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) February 12, 1999
-------------------------------
Lund International Holdings, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16319 41-1568618
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(State of Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
911 Lund Boulevard, Anoka, Minnesota 55303
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 612.576.4200
-----------------------------
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(Former Name or Address, if Changed Since Last Report)
<PAGE>
The undersigned registrant hereby amends the following items,
financial statements, pro forma financial information and exhibits, if any, or
other portions of its Report on Form 8-K filed on February 12, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Financial statements required to be filed pursuant to Item 7
of Report on Form 8-K filed on February 12, 1999.
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
----------
To the Stockholder
SMITTYBILT, INC.
In our opinion, the accompanying balance sheet and the related statements of
income, stockholder's equity and cash flows present fairly, in all material
respects, the financial position of SMITTYBILT, INC. (the "Company") at January
31, 1999, and the results of its operations and its cash flows for the ten-month
period then ended, in conformity with generally accepted accounting principles.
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 audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Costa Mesa, California
April 2, 1999
2
<PAGE>
SMITTYBILT, INC.
BALANCE SHEET
January 31, 1999
----------
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash and cash equivalents $ 138,311
Trade accounts receivable, less allowance for bad
debts of $300,000 2,804,312
Inventory 3,509,408
Prepaid expenses and other assets 174,268
Deferred tax asset 382,847
------------
Total current assets 7,009,146
Property and equipment:
Leasehold improvements 523,030
Machinery and equipment 4,679,982
Furniture and fixtures 86,307
Automobiles 207,511
Computer equipment 366,045
------------
5,862,875
Less, accumulated depreciation and amortization (2,148,092)
------------
3,714,783
Deposits 100,635
------------
Total assets $ 10,824,564
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilties:
Due to Lund $ 1,099,000
Accounts payable 1,853,820
Accrued expenses 645,817
Current portion of long-term debt 80,344
Capital lease obligations, current portion 496,389
------------
Total current liabilities 4,175,370
Notes payable 54,637
Capital lease obligations 1,433,582
Deferred tax liability 227,032
------------
Total liabilities 5,890,621
------------
Commitments and contingencies
Stockholder's equity:
Common stock, $1 par value, 200,000 shares authorized,
6,000 shares outstanding 6,000
Retained earnings 4,927,943
------------
Total stockholder's equity 4,933,943
------------
Total liabilities and stockholder's equity $ 10,824,564
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
SMITTYBILT, INC.
STATEMENT OF INCOME
For The Ten-Month Period Ended January 31, 1999
----------
Net sales $ 13,995,114
Cost of sales 10,535,494
------------
Gross profit 3,459,620
Operating expenses:
General and administrative 1,757,568
Selling and marketing 863,186
Research and development 178,047
------------
Total operating expenses 2,798,801
------------
Income from operations 660,819
Other income (expense):
Interest expense (257,220)
Other, net 13,600
------------
Income before provision for income taxes 417,199
Provision for income taxes 167,000
------------
Net income $ 250,199
============
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SMITTYBILT, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
For The Ten-Month Period Ended January 31, 1999
----------
<TABLE>
<CAPTION>
Total
Common Stock Retained Stockholder's
Shares Amount Earnings Equity
------ ------ -------- -------------
<S> <C> <C> <C> <C>
Balances, April 1, 1998 6,000 $6,000 $4,677,744 $4,683,744
Net income 250,199 250,199
----- ------ ---------- ----------
Balances, January 31, 1999 6,000 $6,000 $4,927,943 $4,927,943
===== ====== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SMITTYBILT, INC.
STATEMENT OF CASH FLOWS
For the Ten-Month Period Ended January 31, 1999
----------
<TABLE>
<S> <C>
Cash flows provided by operations:
Net income $ 250,199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 790,859
Provision for doubtful accounts (128,558)
Deferred income taxes (205,876)
Decrease in trade accounts receivable 520,686
Increase in inventory (393,261)
Decrease in income taxes receivable 128,043
Increase in accounts payable, trade 10,430
Decrease in accrued expenses (44,576)
Increase in prepaid expenses and other assets (123,693)
-----------
Total adjustments 811,170
-----------
Net cash provided by operating activities 1,061,369
-----------
Cash flows from investing activities, capital expenditures (562,607)
-----------
Cash flows from financing activities:
Advances from Lund 1,099,000
Net payments on revolving credit agreements (1,084,300)
Payments on notes payable (11,523)
Payments on capital leases (373,256)
-----------
Net cash used by financing activities (370,079)
-----------
Net increase in cash and cash equivalents 128,683
Cash and cash equivalents, beginning of period 9,628
-----------
Cash and cash equivalents, end of period $ 138,311
===========
</TABLE>
Supplemental Disclosures of Cash Flow Information
Cash paid for interest was $257,220
Cash paid for income taxes was $245,000
Additions to property and equipment by capital lease were $85,866
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
1. Business:
Smittybilt Inc. (the "Company"), manufactures and sells tubular
accessory products for sport utility vehicles and trucks. The Company's
products, marketed and sold under the Smittybilt and Outland brand
names, include tubular step side bars, bumpers, brush guards, truck
bars, cage kits and various other accessories made primarily for the
United States automotive aftermarket.
