SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 1, 1998
EFI Electronics Corporation
(Exact name of registrant as specified in its charter)
Delaware 0-15967 75-207220
- ---------------------------- --------------------- -------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1751 South 4800 West
Salt Lake City, UT 84104
(Address of principal executive offices, including zip code)
(801) 977-9009
(Registrant's telephone number, including area code)
<PAGE>
This Amendment No. 1 to the Current Report on Form 8-K dated January 1, 1998 is
being filed by EFI Electronics Corporation to provide the financial statements,
and pro forma financial information previously omitted from the Report in
reliance on Item 7(a)(4).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Page
(a) Financial statements of business acquired (EFI Electronics Europe, S.L.):
Report of Independent Certified Public Accountants ............. 2
Balance Sheets at March 31, 1997 and 1996....................... 3
Balance Sheets at December 31 and March 31, 1997................ 4
Statements of operations and retained earnings for the Nine
Months Ended December 31, 1997 and for the Years Ended March
31, 1997 and 1996............................................... 5
Statements of Cash Flows for the Nine Months Ended December
31, 1997 and for the Years Ended March 31, 1997 and 1996 ....... 6
Notes to Financial Statements...................................7 - 9
(b) Pro forma financial information:
Unaudited Pro Forma condensed combined financial statements
summary......................................................... 10
Unaudited Pro Forma Condensed Combined Balance Sheet as of
December 31, 1997 .............................................. 11
Unaudited Pro Forma Condensed Combined Statement of Operations for
the Nine Months Ended December 31, 1997 ........................ 12
Unaudited Pro Forma Condensed Combined Statement of Operations for
the Year Ended March 31, 1997................................... 13
<PAGE>
Report of Independent Certified Public Accountants
To the Board of Directors of
Efi Electronics Europe, S.L.
We have audited the accompanying balance sheets of Efi Electronics Europe, S.L.
as of December 31, 1997 and March 31, 1997 and 1996, and the related statements
of operations and retained earnings and cash flows, for the nine months ended
December 31, 1997 and for the years ended March 31, 1997 and 1996. 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 audits 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 Efi Electronics Europe, S.L. as
of December 31, 1997 and March 31, 1997 and 1996, and the results of its
operations and its cash flows for the nine months ended December 31, 1997 and
for the years ended March 31, 1997 and 1996, in conformity with generally
accepted accounting principles
/s/ UNIAUDIT-GRANT THORNTON
Barcelona, Spain
March 8, 1998
<PAGE>
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
(Unaudited) (as Restated)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 249,490 $ 46,429
Receivables (Note 2) 360,816 239,477
Inventories 25,936 40,003
Prepaid expenses 4,948 -0-
Total current assets 641,190 325,909
- --------------------------------------------------------------------------------------------------------
Property - net (Notes 3 and 4) 92,701 14,368
- --------------------------------------------------------------------------------------------------------
Total assets $ 733,891 $ 340,277
========================================================================================================
LIABILITIES
Current liabilities:
Current maturities of capital lease obligations (Note 4) $ 30,241 $ -0-
Accounts payable 195,675 257,447
Due to affiliate 323,712 -0-
Accrued liabilities 33,270 22,498
- --------------------------------------------------------------------------------------------------------
Total current liabilities 582,898 279,945
Capital lease obligations, less current maturities (Note 4) 49,176 -0-
- --------------------------------------------------------------------------------------------------------
Total liabilities 632,074 279,945
- --------------------------------------------------------------------------------------------------------
Commitments (Note 5) - -
STOCKHOLDERS' EQUITY
Common stock; $8.065 par value; 4,600 shares authorized;
4,600 shares issued and outstanding 37,099 37,099
Additional paid-in capital 12,782 12,782
Cumulative foreign currency translation adjustment (16,727) (5,426)
Retained earnings 68,663 15,877
- --------------------------------------------------------------------------------------------------------
Total stockholders' equity 101,817 60,332
- --------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 733,891 $ 340,277
========================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
<S> <C> <C>
DECEMBER 31, 1997 MARCH 31, 1997
ASSETS
Current assets:
Cash and cash equivalents $ 217,095 $ 249,490
