<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) January 4, 1994
Jordan Industries, Inc.
(Exact name of registrant as specified in its charter)
Illinois 33-24317 36-3598114
(State or other (Commission (I.R.S. Employer
Jurisdiction) File Number) Identification No.)
ArborLake Centre, Suite 550
1751 Lake Cook Road, Deerfield, IL 60015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 945-5591
</PAGE>
<PAGE>
Item 2. Acquisition or Disposition of Assets ($ in thousands)
The following section amends, in its entirety, Item 2 of Form 8-K previously
filed on June 3, 1994.
On January 4, 1994, Jordan Industries, Inc. ("The Company"), through its
newly-formed wholly-owned subsidiary, J2, Inc., bought substantially all of the
net assets of Valmark Industries, Inc. ("Valmark"), a manufacturer of membrane
switches, graphic panel overlays, labels, and bar codes.
The purchase price of $18,016, including costs incurred directly related to the
transaction, was allocated to working capital of $2,105, property, plant and
equipment of $1,358, non-compete agreements of $1,500, other assets of $58, and
the assumption of a long-term capital lease obligation of $4 and resulted in an
excess purchase price over net identifiable assets of $12,999. The acquisition
was financed with the issuance of a $4,000 Subordinated Note to a former
shareholder, and cash.
On May 20, 1994, the Company, through its wholly-owned subsidiary, J2, Inc.,
bought all of the common stock of Pamco Printed Tape and Label Co., Inc.
("Pamco"), a manufacturer of printed labels.
The purchase price of $25,500, including costs incurred directly related to the
transaction, was allocated to working capital of $2,237, property, plant and
equipment of $2,690, non-compete agreements of $1,000, and the assumption of a
mortgage note of $731 and resulted in an excess purchase price over net
identifiable assets of $20,304. The acquisition was financed with the issuance
of a $4,000 Subordinated Note to a former shareholder, and cash.
Item 7. Financial Statements and Exhibits
The following sections (a) and (b) amend, in their entirety, sections (a) and
(b) of Item 7 of Form 8-K previously filed on June 3, 1994.
(a) Financial Statements
See Exhibits 28(a) - 28(b) of Item 7(c).
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated statements of
operations are based on the historical statements of operations of the Company,
adjusted to give effect to the following transactions: (a) the acquisitions
in 1994 of Valmark Industries, Inc. ("Valmark"), and Pamco Printed Tape and
Label Company, Inc. ("Pamco"), and (b) certain recurring administrative costs
and taxes of the Company, and the depreciation of the preliminary purchase
price allocated to the fair value of net assets acquired. The Valmark
acquisition is described in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993, filed March 30, 1994, and on Form 10-Q for the
three months ended March 31, 1994, filed May 13, 1994. The pro forma condensed
consolidated statements of operations for the year ended December 31, 1993 and
for the three months ended March 31, 1994 were derived from the audited
historical statements of operations for the year ended December 31, 1993 and
the unaudited historical statement of operations for the three months ended
March 31, 1994, adjusted to give effect to such transactions as if they
occurred as of the beginning of each period.
</PAGE>
<PAGE>
The pro forma adjustments included in the pro forma condensed consolidated
statements of operations are based upon available information and certain
assumptions that management believes are reasonable. With respect to the pro
forma acquisition adjustments described in the notes accompanying the pro forma
condensed consolidated statement of operations, the allocation of the purchase
price of Valmark and Pamco is preliminary and subject to final determination by
the Company's management. The unaudited pro forma condensed consolidated
statement of operations do not purport to represent what the Company's results
of operations would actually have been had the transactions in fact occurred as
of the beginning of each period presented. In addition, the unaudited pro
forma condensed consolidated statements of operations do not purport to project
the Company's results of operations for any future date or period.
The pro forma condensed consolidated statements of operations should be read in
connection with the Company's audited consolidated financial statements which
are included in the Company's Annual Report filed on Form 10-K for the year
ended December 31, 1993 and the Company's unaudited interim condensed
consolidated financial statements included in the Company's Form 10-Q for the
quarter ended March 31, 1994.
