<PAGE>
UNITED STATES 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) JUNE 26, 1998
COMMISSION FILE NO. 001-12837
PAMECO CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 51-0287654
---------------------------- ----------------
(State or other jurisdiction (I.R.S. employer
of incorporation or identification
organization) number)
1000 CENTER PLACE
NORCROSS, GA 30093
----------------------------------------
(Address of principal executive offices)
(770)-798-0700
----------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 26, 1998, Pameco Corporation ("Pameco" or the
"Company") purchased the heating, ventilation, and air
conditioning ("HVAC") and refrigeration operations and
substantially all the related assets of Park Heating and Air
Conditioning Supply Co., Inc. ("Park"), an Illinois corporation.
Park operated seven business locations and a distribution center
in the greater Chicago area.
The preliminary purchase price was approximately $22.5
million but may be adjusted based upon a review of the book value
of the acquired assets and assumed liabilities as of the closing
date. In addition, Pameco has agreed to pay Park additional
consideration at the end of each of the first two years following
the closing if the operating income of the branches exceeds $3.6
million. This summary is qualified in its entirety by reference
to the Asset Purchase Agreement, which has been filed as an
exhibit to this report on Form 8-K. The transaction was funded
under the Company's revolving line of credit with General
Electric Capital Corporation.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements of Business Acquired
Park Heating and Air Conditioning Supply Co., Inc. (a
wholly-owned subsidiary of GB Holdings, Inc.) Financial
Statements for the year ended December 31, 1997 and
Unaudited Financial Statements for the quarter ended
March 31, 1998
Report of Independent Accountants F-1
Balance Sheets F-2
Statements of Income and Retained Earnings F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
(b) Pro Forma Financial Information
Pameco Corporation Pro Forma Condensed Financial
Information-for the quarter ended May 31, 1998 and the
year ended February 28, 1998
Introductory Information PF-1
Pro Forma Condensed Consolidated Statement of Income
for the quarter ended May 31, 1998 PF-2
Pro Forma Condensed Consolidated Statement of Income
for the year ended February 28, 1998 PF-3
Pro Forma Condensed Consolidated Balance Sheet
as of May 31, 1998 PF-4
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Information PF-5
(c) Exhibits
10.26 Agreement for Purchase and Sale of Assets of Park Heating
and Air Conditioning Supply, Co., Inc., dated June 26, 1998,
among Pameco Corporation, Park Heating and Air Conditioning
Supply Co., Inc., and GB Holdings, Inc., previously filed
with the Commission as Exhibit 10.26 of Current Report on
8-K, on July 10, 1998.
23.1 Consent of Ernst & Young LLP<PAGE>
<PAGE>
Report of Independent Auditors
We have audited the accompanying balance sheet of Park Heating
and Air Conditioning Supply Co., Inc. (a wholly-owned subsidiary
of GB Holdings, Inc.) as of December 31, 1997, and the related
statements of income and retained earnings and cash flows for the
year then ended. 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 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Park Heating and Air Conditioning Supply Co., Inc. (a wholly-
owned subsidiary of GB Holdings, Inc.) as of December 31, 1997,
and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Atlanta, GA
July 21, 1998
F-1
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Balance Sheets
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 329,355 $ 274,452
Accounts receivable, less allowance for doubtful
accounts of $80,000 at December 31, 1997 and
March 31, 1998 3,977,048 3,542,237
Inventories 7,919,367 7,952,987
Prepaid expenses and other current assets 71,896 54,774
----------- -----------
Total current assets 12,297,666 11,824,450
Property and equipment, at cost:
Furniture and fixtures 59,626 59,626
Computer equipment 25,787 25,787
Transportation equipment 387,176 387,176
Warehouse equipment 100,694 100,694
Leasehold improvements 331,030 331,030
----------- -----------
Total property and equipment 904,313 904,313
Less accumulated depreciation 216,836 239,670
----------- -----------
Net property and equipment 687,477 664,643
----------- -----------
Total assets $12,985,143 $12,489,093
=========== ===========
</TABLE>
F-2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 3,573,625 $1,869,444
Accrued compensation and commissions 320,732 277,531
Accrued property and sales taxes 610,906 520,116
Other accrued expenses 253,540 195,636
Line of credit 978,080 1,931,831
Current portion of long-term debt 43,900 42,130
Note payable to affiliated company 60,072 55,924
----------- -----------
Total current liabilities 5,840,855 4,892,612
Long-term liabilities:
Notes payable to shareholders 842,950 1,012,005
Long-term debt 89,519 62,106
----------- -----------
Total liabilities 6,773,324 5,966,723
Shareholder's equity:
Common stock, $1 par value, authorized - 100,000
shares; 1,000 shares issued and outstanding 1,000 1,000
Capital in excess of par value 75,000 75,000
Retained earnings 6,135,819 6,446,370
----------- -----------
Total shareholder's equity 6,211,819 6,522,370
----------- -----------
Total liabilities and shareholder's equity $12,985,143 $12,489,093
=========== ===========
</TABLE>
See accompanying notes.