Receivables (Note 2) 386,029 360,816
Inventories 100,881 25,936
Prepaid expenses 18,909 4,948
- --------------------------------------------------------------------------------------------------------
Total current assets 722,914 641,190
- --------------------------------------------------------------------------------------------------------
Property - net (Notes 3 and 4) 78,770 92,701
- --------------------------------------------------------------------------------------------------------
Total assets $ 801,684 $ 733,891
========================================================================================================
LIABILITIES
Current liabilities:
Current maturities of capital lease obligations (Note 4) $ 27,925 $ 30,241
Accounts payable 121,636 195,675
Due to affiliate 530,131 323,712
Accrued liabilities 7,120 33,270
- --------------------------------------------------------------------------------------------------------
Total current liabilities 686,812 582,898
- --------------------------------------------------------------------------------------------------------
Capital lease obligations, less current maturities (Note 4) 28,499 49,176
- --------------------------------------------------------------------------------------------------------
Total liabilities 715,311 632,074
- --------------------------------------------------------------------------------------------------------
Commitments (Note 5) - -
STOCKHOLDERS' EQUITY
Common stock; $8.065 par value; 4,600 shares authorized;
4,600 shares issued and outstanding 37,099 37,099
Additional paid-in capital 12,782 12,782
Cumulative foreign currency translation adjustment (24,298) (16,727)
Retained earnings 60,790 68,663
- --------------------------------------------------------------------------------------------------------
Total stockholders' equity 86,373 101,817
- --------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 801,684 $ 733,891
========================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<S> <C> <C> <C>
Nine Months Ended Year Ended March 31,
December 31, 1997 1997 1996
----------------- ------------ -----------
Net sales $ 856,361 $ 1,015,170 $ 441,783
Cost of sales 637,708 394,431 125,561
- ---------------------------------------------------------------------------------------------------------------
Gross profit 218,653 620,739 316,222
- ---------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling, general and
administrative 219,321 357,036 173,500
Research and development -0- 185,838 120,608
- ---------------------------------------------------------------------------------------------------------------
Total operating expenses 219,321 542,874 294,108
- ---------------------------------------------------------------------------------------------------------------
Earnings/(loss) from operations (668) 77,865 22,114
Other income/(expense):
Interest income 4,273 23,220 1,269
Interest expense (12,227) (21,798) (2,455)
Other, net 2,978 (1,947) 1,768
- ---------------------------------------------------------------------------------------------------------------
Total other income/ (expense) (4,976) (525) 582
- ---------------------------------------------------------------------------------------------------------------
(Loss)/earnings before income taxes (5,644) 77,340 22,696
Income taxes (Note 6) (2,229) (24,554) (6,819)
- ---------------------------------------------------------------------------------------------------------------
Net (loss)/earnings (7,873) 52,786 15,877
Retained earnings, beginning of period 68,663 15,877 -
- ---------------------------------------------------------------------------------------------------------------
Retained earnings, end of period $ 60,790 $ 68,663 $ 15,877
===============================================================================================================
(Loss)/earnings per share - basic $ (1.71) $ 11.48 $ 3.45
===============================================================================================================
Weighted - average common shares outstanding - basic 4,600 4,600 4,600
===============================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
<S> <C> <C> <C>
Nine Months Ended Year Ended March 31,
December 31, 1997 1997 1996
----------------- ------------ -----------
Cash flows provided from operating activities:
Net (loss)/earnings $ (7,873) $ 52,786 $ 15,877
Adjustments to reconcile net (loss)/earnings to net
cash (used in)/provided by operating activities:
Depreciation 9,234 4,836 3,690
Changes in operating assets and liabilities:
Receivables (25,213) (121,339) (239,477)
Inventories (74,945) 14,067 (40,003)
Prepaid expenses (13,961) (4,948) -0-
Accounts payable (74,039) (61,772) 257,447
Due to affiliate 206,419 323,712 -0-
Accrued liabilities (26,150) 10,772 22,499
- ---------------------------------------------------------------------------------------------------------------
