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Previous: HANCOCK JOHN WORLD FUND, 485APOS, 1997-12-09 |
Next: ML EQ REAL ESTATE PORTFOLIO L P, 8-K, 1997-12-09 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A2
--------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of Earliest Event Reported): Commission File Number:
JULY 30, 1996 0-21282
--------------------
SWISHER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
NEVADA 56-1541396
(State of incorporation) (I.R.S. Employer
Identification Number)
6849 FAIRVIEW ROAD
CHARLOTTE, NORTH CAROLINA 28210
704/364-7707
(Address of principal executive
offices and telephone number)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On July 30, 1996, Swisher International, Inc. (the "Company")
completed the acquisition of certain assets from Professional Carpet Systems,
Inc. and Old Dixie Supply Company (such assets are referred to herein as
"Surface Doctor"). On August 14, 1996, the Company filed a Current Report on
Form 8-K describing the transaction. On October 15, 1997, the Company filed a
Form 8-K/A1 containing financial statements for Surface Doctor and pro forma
financial information giving effect to the acquisition of Surface Doctor. In
response to comments made by the staff of the Securities and Exchange
Commission, certain changes have been made to such financial statements and pro
forma financial information.
(a) In accordance with Item 7(a)(1) of Form 8-K, the
Company hereby files the following financial
statements and related notes for Surface Doctor:
(i) audited statements of net assets as of
December 31, 1995 and 1994;
(ii) audited statements of operations and
audited statements of cash flows for the
years ended December 31, 1995 and 1994;
(iii) unaudited statement of net assets as
of June 30, 1996; and
(iv) unaudited statement of income and
unaudited statement of cash flow for the
six months ended June 30, 1996.
(b) In accordance with Item 7(b)(2) of Form 8-K, the
Company hereby files the following unaudited pro
forma condensed financial information giving effect
to the Company's acquisition of Surface Doctor:
(i) balance sheet as of the quarter ended
immediately prior to the acquisition (April
30, 1996 for the Company and June 30, 1996
for Surface Doctor); and
(ii) statement of income covering the fiscal
year ended immediately prior to the
acquisition (the fiscal year ended October
31, 1995 for the Company and the fiscal
year ended December 31, 1995 for Surface
Doctor).
(iii) statement of income for the six
months ended immediately prior to
acquisition (the six months ended April 30,
1996 for the Company and the six months
ended June 30, 1996 for Surface Doctor).
2
<PAGE> 3
(c) The following exhibits are furnished herewith in
accordance with the provisions of Item 601 of
Regulation S-K:
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
----------- ----------- --------
<S> <C> <C>
* 2.1 Asset Purchase Agreement by and among the Company, 2
Professional Carpet Systems, Inc. and Old Dixie
Supply Company, dated July 30, 1996, including the
Option and Registration Rights Agreements attached
thereto as Exhibits 2.1(b), 3.1 and 3.2,
respectively. (Pursuant to Item 601(b)(2) of
Regulation S-K, the remaining exhibits and
schedules are listed in the Asset Purchase Agreement
and will be furnished supplementally upon request by
the Commission.)
</TABLE>
- ----------------
* Previously filed with the Company's Form 8-K filed on August 14, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SWISHER INTERNATIONAL, INC.
Date: December 9, 1997 By: /s/ Patrick L. Swisher
------------------------------
Patrick L. Swisher, President
3
<PAGE> 4
SURFACE DOCTOR
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
<PAGE> 5
SURFACE DOCTOR
C O N T E N T S
Independent Auditor's Report
Financial Statements
Statements of Net Assets
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
<PAGE> 6
Independent Auditor's Report
The Board of Directors
Professional Carpet Systems, Inc.
Atlanta, Georgia
We have audited the accompanying statements of net assets of Surface
Doctor (as described in Note 1) as of December 31, 1995 and 1994, and the
related statements of operations and cash flows for the years then ended. These
financial statements are the responsibility of the Surface Doctor's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
As discussed in Note 1, Surface Doctor is a part of Professional Carpet
Systems, Inc. and affiliated companies and has no separate legal status or
existence.
