<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 1
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 1999
----------------
WILMAR INDUSTRIES, INC.
-----------------------
(Exact name of registrant specified in its charter)
New Jersey 0-27424 22-2232386
-----------------------------------------------------------
(State or other (Commission (IRS Employee
jurisdiction of File Number) Identification No.)
incorporation)
303 Harper Drive
Moorestown, NJ 08057
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone, including area code: (856) 439-1222
--------------
(Former name and former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
Effective December 6, 1999, Wilmar Industries, Inc. ("Wilmar" or the
"Company") acquired all of the outstanding shares of J.A. Sexauer, Inc., a
Delaware corporation ("Sexauer"), its wholly owned subsidiary Sexauer Ltd., a
company organized pursuant to the laws of Ontario, Canada ("Sexauer Ltd."), and
Trayco of S.C., Inc., a Delaware corporation ("Trayco" and together with Sexauer
and Sexauer, Ltd, the "Sexauer Group") from The Dyson-Kissner-Moran Corporation
("DKM") in accordance with a stock purchase agreement dated November 15, 1999
between Wilmar and DKM (the "Stock Purchase Agreement").
The Company acquired all of the shares of common stock, par value $1.00 per
share, of Sexauer and all of the shares of common stock, par value $1.00 per
share, of Trayco from DKM for an aggregate consideration of approximately $85
million, payable in cash. The purchase price is subject to post-closing
adjustment depending upon the Sexauer Group's net book value on the date of
Closing. The purchase price for the Sexauer Group was determined as a result of
arms-length negotiations between representatives of the Company and DKM. The
transaction is being treated for accounting purposes as a purchase.
The Sexauer Group, headquartered in Scarsdale, New York, is a leading
distributor of plumbing specialties to institutional facilities throughout the
United States and Canada. The Company generally intends to continue such uses
for the assets of the Sexauer Group, as well as to expand the Sexauer Group's
product line to include certain of the maintenance products currently sold by
the Company to the apartment house market. The Sexauer Group is now a wholly-
owned subsidiary of the Company.
On December 6, 1999, the Company entered into a revolving credit facility
in an aggregate principal amount of $30,000,000 and a term loan facility in an
aggregate principal amount of $55,000,000 pursuant to a Credit Agreement among
Wilmar and certain of its subsidiaries, First Union National Bank, as
administrative agent, and certain banks (the "Loan Agreement"). Proceeds of the
new credit facility, along with cash on hand, were used to pay the cash portion
of the purchase price and to replace the Company's existing line of credit. The
Company's obligations under the Credit Agreement have been guaranteed by certain
of the Company's subsidiaries, including the Sexauer Group.
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Consolidated Financial Statements of the Sexauer Group.
(1) Reports of Independent Public Accountants.
(2) Consolidated Balance Sheets of the Sexauer Group as of
January 31, 1999 and January 31, 1998.
(3) Consolidated Statements of Operations of the Sexauer Group for
the years ended January 31, 1999, 1998 and 1997.
(4) Consolidated Statements of Cash Flows of the Sexauer Group for
the years ended January 31, 1999, 1998 and 1997.
(5) Consolidated Statements of Changes in Stockholders' Equity of the
Sexauer Group for the years ended January 31, 1999, 1998 and
1997.
(6) Notes to Consolidated Financial Statements.
(d) Interim Financial Statements
(1) Unaudited Balance Sheet of J.A. Sexauer, Inc. and Subsidiary, and
Trayco of S.C., Inc. as of October 31, 1999 and January 31, 1999.
(2) Unaudited Statements of Income and Cash Flows of J.A. Sexauer,
Inc. and Subsidiary, and Trayco of S.C., Inc for the nine months
ended October 31, 1999 and 1998.
(3) Unaudited Statements of Changes in Stockholders' Equity of J.A.
Sexauer, Inc. and Subsidiary, and Trayco of S.C., Inc. for the
periods ending October 31, 1999 and January 31, 1999.
(4) Notes to Interim Financial Statements
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILMAR INDUSTRIES, INC.
By: /s/ William Sanford
---------------------
William Sanford
Senior Vice President and Chief Financial Officer
(Duly authorized and Principal financial officer)
Date: March 24, 2000.
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY,
AND TRAYCO OF S.C., INC.
