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Previous: COMMONWEALTH CASH RESERVE FUND INC, N-30D, 1999-12-13 |
Next: SYNTHETIC INDUSTRIES INC, SC 14D1/A, 1999-12-13 |
SECURITIES AND EXCHANGES 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)
September 29,1999
United Shields Corporation
(Exact name of Registrant as specified in its Charter)
| Colorado | 33-11062D | 84-1049047 | ||
| (State or other | (Commission | (IRS Employer | ||
| jurisdiction
of incorporation) |
File No.) | Identification Number) |
2640 Peerless Road, Cleveland, Tennessee 37312
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(423) 479-1655
N/A
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits
(a), (b) Financial Statements of Business Acquired and Pro Forma Financial Information
Disclosures relative to the acquisition by United Shields Corporation of Pittsfield Mold & Tool, Inc. were made on the registrant's Current Report on Form 8-K, filed October 14, 1999. The following historical pro forma financial statements of Pittsfield Mold & Tool, Inc. are filed with this amendment to such Current Report on Form 8-K:
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
PITTSFIELD MOLD & TOOL, INC.
December 31, 1998 and 1997
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS 5
STATEMENTS OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Pittsfield Mold & Tool, Inc.
We have audited the accompanying balance sheets of Pittsfield Mold & Tool, Inc. (a Massachusetts Corporation) as of December 31, 1998 and 1997, and the related statements of operations and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our 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 Pittsfield Mold & Tool, Inc. as of December 31, 1998 and 1997, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Cincinnati, Ohio
October 22, 1999
| Pittsfield Mold & Tool, Inc. | |||||
| BALANCE SHEETS | |||||
| December 31, | |||||
| ASSETS | 1998 | 1997 | |||
| CURRENT ASSETS | |||||
| Cash | $ |
49,777 |
$ |
606,627 | |
| Accounts receivable - trade | 1,713,589 | 246,359 | |||
| Inventories | 412,684 | 477,182 | |||
| Prepaid expenses | 16,964 | 16,639 | |||
| 2,193,014 | 1,346,807 | ||||
| PROPERTY AND EQUIPMENT - AT COST | |||||
| Machinery and equipment | 4,145,067 | 3,559,382 | |||
| Furniture and fixtures | 81,891 | 81,891 | |||
| Vehicles | 41,806 | 41,806 | |||
| 4,268,764 | 3,683,079 | ||||
| Less accumulated depreciation | 2,911,237 | 2,560,443 | |||
| 1,357,527 | 1,122,636 | ||||
| $ |
3,550,541 |
$ |
2,469,443 | ||
| LIABILITIES | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable | $ |
982,441 |
$ |
143,093 | |
| Accounts payable - related party | 642,407 | 633,475 | |||
| Current portion of long term debt | 132,357 | 159,332 | |||
| Capital lease obligation - current | 52,735 | - | |||
| Accrued liabilities | 129,812 | 33,496 | |||
| Customer deposits | 165,124 | 98,333 | |||
| Total current liabilities | 2,104,876 | 1,067,729 | |||
| LONG TERM DEBT | - | 131,770 | |||
| CAPITAL LEASE OBLIGATION | 237,765 | - | |||
| COMMITMENTS | - | - | |||
| SHAREHOLDERS' EQUITY | |||||
| Common stock, no par value - 5,000 shares authorized, | |||||
| 1,000 shares issued and outstanding at aggregate cost | 5,000 | 5,000 | |||
| Retained earnings | 1,202,900 | 1,264,944 | |||
| Total shareholders' equity | 1,207,900 | 1,269,944 | |||
| $ |
3,550,541 |
$ |
2,469,443 | ||
| Pittsfield Mold & Tool, Inc. | |||||
| STATEMENTS OF OPERATIONS AND RETAINED EARNINGS | |||||
| For the years ended December 31, | |||||
| 1998 | 1997 | ||||
| Net sales | $ | 7,599,348 | $ | 5,125,338 | |
| Cost of sales | 6,939,541 | 3,898,252 | |||
| Gross profit | 659,807 | 1,227,086 | |||
| Selling, general and administrative expense | 727,452 | 758,991 | |||
| Operating profit (loss) | (67,645) | 468,095 | |||
| Interest expense | 21,677 | 8,179 | |||
| Other income | (27,278) | (64,074) | |||
| (5,601) | (55,895) | ||||
| NET EARNINGS (LOSS) | (62,044) | 523,990 | |||
| RETAINED EARNINGS at beginning of year | 1,264,944 | 1,305,784 | |||
| Distributions to shareholders | - | (564,830) | |||
| RETAINED EARNINGS at end of year | $ |
1,202,900 |
$ |
1,264,944 | |
| Pittsfield Mold & Tool, Inc. | |||||
| STATEMENTS OF CASH FLOWS | |||||
| For the years ended December 31, | |||||
|
1998 |
1997 | ||||
| Cash flows provided by (used in) operating activities: | |||||
| Net earnings (loss) | $ | (62,044) | $ | 523,990 | |
