<PAGE>
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): August 13, 1998
PRODUCTION RESOURCE GROUP, L.L.C.
(Exact name of Registrant as Specified in its Charter)
Delaware 333-46235 14-1786937
(State or other (Commission File Number) (IRS Employer Identification No.)
Jurisdiction
of Formation)
539 Temple Hill Road, New Windsor, New York 12553
(Address of Principal Executive Offices) (Zip Code)
(914) 567-5700
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Explanatory Note
The Current Report on Form 8-K of Production Resource Group, L.L.C. (the
"Company" or "PRG"), initially filed with the Securities and Exchange
Commission (the "Commission") on August 27, 1998 is hereby amended by this
Form 8-K/A so as to comply with Item 7 of Form 8-K and the provisions of Rule
3-05 of Regulation S-X. The Form 8-K filed on August 27, 1998 reported, in
Item 2 thereof, the acquisition on August 13, 1998 of Signal Perfection, Ltd.
("SPL"). The consolidated historical financial statements for the most recent
two fiscal years preceding the acquisition of SPL have been included in this
Form 8-K/A. The pro forma effects of the acquisition of SPL on the Company's
financial position at June 30, 1998 and its results of operations for the six
months ended June 30, 1998 and for the most recent fiscal year are also
presented in this Form 8-K/A.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
SPL was acquired by the Company on August 13, 1998. The audited consolidated
financial statements of SPL, as of February 28, 1998 and 1997 and for the
years then ended and the related Report of Independent Auditors are located at
Addendum I.
(b) Pro Forma Financial Information
Pro forma combined balance sheet as of June 30, 1998 and pro forma combined
statements of operations for the six month period ended June 30, 1998 and
for the most recent fiscal year are located at Addendum II.
(c) Exhibits
10.12 Acquisition Agreement dated August 13, 1998 among Signal Perfection,
Ltd. William E. Parry, Chad M. Gillenwater, Sr., Frederick H. Curdts, Philip
DiPaula, Donald Alberg and the Company. (incorporated by reference from Form 8-K
filed on August 27, 1998)
<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.
PRODUCTION RESOURCE GROUP, L.L.C.
October 27, 1998 By /s/ Robert A. Manners
- ----------------- ---------------------
Date Robert A. Manners
Sr. Vice President Business Affairs
and General Counsel
<PAGE>
Addendum I.
Report of Independent Auditors
Board of Directors
Signal Perfection, Ltd.
We have audited the accompanying consolidated balance sheets of Signal
Perfection, Ltd. and affiliate as of February 28, 1998 and 1997 and the
related consolidated statements of income, shareholders' equity, and cash
flows for the years 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Signal
Perfection, Ltd. and affiliate at February 28, 1998 and 1997, and the
consolidated results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.
October 2, 1998
Baltimore, Maryland
ERNST & YOUNG LLP
<PAGE>
Signal Perfection, Ltd.
Consolidated Balance Sheets
February 28
1998 1997
---------------------------
Assets
Current assets:
Cash and cash equivalents $ 564,050 $ 695,506
Marketable securities available-for-sale 64,877 --
Accounts receivable 3,039,135 1,744,528
Unbilled receivables 554,055 270,380
Retention 257,727 159,918
Prepaid income taxes -- 65,995
Note receivable 34,110 54,110
Other current assets -- 1,747
---------------------------
Total current assets 4,513,954 2,992,184
Property and equipment 852,696 818,427
---------------------------
Total assets $5,366,650 $3,810,611
===========================
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
February 28
1998 1997
---------------------------
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued expenses $1,365,770 $ 700,920
Current maturities of long-term debt -- 29,984
Current maturities of notes debt payable to related parties -- 24,146
Deferred revenue 381,257 87,866
Income taxes payable 684,227 --
Deferred income taxes 502,980 806,930
---------------------------
Total current liabilities 2,934,234 1,649,846
Deferred income taxes 15,855 10,178
Long-term debt -- 533,681
Notes payable to related parties -- 125,000
Shareholders' equity
Common stock, no par value, 7000 shares authorized;
6,700 issued and outstanding 77,236 77,236
Retained earnings 2,334,152 1,414,670
Unrealized gain on securities available-for-sale 5,173 --
---------------------------
Total shareholders' equity 2,416,561 1,491,906
---------------------------
Total liabilities and shareholders' equity $5,366,650 $3,810,611
===========================
</TABLE>
<PAGE>
Signal Perfection, Ltd.