F-3
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Statements of Income and Retained Earnings
<TABLE>
<CAPTION>
Quarter
Year ended ended
December 31, March 31,
1997 1998
------------ -----------
(Unaudited)
<S> <C> <C>
Net sales $34,237,121 $6,806,343
Costs and expenses:
Cost of products sold 23,698,309 4,552,073
Warehousing, selling and delivery expenses 4,977,198 1,317,469
Administrative expenses 2,631,411 578,175
----------- ----------
31,306,918 6,447,717
----------- ----------
Operating earnings 2,930,203 358,626
----------- ----------
Interest expense 284,309 48,075
----------- ----------
Net income 2,645,894 310,551
Retained earnings at beginning of year 4,554,925 6,135,819
Dividends paid (1,065,000) -
----------- ----------
Retained earnings at end of year $ 6,135,819 $6,446,370
=========== ==========
</TABLE>
See accompanying notes.
F-4
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Statements of Cash Flows
<TABLE>
<CAPTION>
Quarter
Year ended ended
December 31, March 31,
1997 1998
------------ -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $2,645,894 $ 310,551
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 87,676 22,834
Decrease in accounts receivable 1,612,286 434,811
Increase in inventories (33,620)
(376,842)
(Increase) decrease in prepaid expenses (18,578) 17,122
Increase (decrease) in accounts payable
and accrued expenses 693,698 (1,896,076)
---------- -------------
Net cash provided by (used in) operating activities 4,644,134 (1,144,378)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (329,929) -
---------- -------------
Net cash used in investing activities (329,929) -
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on loans from affiliate (359,581) (4,148)
(Payments) borrowing on line of credit (3,069,744) 953,751
Borrowing from shareholders 167,913 169,055
Borrowing (payments) on other loans 66,312 (29,183)
Dividends paid (1,065,000) -
---------- -------------
Net cash (used in) provided by financing activities (4,260,100) 1,089,475
---------- -------------
Net increase (decrease) in cash 54,105 (54,903)
Cash and cash equivalents at beginning of year 275,250 329,355
---------- -------------
Cash and cash equivalents at end of year $ 329,355 $ 274,452
========== =============
Cash paid for interest $ 280,518 $ 57,596
========== =============
</TABLE>
See accompanying notes.
F-5
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements
Year ended December 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
REPORTING ENTITY
Effective January 1, 1997, the shareholders of Park Heating and
Air Conditioning Supply Co., Inc. (the "Company") exchanged their
shares of stock on a one-for-one basis in the Company for shares
of stock in a newly-formed corporation named GB Holdings, Inc. As
a result of such exchange, Park Heating and Air Conditioning
Supply Co., Inc. became a wholly-owned subsidiary of GB Holdings,
Inc. GB Holdings, Inc., with consent of its shareholders, filed
for S Corporation status effective January 1, 1997. As a result,
the shareholders of GB Holdings, Inc. report the entire corporate
taxable income on their personal income tax returns.
The accompanying financial statements include only the accounts
of Park Heating and Air Conditioning Supply Co., Inc., a wholly-
owned subsidiary of GB Holdings, Inc.