COMBINED FINANCIAL STATEMENTS
AS OF JANUARY 31, 1999, 1998 AND FOR
EACH OF THE THREE YEARS IN THE PERIOD
ENDED JANUARY 31, 1999
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder of
J.A. Sexauer, Inc. and Subsidiary,
and Trayco of S.C., Inc.:
We have audited the accompanying combined balance sheets of J.A. Sexauer, Inc.
and Subsidiary, and Trayco of S.C., Inc. as of January 31, 1999 and 1998, and
the related combined statements of income, stockholder's equity and cash flows
for each of the three years in the period ended January 31, 1999. These
combined financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of J.A. Sexauer, Inc.
and Subsidiary, and Trayco of S.C., Inc., as of January 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the three years
in the period ended January 31, 1999, in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
New York, New York
November 5, 1999
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
-----------------------------------------------------------
COMBINED BALANCE SHEETS
-----------------------
AS OF JANUARY 31, 1999 AND 1998
-------------------------------
(000's omitted, except share data)
----------------------------------
<TABLE>
<CAPTION>
ASSETS 1999 1998
----------- ------- -------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 1,043 $ 949
Accounts receivable net of allowances of $112 and $112, respectively 10,952 10,956
Inventories 10,501 9,819
Prepaid expenses and other 1,395 1,285
Current deferred taxes 264 260
------- -------
Total current assets 24,155 23,269
PROPERTY AND EQUIPMENT, net of accumulated depreciation 2,420 2,306
of $4,005 and $3,732 for 1999 and 1998, respectively
DEFERRED INCOME TAXES 730 541
GOODWILL, net of accumulated amortization of $1,229 and $1,147, for 1999 and 1,515 1,597
1998, respectively
OTHER ASSETS 663 781
------- -------
Total assets $29,483 $28,494
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,016 $ 5,667
Accrued liabilities 3,071 3,241
Income taxes payable (49) (20)
------- -------
9,038 8,888
DUE TO THE DYSON-KISSNER-MORAN CORPORATION 6,595 6,891
OTHER LONG-TERM LIABILITIES 2,120 1,753
------- -------
Total liabilities 17,753 17,532
------- -------
STOCKHOLDER'S EQUITY:
Common stock, par value $1 per share; 3,000 shares authorized; 1,000 shares 1 1
issued and outstanding
Additional paid-in capital 3,615 3,615
Retained earnings 8,244 7,400
Accumulated other comprehensive loss (130) (54)
------- -------
Total stockholder's equity 11,730 10,962
------- -------
Total liabilities and stockholder's equity $29,483 $28,494
======= =======
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
-----------------------------------------------------------
COMBINED STATEMENTS OF INCOME
-----------------------------
FOR THE YEARS ENDED JANUARY 31, 1999, 1998 AND 1997
---------------------------------------------------
(000's omitted)
---------------
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
NET SALES $75,928 $76,075 $71,364
COST OF SALES 34,623 34,180 31,243
------- ------- -------
Gross profit 41,305 41,895 40,121
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 32,072 32,544 30,554
------- ------- -------
Income before interest and provision for income taxes 9,233 9,351 9,567
INTEREST EXPENSE 598 627 626
------- ------- -------
Income before provision for income taxes 8,635 8,724 8,941
PROVISION FOR INCOME TAXES 3,568 3,465 3,605
------- ------- -------
Net income $ 5,067 $ 5,259 $ 5,336
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
-----------------------------------------------------------
COMBINED STATEMENTS OF CASH FLOWS
---------------------------------
FOR THE YEARS ENDED JANUARY 31, 1999, 1998 AND 1997
---------------------------------------------------
(000's omitted)
---------------
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income $ 5,067 $ 5,259 $ 5,336
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation 323 307 278
Amortization 436 542 561
Deferred income taxes (193) (231) (140)
Changes in operating assets and liabilities-
Decrease (increase) in receivables 4 (685) (710)
(Increase) in inventories (682) (1,766) (444)
(Increase) in prepaid expenses and other (110) (103) (458)
(Decrease) increase in accounts payable, accrued liabilities 150 1,365 631
and income taxes
Other, net 138 (16) 130
------- ------- -------
Net cash provided by operating activities 5,133 4,672 5,184
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (506) (428) (128)
------- ------- -------
Net cash (used in) investing activities (506) (428) (128)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt, net (14) (182) (167)
Decrease in amount due to parent (296) (53) (250)
Dividends paid to parent (4,223) (3,636) (4,239)