Net cash (used in)/provided by operating activities (6,528) 218,114 20,033
- ---------------------------------------------------------------------------------------------------------------
Net cash flows from investing activities -
Capital expenditures 4,697 (2,111) (18,059)
- ---------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of Common Stock -0- -0- 49,881
Principal payments under capitalized lease obligations (22,993) (1,641) -0-
- ---------------------------------------------------------------------------------------------------------------
Net cash (used in)/provided by financing activities (22,993) (1,641) 49,881
- ---------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (7,571) (11,301) (5,426)
- ---------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash equivalents (32,395) 203,061 46,429
Cash and cash equivalents at beginning of period 249,490 46,429 -0-
- ---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 217,095 $ 249,490 $ 46,429
===============================================================================================================
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Income taxes $ 24,554 $ 6,819 $ -0-
Interest $ 12,227 $ 21,798 $ 2,455
===============================================================================================================
Supplemental disclosures of capitalized lease obligations:
Capitalized lease obligations $ -0- $ 81,058 $ -0-
===============================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
Notes To Financial Statements
Note 1 The Company and Summary of Significant Accounting Policies:
EFI Electronics Europe, S.L. ("EFI" or the "Company") is a Spanish entity that
sells transient voltage surge suppression ("TVSS") and related power products
both in Spain and to other non-US companies. The accounting policies of the
Company conform to generally accepted accounting principles. The following is a
summary of the most significant of such policies:
Cash and Cash Equivalents--The Company considers all interest-bearing deposits
with an original maturity date of three months or less when purchased to be cash
equivalents.
Inventory---Inventories consist primarily of purchased finished goods and are
stated at the lower of cost (first-in first-out method) or market.
Property--Property is stated at cost and depreciated on the straight-line method
over the 3 to 10 year lives of assets. Gains and losses on disposal of property
are accounted for and disclosed separately in the statement of operations and
retained earnings.
Revenue Recognition--Revenue is recognized generally when product is shipped
and/or services are performed.
Income Taxes--The Company utilizes the liability method of accounting for income
taxes. Under the liability method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. An
allowance against deferred tax assets is recorded when it is more likely than
not that such tax benefits will not be realized. Research tax credits are
recognized as utilized.
Earnings per Share--Basic earnings/(loss) per common share are based on the
weighted average number of common shares outstanding during the period. There
are no options or other equivalent share instruments outstanding. Therefore,
basic and diluted earnings/(loss) are the same.
Foreign Ownership--The Company is an affiliate of EFI Electronics, Inc.,
headquartered in Salt Lake City, Utah U.S.A., that owns 50% of its outstanding
shares. The balance of the shares are owned by four Spanish citizens, one of
whom is active in the operations of the Company.
Estimates--The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets, liabilities, revenues and
expenses during the reporting period. Estimates also affect the disclosure of
contingent assets and liabilities at the date of the financial statements.
Actual results could differ from these estimates.
Research and Development--The Company depends on the research and development
activities of its affiliate and has no such capabilities. In some circumstances,
the Company is charged for such activities that are solely for its benefit. Such
research and development costs have been charged to expense as incurred. The
Company expensed $-0-, $185,838 and $120,608 during the nine months ended
December 31, 1997, and the years ended March 31, 1997 and March 31, 1996,
respectively.
Foreign Currency Translation--The Company's asset and liability accounts, which
are originally recorded in Spanish Pesetas, are translated for financial
reporting purposes, into U.S. Dollar amounts at period-end rates of exchange.
Revenue and expense accounts are translated at the average daily rates during
the period. Transaction gains and losses, the amounts of which are not material,
are included in other income and expense. Foreign currency translation
adjustments are accumulated as a separate component of stockholders' equity.
