<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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 10, 1997
-------------
BEC GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-14360 13-3868804
-------- ------- ----------
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
Suite B-302, 555 Theodore Fremd Avenue, Rye, New York 10580
- ----------------------------------------------------- -----
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (914) 967-9400
--------------
Not Applicable
--------------
(Former name or former address, if changed from last report)
Page 1 of 25.
Index to Financial Statements at page 4.
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
The following Financial Statements, pro forma financial information and
exhibits are filed as part of this Report.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED: The financial
statements of Bolle France for the year ended December 31,
1996, required to be provided by Rule 3-05(b) of Regulation
S-X, together with the report of Price Waterhouse LLP, Bolle
France's Independent Accountants, dated July 9, 1997.
(b) PRO FORMA FINANCIAL INFORMATION: Pro forma financial
information required to be provided pursuant to Article 11 of
Regulation S-X.
2
<PAGE> 3
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.
Dated: September 22, 1997 BEC GROUP, INC.
/s/ Ian G.H. Ashken
---------------------------
By: Ian G.H. Ashken
Title: Chief Financial Officer
3
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Document Page
- -------- ----
<S> <C>
Audited financial statements of Bolle France Filed electronically
for the year ended December 31, 1996, required herewith
to be provided by Rule 3-05(b), together with
the report of Price Waterhouse LLP, Bolle
France's Independent Accountants,
dated July 9, 1997.
Pro Forma financial information required Filed electronically
to be provided pursuant to Article 11 of herewith
Regulation S-X.
</TABLE>
4
<PAGE> 5
HOLDING BF SA AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
Report of Independent Accountants
5
<PAGE> 6
July 9, 1997
REPORT OF INDEPENDENT ACCOUNTS
To the Board of Directors and
Shareholders of Holdings BF SA
HOLDING BF SA
Les Leches Rouges
39360 Viry
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and stockholders' equity and of cash
flows present fairly, in all material respects, the financial position of
Holding BF SA and its subsidiaries at December 31, 1996 and the results of
their operations and their cash flows for the year in conformity with
accounting principles generally accepted in the United States of America. 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.
Befec - Price Waterhouse
Olivier Auscher
6
<PAGE> 7
HOLDING BF SA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS NOTE 1996
<S> <C> <C>
Current assets:
Cash and cash equivalents FF 17,415
Trade receivables, less allowance for doubtful
accounts of FF 1,184 55,902
Trade receivables - related parties 2 9,135
Inventories, net 3 25,818
Other current assets 1,990
----------
Total current assets 110,260
Property and equipment, net 4 10,681
Investments in unconsolidated subsidiaries 191
Other assets 380
----------
Total assets FF 121,512
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable FF 24,722
Accrued liabilities 6 21,991
Short term debt 5 5,793
Short term debt - related parties 2 5,623
----------
Total current liabilities 58,129
Pension liability 900
Commitments and contingencies 9 5,050
----------
Total liabilities 64,079
Minority interests 8 11,594
Stockholders' equity:
Common stock - 16,500 shares issued and 16,500
outstanding par value: FF 1,000
Retained earnings 29,417
Cumulative translation adjustments (78)
----------
Total stockholders' equity 45,839
----------
Total liabilities and stockholders' equity FF 121,512
==========
</TABLE>
The accompanying pages 11 to 20 are an integral part of these financial
statements.
7
<PAGE> 8
HOLDING BF SA AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
<TABLE>
<CAPTION>
NOTES 1996
<S> <C> <C>
Net sales
Trade FF 209,734
Related parties 2 25,259
----------
Total net sales 234,993
Costs and expenses
Costs of sales 156,570
Selling, general and administrative expenses 34,698
Advertising and sponsoring expenses 5,854
Interest expense, net 1,308
Interest expense - related parties 2 926
Other expenses, net 1,006
Equity in losses of unconsolidated subsidiaries (509)
----------
Total costs and expenses 199,853
Income before income taxes 35,140
Provision for income taxes 7 9,123
----------
Net income before minority interests 26,017
Minority interests 8 8,450
----------
Net income FF 17,567
==========
</TABLE>
The accompanying pages 11 to 20 are an integral part of these financial
statements.