2. Basis of Presentation:
Effective January 28, 1999, Lund International Holdings, Inc. ("Lund")
acquired 100% of the outstanding shares of the Company for
consideration of $16 million. The accompanying financial statements are
presented on an historical basis, and do not include adjustments that
might be necessary resulting from the share purchase.
3. Summary Of Significant Accounting Policies:
Cash and Cash Equivalents
Cash and cash equivalents consist of cash in banks and short-term
investments with original maturities of three months or less. The
carrying amount of cash and cash equivalents approximates market value.
Inventory
Inventory is stated at the lower of cost or market, with cost being
determined on the first-in, first-out (FIFO) basis. The Company has
established a reserve to record inventories at estimated net realizable
value. Inventory reserves are determined based upon the Company's
analysis of inventory levels in excess of current requirements or
considered to be obsolete.
7
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided
over the estimated useful lives of the assets, using the straight-line
method. Estimated useful lives are as follows:
Manufacturing equipment 3 to 7 years
Furniture and fixtures 5 years
Automobiles 5 years
Computer equipment 5 to 7 years
Leasehold improvements 5 to 20 years
Computer software 3 years
Repairs and maintenance are expensed as incurred; betterments and
renewals are capitalized and depreciated over the estimated useful
lives of the asset.
Upon sale or retirement of depreciable assets, the related cost and
accumulated depreciation are removed from the accounts. Any gain or
loss on the sale or retirement is included in current earnings.
Long-lived assets are analyzed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If the sum of the undiscounted expected future
cash flows is less than the carrying amount of the asset, an impairment
loss is recognized.
Revenue Recognition
Revenue is recognized upon shipment of the product. The Company
estimates and records a provision for sales returns and allowances
based upon its historical experience.
Research and Development Expenses
Research and development costs incurred in connection with new product
development are expensed as incurred.
8
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
Product Warranty
Beginning in 1998, the Company began providing limited warranties for
five years on black texture finish products (approximately 55% of sales
during the ten-month period ended January 31,1999) and for one year for
all other products. Prior to 1998, the limited warranty for all
products was for one year. The Company accrues for estimated warranty
claims associated with products sold.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered
or settled. Income tax expense comprises the tax payable for the period
and the change in deferred tax assets and liabilities during the
period.
Use of Estimates
The preparation of financial statements requires management to make
certain estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. The most significant areas which require the use of
management's estimates relate to reserves for inventory obsolescence
and accruals for warranty claims, customer returns and customer
rebates. Actual results could differ from those estimates.
4. Inventory:
Inventory at January 31, 1999 consisted of the following:
Raw materials $ 465,102
Work in process 1,368,578
Finished Goods 1,746,535
----------
3,580,215
Less, obsolescence reserve (70,807)
----------
$3,509,408
==========
9
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
5. Due to Lund:
Concurrent with the acquisition of the shares of the Company, Lund paid
certain debt amounts payable to banks ($959,000) and advanced the
Company operating funds. The balance due is noninterest bearing with no
formal due date.
6. Income Taxes:
The provision for income taxes for the ten-month period ended January
31, 1999 consists of the following:
Current:
Federal $286,480
State $ 86,396
--------
372,876
--------
Deferred:
Federal (201,626)
State (4,250
--------
(205,876)
--------
Total $167,000
========
The components of the deferred tax assets (liabilities) at January 31,
1999 are as follows:
Inventory $ 39,568
Warranty, rebates and customer returns 184,326
Accrued vacation 38,953
Plant and equipment (227,032)
---------
Total $ 35,815
=========
10
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
7. Commitments and Contingencies:
Leases
The Company leases office, warehouse and manufacturing facilities under
operating leases that expire in 2007. A portion of the office and
manufacturing facilities is subleased for $10,000 per month to another
corporation owned partially by the Company's former shareholders.
