<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) July 31, 1998
THE JPM COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 0-27738 23-1702908
- ------------------------------- ------------ -----------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number
155 North 15th Street, Lewisburg, Pennsylvania 17837
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 524-8225
-----------------
N/A
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
EXPLANATORY NOTE
This form 8-k/a is being filed by the Registrant as an amendment to its Current
Report on form 8-k dated June 1, 1998 and filed with the Commission on June 12,
1998 to amend I. Item 7 to file the required financial statements.
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
(a) (4) Financial Statements
The financial statements of Antrum Interface 725 Ltd. are included as
Exhibit 99(i).
(b) Pro forma financial information.
Unaudited Pro Forma Condensed Combined
Financial Statements
The following unaudited pro forma condensed combined financial
statements, including the notes thereto, are qualified in their entirety by
reference to, and should be read in conjunction with the historical consolidated
financial statements of JPM and notes thereto for the year ended September 30,
1997 and the Company's quarterly report on Form 10-Q for the period ended March
31, 1998 and the historical financial statements and notes thereto of Antrum
Interface 725 Ltd. for the year ended May 31, 1998, included herein.
The following unaudited pro forma financial statements give effect to
the merger of Antrum Interface 725 Ltd. and The Caper Holding Company
(collectively Antrum Interface) and the acquisition of Antrum Interface by JPM
to be accounted for as a purchase. The unaudited pro forma condensed combined
balance sheet presents the combined financial position of JPM and Antrum
Interface as of March 31, 1998 assuming that the proposed acquisition had
occurred as of March 31, 1998. Such pro forma information is based upon the
historical balance sheet data of JPM and Antrum Interface of that date.
The unaudited selected pro forma combined statements of operations
combine JPM's historical results for the six months ended March 31, 1998 and the
year ended September 30, 1997 with Antrum Interface's historical results for the
six months ended March 31, 1998 and the year ended September 30, 1997,
respectively, giving effect to the acquisition as if it had occurred on October
1, 1996.
The unaudited pro forma adjustments have been prepared in accordance
with APB 16 for a purchase and are based upon available information and upon
certain assumptions stated in the notes thereto that the Company believes are
reasonable.
JPM has a fiscal year ending September 30, and Antrum Interface has a
fiscal year ending May 31. Accordingly, the unaudited proforma condensed
combined financial statements for the year ended September 30, 1997 include
financial information conformed to JPM's year end. The financial information of
Antrum Interface has been converted to US dollars in accordance with FASB No.
52.
The pro forma information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial position
that would have occurred if the acquisition had been consummated at the
beginning of the earliest period presented, nor is it necessarily indicative of
future operating results or the future financial position of JPM.
<PAGE>
THE JPM COMPANY
UNAUDITED PRO FORMA
BALANCE SHEET
(IN THOUSANDS)
MARCH 31, 1998
<TABLE>
<CAPTION>
JPM ANTRUM PRO FORMA
3/31/98 3/31/98 ADJUSTMENTS PRO FORMA
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 2,018 $ 993 $ 3,011
Accounts receivable, net 14,479 4,204 18,683
Inventories, net 21,492 3,438 300(A) 25,230
Other current assets 2,881 34 2,915
------- ------- ----------- ---------
Total current assets 40,870 8,669 300 49,839
PP&E, net 16,889 399 1,745 (B) 19,196
Goodwill 163 (A)
Other assets 4,490 9,101 (D) 13,591
1,331 9 1,340
------- ------- ----------- ---------
$63,580 $ 9,077 $ 11,309 $ 83,966
======= ======= =========== =========
LIABILITIES
Current Liabilities
Short-term borrowings $13,038 $ 16,500 (C) $ 29,538
Current maturities of long-term debt 1,502 1,502
Accounts payable 6,048 $ 1,343 7,391
Accrued expenses 5,913 213 6,126
Income taxes payable 1,270 1,270
Due to related parties 374 (374)(B)
Deferred income taxes 1,322 13 1,335
------- ------- ----------- ---------
Total current liabilities 27,823 3,213 16,126 47,162
Long-term debt 5,397 0 1,049 (B) 6,446
Other long-term liabilities 1,182 0 1,182
------- ------- ----------- ---------
34,402 3,213 17,175 54,790
------- ------- ----------- ---------
1540 Mandatorily redeemable Class A
Preferred Shares -- 1,540 (1,540)(E)
Commitments and contingencies
Shareholders' Equity
200 Common Shares
APIC 17,316 17,316
Foreign currency translation adjustment (11) (2) (13)
Retained earnings 11,873 4,326 (4,326)(E) 11,873
------- ------- ----------- ---------
Total shareholders' equity 29,178 4,324 (4,326) 29,176
------- ------- ----------- ---------
$63,580 $ 9,077 $ 11,309 $ 83,966
======= ======= =========== =========
</TABLE>
(A) Represents the excess of the fair value of Antrum's assets over their
historical cost.
