<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (date of earliest event reported): July 29, 1994
------------
JACOBS ENGINEERING GROUP INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-7463 95-4081636
- --------------------------------------------------------------------------------
(State of (Commission File (I.R.S. Employer
Incorporation) File Number) Identification
Number)
251 South Lake Avenue, Pasadena, California 91101
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(818) 449-2171
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective July 31, 1994, Jacobs Engineering Group Inc. (the "Company")
purchased from CRSS Inc. ("CRSS") the engineering and construction management
service businesses of CRSS (the "Business to be Acquired"). The cash purchase
price was equal to the net book value of the Business to be Acquired on the
closing date, plus $14.0 million. On the closing date, the Company paid CRSS
$33.5 million; an amount equal to the estimated net book value of the Business
to be Acquired on that date, plus $14.0 million. The net book value on the
closing date of the Business to be Acquired is subject to an audit which will
determine the final purchase price and any difference between that amount and
the amount paid on the closing date will be settled between the parties.
In the transaction, the Company purchased substantially all of the assets
of CRS Sirrine Engineers, Inc. ("CRS Sirrine"), subject to certain assumed
liabilities, all of the issued and outstanding equity securities of CRSS
Constructors, Inc. and CRSS International, Inc. and the assets, subject to
certain assumed liabilities, or all of the issued and outstanding equity
securities, of certain insignificant subsidiaries of CRSS. Excluded from the
businesses acquired were the assets and liabilities of four power plant projects
of CRS Sirrine. These projects were either substantially complete or in the
later stages of completion. Additionally, CRSS agreed to share in the future
profit margin improvement or deterioration on certain projects defined in the
purchase agreement.
On August 5, 1994, the Company filed a Current Report on Form 8-K with the
Securities and Exchange Commission (the "Commission") which described this
transaction. That report indicated that the financial statements required by
Rule 3-05 of Regulation S-X and the pro forma financial information required by
Article 11 of Regulation S-X will be filed by the Company in accordance with the
rules and regulations of the Commission. This form 8-K/A files all such
financial statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired:
Being filed herewith are the audited financial statements of the
Business to be Acquired at June 30, 1994 and for the year then
ended, together with the report thereon issued by Ernst & Young,
independent auditors.
(b) Pro forma financial information (of the Company and Business to be
Acquired combined):
Being filed herewith are the unaudited pro forma condensed combined
balance sheet at June 30, 1994; the unaudited pro forma condensed
combined statement of income for the year ended September 30, 1993;
and the unaudited pro forma condensed combined statement of income
for the nine months ended June 30, 1994.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment No. 1 to its Current Report on Form
8-K dated August 5, 1994 to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: October 6, 1994
JACOBS ENGINEERING GROUP INC.
By: /s/ JOHN W. PROSSER, JR.
_________________________
John W. Prosser, Jr.
Senior Vice President
Finance and Administration
3
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP]
Report of Independent Auditors
Board of Directors
Jacobs Engineering Group Inc.
We have audited the accompanying combined balance sheet of the Business
to be Acquired From CRSS Services, Inc. (as defined in Note 1), as of
June 30, 1994, and the related combined statements of operations and cash
flows for the year then ended. These financial statements are the
responsibility of the Company. 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.
As described in Note 1, these financial statements reflect the financial
position and operations of the Business to be Acquired From CRSS
Services, Inc., which was sold to Jacobs Engineering Group Inc. on July
29, 1994.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined financial position of the
Business to be Acquired From CR$S Services, Inc., at June 30, 1994, and
the combined results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
July 29, 1994
1
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
COMBINED BALANCE SHEET
June 30, 1994
(In Thousands)
<TABLE>
<S> <C>
Assets
Current assets:
Receivables, net $53,582
Unbilled fees and job costs 7,676
Prepaid expenses and other assets 394
-------
Total current assets 61,652
Property and equipment, net 4,459
Deferred charges and other 2,438
-------
$68,549
=======
Liabilities and net assets
Current liabilities:
Accounts payable $37,449
Amounts billed in excess of revenues recognize
on contracts in process 7,999
Other current liabilities 3,719
-------
Total current liabilities 49,167
Net assets 19,382
-------
$68,549
=======
</TABLE>
See accompanying notes.