<PAGE>
Note 2 Receivables:
<TABLE>
<CAPTION>
Receivables consist of the following:
<S> <C> <C> <C>
December 31, 1997 March 31, 1997 March 31, 1996
Trade and other receivables $ 391,256 $ 361,869 $ 240,530
Allowance for doubtful accounts (5,227) (1,053) (1,053)
- -----------------------------------------------------------------------------------------------------------------------
Total $ 386,029 $ 360,816 $ 239,477
=======================================================================================================================
</TABLE>
Note 3 Property:
<TABLE>
<CAPTION>
Property and estimated useful lives consist of the following:
<S> <C> <C> <C> <C>
Years December 31, 1997 March 31, 1997 March 31, 1996
Communications equipment 3 - 5 $ 81,058 $ 87,784 $ -0-
Furniture and fixtures 5 - 10 11,859 10,530 22,866
Less: accumulated depreciation (14,147) (5,613) (8,498)
- -----------------------------------------------------------------------------------------------------------------------
Property, net $ 78,770 $ 92,701 $ 14,368
=======================================================================================================================
</TABLE>
Note 4 Capital Lease Obligations:
Maturities of capital lease obligations at December 31, 1997 are as follows:
Fiscal year ending March 31,
1998 (3 months ending) $ 6,981
1999 27,925
2000 26,863
Thereafter -0-
-------------------------------------------------------
Total minimum lease payments 61,769
Less: amount representing interest 5,345
-------------------------------------------------------
Present value of net minimum lease payments 56,424
Less: current portion 27,925
-------------------------------------------------------
$ 28,499
=======================================================
Included in property is $81,058 of equipment under capital leases at December
31, 1997. The related accumulated amortization is $9,290.
<PAGE>
Note 5 Lease Obligations:
The Company currently leases its principal facility for a five-year term ending
in December 2002. The minimum future rental commitments under operating leases
are as follows:
Year ended March 31,
1998 $ 2,943
1999 11,772
2000 11,772
2001 11,772
2002 11,772
2003 8,829
-----------------------------
$ 47,088
=============================
Rental expense was as follows:
Nine months ended December 31, 1997 $ 9,094
Year ended March 31, 1997 $ 13,779
Year ended March 31, 1996 $ 14,644
Note 6 Income Taxes:
<TABLE>
<CAPTION>
The provision for income taxes for the nine months ended December 31, 1997 and
the years ended March 31, 1997 and 1996, consist of the following:
<S> <C> <C> <C>
December 31, 1997 March 31, 1997 March 31, 1996
Current $ 2,229 $ 24,554 $ 6,819
Deferred -0- -0- -0-
-------------------------------------------------
$ 2,229 $ 24,554 $ 6,819
=================================================
</TABLE>
Note 7 Subsequent Event:
On January 1, 1998, EFI Electronics Corporation increased its investment in the
Company by acquiring all of the outstanding shares of common stock held by
others.
<PAGE>
EFI ELECTRONICS CORPORATION
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On January 1, 1998, EFI Electronics Corporation (the "Company") completed the
acquisition of 50% of the outstanding shares of EFI Electronics Europe, S.L., a
Spanish company having its principal place of business in Barcelona, Spain ("EFI
Spain"). The Company owned the remaining 50% of the shares of EFI Spain prior to
the acquisition. EFI Spain was a joint venture between the Company and third
parties which was organized to engage in European distribution of the products
of the Company.
The proforma combined statements of operations for the nine months ended
December 31, 1997 and for the year ended March 31, 1997, give effect to the
transfer of control of EFI Spain to the Company as if such transaction had
occurred at April 1, 1996. The proforma consolidated balance sheet as of
December 31, 1997 gives effect to the transfer of control of EFI Spain to the
Company as if such transaction had occurred on December 31, 1997. The
transaction was accounted for as a purchase in accordance with the provisions of
Accounting Principles Board Opinion No. 16.
