<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
--------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT: OCTOBER 31, 1997
(Date of earliest event reported)
--------------------------
WHITE CAP INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
--------------------------
<TABLE>
<S> <C> <C>
DELAWARE 0-22989 84-1380403
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization Identification No.)
</TABLE>
3120 AIRWAY AVENUE, P.O. BOX 1770, COSTA MESA, CALIFORNIA 92626
(Address of principal executive offices, zip code)
(714) 850-0900
(Registrant's telephone number, including area code)
================================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Registrant has previously reported that on October 31, 1997,
the Registrant completed its acquisition of the assets of Burke
Construction Accessories, L.P. ("BCA"). The acquisition of BCA
was effective as of November 1, 1997. Enclosed herewith are
certain historical financial statements of BCA and pro forma
financial information of the Registrant.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of BCA as of and for the years
ended December 31, 1996 and 1995.
(b) Pro Forma Financial Information.
(i) Pro forma combined balance sheet (unaudited) of
the Registrant as of June 30, 1997;
(ii) Pro forma combined income statement (unaudited)
of the Registrant for the fiscal year ended
March 31, 1997 (excluding BCA);
(iii) Pro forma combined income statement (unaudited)
of the Registrant for the three months ended
June 30, 1997 (excluding BCA);
(iv) Pro forma combined income statement (unaudited)
of the Registrant for the fiscal year ended
March 31, 1997 (including BCA);
(v) Pro forma combined income statement (unaudited)
of the Registrant for the three months ended
June 30, 1997 (including BCA).
<PAGE> 3
SIGNATURES
Pursuant to the requirement 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.
WHITE CAP INDUSTRIES, INC.
(Registrant)
Date: January 12, 1998 By: /s/ CHRIS LANE
------------------------------
Chris Lane
Chief Financial Officer
<PAGE> 4
BURKE CONCRETE ACCESSORIES, L.P.
====================
FINANCIAL STATEMENTS
====================
YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 1
Financial Statements:
Balance Sheets 2
Statements of Operations and Partners' Capital 3
Statements of Cash Flows 4
Notes to Financial Statements 5-10
</TABLE>
<PAGE> 6
[MOWAT MACKIE & ANDERSON LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Burke Concrete Accessories, L.P.
Oakland, California
We have audited the accompanying balance sheet of Burke Concrete Accessories,
L.P., as of December 31, 1996 and the related statements of operations and
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Burke concrete Accessories, L.P. as of
December 31, 1995, were audited by other auditors whose report dated February
12, 1996, expressed an unqualified opinion on those statements.
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 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 Burke Concrete Accessories,
L.P. as of December 31, 1996, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
As explained in Note 2 to the financial statements, the Partnership changed its
method of determining LIFO cost in 1995.
MOWAT MACKIE & ANDERSON
- ----------------------------
Mowat Mackie & Anderson LLP
Certified Public Accountants
February 7, 1997
<PAGE> 7
BURKE CONCRETE ACCESSORIES, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-----------------------
1996 1995
---------- ----------
<S> <C>
ASSETS
Current assets:
Cash $ 73,951 $ 33,992
Accounts receivable, net of allowance for doubtful
accounts of $75,000 and $56,000, respectively 3,064,428 3,145,278
Inventory 2,234,407 1,861,690
Prepaid expenses and other current assets 178,666 192,384
---------- ----------
Total current assets 5,551,452 5,233,344
Rental equipment, net of accumulated depreciation of
$701,383 and $471,886, respectively 2,627,713 2,045,057
Other property and equipment 279,858 227,321
Other assets 9,801 19,485
---------- ----------
$8,468,824 $7,525,207
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $1,653,484 $1,649,750
Accrued liabilities 643,324 514,992
Current portion of long-term debt 456,500 327,244
---------- ----------
Total current liabilities 2,753,308 2,491,986
Long-term debt 4,031,083 4,007,317
Partners' capital 1,684,433 1,025,904
---------- ----------
$8,468,824 $7,525,207
========== ==========
</TABLE>
See notes to financial statements.