</PAGE>
<PAGE>
JORDAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
AT MARCH 31, 1994
($ in millions)
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- ------
ASSETS
Current assets:
Cash and cash equivalents $ 31.2 $(20.9) $10.3
Accounts receivable, net 44.9 1.6 46.5
Inventories 69.2 .7 69.9
Prepaid expenses and other
current assets 7.0 .1 7.1
------- -------- -------
Total Current Assets 152.3 (18.5) 133.8
Property, plant and equipment, net 59.6 2.7 62.3
Note receivable from affiliate 8.3 - 8.3
Goodwill, net 69.6 20.8 90.4
Other assets 36.0 1.0 37.0
------- -------- --------
Total Assets $325.8 $ 6.0 $331.8
======= ======== ========
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Accounts payable $ 27.3 $ .4 $ 27.7
Accrued liabilities 16.7 .3 17.0
Advance deposits 4.8 .6 5.4
Current portion of long-term debt 1.8 - 1.8
------- ------- -------
Total Current Liabilities 50.6 1.3 51.9
Long-term debt 363.8 4.7 368.5
Other non-current liabilities 2.6 - 2.6
Deferred income taxes 3.4 - 3.4
Minority interest .9 - .9
Net capital deficiency (95.5) - (95.5)
------- ------- --------
Total Liabilities and Net
Capital Deficiency $325.8 $ 6.0 $331.8
========= ======== ========
</PAGE>
<PAGE>
JORDAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
($ in millions)
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- -----
Net sales $358.6 $29.1 $387.7
Cost of sales (excluding
depreciation) 221.5 15.9 237.4
Selling, general & administrative
expenses 80.5 5.3 85.8
------- ------ ------
Operating income before deprecia-
tion and amortization of goodwill
and other intangibles 56.6 7.9 64.5
Depreciation 9.1 .8 9.9
Amortization of goodwill and other
intangibles 8.7 1.4 10.1
------- ------ -------
Operating income 38.8 5.7 44.5
Interest expense 41.0 2.5 43.5
Other (income) and expense .6 .5 1.1
------- ------ -------
Income (loss) before income
taxes, minority interest and
extraordinary items (2.8) 2.7 (.1)
Provision (benefit) for income
taxes .7 .3 1.0
------- ------ -------
Income (loss) before minority
interest and extraordinary
items (3.5) 2.4 (1.1)
Minority interest - .6 .6
------- ------ -------
Income (loss) before extra-
ordinary items ($3.5) $1.8 ($1.7)
======= ====== =======
See notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations.
</PAGE>
<PAGE>
JORDAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1994
($ in millions)
Pro Forma
Histor- Adjust- Pro
ical ments Forma
------- --------- -----
Net sales $80.9 $6.4 $87.3
Cost of sales (excluding
depreciation) 50.9 3.7 54.6
Selling, general and administra-
tive expenses 21.2 1.3 22.5
------ ----- ------
Operating income before
depreciation and amortization
of goodwill and other
intangibles 8.8 1.4 10.2
Depreciation 2.3 .2 2.5
Amortization of goodwill and
other intangibles 2.0 .4 2.4
------ ----- ------
Operating income 4.5 .8 5.3
Interest expense 10.0 .1 10.1
Other (income) and expense - .1 .1
------ ----- ------
Income (loss) before income
taxes and minority interest (5.5) .6 (4.9)
Provision (benefit) for income
taxes (1.6) - (1.6)
------- ----- ------
Income (loss) before minority
interest (3.9) .6 (3.3)
Minority interest (.9) .2 (.7)
------- ------ -------
Net income (loss) $(3.0) $ .4 ($2.6)
======= ====== =======
See notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations.
</PAGE>
<PAGE>
JORDAN INDUSTRIES, INC.
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions)
1. The pro forma condensed consolidated statements of operations include an
adjustment for the amortization of the preliminary purchase price
allocated to the fair value of net assets acquired as follows:
For the For the
Year Ended Three Months
December 31, Ended March 31,
1993 1994
------------ ---------------
Amortization-goodwill .8 .2
Amortization-intangibles .5 .1
2. The pro forma condensed consolidated statements of operations also
include the following adjustments:
For the For the
Year Ended Three Months
December 31, Ended March 31,
1993 1994
------------ ---------------
Incremental interest
expense 2.5 .1
Salary adjustments (5.0) (.2)
Elimination of interest
income .4 .2
Additional management fees
to The Jordan Company .2 -
</PAGE>
<PAGE>
EXHIBITS
28(a) Valmark Industries, Inc., Financial Statements for the years ended
December 31, 1993 and 1992.