------- ------- -------
Net cash (used in) financing activities (4,533) (3,871) (4,656)
------- ------- -------
Net increase in cash 94 373 400
CASH, beginning of year 949 576 176
------- ------- -------
CASH, end of year $ 1,043 $ 949 $ 576
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for-
Interest $ 598 $ 605 $ 626
======= ======= =======
Taxes $ 3,873 $ 3,896 $ 3,746
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
-----------------------------------------------------------
COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY
-------------------------------------------
FOR THE YEARS ENDED JANUARY 31, 1999, 1998 AND 1997
---------------------------------------------------
(000's omitted, except per share data)
--------------------------------------
<TABLE>
<CAPTION>
Common Stock Accumulated
------------------ Additional Other
Number of Paid-in Retained Comprehensive Comprehensive
Shares Amount Capital Earnings Income (Loss) Income Total
---------- ------ ---------- -------- ------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 31, 1996 1,000 $1 $3,615 $ 4,680 $ 34 $ 8,330
Net income - - - 5,336 - $5,336 5,336
Foreign currency translation adjustments - - - - 34 34 34
------
Comprehensive income - - - - - $5,370 -
======
Dividends paid to parent - - - (4,239) - (4,239)
--------- ------ ---------- ------- ----- -------
BALANCE, January 31, 1997 1,000 1 3,615 5,777 68 9,461
Net income - - - 5,259 - $5,259 5,259
Foreign currency translation adjustments - - - - (122) (122) (122)
------
Comprehensive income - - - - - $5,137 -
======
Dividends paid to parent - - - (3,636) - (3,636)
--------- ------ ---------- ------- ----- -------
BALANCE, January 31, 1998 1,000 1 3,615 7,400 (54) 10,962
Net income - - - 5,067 - $5,067 5,067
Foreign currency translation adjustments - - - - (76) (76) (76)
------
Comprehensive income - - - - - $4,991 -
======
Dividends paid to parent - - - (4,223) - (4,223)
--------- ------ ---------- ------- ----- -------
BALANCE, January 31, 1999 1,000 $1 $3,615 $ 8,244 $(130) $11,730
========= ====== ========== ======= ===== =======
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
-----------------------------------------------------------
NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
JANUARY 31, 1999, 1998 AND 1997
-------------------------------
(000's omitted)
---------------
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
-------------------
Organization and Basis of Combination
- -------------------------------------
J.A. Sexauer, Inc. and Subsidiary, and Trayco of S.C., Inc. (the "Companies")
are in the business of distributing plumbing, heating and electrical replacement
parts to institutional markets in both the United States and Canada. The
Companies are wholly owned subsidiaries of The Dyson-Kissner-Moran Corporation
("DKM").
These financial statements are shown on a combined basis for the Companies as of
January 31, 1998 and 1999, and for each of the three years in the period ended
January 31, 1999. All significant intercompany transactions and account
balances between these entities have been eliminated.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and the reported amount of
revenues and expenses during the reporting period. Actual results could differ
from these estimates.
Revenue Recognition
- -------------------
The Companies recognize revenue for product sales upon shipment. Estimates for
cash discounts and sales returns and allowances are recorded in the period the
sales are recorded based upon historical experience.
Inventories
- -----------
Inventories, consisting of finished goods, are valued at the lower of cost or
market under both the first-in, first-out (FIFO) and the last-in, first-out
(LIFO) cost methods. Inventories valued under the LIFO method amounted to
$9,666, $9,062 and $7,530 as of January 31, 1999, 1998 and 1997, respectively;
they would have been $726, $681 and $716 higher than reported in these
respective years, had they been valued under the FIFO method.
<PAGE>
Property and Equipment
- ----------------------
Property and Equipment is recorded at cost. Depreciation of property and
equipment is provided under the straight-line method based upon estimated useful
lives of 10 to 50 years for buildings and improvements, 3 to 10 years for
machinery and equipment and 3 to 10 years for furniture and fixtures. Leasehold
improvements are amortized over the lesser of the useful life or the term of the
lease.
Goodwill
- --------
Goodwill represents the excess of the cost over the net assets acquired in
connection with DKM's acquisition of the Companies. Goodwill is being amortized
on a straight-line basis over 40 years.