-2-
<PAGE> 8
BURKE CONCRETE ACCESSORIES, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL
----------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues $24,909,963 $21,262,580
Cost of revenues 14,901,415 12,537,173
----------- -----------
Gross profit 10,008,548 8,725,407
Operating expenses:
Compensation and benefits 5,333,230 4,927,463
Selling, general and administrative 3,569,341 3,405,278
----------- -----------
Total operating expenses 8,902,571 8,332,741
----------- -----------
Income from operations 1,105,977 392,666
Interest expense 447,448 438,235
----------- -----------
Net income (loss) 658,529 (45,569)
Partners' capital at beginning of year 1,025,904 1,071,473
----------- -----------
Partners' capital at end of year $ 1,684,433 $ 1,025,904
=========== ===========
</TABLE>
See notes to financial statements.
-3-
<PAGE> 9
BURKE CONCRETE ACCESSORIES, L.P.
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 658,529 $ (45,569)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 327,123 404,417
Changes in assets and liabilities:
Accounts receivable 80,850 (862,077)
Inventory (372,717) 348,989
Prepaid expenses and other current assets 13,718 (42,102)
Accounts payable 3,734 555,696
Accrued liabilities 128,332 (61,036)
Other - 21,918
--------- ---------
Total adjustments 181,040 365,805
--------- ---------
Net cash provided by operating activities 839,569 320,236
Cash flows from investing activities:
Net purchases of rental equipment (812,153) (730,901)
Purchases of other property and equipment (140,479) (47,341)
--------- ---------
Net cash used in investing activities (952,632) (778,242)
Cash flows from financing activities:
Net borrowings under revolving line of credit agreement 682,650 696,256
Principal repayments on other long-term debt (529,628) (326,947)
--------- ---------
Net cash provided by financing activities 153,022 369,309
--------- ---------
Net increase (decrease) in cash 39,959 (88,697)
Cash at beginning of year 33,992 122,689
--------- ---------
Cash at end of year $ 73,951 $ 33,992
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 447,448 $ 419,384
========= =========
</TABLE>
See notes to financial statements.
-4-
<PAGE> 10
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 1996 and 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operation
Burke Concrete Accessories, L.P. (the Partnership) is a full line distributor of
concrete accessories, construction chemicals, and rental equipment used in
pour-in-place, precast and tilt-up concrete construction, renovation and
maintenance. The Partnership operates from nine leased facilities located in
Seattle and Everett, Washington, Portland, Santa Rosa, Oakland, San Jose,
Sacramento, Los Angeles and Las Vegas. Headquarters are in Hayward, California.
Use of Estimates
The preparation of financial statements in accordance 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 revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Revenue Recognition
The Partnership recognizes revenue from sales upon shipment. Revenue from
rentals is recognized ratably over the term of the rental contract.
Inventory
Inventory is stated at the lower of cost, using the last-in, first-out (LIFO)
method, or market. If the first-in, first-out (FIFO) method had been used,
inventory would have been approximately $2,334,000 and $1,955,000 at December
31, 1996 and 1995, respectively and net income (loss) would have been $664,529
and $(21,569) for the years ended December 31, 1996 and 1995, respectively.
-5-
<PAGE> 11
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
Years Ended December 31, 1996 and 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Rental Equipment
Rental equipment consists of concrete accessories and tilt-up equipment rented
to customers. Rental equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets.
Other Property and Equipment
Other property and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Amortization of leasehold improvements is computed
using the straight-line method over the lesser of the remaining term of the
lease or estimated useful lives of the improvements.
Income Taxes
The Partnership is not a taxpaying entity for income tax purposes, and thus no
income tax expense has been recorded in the statements. Instead, the partners
are individually liable for income taxes on their allocable share of the
Partnership's taxable income.
Concentration of Credit Risk
The Partnership grants credit to customers, substantially all of whom are
dependent on the construction economic sector. The Partnership continuously
evaluates its customers' financial condition, but generally does not require
collateral. The Partnership maintains an allowance for doubtful accounts
receivable and credit losses have been within management's expectations.
Reclassifications
Certain reclassifications have been made to the 1995 financial statements in
order to conform to the presentation used in 1996.
-6-
<PAGE> 12
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
Years Ended December 31, 1996 and 1995
NOTE 2 - INVENTORY
Inventory consists of the following:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Concrete accessories and tilt-up inventory $1,429,987 $1,288,250
Chemical inventory 804,420 573,440
---------- ----------
$2,234,407 $1,861,690
========== ==========
</TABLE>
During 1995 the Partnership changed its method of determining LIFO cost from the
purchase price index method to a link chain method based on actual prices. The
new method of calculating LIFO cost was adopted to more accurately determine
inventory cost. The cumulative effect of the change on prior years was not
determinable.