2
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
COMBINED STATEMENT OF OPERATIONS
Year ended June 30. 1994
(In Thousands)
<TABLE>
<S> <C>
Gross revenues $371,752
Subcontract and procurement costs 220,084
--------
Operating revenues 151,668
Costs and expenses:
Direct 81,917
Operating 69,067
--------
150,984
--------
Operating income 684
Nonoperating income 184
--------
Net earnings $ 868
========
</TABLE>
See accompanying notes.
3
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
COMBINED STATEMENT OF CASH FLOWS
Year ended June 30, 1994
(In Thousands)
<TABLE>
<S> <C>
Operating activities
Net earnings $ 868
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 2,573
Decrease in provision for losses on accounts receivable (258)
Increase in receivables (8,835)
Decrease in unbilled fees and job costs 2,329
Increase in prepaid expenses and other assets (264)
Increase in accounts payable 27,727
Decrease in amounts billed in excess of revenues recognized
on contracts in process (5,693)
Decrease in other current liabilities (377)
Other operating activities (176)
--------
Net cash provided by operating activities 17,894
INVESTING ACTIVITIES
Additions to property and equipment (2,178)
Increase in investment in joint projects (1,481)
--------
Net cash used in investing activities (3,659)
Financing activities
Dividends and cash distributions to CRSS Inc. (28,377)
--------
Net cash used in financing activities (28,377)
--------
Net decrease in cash and cash equivalents (14,142)
Cash and cash equivalents at beginning of period 14,142
--------
Cash and cash equivalents at end of period $ -
========
</TABLE>
See accompanying notes.
4
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements represent the combined financial
position, operating results, and cash flows of all of the issued and
outstanding equity securities of CRSS Constructors, Inc., CRSS International,
Inc., and CRSS of New York, Inc., and substantially all the assets of CRS
Sirrine Engineers, Inc. ("Engineers"), CRSS Civil Engineers, Inc. ("Civil
Engineers"), and CRSS of Illinois, Inc. ("Illinois"), subject to agreed upon
liabilities of Engineers, CRSS Enterprises, Inc., Civil Engineers, and Illinois,
collectively referred to as the "Business to be Acquired From CRSS Services,
Inc.," which was sold to Jacobs Engineering Group Inc. ("Jacobs") as part of the
Purchase Agreement between Jacobs and CRSS Inc. dated July 29, 1994.
The entities referred to above as the Business to be Acquired From CRSS
Services, Inc., are wholly owned subsidiaries of CRSS Services, Inc.
("Services"), which is a wholly owned subsidiary of CRSS Inc.
The accompanying financial statements have been prepared on the historical cost
basis of accounting reflected in the financial and accounting records of
Services.
The operating results and financial position of the Business to be Acquired From
CRSS Services, Inc., presented in the accompanying financial statements do not
necessarily reflect the operating results and financial position which would
have occurred had the Business to be Acquired from CRSS Services, Inc., been an
unaffiliated, stand-alone entity for the fiscal year ended June 30, 1994.
The Business to be Acquired From CRSS Services, Inc., provides comprehensive
engineering, construction management, and program management services to
industrial, institutional, commercial, and public sector clients in both the
domestic and international markets.
All significant intercompany transactions and balances have been eliminated.