8
<PAGE> 9
HOLDING BF SA AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
<TABLE>
<CAPTION>
COMMON STOCK RETAINED CUMULATIVE TOTAL
SHARES AMOUNT EARNINGS TRANSLATION
ADJUSTMENTS
<S> <C> <C> <C> <C> <C>
Balance - December 31, 1995 165 FF 16,500 FF 13,500 FF 30,000
Dividend to stockholders (1,650) (1,650)
Translation adjustments FF (78) (78)
Net income 17,567 17,567
--- --------- ------ ------------ ------
Balance - December 31, 1996 165 FF 16,500 FF 29,417 FF (78) FF 45,839
=== ====== ====== ============ ======
</TABLE>
The accompanying pages 11 to 20 are an integral part of these financial
statements.
9
<PAGE> 10
HOLDING BF SA AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
<TABLE>
<CAPTION>
1996
<S> <C>
Cash flows from operating activities:
Net income FF 17,567
Adjustments to reconcile income to net
cash provided by operating activities:
Minority interest 8,450
Depreciation and amortization 4,386
Bad debt expense 1,091
Loss on sale of property and equipment 69
Changes in current assets and liabilities:
Accounts receivable 736
Inventories (1,438)
Other current assets (1,918)
Accounts payable 340
Accrued liabilities 4,570
Other assets (380)
---------
Net cash provided by operating activities 33,473
---------
Cash flows used by investing activities:
Capital expenditures (4,488)
Proceeds from sale of fixed assets 91
---------
Net cash used by investing activities (4,397)
---------
Cash flows used by financing activities:
Increase in bank debt 4,513
Decrease in short term debt, related parties
(Bolle family) (21,621)
Cash dividends to stockholders (1,650)
Cash dividends to minority stockholders (9,642)
---------
Net cash used by financing activities (28,400)
------
Net increase in cash and cash equivalents 676
Cash and cash equivalents at beginning of year 16,739
---------
Cash and cash equivalents at end of year FF 17,415
=========
</TABLE>
The accompanying pages 11 to 20 are an integral part of these financial
statements.
10
<PAGE> 11
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The consolidated financial statements of Holding BF SA and subsidiaries (the
"Group") have been prepared in accordance with accounting principles generally
accepted in the United States of America. The financial statements of the Group
include only the subsidiaries and equity investments held on a legal entity
basis. Accordingly, the consolidated financial statements include the accounts
of Holding BF SA and its wholly owned and majority-owned subsidiaries (SNC Bolle
76 %, Bolle Protection Sarl 100 %, Bolle Production Sarl 88 %).
Business
The Holding BF SA and subsidiaries operates in one business segment and
manufactures and sells sunglasses, safety glasses, sport shields and ski
goggles. These products are manufactured in the Group's plant in Oyonnax, France
and through subcontractors and are sold to distributors or direct customers
located mainly in the United States and Europe.
Principles of Consolidation
All significant intercompany transactions, profits and accounts have been
eliminated in consolidation. Investments in companies in which the Group does
not have control, but has the ability to exercise significant influence are
accounted for by the equity method. Bolle Sunglasses Ltd and Bolle Canada Inc
are held by majority-owned subsidiaries of Holding BF SA, and therefore the
Group's ownership of each of these entities is 38 %, respectively.
Revenue Recognition
Revenue is recognized upon shipment or delivery of products with estimates
provided for returns based on historical experience.
11
<PAGE> 12
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
Concentration of Credit Risk and Major Customers
In the opinion of management, concentration of credit risk varies significantly
on a country-by-country basis. The Group sells to customers in twenty
countries, with the majority of sales to customers in the United States,
Europe, Australia and Canada.
Credit is generally extended based on an evaluation of the customer's financial
condition and on-going relationship with the Group, and collateral is generally
not required. Credit risk is affected by conditions or occurrences in the local
economies and relative strength of the retail environment in each of the
countries where the Group's customers operate. The Group establishes an
allowance for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends and other information.