NOTE 3 - OTHER PROPERTY AND EQUIPMENT
Other property and equipment is summarized by major classifications as follows:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Office equipment $ 225,480 $ 185,496
Computer equipment and software 163,727 93,864
Leasehold improvements 93,509 67,280
--------- ---------
482,716 346,640
Less accumulated depreciation and amortization (202,858) (119,319)
--------- ---------
$ 279,858 $ 227,321
========= =========
</TABLE>
- 7 -
<PAGE> 13
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
Years Ended December 31, 1996 and 1995
NOTE 4 - BORROWINGS
The Partnership has a revolving line of credit agreement with a lending
institution. The agreement provides for maximum borrowings of $4,500,000 (not to
exceed 80%) of eligible accounts receivable plus the lesser of 50% of eligible
inventory or $1,500,000); however, an intercreditor agreement with the
subordinated debt holder limits borrowings to $3,500,000. Interest is calculated
on the daily outstanding balance at the rate of interest announced publicly by a
bank plus 1.75 percent. The agreement terminates on January 19, 1998, and shall
be automatically renewed for successive periods of one year unless terminated
earlier. Outstanding borrowings are secured by substantially all of the
Partnership's assets.
The agreement includes certain financial and nonfinancial covenants, including
minimum net worth, current ratio and debt service ratios, as defined. The
Partnership was in compliance with these covenants at December 31, 1996.
Long-term debt consists of the following:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Revolving line of credit borrowings $3,033,317 $2,350,667
Subordinated note payable arising from refinance
of original acquisition indebtedness, payable
in monthly installments of $41,500, plus interest
at 11%, with a balloon payment due January 18,
1998, secured by substantially all of the
Partnership's assets 1,433,732 -
Subordinated note payable arising from the 1994
acquisition of the business, refinanced during 1996 - 1,934,732
Other 20,534 49,162
---------- ----------
4,487,583 4,334,561
Less current portion (456,500) (327,244)
---------- ----------
$4,031,083 $4,007,317
========== ==========
</TABLE>
-8-
<PAGE> 14
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
-----------------------------------------
Years Ended December 31, 1996 and 1995
NOTE 4 -- BORROWINGS (Continued)
Future maturities of long-term debt as of December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997 $ 456,500
1998 4,010,550
Thereafter 20,533
----------
$4,487,583
==========
</TABLE>
NOTE 5 -- PARTNERSHIP AGREEMENT
The Partnership shall distribute any operating cash flow and any surplus
Partnership cash annually as follows: (1) to the extent allowed under existing
lending agreements, to satisfy the partners' tax obligation for partnership
taxable income; (2) to each limited partner up to a cumulative 8 percent
annual return on cash capital contributions; (3) to each limited partner as a
return of capital in proportion to their cash capital contributions until
cumulative distributions equal cash capital contributions; (4) to each general
partner, as a return of capital, in proportion to their respective cash
capital contributions; and (5) to each partner in proportion to their
respective ownership.
Allocations of net operating taxable income shall be made to the partners in
the same manner as cash flow is distributed. Net taxable losses shall be
allocated to each partner in proportion to their positive capital account
balances until such balances are reduced to zero, with certain restrictions as
stated in the partnership agreement.
The term of the Partnership is 20 years, beginning November 1, 1993, unless
terminated on an earlier date pursuant to the partnership agreement. Upon
dissolution, the net assets, if any, shall be distributed as follows: (1) to
payment of Partnership debts; (2) to the creation of a trust account to pay
contingent liabilities and expenses; and (3) in the same manner as
distributions of annual cash flow.
NOTE 6 -- RELATED PARTY TRANSACTIONS
The Partnership agreement provides for an annual management fee to be paid to
a shareholder of the general partner for administrative services performed.
Management fees paid for services rendered were $60,000 and $50,000 for the
years ended December 31, 1996 and 1995, respectively.