28(b) Pamco Printed Tape and Label Co., Inc., Financial Statements for
the six months ended December 31, 1993 and the years ended June 30,
1993 and 1992.
</PAGE>
<PAGE>
Financial Statements
Valmark Industries, Inc.
Years ended December 31, 1993 and 1992
with Report of Independent Auditors
</PAGE>
<PAGE>
Valmark Industries, Inc.
Financial Statements
Years ended December 31, 1993 and 1992
Contents
Report of Independent Auditors..............................................1
Financial Statements
Balance Sheets..............................................................2
Statements of Operations and Retained Earnings..............................3
Statements of Cash Flows....................................................4
Notes to Financial Statements...............................................5
</PAGE>
<PAGE>
Report of Independent Auditors
The Board of Directors and Shareholders
Valmark Industries, Inc.
We have audited the accompanying balance sheets of Valmark Industries, Inc. as
of December 31, 1993 and 1992 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 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 Valmark Industries, Inc. at
December 31, 1993 and 1992, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
ERNST & YOUNG
June 24, 1994
</PAGE>
<PAGE>
Valmark Industries, Inc.
Balance Sheets
December 31
1993 1992
--------------------------
Assets
Current assets:
Cash and cash equivalents $ 40,962 $ 67,954
Accounts receivable, net or
allowance for doubtful accounts of
$107,000 in 1993 and $68,000 in 1992 1,798,455 2,188,767
Inventories, at cost:
Finished goods 467,034 273,102
Work in process 103,318 13,355
Raw materials 405,761 374,203
--------------------------
976,113 660,660
Other current assets 9,904 23,176
--------------------------
Total current assets 2,825,434 2,940,557
Property and equipment, at cost:
Furniture and fixtures 366,439 308,438
Equipment and tooling 2,560,076 2,434,025
Leasehold improvements 175,620 169,914
--------------------------
3,102,135 2,912,377
Less accumulated depreciation and
amortization (1,743,403) (1,537,547)
--------------------------
Net property and equipment 1,358,732 1,374,830
Other assets 44,000 44,000
-------------------------
$ 4,228,166 $ 4,359,387
=========================
Liabilities and shareholders' equity
Current liabilities:
Borrowings under bank line of credit $ 653,205 $ 818,843
Accounts payable and accrued liabilities 415,457 709,838
Accrued compensation and related expenses 283,354 358,707
Capital lease obligations due
within one year 8,850 10,058
Current portion of note payable 221,876 236,095
-------------------------
Total current liabilities 1,582,742 2,133,541
Capital lease obligations due
after one year 2,676 14,167
Notes payable 360,880 388,624
Shareholders' equity:
Common stock, no par value;
200,000 shares authorized, 117,501
shares issued and outstanding 141,421 141,421
Retained earnings 2,140,447 1,681,634
-------------------------
Total shareholders' equity 2,281,868 1,823,055
-------------------------
$ 4,228,166 $ 4,359,387
=========================
See accompanying notes.
</PAGE>
<PAGE>
Valmark Industries, Inc.
Statements of Operations and Retained Earnings
Year ended December 31
1993 1992
----------------------------
Product sales, net $15,979,306 $13,890,880
Cost of sales (10,340,973) (8,446,967)
---------------------------
Gross margin 5,638,333 5,443,913
Operating expenses:
Sales and marketing 2,608,484 2,348,498
General and administrative 2,485,973 2,276,431
----------------------------
Total operating expenses 5,094,457 4,624,929
----------------------------
Income from operations 543,876 818,984
Interest expense 95,318 92,779
Other (income) expense (10,255) 27,673
--------------------------
Net income 458,813 698,532
Retained earnings, beginning
of period 1,681,634 983,102
--------------------------
Retained earnings, end of period $ 2,140,447 $ 1,681,634
===========================
See accompanying notes.
</PAGE>
<PAGE>
Valmark Industries, Inc.