DESCRIPTION OF BUSINESS
The Company is engaged in the wholesale distribution of heating
and air conditioning equipment and related supplies and sells to
customers located primarily in the State of Illinois. The Company
operates in one business segment.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
The Company maintains its cash in bank deposit accounts which at
times may exceed federally insured limits. The Company has not
experienced any losses in such accounts. The Company believes it
is not exposed to any significant credit risk with respect to
cash and cash equivalents.
F-6
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
CREDIT POLICY
The Company performs periodic credit evaluations of its
customers' financial conditions and in some instances places
liens on sales of equipment. Receivables are generally due
within 30 days. Credit losses have been within management's
expectations.
INVENTORIES
Inventories, consisting of finished goods held for resale, are
stated at the lower of cost (first-in, first-out method) or
market.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is
provided over the estimated useful lives of the related assets by
the straight-line method. The estimated useful lives for property
and equipment range from five to thirty-nine years. Expenditures
for maintenance and repairs are charged to operations as
incurred.
INCOME TAXES
The Company has elected, with the consent of its shareholders, to
be treated for income tax purposes as a Subchapter S Corporation.
As a result, the shareholders report the entire corporate taxable
income on their personal tax returns.
The pro forma provision for income taxes would be approximately
$1,018,000 for the year ended December 31, 1997. The pro forma
provision for income taxes represents a provision for income
taxes as if the Company had operated as a C Corporation for
income tax purposes for the year ended December 31, 1997.
F-7
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
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 reporting
period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the balance sheet for cash,
accounts receivable, and accounts payable approximate their fair
values. The fair values of the Company's debt approximates the
reported amounts in the balance sheet as their respective
interest rates approximate the market rates for similar debt
instruments.
RECENT PRONOUNCEMENTS
In June 1997, Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income, was issued. SFAS 130
establishes new standards for the reporting and display of
comprehensive income and its components in a full set of general
purpose financial statements. These new standards require that
all items recognized as components of comprehensive income be
reported in a financial statement that is displayed with the same
prominence as other financial statements. SFAS 130 is effective
for fiscal years beginning after December 15, 1997. The adoption
of SFAS 130 is not expected to have a material impact on the
Company's financial statements.
F-8
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
INTERIM STATEMENTS
The interim financial data for the quarter ended March 31, 1998
is unaudited; however, in the opinion of management, the interim
data includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the
results for the interim period.
2. LINE OF CREDIT
The Company and two affiliated companies (LDR Industries, Inc.
("LDR") and G & S Supply, Inc.) have a revolving credit agreement
with a bank which provides for a commitment for borrowing of
$15,000,000 at the prime rate (8.5% at December 31, 1997) with
maximum borrowings at any time based upon the three companies'
aggregate levels of eligible inventory and accounts receivable,
as defined. The three companies have pledged substantially all
their assets as collateral for all borrowings. The line of
credit includes covenants which, among other things, restrict the
companies' abilities to incur additional new indebtedness and pay
dividends without lender approval. This debt is guaranteed by
the shareholders of the companies. All bank borrowings under
this agreement were repaid on June 29, 1998.
3. NOTE PAYABLE TO AFFILIATED COMPANY
The note payable to an affiliated company is due on demand, is
unsecured, and bears interest at the same rate charged under the
bank revolving credit agreement.
F-9
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements (continued)
4. LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 1997:
Notes payable to shareholders, all unsecured and due
January 1, 1999 with interest at 8.25% $842,950
Other 133,419
--------
976,369
Less: Current portion 43,900
--------
Long-term debt $932,469
========
5. EMPLOYEE BENEFIT PLAN
The Company and two of its affiliates sponsor a defined
contribution plan (the "Plan") which covers all full-time
employees. The Plan provides for voluntary employee and
discretionary employer contributions. The Company contributed
$115,140 to the Plan for the year ended December 31, 1997.
6. COMMITMENTS AND CONTINGENCIES
Operating Leases
- ----------------
The Company leases its offices and distribution facilities from
an affiliated entity on a month-to-month basis. Rent expense for
these leases was $845,738 for the year ended December 31, 1997.
