This appraisal report provides valuations for machinery and equipment belonging to XXXXXXX as of May 30, 2008. Scott Buth of Alternative Machine Tool performed an inspection of the equipment and determined the total fair market value to be $669,600. The value is distributed among several categories of equipment, including vertical machining centers valued at $220,900, horizontal machining centers valued at $123,000, and CNC turning centers valued at $195,000. The report provides details on individual pieces of equipment within each category, along with the appraiser's qualifications and methodology.
1. Alternative Machine Tool, LLC
300 Venture Drive
Dousman, WI
APPRAISAL REPORT
Prepared for
XXXXXXX
XXXXX
XXXXX
Prepared By: Scott E. Buth
Date: May 30, 2008
2. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
INDEX
COVER LETTER Page 3
CERTIFICATE OF VALUES Page 4
CERTIFICATION Page 5
DEFINITION OF VALUES Page 6
STATEMENT OF CONDITIONS Page 7
APPROACHES TO VALUE/DEPRECIATION Page 8
APPRAISER S QUALIFICATIONS Page 9
APPRAISAL REPORT DETAILED LISTINGS Page 10 - 15
3. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
May 30, 2008
XXXXXXXXX
XXXXXX
XXXXXX
XXXXXX
RE: Appraisal of Machinery and Equipment
Dear XXXXXX,
Pursuant to your request, I as an AMEA Accredited Appraiser of Alternative Machine Tool, LLC have
prepared an Appraisal of XXXXXX, a copy of which is enclosed. This report is intended for use by only
You , XXXXX and your Financial Advisors, and is intended for use in conjunction with the possible sale of
your business. Use of this report by others is not intended by the appraiser, nor is the report intended for
any other use unless express written consent is further granted.
On 05/28/08, I personally viewed the Machinery and Equipment. Following my inspection, I supervised an
investigation into the market conditions for this type of equipment in order to prepare an impartial report. I
also consulted with Pat Klitzman, Madison Tool, Inc. and Jack Mendenhall, Used Machinery Sales, Inc.
and they were not compensated for these services.
The cost, income and market approaches to value have been considered for this appraisal and have been
utilized where necessary or deemed inappropriate for the value conclusions found therein. The enclosed
appraisal is a restricted use appraisal.
The values for the subject equipment were determined by data collected in the course of research and
analysis using but not limited to: Market data from Used Equipment Dealers, Conversations with New
Equipment Manufacturer s, Consultation with Auctioneers, In-House Data Bases, Industry Data Bases and
Trade Journals.
After a thorough analysis of the machinery and equipment and review of the information made available to
me, it is my opinion that as of May 30, 2008 the machinery and equipment has the Fair Market Value
shown on the certificate that I prepared.
As an agent of Alternative Machine Tool, LLC, I certify that neither I nor Alternative Machine Tool, LLC
or any of its employees have any present or future interest in the appraised property. The fees charged for
this appraisal were not contingent on the values reported nor were any undisclosed fees, commissions, or
other compensation received.
Respectfully submitted,
Scott E. Buth
Page 3
4. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
DOES
CERTIFY
That on this date given in this certificate, the property of
XXXXXXX
XXXXXXX
XXXXXXXX
$ 669,600.00
WAS WELL AND REASONABLY WORTH
ON THE BASIS OF IT S FAIR MARKET VALUE
*****************************
Distribution of Value Are As Follows:
DESCRIPTION PAGES FAIR MARKET
VALUE
Vertical Machining Centers 10 $ 220,900.00
Horizontal Machining Centers 11 $ 123,000.00
CNC Turning Centers 12 $ 195,000.00
Manual Milling Machinery 13 $ 10,300.00
Manual Turning Machinery 13 $ 8,450.00
Manual Surface Grinders 13 $ 28,200.00
Rolling Stock 14 $ 11,650.00
Welding Equipment 14 $ 7,600.00
Shop Support Equipment 14-15 $ 19,400.00
Inspection Equipment 15 $ 45,100.00
TOTAL $ 669,600.00
Effective Date
May 30,2008
By:
Scott E. Buth
Page 4
5. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
CERTIFICATION
I certify that, to the best of my knowledge and belief:
The statements of fact contained in this report are true and correct.
The reported analysis, opinions and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, unbiased professional
analysis, opinions and conclusions.
I have no present or prospective interest in the property that is the subject of this
report and I have no personal interest or bias with the respect to the parties
involved.
My compensation is not contingent on an action or event resulting from the
analysis, opinions or conclusions in, or the use of, this report.
My analysis, opinions ad conclusions were developed, an this report has been
prepared, in conformity with the Association of Machinery and Equipment
Appraisers Standards and Procedures of Professional Ethics and Practice and the
Uniform Standards of Professional Appraisal Practice.
I have made a personal inspection of the property that is the subject of this report.
No one provided significant professional assistance to the person signing this
report.
__________________________________
Scott E. Buth
Page 5
6. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
DEFINITION OF VALUE USED FOR THIS APPRAISAL
FAIR MARKET VALUE APPRAISAL A professional opinion of the most probable
price expressed in terms of currency to be realized for property in an exchange between a
willing buyer and a willing seller, with equity to both, neither being under any
compulsion to buy or sell, and both parties fully aware of all the relevant facts as of the
effective date of this appraisal report.
