CapEx Assessment — Age Risk & Replacement Forecast¶

Analysis based on equipment/machine-inventory and financials/balance-sheet.

Equipment Age Distribution¶

🟢 Recent Investments (0-7 years old) — Revenue Generators¶

Machine	Year	Age	Replacement Value	Risk
ZEISS Duramax CMM	2024	1 yr	$80,000	None
FARO Arm CMM	2021	4 yr	$45,000	None
Haas VF-2SSYT	2020	5 yr	$95,000	None
Makino U6 H.E.A.T EDM	2019	6 yr	$150,000	None
Haas ST-35Y	2018	7 yr	$100,000	None

Good news: The most critical, revenue-generating machines are all modern. The LANL QA capability (ZEISS + FARO) is particularly strong.

🟡 Aging But Functional (8-25 years old)¶

Machine	Year	Age	Replacement Value	Risk
Haas TL-2	2008	17 yr	$30,000	Low
Haas VF-4SS	2003	22 yr	$40,000	Medium
Kent LA30120 Lathe	2000	25 yr	$15,000	Low
Haas VF-5/40	1998	27 yr	$50,000	Medium — spindle
Haas VF-10	1998	27 yr	$69,000	Medium — spindle
Ameriseiki TC-1	1996	29 yr	$25,000	Medium
Sullair Compressor	1994	31 yr	$6,000	HIGH — single point of failure
Union B130 HBM	1991	34 yr	$85-200K	HIGH — control risk

🔴 Near End-of-Life (25+ years, limited remaining value)¶

Machine	Year	Age	Replacement Value	Risk
LVD Press Brake	1989	36 yr	$12,000	Low (simple mechanical)
Mori Seiki SL-25	1987	38 yr	$19,000	High — parts scarce
Mori Seiki MV-JR	1986	39 yr	$10,000	High — likely backup
Hyster 15K Forklift	1982	43 yr	$10,000	Medium
HTC Power Shear	1975	50 yr	$22,000	Low (simple hydraulic)
Monarch Lathe	1952	73 yr	$9,000	Museum piece

Book Value vs. Replacement Value¶

Category	Book (Gross)	Accum. Depreciation	Net Book Value	Replacement Value
Shop Equipment	$1,052,394	($922,782)	$129,612	~$1,196,250
Gap				$1,066,638

The equipment is 88% depreciated on the books but has ~$1.2M in replacement value. This is a hidden asset — the balance sheet significantly understates the real equipment value.

3-5 Year CapEx Forecast¶

Item	Est. Cost	Priority	Timing
Air compressor replacement	$15–20K	HIGH — shop can't run without it	Year 1-2
Haas VF-5/VF-10 spindle rebuilds	$15–25K	Medium — as they fail	Year 1-3
Union B130 control retrofit (if needed)	$30–50K	Contingent — only if Heidenhain TNC 355 dies	Year 2-4
Forklift replacement (Hyster)	$15–25K	Low-medium	Year 2-4
Welder refresh/replacement	$5–10K	Low	Year 3-5
Total 3-5yr range	$50–130K

Section 179 CapEx History¶

Year	Section 179 Deduction	Likely Purchases
2023	$0	None
2024	$77,000	ZEISS Duramax CMM (~$80K)
2025	$138,000	Unknown — ask seller

(Source: financials/tax-returns)

Maintenance & PM Approach¶

Metric	Value	Notes
Annual Maintenance Spend	~$16,840/year ($50,517 total 2023-2025)	Seller confirmed
Preventive Maintenance	Informal	HAAS technician every 1-2 years for leveling and PM on HAAS machines; all other machines maintained as-needed

Implication: Low formal PM program increases risk of unexpected breakdowns, but maintenance costs are relatively low (~1.4% of equipment replacement value annually).

The increasing CapEx trend ($0 → $77K → $138K) shows the business was investing in growth, not deferring maintenance. This is a positive signal.

Open Questions¶

#	Question	Status
30a	Sullair compressor condition, rebuild history, backup?	❌
30b	Union B130 usage frequency, control issues?	❌
30c	Haas VF-5/VF-10 spindle rebuild history?	❌
30d	Mori Seiki machines — production or backup?	❌
30e	Makino EDM maintenance status?	❌
30f	Annual maintenance/repair spend (dollar figure)?	❌
30g	Planned purchases not yet executed?	❌
30h	PM schedule formal or informal?	❌

See: deal/due-diligence