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 Surface Doctor as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
Blackwell, Poole & Company
Atlanta, Georgia
October 8, 1996
1
<PAGE> 7
This sheet was intentionally left blank.
<PAGE> 8
SURFACE DOCTOR
STATEMENTS OF NET ASSETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
--------- ---------
<S> <C> <C>
Current Assets
Accounts Receivable, Less Allowance
for Doubtful Accounts of $22,900
and $16,210 for 1995 and 1994 $ 93,769 $ 85,747
Notes Receivable, Less Allowance for
Doubtful Notes of $20,000 and $6,715
for 1995 and 1994 (Notes 3 and 4) 48,996 98,834
Inventory (Note 2) 74,831 55,005
Prepaid Expenses 20,238 13,203
-------- --------
Total Current Assets 237,834 252,789
Property and Equipment, net (Notes 2 and 5) 109,246 107,938
Other Assets
Notes Receivable, Less Allowance for
Doubtful Notes of $20,472 and $4,000
for 1995 and 1994 (Notes 3 and 4) 51,248 47,986
Other 12,126 9,710
-------- --------
Total Other Assets 63,374 57,696
-------- --------
$410,454 $418,423
======== ========
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE> 9
LIABILITIES AND NET ASSETS
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
-------- --------
<S> <C> <C>
Current Liabilities
Accounts Payable $ 27,747 $106,450
Accrued Expenses 9,131 16,105
Advertising Fund (Note 2) 15,201 1,584
-------- --------
Total Current Liabilities 52,079 124,139
Deferred Revenue (Note 6) 58,495 54,170
Net Assets 299,880 240,114
-------- --------
$410,454 $418,423
======== ========
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE> 10
SURFACE DOCTOR
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
---------- ---------
<S> <C> <C>
Revenues
Franchise Fees (Note 2) $ 920,603 $ 695,175
Royalties 133,490 21,283
Supply Sales 507,739 101,091
Service Revenues 335,373 465,977
---------- ----------
Total Revenues 1,897,205 1,283,526
Costs and Expenses
Costs of Revenues (Note 2) 645,093 466,011
Selling, General and Administrative
Expenses (Note 2) 1,034,864 951,393
---------- ----------
Total Costs and Expenses 1,679,957 1,417,404
---------- ----------
Operating Income (Loss) 217,248 (133,878)
Other Income 11,072 1,247
---------- ----------
Net Income (Loss) $ 228,320 $ (132,631)
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE> 11
SURFACE DOCTOR
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) $ 228,320 $ (132,631)
Adjustment to Reconcile Net Income
to Cash Provided by Operating
Activities:
Depreciation and Amortization 29,203 15,719
Provision for Bad Debts 68,080 28,628
Changes in Current Assets and
Current Liabilities:
Accounts Receivable (41,345) (103,660)
Inventories (19,826) (55,005)
Prepaid Expenses (7,035) 1,025
Accounts Payable (78,703) 106,301
Advertising Fund 13,617 1,584
Accrued Expenses (6,974) 16,105
Deferred Revenue 4,325 53,170
----------- -----------
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 189,662 (68,764)
----------- -----------
INVESTING ACTIVITIES:
Capital Expenditures (30,218) (123,565)
Increase in Other Assets (2,709) (9,239)
Net Decrease (Increase) in
Notes Receivable 11,819 (157,535)
----------- -----------
CASH USED FOR INVESTING ACTIVITIES (21,108) (290,339)
----------- -----------
FINANCING ACTIVITIES
Net Increase (Decrease) in Net Assets (168,554) 359,103
----------- -----------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES (168,554) 359,103
NET CHANGE IN CASH -- --
CASH, BEGINNING OF YEAR -- --
----------- -----------
CASH, END OF YEAR $ -- $ --
=========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
5
<PAGE> 12
SURFACE DOCTOR
NOTES TO FINANCIAL STATEMENTS
1. Business
Surface Doctor ("SD") is a division of the affiliated companies
Professional Carpet Systems, Inc. ("PCS"), First American Operations,
Inc. ("FAO") and Old Dixie Supply Company ("ODS"). SD has no separate
legal status or existence. SD operates and franchises a resurfacing
process. SD specializes in resurfacing appliances, counter tops and
fixtures. The SD franchisees may market these services, based on
designated marketing areas throughout the world, to the apartment
industry, hotels, homeowners and commercial customers.
