HomeMy WebLinkAboutLMH Industries - Loan Request
To: Deschutes County Board of Commissioners
From: Judith Ure, Department of Administrative Services
Date: June 20, 2013
Subject: Economic Development Loan Requests
Attached are briefing papers describing two economic development loan requests scheduled for
discussion during the Board’s June 26, 2013 work session. Both requests have been reviewed by
Economic Development for Central Oregon (EDCO) and evaluated by EDCO’s Due Diligence
Committee. The resulting recommendations are as follows:
Vantage Clinical Solutions, Inc.: $10,000
LMH Industries, Inc.: $40,000
Representatives from EDCO will be attending the June 26 meeting to provide additional
information and to answer any questions Board members may have.
The Deschutes County Economic Development Fund currently has a cash balance of
approximately $142,000. This balance reflects loan repayments received year-to-date as well as
loans and grants approved and paid during this fiscal year, including:
December 19, 2012: Consumer Cellular - $50,000
January 17, 2013: Energyneering, Inc. - $34,000
March 16, 2013: Venture Catalyst Program - $20,000
June 13, 2013: NAVIS - $50,000
An additional $25,000 payment to the Redmond Airport in support of the new direct flight
service to Los Angeles is pending based on the Board’s approval of modifications to the
resolution that governs the Economic Development Fund. If the revised language and payment
are approved, the fund balance available for new loan requests, including those described above,
will be approximately $117,000.
Please contact me if you have any questions concerning the Economic Development Fund or
Economic Development Loan program in advance of the June 26 meeting.
BRIEFING PAPER FOR LMH Industries, Inc.
Request for Deschutes County Forgivable Loan
June 7th, 2013
Company Request: $40,000
EDCO Recommendation: $40,000
Proposed Job Creation within 24 months of Dec 31, 2012: 40 new employees
Average Pay for New Employees (all positions, excluding commissions): $41,793
Industry: Electronic Equipment Manufacturing
Website: www.LMHindustries.com
Company Background:
LMH is a manufacturer of cable assemblies and harnesses, custom molded products, cable and
connector manufacturing for the military and medical markets. The company currently has
over 50 customers who are reputable and long standing military and medical device
manufacturers who use LMH high quality and substantially durable cable assemblies. The
company began operations in March of 2011 and has experienced tremendous growth due to
growing customer relationships and orders.
LMH’s Business strategy, like most businesses, is to grow and be the best at what they do.
In the first year of business, LMH has secured several large purchase orders from top
military and medical original equipment manufacturers. To support this large volume of
orders LMH has grown its employee base to 94 local full time employees, 3 out of area
employees and the project that this will increase to 146 local full time employees by 4th Qtr.
2014. Funds will be used to purchase new computers, software, manufacturing machinery
and building improvements. LMH has purchased their formerly leased production facility
at 2095 SW Badger and is operating at a temporary location on SE 1st Street while the second
floor can be built out to accommodate additional needed manufacturing space.
EDCO Recommendation
A due diligence process was completed by the REDI (Redmond Economic Development, Inc.)
incentives review committee on May 10th, 2013. The participants in the review included, Joe
Centanni, CPA; Bruce Barrett, Business Consultant; Roger Lee, EDCO (Economic Development
for Central Oregon) Executive Director and Jon Stark, Manager for REDI. After thorough review
of the application, onsite tour of operations, and review of financial statements, the committee
supported the following recommendation:
EDCO is recommending to Deschutes County an award of $40,000 or $1000 per job created over
24 months following the application date.
Conditions include:
Company hires 40 FTE by December 31, 2014 and maintains total employment of 134 local
employees until December 31, 2015
Providing quarterly employment updates and the ability to inspect complete financial
statements from award date through termination of the yet-to-be executed agreement with
Deschutes County.
Deschutes County’s successful negotiation of a personal guarantee with a principal of the
company.
Failure to meet the above provisions would result in partial or full repayment of the loan, with
interest.