Minimum annual lease payments, net of sublease rentals under
noncancellable leases at January 31, 1999 are as follows:
Years Ending January 31,
2000 $ 741,276
2001 736,668
2002 743,876
2003 766,580
2004 761,796
Thereafter 3,448,476
----------
$7,198,672
==========
Net rent expense for the above operating leases and other equipment
rentals for the ten-month period ended January 31, 1999 was
approximately $615,152.
The Company leases certain manufacturing machinery and equipment under
capital leases expiring at various dates through November 2004, with
interest rates ranging from 8.0 to 11.0 percent. At January 31, 1999,
the carrying amount of capitalized leased assets, primarily machinery
and equipment, aggregated $1,892,814, net of accumulated amortization
of $999,958.
11
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
Future minimum lease payments and the related obligations under capital
leases at January 31, 1999 are as follows:
Years Ending January 31,
2000 $ 496,389
2001 530,850
2002 365,207
2003 264,696
2004 154,232
Thereafter 118,597
----------
1,929,971
Less, current portion 496,389
----------
Noncurrent portion $1,433,582
==========
401(k) Plan
The Company sponsors a 401(k) plan covering substantially all
employees that requires the Company to match 35 percent of employee
contributions up to seven percent of an employee's compensation.
Contributions to the plan by the Company during the ten-month period
ended January 31, 1999 approximated $15,000.
Litigation:
The Company is not a party to any pending legal proceedings that it
believes will have a material effect on its financial condition or
results of operations.
8. Long-term Debt
Long-term debt at January 31, 1999 consisted of installment loans for
vehicles and amounts due a former shareholder of the Company. In
connection with the share purchase by Lund, the former shareholders
have agreed to assume such indebtedness.
9. Related Parties Transactions
The Company leases office and manufacturing facilities under operating
leases and certain manufacturing equipment and machinery under capital
leases from entities owned or partially owned by the former
shareholders of the Company. Total payments under such leases
aggregated $623,500 during the ten-month period ended January 31, 1999.
12
<PAGE>
SMITTYBILT, INC.
NOTES TO FINANCIAL STATEMENTS
----------
A portion of the leased manufacturing facilities is sublet to another
entity owned partially by the former shareholders of the Company. Such
entity provides on-site powder coating for the Company's products and
unrelated customers. Payments received under the sublease totaled
$100,000 and payments made for powder coating totaled $700,000 during
the ten-month period ended January 31, 1999.
Amounts due Lund at January 31, 1999 relate to payments made by Lund to
retire the Company's bank debt at the closing date of the share
purchase transaction by Lund and operating advances made by Lund to the
Company.
10. Credit Risk:
The Company's sales are primarily to distributors of automotive
aftermarket products located throughout the United States. During the
ten-month period ended January 31, 1999, sales to one customer
accounted for approximately 14% of the Company's net sales.
13
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information required to be filed pursuant to Item 7
of Report on Form 8-K filed on February 12, 1999.
14
<PAGE>
On January 28 1999, Lund International Holdings, Inc. (the "Company"), through a
wholly-owned subsidiary, SB Holdings, Inc., a Delaware corporation, acquired all
of the issued and outstanding capital stock of Smittybilt, Inc. ("Smittybilt")
for an aggregate purchase price of $15,898,032 (approximately $18.0 million
after assuming Smittybilt's debt for vehicle loans and capital equipment
leases). The funds for the purchase of the outstanding capital stock were
obtained from (i) an equity investment in the Company of $5.0 million from an
affiliate of Harvest Partners, Inc., entities of Massachusetts Mutual Life
Insurance Company, Liberty Mutual Insurance Company, and BancBoston Capital,
Inc., (ii) a loan to the Company of $9.5 million from Heller Financial, Inc.,
and (iii) a loan to the Company of $5.0 million from an affiliate of
Massachusetts Mutual Life Insurance Company and National City Venture
Corporation. Complete details of the funding arrangements for this transaction
can be found in Forms 8-K that were filed on January 6, 1999 and February 12,
1999.
Smittybilt, headquartered in Corona, California, is a manufacturer for and
supplier to the automotive aftermarket of stainless, chromed and painted steel
tubular accessory products, including tubular steps, brush guards, bumpers and
nerf bars for pick-up trucks and sport utility vehicles (collectively "light
trucks"). For the Company, the Smittybilt acquisition provides an entry into
totally new product categories distributed through customers common to its Light
Truck, Suspension and Auto Ventshade divisions.