Total rent expense for all operating leases was $987,084 for the
year ended December 31, 1997.
Guarantee of Purchase Commitments
- ---------------------------------
At December 31, 1997, the Company was contingently liable for
LDR's $1,153,463 of purchase commitments outstanding through bank
letters of credit.
F-10
<PAGE>
<PAGE>
Park Heating and Air Conditioning
Supply Co., Inc.
(a wholly-owned subsidiary of GB Holdings, Inc.)
Notes to Financial Statements (continued)
7. RELATED PARTY TRANSACTIONS
Interest expense on the notes payable to affiliated companies and
to shareholders aggregated $68,608 for the year ended December
31, 1997. In addition, the Company reimbursed LDR approximately
$552,000 for certain labor and related benefits.
8. SUBSEQUENT EVENTS
The Company declared and paid dividends of $300,000 to its
shareholders in January 1998.
On June 26, 1998, the Company was acquired by Pameco Corporation,
a publicly-traded nationwide distributor of heating, ventilation
and air conditioning and refrigeration equipment.
F-11
<PAGE>
PRO FORMA FINANCIAL INFORMATION
Introductory Information
The following unaudited pro forma condensed consolidated
financial information sets forth the combined results and
financial position of the Company and Park assuming the Company
purchased Park based on the information, qualifications and assumptions
set forth in the following Notes to Unaudited Pro Forma Condensed
Consolidated Financial Information.
The following unaudited pro forma financial information
should be read in conjunction with the Company's audited and
unaudited financial statements, including the notes thereto,
contained in: (i) Pameco Corporation's Annual Report on Form 10-
K for the year ended February 28, 1998 and (ii) Pameco
Corporation's Quarterly Report on Form 10-Q for the quarterly
period ended May 31,1998.
The unaudited pro forma condensed consolidated statements of
income for the three months ended May 31, 1998 and for the year
ended February 28, 1998 present the consolidated operating
results of the Company and Park as if the acquisition described
above had occurred at the beginning of the period presented. Park
prepares its financial statements based on a December 31 year
end. For purposes of this pro forma presentation, Park's
statement of income was adjusted to reflect a twelve-month period
ended February 28, 1998 and three-month period ended May 31, 1998
to conform with Pameco's presentation. The unaudited pro forma
condensed consolidated balance sheet as of May 31, 1998 includes
the unaudited balance sheet of Park as of May 31, 1998. The
unaudited pro forma condensed consolidated balance sheet as of
May 31, 1998 presents the combined consolidated financial
position of the Company and Park as if the acquisition described
above had occurred on May 31, 1998. These pro forma financial
statements reflect the use of the purchase method of accounting
and are based on the historical financial information of the
Company and Park adjusted for the pro forma adjustments described
in the accompanying notes to unaudited pro forma condensed
consolidated financial information. Certain reclassifications
and adjustments have been made to the historical financial
statements of Park to conform to the Company's financial
presentation and interim reporting dates.
The pro forma adjustments in certain cases are based on
preliminary estimates of the fair values of assets and
liabilities of Park, which may require further adjustment when
additional information is obtained during the one year period
subsequent to the acquisition date. Any reallocation of the
purchase price based on the final valuation of the assets and
liabilities should not differ significantly from the original
estimate and should not have a material impact on the pro forma
financial statements.
The pro forma financial information is presented for
illustrative purposes only, has been prepared under guidelines of
the Securities and Exchange Commission, and is not intended to be
indicative of the operating results that would have occurred if
the acquisition had been consummated in accordance with the
assumptions set forth below, nor is it intended to be a forecast
of future operating results.