Management uses estimates and assumptions in preparing these
financial statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported amounts
of assets and liabilities, the disclosures of contingent assets and
liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were used.
SD was sold to Swisher International, Inc. effective July 1, 1996.
2. Summary of Significant Accounting Policies
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of SD
as described above. Revenues and direct costs are recorded based on
actual amounts. Selling, general and administrative expenses were
allocated based on best estimates available.
INVENTORIES
Inventories are valued at the lower of cost (first-in, first-out)
or market.
PROPERTY, EQUIPMENT, DEPRECIATION AND AMORTIZATION
Property and equipment are stated at cost. Depreciation and
amortization are computed over the estimated useful lives of the assets
on a straight-line basis for financial reporting and accelerated
methods for income tax purposes. Expenditures for maintenance, repairs,
renewals, and betterments that do not materially prolong the useful
lives of the assets are expensed as incurred during the year.
The estimated useful lives for each class of property and
equipment are as follows:
<TABLE>
<S> <C>
Vehicles 5 years
Equipment 7 years
Leasehold Improvements Term of Lease
</TABLE>
6
<PAGE> 13
SURFACE DOCTOR
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
REVENUE RECOGNITION
Franchise sales are recognized when SD has performed all material
services and obligations of the franchise contract, which generally
coincides with the completion of all training by the franchisee.
Certain franchise sales have been deferred until SD has substantially
performed all of its obligations under the franchise agreement. Royalty
fees are recognized as revenue as the fees are earned. Service revenues
from SD owned operations are recognized when the services are
performed. The Franchisees pay monthly royalties for ongoing support.
At the end of training, the Franchisee is fully prepared to begin
operations.
SD recognizes interest income when earned which coincides in most
cases when received. Some interest is recognized when received due to
some non-performing loans. SD reports change in present value of the
expected future cash flows related to impaired notes receivable as an
increase or decrease in bad debt expense.
ADVERTISING FUND
SD franchises are required to contribute a fixed monthly amount
for local, regional and national advertising to a fund that is
maintained and accounted for by SD. The funds are disbursed by SD at
its discretion.
INCOME TAXES
PCS and FAO elected to be taxed under Subchapter S of the Internal
Revenue Code. Accordingly, taxable income of the SD divisions of PCS
and FAO are taxable to the stockholder who is responsible for payment
of taxes thereon.
Effective January 1, 1995, ODS elected to be taxed under
Subchapter S of the Internal Revenue Code. The election was approved by
the Internal Revenue Service in 1994; therefore, no deferred income
taxes were provided for the year ended December 31, 1994. Taxable
income of the SD division of ODS for the year ended December 31, 1995,
is taxable to the stockholder who is responsible for payment of taxes
thereon.
7
<PAGE> 14
SURFACE DOCTOR
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
MANAGEMENT ALLOCATIONS
Included in selling, general and administrative expenses for the
years ended December 31, 1995 and 1994 are management charges from PCS,
FAO and ODS. These charges represent allocation of corporate expenses
which are based on various allocation methods. These allocation methods
were based on sales and payroll cost of each affiliated company.
Management believes that the above allocations are reasonable and
result in costs that are not materially different from those which
would have been incurred on a stand alone basis.
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject SD to
concentrations of credit risk consist principally of accounts
receivable and notes receivable. Accounts receivable credit risks are
limited due to the large number of customers comprising SD's customer
base and their dispersion across many different geographic areas. Notes
receivable credit risks are limited due to SD requiring collateral and
substantial down payments.