(B) Represents the assets and liabilities acquired in the Caper merger.
(C) Represents debt issued to consummate the acquisition of Antrum.
(D) Represents the excess of the cost of the acquisition of Antrum over the
estimated fair value of net assets acquired, which will be amortized
over 20 years.
(E) Represents elimination of Antrum's equity.
<PAGE>
THE JPM COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(IN THOUSANDS)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
JPM ANTRUM PRO FORMA
9/30/97 9/30/97 ADJUSTMENTS PRO FORMA
-------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $112,787 $17,275 $ 75 (1) $ 130,062
Cost of sales 89,250 12,318 (86)(5) 101,557
-------- ------- ----------- ---------
23,537 4,957 11 28,505
Selling, general and administrative expenses 9,811 2,149 615 (2) 12,575
Costs related to merger 873 - 873
-------- ------- ----------- ---------
12,853 2,808 (604) 15,057
Other income (expense):
Foreign exchange gain (loss) (127) (127)
Interest expense (670) (76)(3) (1,984)
(1,238)(4)
Other, net (1) (10) (11)
-------- ------- ----------- ---------
(671) (137) (1,314) (2,122)
-------- ------- ----------- ---------
Income before income taxes 12,182 2,671 (1,918) 12,935
Provision for income taxes 4,853 1,048 (729)(6) 5,172
Net income $ 7,329 $ 1,623 (1,189) $ 7,763
Basic earnings per share $ 1.07 $ 8,115 $ 1.13
Diluted earnings per share $ 0.97 $ 8,115 $ 1.03
Weighted average shares outstanding (basic) 6,850,000 200 6,850,000
Weighted average shares outstanding (diluted) 7,538,000 200 7,538,000
</TABLE>
(1) Represents depreciation of acquired Caper property, plant and equipment and
depreciation of adjustment for excess of fair value over cost of PP&E.
(2) Represents amortization of goodwill.
(3) Represents interest on Caper mortgage.
(4) Represents interest expense related to debt issued to consummate
acquisition of Antrum.
(5) Represents elimination of rent expense paid by Antrum to Caper as a result
of the merger.
(6) Represents reduction of income tax provision for effects of pro forma
adjustments.
<PAGE>
THE JPM COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(IN THOUSANDS)
SIX MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
JPM ANTRUM PRO FORMA
3/31/98 3/31/98 ADJUSTMENTS PRO FORMA
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $61,839 $12,337 38 (1) $74,176
Cost of sales 51,214 8,149 $ (43)(5) 59,358
------- ------- ----------- ---------
10,625 4,188 5 14,818
Selling, general and administrative expenses 6,817 520 293 (2) 7,630
Costs related to merger 400 - 400
Plant shut down expense 1,412 1,412
------- ------- ----------- ---------
1,996 3,668 (288) 5,376
Other income (expense):
Exchange gain (loss) (291) (291)
Interest expense (707) (38)(3) (1,364)
(619)(4)
Other, net 48 1 49
------- ------- ----------- ---------
(659) (290) (657) (1,606)
------- ------- ----------- ---------
Income before income taxes 1,337 3,378 (945) 3,770
Provision for income taxes 508 1,528 (359)(6) 1,677
------- ------- ----------- ---------
Net income $ 829 $ 1,850 (586) $ 2,093
Basic earnings per share $ 0.12 $ 9,250 $ 0.30
Diluted earnings per share $ 0.11 $ 9,250 $ 0.28
Weighted average shares outstanding (basic) 6,992,000 200 6,992,000
Weighted average shares outstanding (diluted) 7,492,000 200 7,492,000
</TABLE>
(1) Represents depreciation of acquired Caper property, plant and equipment and
depreciation of adjustment for excess of fair value over cost of PP&E.
(2) Represents amortization of goodwill.
(3) Represents interest on Caper mortgage.