Income Taxes
- ------------
The Companies account for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
which requires the use of an asset and liability method of accounting for
deferred income taxes. Under SFAS No. 109, deferred tax assets or liabilities
at the end of each period are determined using the tax rate expected to apply to
taxable income in the period in which the deferred tax asset or liability is
expected to be settled or realized.
Translation of Foreign Currencies
- ---------------------------------
The Companies' international subsidiary uses its local currency as its
functional currency. Assets and liabilities are translated at exchange rates in
effect at the balance sheet date, and income and expense accounts at average
exchange rates during the period. Resulting translation adjustments are
recorded directly to a separate component of stockholder's equity.
Comprehensive Income
- --------------------
During the year ended January 31, 1999, the Companies adopted Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." This statement establishes rules for the reporting of comprehensive
income and its components. Comprehensive income consists of net income and
foreign currency translation adjustments and is presented in the consolidated
statement of stockholder's equity. The adoption of SFAS 130 had no impact on
the Companies' combined financial position or results of operations. Prior year
financial statements have been reclassified to conform to the SFAS 130
requirements.
Reclassification
- ----------------
Certain prior year amounts have been reclassified to conform with current year's
presentation.
<PAGE>
2. PROPERTY AND EQUIPMENT
----------------------
Property and equipment consist of the following as of January 31:
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Land $ 308 $ 308
Buildings and improvements 2,482 2,249
Furniture and fixtures 3,144 2,981
Machinery and equipment 491 500
------ ------
6,425 6,038
Less- Accumulated depreciation 4,005 3,732
------ ------
$2,420 $2,306
====== ======
</TABLE>
3. EMPLOYEE BENEFIT PLANS
----------------------
The Companies have profit sharing plans pursuant to Section 401(k) of the
Internal Revenue Code, whereby participants may contribute a percentage of
compensation, but not in excess of the maximum allowed under the Internal
Revenue Code. The plans provide for discretionary contributions by the
Companies, which amounted to approximately $715, $720 and $688 in the fiscal
years ended January 31, 1999, 1998 and 1997, respectively.
4. INCOME TAXES
------------
The Companies are included in the consolidated federal income tax return of DKM.
The Companies do not have a tax-sharing agreement with DKM. The Companies'
federal tax provision is computed using the separate return method, whereby the
allocation of current and deferred tax expense is based on what the Companies'
provision would have been had the Companies filed a separate return. State
taxes are recorded and paid directly to those agencies.
Income taxes are based on pretax earnings, which are segmented geographically
for the years ended January 31, as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- --------- ---------
<S> <C> <C> <C>
Domestic $8,216 $8,074 $8,114
Foreign 419 650 827
------ ------ ------
$8,635 $8,724 $8,941
====== ====== ======
</TABLE>
The components of the income tax provision (benefit) for the years ended January
31, were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
Current:
<S> <C> <C> <C>
Federal $3,112 $2,993 $2,932
State and local 421 424 415
Foreign 228 279 421
------ ------ ------
3,761 3,696 3,768
Deferred:
Federal (170) (204) (142)
State and local (23) (27) (21)
------ ------ ------
$3,568 $3,465 $3,605
====== ====== ======
</TABLE>
<PAGE>
Reconciliation of the provision for income taxes at the U.S. federal statutory
rate of 35% for the years ended January 31, is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------ -------
<S> <C> <C> <C>
Combined income before income taxes $8,635 $8,724 $8,941
====== ====== ======
Expected tax at 35% $3,022 $3,053 $3,129
State taxes, net of federal benefit 272 255 267
Foreign taxes in excess of 35% 81 51 132
Other nondeductible items 193 106 77
------ ------ ------
Provision for income taxes $3,568 $3,465 $3,605
====== ====== ======
</TABLE>
Deferred tax assets relate primarily to reserves and other accruals, which will
be deductible in future periods. There were no valuation allowances for
deferred tax assets as of January 31, 1999, 1998 and 1997. Management has
determined, based on the Companies' history of operating earnings and their
expectations for the future, that operating income will more likely than not be
sufficient to fully realize the benefits associated with the deferred tax
assets.
5. RELATED PARTY TRANSACTIONS
--------------------------
The Companies have agreements with an affiliate, which provide for certain
management and related services. Charges of $574, $400 and $400 were incurred
for such services during the years ended January 31, 1999, 1998 and 1997,
respectively.
The Companies believe that the method for allocating such charges is reasonable
and approximates the amount that would have been incurred by the Companies on a
stand-alone basis.