On December 23, 1998, a wholly-owned subsidiary of the Company, New Holdings,
Inc., a Delaware corporation, acquired all of the issued and outstanding capital
stock of Ventshade Holdings, Inc. ("Ventshade") for an aggregate purchase price
of $66,875,000. The funds for the purchase of the outstanding capital stock were
obtained from (i) an equity investment in the Company of $25 million from an
affiliate of Harvest Partners, Inc., entities of Massachusetts Mutual Life
Insurance Company, Liberty Mutual Insurance Company, and BancBoston Capital,
Inc., (ii) a loan to the Company of $25 million from Heller Financial, Inc.,
(iii) a loan to the Company of $20 million from an affiliate of Massachusetts
Mutual Life Insurance Company and National City Venture Corporation, (iv) seller
financing of $875,000 included for tax credits which were due to Company as a
result of the acquisition, and (v) working capital of the Company. Complete
details of the funding arrangements for this transaction can be found in Form
8-K that was filed on January 6, 1999.
Ventshade Holdings, Inc. is a holding company with one subsidiary, Auto
Ventshade Company ("AVS"). AVS headquartered in Lawrenceville, Georgia, is a
manufacturer and supplier to the automotive aftermarket of shades, visors,
deflectors, and light covers used on pick-up trucks, sport utility vehicles,
minivans (collectively "light trucks"), and passenger cars. AVS is a supplier to
all major channels of distribution for automotive accessories, including
automotive retailers, mass merchandisers, leading three-step distributors, and
original equipment manufacturers. The registrant intends to utilize management
expertise, assets, and distribution channels obtained in connection with the
acquisition for the continued production and distribution of accessories for
light trucks and passenger cars.
15
<PAGE>
Prior to its acquisition by the Company, Smittybilt did not issue audited
financial statements. Immediately following the acquisition, the Company's
auditors completed an audit of Smittybilt's balance sheet as of January 31,
1999, and its statements of operations and cash flows for the ten months ended
January 31, 1999. Therefore, in presenting the following pro forma condensed
consolidated balance sheet, the Company used the Company's audited balance sheet
as of December 31, 1998 and Smittybilt's balance sheet as of January 31, 1999.
In presenting the pro forma condensed consolidated statement of operations, the
Company used the Company's audited statement of operations for the twelve months
ended December 31, 1998, which includes Ventshade for nine days, Ventshade's
unaudited statement of operations for the approximate twelve months ended
December 31, 1998, and Smittybilt's audited statement of operations for the ten
months ended January 31, 1999 and the unaudited two month period ended March 31,
1998. The pro forma financial statements give effect to the Ventshade
acquisition and the financing thereof as if such transactions had occurred on
January 1, 1998, and the Smittybilt acquisition and the financing thereof as if
such transactions had occurred on February 1, 1998. The acquisitions of
Ventshade and Smittybilt were accounted for pursuant to the purchase method of
accounting.
The pro forma financial data presented herein is based on management's estimate
of the effects of the acquisition and financing thereof. The pro forma financial
data is based upon current available information and certain assumptions that
the Company believes are reasonable. The Company does not expect the receipt of
additional information to have a material adverse effect on the pro forma
financial data. The pro forma condensed consolidated balance sheet of the
Company as of December 31, 1998 and the statement of operations for the twelve
months ended December 31, 1998 are unaudited, but in the opinion of the Company
include all adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of the results of operations and financial position for
the periods presented.
The pro forma condensed consolidated balance sheet as of December 31, 1998 and
the statement of operations for the twelve months ended December 31, 1998 are
not necessarily indicative of the results of operations or financial position
that actually would have been achieved had the transactions described been
consummated as of the dates indicated, or that may be achieved in the future.