The historical financial statements included in the proforma combined financial
statements are as of the date and for the periods presented. These unaudited
proforma financial statements are for informational purposes only and not
necessarily indicative of the results of operations or financial position that
actually would have been achieved had the transaction described herein been
consummated as of the dates indicated, or that may be achieved in the future.
These unaudited proforma statements should be read in conjunction with the
historical financial statements and the related notes thereto of the Company as
of December 31, 1997 and for the nine months then ended filed on Form 10-QSB and
as of March 31, 1997 and for the year then ended filed on Form 10-KSB with the
Securities and Exchange Commission, and of EFI Spain included elsewhere herein.
<PAGE>
EFI ELECTRONICS CORPORATION
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EFI EFI PROFORMA PROFORMA
USA EUROPE ADJUSTMENTS COMBINED
ASSETS
Current assets:
Cash and cash equivalents $ 7,287 $ 217,095 $ (125,000) {F1} $ 99,382
Receivables 2,881,559 386,029 -0- 3,267,588
Inventories 3,894,878 100,881 (29,213) 3,966,546
Prepaid expenses 175,314 18,909 -0- 194,223
- ----------------------------------------------------------------------------------------------------------------------
Total current assets 6,959,038 722,914 (154,213) 7,527,739
Property - net 2,396,612 78,770 -0- 2,475,382
- ----------------------------------------------------------------------------------------------------------------------
Investment in EFI Europe 141,875 -0- (141,875) -0-
Due from EFI Europe 534,902 -0- (534,902) -0-
Goodwill -0- -0- 711,483 {F1} 711,483
Other assets 63,435 -0- -0- 63,435
- ----------------------------------------------------------------------------------------------------------------------
Total other assets 740,212 -0- 34,706 774,918
- ----------------------------------------------------------------------------------------------------------------------
Total assets $ 10,095,862 $ 801,684 $ (119,507) $ 10,778,039
======================================================================================================================
LIABILITIES
Current liabilities:
Revolving line of credit $ 3,395,148 $ -0- $ -0- $ 3,395,148
Current maturities of notes payable 587,414 -0- 131,682 {F1} 719,096
Current maturities of capital lease
obligations 99,912 27,925 -0- 127,837
Accounts payable 997,341 121,636 -0- 1,118,977
Due to EFI - USA -0- 530,131 (530,131) -0-
Reserve for customer warranty 246,420 -0- -0- 246,420
Accrued liabilities 792,701 7,120 -0- 799,821
- ----------------------------------------------------------------------------------------------------------------------
Total current liabilities 6,118,936 686,812 (398,449) 6,407,299
- ----------------------------------------------------------------------------------------------------------------------
Long-term liabilities:
Notes payable, less current maturities 832,551 -0- 143,318 {F1} 975,869
Capital leases, less current maturities 267,437 28,499 -0- 295,936
- ----------------------------------------------------------------------------------------------------------------------
Total long-term liabilities 1,099,988 28,499 143,318 1,271,805
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 7,218,924 715,311 (255,131) 7,679,104
- ----------------------------------------------------------------------------------------------------------------------
Commitments - - - -
STOCKHOLDERS' EQUITY
Common stock 528 37,099 (37,077) {F1} 550
Additional paid-in capital 2,625,962 12,782 281,996 {F1} 2,920,740
Retained earnings 460,448 60,790 (92,038) 429,200
Cumulative translation adjustment -0- (24,298) (17,257) (41,555)
- ----------------------------------------------------------------------------------------------------------------------
3,086,938 86,373 135,624 3,308,935
Less stock subscriptions receivable (210,000) -0- -0- (210,000)
- ----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 2,876,938 86,373 135,624 3,098,935
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 10,095,862 $ 801,684 $ (119,507) $ 10,778,039
======================================================================================================================
</TABLE>
{F1} - The Company purchased all of the outstanding common stock of EFI Spain.