Consolidated Statements of Income
Year ended February 28
1998 1997
-----------------------------
Revenue:
Contract revenue $14,044,561 $ 9,851,481
Equipment sales 405,722 205,814
Other 63,796 48,540
-----------------------------
Total revenue 14,514,079 10,105,835
Direct expenses 11,188,732 8,040,532
-----------------------------
Gross margin 3,325,347 2,065,303
General and administrative 1,793,917 1,267,163
-----------------------------
Income before income taxes 1,531,430 798,140
Income tax provision 611,948 323,362
-----------------------------
Net income $ 919,482 $ 474,778
=============================
See accompanying notes.
<PAGE>
Signal Perfection, Ltd.
Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Unrealized Gain on Total
Common Retained Securities Available Shareholders'
Shares Stock Earnings for Sale Equity
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at February 29, 1996 6,700 $ 77,236 $ 939,892 $ -- $1,017,128
1997 net income -- -- 474,778 -- 474,778
---------------------------------------------------------------------------------
Balance at February 28, 1997 6,700 77,236 1,414,670 -- 1,491,906
1998 net income -- -- 919,482 919,482
1998 Unrealized gain -- -- -- 5,173 5,173
--------------------------------------------------------------------------------
Balance at February 28, 1998 6,700 $ 77,236 $2,334,152 $ 5,173 $2,416,561
================================================================================
</TABLE>
See accompanying notes.
<PAGE>
Signal Perfection, Ltd.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended February 28
1998 1997
------------------------------
<S> <C> <C>
Operating activities
Net income $ 919,482 $ 474,778
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 43,113 46,962
Deferred income taxes (298,273) 160,202
Loss on disposal of equipment 3,217 --
Changes in operating assets and liabilities:
Accounts receivable (1,294,607) (586,564)
Unbilled receivables (283,675) (155,255)
Retention (97,809) 174,161
Prepaid income taxes 65,995 161,539
Other current assets 1,747 8,462
Accounts payable and accrued expenses 664,850 411,717
Income taxes payable 684,227 --
Deferred revenue 293,391 (162,667)
------------------------------
Net cash provided by operating activities 701,658 533,335
Investing activities
Notes originated -- (45,000)
Payments on notes receivable 20,000 --
Purchases of marketable securities (59,704) --
Proceeds from sale of assets 10,000 --
Purchase of property and equipment (90,599) (55,631)
------------------------------
Net cash used in investing activities (120,303) (100,631)
Financing activities
Issuance of long-term debt -- 20,000
Repayments of long-term debt (563,665) (63,190)
Repayments of notes payable to related parties (149,146) (23,121)
------------------------------
Net cash used in financing activities (712,811) (66,311)
------------------------------
Increase (decrease) in cash and cash equivalents (131,456) 366,393
Cash and cash equivalents at beginning of year 695,506 329,113
------------------------------
Cash and cash equivalents at end of year $ 564,050 $ 695,506
==============================
</TABLE>
See accompanying notes.
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements
February 28, 1998 and 1997
1. Summary of Significant Accounting Policies
Description of Business
Signal Perfection, Ltd. (the "Company") was incorporated in Maryland in
February, 1992. The Company is engaged in the design, implementation and
servicing of audio/visual and other low voltage electronic systems at large
facilities throughout the United States.
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and
its affiliate, CWF, LLC. CWF, LLC is a special purpose entity formed in 1998
by the shareholders of the Company to own the land and building currently
utilized in the Company's operations. EITF 96-21, Implementation Issues In
Accounting For Leasing Transactions involving Special-Purpose Entities,
requires the consolidation of special-purpose entities. Intercompany
transactions and balances have been eliminated in consolidation.
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.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Concentration of Credit Risk
The Company performs credit evaluations of the financial condition of all new
customers. Collateral for the services performed varies from contract to
contract. Approximately 85% of all customers pay on average 5% of the contract
as collateral. Receivables are generally due within 30 days.
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Accounting for Contracts
Contracts generally are performed under fixed price arrangements. The lengths
of the Company's contracts vary but are normally less than one year. Revenues
are recognized on contracts as services are performed.
Provisions for estimated losses on uncompleted contracts are recorded in the
period in which such losses are determined.