| Adjustments to reconcile net earnings to net cash | |||||
| provided by (used in) operating activities: | |||||
| Depreciation | 350,795 | 286,403 | |||
| Gain on disposal of property and equipment | - | (38,000) | |||
| Changes in assets and liabilities: | |||||
| Accounts receivable | (1,467,230) | 185,200 | |||
| Inventories | 64,498 | (398,792) | |||
| Prepaid expenses | (325) | 2,308 | |||
| Accounts payable | 848,280 | 570,725 | |||
| Accrued liabilities | 96,316 | (14,048) | |||
| Customer deposits | 66,791 | 98,333 | |||
| Net cash provided by (used in) operating activities | (102,919) | 1,216,119 | |||
| Cash flows provided by (used in) investing activities: | |||||
| Capital expenditures | (282,686) | (539,388) | |||
| Proceeds from sale of property and equipment | - | 38,000 | |||
| Net cash used in investing activities | (282,686) | (501,388) | |||
| Cash flows provided by (used in) financing activities: | |||||
| Proceeds from issuance of debt | - | 300,000 | |||
| Repayment of long term debt | (158,745) | (8,898) | |||
| Payments on capital lease obligation | (12,500) | - | |||
| Distributions to shareholders | - | (564,830) | |||
| Net cash used in financing activities | (171,245) | (273,728) | |||
| Net increase (decrease) in cash | (556,850) | 441,003 | |||
| Cash at beginning of year | 606,627 | 165,624 | |||
| Cash at end of year | $ | 49,777 | $ | 606,627 | |
| Supplemental disclosures of cash flow information: | |||||
| Cash paid during the year for interest | $ | 21,677 | $ | 6,594 | |
| Supplemental non-cash disclosures: | |||||
| Equipment obtained under capital lease | $ | 303,000 | $ | - | |
Pittsfield Mold & Tool, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE A - SUMMARY OF ACCOUNTING POLICIES
Pittsfield Mold & Tool, Inc. (the Company), located in Pittsfield, Massachusetts, is engaged in the manufacturing of custom plastic molded industrial parts and custom molds for customers located throughout the United States. A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.
1. Cash
The Company maintains cash balances at a Massachusetts institution. These accounts are insured by the FDIC up to $100,000. At December 31, 1998, the Company had $52,141 of uninsured balances held in this financial institution.
2. Accounts Receivable
The Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made.
3. Inventories
Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.
4. Property and Equipment
Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the related assets, on straight-line and accelerated methods. Expenditures for maintenance and repairs are charged to expense as incurred while expenditures that extend the useful life of assets are capitalized. The cost and related accumulated depreciation for property and equipment retired or sold are removed from the accounts and the resulting gain or loss is included in operations.
Pittsfield Mold & Tool, Inc.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998 and 1997
NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)
5. Income Taxes
Income taxes are not recorded in the financial statements because the Company has elected S Corporation treatment for federal and state income tax purposes. Consequently, any income or loss is included in the tax returns of the Company's shareholders. Had the Company recorded such taxes, Federal and state tax expense would have been approximately $210,000 for the year ended December 31, 1997. There would have been no federal and state tax expense for the year ended December 31, 1998.
6. Use of Estimates in Financial Statements
In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE B - INVENTORIES
Inventories at December 31, consist of the following:
| 1998 | 1997 | |
| Raw materials | $216,819 | $136,322 |
| Finished goods | 195,865 | 340,860 |
| $412,684 | $477,182 |
Pittsfield Mold & Tool, Inc.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998 and 1997
NOTE C - LONG TERM DEBT
The Company had a bank term loan payable in monthly installments of $6,173 including interest at a rate of 8.50% per annum. The original maturity date was October 8, 2002 and it was secured by a first security interest in the business assets of the Company. The Company made a $100,000 payment towards the loan on January 5, 1998 and retained the same monthly payments during 1998. The loan was paid off on May 4, 1999; accordingly, the entire amount outstanding at December 31, 1998 has been classified as current.
