SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K (A)
CURRENT REPORT
AMENDMENT NO. 1
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 16, 1995
-------------------------------------------------
Date of Report (Date of earliest event reported)
CPAC, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
New York 0-9600
---------------------------- -----------------------
State or other jurisdiction Commission File Number
of incorporation
16-0961040
-------------------------
IRS Employer ID Number
2364 Leicester Road, Leicester, New York 14481
-----------------------------------------------
(Address of Principal Executive Offices)
(716) 382-3223
----------------------------------------------------
(Registrant's telephone number, including area code)
The Exhibit Index is located at page 32 of this report, as amended.
The Registrant hereby amends the following items, financial statements, and pro
forma information of its Current Report on Form 8-K filed January 31, 1995, as
set forth in the pages attached hereto:
Reference is made to the January 16, 1995, licensing agreement signed with
Stanhome, Inc., as previously reported on Form 8-K as of January 31, 1995. The
following financial statements and pro forma financial information is hereby
provided:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statements of Business Acquired
Audited historical financial statements of Stanley Home Products (a
Division of Stanhome, Inc.) as of December 31, 1994 and 1993, and the
related statements of income (loss), changes in division account and cash
flows for each of the years in the three-year period ended December 31,
1994.
Audited historical financial statements of Stanhome Inter-American
Corporation as of December 31, 1994 and 1993, and the related statements
of income and accumulated (deficit) and cash flows for each of the years
in the three-year period ended December 31, 1994.
B. Pro Forma Financial Information
CPAC, Inc. pro forma financial information.
CPAC, Inc. pro forma (unaudited) condensed consolidated balance sheet as
of December 31, 1994.
CPAC, Inc. pro forma (unaudited) condensed statement of income for the
nine months ended December 31, 1994.
CPAC, Inc. pro forma (unaudited) condensed consolidated statement of
income for the year ended March 31, 1994.
C. Exhibits
23.1 - Consent of Arthur Andersen LLP
23.2 - Consent of Arthur Andersen LLP
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
CPAC, INC.
--------------------------
(Registrant)
Date March 31, 1995 By /s/ Thomas J. Weldgen
---------------------------- --------------------------
Thomas J. Weldgen
Chief Financial Officer
STANLEY HOME PRODUCTS
---------------------
(A DIVISION OF STANHOME INC.)
-----------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
AND FOR THE THREE YEARS
-----------------------
IN THE PERIOD ENDED DECEMBER 31, 1994
-------------------------------------
TOGETHER WITH
-------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Stanhome Inc.:
We have audited the accompanying balance sheets of Stanley Home Products (a
division of Stanhome Inc.) as of December 31, 1994 and 1993, and the related
statements of income (loss), changes in division account, and cash flows for
each of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Division'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 Stanley Home Products as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994 in conformity
with generally accepted accounting principles.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 21, 1995
STANLEY HOME PRODUCTS
---------------------
(A DIVISION OF STANHOME INC.)
-----------------------------
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
ASSETS 1994 1993
------ ---- ----
CURRENT ASSETS:
Cash $ 47,718 $ 249,724
Accounts receivable, net 1,428,177 2,710,780
Other accounts receivable 325,971 75,233
Accounts receivable from affiliated
companies 90,460 2,421,641
Inventories 5,452,543 4,295,577
Prepaid expenses and other 50,492 31,537
---------- -----------
Total current assets 7,395,361 9,784,492
---------- -----------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and improvements 486,075 673,715
Buildings and improvements 2,920,319 3,909,690
Machinery and equipment 2,802,324 6,402,091
Furniture and fixtures 2,453,089 2,395,083
Transportation equipment 91,545 134,747
---------- -----------
8,753,352 13,515,326
Less - Accumulated depreciation 6,823,437 11,257,673
---------- -----------
1,929,915 2,257,653
----------- ------------
Total assets $9,325,276 $12,042,145
========== ===========
The accompanying notes are an integral
part of these financial statements.
STANLEY HOME PRODUCTS
---------------------
(A DIVISION OF STANHOME INC.)
-----------------------------
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
LIABILITIES AND DIVISION ACCOUNT 1994 1993
-------------------------------- ---- ----
CURRENT LIABILITIES:
Accounts payable from affiliated
companies $ 68,745 $ 101,670
Accounts payable, other 4,316,511 4,453,240
Dealer deposits 729,730 827,297
Unredeemed coupons and certificates 566,393 614,395
Accrued commissions 465,678 634,013
Accrued vacation payable 358,259 531,077
Accrued pension 400,000 130,000
Accrued restructuring 1,188,411 3,783,740
Other accrued expenses 656,494 775,467
---------- -----------
Total current liabilities 8,750,221 11,850,899
---------- -----------
DIVISION ACCOUNT 575,055 191,246
---------- -----------
Total liabilities and division
account $9,325,276 $12,042,145
========== ===========
The accompanying notes are an integral
part of these financial statements.
STANLEY HOME PRODUCTS
---------------------
(A DIVISION OF STANHOME INC.)