LOCATION OF APPRAISED PROPERTY
XXXXXXXX
XXXXXXXX
XXXXXXXX
APPRAISAL CONSIDER ATIONS
Our appraisal of the listed assets included a personal inspection and inventory of the subject
assets and a review of certain fixed asset records. Discussions were held with the management of
the company and a review was made of the industry to gain insight into company operations. This
investigation has considered the assets in relation to such factors as:
· The history and character of the business.
· The character, extent, condition and utility of the assets considering installation costs
necessary to reflect the value consideration of the property in place for the purpose of
continued use.
· The recognition of current economic conditions as of the appraisal date and the economic
outlook for this business.
· The influence of modern and changing technology and innovation applicable to this
business.
· The condition of the used equipment marketplace as it relates to similar property at the
date of valuation.
Page 6
7. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
STATEMENT OF CONDITIONS
All facts and data set forth in this report are based upon an estimate of value only and are true and
accurate to the best of the appraiser s knowledge and belief.
No investigation has been made into the title to the property and all items listed are assumed to be
the property of the subject company.
No consideration has been given to liens or encumbrances which may be against the property
other than those discussed in this report.
I have no present or prospective interest in the property that is the subject of this report, and I
have no personal interest or bias with respect to the parties involved.
The appraised property has been personally inspected unless otherwise stated.
This appraisal has been made in accordance with accepted appraisal practices in accordance with
the Association of Machinery and Equipment Appraisers Standards and Procedures of
Professional Appraisal Ethics and Practice and Uniform Standards of Professional Appraisal
Practice and reflects the best judgment of the appraiser. When appropriate, new and used
equipment dealers have been consulted for comparable prices; and catalogs, trade publications
and comparative results of auction sales have been utilized.
Information provided by others has been assumed to be correct for the purposes of this report and
no responsibility is taken for the accuracy of the same.
Since conclusions by the appraiser are based upon judgment, isolation of any element as the sole
basis of comparison to the whole appraisal may be inaccurate.
The fees for this appraisal are not contingent upon values reported.
Consideration for possible environment hazards from any source goes beyond the scope of this
appraisal.
It is assumed that there are no hidden or unapparent conditions of the equipment which would
render it more or less valuable.
Other limitations or assumptions, if any, are clearly defined and individually set out at the point
relating to the subject.
The appraiser is not required to give testimony, be present in any court of law, or appear before
any commission or board by reason of this appraisal, unless prior arrangements have been made.
Page 7
8. ALTERNATIVE MACHINE TOOL, LLC
300 VENTURE DRIVE
DOUSMAN, WI 53118
Approaches to Value
Market Approach
This approach is also known as the Comparison Sales Approach . The primary intent of
the market approach is to determine the desirability of the asset and recent sales or
offerings of similar assets currently on the market in order to arrive at an indication of the
most probable selling price for the assets being appraised. If the comparable sales are not
exactly similar to the asset being appraised, adjustments are made to bring them as
closely in line as possible with the subject property.
Cost Approach
This approach is based on the proposition that the informed purchaser would pay no more
for a property than the cost of producing a substitute property with the same utility as the
subject property. It considers that the maximum value of a property to a knowledgeable
buyer would be the amount currently required to construct or purchase a new asset of
equal utility. When the subject asset is not new, the current cost must be adjusted for all
forms of depreciation as of the effective date of the appraisal.
Income Approach
This approach considers value in relation to the present worth of future benefits derived
from ownership and is usually measured through the capitalization of a specific level of
income. This approach is the least common approach used in the valuation of machinery
and equipment since it is difficult to isolate income attributable to a specific asset.
Forms of Depreciation
Physical Deterioration
A form of depreciation where the loss in value or usefulness of an asset is attributable
solely to physical causes, such as wear and tear and exposure to the elements.
Functional Obsolescence
A form of depreciation where the loss in value is due to factors inherent in the property
itself and due to changes in design, or process resulting in inadequacy, over capacity,
excess construction, lack of functional utility, or excess operating costs.
Economic Obsolescence
A form of depreciation or loss in value, caused by unfavorable external conditions. These
can include such things as the economics of the industry, availability of financing, loss of
materials and labor sources, passage of new legislation and changes in ordinances.
Page 8
9. QUALIFICATIONS OF APPRAISER
Scott E. Buth
300 Venture Drive
Dousman, WI 53118
EXPERIENCE
1987 1991 Machine Tool Repair & Service
Schweda Machinery/EDM Sales, Inc.
1991-1998 Machine Tool Sales
Schweda Machinery/EDM Sales, Inc.
1998-2001 Sales Management-Machinery Buyer
Schweda Machinery/EDM Sales, Inc.
2001- Present President
Alternative Machine Tool, LLC
EDUCATION
1980 1984 UW-Wisconsin Platteville
B.S. Agriculture Engineering Technology
B.S. Agriculture Economics
Association of Machinery & Equipment Appraisers
1995 Certify your Assets - Seminar
Machinery Dealers National Association
1998 Weekend with the Pros
2005 Weekend with the Pros
2007 Weekend with the Pros
Page 9