-9-
<PAGE> 15
BURKE CONCRETE ACCESSORIES, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
Years Ended December 31, 1996 and 1995
NOTE 7 -- EMPLOYEE BENEFIT PLAN
The Partnership has a 401(k) profit-sharing plan that covers substantially all
employees who meet certain eligibility requirements. Eligible employees may
elect to make voluntary contributions to the Plan up to 20% of their annual
compensation, subject to certain limitations. The Partnership matches employee
contributions in an amount equal to 25% of the employee's contributions, but not
to exceed a maximum of an employee's contribution of $500 per quarter.
Contributions vest no later than at the end of five years of service.
Contributions were $27,971 and $27,859 for the years ended December 31, 1996 and
1995, respectively.
NOTE 8 -- LEASES
The Partnership leases office and distribution facilities, vehicles, and certain
equipment, under operating leases expiring in various years through 2004.
Certain operating leases provide for renewal options, for periods from two to
five years, at the fair rental value at the time of renewal. In addition,
certain leases contain escalation clauses.
Future minimum rental payments under non-cancelable operating leases with
remaining terms in excess of one year as of December 31, 1996 are:
1997 $ 551,917
1998 555,381
1999 497,593
2000 177,884
2001 84,913
Thereafter 192,450
----------
$2,060,138
==========
Total future minimum rental payments have not been reduced by $30,640 of
sublease rentals to be received in the future under non-cancelable subleases.
Rent expense was $643,242 and $606,800 for the years ended December 31, 1996 and
1995, respectively.
-10-
<PAGE> 16
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following unaudited pro forma combined financial data for the year
ended March 31, 1997 and the three months ended June 30, 1997 (the "Unaudited
Pro Forma Combined Financial Data") give effect to (i) the 1997 acquisitions of
A-Y Supply, Stop Supply, and Viking Distributing as previously reported, (ii)
the November 1, 1997 acquisition of Burke Concrete Accessories, and (iii) the
initial public offering of the Registrant's common stock in October 1997 and
the use of proceeds previously reported to repay certain indebtedness and redeem
outstanding Senior Redeemable Preferred Stock. The Unaudited Pro Forma Combined
Financial Data are based on the historical financial statements of the
registrant, A-Y Supply, Stop Supply, Viking Distributing and Burke Concrete
Accessories and the assumptions and adjustments described in the accompanying
notes to the Unaudited Pro Forma Combined Financial Data. The pro forma combined
statements of operations were prepared as if such transactions had occurred on
April 1, 1996. The Unaudited Pro Forma Combined Financial Data are not
necessarily indicative of the results which actually would have occurred if such
transactions had occurred on the dates indicated or which may occur in the
future. The Unaudited Pro Forma Combined Financial Data should be read in
conjunction with the Financial Statements of Burke Concrete Accessories
contained elsewhere in this report and the financial statements of the
registrant as previously reported.
<PAGE> 17
WHITE CAP INDUSTRIES, INC.
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
White Burke Concrete Pro forma Offering Pro forma
Cap Accessories Adjustments Combined Adjustments As Adjusted
-------- -------------- ----------- -------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash $ 2,882 $ 23 $ - $ 2,905 $ 1,051 (e) $ 3,956
Receivables 27,279 3,768 - 31,047 - 31,047
Inventory 23,029 2,022 - 25,051 - 25,051
Other 1,724 290 - 2,014 3,071 (f) 5,085
-------- ------- ------- --------- ------- ---------
Current assets 54,914 6,103 - 61,017 4,122 65,139
-------- ------- ------- --------- ------- ---------
Fixed assets, net 9,534 3,122 - 12,656 - 12,656
Intangibles 25,982 4,000 (a) 29,982 (1,274)(g) 28,708
