SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) June 25, 1999
GALAXY ENTERPRISES, INC.
------------------------
(Exact name of registrant as specified in its charter)
Nevada 0-25055 88-0315212
- --------------- ----------- -------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
754 East Technology Avenue, Orem, Utah 84097
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 227-0004
<PAGE>
Item 2. Acquisition or Disposition of Assets
On June 25, 1999, IMI, Inc., a wholly-owned subsidiary of Galaxy
Enterprises, Inc. ("Galaxy") acquired substantially all of the assets of Impact
Media, L.L.C., a Utah limited liability company ("Impact Media") engaged in the
design, manufacture and marketing of multimedia brochure kits, shaped compact
discs and similar products and services intended to facilitate conducting
business over the Internet. The assets acquired include, among other things,
equipment, inventory and finished goods, intellectual property, computer
programs and cash and accounts receivable, the primary use of which relates to
the design, manufacture and marketing of Impact Media's products and services.
It is the present intent of Galaxy to continue to devote the assets to such
purposes.
Galaxy will account for this acquisition under the purchase method of
accounting. Galaxy, through IMI, and Impact Media established by negotiation a
purchase consideration for the acquired assets of 250,000 previously authorized
but unissued shares of Galaxy's common stock, subject to certain adjustments
(the "Shares") plus the obligation to discharge approximately $186,140 in debt.
Galaxy has placed the Shares into an escrow account established with Jay
Poelman, an affiliate of Galaxy, and the Shares, or appropriate portion thereof,
shall be distributed to Impact Media pursuant to the terms of an earn-out
agreement during the annual periods ending on May 31, 2000, and May 31, 2001. A
copy of the purchase agreement and earn-out agreement are attached below.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. The audited financial
statements of Impact Media, LLC are being filed herewith as Exhibit 99.1, and
the unaudited balance sheets, income statements and statements of cash flows of
Impact Media LLC for the five months ended May 31, 1999 and 1998 are being filed
herewith as Exhibit 99.2.
(b) Pro Forma Financial Information. The pro forma financial
information for the year ended December 31, 1998 and for the six months ended
June 30, 1999 are being filed herewith as Exhibit 99.3.
(c) Exhibits. The following documents are being filed as exhibits to
this report:
2.1* Asset Purchase Agreement, dated as of May 31, 1999, by and
between Impact Media, L.L.C. and IMI, Inc.
2.2* Earn-Out Agreement, dated as of May 31, 1999, by and among
Impact Media, L.L.C., IMI, Inc. and Jay Poelman.
23.1 Consent of Wisan, Smith, Racker & Prescott, LLP, independent
auditors.
99.1 Audited Financial Statements of Impact Media, LLC as of
December 31, 1998.
99.2 Unaudited Balance Sheets, Income Statements and Statements of
Cash Flows of Impact Media, LLC for the five months ended May
31, 1999 and 1998.
99.3 Pro forma financial information for the year ended December
31, 1998 and for the six months ended June 30, 1999.
*Previously filed.
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.
GALAXY ENTERPRISES, INC.
(registrant)
September 3, 1999 BY: /s/ Frank C. Heyman
- ----------------- -----------------------
(Date) FRANK C. HEYMAN,
CHIEF FINANCIAL OFFICER
Consent of Wisan, Smith, Racker & Prescott, LLP, Independent Auditors
We consent to the use in this Amended Report on Form 8-K of our report dated
August 18, 1999, relating to the financial statements of Impact Media LLC.
Wisan, Smith, Racker & Prescott, LLP
Salt Lake City, Utah
September 2, 1999
Audited Financial Statements of Impact Media, LLC as of December 31, 1998.
