<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): July 31, 1998
PRODUCTION RESOURCE GROUP, L.L.C.
(Exact name of Registrant as Specified in its Charter)
Delaware 333-46235 14-1786937
(State or other Jurisdiction (Commission File Number) (IRS Employer
of Formation) Identification No.)
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 10, 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 10, 1998 reported, in Item 2
thereof, the acquisition on July 31, 1998 of CBE Exhibits and Events, Inc.
("CBE"). The combined historical financial statements for the most recent two
fiscal years preceding the acquisition of CBE have been included in this Form
8-K/A. The pro forma effects of the acquisition of CBE on the Company's
financial position at June 30, 1998 and 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 Statement, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
CBE was acquired by the Company on July 31, 1998. The audited financial
statements of CBE, and the related Independent Accountants' Report as of
December 31, 1997 and 1996 and for the years then ended are located at
Addendum I.
(b) Pro Forma Financial Information
Pro forma combined balance sheet as of June 30, 1998 and statements of
operations for the six month period ended June 30, 1998 and pro forma combined
for the year ended December 31, 1997 are located at Addendum II.
(c) Exhibits
10.11 Acquisition Agreement dated July 31, 1998 among CBE Exhibits and Events,
Incorporated, Jeffrey Allen Marmack and the Company (incorporated by reference
from Form 8-K filed on July 31, 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 13, 1998 By /s/ Robert A. Manners
- ---------------- -----------------------------------
Date Robert A. Manners
Sr. Vice President Business Affairs
and General Counsel
<PAGE>
Addendum I.
Report of Independent Accountants
---------------------------------
Board of Directors
C B E Exhibits and Events, Inc.
We have audited the accompanying balance sheets of C B E Exhibits and Events,
Inc. as of December 31, 1997 and 1996, and the related statements of income and
retained earnings 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 financial position of C B E Exhibits and Events, Inc.
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
October 9, 1998 HAM, LANGSTON & BREZINA, LLP
Houston, Texas
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
BALANCE SHEET
December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
------ ---------- ----------
<S> <C> <C>
Current assets:
Accounts receivable, net $1,987,169 $1,033,307
Prepaid expenses 8,919 --
Inventory 25,000 25,000
---------- ----------
Total current assets 2,021,088 1,058,307
Property and equipment, net 164,852 90,907
Other assets 8,859 9,152
---------- ----------
Total assets $2,194,799 $1,158,366
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------
<S> <C> <C>
Current liabilities:
Book overdraft $ 126,408 $ 75,124
Note payable 320,000 200,000
Current portion of long-term debt -- 4,941
Current portion of capital lease
obligation 6,885 --
Accounts payable 278,393 244,391
Accrued liabilities 23,130 95,847
State income tax payable 25,138 --
Deferred state income taxes 56,000 27,000
---------- ----------
Total current liabilities 835,954 647,303
Long-term debt, net of current portion -- 11,445
Capital lease obligation, net of current portion 13,885 --
Due to stockholder -- 80,000
---------- ----------
Total liabilities 849,839 738,748
---------- ----------
Commitments and contingencies (Notes 1, 6 and 8)
Stockholder's equity:
Common stock; $0.10 par value; 1,000,000
shares authorized; 10,000 shares issued and
outstanding 1,000 1,000
Additional paid-in capital 23,492 23,492
Retained earnings 1,320,468 395,126
---------- ----------
Total stockholder's equity 1,344,960 419,618
---------- ----------
Total liabilities and stockholder's
equity $2,194,799 $1,158,366
========== ==========
</TABLE>
See notes to financial statements
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
for the years ended December 31, 1997 and 1996
----------
1997 1996
----------- -----------
Service revenue $ 7,848,000 $ 3,981,578
Direct cost of production 5,190,354 2,510,218
----------- -----------
Gross profit 2,657,646 1,471,360
Selling, general and administrative expenses 1,202,325 932,788
Depreciation and amortization 34,333 12,327
----------- -----------
Income from operations 1,420,988 526,245
Other income and (expense):
Interest income 17,235 10,039
Interest expense (15,305) (3,129)
----------- -----------
Income before provision for state income tax 1,422,918 533,155
Provision for state income tax 65,138 24,000
----------- -----------
Net income 1,357,780 509,155
Distributions to the stockholder (432,438) (312,254)
Retained earnings, beginning of year 395,126 198,225
----------- -----------
Retained earnings, end of year $ 1,320,468 $ 395,126
=========== ===========
See notes to financial statements.