Other long-term assets 212 51 - 263 - 263
-------- ------- ------- --------- ------- ---------
Long-term assets 35,728 3,173 4,000 42,901 (1,274) 41,627
-------- ------- ------- --------- ------- ---------
Total assets $ 90,642 $ 9,276 $ 4,000 $ 103,918 $ 2,848 $ 106,766
======== ======= ======= ========= ======= =========
Accounts payables $ 22,299 $ 2,926 $ - $ 25,225 $ - $ 25,225
Accruals 4,782 400 1,450 (a) 6,632 - 6,632
Line of credit - - - - - -
Term debt - current portion 3,106 1,185 (1,185)(b) 3,106 (2,400)(g) 706
Other current liabilities - - - - - -
-------- ------- ------- --------- ------- ---------
Total current liabilities 30,187 4,511 265 34,963 (2,400) 32,563
Line of Credit 28,330 - 8,500 (c) 36,830 (28,330)(h) 8,500
Term debt - long term 9,000 3,119 (3,119)(b) 9,000 (9,000)(g) -
Subordinated debt 19,500 - - 19,500 (19,500)(i) -
Other long-term liabilities 3,741 - - 3,741 - 3,741
-------- ------- ------- --------- ------- ---------
Total liabilities 90,758 7,630 5,646 104,034 (59,230) 44,804
-------- ------- ------- --------- ------- ---------
Equity (Deficit):
Common stock 11 - - 11 71,750 (j) 71,761
Redeemable preferred stock 2,650 - - 2,650 (2,650)(k) -
Convertible preferred stock 2,256 - - 2,256 (2,250)(j) 6
Partners' capital - 966 (966)(d) - -
Retained earnings (5,033) 680 (680)(d) (5,033) (4,772)(l) (9,805)
-------- ------- ------- --------- ------- ---------
Total Equity (Deficit) (116) 1,646 (1,646) (116) 62,078 61,962
-------- ------- ------- --------- ------- ---------
Total Liabilities & Equity $ 90,642 $ 9,276 $ 4,000 $ 103,918 $ 2,848 $ 106,766
======== ======= ======= ========= ======= =========
</TABLE>
<PAGE> 18
1. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
(a) Adjustments to reflect the goodwill and other intangible assets, and
additional acquisition costs associated with the acquisition of Burke
Concrete Accessories.
(b) Adjustments to reflect the retirement of Burke Concrete Accessories term
debt.
(c) Adjustment to reflect the line of credit borrowings to purchase Burke
Concrete Accessories.
(d) Removal of Burke Concrete Accessories partners' capital and retained
earnings.
(e) Adjustment to reflect the net increase in cash upon completion of the
Offering after repayment of bank debt, subordinated debt, payment of
preferred stock dividends, redemption of all redeemable preferred stock and
payment of all debt prepayment penalties.
(f) Adjustment to reflect the tax benefit associated with the debt prepayment
penalties and charge-off of deferred loan fees (see note l below).
(g) Adjustment to reflect the payoff of the Company's bank long term debt,
subordinated debt and charge-off of associated deferred loan fees.
(h) Adjustment to reflect the payoff of a portion of the Company's line of
credit.
(i) Adjustment to reflect the retirement of subordinated debt:
<TABLE>
<S> <C>
Payment of offering proceeds $ 18,750
Conversion of debt to common stock 750
--------
$ 19,500
========
</TABLE>
(j) Adjustment to reflect the net increase in common stock and additional
paid-in-capital as follows:
<TABLE>
<S> <C>
Gross offering $ 75,000
Offering costs 6,500
--------
Net proceeds 68,500
Conversion of convertible preferred
stock to common stock 2,250
Conversion of seller notes to common
stock 1,000
--------
Net increase in equity 71,750
Portion of equity increase allocated
to common stock 5
--------
Increase in paid-in-capital $ 71,745
========
</TABLE>
(k) Adjustment to reflect repayment of all redeemable preferred stock.
(l) Adjustment to reflect the net increase in accumulated deficit as follows:
<TABLE>
<S> <C>
Debt prepayment penalties 5,966
Interest charges on debt loan fees 250
Charge-off of deferred loan fees 1,274
-------
7,490
Tax benefit 3,071
-------
Increase in accumulated deficit
before the preferred
stock dividend 4,419
Preferred stock dividends 353
-------
Net increase in accumulated
deficit $ 4,772
=======
</TABLE>
<PAGE> 19
WHITE CAP INDUSTRIES, INC.