3. Notes Receivable
SD has notes receivable from its franchises that were issued in
conjunction with the sales of the individual franchises. These notes
are due in years ranging from 1996 to 2002 and bear interest at rates
ranging from 8% to 12%. The notes are primarily collateralized by all
right, title, and interest in the franchise granted, the proceeds upon
any sale of the franchise and all accounts receivable of the franchise
company. Notes receivable amounted to $140,716 and $157,535, less an
allowance for doubtful notes of $40,472 and $10,715 at December 31,
1995 and 1994, respectively. SD provided allowances for two specific
international accounts that totaled approximately $44,000.
8
<PAGE> 15
SURFACE DOCTOR
NOTES TO FINANCIAL STATEMENTS
4. Impaired Notes Receivable
As of December 31, 1995 and 1994, the recorded investment in
impaired notes receivable was $29,700, and $5,000 (with allowances for
doubtful notes of $29,700 and $5,000) respectively. Following is a
summary of the activity in the allowance for doubtful notes accounts:
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
-------- --------
<S> <C> <C>
Balance Beginning of Year $10,715 -
Additions Charged to Operations 34,757 10,715
Write-Offs (5,000) -
------- -------
Balance End of Year $40,472 $10,715
======= =======
</TABLE>
5. Property and Equipment
Property and equipment consisted of the following
<TABLE>
<CAPTION>
December December
31, 1995 31, 1994
-------- --------
<S> <C> <C>
Vehicles $ 74,678 $ 74,678
Equipment 64,926 48,588
Leasehold Improvements 23,029 9,149
Less accumulated depreciation
and amortization (53,387) (24,477)
-------- --------
$109,246 $107,938
======== ========
</TABLE>
6. Deferred Revenue
Deferred revenue at December 31, 1995 and 1994 represents certain
franchise sales that have been deferred until SD has substantially
performed all of its obligations under the franchise agreement.
9
<PAGE> 16
SURFACE DOCTOR
STATEMENT OF NET ASSETS
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Current Assets
Accounts Receivable, Less allowance for Doubtful
Accounts of $31,747 $ 120,543
Notes Receivable, Less Allowance for Doubtful
Notes of $4,000 21,000
Inventories 83,426
Prepaid Expenses 40,504
-------------------
Total Current Assets 265,473
Property and Equipment, Net 93,243
Other Assets
Notes Receivable, Less Allowance for Doubtful
Notes of $10,903 58,784
Other 15,616
-------------------
Total Other Assets 74,400
-------------------
$ 433,116
===================
Current Liabilities
Accounts Payable $ 159,281
Accrued Expenses 5,877
Advertising 27,468
-------------------
Total Current Liabilities 192,626
Deferred Revenue 116,215
Net Assets 124,275
$ 433,116
===================
</TABLE>
<PAGE> 17
SURFACE DOCTOR
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Revenues
Franchise Fees $ 270,970
Royalties 88,105
Supply Sales 318,155
Service Revenues 159,968
------------------
Total Revenue 837,198
Costs and Expenses
Costs of Revenues 320,683
Selling, General and Administrative Expenses 402,475
------------------
Total Costs and Expenses 723,158
------------------
Operating Income 114,040
Other Income 7,963
------------------
Net Income $ 122,003
==================
</TABLE>
<PAGE> 18
SURFACE DOCTOR
STATEMENT OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net Income $ 122,003
Adjustments to Reconcile Net Income to Cash
Provided by Operating Activities:
Depreciation and Amortization 17,477
Provision for Bad Debts 23,208
Changes in Current Assets and Current Liabilities:
Accounts receivable (44,220)
Inventories (8,595)
Prepaid Expense (20,265)
Accounts Payable 131,534
Advertising Fund 12,267
Accrued Expenses (3,254)
Deferred Revenue 57,720
-------------------
CASH PROVIDED BY OPERATING ACTIVITIES 287,875
-------------------
INVESTING ACTIVITIES
Capital Expenditures (1,300)