Impact Media, LLC
Orem, Utah
We have audited the accompanying balance sheet of Impact Media, LLC as of
December 31, 1998, and the related statements of operations and members' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Impact Media, LLC as of
December 31, 1998 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
Wisan, Smith, Racker & Prescott, LLP
Salt Lake City, Utah
August 18, 1999
<PAGE>
IMPACT MEDIA, LLC
BALANCE SHEET
December 31, 1998
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 151,660
Inventory 12,500
----------
TOTAL CURRENT ASSETS $ 164,160
EQUIPMENT 33,945
PREPAID EXPENSES 2,390
----------
TOTAL ASSETS $ 200,495
==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 23,890
Accrued expenses 4,290
Notes payable - related party 2,400
Notes payable - current portion 14,684
----------
TOTAL CURRENT LIABILITIES 45,264
NOTES PAYABLE 18,875
MEMBERS' EQUITY 136,356
----------
TOTAL LIABILITIES AND EQUITY $ 200,495
==========
THE ACCOMPANYING NOTES ARE AN INTEGARAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
IMPACT MEDIA, LLC
STATEMENT OF OPERATIONS AND MEMBERS' EQUITY
Year ended December 31, 1998
REVENUE
Net sales $ 3,211,072
Cost of sales 2,615,227
-----------
GROSS PROFIT $ 595,845
OPERATING EXPENSES
Selling 17,450
General and administrative 451,172
Depreciation 3,935 472,557
----------- ----------
OPERATING INCOME 123,288
OTHER EXPENSE
Interest expense 3,650
----------
Income before income taxes 119,638
Income taxes -
----------
NET INCOME 119,638
MEMBERS' EQUITY
Balance - beginning of year -
Contributions 16,718
----------
Balance - end of year $ 136,356
==========
THE ACCOMPANYING NOTES ARE AN INTEGARAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
IMPACT MEDIA, LLC
STATEMENT OF CASH FLOWS
Year ended December 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 119,638
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 3,935
Changes in operating assets and liabilities:
Increase in inventory (12,500)
Increase in other assets (2,390)
Increase in trade accounts payable 23,890
Increase in accrued expenses 4,290
------------
Net cash flows from operating activities $ 136,863
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (17,751)
------------
Net cash used by investing activities (17,751)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash from notes payable 41,430
Principal payments on notes payable (25,600)
Cash from contributions 16,718
------------
Net cash flows from financing activities 32,548
-----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 151,660
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR -
-----------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 151,660
===========
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
In 1998, $20,129 of equipment was purchased by assuming $20,129 of long-term
capital leases.
THE ACCOMPANYING NOTES ARE AN INTEGARAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
IMPACT MEDIA, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
I. Business Activities
Impact Media, LLC (the Company) was organized on January 1, 1998
and is engaged in the design, manufacture and marketing of
multimedia brochure kits, shaped compact discs and similar
products and services intended to facilitate conducting business
over the Internet. The Company markets its products and services
throughout the United States.
Cash and Cash Equivalents
-------------------------
Cash equivalents are generally comprised of certain highly liquid
investments with maturities of less than three months.
Inventories
-----------
Inventories are reflected in the financial statements at their
aggregate lower of cost (first-in, first-out) or market.
Inventory consists mainly of finished goods.
II. Property and Equipment
Depreciation expense in computed principally on the straight-line
method in amounts sufficient to write off the cost of depreciable
assets over their estimated useful lives.
Normal maintenance and repair items are charged to costs and
expenses as incurred. The cost and accumulated depreciation of
property and equipment sold or otherwise retired are removed from
the accounts and gain or loss on disposition is reflected in net
income in the period of disposition.
III. 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.
IV. Revenue Recognition
Revenue is recognized when services are provided to customers.
V. Income Taxes
The Company has filed an election with the Internal Revenue
Service to report taxable income as a partnership. Under such
election, federal and state income taxes on earnings of the
Company are the responsibility of the individual members.
VI. Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued
SFAS No. 130, "Reporting Comprehensive Income," which establishes
new rules for the reporting and display of comprehensive income
and its components. Application of SFAS No. 130 had no impact on
the Company's net income or members' equity.
Advertising and Promotion
-------------------------
All costs associated with advertising and promoting the Company's
products and services are expensed in the period incurred.
Advertising expense amounted to $460 for the year ended December
31, 1998.
NOTE 2 - CASH AND CASH EQUIVALENTS
The Company maintains its cash in bank deposit accounts which, at
times, may exceed federally insured limits. The Company has not
experienced any losses in such accounts. The Company believes it
is not exposed to any significant credit risk on cash and cash
equivalents.