-----------------------------
STATEMENTS OF INCOME (LOSS) AND DIVISION ACCOUNT
------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
----------------------------------------------------
1994 1993 1992
---- ---- ----
NET SALES $33,958,262 $37,682,578 $39,101,203
COST OF SALES 13,155,114 14,942,277 14,566,994
----------- ----------- -----------
Gross profit 20,803,148 22,740,301 24,534,209
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE 23,821,821 23,770,917 23,160,479
RESTRUCTURING CHARGE - 3,950,000 -
----------- ----------- -----------
Operating profit (loss) (3,018,673) (4,980,616) 1,373,730
OTHER INCOME (EXPENSE):
Gain (losses) on sale of fixed
assets, net 1,963,197 (2,738) (16,710)
Other income, net 81,759 81,486 73,368
----------- ----------- -----------
Income (loss) before taxes (973,717) (4,901,868) 1,430,388
PROVISION FOR (BENEFIT FROM)
INCOME TAXES:
- Current (1,116,441) (370,411) 561,993
- Deferred 730,849 (1,570,729) (9,863)
----------- ----------- -----------
Provision for (benefit from)
income taxes (385,592) (1,941,140) 552,130
----------- ----------- -----------
Net income (loss) (588,125) (2,960,728) 878,258
DIVISION ACCOUNT, beginning of year 191,246 9,814,121 3,957,561
TRANSFERS (TO) FROM PARENT 971,934 (6,662,147) 4,978,302
----------- ----------- -----------
DIVISION ACCOUNT, end of year $ 575,055 $ 191,246 $ 9,814,121
=========== =========== ===========
The accompanying notes are an integral
part of these financial statements.
<TABLE>
STANLEY HOME PRODUCTS
---------------------
(A DIVISION OF STANHOME INC.)
-----------------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
----------------------------------------------------
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (588,125) $(2,960,728) $ 878,258
----------- ----------- ----------
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation 569,912 720,714 682,176
(Gain) loss on sale of fixed assets, net (1,963,197) 2,738 16,710
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable 3,363,046 2,283,330 (79,238)
(Increase) decrease in inventories (1,156,966) 3,486,651 (2,067,790)
(Increase) decrease in prepaid
expenses (18,955) 12,295 62,454
Increase (decrease) in accounts
payable (169,654) (548,180) 544,495
Increase (decrease) in other
accrued expenses (118,969) (14,971) (4,898,223)
Increase (decrease) in accrued
commissions (168,335) 54,972 257,074
Increase (decrease) in accrued
vacation payable (172,818) (4,739) (294,078)
Increase (decrease) in accrued
pension 270,000 130,000 -
Increase (decrease) in accrued
restructuring (2,595,329) 3,730,351 (418,695)
Decrease in dealer and customer
deposits (97,567) (5,613) (78,997)
Decrease in unredeemed coupons and
certificates (48,002) (69,150) (62,975)
----------- ----------- ----------
Total adjustments (2,306,834) 9,778,398 (6,337,087)
----------- ----------- ----------
Net cash provided by (used in)
operating activities (2,894,959) 6,817,670 (5,458,829)
----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of fixed assets 2,413,987 14,520 -
Purchase of property and equipment (692,968) (219,399) (241,373)
----------- ----------- ----------
Net cash provided by (used in)
investing activities 1,721,019 (204,879) (241,373)
----------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Transfers (to) from Parent 971,934 (6,662,147) 4,978,302
----------- ----------- ----------
Net cash provided by (used in)
financing activities 971,934 (6,662,147) 4,978,302
----------- ----------- ----------
NET DECREASE IN CASH (202,006) (49,356) (721,900)
CASH, beginning of year 249,724 299,080 1,020,980
----------- ----------- ----------
CASH, end of year $ 47,718 $ 249,724 $ 299,080
=========== =========== ==========
<FN>
The accompanying notes are an integral part
of these financial statements.
</FN>
</TABLE>
STANLEY HOME PRODUCTS
---------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994, 1993 AND 1992
--------------------------------
1. Summary of Significant Accounting and Reporting Policies:
--------------------------------------------------------
Organization -
------------
Stanley Home Products (the Division) is a division of Stanhome Inc., a
Massachusetts corporation. The Division manufactures and markets a broad
range of household, personal care and cosmetic items. On January 16, 1995,
management and the board of directors of Stanhome Inc. approved a plan to
close the Division and license its trademarks and formulas to another
company (see Note 5).
The Division is not a separately capitalized, legal entity. As such, the
Division's operating results and other activity with its parent company,
Stanhome Inc., are reflected on the accompanying balance sheet within the
Division Account.
Accounts Receivable -
-------------------
Accounts receivable were net of allowances for doubtful accounts of $730,000
and $300,000 at December 31, 1994 and 1993, respectively.
Inventories -
-----------
Inventories are valued at the lower of cost or market. Cost components
include labor, manufacturing overhead and amounts paid to suppliers of
materials. The Division values raw materials and certain manufactured and
purchased items utilizing the last-in, first-out method (LIFO). The cost on
a first-in, first-out basis over the carrying amount of inventories as
reflected in the accompanying balance sheets was $1,562,593 and $894,437 at
December 31, 1994 and 1993, respectively.
The major classes of inventories were as follows:
1994 1993
---- ----
Raw material and supplies $ 580,387 $1,360,281
Work in process - 10,604
Finished goods 6,434,749 3,819,129
---------- ----------
7,015,136 5,190,014
Less: LIFO reserves 1,562,593 894,437
---------- ----------
$5,452,543 $4,295,577
========== ==========
Property, Plant and Equipment -
-----------------------------
Depreciation is provided over the estimated useful lives of the assets
utilizing the straight-line method. The method for financial statement and
income tax purposes differs in some circumstances, resulting in deferred
income taxes.
The 1994 gain on sale of assets is related primarily to the sale of two of
the Division's distribution centers.
The estimated useful lives of the various classes of assets are:
Range in Years
--------------
Land improvements 10-15
Buildings and improvements 15-40
Machinery and equipment 5-12
Furniture and fixtures 5-10
Transportation equipment 3-8
2. Pension Plan:
------------
The Stanhome Inc. Pension Plan covers substantially all employees of the
Division as well as corporate employees of Stanhome Inc. Benefits are based
on years of service and the employee's compensation, as defined.