Increase in Other Assets (3,665)
Net Decrease in Notes Receivable 14,698
-------------------
CASH PROVIDED BY INVESTING ACTIVITIES 9,733
-------------------
FINANCING ACTIVITIES
Decrease in Net Assets (297,608)
-------------------
CASH USED FOR FINANCING ACTIVITIES (297,608)
-------------------
DECREASE IN CASH -
CASH, BEGINNING OF PERIOD -
-------------------
CASH, END OF PERIOD $ -
===================
</TABLE>
<PAGE> 19
SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Swisher Surface Adjustments
International Inc. Doctor Increase Pro Forma
April 30, 1996 June 30, 1996 (Decrease) Combined
------------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 775,476 $ -- $ (20,000) $ 755,476
Cash, restricted 700,000 -- -- 700,000
Accounts receivable, franchisees, net of
allowance for doubtful accounts
$ 114,391 1,356,586 120,543 96 1,477,225
Other receivables 337,323 -- -- 337,323
Current portion of notes receivable 614,890 21,000 -- 635,890
Inventories 96,769 83,426 (8,426) 171,769
Prepaid expenses 168,188 40,504 -- 208,692
Prepaid advertising costs 170,821 -- -- 170,821
----------- ----------- ----------- -----------
TOTAL CURRENT ASSETS 4,220,053 265,473 (28,330) 4,457,196
----------- ----------- ----------- -----------
Property and equipment, Net 603,620 93,243 (37,010) 659,853
----------- ----------- ----------- -----------
Other Assets
Notes receivable 2,113,281 58,784 (97) 2,171,968
Intangible assets, net 1,016,096 -- 814,963 1,831,059
Other assets -- 15,616 (15,616) --
----------- ----------- ----------- -----------
3,129,377 74,400 799,250 4,003,027
----------- ----------- ----------- -----------
TOTAL ASSETS $ 7,953,050 $ 433,116 $ 733,910 $ 9,120,076
=========== =========== =========== ===========
</TABLE>
<PAGE> 20
SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Swisher Surface Adjustments
International Inc. Doctor Increase Pro Forma
April 30, 1996 June 30, 1996 (Decrease) Combined
------------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 1,113,316 $ -- $ -- $ 1,113,316
Accounts payable 678,671 159,281 (105,000) 732,952
Accrued expenses 120,946 5,877 (5,877) 120,946
Advertising fund -- 27,468 -- 27,468
Deferred revenue 175,986 116,215 -- 292,201
Income taxes payable 99,195 -- -- 99,195
----------- ----------- ----------- -----------
TOTAL CURRENT LIABILITIES 2,188,114 308,841 (110,877) 2,386,078
Long-Term Debt, less current maturities 969,052 -- -- 969,052
Deferred income taxes 85,124 -- -- 85,124
----------- ----------- ----------- -----------
TOTAL LIABILITIES 3,242,290 308,841 (110,877) 3,440,254
----------- ----------- ----------- -----------
Stockholders' Equity
Preferred stock, par value $.10; authorized
1,500,000 shares; none issued -- -- -- --
Series A Junior Participation Preferred Stock
par value $1.00; authorized 100,000 shares;
none issued -- -- -- --
Common stock, par value $.01; authorized
15,000,000 shares; 1,735,799 shares issued
and outstanding at April 30, 1996 17,357 -- 2,000 19,357
Additional paid-in capital 3,039,599 124,275 842,787 4,006,661
Retained earnings 1,653,804 -- -- 1,653,804
----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 4,710,760 124,275 844,787 5,679,822
----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY
AND LIABILITIES $ 7,953,050 $ 433,116 $ 733,910 $ 9,120,076
=========== =========== =========== ===========
</TABLE>
<PAGE> 21
SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Swisher Surface Pro Forma
International Inc. Doctor Adjustments
Year End Year End Increase Pro Forma
October 31, 1995 (c)December 31, 1995 (c)(Decrease) Combined
----------------- -------------------- -------------- ----------
<S> <C> <C> <C> <C>
Revenues
Product Sales to Franchisees $2,359,461 $ 507,739 $ -- $2,867,200
Service Fees 1,382,852 -- -- 1,382,852
Royalties 1,192,336 133,490 -- 1,325,826