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
STATEMENT OF CASH FLOWS
for the years ended December 31, 1997 and 1996
----------
1997 1996
----------- -----------
Cash flows from operating activities:
Net income $ 1,357,780 $ 509,155
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation expense 34,040 12,033
Amortization expense 293 293
Deferred state income tax 29,000 24,000
Changes in operating assets and liabilities:
Accounts receivable, net (953,862) (581,068)
Prepaid expenses and other assets (8,919) --
Inventory -- (15,000)
Accounts payable 34,002 122,571
Accrued liabilities (72,717) 68,499
State income tax payable 25,138 --
Book overdraft 51,284 71,684
----------- -----------
Net cash provided by operating
activities 496,039 212,167
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (81,403) (28,068)
----------- -----------
Net cash used in investing activities (81,403) (28,068)
----------- -----------
Cash flows from financing activities:
Net proceeds from notes payable 920,000 200,000
Payments on notes payable (816,386) (3,952)
Payments on capital lease obligations (5,812) --
Distributions to the stockholder (432,438) (312,254)
Repayment of amount due to stockholder (80,000) (67,893)
----------- -----------
Net cash used in financing activities (414,636) (184,099)
----------- -----------
Net increase in cash and cash equivalents -- --
Cash and cash equivalents, beginning of year -- --
----------- -----------
Cash and cash equivalents, end of year $ -- $ --
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 15,305 $ 3,129
=========== ===========
Cash paid for income taxes $ -- $ --
=========== ===========
See notes to financial statements.
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
NOTES TO FINANCIAL STATEMENTS
----------
1. Organization and Significant Accounting Policies
------------------------------------------------
C B E Exhibits and Events, Inc. (the "Company") provides support
services to exhibitors at trade shows and other major events. These
services include show and event logistic support, booth and exhibit
construction and storage, and show assembly of booths and exhibits. The
Company provides services to a limited number of major customers
located primarily in Houston, Texas. (See Note 8)
Management 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 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. These estimates mainly
involve the useful lives of property and equipment, the valuation of
deferred tax assets and the collectibility of accounts receivable.
Revenue Recognition
-------------------
Revenue is recognized at the time services are performed.
Concentrations of Credit Risk
-----------------------------
Financial instruments which subject the Company to concentrations of
credit risk include cash and accounts receivable. The Company maintains
its cash in well known banks selected based upon management's
assessment of the banks' financial stability and capability. Balances
periodically exceed the $100,000 federal depository insurance limit;
however, the Company has not experienced any losses on deposits.
Accounts receivable generally arise from sales of services to
technology and energy companies operating in and around Houston, Texas.
Collateral is generally not required for credit granted.
Cash Equivalents
----------------
For purposes of reporting cash flows, the Company considers all
short-term investments with an original maturity of three months or
less to be cash equivalents.
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
----------
1. Organization and Significant Accounting Policies, continued
-----------------------------------------------------------
Property and Equipment
----------------------
Property and equipment is stated at cost. Depreciation is computed
principally by the straight-line method over the estimated useful lives
of 5 to 7 years for office furniture and equipment, and 3 years for
transportation and other equipment.
Income Taxes
------------
For Federal income tax reporting purposes the Company has elected to be
taxed as an S corporation. Accordingly, all income and expenses are
allocated and taxed directly to the Company's sole stockholder and no
provision for federal income taxes is included in the financial
statements.
The Company uses the liability method in accounting for state income
taxes. Under this method, deferred tax assets and liabilities are
determined based on temporary differences between financial reporting
and income tax carrying amounts 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.