<PAGE>
NOTE 4 - EQUIPMENT
Equipment as of December 31, 1998 is detailed in the following
summary:
Accumulated Net Book
Cost Depreciation Value
----------- ----------- -----------
Computer equipment $ 15,261 $ 2,025 $ 13,236
Furniture and fixtures 18,025 1,072 16,953
Computer software 4,594 838 3,756
----------- ----------- -----------
$ 37,880 $ 3,935 $ 33,945
=========== =========== ===========
Included in property and equipment are assets capitalized under
capital lease obligations at December 31, 1998 amounting to
$21,914 of which $17,860 is furniture and fixtures, $3,455 is
computer equipment and $599 is computer software. Accumulated
amortization for items capitalized under capital leases was
$2,250 at December 31, 1998. Amortization expense, which is
computed using the straight-line method over the term of each
lease, is included with depreciation expense.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
VII. Leases
The Company leases its office space under operating lease
agreements. Future aggregate minimum obligations under operating
leases as of December 31, 1998 are as follows:
Operating
Leases
Year ending December 31, -----------
1999 $ 18,600
2000 -
2001 -
2002 -
2003 -
------------
Total $ 18,600
============
Rental expenses under the operating lease agreements totaled
approximately $10,910 for the year ended December 31, 1998.
NOTE 5 - NOTES PAYABLE - RELATED PARTY
Notes payable - related party as of December 31, 1998 are
detailed in the following summary:
Note payable to relative of a member,
bearing interest at 20%, unsecured,
payable on demand $ 2,400
Less current portion (2,400)
------------
Long-term portion $ -
============
<PAGE>
NOTE 6 - NOTES PAYABLE
Notes payable as of December 31, 1998 are detailed in the
following summary:
Note payable to a financial institution,
interest at 9.75%, payable in monthly payments
of $697 including principal and interest,
through December, 2000 $ 15,000
Obligations under capital leases, due in monthly
installments with imputed interest of 10% 18,559
-----------
33,559
Less current portion (14,684)
Long-term portion $ 18,875
===========
The following is a schedule by years of principal payments under
notes payable as of December 31, 1998:
1999 $ 14,684
2000 15,238
2001 3,637
-----------
$ 33,559
===========
The following is a schedule by years of future minimum lease
payments under capital leases together with the present value of
the net minimum payments as of December 31, 1998:
1999 $ 9,098
2000 9,098
2001 4,437
-----------
Total minimum lease payments 22,633
Amount representing interest (4,074)
-----------
Present value of net minimum lease
payments (including $7,461
classified as current) $ 18,559
===========
Interest paid during the year ended December 31, 1998 was $3,650.
NOTE 7 - YEAR 2000 ISSUE (UNAUDITED)
Like other companies, Impact Media, LLC, could be adversely
affected if the computer systems the Company, it's suppliers or
customers use do not properly process and calculate date-related
information and data from the period surrounding and including
January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and
devices such as production equipment, etc. At this time, because
of the complexities involved in the issue, management cannot
provide assurance that the Year 2000 issue will not have an
impact on the Company's operations.
NOTE 8 - SUBSEQUENT EVENTS
On June 25, 1999 Galaxy Enterprises, Inc. purchased the Company's
net assets by assuming all liabilities of the Company. The
agreement was effective May 31, 1999. The operations of the
Company on May 31, 1999 ceased and business activities related to
the Company were performed by Galaxy Enterprises, Inc. During
1998, the Company paid Galaxy Enterprises, Inc. $226,350 to
package and ship a portion of its products.