(4) Represents interest expense related to debt issued to consummate
acquisition of Antrum.
(5) Represents elimination of rent expense paid by Antrum to Caper as a result
of the merger.
(6) Represents reduction of income tax provision for effects of pro forma
adjustments.
<PAGE>
Exhibits
- --------
23 Consent of Independent Accountants.
99(i) May 31, 1998 Antrum Interface 725 Ltd. Financial Statements.
<PAGE>
SIGNATURES
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 hereunto duly authorized.
THE JPM COMPANY
/s/ John H. Mathias
---------------------
John H. Mathias
Chairman and Chief Executive
Officer
Date: July 31, 1998
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-34945) and
in the Registration Statements on Form S-8 (Nos. 333-19769, 333-19885, 333-19953
and 333-24315) of the JPM Company of our report dated July 29, 1998, relating to
the financial statements of Antrum Interface 725 Ltd., which appears in the
Current Report on Form 8-K of The JPM Company dated July 31, 1998.
BRAITHEWAITE HARRIS & CHONG
Toronto, Ontario
July 31, 1998
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-34945) and
in the Registration Statements on Form S-8 (Nos. 333-19769, 333-19885, 333-19953
and 333-24315) of The JPM Company of our report dated July 29, 1998, relating to
the financial statements of Antrum Interface 725 Ltd., which appears in the
Current Report on Form 8-K of the JPM Company dated July 31, 1998.
PRICEWATERHOUSECOOPERS LLP
Philadelphia, PA
July 31, 1998
<PAGE>
EXHIBIT 99(i)
ANTRUM INTERFACE
725 LTD.
(A subsidiary of The Caper Holding Company Inc.)
Financial Statements
MAY 31, 1998 AND 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of
Antrum Interface 725 Ltd.
In our opinion, the accompanying balance sheet and the related statements of
operations, of shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of Antrum Interface 725 Ltd. (a
subsidiary of The Caper Holding Company Inc.) at May 31, 1998 and the results of
its operations and its cash flows for the year in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA
July 29, 1998
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
July 29, 1998
To the Board of Directors and
Shareholders of
Antrum Interface 725 Ltd.
In our opinion, the accompanying balance sheet and the related statements of
operations, of shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of Antrum Interface 725 Ltd. at May
31, 1997 and the results of its operations and its cash flows for the year in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
/s/ Braithwaite, Harris & Chong
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Balance Sheet
As of May 31, 1998 and 1997
- --------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars except per share amounts)
<TABLE>
<CAPTION>
Assets
1998 1997
------- -------
<S> <C> <C>
Current assets:
Cash $ 1,811 $ 209
Accounts receivable (net of allowance of $200 and $152) 2,841 3,079
Inventories, net 3,988 3,320
Due from related parties 656 --
Income taxes receivable -- 552
Prepaid expenses and other current assets 7 13
------- -------
Total current assets 9,303 7,173
------- -------
Property, plant and equipment, net 1,004 476
Other assets 12 7
------- -------
$10,319 $ 7,656
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,530 $ 767
Accrued expenses 469 2,168
Income taxes payable 1,057 --
Due to related parties -- 1,108
Other liabilities 19 20
------- -------
Total current liabilities 3,075 4,063
------- -------
Commitments
Mandatorily redeemable Class A preferred stock, no par value,
unlimited shares authorized, 1,540 shares issued and outstanding 1,540 1,540
------- -------
Shareholders' equity:
Common stock, $1.00 par value, unlimited shares authorized,
200 shares issued and outstanding -- --
Retained earnings 5,704 2,053
------- -------
Total shareholders' equity 5,704 2,053
------- -------
$10,319 $ 7,656
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Statement of Operations
For the Years Ended May 31, 1998 and 1997
- --------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars except per share amounts)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Net sales $ 31,514 $ 19,461
Cost of sales 23,071 13,751
-------- --------
8,443 5,710
Selling, general and administrative expenses 2,236 2,868
-------- --------
6,207 2,842
Other income (expense):
Exchange loss (332) (163)
-------- --------
Income before income taxes 5,875 2,679
Provision for income taxes 2,224 1,026
-------- --------
Net income $ 3,651 $ 1,653
======== ========
Net income per common share (Basic and Diluted) $ 18,255 $ 8,265
======== ========
Weighted average number of shares outstanding
(Basic and Diluted) 200 200
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Statement of Shareholders' Equity
For the Years Ended May 31, 1998 and 1997