PF-1
<PAGE>
<TABLE>
<CAPTION>
PAMECO CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE QUARTER ENDED MAY 31, 1998
(Unaudited; In thousands, except per share amounts)
Pameco
Corporation
Pameco Park Pro Pro
Corporation Supply Forma Forma
(Historical) (Historical) Adjustments As Adjusted
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 145,194 $ 7,954 $ --- $ 153,148
Costs and expenses:
Cost of products sold 111,146 5,534 --- 116,680
Warehousing, selling, and administrative expenses 29,519 1,924 --- 31,443
Amortization of excess of cost over acquired 204 --- 88 (A) 292
net assets
Amortization of excess of acquired net assets (306) --- --- (306)
over cost ------------ ------------ ----------- -----------
140,563 7,458 88 148,109
------------ ------------ ----------- -----------
Operating earnings (loss) 4,631 496 (88) 5,039
Other expenses:
Interest expense, net (1,022) (50) (410) (B) (1,482)
Discount on sale of accounts receviable and (760) 23 --- (737)
other expenses ------------ ------------ ----------- -----------
Income before income taxes 2,849 469 (498) 2,820
Provision for income taxes 965 --- (11) (C) 954
------------ ------------ ----------- -----------
Net income (loss) $ 1,884 $ 469 $ (487) $ 1,866
============ ============ =========== ===========
Basic earnings per share $ 0.22 $ 0.21
============ ===========
Basic weighted average shares outstanding 8,740 8,740
============ ===========
Diluted earnings per share $ 0.21 $ 0.20
============ ===========
Diluted weighted average shares outstanding
9,120 9,120
============ ============
</TABLE>
The introductory information reported under Item 7(b) and the
accompanying notes to unaudited pro forma condensed consolidated
financial information are an integral part of these statements.
Pro forma information should not be construed to be a forecast
of future operating results.
PF-2
<PAGE>
<TABLE>
<CAPTION>
PAMECO CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED FEBRUARY 28, 1998
(Unaudited; In thousands, except per share amounts)
Pameco
Corporation
Pameco Park Pro Pro
Corporation Supply Forma Forma
(Historical) (Historical) Adjustments As Adjusted
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 484,010 $ 34,095 $ --- $ 518,105
Costs and expenses:
Cost of products sold 368,685 23,751 --- 392,436
Warehousing, selling, and administrative expenses 98,655 7,582 --- 106,237
Amortization of excess of cost over acquired net assets 441 --- 352 (A) 793
Amortization of excess of acquired net assets over cost (1,224) --- --- (1,224)
---------- --------- ---------- ----------
466,557 31,333 352 498,242
---------- --------- ---------- ----------
Operating earnings (loss) 17,453 2,762 (352) 19,863
Other expenses:
Interest expense, net (1,980) (236) (1,641) (B) (3,857)
Discount on sale of accounts receviable and other (3,086) --- --- (3,086)
---------- --------- ---------- ----------
Income before income taxes 12,387 2,526 (1,993) 12,920
Provision for income taxes 3,541 --- 203 (C) 3,744
---------- --------- ---------- ----------
Net income (loss) $ 8,846 $ 2,526 $ (2,196) $ 9,176
========== ========= ========== ==========
Basic earnings per share $ 1.14 $ 1.18
========== ==========
Basic weighted average shares outstanding 7,779 7,779
========== ==========
Diluted earnings per share $ 1.08 $ 1.12
========== ==========
Diluted weighted average shares outstanding 8,183 8,183
========== ==========
</TABLE>
The introductory information reported under Item 7(b) and the
accompanying notes to unaudited pro forma condensed consolidated
financial information are an integral part of these statements.
Pro forma information should not be construed to be a forecast of
future operating results.