IMPACT MEDIA, LLC
BALANCE SHEETS
May 31, 1999 and 1998
(UNAUDITED)
1999 1998
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 16,905 $ 15,282
Inventory 13,133 -
----------- -----------
TOTAL CURRENT ASSETS 30,038 15,282
EQUIPMENT, net of accumulated depreciation
of $6,643 and $650 31,237 10,498
PREPAID EXPENSES 3,940 -
----------- -----------
TOTAL ASSETS $ 65,215 $ 25,780
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 128,414 $ -
Accrued expenses 18,546 9,265
Advances from related party 12,337 -
Notes payable - related party 2,400 14,000
Notes payable - current portion 15,143 1,225
----------- -----------
TOTAL CURRENT LIABILITIES 176,840 24,490
NOTES PAYABLE 13,923 2,275
MEMBERS' EQUITY (125,548) (985)
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 65,215 $ 25,780
=========== ===========
<PAGE>
IMPACT MEDIA, LLC
STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY
Five Months ended May 31, 1999 and 1998
(UNAUDITED)
1999 1998
----------- -----------
REVENUE
Net sales $ 722,899 $ 328,904
Cost of sales 353,391 234,721
----------- -----------
GROSS PROFIT 369,508 94,183
OPERATING EXPENSES
Selling 13,250 12,185
General and administrative 614,492 99,051
Depreciation 2,708 650
----------- -----------
630,450 111,886
----------- -----------
OPERATING LOSS (260,942) (17,703)
OTHER EXPENSE
Interest expense 962 -
----------- -----------
Loss before income taxes (261,904) (17,703)
Income taxes - -
----------- -----------
NET LOSS (261,904) (17,703)
MEMBERS' EQUITY
Balance - beginning of year 136,356 -
Contributions - 16,718
----------- -----------
Balance - end of year $ (125,548) $ (985)
=========== ===========
<PAGE>
IMPACT MEDIA, LLC
STATEMENTS OF CASH FLOWS
Five Months ended May 31, 1999 and 1998
(UNAUDITED)
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (261,904) $ (17,703)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 2,708 650
Changes in operating assets and liabilities:
Increase in inventory (633) -
Increase in other assets (1,550) -
Increase in trade accounts payable 104,524 -
Increase in accrued expenses 14,256 9,265
----------- -----------
Net cash used by operating activities (142,599) (7,788)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment - (7,648)
----------- -----------
Net cash used by investing activities - (7,648)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash from notes payable 12,337 14,000
Principal payments on notes payable (4,493) -
Cash from contributions - 16,718
----------- -----------
Net cash flows from financing activities 7,844 30,718
----------- -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (134,755) 15,282
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 151,660 -
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 16,905 $ 15,282
=========== ===========
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the five months ended May 31, 1998, $3,500 of equipment was purchased by
assuming $3,500 of long-term capital leases.
Pro forma financial information for the year ended
December 31, 1998 and for the six months ended June 30, 1999.
On June 25, 1999, IMI, Inc., a wholly-owned subsidiary of Galaxy Enterprises,
Inc. ("Galaxy") acquired substantially all of the assets of Impact Media,
L.L.C., a Utah limited liability company ("Impact Media"). The acquisition was
accounted for by the purchase method.
This section contains the unaudited pro forma condensed combined statements of
income for the six months ended June 30, 1999, and for the year ended December
31, 1998, giving effect to the acquisition as if this transaction had occurred
at the beginning of each period. The pro forma statements have been prepared by
Galaxy management based upon the historical financial statements of Impact Media
included herein. Impact Media's results for the six months ended June 30, 1999
were derived from their results for the five months ended May 31, 1999 plus the
results for the consolidated Company for the month of June 30, 1999. No periods
for Impact Media were excluded from or included more than once in the condensed
combined pro forma statements of income. The Galaxy statement of income for the
year ended December 31, 1998, was audited and was the statement used for the
Galaxy 1998 Annual Report to Shareholders. The Galaxy statement of income for
the six months ended June 30, 1999, was unaudited and was the statement used for
the Galaxy Form 10-QSB report for its second quarter ended June 30, 1999. The
pro forma combined results in the statements referred to above are not
necessarily indicative of the actual operating results that would have occurred
had the acquisition been consummated on January 1, 1998, or of future operating
results of the combined operations. The pro forma financial statements should be
read in conjunction with the consolidated financial statements contained in
Galaxy's 1998 Annual Report to Shareholders, Galaxy's report on Form 10-QSB for
the quarter ended June 30, 1999, and Impact Media's audited financial statements
included herein. A copy of Galaxy's 1998 Annual Report to Shareholders and its
Form 10-QSB report for the quarter ended June 30, 1998, may be obtained, upon
request, from the Company.
The following pro forma statements do not include the effect of additional
consideration of 250,000 shares of previously authorized but unissued shares of
Galaxy's common stock that are subject to an earn-out agreement during the
annual periods ending on May 31, 2000 and May 31, 2001 because as of the date of
this amendment, none of the shares have been earned. A pro forma combined
balance sheet as of June 30, 1999 has not been included, as the acquisition of
Impact Media has already been reflected in the combined balance sheet issued
with the June 30, 1999 Form 10-QSB.
<PAGE>
<TABLE>
<CAPTION>
Galaxy Enterprises, Inc.