For the year ended December 31, 1996 one customer located in the United States
of America represented 28 % of the Group's net sales.
The Group sells its products to three related party distributors, Bolle UK,
Bolle Japan and Bolle Diffusion Sarl which are respectively 52 %, 30 % and 100
% owned by the shareholders of Holding BF S.A. The aggregate amount of sales to
these distributors represented 11 % of the Group's sales.
Foreign Currency Translation
For non-French subsidiaries which operate in a local currency environment,
assets and liabilities are translated into French Francs at year-end exchange
rates. Income and expense items are translated at average rates prevailing
during the year. Translation adjustments for these subsidiaries are accumulated
in a separate component of Stockholders' Equity.
Foreign Currency Transactions
In the normal course of business, operations (mainly sales) of the Group are
exposed to fluctuations in currency values, and in particular to the US dollar.
The Group does not enter into any type of financial instrument with respect to
balance sheet exposure arising from foreign exchange risk.
12
<PAGE> 13
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
The Group, however, has entered into a series of agreements with a customer
providing a series of fixed exchange rates on the French franc/U.S. dollar
exchange rate for sales to that customer. Foreign currency transaction losses
amounting to FF 314 at December 31, 1996 are included with interest expense.
Cash and cash equivalents
Cash and cash equivalents represent investments with maturities of three months
or less from the time of purchase, and are carried at cost which approximates
fair value because of the short maturity of those instruments. Cash paid for
interest and income taxes was FF 1 232 and FF 7 852, respectively for the year
ended December 31, 1996.
Warranties
Certain sales which are subject to warranty against material defects. Potential
future warranty costs are provided for.
Impairment of Long-Lived Assets
At each balance sheet date, the Group evaluates the realizability of long-lived
assets based on expectations of undiscounted cash flows. Should this review
indicate that the cost of long-lived assets may be impaired, an evaluation of
recoverability would be performed. If an evaluation is required, the estimated
future undiscounted cash flows associated with the asset would be compared to
the asset's carrying amount to determine whether a write-down to market value
is required.
Pensions and post retirement indemnity
A provision is recorded for legal employees' lump sum termination indemnities.
These indemnities are due to employees which leave the Group at retirement age
(65) and depend upon the length of employees' service. The obligation, which is
not funded, is calculated using an actuarial method (discount rate of 6.19 %,
salary increase of 2.5 %) and takes into account staff turnover and mortality
statistics until retirement age. There are no other pensions, post-retirement
or post employment obligations to the company as such employee benefits are
provided by the French social security system.
13
<PAGE> 14
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
Research and Development
Research, development and engineering expenditures which amounted to FF 1,376
in 1996 are expensed as incurred. Substantially all engineering and
development costs are related to developing new products or designing
significant improvements to existing products.
Income Taxes
Taxable income/loss of the various companies comprising the Group was included
in the tax returns of the appropriate taxable entity. Accordingly, consolidated
income tax returns were not prepared for the Group.
Deferred income taxes are provided on the difference in basis of assets and
liabilities between financial reporting and tax returns using enacted tax
rates. A valuation allowance is recorded when realization of deferred tax
assets is not assured.
Investments in unconsolidated subsidiaries
Investments in more than 20 % owned affiliates are carried on the balance sheet
according to the equity method. Other investments are carried out at cost. A
reserve would be recorded if the cost exceeds fair value.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires Group management to make estimates and
assumptions that effect 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
reporting period. Actual results could differ from these estimates.
Fair value
At December 31, 1996, the carrying value of financial instruments such as trade
receivables, accounts payable and short term debt approximated their fair
values based on the short term maturities of these instruments.
14
<PAGE> 15
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 2 - RELATED PARTY TRANSACTIONS
As disclosed in Note 1, the Group sells to related parties for which
transactions and balances have been, to the extent possible, disclosed under
the caption "related parties" in the statement of operations and on the balance
sheet (Bolle UK, Bolle Japan, Bolle Diffusion Sarl). Such transactions are
realized at conditions equivalent to those prevailing for unrelated parties.