Marketing Fees 45,864 -- -- 45,864
Revenue from Company
Owned Operations 1,775,585 335,373 -- 2,110,958
Initial franchise sales 934,118 920,603 -- 1,854,721
Other Income 272,318 11,072 -- 283,390
---------- ---------- ---------- ----------
Total Revenues 7,962,534 1,908,277 -- 9,870,811
---------- ---------- ---------- ----------
Costs and Expenses
Cost of Revenues 4,054,660 645,093 -- 4,699,753
Selling, General and
Administrative 3,124,145 1,034,864 19,574 (a) 4,178,583
Interest Expense 162,110 -- -- 162,110
---------- ---------- ---------- ----------
Total Costs and Expenses 7,340,915 1,679,957 19,574 9,040,446
---------- ---------- ---------- ----------
Income Before Taxes 621,619 228,320 (19,574) 830,365
Income Tax Expense 246,000 -- 81,522 (a) 327,522
---------- ---------- ---------- ----------
Net Income $ 375,619 $ 228,320 $ (101,096) $ 502,843
========== ========== ========== ==========
Net Income per Common Share $ 0.20 $ 0.24
========== ==========
Weighted Average Number of
Common Shares and Common
Share Equivalents Outstanding 1,904,258 200,000 (b) 2,104,258
========== ========== ==========
</TABLE>
<PAGE> 22
SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Swisher Surface Pro Forma
International Inc. Doctor Adjustments
Six Months Ended Six Months Ended Increase Pro Forma
April 30, 1996 (c)June 30, 1996 (c)(Decrease) Combined
----------------- ---------------- ------------- ----------
<S> <C> <C> <C> <C>
Revenues
Product Sales to Franchisees $1,380,094 $ 318,155 $ -- $1,698,249
Service Fees 806,803 -- -- 806,803
Royalties 749,024 88,105 -- 837,129
Marketing Fees 22,594 -- -- 22,594
Revenue from Company
Owned Operations 1,280,709 159,968 -- 1,440,677
Initial franchise sales 287,161 270,970 -- 558,131
Other Income 132,918 7,963 -- 140,881
---------- ---------- ---------- ----------
Total Revenues 4,659,303 845,161 -- 5,504,464
---------- ---------- ---------- ----------
Costs and Expenses
Cost of Revenues 2,350,775 320,683 -- 2,671,458
Selling, General and
Administrative 1,863,114 402,475 9,788 (a) 2,275,377
Interest Expense 124,882 -- -- 124,882
---------- ---------- ---------- ----------
Total Costs and Expenses 4,338,771 723,158 9,788 5,071,717
---------- ---------- ---------- ----------
Income Before Taxes 320,532 122,003 (9,788) 432,747
Income Tax Expense 131,418 -- 43,827 (a) 175,245
---------- ---------- ---------- ----------
Net Income $ 189,114 $ 122,003 $ (53,615) $ 257,502
========== ========== ========== ==========
Net Income per Common Share $ 0.11 $ 0.13
========== ==========
Weighted Average Number of
Common Shares and Common
Share Equivalents Outstanding 1,794,649 200,000 (b) 1,994,649
========== ========== ==========
</TABLE>
<PAGE> 23
SWISHER INTERNATIONAL, INC. AND SURFACE DOCTOR
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
<TABLE>
<S> <C> <C> <C>
(a) The following proforma adjustments are incorporated in the pro forma
condensed combined statements of income:
Year ended Six Months Ended
October 31, 1995 April 30, 1996
---------------- ----------------
1. Increase in amortization expense
resulting from goodwill. $ (17,241) $ (8,621)
2. Increase in amortization expense
resulting from adjustment to
carrying amount of trademarks. (2,333) (1,167)
3. Decrease in income tax expense
associated with 1 and 2 above. 7,751 3,876
4. Increase in income tax expense resulting
from the change of Surface Doctor from
an S-Corporation to a C-Corporation status. (89,273) (47,703)
---------- ---------
$ (101,096) $ (53,615)
========== =========
(b) Represents the issuance of 200,000 shares of Swisher International, Inc.
stock in exchange for the assets of Surface Doctor.
(c) Combined statements for different periods due to the different fiscal
year-end of the registrant and acquired companies.
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