NOTE D - CAPITAL LEASE OBLIGATION
The Company entered into an agreement during 1998 to lease certain equipment under a capital lease that expires in 2003. Following is a schedule, by years, of future minimum payments under the capital lease together with the present value, calculated at the Company's incremental borrowing rate at the inception of the lease, of future minimum rentals as of December 31, 1998:
| Year ending December 31: | |
| 1999 | $ 75,404 |
| 2000 | 75,404 |
| 2001 | 75,404 |
| 2002 | 75,404 |
| 2003 | 51,553 |
| Total minimum lease payments | 353,169 |
| Amount representing interest | (62,669) |
| Current portion of capital lease obligation | (52,735) |
| Present value of long-term obligation under
capital lease |
$237,765 |
| At December 31, 1998, equipment held under capital lease consisted of the following: | |
| Machinery and equipment | $303,000 |
| Less: accumulated depreciation | 43,299 |
| $259,701 | |
Pittsfield Mold & Tool, Inc.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998 and 1997
NOTE E - OPERATING LEASES
On January 1, 1997, the Company entered into an agreement with its stockholders to lease office and warehouse space at an annual rate of $300,000, plus maintenance, insurance and taxes. The entire 1997 and 1998 rent totaling $600,000 is included in accounts payable - related party at December 31, 1998. The entire 1997 rent of $300,000 was included in this account at December 31, 1997. This agreement expires December 31, 2001.
The Company also leases additional warehouse space at an annual rental of $36,000. The lease is with a related party and has no fixed terms.
Total rent expense was $333,750 and $322,500 for the years ended December 31, 1998 and 1997, respectively.
NOTE F - 401(K) PLAN
The Company has a 401(k) Savings Plan covering eligible employees; contributions are made at the discretion of the Board of Directors. Contributions to the plan were approximately $23,000 in 1998 and $9,000 in 1997.
NOTE G - MAJOR CUSTOMERS
For the year ended December 31, 1998, the Company had sales to two customers that approximated 57% of total sales. The Company purchased approximately $700,000 of parts from one of these customers necessary to manufacture that customer's goods. For the year ended December 31, 1997, the Company had sales to two customers, which approximated 45% of total sales.
NOTE H - SUBSEQUENT EVENT
On September 29, 1999, all of the outstanding stock of the Company was acquired by United Shields Corporation for $2,200,000, consisting of cash and promissory notes.
|
PITTSFIELD MOLD & TOOL, INC. BALANCE SHEET September 29, 1999 (UNAUDITED) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| CASH | $353,886 | |||||||
| ACCOUNTS RECEIVABLE, NET | 1,862,349 | |||||||
| INVENTORIES | 567,477 | |||||||
| PREPAID EXPENSES | 279 | |||||||
| TOTAL CURRENT ASSETS | 2,783,991 | |||||||
| PROPERTY, PLANT AND EQUIPMENT | 3,992,970 | |||||||
| LESS: ACCUMULATED DEPRECIATION | 2,837,355 | |||||||
| NET PROPERTY, PLANT AND EQUIPMENT | 1,155,615 | |||||||
| TOTAL ASSETS | $3,939,606 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| ACCOUNTS PAYABLE | $1,112,502 | |||||||
| ACCRUED EXPENSES AND OTHER | ||||||||
| CURRENT LIABILITIES | 291,368 | |||||||
| CAPITAL LEASE OBLIGATION | 52,735 | |||||||
| TOTAL CURRENT LIABILITIES | 1,456,605 | |||||||
| LONG-TERM LIABILITIES | ||||||||
| CAPITAL LEASE OBLIGATION | 198,635 | |||||||
| TOTAL LONG-TERM LIABILITIES | 198,635 | |||||||
| TOTAL LIABILITIES | 1,655,240 | |||||||
| STOCKHOLDERS' EQUITY | ||||||||
| COMMON STOCK | 5,000 | |||||||
| ACCUMULATED EARNINGS | 2,279,366 | |||||||
| TOTAL STOCKHOLDERS' EQUITY | 2,284,366 | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,939,606 | |||||||
| PITTSFIELD MOLD & TOOL, INC.
STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
|
NINE MONTHS ENDED | |||||||
| 9/29/99 | 9/30/98 | ||||||
| NET SALES | $7,889,378 | $5,306,432 | |||||
| COST OF SALES | 6,335,377 | 4,452,020 | |||||
| GROSS PROFIT | 1,554,001 | 854,412 | |||||
| SELLING, GENERAL AND ADMINISTRATIVE | |||||||
| EXPENSES | 474,167 | 474,077 | |||||
| INCOME FROM OPERATIONS | 1,079,834 | 380,335 | |||||
| INTEREST EXPENSE | (22,048) | (12,230) | |||||
| OTHER INCOME | 18,674 | 20,999 | |||||
| NET EARNINGS | $1,076,460 | $ 389,104 | |||||
|
PITTSFIELD MOLD & TOOL, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||
|
NINE MONTHS ENDED | |||||||||
| 9/29/99 | 9/30/98 | ||||||||
| CASH FLOWS PROVIDED BY(USED IN) OPERATING ACTIVITIES: | |||||||||
| NET EARNINGS | $1,076,460 | $ 389,104 | |||||||
| ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH | |||||||||
| PROVIDED BY (USED IN) OPERATING ACTIVITIES | |||||||||
| DEPRECIATION | 266,728 | 167,794 | |||||||
| CHANGES IN ASSETS AND LIABILITIES: | |||||||||
| ACCOUNTS RECEIVABLE | (148,760) | (688,237) | |||||||
| INVENTORIES | (154,793) | (101,538) | |||||||
| PREPAID EXPENSES | 16,685 | 15,894 | |||||||
| ACCOUNTS PAYABLE | 130,061 | 320,945 | |||||||
| CUSTOMER DEPOSITS | (165,124) | 0 | |||||||
| ACCRUED LIABILITIES | (438,443) | 126,821 | |||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 582,814 | 230,783 | |||||||
| CASH FLOWS USED IN INVESTING ACTIVITIES: | |||||||||
| CAPITAL EXPENDITURES | (64,812) | (533,556) | |||||||
| NET CASH USED IN INVESTING ACTIVITIES | (64,812) | (533,556) | |||||||
| CASH FLOWS USED IN FINANCING ACTIVITIES: | |||||||||
| PAYMENTS ON CAPITAL LEASE OBLIGATIONS | (213,893) | (61,053) | |||||||
| NET CASH USED IN FINANCING ACTIVITIES | (213,893) | (61,053) | |||||||
| NET INCREASE (DECREASE) IN CASH | 304,109 | (363,826) | |||||||
| CASH AT BEGINNING OF PERIOD | 49,777 | 606,627 | |||||||
| CASH AT END OF PERIOD | $ 353,886 | $ 242,801 | |||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||
| CASH PAID DURING THE YEAR FOR INTEREST | $ 22,048 | $ 12,230 | |||||||
| UNITED SHIELDS CORPORATION | ||||||||||
|
PRO FORMA CONSOLIDATED BALANCE SHEET | ||||||||||
|
HISTORICAL |
||||||||||
|
USC |
PM&T | PRO FORMA | PRO FORMA | |||||||
|
9/24/99 |
9/29/99 |
ADJUSTMENTS(1) |
COMBINED | |||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| CASH | $1,648,519 | $353,886 | ($726,318) | $1,276,087 | ||||||
| ACCOUNTS RECEIVABLE, NET | 1,594,392 | 1,862,349 | 0 | 3,456,741 | ||||||
| INVENTORIES | 1,202,012 | 567,477 | 0 | 1,769,489 | ||||||
| PREPAID EXPENSES | 18,944 | 279 | 0 | 19,223 | ||||||
| TOTAL CURRENT ASSETS | 4,463,867 | 2,783,991 | (726,318) | 6,521,540 | ||||||
| PROPERTY, PLANT AND EQUIPMENT | 5,564,259 | 3,992,970 | 5,187,154 | 14,744,383 | ||||||
| LESS: ACCUMULATED DEPRECIATION | 1,134,474 | 2,837,355 | 0 | 3,971,829 | ||||||
| NET PROPERTY, PLANT AND EQUIPMENT | 4,429,785 | 1,155,615 | 5,187,154 | 10,772,554 | ||||||
| DEPOSITS | 55,483 | 0 | 0 | 55,483 | ||||||
| GOODWILL, NET | 4,722,208 | 0 | 1,347,966 | 6,070,174 | ||||||
| RESTRICTED SHORT-TERM INVESTMENTS | 694,395 | 0 | 0 | 694,395 | ||||||
| INVESTMENT IN POTENTIAL ACQUISITIONS | 22,613 | 0 | (22,613) | 0 | ||||||
| OTHER | 10,627 | 0 | 0 | 10,627 | ||||||
| TOTAL ASSETS | $14,398,978 | $3,939,606 | $5,786,189 | $24,124,773 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| ACCOUNTS PAYABLE | $1,029,522 | $1,112,502 | $0 | $2,142,024 | ||||||