As disclosed in Note 5, the Group borrows from certain stockholders (Bolle
family). Interest expense and balances are disclosed in the statement of
operations and on the balance sheet, respectively.
Certain stockholders of the Group own 100 % of RM Plastique Sarl, a company
with which the Group subcontracts certain assembly tasks. Services rendered by
RM Plastique Sarl, amounting to FF 1,385 for the year ended December 31, 1996,
are invoiced at cost on an arm's length basis.
The minority stockholders in SNC Bolle referred to in Note 8 are also the
majority stockholders of the Group.
NOTE 3 : INVENTORIES
Inventories consist of the following at December 31 :
<TABLE>
<CAPTION>
1996
<S> <C>
Raw materials FF 13,076
Work in progress 10,580
Finished goods 6,862
Reserves (4,700)
------
FF 25,818
======
</TABLE>
Inventories are stated at the lower of cost or market value. Costs include
material, direct labor and production overhead. Inventory is determined on an
average cost basis. Obsolescence expense was FF 167 for the year ended December
31, 1996.
15
<PAGE> 16
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment net consists of the following at December 31 :
<TABLE>
<CAPTION>
1996
<S> <C>
Buildings and fixtures FF 11,193
Machinery and equipment 55,895
Motor vehicles 2,564
Office furniture 3,296
------
72,948
Less accumulated depreciation (62,267)
------
FF 10,681
======
</TABLE>
Property and equipment are stated at cost. Additions and improvements are
capitalized. Maintenance and repairs are expensed as incurred. Depreciation is
computed on either a straight line basis or on an accelerated basis (mainly for
moulds and presses), over the estimated useful lives of the assets. Useful
lives range from 3 years for moulds to 20 years for buildings. Asset cost and
accumulated depreciation amounts are removed for dispositions and retirements,
with resulting gains and losses reflected in earnings.
Depreciation expense for the year ended December 31, 1996 amounted to FF 4,386.
NOTE 5 - SHORT TERM DEBT
<TABLE>
<CAPTION>
1996
<S> <C>
Short term debt
Bank debt FF 607
Bank overdraft 5,186
------
5,793
Short term debt-related parties (Bolle family) 5,623
------
Total short term debt FF 11,416
======
</TABLE>
16
<PAGE> 17
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
The Group benefits from bank credit facilities which extend through October 31,
1997 totaling FF 8 200 at an interest of Pibor + 1.5. The rate of interest for
the year ended December 31, 1996 averaged 7.7 %.
Short term related party debt represents dividends declared by the Group
payable to the Bolle family and interest accrued on such undistributed
dividends at a variable rate of interest, which averaged 6.42 % in 1996.
NOTE 6 - ACCRUED LIABILITIES
Accrued liabilities consist of the following at December 31 :
<TABLE>
<CAPTION>
1996
<S> <C>
Salaries, wages and other employee benefits FF 5 228
Fringe benefits accruals 2,053
Interest 1,924
Incomes taxes 7,117
Deferred income tax 1,154
Warranty 3,400
Other 1,115
------
FF 21,991
======
</TABLE>
17
<PAGE> 18
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 7 - INCOME TAXES
The provision (benefit) from income taxes consists of the following :
<TABLE>
<CAPTION>
1996
<S> <C>
Current FF 12,588
Deferred (3,465)
------
FF 9,123
======
</TABLE>
The Group's effective tax rate differs from the statutory rate of 36.7 % as
follows :
<TABLE>
<CAPTION>
1996
%
<S> <C>
French statutory rate 36.7
Non taxable income attributable to minority stockholders (see note 8) (10.5)
Other ( 0.2)
Effective income tax rate 26.0
====
</TABLE>
Significant components of deferred income taxes are as follows at
December 31 :
<TABLE>
<CAPTION>
1996
<S> <C>
Pension liability FF (467)
Accrued liabilities FF 697
Other liabilities FF 624
----
FF 854
====
</TABLE>
At December 31, 1996, other assets include FF 300 of deferred tax assets and
accrued liabilities include FF 1, 154 of deferred tax liabilities.