REVENUE RECOGNITION
Revenues earned on long-term contracts are reported using the percentage-of-
completion method, based primarily on contract costs incurred to date versus
total anticipated contract costs. Where a single contract has both design and
construction as identifiable
5
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
segments, revenue recognition is segmented resulting in market levels of
profitability for each segment. Where there is a change in the estimate to
complete a project, the Business to be Acquired From CRSS Services, Inc.,
follows the "cumulative catch-up" method. Charges are made to operations for
estimated losses when such losses become known.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is computed primarily
on the straight-line method over the estimated useful lives of the related
assets. Maintenance and repairs are charged to expense as incurred; improvements
are capitalized.
JOINT PROJECTS
The Business to be Acquired From CRSS Services, Inc., is involved in several
associations with unrelated parties formed for the purpose of undertaking a
single, agreed-upon project. The joint projects generally maintain contract-
related trade receivables, payables, and cash without any long-term assets or
liabilities and require little, if any, initial investment by the Business to be
Acquired From CRSS Services, Inc. The Company's share of joint project
operations is included within the combined financial statements.
INCOME TAXES
The Business to be Acquired From CRSS Services, Inc., is not a separate taxable
entity for federal or state income tax purposes. The operations of the Business
to be Acquired From CRSS Services, Inc., are included in the CRSS Inc.
consolidated federal income tax return and various state returns. No portion of
Services' or CRSS Inc.'s income tax expense has been allocated to the Business
to be Acquired From CRSS Services, Inc. All income taxes payable and deferred
income tax accounts related to the Business to be Acquired From CRSS Services,
Inc., were retained by Services and CRSS Inc.
EARNINGS PER SHARE
Earnings per share information has been omitted since the Business to be
Acquired From CRSS Services, Inc., has no publicly traded equity securities.
6
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
2. GEOGRAPHIC DATA AND MAJOR CUSTOMERS
Operations by geographic area for the fiscal year ended June 30, 1994 are as
follows:
<TABLE>
<CAPTION>
United
States Foreign Consolidated
---------------------------------------
(In Thousands)
<S> <C> <C> <C>
Gross revenues $367,798 $3,954 $371,752
Operating revenues 147,804 3,864 151,668
Operating income 305 379 684
Identifiable assets 68,549 - 68,549
</TABLE>
Revenues from government agencies for the fiscal year ended June 30, 1994 are as
follows:
<TABLE>
<CAPTION>
Domestic Foreign
------------------------
<S> <C> <C>
Gross revenues $122,471 $352
Operating revenues 44,254 344
</TABLE>
The Business to be Acquired From CRSS Services, Inc., had two major projects
during fiscal 1994, which accounted for approximately 50% of the combined gross
revenues and approximately 18% of the combined operating revenues. The two major
projects include the engineering design, procurement, and construction of a
wafer fabrication facility in Austin, Texas, for Advanced Micro Devices and
construction management services for the Orange County Civic Center in Orlando,
Florida.
7
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
2. GEOGRAPHIC DATA AND MAJOR CUSTOMERS (CONTINUED)
The gross and operating revenues contributed by these two projects during the
fiscal year ended June 30, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Revenues Operating Revenues
Dollars % of Total Dollars % of Total
-------- ---------- ------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Advanced Micro Devices $137,694 37% $24,324 16%
Orange County Civic Center 47,240 13% 2,243 2%
-------- ---------- ------- ----------
$184,934 50% $26,567 18%
======== ========== ======= ==========
</TABLE>
3. RECEIVABLES
Receivables as of June 30, 1994 consist of the following (in thousands):
<TABLE>
<S> <C>
Trade receivables $47,701
Retainage 7,197
Other 225
-------
55,123
Less allowance for doubtful accounts (1,541)
-------
$53,582
=======
</TABLE>
The balance billed, but not paid, pursuant to retainage provisions in service
contracts will be due upon completion of the contracts and acceptance of the
projects by the owner. Retainage balances at June 30, 1994 are scheduled to be
collected as follows (in thousands):
<TABLE>
<S> <C>
YEAR ENDED JUNE 30
1995 $6,645
1996 526
1997 23
1998 -
1999 3
------
$7,197
======
</TABLE>
8
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
4. PROPERTY AND EQUIPMENT
Property and equipment as of June 30, 1994 consist of the following
(in thousands):
<TABLE>
<S> <C>
Machinery and equipment $ 17,784
Buildings and leasehold improvements 619
Furniture and fixtures 2,436
--------
20,839
Less accumulated depreciation (16,380)
--------
$ 4,459
========
</TABLE>
Machinery and equipment consists primarily of computer equipment and software
utilized in providing engineering, design, and construction services.