The following tables set forth the funded status and the net pension expense
as of and for the years ended December 31, 1994, 1993 and 1992, for the Plan
(in thousands). The portion of pension expense allocated to the Division
during 1994, 1993 and 1992 was approximately $704,000, $1,111,000 and
$1,063,000, respectively.
1994 1993
---- ----
Actuarial present value of
accumulated benefit obligation,
including vested benefits of
$27,508 and $28,632, respectively $ 28,475 $ 30,183
======== ========
Projected benefit obligation $ 35,707 $ 37,285
Plan assets at fair value,
marketable primarily securities (22,697) (22,247)
-------- --------
Unfunded excess of projected benefit
obligation over plan assets 13,010 15,038
Unrecognized net transition liability
being recognized over 15 years (848) (1,190)
Unrecognized prior service costs 803 216
Unrecognized net loss (2,939) (4,843)
-------- --------
Pension liability recognized in the
Stanhome Inc. balance sheet $ 10,026 $ 9,221
======== ========
1994 1993 1992
---- ---- ----
Net pension expense:
Service cost during the year $ 2,151 $ 1,236 $ 1,629
Interest cost on projected
benefit obligation 2,620 2,492 2,250
Actual return on plan assets (48) (1,300) (894)
Net amortization of prior
service cost, net transition
liability and net loss (1,675) 45 (407)
------- ------- -------
Net periodic pension expense
recognized in the Stanhome, Inc.
income statement $ 3,048 $ 2,473 $ 2,578
======= ======= =======
The weighted average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation ranged from 5% to 8% and 5% to 7%,
respectively. The expected long-term rate of return on assets was 8%.
In addition to providing pension benefits, Stanhome Inc. and its
subsidiaries sponsor a single-employer defined benefit postretirement health
care and life insurance plan. Substantially all of the Division's employees
may become eligible for the benefits under this plan if they reach allowable
retirement age while working for Stanhome Inc. or its subsidiaries. Those
benefits are provided principally through insurance companies whose premiums
are based on the anticipated benefits to be paid. The total costs for such
retired employee benefits were principally accrued during their active
employment.
Effective January 1993, the Division adopted Statement No. 106 of the
Financial Accounting Standards Board and formalized its funding policy for
the plan. Under that policy, Stanhome, Inc. pays premiums to insurance
companies who provide the post retirement benefits. The effect of adopting
the statement in 1993 was not material to the Division.
Net periodic postretirement benefit expense for the Stanhome Inc. defined
benefit postretirement health care and life insurance plan includes the
following components (in thousands). The portion of postretirement benefit
expense allocated to the Division during 1994 and 1993 was approximately
$130,000 and $137,000, respectively.
1994 1993
---- ----
Service cost $ 280 $ 310
Interest cost on accumulated
postretirement benefit obligation 170 180
------ ------
Net periodic postretirement benefit
expense $ 450 $ 490
====== ======
The following table sets forth the funded status of the plan reconciled with
the amount shown in the Stanhome Inc.'s balance sheet at December 31, 1994
and 1993 (in thousands):
1994 1993
---- ----
Accumulated postretirement benefit
obligation:
Retirees $2,652 $1,762
Fully eligible active plan
participants 459 933
Other active plan participants 2,085 2,657
------ ------
5,196 5,352
Plan assets at fair value - -
------ ------
Accumulated postretirement benefit
obligation in excess of plan
assets 5,196 5,352
Unrecognized net gain/(loss) from
differences between past experience
and that assumed - -
Unrecognized net transition asset/
(liability) - -
------ ------
Accrued postretirement benefit
liability recognized in the
Stanhome Inc. balance sheet $5,196 $5,352
====== ======
A 25% annual rate of increase in the per capita cost of covered health care
benefits was assumed for 1995. The cost trend rate was assumed to decrease
gradually but still remain at double digit rates until 2020. After 2020,
the rate was assumed to drop to and stabilize at 8%. Increasing the assumed
health care expense trend rates by one percentage point in each year would
increase the accumulated postretirement benefit obligation as of December
31, 1994 by $460,000 and the aggregate of the service and interest cost
components of the net postretirement benefit expense for the year then ended
by $140,000.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 6%.
In January 1995, Stanhome Inc. entered into an agreement with a third party
to license the operations of the Division (See Note 5). As a result,
approximately 350 participants of the qualified pension plan will retire or
be terminated in 1995. The impact of the plan curtailment is an estimated
gain of $477,000. However, as part of this termination, affected
participants will be given an enhanced retirement benefit. The total cost
of these enhancements will be approximately $1.2 million.
3. Income Taxes:
------------
The Division is included in the United States Federal income tax return of
its parent company. Income tax expense (benefit) has been allocated to the
Division in the accompanying financial statements based on the Division's
contribution to the parent company's consolidated tax liability. As a
result, to the extent operating losses of the Division are utilized by the
parent company to reduce the consolidated tax liability, the tax benefit of
such losses is reflected in the accompanying financial statements. The
resulting income taxes payable or receivable are reflected in the division
account.
Deferred income taxes result from differences between financial and tax
reporting of bad debt, inventory and restructuring reserves and accelerated
depreciation.
Effective January 1993, the Division adopted Statement No. 109 of the
Financial Accounting Standards Board. Prior year financial statements have
not been restated for the effect of this statement. The effect of adopting
the statement in 1993 was not material to the Division's results of
operations or financial position.
4. Restructuring Program:
---------------------
In the second quarter of 1993, Stanhome Inc. implemented a restructuring
program to take advantage of consolidation opportunities principally in the
distribution and administrative functions within Stanhome. The
restructuring program resulted in the recognition of a $3,950,000 charge in
1993 by the Division, representing primarily estimated costs for severances
associated with the closing of the Industrial Division, the Gift Gallery
Division, two distribution centers (Zanesville and Chicago), the
elimination of self-manufacturing and the overall reduction of workforce
levels within the Division.