| ACCRUED EXPENSES AND OTHER | ||||||||||
| CURRENT LIABILITIES | 837,769 | 291,368 | (17,244) | 1,111,893 | ||||||
| REVOLVING LINE OF CREDIT | 291,682 | 0 | 1,637,799 | 1,929,481 | ||||||
| NOTES PAYABLE-RELATED PARTIES | 832,370 | 0 | 0 | 832,370 | ||||||
| NOTES PAYABLE | 0 | 0 | 2,482,288 | 2,482,288 | ||||||
| CAPITAL LEASE OBLIGATION | 0 | 52,735 | 0 | 52,735 | ||||||
| TOTAL CURRENT LIABILITIES | 2,991,343 | 1,456,605 | 4,102,843 | 8,550,791 | ||||||
| LONG-TERM LIABILITIES | ||||||||||
| REVOLVING LINE OF CREDIT | ||||||||||
| NOTES PAYABLE-RELATED PARTIES | 1,256,424 | 0 | 0 | 1,256,424 | ||||||
| NOTES PAYABLE | 3,738,453 | 0 | 3,967,712 | 7,706,165 | ||||||
| DEFERRED COMPENSATION | 625,357 | 0 | 0 | 625,357 | ||||||
| CAPITAL LEASE OBLIGATION | 0 | 198,635 | 0 | 198,635 | ||||||
| TOTAL LONG-TERM LIABILITIES | 5,620,234 | 198,635 | 3,967,712 | 9,786,581 | ||||||
| TOTAL LIABILITIES | 8,611,577 | 1,655,240 | 8,070,555 | 18,337,372 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||||
| COMMON STOCK | 194,549 | 5,000 | (5,000) | 194,549 | ||||||
| ADDITIONAL PAID-IN-CAPITAL | 10,634,172 | 0 | 0 | 10,634,172 | ||||||
| ACCUMULATED EARNINGS (DEFICIT) | (5,041,320) | 2,279,366 | (2,279,366) | (5,041,320) | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 5,787,401 | 2,284,366 | (2,284,366) | 5,787,401 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $14,398,978 | $3,939,606 | $5,786,189 | $24,124,773 | ||||||
| (1) Reflects the cash paid and debt issued to fund the purchase of PM&T 's net assets, capital stock, and | ||||||||||
| property, plant and equipment from the prior owners, and the goodwill resulting from the purchase. | ||||||||||
| UNITED SHIELDS CORPORATION | ||||||||||||
| PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
| HISTORICAL | ||||||||||||
| USC | PM&T | |||||||||||
| 9 MONTHS ENDED | PRO FORMA | PRO FORMA | ||||||||||
| 9/24/99 | 9/29/99 | ADJUSTMENTS | COMBINED | |||||||||
| NET SALES | $9,637,436 | $7,889,378 | $ - | $17,526,814 | ||||||||
| COST OF SALES | 7,404,775 | 6,335,377 | (68,711) | (1) | 13,671,441 | |||||||
| GROSS PROFIT | 2,232,661 | 1,554,001 | 68,711 | 3,855,373 | ||||||||
| OPERATING EXPENSES | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE | ||||||||||||
| EXPENSES | 1,875,475 | 474,167 | (176,671) | (2) | 2,172,971 | |||||||
| GOODWILL AMORTIZATION | 268,172 | 0 | 67,398 | (3) | 335,570 | |||||||
| TOTAL OPERATING EXPENSES | 2,143,647 | 474,167 | (109,273) | 2,508,541 | ||||||||
| INCOME (LOSS) FROM OPERATIONS | 89,014 | 1,079,834 | 177,984 | 1,346,832 | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| INTEREST EXPENSE | (714,959) | (22,048) | (526,952) | (4) | (1,263,959) | |||||||
| GAIN (LOSS) ON SALE OF PROPERTY AND | ||||||||||||
| EQUIPMENT | 22,487 | 0 | 0 | 22,487 | ||||||||
| OTHER | 14,111 | 18,674 | 0 | 32,785 | ||||||||
| TOTAL OTHER INCOME (EXPENSE) | (678,361) | (3,374) | (526,952) | (1,208,687) | ||||||||
| NET LOSS | $ (589,347) | $1,076,460 | $ (348,968) | $ 138,145 | ||||||||
| NET LOSS PER COMMON SHARE | ($0.03) | $0.01 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 16,855,424 | 16,855,424 | ||||||||||
| (1) Reflects the elimination of rent expense paid to the former owners relating to the plant manufacturing | ||||||||||||