PRO FORMA COMBINED INCOME STATEMENT
(UNAUDITED)
FISCAL YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
A-Y Stop Viking Pro Forma Pro Forma Offering Pro Forma
White Cap(a) Supply(a) Supply(b) Distributing Adjustments Combined Adjustments As Adjusted
------------ --------- --------- ------------ ----------- -------- ----------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 101,770 $21,689 $ 6,222 $35,192 $ - $164,873 $ - $164,873
Cost of goods sold 69,740 14,952 3,532 24,528 - 112,752 - 112,752
--------- ------- ------- ------- ------- -------- ------- --------
Gross profit 32,030 6,737 2,690 10,664 - 52,121 - 52,121
--------- ------- ------- ------- ------- -------- ------- --------
Selling, general and
administrative expenses 27,375 4,416 2,294 9,446 (660)(c) 42,871 - 42,871
--------- ------- ------- ------- ------- -------- ------- --------
Income from operations 4,655 2,321 396 1,218 660 9,250 - 9,250
Interest expense, net 2,273 - 182 280 - 2,735 (1,767)(e) 968
--------- ------- ------- ------- ------- -------- ------- --------
Income before provision (benefit)
for income taxes 2,382 2,321 214 938 660 6,515 1,767 8,282
Provision (benefit) for
income taxes (414) 51 2 402 2,630 (d) 2,671 725 (f) 3,396
--------- ------- ------- ------- ------- -------- ------- --------
Net income $ 2,796 $ 2,270 $ 212 $ 536 $(1,970) $ 3,844 $ 1,042 $ 4,886
========= ======= ======= ======= ======= ======== ======= ========
Pro forma net income per common equivalent shares outstanding $ 0.43
========
Pro forma weighted average common equivalent shares outstanding 11,260,981
==========
</TABLE>
<PAGE> 20
WHITE CAP INDUSTRIES, INC.
PRO FORMA COMBINED INCOME STATEMENT
(UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Stop Viking Pro Forma Pro Forma Offering Pro Forma
White Cap(a) Supply(b) Distributing Adjustments Combined Adjustments As Adjusted
------------ --------- ------------ ----------- --------- ----------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $37,311 $ 538 $ 8,982 $ -- $46,831 $ -- $46,831
Cost of goods sold 25,848 287 6,138 -- 32,273 -- 32,273
------- ------- ------- ------- ------- ------- -------
Gross profit 11,463 251 2,844 -- 14,558 -- 14,558
------- ------- ------- ------- ------- ------- -------
Selling, general and
administrative expenses 9,423 185 2,198 154 (c) 11,960 -- 11,960
------- ------- ------- ------- ------- ------- -------
Income from operations 2,040 66 646 (154) 2,598 -- 2,598
Interest expense, net 1,319 18 20 -- 1,357 (1,114)(e) 243
------- ------- ------- ------- ------- ------- -------
Income before provision (benefit)
for income taxes 721 48 626 (154) 1,241 1,114 2,355
Provision (benefit) for
income taxes 318 20 257 (64) 531 435 (f) 966
------- ------- ------- ------- ------- ------- -------
Net income $ 403 $ 28 $ 369 $ (90) $ 710 $ 679 $ 1,389
======= ======= ======= ======= ======= ======= =======
Pro forma net income per common equivalent shares outstanding $ 0.12
=======
Pro forma weighted average common equivalent shares outstanding 11,368,075
==========
</TABLE>
<PAGE> 21
Unaudited Pro Forma Combined Income Statement Adjustments
(a) A-Y Supply results of operations are included in White Cap's income
statement from January 1, 1997 (acquisition date) forward. The A-Y Supply
column only includes the results of operations for the period April 1, 1996
through December 31, 1996.
(b) Stop Supply's fiscal year ended January 31, 1997. Stop Supply was acquired
effective May 1, 1997. Hence for the three months ended June 30, 1997, the
Stop Supply information only includes the results of operations for the
one month period ended April 30, 1997.
(c) Adjustment to reflect the reduction of acquired companies' prior owners
compensation to a normalized ongoing amount reflecting current employment
agreements, which is offset, in part, by the amortization of goodwill and
covenants not to compete associated with recent acquisitions.
<TABLE>
<CAPTION>
Fiscal Year Three Months
Ended Ended
March 31, 1997 June 30, 1997
-------------- -------------
<S> <C> <C>
Reduction in compensation:
A-Y Supply $ 300 $ -
Stop Supply 170 -
Viking Distributing 1,024 54
------ ------
1,494 54
Goodwill amortization:
A-Y Supply (278) (69)
Stop Supply (48) (12)
Viking Distributing (308) (77)
------ ------
(634) (158)
Covenant not to compete amortization:
A-Y Supply (200) (50)
------ ------
Net expense (increase) reduction $ 660 $ (154)
====== ======
</TABLE>
(d) Adjustment to record a tax provision at a combined federal and state rate
of 41% for the entire period presented. A-Y Supply and Stop Supply were S
Corporations prior to being acquired by White Cap. White Cap converted
from S Corporation to C Corporation status in February 1997.