Fair Value of Financial Instruments
-----------------------------------
The Company includes fair value information in the notes to financial
statements when the fair value of its financial instruments is
different from the book value. When the book value approximates fair
value, no additional disclosure is made.
Recently Issued Pronouncements
------------------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income". SFAS No. 130 establishes standards for reporting and display
of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. It
requires (a) classification of the components of other comprehensive
income by their nature in a financial statement and (b) the display of
the accumulated balance of the other comprehensive income separate from
retained earnings and additional paid-in capital in the equity section
of a statement of financial position. SFAS 130 is effective for years
beginning after December 15, 1997 and is not expected to have a
material impact on financial position or results of operations.
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
----------
2. Property and Equipment
----------------------
Property and equipment at December 31, 1997 and 1996 consists of the
following:
1997 1996
--------- ---------
Furniture and fixtures $ 835 $ 835
Machinery and equipment 41,492 13,983
Transportation equipment 55,456 48,069
Leasehold improvements 73,089 --
--------- ---------
170,872 62,887
Less accumulated depreciation (48,020) (13,980)
--------- ---------
122,852 48,907
Land 42,000 42,000
--------- ---------
Total $ 164,852 $ 90,907
========= =========
3. Book Overdraft
--------------
The book overdraft at December 31, 1997 and 1996 consists of checks
drawn against the Company's operating account in excess of cash on
hand. These book overdrafts were covered in January 1998 and 1997
through collections of accounts receivable.
4. Note Payable
------------
Note payable at December 31, 1997 and 1996 consists of draws under a
$425,000 revolving line of credit with a bank. The note bears interest
at the bank's prime rate (8.5% at December 31, 1997) plus 1.5% per
year and is due August 10, 1998. This note is collateralized by
accounts receivable and the personal guarantee of the Company's sole
stockholder.
5. Income Taxes
------------
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 state
income tax purposes.
The composition of deferred tax liabilities and the related tax
effects at December 31, 1997 and 1996 are as follows:
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
----------
<TABLE>
<CAPTION>
1997 1996
-------- -------
<S> <C> <C>
Effect of the use of the cash method of accounting for tax reporting
purposes............................................................. $ 72,000 $27,000
Other.................................................................. (16,000) --
-------- -------
Deferred tax liability................................................. $ 56,000 $27,000
-------- -------
-------- -------
The difference between the state income tax expense reported in the
accompanying statement of operations and the amount that would result
if the Texas state income-based franchise tax rate of 4.5% were
applied to pre-tax income is as follows:
<CAPTION>
PERCENTAGE PERCENTAGE
1997 OF PRE-TAX 1996 OF PRE-TAX
AMOUNT LOSS AMOUNT LOSS
------- ------------ ------- -------------
<S> <C> <C> <C> <C>
Provision for state income tax at statutory rate......... $64,031 4.5% $23,991 4.5%
Non-deductible expenses and other........................ 1,107 0.0 9 0.0
------- ---- ------- ----
Total.................................................... $65,138 4.5% $24,000 4.5%
------- ---- ------- ----
------- ---- ------- ----
</TABLE>
Income tax expense for the years ended December 31, 1997 and 1996 consists of
the following:
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Current state income-based franchise tax expense........................ $36,138 $ --
Deferred state income-based franchise tax expense....................... 29,000 24,000
------- -------
$65,138 $24,000
------- -------
------- -------
</TABLE>
6. Lease Commitments
-----------------
During 1997 and 1996 the Company acquired certain office equipment
under leases accounted for as capital leases. Amortization of leased
assets is included in depreciation and amortization expense. Included
in property and equipment at December 31, 1997 and 1996 are the
following assets held under capital leases:
1997 1996
------- -------
Machinery and equipment $26,786 $ --
Accumulated amortization 3,037 --
------- -------
Assets under capital leases, net $23,749 $ --
======= =======
The Company also leases office and warehouse facilities and certain
office equipment under operating leases. Office and warehouse space is
leased from the Company's sole stockholder under a three year lease
with a single one-year renewal option. Rental expense for operating
leases was $174,032 and $105,323 during the years ended December 31,
1997 and 1996, respectively. Included in 1997 rental expense was
$71,344 paid to the Company's sole stockholder.