| operation and the addition of depreciation expense resulting from the purchase of real property | ||||||||||||
| from the previous owners. | ||||||||||||
| (2) Reflects a reduction in salaries and office space rent paid to the former owners. | ||||||||||||
| (3) Reflects the amortization of estimated goodwill over a 15 year period. | ||||||||||||
| (4) Reflects additional interest expense resulting from the debt incurred for the purchase of PM&T capital | ||||||||||||
| stock and real property from the former owners. | ||||||||||||
| UNITED SHIELDS CORPORATION | ||||||||||||
| PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
| HISTORICAL | ||||||||||||
|
USC |
PM&T | |||||||||||
| 12 MONTHS ENDED | PRO FORMA | PRO FORMA | ||||||||||
|
12/25/98 |
12/31/98 | ADJUSTMENTS | COMBINED | |||||||||
| NET SALES | $12,955,424 | $7,599,348 | $ - | $20,554,772 | ||||||||
| COST OF SALES | 10,222,027 | 6,939,541 | (87,911) | (1) | 17,073,657 | |||||||
| GROSS PROFIT | 2,733,397 | 659,807 | 87,911 | 3,481,115 | ||||||||
| OPERATING EXPENSES | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE | ||||||||||||
| EXPENSES | 2,808,617 | 727,452 | (241,834) | (2) | 3,294,235 | |||||||
| GOODWILL AMORTIZATION | 357,561 | 0 | 89,864 | (3) | 447,422 | |||||||
| WRITE-OFF OF INVESTMENT IN POTENTIAL | ||||||||||||
| ACQUISITION | 530,075 | 0 | 0 | 530,075 | ||||||||
| REORGANIZATION AND RESTRUCTURING, NET | 44,936 | 0 | 0 | 44,936 | ||||||||
| TOTAL OPERATING EXPENSES | 3,741,189 | 727,452 | (151,970) | 4,316,671 | ||||||||
| INCOME (LOSS) FROM OPERATIONS | (1,007,792) | (67,645) | 239,881 | (835,556) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| INTEREST EXPENSE | (1,439,928) | (21,677) | (710,323) | (4) | (2,171,928) | |||||||
| GAIN (LOSS) ON SALE OF PROPERTY AND | ||||||||||||
| EQUIPMENT | (67,218) | 0 | 0 | (67,218) | ||||||||
| OTHER | 8,789 | 27,278 | 0 | 36,067 | ||||||||
| TOTAL OTHER INCOME (EXPENSE) | (1,498,357) | 5,601 | (710,323) | (2,203,079) | ||||||||
| LOSS BEFORE EXTRAORDINARY ITEM | (2,506,149) | (62,044) | (470,442) | (3,038,635) | ||||||||
| EXTRAORDINARY ITEM - GAIN ON | ||||||||||||
| RESTRUCTURING OF DEBT | 62,500 | 0 | 0 | 62,500 | ||||||||
| NET LOSS | $ (2,443,649) | $ (62,044) | $ (470,442) | $ (2,976,135) | ||||||||
| NET LOSS PER COMMON SHARE | ($0.20) | ($0.24) | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 12,471,018 | 12,471,018 | ||||||||||
| (1) Reflects the elimination of rent expense paid to the former owners relating to the plant manufacturing | ||||||||||||
| operation and the addition of depreciation expense resulting from the purchase of real property | ||||||||||||
| from the previous owners. | ||||||||||||
| (2) Reflects a reduction in salaries and office space rent paid to the former owners. | ||||||||||||
| (3) Reflects the amortization of estimated goodwill over a 15 year period. | ||||||||||||
| (4) Reflects additional interest expense resulting from the debt incurred for the purchase of PM&T capital | ||||||||||||
| stock and real property from the former owners. | ||||||||||||
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.
UNITED SHIELDS CORPORATION
Date: December 13, 1999 By:_________________________________
John F. Quigley
Senior Vice President and
Chief Financial Officer
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