- -------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars)
<TABLE>
<CAPTION>
Common Stock Preferred Stock Total
Number of Number of Retained Shareholders'
Shares Amount Shares Amount Earnings Equity
--------- -------- --------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at May 31, 1996 200 $ -- 1,540 $ 1,540 $ 1,509 $ 3,049
Net income 1,653 1,653
Dividends (1,109) (1,109)
--------- -------- --------- -------- ---------- -------------
Balance at May 31, 1997 200 -- 1,540 1,540 2,053 3,593
Net income 3,651 3,651
--------- -------- --------- -------- ---------- -------------
Balance at May 31, 1998 200 $ -- 1,540 $ 1,540 $ 5,704 $ 7,244
========= ======== ========= ======== ========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Statement of Cash Flows
For the Years Ended May 31, 1998 and 1997
- --------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars)
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,651 $ 1,653
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation 171 136
Provision for inventory obsolescence 193 210
Allowance for doubtful accounts 48 46
Loss on disposal of property, plant and equipment 13 --
Change in assets and liabilities:
(Increase) decrease in accounts receivable 190 (983)
(Increase) decrease in inventories (861) (1,114)
(Increase) decrease in prepaid expenses and other assets 1 (8)
(Increase) decrease in income taxes receivable 552 (552)
Increase (decrease) in accounts payable 763 138
Increase (decrease) in accrued expenses (1,699) 1,896
Increase (decrease) in income taxes payable 1,056 (1,321)
Increase (decrease) in other liabilities (2) 8
------- -------
Net cash provided by (used in) operating activities 4,076 109
------- -------
Cash flows from investing activities:
Capital expenditures (710) (241)
------- -------
Net cash provided by (used in) investing activities (710) (241)
------- -------
Cash flows from financing activities:
Due to (from) related parties, net (1,764) 1,276
Dividends paid -- (1,109)
------- -------
Net cash provided by (used in) financing activities (1,764) 167
------- -------
Increase in cash 1,602 35
Cash at beginning of period 209 174
------- -------
Cash at end of period $ 1,811 $ 209
======= =======
Supplemental cash flow information:
Cash paid for income taxes $ 598 $ 1,763
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ANTRUM INTERFACE 725 LTD. (A subsidiary of The Caper Holding Company Inc.)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MAY 31, 1998 AND 1997
- -------------------------------------------------------------------------------
(AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS)
1. THE COMPANY
Antrum Interface 725 Ltd. (the "Company") is a closely held corporation
located in Toronto, Ontario. The Company is an independent manufacturer of
cable assemblies and wire harnesses for original equipment manufacturers in
the computer, networking and telecommunications sectors of the electronics
industry.
A substantial portion of the Company's products are sold to a limited number
of customers. Accordingly a significant decrease in business from, or the
loss of, any of its major customers would have a material adverse effect on
the Company. The Company continuously seeks to expand the number of products
it supplies to existing customers, as well as to develop similar
relationships with new customers. Because of the complexity of these
relationships, sales cycles can be extremely long, sometimes taking up to 18
months to develop. As the Company becomes a qualified supplier for new
products and its customers' products progress through their life cycles, the
Company's operating results can fluctuate significantly.
Effective June 1, 1998, the Company was merged with The Caper Holding
Company Inc. (Caper), the majority owner of the Company. Subsequent to the
merger, all of the outstanding shares of the mergered company, Antrum
Interface, were acquired by The JPM Company for cash and contingent
consideration of approximately $30,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
INVENTORIES
Inventories are valued at the lower of cost or market as determined on the
first-in, first-out basis. Cost includes raw materials, direct labor and
manufacturing overhead. The Company generally provides reserves for
inventory considered to be in excess of 12 months of forecasted future
demand.
PROPERTY, PLANT AND EQUIPMENT
Property and equipment are recorded at cost and are depreciated on a
straight-line basis over the estimated useful lives of the assets. The
estimated useful lives of the assets range from three to five years.
REVENUE RECOGNITION
Revenue from sale of cable assembly and wire harness products is recognized
upon shipment to customers. Reserves are provided in the period of sale for
estimated returns, discounts and warranty costs.