16
<PAGE>
Lund International Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
December 31, 1998
($ in 000's)
<TABLE>
<CAPTION>
Lund Smittybilt Pro Forma Pro Forma
Historical(1) Historical(2) Adjustments Consolidated
------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments $ 1,191 $ 138 $ -- $ 1,329
Accounts receivable, net 33,390 2,804 (140) (3) 36,054
Inventories 21,771 3,510 541 (4) 25,822
Deferred income taxes 4,300 383 4,683
Other current assets 2,552 174 2,726
---------- ---------- ---------- ----------
Total current assets 63,204 7,009 401 70,614
Property and equipment, net 29,568 3,715 (78) (5) 33,205
Intangibles, net 119,834 -- 10,641 (6) 130,475
Restricted cash and marketable securities 3,911 -- 3,911
Other assets 4,840 101 315 (7) 4,482
(774) (8)
---------- ---------- ---------- ----------
$ 221,357 $ 10,825 $ 10,505 $ 242,687
========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 6,466 $ 1,854 $ 8,320
Due to Lund -- 1,099 (140) (3) --
(959) (9)
Accrued expenses 17,750 646 -- 18,396
Deferred income taxes -- -- 216 (10) 216
Long-term debt, current portion 4,251 577 (72)(11) 4,756
---------- ---------- ---------- ----------
Total current liabilities 28,467 4,176 (955) 31,688
Long-term debt, less current portion 99,796 1,488 (35)(11) 111,761
14,500 (12)
(917)(13)
(3,071)(14)
Deferred income taxes 6,600 227 6,827
Other liabilities 607 -- 607
---------- ---------- ---------- ----------
Total liabilities 135,470 5,891 9,522 150,883
Stockholders' equity:
Preferred stock 2 -- 1 (15) 3
Class B common stock 15 -- 15
Common stock 631 6 (6)(16) 631
Additional paid-in capital 58,164 -- 4,999 (15) 64,080
917 (13)
Retained earnings 27,075 4,928 (4,928)(16) 27,075
---------- ---------- ---------- ----------
Total stockholders' equity 85,887 4,934 983 91,804
---------- ---------- ---------- ----------
$ 221,357 $ 10,825 $ 10,505 $ 242,687
========== ========== ========== ==========
</TABLE>
17
<PAGE>
The following footnotes describe the adjustments to the historical financial
statements to arrive at the condensed pro forma consolidated balance sheet at
December 31, 1998. In preparing such adjustments, the assumed price is as
follows ($ in 000's):
Acquisition of stock of Smittybilt, Inc. $15,898
Direct transactions costs 989
---------
$16,887
=========
The purchase price has been allocated to assets and liabilities as indicated in
the following summary opening balance sheet of Smittybilt, Inc. ($ in 000's):
Current assets $7,550
Property and equipment, net 3,637
Non-compete agreement 1,000
Goodwill 9,641
Other assets 101
---------
Total assets 21,929
=========
Current liabilities $ 3,361
Notes payable 20
Capital lease obligations 1,434
Deferred income taxes 227
---------
Total liabilities 5,042
---------
Net assets $16,887
=========
(1) The audited consolidated balance sheet of the Company as of December
31, 1998 as reported and filed with the Securities and Exchange
Commission in the Company's Form 10-K for the year ended December 31,
1998.
(2) The audited balance sheet of Smittybilt as of January 31, 1999.
(3) Elimination of loan from the Company to Smittybilt.
(4) Represents fair market value adjustment to Smittybilt's inventories.
(5) Represents the net book value of vehicles transferred to the former
owners of Smittybilt.
(6) Represents the purchase accounting increase in Smittybilt's intangibles
to reflect goodwill of approximately $9.6 million a non-compete
agreement of $1.0 million.
(7) Represents financing costs that were incurred and deferred in
connection with the debt to finance the acquisition.
(8) Represents the Company's prepaid deal fees and expenses.
18
<PAGE>
(9) Represents Smittybilt's debt paid in connection with the acquisition.
(10) Represents deferred tax resulting from a balance sheet purchase
accounting adjustment.
(11) Represents Smittybilt's debt assumed by the former owners.
(12) Represents the debt incurred to finance the acquisition.
(13) Represents the fair value of share warrants issued in connection with
subordinated debt incurred to finance the acquisition.
(14) Represents pay down of the Company's revolving line of credit as a
result of the equity contribution and debt funding exceeding
Smittybilt's purchase price. A substantial portion of this excess cash
will be needed to pay deal fees and expenses of the Smittybilt and Auto
Ventshade acquisitions.
(15) Represents preferred stock issued in connection with a $5 million
equity contribution to the Company.
(16) Represents the elimination of Smittybilt's shareholders' equity.