Trayco of S.C., Inc. ("Trayco") has a long-term financing arrangement with DKM.
Debt under this arrangement is due December 31, 2008 with interest payable
monthly at a specified bank's prime rate (7.75%, 8.5% and 8.25% as of January
31, 1999, 1998 and 1997, respectively). Trayco incurred $597, $609 and $593 of
interest expense during the years ended January 31, 1999, 1998 and 1997,
respectively, for amounts outstanding under this agreement.
Payments made to DKM for federal income taxes in the years ended January 31,
1999, 1998 and 1997 were $3,181, $3,118 and $2,916 respectively.
The Companies paid dividends to DKM of $4,223, $3,636 and $4,239 for the years
ended January 31, 1999, 1998 and 1997, respectively.
<PAGE>
6. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Companies and twenty other subsidiaries of DKM, jointly and severally
guarantee obligations under DKM's Credit Agreement and Senior Secured Note
Purchase Agreements. At January 31, 1999 and 1998, the amount outstanding under
these agreements was $132,615 and $90,020, respectively.
There are various lawsuits and claims pending against the Companies. In the
opinion of management, the ultimate resolution of these contingencies will not
have a material adverse effect on the financial position and results of
operations of the Companies.
The Companies have future minimum rental commitments under noncancelable leases
as of January 31, 1999 as follows:
<TABLE>
<CAPTION>
Year Ending
January 31, Amount
------------- ---------
<S> <C>
2000 $179
2001 177
2002 174
2003 172
Thereafter 10
----
Total $712
====
</TABLE>
Rental expense for the years ended January 31, 1999, 1998 and 1997 was $204,
$221 and $214, respectively.
<PAGE>
J.A. SEXAUER AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
COMBINED UNAUDITED FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1999
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
COMBINED BALANCE SHEETS (UNAUDITED)
AS OF OCTOBER 31, 1999 AND JANUARY 31, 1999
(000's omitted)
<TABLE>
<CAPTION>
October 31, January 31,
1999 1999
ASSETS ---------- ----------
------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,376 $ 1,043
Accounts receivable net of allowances of $172 and $112, respectively 10,201 10,952
Inventories 11,467 10,501
Prepaid expenses and other 1,184 1,395
Current deferred taxes 471 264
---------- ----------
Total current assets $24,699 $24,155
PROPERTY AND EQUIPMENT 2,688 2,420
net of accumulated depreciation of $4,599 and $4,055, respectively
DEFERRED INCOME TAXES 840 730
GOODWILL, net of accumulated amoritization of $1,290 and $ 1,208, respectively 1,454 1,515
OTHER ASSETS 789 663
---------- ----------
Total Assets $ 30,470 $ 29,483
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 4,934 $ 6,016
Accrued liabilities 3,337 3,071
Income taxes payable 219 (49)
---------- ----------
8,490 9,038
DUE TO THE DYSON-KISSNER-MORAN CORPORATION 7,196 6,595
OTHER LONG-TERM LIABILITIES 2,767 2,120
---------- ----------
Total liabilities 18,453 17,753
---------- ----------
STOCKHOLDERS EQUITY:
Common stock, par value $1 per share; 3,000 shares authorized; 1 1
1,000 shares issued and outstanding
Additional paid-in-capital 3,615 3,615
Retained earnings 8,484 8,244
Accumulated other comprehensive loss (83) (130)
---------- ----------
Total stockholder's equity 12,017 11,730
---------- ----------
Total liabilities and stockholder's equity $ 30,470 $ 29,483
========== ==========
</TABLE>
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
COMBINED STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDING OCTOBER 31, 1999 AND 1998
(000's omitted)
<TABLE>
<CAPTION>
<S> <C> <C>
For the Nine For the Nine
Months Ended Months Ended
October 31, October 31,
1999 1998
-------------- --------------
NET SALES $59,278 $56,840
COST OF SALES 26,539 25,496
-------------- --------------
Gross Profit 32,739 31,344
SELLING, GENERAL AND ADMINISTRATIVE 25,742 23,510
-------------- --------------
6,997 7,834
INTEREST EXPENSE 431 945
-------------- --------------
Income before provision for income taxes 6,566 6,889
PROVISION FOR INCOME TAXES 2,629 2,805
-------------- --------------
Net income $3,937 $4,084
============= =============
</TABLE>
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED)
FOR THE PERIODS ENDED OCTOBER 31, 1999 AND JANUARY 31, 1999
(000's omitted, except share data)
<TABLE>
<CAPTION>
Common Stock Accumulated
------------------ Additional Other
Number of Paid-in Retained Comprehensive Comprehensive
Shares Amount Capital Earnings Income (loss) Income (loss) Total