The asset, unbilled receivables, represents contract costs incurred to date
and estimated earned contract gross profit, in excess of amounts billed. The
liability, deferred revenue, represents amounts billed in excess of contract
costs incurred to date and estimated contract gross profit.
Marketable Securities Available for Sale
The Company maintains investments in stock and mutual funds that are
classified as available-for-sale investments and recorded at fair market
value. Unrealized gains and losses are reported in a separate component of
shareholders' equity. Realized gains and losses are included in other income.
Interest and dividends are included in other income.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.
Income Taxes
Income taxes are calculated using the liability method which requires the
recognition of deferred tax liabilities and assets based on differences
between the financial reporting and tax basis of assets and liabilities and
are measured using the enacted tax rates and laws that will be in effect when
the differences are expected to reverse.
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements (continued)
2. Marketable Securities
On February 28, 1998, available-for-sale securities consisted of the
following:
Gross Estimated
Unrealized Fair
Cost Gains Value
---------------------------------------
Stocks $ 5,958 $ 455 $ 6,413
Mutual funds 53,746 4,718 58,464
---------------------------------------
$59,704 $ 5,173 $64,877
=======================================
3. Costs and Estimated Earnings on Uncompleted Contracts
The status of uncompleted contracts is as follows:
1998 1997
------------------------------
Costs incurred on uncompleted contracts $ 4,010,846 $ 7,019,414
Estimated earnings 1,302,382 2,089,404
Less: Billings to date (5,140,430) (8,926,304)
------------------------------
$ 172,798 $ 182,514
==============================
Included in the balance sheet under the
following captions are:
Unbilled receivables $ 554,055 $ 270,380
Deferred revenue (381,257) (87,866)
------------------------------
$ 172,798 $ 182,514
==============================
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements (continued)
4. Property and Equipment
The components of property and equipment are as follows:
1998 1997
-------------------------
Land $130,000 $130,000
Building 639,522 639,522
Furniture and equipment 121,885 107,240
Vehicles 75,954 54,647
-------------------------
967,361 931,409
Accumulated depreciation 114,665 112,982
-------------------------
$852,696 $818,427
=========================
5. Long-Term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
1998 1997
------------------------
<S> <C> <C>
Mortgage payable to bank secured by the building and land,
bearing interest at 8.5% maturing in September 2015. Paid
in full in February 1998. $ -- $533,971
Note payable to bank secured by a vehicle, bearing
interest at 8.11%, maturing in February
2000. Paid in full in February 1998. -- 18,421
Note payable to a financing company secured by a vehicle,
bearing interest at 9.95%, maturing in February 1999.
Paid in full in February 1998. -- 11,273
------------------------
-- 563,665
Less: current maturities -- 29,984
------------------------
$ -- $533,681
========================
</TABLE>
Total interest paid and expensed in 1998 and 1997 was $64,360 and $62,066,
respectively.
The Company has an unsecured operating line of credit arrangement with a bank,
under which the Company may borrow up to $500,000.
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements (continued)
6. Notes Payable to Related Parties
Notes payable to related parties consisted of the following:
<TABLE>
<CAPTION>
1998 1997
--------------------------
<S> <C> <C>
Notes payable to the officers of the Company bearing
interest at 10% $ -- $ 20,346
Note payable to an officer bearing interest at 10%,
maturing in May 1997 -- 3,800
Subordinated notes payable to the officers of the Company
bearing interest at 10% -- 125,000
--------------------------
-- 149,146
Less: current maturities -- 24,146
==========================
$ -- $125,000
==========================
</TABLE>
All related party notes were paid in full prior to February 28, 1998.
7. Income Taxes
The components of the income tax (benefit) provision are as follows:
1998 1997
----------------------------
Current:
Federal $ 745,240 $ 133,881
State 164,981 29,279
----------------------------
910,221 163,160
Deferred:
Federal (244,210) 131,165
State (54,063) 29,037
----------------------------
(298,273) 160,202
----------------------------
$ 611,948 $ 323,362
============================
Total income taxes paid in 1998 and 1997 were $160,000 and $233,412,
respectively.
<PAGE>
Signal Perfection, Ltd.
Notes to Consolidated Financial Statements (continued)
7. Income Taxes (continued)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities are as follows:
1998 1997
-------------------------
Deferred tax liabilities:
Use of completed contract method to recognize
revenue for tax purposes $502,980 $806,930
Tax over book depreciation 15,855 10,178
-------------------------
$518,835 $817,108
=========================
8. Year 2000 Issue (unaudited)
The Company has developed a plan to modify its information technology to be
ready for the year 2000 and has begun converting critical data processing
systems. The Company currently expects the project to be substantially
completed by 1999. The Company does not expect this project to have a
significant effect on operations.