5. LEASE COMMITMENTS
The Business to be Acquired From CRSS Services, Inc., leases the majority of its
office facilities and certain equipment under operating lease agreements.
Certain leases contain renewal options and escalation clauses. Total rental
expense for all operating leases amounted to approximately $9,359,000 in fiscal
1994. There was no sublease rental income during fiscal 1994.
The following is a schedule of future noncancelable minimum lease payments under
leases with an initial remaining term of more than one year (in thousands):
<TABLE>
<S> <C>
Year ended June 30
1995 $3,701
1996 2,772
1997 1,987
1998 1,865
1999 1,802
2000 and thereafter 751
-------
$12,878
=======
</TABLE>
9
<PAGE>
BUSINESS TO BE ACQUIRED FROM CRSS SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
6. CHANGE IN NET ASSETS
(Dollars in Thousands)
<TABLE>
<S> <C>
Net assets as of June 30, 1993 $ 46,892
Fiscal 1994 net earnings 868
Cash dividends and distributions to CRSS Inc. (28,378)
--------
Net assets as of June 30, 1994 $ 19,382
========
</TABLE>
7. CONTINGENCIES
The operating subsidiaries of the Business to be Acquired From CRSS Services,
Inc., are defendants in a number of lawsuits involving claims typical of those
filed against the engineering and construction professions, alleging primarily
professional errors, omissions, and/or delays. CRSS Inc. has agreed to indemnify
Jacobs against legal claims arising from any acts, errors, or omissions prior to
August 1, 1994. As such, the Business to be Acquired From CRSS Services, Inc.
combined financial statements do not include any provisions for uninsured
losses.
A substantial portion of the Business to be Acquired From CRSS Services, Inc.
contracts are with and through various federal and state agencies whose
contracts are subject to audit and/or renegotiation in accordance with
applicable legislation. The Business to be Acquired From CRSS Services, Inc., is
of the opinion that its contractual relationships with these agencies are in
accordance with the requirements of such regulations.
CRSS Inc. and Jacobs have agreed to share in the future profit margin
improvement or deterioration of certain projects.
10
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Introductory Paragraphs:
Effective July 31, 1994, Jacobs Engineering Group Inc. (the "Company")
purchased from CRSS Inc. ("CRSS") the engineering and construction management
service businesses of CRSS (the "Business to be Acquired"). The cash purchase
price was equal to the net book value of the Business to be Acquired on the
closing date, plus $14.0 million. On the closing date, the Company paid CRSS
$33.5 million, an amount equal to the estimated net book value of the Business
to be Acquired on that date, plus $14.0 million. The net book value on the
closing date of the Business to be Acquired is subject to an audit which will
determine the final purchase price and any difference between that amount and
the amount paid on the closing date will be settled between the parties. A draft
balance sheet of the Business to be Acquired as of the closing date indicates
that the net book value of its assets were $24.7 million at that date,which
would indicate a cash purchase price of $38.7 million.
In the transaction, the Company purchased substantially all of the assets
of CRS Sirrine Engineers, Inc. ("CRS Sirrine"), subject to certain assumed
liabilities, all of the issued and outstanding equity securities of CRSS
Constructors, Inc. and CRSS International, Inc. and the assets, subject to
certain assumed liabilities, or all of the issued and outstanding equity
securities, of certain insignificant subsidiaries of CRSS. Excluded from the
businesses acquired were the assets and liabilities of four power plant projects
of CRS Sirrine. These projects were either substantially complete or in the
later stages of completion. Additionally, CRSS agreed to share in the future
profit margin improvement or deterioration on certain projects defined in the
purchase agreement.