Pro Forma Condensed Combined Statement Of Income
Year Ended December 31, 1998
(Unaudited)
Pro Forma
Galaxy Impact Pro Forma Statement
Enterprises, Inc. Media LLC Adjustments of Income
----------------------------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net Sales $ 11,448,392 $ 3,211,072 $ (226,345)(1) $ 14,433,119
Cost of Sales 5,105,614 2,615,227 (226,345)(1) 7,494,496
-------------------- ----------------- ----------------- ------------------
Gross Profit 6,342,778 595,845 - 6,938,623
Operating Expenses
Selling 4,764,340 17,450 4,781,790
General and administrative 1,426,853 451,172 1,878,025
Depreciation 53,260 3,935 57,195
Amortization 80,175 8,370 (2) 88,545
-------------------- ----------------- ----------------- ------------------
Total operating expenses 6,324,628 472,557 8,370 6,805,555
Income from operations 18,150 123,288 (8,370) 133,068
Other Income (Expenses)
Interest income 11 - 11
Other income 5,405 - 5,405
Interest expense (4,142) (3,650) - (7,792)
-------------------- ----------------- ----------------- ------------------
1,274 (3,650) - (2,376)
Income before income taxes 19,424 119,638 (8,370) 130,692
Income Taxes 15,951 - (50,010)(3) (34,059)
-------------------- ----------------- ----------------- ------------------
Net Income $ 35,375 $ 119,638 $ (58,380) $ 96,633
==================== ================= ================= ==================
Net Income Per Share:
Basic $ 0.0067 $ 0.0227 $ (0.0111) $ 0.0183
==================== ================= ================= ==================
Diluted $ 0.0062 $ 0.0209 $ (0.0102) $ 0.0169
==================== ================= ================= ==================
See Notes to Pro Forma Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Galaxy Enterprises, Inc.
Pro Forma Condensed Combined Statement Of Income
Six Months Ended June 30, 1999
(Unaudited)
Pro Forma
Galaxy Impact Pro Forma Statement
Enterprises, Inc. Media LLC Adjustments of Income
---------------------------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net Sales $ 8,167,288 $ 722,899 $ (60,657)(1) $ 8,829,530
Cost of Sales 4,643,970 353,391 (60,657)(1) 4,936,704
------------------- ---------------- ----------------- ------------------
Gross Profit 3,523,318 369,508 - 3,892,826
Operating Expenses
Selling 3,009,021 13,250 3,022,271
General and administrative 1,101,036 614,492 1,715,528
Depreciation 43,175 2,708 45,883
Amortization 29,100 - 4,185 (2) 33,285
------------------- ---------------- ----------------- ------------------
Total Operating Expenses 4,182,332 630,450 4,185 4,816,967
Operating Profit (659,014) (260,942) (4,185) (924,141)
Other Income (Expenses)
Interest income 6,177 - 6,177
Other income/(expense) (7,241) - (7,241)
Interest expense (4,567) (962) (5,529)
------------------- ---------------- ----------------- ------------------
(5,631) (962) - (6,593)
Income before taxes (664,645) (261,904) (4,185) (930,734)
Income Taxes 277,997 - 111,350 (3) 389,347
------------------- ---------------- ----------------- ------------------
Income before cumulative effect of
a change in accounting principal (386,648) (261,904) 107,165 (541,387)
Cumulative effect on prior years of
accounting change (less income
taxes of $25,432) (44,982) - - (44,982)
------------------- ---------------- ----------------- ------------------
Net Income(Loss) $ (431,630) $ (261,904) $ 107,165 $ (586,369)
=================== ================ ================= ==================
Net Income(Loss) Per Share:
Basic $ (0.0757) $ (0.0459) $ 0.0188 $ (0.1028)
=================== ================ ================= ==================
Diluted $ (0.0755) $ (0.0458) $ 0.0188 $ (0.1025)
=================== ================ ================= ==================
See notes to Pro Forma Statements.
EXPLANATORY NOTES TO PRO FORMA ADJUSTMENTS (UNAUDITED)
1) Elimination of sales and costs between Galaxy Enterprises, Inc. and Impact Media.
2) Increase in goodwill amortization
3) Income tax expense was adjusted based on pro forma net income.
</TABLE>