<PAGE>
Addendum II.
Pro Forma Combined Financial Information
In 1997 and 1998, PRG completed the following additional acquisitions
(collectively referred to as "Other Acquisitions"):
In June 1997, PRG acquired substantially all the assets and assumed
certain liabilities of Design Dynamics, Inc. ("DDE").
In August 1997, PRG acquired substantially all the assets and assumed
certain liabilities of five companies operating under the name of Bash
("Bash").
In January 1998, PRG acquired substantially all the assets and
assumed certain liabilities of Pro-Mix, Inc. ("Pro-Mix").
In June 1998, PRG acquired Light and Sound Designs Holdings Limited
("Holdings"). In addition, PRG acquired substantially all the assets
and assumed certain liabilities of Production Arts Lighting Inc. and
affiliated companies (collectively "Production Arts").
In July 1998, PRG acquired substantially all the assets and assumed
certain liabilities of CBE Events and Exhibits, Inc. ("CBE").
In December 1997, PRG issued $100,000,000 of Senior Subordinated Notes (the
"Offering"). The proceeds from the Offering were used to repay existing bank
indebtedness, to purchase the net assets of Pro-Mix and for working capital
requirements.
The following unaudited pro forma combined statements of operations for the six
month period ended June 30, 1998 and for the year ended December 31, 1997 give
effect to the SPL acquisition, Other Acquisitions and the Offering. In addition
they are based on the historical financial statements of the Company, SPL and
the Other Aquisitions. The financial statements for Holdings are for the year
ended March 31, 1998 and for the period January 1, 1998 to June 19, 1998. The
historical results of operations of Holdings have been adjusted to conform to
generally accepted accounting principles of the United States and have been
translated into United States Dollars based upon appropriate exchange rates. The
historical results of operations of SPL are for the year ended February 28, 1998
and for the six months ended June 30, 1998. The unaudited pro forma combined
statement of operations give effect to the combinations under the purchase
method of accounting.
The unaudited pro forma combined balance sheet as of June 30, 1998 reflects the
effect of the acquisition of SPL and CBE on the Company's balance sheet. The
effect of the acquisitions of Pro-Mix, Holdings and Production Arts, which
closed on January 2, June 19 and June 30, 1998, respectively, was reflected in
the Company's June 30, 1998 balance sheet which was included in the Form 10-Q
filed for such period.
The unaudited pro forma combined statements of operations have been prepared by
the management of the Company, SPL and the Other Acquisitions based upon
historical information included herein and other financial information. These
pro forma statements do not purport to be indicative of the combined results of
operations or financial position which would have been achieved had the
transactions described above taken place at the dates indicated and should not
be construed as representative of the Company's combined financial position or
combined results of operations for any future date or period. The pro forma
combined statements of operations should be read in conjunction with (i) the
Company's historical financial statements and notes contained in the Company's
registration statement on Form S-4 and the Company's quarterly report on Form
10-Q and (ii) the historical financial statements of SPL and the Other
Acquisitions contained in Forms 8-K filed by the Company in connection with its
various acquisitions.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Statement of Operations
Year ended December 31, 1997
($ In thousands)
<TABLE>
<CAPTION>
PRG OTHER SPL
ACQUISITIONS
------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ 75,180 $ 98,225 $ 14,514
Direct production expenses:
Direct production costs 46,131 53,699 11,189
Depreciation expense 6,181 7,067 --
------------------------------------------------------------------
52,312 60,766 11,189
------------------------------------------------------------------
Gross profit 22,868 37,459 3,325
Selling, general and administrative expenses 16,185 23,965 1,687
Other depreciation and amortization 2,182 1,091 43