(e) Adjustment to reflect the change in interest expense upon repayment of
outstanding bank and subordinated debt.
(f) Adjustment to reflect the elimination of the tax benefit associated with
the reduction of interest expense due to debt retirement.
<PAGE> 22
WHITE CAP INDUSTRIES, INC.
PRO FORMA COMBINED INCOME STATEMENT
(UNAUDITED)
FISCAL YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Pro Forma Burke
Reflecting Other Concrete Pro Forma Pro Forma
Transactions(a) Accessories Adjustments As Adjusted
---------------- ----------- ----------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $164,873 $ 25,249 $ -- $190,122
Cost of goods sold 112,752 15,041 521 (b) 128,314
-------- -------- -------- --------
Gross profit 52,121 10,208 (521) 61,808
-------- -------- -------- --------
Selling, general and
administrative expenses 42,871 9,022 40 (c) 51,933
-------- -------- -------- --------
Income from operations 9,250 1,186 (561) 9,875
Interest expense, net 968 479 172 (e) 1,619
-------- -------- -------- --------
Income before provision
for income taxes 8,282 707 (733) 8,256
Provision for
income taxes 3,396 -- (11)(d) 3,385
-------- -------- -------- --------
Net income $ 4,886 $ 707 $ (722) $ 4,871
======== ======== ======== ========
Pro forma net income per common equivalent shares outstanding $ 0.43
========
Pro forma weighted average common equivalent shares outstanding 11,260,981
==========
</TABLE>
<PAGE> 23
WHITE CAP INDUSTRIES, INC.
PRO FORMA COMBINED INCOME STATEMENT
(UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma Burke
Reflecting Other Concrete Pro Forma Pro Forma
Transactions(a) Accessories Adjustments As Adjusted
---------------- ----------- ----------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $ 46,831 $ 7,005 $ -- $ 53,836
Cost of goods sold 32,273 4,515 -- 36,788
-------- -------- -------- --------
Gross profit 14,558 2,490 -- 17,048
-------- -------- -------- --------
Selling, general and
administrative expenses 11,960 2,146 (15)(c) 14,091
-------- -------- -------- --------
Income from operations 2,598 344 15 2,957
Interest expense, net 243 124 39 (e) 406
-------- -------- -------- --------
Income before provision for
income taxes 2,355 220 (24) 2,551
Provision for income taxes 966 -- 80 (d) 1,046
-------- -------- -------- --------
Net income $ 1,389 $ 220 $ (104) $ 1,505
======== ======== ======== ========
Pro forma net income per common equivalent shares outstanding $ 0.13
========
Pro forma weighted average common equivalent shares outstanding 11,368,075
==========
</TABLE>
<PAGE> 24
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT ADJUSTMENTS
(a) Pro forma includes the results of operations for White Cap, A-Y Supply,
Stop Supply, and Viking Distributing.
(b) Adjustment to reflect the elimination of a nonrecurring benefit to cost of
goods sold relating to the write-up of rental assets in a previous change
in Burke's ownership.
(c) Adjustment to reflect the reduction of acquired company's management fees
to the former partnership which is offset, in part, by the amortization of
goodwill associated with the acquisition.
<TABLE>
<CAPTION>
FISCAL YEAR THREE MONTHS
ENDED ENDED
MARCH 31, 1997 JUNE 30, 1997
-------------- -------------
<S> <C> <C>
Reduction in managment fees $ 60 $ 40
Goodwill amortization (100) (25)
====== =====
Net expense (increase) reduction $ (40) $ 15
====== =====
</TABLE>
(d) Adjustment to record a tax provision at a combined federal and state rate
of 41% for the entire period presented. Burke Concrete Accessories was a
partnership prior to being acquired by White Cap.
(e) Adjustment to reflect the increase in interest expense related to the
additional borrowings to acquire Burke Concrete Accessories.