5. Subsequent Event:
----------------
In January 1995, Stanhome Inc. entered into an agreement with a third party
to license the domestic operations of its Worldwide Direct Selling Group
consisting of the Division and certain operations located in Puerto Rico.
The agreement calls for a third party to license the trademarks and formulas
of the Division for use in the U.S., Puerto Rico and Canada, and remit to
Stanhome Inc. royalties based on sales of the related products.
In connection with this agreement, the Division will close its
administrative and distribution facilities during the first quarter of 1995.
Management believes that the total costs to exit the operations, including
employee severance benefits, will be approximately $6 million, partially
offset by anticipated gains from the sale of the Division's distribution
facilities. In accordance with Emerging Issues Task Force Issue 94-3, exit
costs were not recorded in 1994.
FS03015A
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
AND FOR THE THREE YEARS
-----------------------
IN THE PERIOD ENDED DECEMBER 31, 1994
-------------------------------------
TOGETHER WITH
-------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Stanhome Inc.:
We have audited the accompanying balance sheets of Stanhome Inter-American
Corporation (a United States of America, State of Delaware Corporation and
wholly-owned subsidiary of Stanhome Inc.) as of December 31, 1994 and 1993, and
the related statements of income and accumulated deficit and cash flows for
each of the three years in the period ended December 31, 1994. 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 Stanhome Inter-American
Corporation as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1994 in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Juan, Puerto Rico
February 21, 1995
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
BALANCE SHEETS
--------------
DECEMBER 31, 1994 AND 1993
--------------------------
ASSETS
------
1994 1993
---- ----
CURRENT ASSETS:
Cash and cash equivalents $ 421,592 $ 89,528
Accounts receivable, less allowance
for doubtful accounts of $50,000 and
$11,315, respectively 100,213 102,427
Inventories, net of reserves of $75,000
and $7,512, respectively 170,312 203,704
Income tax benefit receivable - 214,830
Prepaid expenses 7,733 8,485
--------- ----------
Total current assets 699,850 618,974
--------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land - 54,933
Buildings and improvements - 577,728
Building equipment - 217,618
Office mechanical equipment 237,726 247,404
Factory equipment 40,270 59,268
Office furniture and fixtures 34,290 47,771
Motor vehicles 15,994 12,447
--------- ----------
328,280 1,217,169
Less - Accumulated depreciation 308,486 834,108
--------- ----------
Net property, plant and equipment 19,794 383,061
--------- ----------
--------- ----------
$ 719,644 $1,002,035
========= ==========
The accompanying notes are an integral
part of these financial statements.
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
BALANCE SHEETS
--------------
DECEMBER 31, 1994 AND 1993
--------------------------
LIABILITIES AND STOCKHOLDER'S DEFICIT
-------------------------------------
1994 1993
---- ----
CURRENT LIABILITIES:
Accounts payable $ 50,275 $ 41,219
Payable to Stanhome Inc. 4,116 734,199
Dealers' security deposits 99,838 91,209
Accrued restructuring expenses 350,000 350,000
Accrued expenses 115,562 142,879
Accrued taxes 166,744 -
--------- ----------
Total current liabilities 786,535 1,359,506
--------- ----------
LONG-TERM SEVERANCE OBLIGATION 64,590 91,393
--------- ----------
STOCKHOLDER'S DEFICIT:
Common stock, $100 par value -
Authorized, issued and outstanding
1,000 shares 100,000 100,000
Accumulated deficit (231,481) (548,864)
--------- ----------
Total stockholder's deficit (131,481) (448,864)
--------- ----------
$ 719,644 $1,002,035
========= ==========
The accompanying notes are an integral
part of these financial statements.
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
--------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
----------------------------------------------------
1994 1993 1992
---- ---- ----
NET SALES $1,719,231 $1,858,043 $2,017,105
COST OF SALES 646,656 697,494 741,487
---------- ---------- ----------
Gross profit 1,072,575 1,160,549 1,275,618
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,327,119 1,347,424 1,313,501
RESTRUCTURING CHARGE - 350,000 -
---------- ---------- ----------
Operating loss (254,544) (536,875) (37,883)
OTHER INCOME (EXPENSE):
Gain on sale of fixed assets 777,801 - -
Technical service fee (60,079) (62,405) (66,479)
Other expense, net 25,102 (38,370) (30,055)
---------- ---------- ----------
Income (loss) before income tax
provision 488,280 (637,650) (134,417)
---------- ---------- ----------
INCOME TAX PROVISION (BENEFIT)
Current 197,916 (223,062) (45,436)
Deferred (27,019) 12,385 (265)
---------- ---------- ----------
Income tax provision (benefit) 170,897 (210,677) (45,701)
---------- ---------- ----------
Net income (loss) 317,383 (426,973) (88,716)
ACCUMULATED DEFICIT, beginning of year (548,864) (121,891) (33,175)
---------- ---------- ----------
ACCUMULATED DEFICIT, end of year $ (231,481) $ (548,864) $ (121,891)
========== ========== ==========
The accompanying notes are an integral
part of these financial statements.