18
<PAGE> 19
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 8 - MINORITY INTERESTS
<TABLE>
<CAPTION>
1996
<S> <C>
Minority interests at December 31, 1995 FF 12,786
Minority interests in net income of consolidated subsidiaries 8,450
Dividends paid to minority stockholders (9,642)
------
Minority interests at December 31, 1996 FF 11,594
======
</TABLE>
Minority shareholders have a 24 % interest in SNC Bolle, a Group consolidated
subsidiary which form of incorporation provides for an allocation of pre-tax
income to minority shareholders in the period earnings are generated. Minority
interests in the statement of operations for the year ended December 31, 1996
include FF 8,011 relating to SNC Bolle. This amount is on a pre-tax basis as
the related income tax is born directly by the minority stockholders (see note
7).
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Group has various commitments to purchase materials and supplies as part of
the ordinary conduct of business. In the aggregate, such commitments are not at
prices in excess of current market.
The Group is currently subject to a tax audit, the final conclusions of which
are not available. The Group is also subject to various risks with respect to
matters arising from the normal course of business. Accordingly, the Group has
recorded an incremental charge of FF 1,550 in connection with these matters in
1996. Management believes that the probable resolution of such contingencies
will not materially affect the financial position or results of operations of
the Group.
19
<PAGE> 20
HOLDING BF SA AND SUBSIDIARIES
DECEMBER 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)
NOTE 10 - SUBSEQUENT EVENTS
On July 9, 1997, a purchase agreement was signed whereby Bolle Inc., a
wholly-owned subsidiary of BEC Group Inc. acquired from the Bolle family,
shareholders of Holding BF SA, all of the shares of Holding BF SA and
subsidiaries. Further, in connection with the purchase agreement, Holding BF
SA acquired the minority interests in SNC Bolle and all of the outstanding
stock of RM Plastiques Sarl prior to closing of the transaction.
A customer representing approximately 10 % of net trade sales in 1996 has
informed the Group that it may discontinue its relationship by the end of
September 1997.
The balance of the Bolle family debt (December 31, 1995 : FF 27,244, December
31, 1996 : FF 5,623 - see note 5 above) was reimbursed in 1997.
The purchase agreement stipulates that the land on which the building is
erected will be sold by the Bolle family for a contribution of FF 2,500. The
land has been leased since 1991 for an annual rental of FF 176.
20
<PAGE> 21
BEC GROUP, INC.
PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements give effect to
the acquisition of BF Holding and related assets (the "Acquisition" of "Bolle
France") under the purchase method of accounting. The pro forma combined
financial statements are based on the historical audited and unaudited interim
financial statements of BEC Group, Inc. ("BEC" or the "Company") and Bolle
France and the estimates and assumptions set forth below.
The audited financial statements of Bolle France for the year ended December
31, 1996 reflect the consolidation, on a legal basis, of BF Holding prior to
its acquisition by BEC. The unaudited interim financial statements of Bolle
France as of and for the six months ended June 30, 1997 reflect the
consolidation of BF Holdings based upon ownership following BEC's acquisition.
Accordingly, the first column of pro forma adjustments to the statement of
operations for the year ended December 31, 1996 represents adjustments to
present the results on a consistent ownership basis with June 30, 1997 results
and with the ownership structure following the acquisition.
Pro forma adjustments are based upon preliminary estimates, available
information and certain assumptions that management deems appropriate. The
unaudited pro forma combined financial information presented herein is not
necessarily indicative of the results of operations or financial position that
BEC would have obtained had such events occurred at the beginning of the
period, as assumed, or of the future results of the Company. The pro forma
combined financial statements should be read in conjunction with the other
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996 and Quarterly Reports on Form
10-Q for the three months ended March 31, 1997 and June 30, 1997, which are
incorporated herein by reference.
21
<PAGE> 22
BEC GROUP, INC.