--------- ------- ---------- -------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 31, 1998 1,000 $ 1 $ 3,615 $ 7,400 $ (54) $ 10,962
Net income 5,067 $ 5,067 5,067
Foreign currency translation adjustments (76) (76) (76)
------------
Comprehensive income 4,991
============
Dividends paid to parent (4,223) (4,223)
--------- ------- ---------- -------- ------------- -----------
BALANCE, January 31, 1999 1,000 1 3,615 8,244 (130) 11,730
Net income 3,937 3,984 3,937
Foreign currency translation adjustments 47 47 47
------------
Comprehensive income 3,984
============
Dividends paid to parent (3,697) (3,697)
--------- ------- ---------- -------- ------------- -----------
BALANCE, October 31, 1999 1,000 $ 1 $ 3,615 $ 8,484 (83) $ 12,017
========= ======= ========== ======== ============= ===========
</TABLE>
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
COMBINED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDING OCTOBER 31, 1999 AND 1998
(000's omitted)
<TABLE>
<CAPTION>
October 31, October 31,
1999 1998
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 3,937 $ 4,084
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 289 279
Amortization 356 332
Deferred income taxes (315) 54
Changes in operating assets and liabilities:
Decrease in receivables 751 1,041
(Increase) in inventories (966) (520)
Decrease (increase) in prepaid expenses and other 211 (106)
(Decrease) increase in accounts payable,
accrued liabilities and income taxes (216) (2,371)
Other, net (57) 20
----------- -----------
Net cash provided by operating activities 3,990 2,813
----------- -----------
INTEREST EXPENSE
Purchases of property and equipment, net (219) (527)
----------- -----------
Net cash used in investing activities (219) (527)
----------- -----------
FINANCING ACTIVITIES
Principle payaments on debt, net - (14)
Increase (decrease) in amount due to parent 259 -
Dividends paid to parent (3,697) (2,267)
----------- -----------
Net cash used in financing activities (3,438) (2,281)
----------- -----------
NET INCREASE IN CASH 333 5
CASH, BEGINNING OF PERIOD 1,043 1,021
----------- -----------
CASH, END OF PERIOD $ 1,376 $ 1,026
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest 425 $ 456
=========== ===========
Taxes 501 $ 538
=========== ===========
</TABLE>
<PAGE>
J.A. SEXAUER, INC. AND SUBSIDIARY, AND TRAYCO OF S.C., INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
- ------------------------------
The condensed consolidated financial statements include the accounts of J.A.
Sexauer, Inc. and Subsidiary, and Trayco of S.C., Inc. (the "Companies"). The
Companies are wholly owned subsidiaries of the Dyson-Kissner-Moran Corporation
("DKM"). All significant transactions and account balances between these
entities have been eliminated.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with
Article 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, such interim
statements reflect all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the financial position and the results of operations
and cash flows for the interim periods presented. The results of operations for
these interim periods are not necessarily indicative of the results to be
expected for the full year ending January 31, 2000. These financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes included in the Company's Financial Statements for the year ended
January 31, 1999.
NOTE 2 - INCOME TAXES
- ---------------------
The Company provides for income taxes based upon the Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
requires an asset and liability approach to financial accounting and reporting
for income taxes. Under SFAS No. 109, deferred tax assets or liabilities at the
end of each period are determined using the tax rate expected to apply to
taxable income in the period in which the deferred tax asset or liability is
expected to be settled or realized.
NOTE 3 - TRANSLATION OF FOREIGN CURRENCIES
- ------------------------------------------
The Companies' international subsidiary uses its local currency as its
functional currency. Assets and liabilities are translated at exchange rates in
effect at the balance sheet date, and income and expense accounts at average
exchange rates during the period. Resulting translation adjustments are
recorded directly to a separate component of stockholder's equity.
Note 4 - Commitments and Contingencies
- --------------------------------------
The Company is involved in various legal proceedings in the ordinary course of
its business, which are not anticipated to have a material adverse effect on the
Company's results of operations or financial position.