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
----------------------------------------------------
1994 1993 1992
---- ---- ----
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net income $ 317,383 $(426,973) $(88,716)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 16,890 31,770 33,630
Gain on sale of fixed assets (777,801) - -
Changes in assets and liabilities:
Decrease in accounts receivable, net 2,214 (5,305) 55,841
Decrease in inventories, net 33,392 59,107 108,821
Decrease in income tax refund
receivable, net 214,830 (164,976) 1,266
Decrease in prepaid expenses 752 6,011 3,084
Decrease in accounts payable and
accrued expenses (748,344) 193,649 (152,850)
Increase in restructuring expense - 350,000 -
Increase in accrued taxes 166,744 - -
Increase in dealers' security deposits 8,629 (1,397) 1,297
Decrease in severance obligation (26,803) (21,530) (18,973)
--------- --------- ---------
Net cash (used for) provided by
operating activities (792,114) 20,356 (56,600)
--------- --------- ---------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Proceeds from sale of fixed assets 1,136,971 - -
Purchase of property and equipment (12,793) (14,690) (1,890)
--------- --------- ---------
1,124,178 (14,690) (1,890)
--------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 332,064 5,666 (58,490)
CASH AND CASH EQUIVALENTS, beginning of year 89,528 83,862 142,352
--------- --------- ---------
CASH AND CASH EQUIVALENTS, end of year $ 421,592 $ 89,528 $ 83,862
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 27,336 $ 37,213 $ 29,962
Income taxes $ - - -
The accompanying notes are an integral
part of these financial statements.
STANHOME INTER-AMERICAN CORPORATION
-----------------------------------
(A wholly-owned subsidiary of Stanhome Inc.)
--------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994, 1993 and 1992
--------------------------------
1. Accounting Policies:
-------------------
The following is a summary of significant accounting and reporting policies
employed by Stanhome Inter-American Corporation (the Company), a United
States of America, State of Delaware Corporation and wholly-owned subsidiary
of Stanhome, Inc. located in Bayamon, Puerto Rico.
The Company considers all highly liquid securities, including time deposits,
with maturities of three months or less, when purchased, to be cash
equivalents.
Inventories are valued at the lower of cost (first-in, first-out) or market.
Depreciation is provided over the estimated useful lives (5 to 50 years) of
the assets utilizing the straight-line method for financial statement
purposes.
Certain reclassifications have been made in the 1993 and 1992 financial
statements to conform to the 1994 presentation.
2. Pension Plan:
------------
In 1989, the Stanhome Inter-American Corporation defined benefit pension
plan (the Plan) was merged into the Stanhome Inc. Pension Plan. The Plan
covers substantially all employees of Stanhome Inter-American Corporation
except unit sales leaders and district managers. Benefits are based on
years of service and the employee's compensation, as defined.
The following table sets forth the funded status and the net pension expense
as of and for the year ended December 31, 1994, 1993 and 1992, for the Plan
(in thousands). The portion of pension expense allocated to the Company
during 1994, 1993 and 1992 was approximately $25,000, $24,000 and $21,000,
respectively.
1994 1993
---- ----
Actuarial present value of accumulated
benefit obligation, including vested
benefits of $27,508 and $28,632,
respectively $ 28,475 $ 30,183
======== ========
1994 1993
---- ----
Projected benefit obligation $ 35,707 $ 37,285
Plan assets at fair value, primarily
marketable securities (22,697) (22,247)
-------- --------
Unfunded excess of projected benefit
obligation over plan assets 13,010 15,038
Unrecognized net transition liability
being recognized over 15 years (848) (1,190)
Unrecognized prior service costs 803 216
Unrecognized net loss (2,939) (4,843)
-------- --------
Pension liability recognized in the
Stanhome Inc. balance sheet $ 10,026 $ 9,221
======== ========
1994 1993 1992
---- ---- ----
Net pension expense:
Service cost during the year $ 2,151 $ 1,236 $1,629
Interest cost on projected
benefit obligation 2,620 2,492 2,250
Actual return on plan assets (48) (1,300) (894)
Net amortization of prior service
cost, net transition liability
and net loss (1,675) 45 (407)
------- ------- ------
Net periodic pension expense $ 3,048 $ 2,473 $2,578
======= ======= ======
The weighted average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation ranged from 5% to 8% and 5% to 7%,
respectively. The expected long-term rate of return on assets was 8%.
Effective January 1993, the Company adopted Statement No. 106 of the
Financial Accounting Standards Board and formalized its funding policy for
the plan. Under that policy, the Company pays premiums to insurance
companies who provide the postretirement benefits. The effect of adopting
the statement in 1993 was not material to the Company.
3. Transactions With Affiliates:
----------------------------
The majority of the Company's products are purchased directly from the
parent company, Stanhome Inc. In addition, the Company pays a technical
service fee (approximately $60,000, $62,000 and $66,000 in 1994, 1993 and
1992, respectively) for administrative services performed by the parent
company on its behalf.
4. Income Taxes:
------------
The Company is included in the United States Federal income tax return of
its parent company. Deferred income taxes result from differences between
financial and tax reporting of vacation and severance pay, returns and
allowances and accelerated depreciation.
Effective January 1993, the Company adopted Statement No. 109 of the
Financial Accounting Standards Board. Prior year financial statements have
not been restated for the effect of this statement. The effect of adopting
the statement in 1993 was not material to the Company's results of
operations or financial position.
5. Restructuring Program:
---------------------
In the second quarter of 1993, Stanhome Inc. implemented a restructuring
program to take advantage of consolidation opportunities principally in the
distribution and administration functions within the company. The
restructuring program resulted in the recognition of a $350,000 charge in
1993 by the Company, representing primarily estimated costs for severance
and moving expenses associated with closing the distribution center and
relocating the sales office.
6. Subsequent Events:
-----------------
In January 1995, Stanhome, Inc. (Stanhome) entered into an agreement with a
third party to license the domestic operations of its Worldwide Direct
Selling Group consisting of Stanley Home Products (SHP) and certain
operations located in Puerto Rico. The agreement calls for the third party
to license the trademarks and formulas of SHP for use in the U.S., Puerto
Rico and Canada, and remit to Stanhome royalties based on sales of the
related products.