<PAGE>
ANTRUM INTERFACE 725 LTD. (A subsidiary of The Caper Holding Company Inc.)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MAY 31, 1998 AND 1997
- -------------------------------------------------------------------------------
(AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS)
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
No. 109") which requires the establishment of a deferred tax asset or
liability for the recognition of future deductions or taxable amounts, and
operating loss and tax credit carryforwards. Deferred tax expense or benefit
is recognized as a result of the change in the deferred asset or liability
during the year. If necessary, the Company will establish a valuation
allowance to reduce deferred tax assets to an amount which, more likely than
not, will be realized. The Company has no significant permanent or
temporary differences.
FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in a foreign currency are recorded at the exchange
rate in effect at the date the transaction is recognized. At each balance
sheet date, recorded balances that are denominated in a foreign currency are
adjusted to reflect the current exchange rate. Exchange gains and losses are
included in earnings and amounted to a loss of $332 and $163 for 1998 and
1997, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
period. Actual results could differ from those estimates.
3. INVENTORIES
<TABLE>
<CAPTION>
MAY 31
----------------
1998 1997
------- -------
<S> <C> <C>
Finished goods $ 951 $ 675
Work-in-process 317 349
Raw materials and supplies 3,720 3,103
Valuation reserve (1,000) (807)
------- -------
$ 3,988 $ 3,320
======= =======
</TABLE>
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Notes to Financial Statements
For the Years Ended May 31, 1998 and 1997
- --------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars)
4. Property, Plant and Equipment
<TABLE>
<CAPTION>
May 31,
-----------------------------
1998 1997
-------- ---------
<S> <C> <C>
Buildings $ 253 $ --
Machinery and equipment 644 583
Furniture and fixtures 510 390
Leasehold improvements 276 73
Accumulated depreciation (679) (570)
-------- ---------
$ 1,004 $ 476
======== =========
</TABLE>
5. Accrued Expenses
<TABLE>
<CAPTION>
May 31,
-----------------------------
1998 1997
-------- ---------
<S> <C> <C>
Accrued salaries $ 130 $ 2,068
Other 339 100
-------- ---------
$ 469 $ 2,168
======== =========
</TABLE>
6. Related Parties
<TABLE>
<CAPTION>
May 31,
-----------------------------
1998 1997
-------- ---------
<S> <C> <C>
Due to shareholders $ 9 $ 437
Due to (from) Caper (665) 671
-------- ---------
$ (656) $ 1,108
======== =========
</TABLE>
The related party amounts are non-interest bearing and have no specific
repayment terms.
<PAGE>
Antrum Interface 725 Ltd. (A subsidiary of The Caper Holding Company Inc.)
Notes to Financial Statements
For the Years Ended May 31, 1998 and 1997
- --------------------------------------------------------------------------------
(Amounts in thousands of Canadian Dollars)
7. MANDATORILY REDEEMABLE PREFERRED SHARES
At May 31, 1998 and 1997, the Company has outstanding 1,540 shares of Class
A Preferred Shares. These shares are mandatorily redeemable by the holders
at any time at a redemption value of $1,000 per share for a total redemption
value of $1,540. These shares were canceled in connection with the merger
with Caper as of June 1, 1998.
8. COMMITMENTS
During 1998 and 1997, the Company leased its facilities in Toronto from
Caper. Rent expense under these leases totaled $123 and $66 for 1998 and
1997, respectively. In conjunction with the merger with Caper, the
Toronto facility is owned by Antrum as of June 1, 1998.
During 1998 and 1997, the Company leased its facility in Calgary from a
third party. Rent expense under these leases was $26 for each of 1998 and
1997. As of May 31, 1998, the Company purchased the Calgary facility for
$253.
9. MAJOR CUSTOMERS AND SUPPLIERS
The Company's sales to one customer, which operates through divisions in
Canada and the United States, represent 97% of the Company's sales for 1998
and 1997. At May 31, 1998 and 1997, aggregate accounts receivable from this
customer represent 96% and 97% of total accounts receivable, respectively.
Export sales, primarily to customers in the United States, approximated
$8,159 or 26% and $3,210 or 16% of total sales for 1998 and 1997,
respectively.
Historically, the Company has purchased a significant portion of its wire,
cable and connectors from a limited number of suppliers. Although the
Company believes that its raw materials are generally available from several
domestic and international sources, customers often specify that the Company
purchase certain components from particular manufacturers. Accordingly, the
loss of any of the Company's key suppliers could have a material adverse
impact on the Company.