Minimum lease payments due under leases with original lease terms of
greater than one year and expiration dates subsequent to December 31,
1997 are summarized as follows:
<PAGE>
C B E EXHIBITS AND EVENTS, INC.
NOTES TO FINANCIAL STATEMENTS, Continued
----------
6. Lease Commitments, continued
----------------------------
<TABLE>
<CAPTION>
Operating Leases
-------------------------------
Year Ended Capital Office and Office
December 31, Leases Warehouse Equipment Total
------------ ------ --------- --------- -----
<S> <C> <C> <C> <C>
1998 $ 9,581 $106,944 $ 2,749 $109,693
1999 9,581 106,944 2,749 109,693
2000 5,478 44,590 2,062 46,652
2001 1,552 -- -- --
-------- -------- -------- --------
Total minimum lease
payments 26,192 $258,478 $ 7,560 $266,038
======== ======== ======== ========
Less amount representing
interest 5,422
--------
Present value of minimum
lease payments 20,770
Less current portion 6,885
--------
Long-term portion $ 13,885
========
</TABLE>
7. Employee Benefit Plan
---------------------
Effective January 1, 1995, the Company adopted the C B E Exhibits and
Events, Inc. Profit Sharing Plan (the "Plan"), a defined contribution
plan that covers substantially all employees that have completed one
year of service. Company contributions to the Plan are discretionary
and the Company made contributions of $58,098 and $69,103 for the years
ended December 31, 1997 and 1996, respectively.
8. Major Customers
---------------
During the years ended December 31, 1997 and 1996, one customer
accounted for approximately 85% of the Company's service revenue. Loss
of that customer would have a serious adverse effect on the Company's
business. Accounts receivable from the Company's largest customer were
$1,571,000 and $713,000 at December 31, 1997 and 1996, respectively.
9. Subsequent Events
-----------------
Effective July 31, 1998, Production Resource Group, L.L.C. ("PRG"),
acquired substantially all assets and assumed substantially all
liabilities of the Company, pursuant to a purchase and sale agreement
(the "Agreement") between the Company, its sole stockholder and PRG.
Under the Agreement, PRG paid the Company $3,000,000 in cash and agreed
to make additional payments of up to $7,000,000 based upon the
satisfaction of certain performance targets.
10. Non-Cash Investing and Financing Activities
-------------------------------------------
During the year ended December 31, 1997, the Company incurred capital
lease obligations of $26,786 to acquire certain warehouse and office
equipment.
<PAGE>
Addendum II.
Pro Forma Combined Financial Information
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 (i) the acquisition of Light and Sound Design Holdings Limited
("Holdings") on June 19, 1998 and (ii) the acquisition of Production Arts on
June 30, 1998 and (iii) the acquisition of CBE on July 31, 1998 as if such
acquisitions occurred on the first day of the periods covered by the statement
of operations.
The unaudited pro forma combined balance sheet as of June 30, 1998 reflects
the effect of the acquisition of CBE on the Company's balance sheet. The effect
of the acquisitions of Holdings and Production Arts, which closed on 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 are based on the
historical financial statements of the Company and the historical results of
operations for Holdings, Production Arts and CBE. 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 unaudited pro forma combined statement of
operations gives effect to the combinations under the purchase method of
accounting.