In connection with this agreement, the Company will close administrative and
distribution facilities during the first quarter of 1995. Management
believes that the total costs to exit the operations, including employee
severance benefits, will not have a material adverse effect on Stanhome
Inc.'s operations. In accordance with Emerging Issues Task Force Issue 94-
3, exit costs were not recorded in 1994.
fs02075a/
CPAC, INC.
PRO FORMA FINANCIAL INFORMATION
A. Stanley Home Products
---------------------
On January 16, 1995, the Company entered into an agreement with Stanhome,
Inc. to license the domestic operations of Stanhome, Inc.'s Worldwide Direct
Selling Group, known as Stanley Home Products. The agreement allowed the
Company to license the trademarks and formulas of Stanley Home Products for use
in the U.S., Puerto Rico, and Canada, in exchange for royalties based on sales
of the related products.
The Stanley Home Products operations were comprised of Stanley Home Products
(SHP), a `division'' of Stanhome, Inc., and Stanhome Inter-American Corporation
(SIAC), a `wholly-owned subsidiary'' of Stanhome, Inc.
The agreement did not require the Company to purchase any assets or assume
any liabilities. The agreement also specified that inventory necessary to
fulfill orders that are not manufactured or purchased from independent third
parties, will be provided to the Company on a consignment basis by Stanhome,
Inc. through September 30, 1996.
B. The Fuller Brush Company Acquisition
------------------------------------
As previously disclosed in Form 8-K, on October 13, 1994 the Company
acquired substantially all of the assets of The Fuller Brush Company, a Kansas
corporation, in exchange for payment of $1,719,000 in cash, 300,000 shares of
the Company's $.01 par value common stock with a fair market value of
$3,360,000, the assumption of certain of Seller's liabilities, and acquisition
related costs of $625,000 for a total asset purchase price of approximately
$15,600,000.
The acquisition has been accounted for as a purchase transaction. The
transaction was completed through CPAC Brush, Inc., a newly-formed, wholly-owned
subsidiary of CPAC, Inc. Immediately after the acquisition, CPAC Brush, Inc.
changed its corporate name to The Fuller Brush Company, Inc. (Fuller). The
Fuller Brush Company assets acquired and liabilities assumed by CPAC have been
included in the CPAC consolidated balance sheet since October 13, 1994, and the
results of operations since the October 13, 1994 acquisition date have been
consolidated into the financial results for the quarter ended December 31, 1994.
C. Pro Forma Financial Statements
------------------------------
The pro forma (unaudited) condensed consolidated balance sheet as of
December 31, 1994, set forth below, presents the financial position of the
Company as if the license agreement with Stanhome, Inc. had been signed December
31, 1994. Such balance sheet combines, with appropriate adjustments, the
Company's unaudited balance sheet as of December 31, 1994, with the audited
balance sheet of SHP as of December 31, 1994 and the audited balance sheet of
SIAC as of December 31, 1994.
The pro forma (unaudited) condensed consolidated statement of income for the
nine months ended December 31, 1994, set forth below, presents the results of
operations of the Company for such period as if the Company had signed the
license agreement with Stanhome, Inc. as of April 1, 1994. Such statement
combines, with appropriate adjustments, the Company's unaudited consolidated
results of operations for the nine months ended December 31, 1994, The Fuller
Brush Company's preacquisition unaudited results of operations for the period
April 1, 1994 to October 13, 1994, SHP's unaudited pre-license agreement results
of operations for its comparable nine months and SIAC's unaudited pre-license
agreement results of operations for its comparable nine months ended December
31, 1994. The results of operations of both SHP and SIAC were derived by
subtracting the unaudited results of operations for SHP and SIAC for the quarter
ended March 31, 1994 from their respective results of operations for the twelve
months ended December 31, 1994 to arrive at the results for the nine-month
period.
The pro forma (unaudited) condensed consolidated statement of income for the
fiscal year ended March 31, 1994, set forth below, presents the results of
operations of the Company for such year as if the Company had signed the license
agreement with Stanhome, Inc. as of April 1, 1993, the beginning of Fiscal 1994.
Such statement combines, with appropriate adjustments, the Company's audited
consolidated results of operations for its fiscal year ended March 31, 1994, the
Fuller Brush Company's audited results of operations for its fiscal year ended
May 28, 1994, SHP audited results of operations for its year ended December 31,
1994, and SIAC audited results of operations for its year ended December 31,
1994.
D. Pro Forma Information
---------------------
The pro forma (unaudited) financial statements have been prepared on the
basis of preliminary assumptions and estimates which are subject to adjustment.
The pro forma unaudited financial statements may not be indicative of the
results that actually would have been achieved if the license agreement with
Stanhome, Inc. had been effected on the dates indicated, or which may be
achieved in the future. The license agreement commences April 1, 1995 and will
therefore not impact the CPAC, Inc. results of operations for the year ended
March 31, 1995.
Preliminary, unaudited net sales information for Stanley Home Products for
1995 indicate that sales may be significantly lower than historical levels. The
reduction is partially attributable to the peso devaluation which has
significantly impacted sales at the United States/Mexican border, as well as the
elimination of credit sales and implementation of an `all cash'' sales term
policy. While it is unknown whether these factors will continue to impact the
Stanley Home Products operations during the Company's fiscal 1996 year, it is
probable that the pro forma sales presented will be reduced.
<TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
(UNAUDITED)
(AMOUNTS IN THOUSANDS - 000'S OMITTED)
<CAPTION>
CPAC SHP SIAC Adjustments Pro Forma
---- --- ---- ----------- ---------
<S> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 78 $ 48 $ 422 $ (470) 1 $ 78
Accounts receivable, net 12,685 1,845 100 (1,945) 1 12,685
Inventory 12,273 5,453 170 (5,623) 1, 2 12,273
Prepaid expenses & other
current assets 1,401 50 8 (58) 1 1,401
----------- ----------- ----------- ----------- ---------
Total current assets 26,437 7,396 700 (8,096) 26,437
Property, plant & equipment, net 14,509 1,930 20 (1,950) 1 14,509
Goodwill and intangibles 875 2,500 3 3,375
Other assets 2,919 2,919
----------- ------------ ------------ ------------ ---------
Total Assets $ 44,740 $ 9,326 $ 720 $ (7,546) $ 47,240
=========== =========== =========== =========== =========
Current Liabilities:
Current portion of long-term
debt $ 3,233 $ $ $ $ 3,233
Accounts payable 4,553 4,386 54 (4,440) 1 4,553
Accrued payroll & related
expenses 1,195 1,195
Accrued taxes 46 46
Other accrued expenses &
liabilities 2,147 4,365 732 (4,772) 1, 4 2,472
----------- ----------- ----------- ----------- ---------
Total current liabilities 11,174 8,751 786 (9,212) 11,499
Long-term debt 11,551 11,551
Accrued deferred compensation 420 420
Other liabilities 65 2,110 1, 4 2,175
Minority interest in foreign
subsidiary 31 31
Shareholders' equity:
Common stock 44 100 (100) 1 44
Additional paid-in capital 12,756 12,756
Retained earnings (deficit) 9,891 575 (231) (344) 1 9,891
Foreign currency translation
adjustment (771) (771)
----------- ------------ ------------ ------------ ---------
21,920 575 (131) (444) 21,920
Treasury stock, at cost (356) (356)
----------- ------------ ------------ ------------ ---------
Total Shareholders' Equity 21,564 575 (131) (444) 21,564
----------- ----------- ----------- ----------- ---------
Total Liabilities &
Shareholders' Equity $ 44,740 $ 9,326 $ 720 $ (7,546) $ 47,240
=========== =========== =========== =========== =========
</TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
(UNAUDITED)
Legend: (Amounts in thousands)
1 Represents assets not acquired and liabilities not assumed, as agreement did
not require acquisition of operating assets or assumption of liabilities.
2 No inventory was acquired; however, the agreement specifies that Stanhome,
Inc. will provide the Company up to $6,000 of inventory, on a consignment
basis. In addition, Stanhome, Inc. will purchase and provide up to $3,000 of
additional consignment inventory, if needed. Inventory ownership remains
Stanhome, Inc.'s until purchased.
3 Represents value assigned to the license agreement, which will be amortized
over the 15 year agreement.
4 Represents the present value of the total minimum royalty obligation over 15
years, discounted at 10%:
Current portion $ 325
Long-term 2,175
-------
$ 2,500
=======
<TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED DECEMBER 31, 1994
(UNAUDITED)
(AMOUNTS IN THOUSANDS - 000'S OMITTED)
<CAPTION>
Adjust- Adjust-
CPAC Fuller SHP SIAC ments ments Pro Forma
---- ------ --- ---- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ 40,248 $ 13,095 $ 25,667 $ 1,289 $ $ $ 80,299
Costs & expenses:
Cost of sales 23,493 7,816 9,943 485 (61) 1 41,676
Selling, administrative
& engineering expenses 12,218 5,065 18,006 995 (196) 2 (2,300)6 33,788
Research & development
expense 215 215
Interest expense, net 463 379 4 3 846
Other (income) expense (2,025) (752) 2,696 7 (81)
----------- ----------- ----------- ----------- ----------- ----------- -----------
36,389 13,260 25,924 728 (253) 396 76,444
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before
income tax expense 3,859 (165) (257) 561 253 (396) 3,855
Income tax (expense)
benefit (1,490) (58) 102 (200) (102) 4 165 8 (1,583)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 2,369 $ (223) $ (155) $ 361 $ 151 $ (231) $ 2,272
=========== =========== =========== =========== =========== =========== ===========
Net income per common share:
Primary $ 0.58 5 $ 0.52
Fully diluted $ 0.58 5 $ 0.52
Weighted average number of
shares outstanding:
Primary 4,094,234 5 4,361,897
Fully diluted 4,103,920 5 4,371,490
</TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED DECEMBER 31, 1994
(UNAUDITED)
Legend: (Amounts in thousands)
1 Adjustment to reflect net reduction in historic Fuller depreciation expense
based upon preliminary estimate of the remaining useful lives of assets
acquired.
2 Adjustments reflect:
Reversal of Fuller environmental expenses not assumed by CPAC,
which are the responsibility of the seller $ 150
Reduction in historic Fuller depreciation and amortization expenses
based on revised valuation and remaining useful lives 18
Elimination of Fuller rental expense on equipment and property
owned by the seller's majority shareholder 28
-------
$ 196
=======
3 Represents additional interest expense on new acquisition borrowings
amounting to $266, net of interest savings from elimination of Fuller debt
obligations not assumed, of $262.
4 Reflects tax provision as a result of Fuller pro forma adjustments described
above, net of the elimination of deferred income tax amounts previously
established by the seller, as required by purchase accounting.
5 Weighted average shares outstanding and net income per share have been
restated to show the effects of a 5 for 4 stock split, announced by the CPAC,
Inc. Board of Directors on November 18, 1994 to shareholders of record as of
December 22, 1994. The additional shares resulting from the split were
distributed to shareholders on January 12, 1995.