PRO FORMA BALANCE SHEET
AS OF JUNE 30, 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
(1)
BOLLE PRO FORMA PRO FORMA
BEC GROUP FRANCE ADJUSTMENTS CONSOLIDATED
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash & Cash Equivalents $ 1,613 $ 1,258 $ (500) (a) $ 2,371
Trade receivables 13,892 9,698 (1,442) (b) 22,148
Allowance for doubtful accounts (824) (347) (1,171)
---------------------------------- ------------
Trade receivables, net 13,068 9,351 (1,442) 20,977
Inventories 16,844 6,003 22,847
Other current assets 5,831 370 (1,000) (c) 5,201
---------------------------------- ------------
Total current assets 37,356 16,982 (2,942) 51,396
================================== ============
Investment in subsidiaries 0 0
Investment in affiliates 10,047 43 10,090
Property and equipment 17,128 2,053 8,500 (d) 27,681
Accumulated depreciation (3,498) 0 (3,498)
---------------------------------- ------------
Property and equipment, net 13,630 2,053 8,500 24,183
---------------------------------- ------------
Goodwill 12,621 0 6,787 (e) 19,408
Accumulated amortization, goodwill (717) 0 (717)
---------------------------------- ------------
Goodwill, net 11,904 0 6,787 18,691
Other intangible assets 2,373 0 40,000 (f) 42,373
---------------------------------- ------------
Accumulated amortization, other intangibles (477) 0 (477)
---------------------------------- ------------
Other intangible assets, net 1,896 0 40,000 41,896
---------------------------------- ------------
Other assets 4,422 0 4,422
---------------------------------- ------------
Total assets $ 79,255 $ 19,078 $ 52,345 $ 150,678
================================== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term debt $ 18,645 $ 425 $ 3,000 (g) $ 22,070
Accounts payable 5,402 5,117 (1,442) (b) 9,077
Accrued social costs 1,285 752 2,037
Other accrued expenses 8,042 2,005 2,800 (h) 12,847
---------------------------------- ------------
Total current liabilities 33,374 8,299 4,358 46,031
Long term debt 26,423 0 30,000 (g) 56,423
Long term liabilities 9,656 1,266 5,500 (i) 16,422
---------------------------------- ------------
Total liabilities 69,453 9,565 39,858 118,876
---------------------------------- ------------
Minority interests 12,706 (j) 12,706
Stockholders' equity:
Capital 28,471 9,513 (9,513) (k) 28,471
Preferred Stock 0 9,294 (l) 9,294
Retained earnings (18,669) 0 (18,669)
---------------------------------- ------------
Total stockholders' equity 9,802 9,513 (219) 19,096
---------------------------------- ------------
Total liabilities and stockholders' equity $ 79,255 $ 19,078 $ 52,345 $ 150,678
================================== ============
</TABLE>
(1) Represents BF Holding based on the legal ownership of its subsidiaries
prior to the reorganization which occurred simultaneously with BEC Group's
acquisition of BF Holding.
22
<PAGE> 23
BEC GROUP, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
(1)
BOLLE PRO FORMA
BEC GROUP FRANCE ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES:
Net sales $33,642 $16,633 ($3,060) (m) $47,215
COSTS AND EXPENSES:
Cost of sales 19,124 10,883 (3,060) (m) 26,947
Selling general and administrative 10,619 3,945 (179) (n) 15,103
718 (o)
Interest expense 1,712 144 846 (p) 2,958
256 (q)
Other income (826) (185) (1,011)
------- ------- ------- -------
Total costs and expenses 30,629 14,787 (1,419) 43,997
------- ------- ------- -------
Income from continuing operations
before income taxes 3,013 1,846 (1,641) 3,218
Provision for income taxes 964 791 (656) (r) 1,099
------- ------- ------- -------
Income form continuing operations
before minority interests $2,049 $1,055 ($985) $2,119
======= ======= ====== =======
Weighted average shares 17,613 17,613
Earnings per share $0.12 $0.12
</TABLE>
(1) Represents BF Holding based on the legal ownership of its subsidiaries
after to the reorganization which occurred simultaneously with BEC
Group's acquisition of BF Holding.