Non recurring compensation expense 2,125 -- --
------------------------------------------------------------------
Operating profit 2,376 12,403 1,595
Interest expense 3,956 724 64
Interest (income) (117) (82)
------------------------------------------------------------------
Income (loss) from continuing operations before income taxes,
extraordinary item and minority interest (1,463) 11,761 1,531
Provision for income taxes 392 1,590 612
------------------------------------------------------------------
Income (loss) from continuing operations (1,855) 10,171 919
Discontinued operations:
Loss from operations of discontinued
Themed Attraction Permanent Installation Business (5,302) -- --
------------------------------------------------------------------
Income (loss) before minority interest and extraordinary item (7,157) 10,171 919
Minority interest
Extraordinary item (614) --
--------------------- --------------------- ----------------------
Net income (loss) $ $ $
(7,771) 10,171 919
==================================================================
</TABLE>
<TABLE>
<CAPTION>
OTHER ACQUISITIONS SPL PRO FORMA PRO FORMA
PRO FORMA ADJUSTMENTS ADJUSTMENTS COMBINED
------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ $ $ 187,919
Direct production expenses:
Direct production costs 111,019
Depreciation expense 13,248
-----------------------------------------------------------------
124,267
Gross profit -----------------------------------------------------------------
63,652
Selling, general and administrative expenses
Other depreciation and amortization (1) (887) 40,950
Non recurring compensation expense (2) 1,154 (6) 193 4,663
(3) (2,125) --
Operating profit -----------------------------------------------------------------
1,858 (193) 18,039
Interest expense
Interest (income) (4) 10,456 (7) 540 15,740
(199)
Income (loss) from continuing operations before income taxes, -----------------------------------------------------------------
extraordinary item and minority interest (8,598) (733) 2,498
Provision for income taxes
2,594
Income (loss) from continuing operations -----------------------------------------------------------------
(8,598) (733) (96)
Discontinued operations:
Loss from operations of discontinued
Themed Attraction Permanent Installation Business (5,302)
-----------------------------------------------------------------
Income (loss) before minority interest and extraordinary item (8,598) (733) (5,398)
Minority interest (5) (126) (126)
Extraordinary item (614)
-----------------------------------------------------------------
Net income (loss) $ (8,724) $ (733) $
(6,138)
=================================================================
</TABLE>
Other Acquisitions
- ------------------
1. To reflect the reduction in certain executive compensation of $12,000,
$495,000 and $380,000 from historical levels to amounts payable under
employment contracts entered into in connection with the acquisitions of the
net assets of Design Dynamics, Bash and Pro-Mix respectively.
2. To record the estimated increase in goodwill amortization as follows:
Acquisition Amortization Period Amount
----------- ------------------- ------
DDE 15 years $ 84,000
Bash 15 years $ 484,000
Pro-Mix 25 years $ 44,000
Holdings 25 years $ 300,000
Production Arts 25 years $ 195,000
CBE 15 years $ 47,000
----------
$1,154,000
==========
3. To eliminate non-recurring compensation expense paid to the two
shareholders of Bash and a shareholder of Design Dynamics upon their
execution of employment agreements with the Company.
4. Reflects adjustments to interest expense as follows.
<TABLE>
<CAPTION>
<S> <C>
Interest on Senior Subordinated Notes $11,500,000
Elimination of interest expense on credit facility indebtedness (3,551,000)
Elimination of interest expense related to acquisitions (360,000)
Amortization of deferred financing costs related to Offering of Notes 370,000
Interest expense on borrowings to fund acquisitions 2,497,000
-----------
$10,456,000
===========
</TABLE>
5. To record minority interest related to the Holdings acquisition for the
period.
SPL Acquisition
- ---------------
6. To record the estimated goodwill amortization attributable to the
acquisition. Goodwill for SPL is being amortized over twenty five years.