The unaudited pro forma combined statements of operations have been prepared by
the management of the Company, Holdings, Production Arts and CBE based upon
historical information included herein and other financial information. These
pro forma statements do not purport to be indicative of the 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 financial position or results of
operations for any future date or period.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Statements of Operations
($ In thousands)
<TABLE>
<CAPTION>
PRG Holdings Production Arts
For the year ended For the year ended For the year ended
December 31, 1997 March 31, 1998 December 31, 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
Revenues $ 75,180 $ 31,638 $ 25,787
Direct production expenses:
Direct production costs 46,131 18,133 15,873
Depreciation expense 6,181 2,607 1,231
------------------ ------------------ ------------------
52,312 20,740 17,104
------------------ ------------------ ------------------
Gross profit 22,868 10,898 8,683
Selling, general and administrative expenses 16,185 6,854 6,106
Other depreciation and amortization 2,182 518 270
Non recurring compensation expense 2,125 -- --
------------------ ------------------ ------------------
Operating profit 2,376 3,526 2,307
Interest expense 3,956 10 339
Interest (income) (117) (40) (8)
------------------ ------------------ ------------------
Income (loss) from continuing operations before income taxes, (1,463) 3,556 1,976
extraordinary item and minority interest
Provision for income taxes 392 1,343 159
------------------ ------------------ ------------------
Income (loss) from continuing operations (1,855) 2,213 1,817
Discontinued operations:
Loss from operations of discontinued
Themed Attraction Permanent Installation Business (5,302) -- --
------------------ ------------------ ------------------
Income (loss) before minority interest and extraordinary item (7,157) 2,213 1,817
Minority interest -- -- --
Extraordinary item (614) -- --
================== ================== ==================
Net income (loss) $ (7,771) $ 2,213 $ 1,817
================== ================== ==================
</TABLE>
<TABLE>
<CAPTION>
CBE
For the year ended Pro Forma Company
December 31, 1997 Adjustments Pro Forma
------------------ ----------- -----------
<S> <C> <C> <C>
Revenues $ 7,848 $ $ 140,453
Direct production expenses:
Direct production costs 5,190 85,327
Depreciation expense -- 10,019
------------------ ----------- -----------
5,190 95,346
------------------ ----------- -----------
Gross profit 2,658 45,107
Selling, general and administrative expenses 1,202 30,347
Other depreciation and amortization 34(1) 542 3,546
Non recurring compensation expense -- 2,125
------------------ ----------- -----------
Operating profit 1,422 (542) 9,089
Interest expense 15(3) 2,497 6,817
Interest (income) (17) (182)
------------------ ----------- -----------
Income (loss) from continuing operations before income taxes, 1,424 (3,039) 2,454
extraordinary item and minority interest
Provision for income taxes 65 1,959
------------------ ----------- -----------
Income (loss) from continuing operations 1,359 (3,039) 495
Discontinued operations:
Loss from operations of discontinued
Themed Attraction Permanent Installation Business -- (5,302)
------------------ ----------- -----------
Income (loss) before minority interest and extraordinary item 1,359 (3,039) (4,807)
Minority interest (2) (126) (126)
Extraordinary item (614)
================== =========== ===========
Net income (loss) $ 1,359 $ (3,165) $ (5,547)
================== =========== ===========
</TABLE>
(1) To record the estimated goodwill amortization attributable to the
acquisitions of Holdings, Production Arts and CBE. Goodwill is
amortized over a period of twenty five years for Holdings and
Production Arts and fifteen years for CBE.
(2) To record minority interest for the year.
