made extra efforts to control costs, produce a quality part and promote sales. Here is an average of what the company has paid to the employees in the last four years. Iowa EE's ' Annual Bonus 2005 2004 = 2003 2002 Bonus Bonus Milkontii; Bonus $148,077 $ 90,044 $56,900 $49,150 #of employees 85 74 60 50 Avg. per Employee $1,787 $1,815 $1,220 $997 Does the Business offer child care services? ❑ Yes X No Child care services include child care services on-site at the facility in which the project will occur or off-site child care subsidized by the business at the rate of 50%or more of the costs incurred by an employee. 13. Identify the Business'competitors. If any of these competitors have Iowa locations, please explain the nature of the competition (e.g.competitive business segment, estimated market share,etc.)and explain what impact the proposed project have on the Iowa competitor. In the state of Iowa, Advanced Heat Treat Corp.does not have a lot of competition,except in the Quad City areas; TriCity and Donahue. The majority of the competitors for Advanced Heat Treat Corp. are outside the state of Iowa; St. Louis, Chicago, Minneapolis, Rockford, IL, Milwaukee, WI. The expansion at the Burton facility will give us the ability to install larger size furnaces to gain a larger market share from customers outside the state of Iowa. These larger furnaces will also support local businesses and eliminate their needs to send product outside the state of Iowa for heat treating services. 14. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa? X Yes fl No If yes, please explain why and identify those jobs as"retained jobs"in the following question. It is Advanced Heat Treat Corp. intention to expand the conventional side of the business, if not in Iowa then in the new ion-nitriding facility in Alabama. The positions of Operations Manager and Metallurgist would be relocated to Alabama immediately and staff would be hired for growth at the Alabama site. Section A—Applicant&Project Information 10 15. List the jobs that will be retained and/or created as the result of this project. (A retained job is an existing job that would be eliminated or moved to another state if the project does not proceed in Iowa.) For retained jobs, include the current hourly wage rate. For jobs to be created, including the starting hourly wage rate. Job Title Skills,Education,or Experience Number of Retained(R)or Starting or Current Wage Required Jobs Created(C) Rate Year 1 of the Project Operations Manager 1 Retained $80,000 Heat Treat Tech See attached job descriptions 25 Retained $25,230 Heat Treat Tech 2 _ Created $27,726 Heat Treat Tech 2 Created $28,933 Heat Treat Tech 2 Created $29,350 Supervisor 3 Retained $41,500 1 Created $38,000 Office Support 3 Retained $26,500 1 Created $22,888 Lab Technicians 2 Retained $27,000 1 Created $26,500 Metallurgist 1 Retained $50,000 Sales 1 Retained $49,500 Maintenance Mgr 1 Retained $68,600 Maintenance 1 Retained $33,000 1 Created $36,400 Year 1 Subtotal 10 created :"sib r:,. ` a 0M „„ , Year 2 of the Project Heat Treat Tech 1 Created $29,222 Heat Treat Tech 1 Created $29,640 Year 2 Subtotal 2 created ,€, .;, , q ;;6 I �'.. Year 3 of the Project t,,.. Heat Treat Tech 1 Created $28,380 Heat Treat Tech 2 Created $29,500 Heat Treat Tech 1 Created $29,940 Sales 1 Created $35,000 Year 3 Subtotal 5 created These wages do not include any employee annual bonuses. Total Number of Retained Jobs: 38 Total Number of Created Jobs: 17 This figure is conservative;Advanced Heat Treat Corp.does not want to overstate the number of newly created positions. 16. Discuss each of the following items with respect to the proposed project: a) the current employment conditions in the community, include any business closures, unemployment rates,etc. and if applicable,the community's need for assistance in attracting the Business. Section A—Applicant&Project Information 11 The State's unemployment rate for 2nd Quarter 2006 was 3.6%. Comparatively, the local unemployment rate for the Waterloo/Cedar Falls MSA was slightly lower at 3.3%. While the area's economic recovery continues to improve, there is still a tremendous need in the area for more jobs and higher wages. A laborshed study is currently being conducted for the area, but the 2003 study reflected significant numbers of individuals working in the Cedar Valley and surrounding communities who were interested in finding employment or willing to change employment. The positions at AHT will offer excellent alternative employment with quality benefits. A local Discovered Resources Job Fair was held in October 2006. Approximately 65 employers participated and over 1,000 job seekers attended demonstrating a need for more job opportunities in the area. b) impact of the proposed project on the community and the state, include projections that reflect the impact on local and state tax revenue and any additional costs the community will incur as the result of the proposed project; The investment of the State, the City, and the principal, Gary Sharp, will increase the ability of the company to enter its next state of growth in heat-treating services. These new technologies will bring work from outside the Cedar Valley and will allow AHT to diversity the customer and product base. c) impact the proposed project will have on current employees, including the potential for increased skills and wages; and This expansion is one phase of continued growth, which will result in opportunities for existing employees to gain promotions, advancements, training in new skills as well as the opportunity for additional compensation and benefits. d) impact the investment will have on the ability of the business to expand, upgrade, or modernize its capabilities. This investment will facilitate additional growth and expansion of AHT and will secure this growth for the Cedar Valley and the State of Iowa. Because much of AHT's past success and growth have been attributable to its stable, reliable, well-educated Iowa workforce, the company would like to continue the growth of its operations in the State of Iowa. 17. Is the Business actively considering locations outside of Iowa? X Yes ❑ No If yes, where and what assistance is being offered? Advanced Heat Treat Corp. is currently building a fourth ion-nitriding service center in Cullman, AL. The community of Cullman has provided land, property tax abatements for 10 years and is setting up training for potential employees per our guidelines. 18. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed to complete this project Financing Gap - The Business can only raise a portion of the debt and equity necessary to complete the project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap. Rate of Return Gap — The Business can raise sufficient debt and equity to complete the project, but the returns are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the rewards. X Locational Disadvantage (Incentive)—The Business is deciding between a site in Iowa (site A) and a site in another state (site B) for its project The Business argues that the project will cost less at site B and will require a subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site A and site B. What measures were analyzed to determine the amount and form of assistance needed? Regarding Alabama incentives , labor costs, work force, building costs, state incentives Section A—Applicant&Project Information 12 19. What amount of state assistance is requested based on the above-identified need? $100,000 What type/form of assistance is preferred (e.g. loans,forgivable loans, tax incentives, etc.)? Forgivable loans 20. Please indicate what program(s)the Business is applying to and download and submit those applicable sections: X CEBA (Complete Section B) ❑ EZ (Complete Section C) ❑ HQJC (Complete Section D) ❑ EVA (Complete Section E) ❑ VAAPFAP (Complete Section F) ❑ EDSA (Complete Section G) The Department reserves the right to review this application and determine, based on the proposed project and available program funds, which financial assistance program(s)is best suited for the Business'project. The actual program(s)utilized may vary from the programs indicated above. Section A—Applicant&Project Information 13 21. Return on Investment Information—Business Taxes 1DED is required to calculate the return on state and local government investments in this project. Data from other parts of the application will be combined with the estimates requested below to calculate the required return on investment information. With an expansion at the Burton Avenue facility Advanced Heat Treat Corp. is forecasting increase revenue of: $1.1 million in the first full year of operation $1.3 million in the second $1.5 million in the third. Theses figures are conservative and adding only the equipment defined in the original project. There is floor space for additional equipment as demanded by production. Instructions for Question 21 - IDED is asking for a best estimate on the increase in taxes associated with this project. - Estimates should only include the expected increase in tax liability resulting from this project. - At minimum, IDED needs estimates for the first three years of the project. - Show data as if no tax abatements or tax credits awarded for this project were taken. - For partnership forms of ownership(e.g. limited partnerships, s-corporations, LLC, etc.), please estimate the partners' increase in Iowa tax liability due to this project. - Sales and use taxes refer to the taxes paid on materials,etc.that the Business purchases, not taxes you collect from sales to your customers. - Applicants will not be held to these numbers with respect to any award from or contract with IDED. - This page of the application will automatically be treated as confidential. Increase in Tax Collections Associated with this Project State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 State Corporate Income Tax* $ $ $ $ $ State Business Sales and Use Tax $ $ $ $ $ *Insurance Companies: Provide State Insurance Premium Tax Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 Local Real Estate Property Tax $ $ $ $ $ Local Option Sales Tax $ $ $ $ $ Section A—Applicant&Project Information 14 Attachments Please attach the following documents: Al Business Plan This is company confidential information, however; a copy of the table of contents is being provided for your reference. If you need additional input please contact Gary L. Sharp, President/CEO directly. At a minimum, include: • marketing study, • feasibility study, • projected profit and loss statements for three years into the future, • project budget, • production operations, • management structure, • personnel needs, • descriptions of product or process, • status of product/process development, and • patent status(if applicable). (Any information outlined above not included in the business plan should be submitted as supplemental information via a separate attachment.) A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page(Page 1)for the past year and a copy of the most recent payroll report for one pay period. See Attachment A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. Advanced Heat Treat Corp. has never had a violation. See attached Affidavit. A4 Financial Information(Existing Businesses Only) • Profit and loss statements and balance sheets for past three year-ends; • Current YTD profit and loss statement and balance sheet; • Schedule of aged accounts receivable; • Schedule of aged accounts payable;and • Schedule of other debts. This is company confidential information. Advanced Heat Treat Corp. hires the accounting firm of Bergan, Paulsen & Company P.C. annually to conduct an Independent Review of the financial statements and complete the necessary income tax forms. If additional information is required,contact Gary L. Sharp, President/CEO. Section A—Applicant&Project Information 15 Application Checklist Section A—Applicant&Project Information 16 k; S • • •