23
<PAGE> 24
BEC GROUP, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE COMBINED YEAR ENDED DECEMBER 31, 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
(1) (2)
BOLLE PRO FORMA ADJUSTMENTS
BEC GROUP FRANCE I II PRO FORMA
<S> <C> <C> <C> <C> <C>
REVENUES:
Net sales $66,996 $45,953 $2,599 ($12,955) (m) $102,593
COSTS AND EXPENSES:
Cost of sales 37,805 30,617 2,723 (12,955) (m) 58,190
Selling general and administrative 20,630 7,930 58 (123) (n) 29,931
1,436 (o)
Interest expense 2,588 437 (20) 1,980 (p) 5,496
511 (q)
Other (income) expense (1,453) 97 22 (1,334)
------- ------- ------ -------- --------
Total costs and expenses 59,570 39,081 2,783 (9,151) 92,283
------- ------- ------ -------- --------
Income from continuing operations
before income taxes 7,426 6,872 (184) (3,804) 10,310
Provision for income taxes 2,505 1,784 (59) (1,522) (r) 2,767
------- ------- ------ -------- --------
Income form continuing operations
before minority interests $4,921 $5,088 ($125) ($2,282) $7,543
======= ======= ====== ======== ========
Weighted average shares 17,669 17,669
Earnings per share $0.28 $0.43
</TABLE>
(1) Represents BF Holding based on the legal ownership of its subsidiaries
prior to the reorganization which occurred simultaneously with BEC
Group's acquisition of BF Holding.
(2) Represents the adjustments necessary to reflect reorganization of BF
Holding and its subsidiaries
24
<PAGE> 25
NOTES TO THE PRO FORMA COMBINED FINANCIAL
STATEMENTS (Unaudited)
(In thousands, except per share data)
PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
(a) Adjustment to reflect the use of Bolle France cash to finance the purchase
of the land and building.
(b) Adjustment to reflect the elimination of trade receivables and payables
between Bolle France and Bolle America.
(c) Adjustment to reflect the credit of BEC's good faith deposit towards the
cash portion of the purchase price.
(d) Adjustment to reflect estimated fair value of buildings and land purchased
as part of the Acquisition.
(e) Adjustment to reflect estimated goodwill to be recorded on the Acquisition
and amortized over a 40-year life.
(f) Adjustment to reflect the estimated fair value of the worldwide Bolle(R)
trademark amortized over a 40 year life.
(g) Adjustment to reflect draw down of the NationsBank credit facility to
satisfy a portion of the cash consideration to purchase Bolle France.
(h) Adjustment to reflect transaction expenses payable.
(i) Adjustment to reflect reserve for Acquisition related liabilities.
(j) Adjustment to reflect the issuance of Bolle Inc. preferred stock and common
stock to Sellers to satisfy a portion of the purchase consideration.
(k) Adjustment to reflect the elimination of Bolle France stockholders' equity
balance as the transaction is accounted for as a purchase.
(l) Adjustment to reflect the issuance of BEC preferred stock to Sellers to
satisfy a portion of the purchase consideration.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS
(m) Adjustment to reflect the elimination of sales from Bolle France to Bolle
America during the period.
(n) Adjustment to reflect the elimination of Acquisition related expenses at
Bolle France.
(o) Adjustment to reflect the depreciation of the fair value adjustment to the
building and product molds over a useful life of 30 years and to reflect
the amortization of the goodwill and trademark value recorded over an
estimated useful life of 40 years.
(p) Adjustment to reflect the increase in interest expense resulting from the
increased credit facility used to satisfy the cash portion of the purchase
price. Interest is assumed at 5.5% per annum. The effect on pre-tax
income from a 1/8% variance in the interest rate would be $41.
(q) Adjustment to reflect six months contractual interest of 5.5% on the BEC
Preferred Stock issued in connection with the Acquisition.
(r) Adjustment to reflect a statutory tax rate of 40%.
25