19
<PAGE>
Lund International Holdings, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For The Twelve Months Ended December 31, 1998
($ in 000's, except per share amounts)
<TABLE>
<CAPTION>
Ventshade Smittybilt
Lund Ventshade Pro Forma Smittybilt Pro Forma Pro Forma
Historical(1) Historical(2) Adjustments Historical(3) Adjustments Consolidated
------------- ------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 112,594 $ 54,442 $ 16,869 $ 183,905
Cost of goods sold 81,825 35,906 610 (4) 12,529 541 (4) 131,903
492 (5)
---------- -------------------------- ------------------------- ----------
Gross profit 30,769 18,536 (1,102) 4,340 (541) 52,002
Operating expenses
General and administrative 11,800 3,716 2,146 17,662
Selling and marketing 13,736 5,647 891 20,274
Research and development 2,970 64 284 3,318
Amortization 2,424 1,034 (133)(6) -- 407 (11) 5,841
2,109 (7)
---------- -------------------------- ------------------------- ----------
Total operating expenses 30,930 10,461 1,976 3,321 407 47,095
---------- -------------------------- ------------------------- ----------
Income from operations (161) 8,075 (3,078) 1,019 (948) 4,907
Other income (expense)
Interest expense (5,484) (1,581) (3,635)(8) (309) (1,328)(12) (12,337)
Interest income 106 35 -- 141
Other, net (146) (7,772) 7,367 (9) 13 -- (538)
---------- -------------------------- ------------------------- ----------
Other income (expense) (5,524) (9,318) 3,732 (296) (1,328) (12,734)
---------- -------------------------- ------------------------- ----------
Income before income taxes (5,685) (1,243) 654 723 (2,276) (7,827)
Income tax (benefit) expense (1,615) (480) 303(10) 289 (814)(10) (2,317)
---------- -------------------------- ------------------------- ----------
Net income (loss) $ (4,070) $ (763) $ 351 $ 434 $ (1,462) $ (5,510)
========== ========================== ========================= ==========
Net loss per share $ (0.64) $ (0.87)
========== ==========
Common weighted average
shares (basic) 6,326 6,326
========== ==========
</TABLE>
20
<PAGE>
(1) Represents the audited consolidated statement of operations of the
Company for the twelve months ended December 31, 1998 as reported and
filed with the Securities and Exchange Commission in the Company's Form
10-K for the year ended December 31, 1998.
(2) Represents the unaudited historical statement of operations of
Ventshade for the period from January 1, 1998 to December 22, 1998.
(3) Represents Smittybilt's audited historical statement of operations for
the ten months ended January 31, 1999 and the unaudited statement of
operations for the two months ended March 31, 1998.
(4) Represents cost of goods sold related to the fair market value
adjustment to Ventshade's and Smittybilt's inventories.
(5) Represents increased depreciation of molds and dies (4 years).
(6) Elimination of prior ownership acquisition (financing) costs.
(7) Represents increased amortization of goodwill (40 years), work force
(5 years), non-compete (6 years) and customer list (10 years).
(8) Represents interest expense related to indebtedness incurred to
complete the Ventshade acquisition and amortization of related deferred
financing costs, offset by interest expense on Ventshade's debt and
related deferred financing costs retired in connection with the
acquisition. Pro forma interest expense was calculated based on average
debt outstanding using the current interest rates on acquisition debt.
(9) Elimination of prior ownership's deal costs.
(10) Represents the tax effect of the pro forma accounting adjustments for
Ventshade and Smittybilt.
(11) Represents increased amortization of goodwill (40 years) and
non-compete (6 years).
(12) Represents interest expense related to indebtedness incurred to
complete the Smittybilt acquisition and amortization of related
deferred financing costs, offset by interest expense on Smittybilt's
debt retired in connection with the acquisition. Pro forma interest
expense was calculated based on average debt outstanding using the
current interest rates on acquisition debt.
21
<PAGE>
(c) EXHIBITS.
23.1 Consent of PricewaterhouseCoopers LLP
22
<PAGE>
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 thereunto duly authorized.
LUND INTERNATIONAL HOLDINGS, INC.
Dated: April 12, 1999 By: /s/ Dennis W. Vollmershausen
---------------------------------------
Dennis W. Vollmershausen
Its Chief Executive Officer
23
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
23.1 Consent of PricewaterhouseCoopers LLP
24
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements of
Lund International Holdings, Inc. on Form S-8 (File Nos. 33-78140, 333-46263,
33-64083 and 33-37160) of our report dated April 2, 1999 on our audit of the
financial statements of Smittybilt, Inc. as of January 31, 1999 and for the ten
month period ended January 31, 1999 included in this Form 8K/A of Lund
International Holdings, Inc. dated April 13, 1999.
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
April 12, 1999