PF-3
<PAGE>
<TABLE>
<CAPTION>
PAMECO CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MAY 31, 1998
(Unaudited; In thousands, except per share amounts)
Pameco
Corporation
Pameco Park Pro Pro
Corporation Supply Forma Forma
(Historical) (Historical) Adjustments (D) As Adjusted
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 152 $ 393 $ (386) $ 159
Accounts receivable, net 33,742 4,120 (4) 37,858
Inventories 134,286 6,895 --- 141,181
Prepaid expenses and other current assets 2,316 31 (21) 2,326
--------- --------- --------- ---------
Total current assets 170,496 11,439 (411) 181,524
Property and equipment, net 13,010 702 (96) 13,616
Excess of cost over acquired net assets, net 27,684 --- 14,075 41,759
Other assets 728 (88) 89 729
Deferred income tax assets 12,787 --- --- 12,787
--------- --------- --------- ---------
Total assets $ 224,705 $ 12,053 $ 13,657 $ 250,415
========= ========= ========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 71,481 $ 2,205 $ --- $ 73,686
Accrued compensation and withholdings 2,108 247 (132) 2,223
Other accrued liabilities and expenses 18,164 976 (211) 18,929
Note payable --- 1,159 (1,159) ---
Current portion of capital lease obligations and other debt 31 47 (22) 56
--------- --------- --------- ---------
Total current liabilities 91,784 4,634 (1,524) 94,894
Long-term liabilities:
Debt 53,421 857 21,674 75,952
Capital lease obligations 29 --- --- 29
Warranty reserves and other 4,003 69 --- 4,072
--------- --------- --------- ---------
Total long-term liabilities 57,453 926 21,674 80,053
Excess of acquired net assets over cost, net 4,693 --- --- 4,693
Shareholders' equity:
Common stock 88 1 (1) 88
Capital in excess of par value 37,332 75 (75) 37,332
Retained earnings 33,955 6,417 (6,417) 33,955
--------- --------- --------- ---------
71,375 6,493 (6,493) 71,375
Note receivable from shareholder (600) --- --- (600)
Total shareholders' equity 70,775 6,493 (6,493) 70,775
--------- --------- --------- ---------
Total liabilities and shareholders' equity $ 224,705 $ 12,053 $ 13,657 $ 250,415
========= ======== ========= =========
</TABLE>
The introductory information reported under Item 7(b) and the accompanying
notes to unaudited pro forma condensed consolidated financial
information are an integral part of these statements. Pro forma information
should not be construed to be a forecast of future operating results.
PF-4<PAGE>
PAMECO CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The historical information for each company reflected in the
accompanying unaudited pro forma condensed consolidated financial
statements have been determined using generally accepted
accounting principles.
The following notes describe the pro forma adjustments
necessary to reflect the effects of the acquisition. Actual
adjustments to account for the acquisition under the purchase
method are dependent upon the final valuation of the assets and
liabilities of Park.
Note A- The pro forma adjustment to "Amortization of excess
of cost over acquired net assets" reflects the additional expense
resulting from the amortization of the goodwill recorded in
association with the acquisition of Park. Goodwill is amortized
over forty years.
Note B- The pro forma adjustment to "Interest expense, net"
reflects the additional interest costs on debt issued to fund
the cash portion of the purchase price based on estimated
financing costs for the acquisition of Park.
Note C- The pro forma adjustment to "Provision (benefit) for
income taxes" reflects the net income tax impact at the
Company's effective income tax rate of the pro forma adjustments
described above and records the tax impact of Park's historical
results at the Company's effective income tax rate. Park was
previously organized as a subchapter-S corporation.
Note D- The purchase method of accounting for acquisitions
requires that the assets and liabilities of Park be adjusted to
their estimated fair values. These adjustments reflect
management's best estimate of the fair values of the assets and
liabilities of Park as of June 26, 1998 using information
currently available.
PF-5
<PAGE>
<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 thereunto duly authorized.
PAMECO CORPORATION
------------------------------
(Registrant)
By: /s/ THEODORE R. KALLGREN
------------------------------
Theodore R. Kallgren
Chief Financial Officer
September 8, 1998 (Mr. Kallgren has been duly authorized
to sign on behalf of the registrant)
<PAGE>
Exhibit Index
Exhibit No. Description
- ----------- -----------
23.1 Consent of Independent Auditors
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated July 21, 1998, with
respect to the financial statements of Park Heating and Air
Conditioning Supply Co., Inc. for the year ended December 31,
1997, included in this report on Form 8-K of Pameco Corporation
and incorporated by reference in the Registration Statements of
Pameco Corporation listed below:
*Registration Statement No. 333-33939 on Form S-8, dated August 19,
1997 and related Prospectus
*Registration Statement No. 333-43849 on Form S-8, dated January 7, 1998
and related Prospectus
/s/ Ernst & Young LLP
Atlanta, GA
September 3, 1998