The purchase price for the shares was $125,000 of cash, note payable of $275,000
(interest rate of 8.50%) and 220,000 shares of the Company's common stock
(valued at 65% of the average price of the Company's common stock for five
business days prior to the purchase of EFI Spain). Goodwill was determined as
the difference between the purchase price and the investment in EFI Spain.
<PAGE>
EFI ELECTRONICS CORPORATION
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EFI EFI PROFORMA PROFORMA
USA EUROPE ADJUSTMENTS COMBINED
Net sales $ 12,079,263 $ 856,361 $ (527,129) $ 12,408,495
Cost of sales (7,741,446) (637,708) 527,129 (7,852,025)
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 4,337,817 218,653 -0- 4,556,470
- ----------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling, general and administrative 3,084,695 219,321 -0- 3,304,016
Research and development 605,811 -0- -0- 605,811
Bad debts 20,000 -0- -0- 20,000
- ----------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,710,506 219,321 -0- 3,929,827
- ----------------------------------------------------------------------------------------------------------------------
Earnings/(loss) from operations 627,311 (668) -0- 626,643
Other income/(expense)
Equity in earnings of joint venture 23,375 -0- (23,375) -0-
Other expense, net (85,800) (12,227) -0- (98,027)
Interest income -0- 7,251 -0- 7,251
Interest expense (398,892) -0- -0- (398,892)
- ----------------------------------------------------------------------------------------------------------------------
Total other income/(expense) (461,317) (4,976) (23,375) (489,668)
- ----------------------------------------------------------------------------------------------------------------------
Earnings/(loss) before income taxes 165,994 (5,644) (23,375) 136,975
Income taxes -0- (2,229) -0- (2,229)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings/(loss) $ 165,994 $ (7,873) $ (23,375) $ 134,746
======================================================================================================================
Proforma earnings per share:
Basic $ 0.03
Diluted $ 0.02
======================================================================================================================
Weighted average common and dilutive common equivalent shares outstanding:
Basic 5,273,096
Diluted 5,478,433
======================================================================================================================
</TABLE>
Note - the proforma adjustments shown above eliminate routine inter-company
sales and expenses.
<PAGE>
EFI ELECTRONICS CORPORATION
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EFI EFI PROFORMA PROFORMA
USA EUROPE ADJUSTMENTS COMBINED
Net sales $ 13,759,812 $ 1,015,170 $ (256,105) $ 14,518,877
Cost of sales (9,235,554) (394,431) 256,105 (9,373,880)
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 4,524,258 620,739 -0- 5,144,997
- ----------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling, general and administrative 4,053,615 357,036 -0- 4,410,651
Research and development 552,458 185,838 (185,838) 552,458
Bad debt 79,117 -0- -0- 79,117
- ----------------------------------------------------------------------------------------------------------------------
Total operating expenses 4,685,190 542,874 (185,838) 5,042,226
- ----------------------------------------------------------------------------------------------------------------------
Earnings/(loss) from operations (160,932) 77,865 185,838 102,771
Other income/(expenses)
Equity in earnings of joint venture 151,818 -0- (151,818) -0-
Other income , net 106 21,273 -0- 21,379
Interest expense (454,415) (21,798) -0- (476,213)
- ----------------------------------------------------------------------------------------------------------------------
Total other income/(expense) (302,491) (525) (151,818) (454,834)
- ----------------------------------------------------------------------------------------------------------------------
Earnings/(loss) before income taxes (463,423) 77,340 34,020 (352,063)
Income taxes (33,895) (24,554) -0- (58,449)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings/(loss) $ (497,318) $ 52,786 $ 34,020 $ (410,512)
======================================================================================================================
Proforma loss per share:
Basic $ (0.11)
Diluted $ (0.11)
======================================================================================================================
Weighted average common and dilutive common equivalent shares outstanding:
Basic 3,815,016
Diluted 3,815,016
======================================================================================================================
</TABLE>
Note - the proforma adjustments shown above eliminate routine inter-company
sales and expenses.