The accompanying unaudited pro forma condensed combined financial
statements present, in columnar form, the condensed historical financial
statements of the Company and the Business to be Acquired, pro forma adjustments
and the pro forma results. The columns titled "Jacobs Engineering (as reported)"
were prepared from audited and unaudited financial statements filed with the
Commission. The columns titled "Businesses Acquired (historical)" were prepared
from the unaudited books and records of the Business to be Acquired, and
excludes corporate allocations of general and administrative expenses which
historically were charged to the Business to be Acquired by CRSS. The most
recent fiscal year of CRSS prior to the transaction ended June 30, 1994.
Accordingly, the historical financial information of the businesses acquired has
been adjusted to conform to the Company's fiscal year end of September 30, 1993.
The historical financial information of the businesses acquired has also been
adjusted to exclude the assets, liabilities and results of operations of the
four power projects not acquired by the Company.
11
<PAGE>
JACOBS ENGINEERING GROUP INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
June 30, 1994
(unaudited)
<TABLE>
<CAPTION>
Jacobs Businesses
Engineering Acquired Pro forma Pro forma
(as reported) (historical) Adjustments Combined
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 13,904,300 $ - ($8,382,000) (a) $ 5,522,300
Marketable securities 3,096,900 - - 3,096,900
Receivables 221,342,200 61,258,000 - 282,600,200
Deferred income taxes 20,349,900 - - 20,349,900
Prepaid expenses and other 3,681,900 394,000 - 4,075,900
------------ ----------- ------------ ------------
Total current assets 262,375,200 61,652,000 (8,382,000) 315,645,200
Property, equipment and
improvements, net 54,387,100 4,459,000 - 58,846,100
Other assets, net 51,856,000 2,438,000 14,000,000 (b) 68,294,000
------------ ----------- ------------ ------------
$368,618,300 $68,549,000 $ 5,618,000 $442,785,300
============ =========== ============ ============
Liabilities and Stockholders'
Equity:
Current liabilities:
Notes payable to banks $ 9,279,700 $ - $ - $ 9,279,700
Accounts payable 36,321,600 37,449,000 - 73,770,600
Accrued liabilities 77,100,800 3,719,000 - 80,819,800
Customers' advances in
excess of related
revenues 25,932,700 7,999,000 - 33,931,700
Income taxes payable 7,705,300 - - 7,705,300
------------ ----------- ------------ ------------
Total current liabilities 156,340,100 49,167,000 - 205,507,100
Long-term debt - - 25,000,000 (c) 25,000,000
Deferred gains on real estate
transactions 2,906,500 - - 2,906,500
Other deferred liabilities 9,566,900 - - 9,566,900
Stockholders' equity:
Preferred stock - - - -
Common stock 24,975,500 - - 24,975,500
Additional paid-in capital 34,798,000 - - 34,798,000
Retained earnings 139,298,000 19,382,000 (19,382,000) (d) 139,298,000
Cumulative foreign currency
translation adjustment 733,300 - - 733,300
------------ ----------- ------------ ------------
Total stockholders'
equity 199,804,800 19,382,000 (19,382,000) 199,804,800
------------ ----------- ------------ ------------
$368,618,300 $68,549,000 $ 5,618,000 $442,785,300
============ =========== ============ ============
</TABLE>
See accompanying notes.