7. To record the estimated effect of the interest expense on borrowings
incurred by PRG to fund the acquisition of SPL.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Statements of Operations
($ In thousands)
<TABLE>
<CAPTION>
PRG OTHER ACQUISITIONS SPL
FOR THE SIX MONTHS FOR THE SIX FOR THE SIX
ENDED JUNE 30, 1998 MONTHS ENDED MONTHS ENDED
JUNE 30, 1998 JUNE 30, 1998
--------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ 55,365 $ 32,285 $ 9,514
Direct production expenses:
Direct production costs 32,548 19,534 7,408
Depreciation expense 4,761 2,269 --
--------------------------------------------------------------
37,309 21,803 7,408
--------------------------------------------------------------
Gross profit 18,056 10,482 2,106
Selling, general and administrative expenses 13,463 6,292 1,365
Other depreciation and amortization 2,247 139 23
--------------------------------------------------------------
Operating profit 2,346 4,051 718
Interest expense 6,233 192 27
Interest (income) (433) (11)
--------------------------------------------------------------
Income (loss) before income taxes and minority interest (3,454) 3,870 691
Provision for income taxes 193 497 283
--------------------------------------------------------------
Income (loss) before minority interest (3,647) 3,373 408
Minority interest (11)
--------------------------------------------------------------
Net income (loss) $ (3,658) $ 3,373 $ 408
==============================================================
</TABLE>
<TABLE>
<CAPTION>
OTHER ACQUISITIONS SPL PRO FORMA COMPANY PRO
PRO FORMA ADJUSTMENTS ADJUSTMENTS FORMA
---------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ $ $ 97,164
Direct production expenses:
Direct production costs 59,490
Depreciation expense 7,030
---------------------------------------------------------------------------
66,520
---------------------------------------------------------------------------
Gross profit 30,644
Selling, general and administrative expenses 21,120
Other depreciation and amortization (8) 259 (10) 96 2,764
---------------------------------------------------------------------------
Operating profit (96) 6,760
Interest expense (9) 1,200 (11) 288 7,940
Interest (income) (444)
---------------------------------------------------------------------------
Income (loss) before income taxes and minority intere (1,459) (384) (736)
Provision for income taxes 973
---------------------------------------------------------------------------
Income (loss) before minority interest (1,459) (384) (1,709)
Minority interest (21) (32)
---------------------------------------------------------------------------
Net income (loss) $ (1,480) (384) $ (1,741)
===========================================================================
</TABLE>
8. To record the estimated goodwill amortization attributable to the
acquisitions of Holdings, Production Arts and CBE.
9. To record the estimated effect of interest expense on borrowings incurred
by the Company to fund the acqusitions of Holdings, Production Arts and
CBE.
10. To record the estimated goodwill amortization attributable to the
acquisition of SPL. Goodwill is amortized over a period of twenty five
years for SPL.
11. To record the estimated effect of interest expense on borrowings incurred
by the Company to fund the acquisition of SPL.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Balance Sheet
June 30, 1998
($ In thousands)
<TABLE>
<CAPTION>
PRG CBE SPL
June 30, June 30, June 30, Pro Forma Company Pro
1998 1998 1998 Adjustments Forma
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 16,631 $ 771 $ 398 (14) $ 208 $ 18,008
Accounts Receivable - net 26,240 1,930 3,106 31,276
Unbilled receivables 1,015 1,015
Inventories 9,481 -- 472 9,953
Other current asset 3,215 54 376 3,645
------------------------------------------------------------------
Total current assets 55,567 2,755 5,367 208 63,897
Property and equipment - net 76,060 151 105 (14) (44) 76,272
Goodwill - net 28,099 -- -- (12) 5,240 33,339
Other assets 10,251 10 774 (14) (774) 10,261
------------------------------------------------------------------
Total assets $ 169,977 $ 2,916 $ 6,246 $ 4,630 $ 183,769
==================================================================
Liabilities and Members' Equity
Current liabilities
Current portion of long-term debt $ 317 $ 8 $ -- $ $ 325
Accounts payable 15,500 492 2,111 18,103
Payoll and sales taxes payable 2,716 62 81 2,859
Deferred revenue 5,708 -- -- 5,708
Other current liabilities 8,609 91 451 (14) (91) 9,060
------------------------------------------------------------------
Total current liabilities 32,850 653 2,643 (91) 36,055
Long-term debt
Senior Subordinated Notes 100,000 -- -- 100,000
Credit Facilities 32,338 -- -- (13) 9,770 42,108
Other long-term debt 3,634 11 600 (14) (600) 3,645
Minority interest 791 -- -- 791
Members' equity 364 -- -- (14) 806 1,170
Common stock -- 1 77 (14) (78) --
Additional paid-in-capital -- 23 (14) (23) --
Retained Earnings -- 2,228 2,926 (14) (5,154) --
------------------------------------------------------------------
$ 169,977 $ 2,916 $ 6,246 $ 4,630 $ 183,769
==================================================================
</TABLE>
12. To record the estimated goodwill attributable to the acquisitions of CBE
($701,000) and SPL ($4,539,000).
13. To record the additional borrowings incurred to fund the acquisitions of
CBE ($3,000,000) and SPL ($6,770,000).
14. To adjust for certain assets not purchased and liabilities not assumed and
to adjust memebers' equity for the acquisitions of CBE and SPL.