6 Adjustments reflect:
Elimination of costs related to Stanley distribution facilities not
utilized under the agreement $ 1,868
Elimination of Stanley depreciation expense for equipment and
property not acquired 432
-------
$ 2,300
=======
7 Adjustments reflect:
Elimination of income recorded from the sale of Stanley's
distribution facilities $ 2,741
Reversal of technical service fee for administrative services (45)
-------
$ 2,696
=======
8 Reflects tax provision as a result of pro forma adjustments described above.
<TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 1994
(UNAUDITED)
(AMOUNTS IN THOUSANDS - 000'S OMITTED)
<CAPTION>
Adjust- Adjust-
CPAC Fuller SHP SIAC ments ments Pro Forma
---- ------ --- ---- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ 43,798 $ 23,628 $ 33,958 $ 1,719 $ $ $ 103,103
Costs & expenses:
Cost of sales 26,067 14,017 13,155 647 (201) 1 53,685
Selling, administrative
& engineering expenses 12,888 9,777 23,822 1,327 (674) 2 (2,839)6 44,301
Research & development
expense 270 812 1,082
Minority interest in
consolidated foreign sub. 1 1
Interest expense, net 349 (103) 3 246
Other (income) expense (169) (2,045) (743) 2,681 7 (276)
----------- ----------- ----------- ----------- ----------- ----------- ----------
39,575 24,437 34,932 1,231 (978) (158) 99,039
----------- ----------- ----------- ----------- ----------- ----------- ----------
Income (loss) before
income tax expense 4,223 (809) (974) 488 978 158 4,064
Income tax (expense)
benefit (1,596) (55) 386 (171) (336) 4 (57)8 (1,829)
----------- ----------- ----------- ----------- ----------- ----------- ----------
NET INCOME (LOSS) $ 2,627 $ (864) $ (588) $ 317 $ 642 $ 101 $ 2,235
=========== =========== =========== =========== =========== =========== ==========
Net income per common share:
Primary $ 0.67 5 $ 0.52
Fully diluted $ 0.67 5 $ 0.52
Weighted average number of
shares outstanding:
Primary 3,896,755 5 4,271,755
Fully diluted 3,908,089 5 4,283,089
</TABLE>
CPAC, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 1994
(UNAUDITED)
Legend: (Amounts in thousands)
1 Adjustment to reflect net reduction in historic Fuller depreciation expense
based upon preliminary estimate of the remaining useful lives of assets
acquired.
2 Adjustments reflect:
Elimination of costs related to a Fuller sales facility closed in
December 1993 $ 190
Elimination of costs relating to duplicate Fuller personnel and
administrative overhead 183
Reversal of Fuller environmental expenses not assumed by CPAC,
which are the responsibility of the seller 150
Reduction in historic Fuller depreciation and amortization expenses
based on revised valuation and remaining useful lives 95
Elimination of Fuller rental expense on equipment and property
owned by the seller's majority shareholder 56
-------
$ 674
=======
3 Represents additional interest expense on new acquisition borrowings of $318,
net of interest savings from elimination of Fuller debt obligations of $421.
4 Reflects tax provision as a result of Fuller pro forma adjustments described
above, net of the elimination of deferred income tax amounts previously
established by the seller, as required by purchase accounting.
5 Weighted average shares outstanding and net income per share have been
restated to show the effects of a 5 for 4 stock split, announced by the CPAC,
Inc. Board of Directors on November 18, 1994 to shareholders of record as of
December 22, 1994. The additional shares resulting from the split were
distributed to shareholders on January 12, 1995.
6 Adjustments reflect:
Elimination of costs related to Stanley distribution facilities not
utilized under the agreement $ 2,363
Elimination of Stanley depreciation expense for equipment and
property not acquired 476
-------
$ 2,839
=======
7 Adjustments reflect:
Elimination of income recorded from the sale of Stanley's
distribution facilities $ 2,741
Reversal of technical service fee for administrative services (60)
-------
$ 2,681
=======
8 Reflects tax provision as a result of pro forma adjustments described above.
INDEX TO EXHIBITS
Item Description Page
---- ----------- ----
1. Underwriting Agreement
Not Applicable
2. Plan of acquisition, reorganization, arrangement, liquidation or
succession
2.1 License Agreement, effective as of the 16th day of
January, 1995, by and between Licensor, Stanhome
Inc., whose address is 333 Western Avenue,
Westfield, MA 01085, and Licensee, CPAC, Inc., 2364
Leicester Road, Leicester, NY 14481, together with
all Exhibits thereto, previously filed in Form 8-K.
2.2 Agreement, effective as of the 16th day of January,
1995, by and between Stanhome Inc., a Massachusetts
corporation, whose address is 333 Western Avenue,
Westfield, MA 01085, and CPAC, Inc., a New York
corporation, whose address is 2364 Leicester Road,
Leicester, NY 14481.
4. Instruments defining the rights of security holders, including
indentures
Not Applicable
16. Letter re: change in certifying accountant
Not Applicable
17. Letter re: director resignation
Not Applicable
20. Other documents or statements to security holders
Not Applicable
23. Consents of experts and counsel
23.1 Consent of Arthur Andersen LLP 33
23.2 Consent of Arthur Andersen LLP 34
24. Power of Attorney
Not Applicable
27. Financial Data Schedule
Not Applicable
99. Additional Exhibits, as previously filed on Form 8-K:
None
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 21, 1995
included in CPAC, Inc. and Subsidiaries' Form 8-K for the year ended December
31, 1994 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Hartford, Connecticut
March 28, 1995
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 21, 1995
included in CPAC, Inc. and Subsidiaries' Form 8-K for the year ended December
31, 1994 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Juan, Puerto Rico
March 28, 1995