12
<PAGE>
JACOBS ENGINEERING GROUP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1993
(unaudited)
<TABLE>
<CAPTION>
Jacobs Businesses
Engineering Acquired Pro forma Pro forma
(as reported) (historical) Adjustments Combined
--------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
Revenues $ 1,142,926,100 $ 273,450,000 $ - $ 1,416,376,100
Costs and expenses:
Direct costs of contracts (995,350,000) (221,364,400) - (1,216,714,400)
Selling, general and
administrative expenses (101,519,400) (53,781,600) (466,700)(e) (155,767,700)
Interest income (expense),
net 1,304,300 21,000 (2,130,500)(f) (805,200)
Other income (expense) net 1,977,400 (27,000) - 1,950,400
--------------- ------------- ----------- ---------------
Total costs and expenses (1,093,587,700) (275,152,000) (2,597,200) (1,371,336,900)
--------------- ------------- ----------- ---------------
Income before taxes 49,338,400 (1,702,000) (2,597,200) 45,039,200
Provision for income taxes (20,668,400) - 1,801,200(g) (18,867,200)
--------------- ------------- ----------- ---------------
Net income $ 28,670,000 $ (1,702,000) $ (796,000) $ 26,172,000
=============== ============= =========== ===============
Earnings per share $ 1.15 $ 1.05
=============== ===============
Weighted average shares
outstanding 24,964,500 24,964,500
=============== ===============
</TABLE>
See accompanying notes.
13
<PAGE>
JACOBS ENGINEERING GROUP INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Jacobs Businesses
Engineering Acquired Pro forma Pro forma
(as reported) (historical) Adjustments Combined
------------- ------------ ----------- ---------------
<S> <C> <C> <C> <C>
Revenues $ 797,024,300 $ 301,443,000 $ - $ 1,098,467,300
Costs and expenses:
Direct costs of contracts (691,750,000) (261,650,100) - (953,400,100)
Selling, general and
administrative expenses (69,649,300) (38,771,900) (350,000)(e) (108,771,200)
Interest income (expense), net 409,900 1,700 (1,597,900)(f) (1,186,300)
Other income (expense), net 520,800 (16,000) - 504,800
------------- ------------- ----------- ---------------
Total costs and expenses (760,468,600) (300,436,300) (1,947,900) (1,062,852,800)
------------- ------------- ----------- ---------------
Income before taxes 36,555,700 1,006,700 ( 1,947,900) 35,614,500
Provision for income taxes (14,700,700) - 378,200 (g) (14,322,500)
------------- ------------- ----------- ---------------
Net income $ 21,855,000 $ 1,006,700 $(1,569,700) $ 21,292,000
============= ============= =========== ===============
Earnings per share $0.87 $0.85
============= ===============
Weighted average shares
outstanding 25,135,500 25,135,500
============= ===============
</TABLE>
See accompanying notes.
14
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(a) This adjustment reflects the pro forma effect on cash at June 30, 1994
giving effect to the $8.4 million of cash used by the Company to acquire
the businesses.
(b) This adjustment reflects the pro forma goodwill amount at June 30, 1994.
The goodwill amount was assumed to be $14.0 million (the premium paid over
the net book value of the acquired businesses) and does not include other
costs of the acquisition, nor any adjustments that may occur as a result of
the allocation of the purchase price which will be completed in accordance
with APB Opinion No. 16, as amended.
(c) In connection with the acquisition, the Company amended one of its existing
short-term credit facilities to increase the borrowing capacity thereunder.
The Company then borrowed $25.0 million under the amended facility to
complete the purchase of the acquired businesses. The Company expects to
enter into a definitive, three-year revolving credit agreement to replace
that portion of the amended facility used to finance the acquisition. This
pro forma adjustment reflects the effect of that financing on the June 30,
1994 balance sheet.
(d) This adjustment eliminates the equity of the businesses acquired as of the
date of acquisition.
(e) These adjustments reflect the pro forma amortization of goodwill (which
is assumed to be amortized over a 30-year period).
(f) These adjustments reflect the pro forma effects on net interest expense as
a result of the estimated $38.7 million cash purchase price.
(g) These adjustments reflect the pro forma effects on consolidated income tax
expense due to the results of operations of the Business to be Acquired,
the pro forma amortization of goodwill and the pro forma interest expense
associated with the acquisition indebtedness.
15