(3) To record the estimated effect of interest expense on borrowings
incurred by the Company to fund the acquisitions.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Statements of Operations
($ In thousands)
<TABLE>
<CAPTION>
PRG Holdings Production Arts
For the six For the period For the six
months ended January 1, 1998 to months ended
June 30, 1998 June 19, 1998 June 30, 1998
------------- ------------------ ---------------
<S> <C> <C> <C>
Revenues $ 55,365 $ 13,551 $ 14,093
Direct production expenses:
Direct production costs 32,548 7,477 9,122
Depreciation expense 4,761 1,481 788
------------ ------------------ ---------------
37,309 8,958 9,910
------------ ------------------ ---------------
Gross profit 18,056 4,593 4,183
Selling, general and administrative expenses 13,463 3,518 2,505
Other depreciation and amortization 2,247 126
------------ ------------------ ---------------
Operating profit 2,346 1,075 1,552
Interest expense 6,233 3 185
Interest (income) (433) -- --
------------ ------------------ ---------------
Income (loss) before income taxes and minority interest (3,454) 1,072 1,367
Provision for income taxes 193 433 19
------------ ------------------ ---------------
Income (loss) before minority interest (3,647) 639 1,348
Minority interest (11)
============ ================== ===============
Net income (loss) $ (3,658) $ 639 $ 1,348
============ ================== ===============
</TABLE>
<TABLE>
<CAPTION>
CBE
For the six
months ended Pro Forma Company
June 30, 1998 Adjustments Pro Forma
------------- ----------- ---------
<S> <C> <C> <C>
Revenues $ 4,641 $ $ 87,650
Direct production expenses:
Direct production costs 2,935 52,082
Depreciation expense -- 7,030
------------ ----------- ---------
2,935 59,112
------------ ----------- ---------
Gross profit 1,706 28,538
Selling, general and administrative expenses 269 19,755
Other depreciation and amortization 13(4) 259 2,645
------------ ----------- ---------
Operating profit 1,424 (259) 6,138
Interest expense 4(6) 1,200 7,625
Interest (income) (11) (444)
------------ ----------- ---------
Income (loss) before income taxes and minority interest 1,431 (1,459) (1,043)
Provision for income taxes 45 690
------------ ----------- ---------
Income (loss) before minority interest 1,386 (1,459) (1,733)
Minority interest (5) (21) (32)
============ =========== =========
Net income (loss) $ 1,386 $ (1,480) $ (1,765)
============ =========== =========
</TABLE>
(4) To record the estimated goodwill amortization attributable to the
acquisitions of Holdings, Production Arts and CBE. Goodwill is
amortized over a period of twenty five years for Holdings and
Production Arts and fifteen years for CBE.
(5) To record minority interest for the period.
(6) To record the estimated effect of interest expense on borrowings
incurred by the Company to fund the acquisitions.
<PAGE>
PRODUCTION RESOURCE GROUP, L.L.C.
Unaudited Pro Forma Combined Balance Sheet
June 30, 1998
($ In thousands)
<TABLE>
<CAPTION>
PRG CBE
Pro Forma Company
June 30, 1998 June 30, 1998 Adjustments Pro Forma
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 16,631 $ 771 $ -- $ 17,402
Accounts Receivable - net 26,240 0 -- 26,240
Inventories 9,481 1,930 -- 11,411
Other current assets 3,215 54 -- 3,269
------------ ------------ ------------ ------------
Total current assets 55,567 2,755 -- 58,322
Property and equipment - net 76,060 151(9) (44) 76,167
Goodwill - net 28,099 -- (7) 701 28,800
Other assets 10,251 10 -- 10,261
============ ============ ============ ============
Total assets $ 169,977 $ 2,916 $ 657 $ 173,550
============ ============ ============ ============
Liabilities and Members' Equity
Current liabilities:
Current portion of long-term debt $ 317 $ 8 $ -- $ 325
Accounts payable 15,500 492 -- 15,992
Payoll and sales taxes payable 2,716 62 -- 2,778
Deferred revenue 5,708 -- -- 5,708
Other current liabilities 8,609 91(9) (91) 8,609
------------ ------------ ------------ ------------
Total current liabilities 32,850 653 (91) 33,412
Long-term debt:
Senior Subordinated Notes 100,000 -- -- 100,000
Credit Facilities 32,338 -- (8) 3,000 35,338
Other long-term debt 3,634 11 -- 3,645
Minority interest 791 -- -- 791
Members' equity 364 -- -- 364
Common stock -- 1(9) (1) --
Additional paid-in-capital -- 23(9) (23) --
Retained Earnings -- 2,228(9) (2,228) --
============ ============ ============ ============
$ 169,977 $ 2,916 $ 657 $ 173,550
============ ============ ============ ============
</TABLE>
(7) To record the estimated goodwill attributable to the acquisition of
CBE.
(8) To record the additional borrowings incurred by the Company to fund the
acquisition of CBE.
(9) To adjust for certain assets not purchased and liabilities not assumed
from CBE and to eliminate CBE's shareholders' equity.
