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distribution agreements were Anheuser Busch (Budweiser), Pabst,
and Coors.
During its tax years ended February 28, 1991, and February
29, 1992, BDC generated $197,923 and $215,236 net after-tax
income, respectively. Net income before taxes was $337,554 in
1991 and $361,362 in 1992. Simple cashflow (before depreciation,
amortization, interest, and principal payments on debt and
taxes), with certain adjustments for optional or one-time
expenses, was $366,500 for 1990 and $420,500 for 1991.3
The company had 10 employees and owned all its operating
assets, including its delivery trucks and office and warehouse
space. In each of the years 1991 and 1992, the company paid Mr.
Langdon $90,000 in wages.
B. Sale of BDC's Assets
By early 1990, Mr. Langdon began to consider the possibility
of selling BDC's business. At that time, Mr. Langdon and his
wife, respectively, were approximately 69 years old and 68 years
old. Nevertheless, he was ambivalent about selling. He and his
wife were in good health, and Mr. Langdon worked every day,
actively managing every aspect of the business. He had expanded
the business throughout the 1980's and continued to do so up
until the time of sale. For instance, in 1988 Mr. Langdon added
3These figures are included in the accountants' statement
furnished with the offering.
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