Statements of Cash Flows
Year ended December 31
1993 1992
------------------------
Operating activities
Net income $ 458,813 $ 698,532
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 520,426 442,157
Provision for bad debts 39,000 24,000
Chance in operating assets and
liabilities:
Accounts receivable 351,312 (783,421)
Inventories (315,453) (148,358)
Other current assets 13,272 (11,501)
Accounts payable and accrued
liabilities (294,381) 325,129
Accrued compensation and
related expenses (75,353) 116,845
-------------------------
Net cash provided by operating activities 697,636 663,383
Investing activities
Purchase of property and equipment (504,328) (885,104)
Financing activities
Net repayments under line of credit
agreement (165,638) (92,000)
Principal payments on capital lease
obligations (12,699) (8,006)
Proceeds from notes payable 159,537 517,503
Payments on note payable (201,500) (164,323)
------------------------
Net cash (used in) provided by
financing activities (220,300) 253,174
------------------------
Net (decrease) increase in cash and
cash equivalents (26,992) 31,453
Cash and cash equivalents at
beginning of period 67,954 36,501
------------------------
Cash and cash equivalents at end
of period $ 40,962 $ 67,954
========================
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest $ 98,518 $ 91,379
========================
See accompanying notes.
</PAGE>
<PAGE>
Valmark Industries, Inc.
Notes to Financial Statements
December 31, 1993
1. The Company and its Significant Accounting Policies
Valmark Industries, Inc. (the "Company") was incorporated in California in
April 1980. The Company manufactures and markets labels, panel overlays,
membrane switches and shielding devices and markets these products primarily to
electronics manufacturers in the United States. The Company performs periodic
credit evaluations of its customers, maintains an allowance for doubtful
accounts for potential credit losses and generally does not require collateral.
One customer accounted for 21% and 24% of net sales for the years ended
December 31, 1993 and 1992, and 13% and 10% of accounts receivable at December
31, 1993 and 1992, respectively.
On January 4, 1994, Jordan Industries, Inc., through a newly-formed wholly
owned subsidiary, J2, Inc. purchased substantially all of the assets of the
Company, and assumed certain liabilities of the Company for a purchase price of
$18.0 million.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid short-term cash
investments with original maturities of three months or less.
Inventories
Raw material inventory is valued at the lower of cost, determined on the
first-in, first-out basis, or market. Finished goods inventory is valued at
the lower of cost, determined under the retail method, or market.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided over the
estimated useful lives of the respective assets, generally three to ten years,
on a straight-line basis. Leasehold improvements are amortized on a
straight-line basis over the shorter of the lease term or the life of the
respective asset.
Income Taxes
The Company has elected to be treated as an S Corporation for federal income
tax purposes. As a result of this election, income tax attributes of the
Company are passed through to the shareholders.
</PAGE>
<PAGE>
Valmark Industries, Inc.
Notes to Financial Statements
(continued)
1. The Company and its Significant Accounting Policies (continued)
Income Taxes (continued)
In February 1992, the Financial Accounting Standards Board issued Statement
("SFAS") No. 109, "Accounting for Income Taxes" (Standard). The Company
adopted the provisions of the Standard effective January 1, 1993. Under SFAS
No. 109, the liability method is used in accounting for income taxes. Under
this 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. Because the Company has elected
S Corporation status, the adoption of SFAS No. 109 had no impact on the
Company's financial position or results of operations.
2. Bank Borrowings
Long-term debt at December 31, 1993 consists of two notes payable to a bank
with principal and interest due in monthly installments. Interest is payable
at the bank's reference rate plus 1% (effective rate of 7% at December 31,
1993). Notes payable at December 31, 1993 mature as follows:
1994 $221,876
1995 221,876
1996 115,738
1997 23,266
-----------
$582,756
===========
The Company also has a revolving loan agreement with a bank that allows for
borrowings of 80% of eligible accounts receivable (as defined) up to
$1,500,000. Outstanding borrowings at December 31, 1993 and 1992 totalled
$653,205 and $818,843, respectively. All borrowings under the revolving loan
agreement, including any interest thereon, become due and payable June 15,
1995. Advances under this agreement accrue interest at the bank's reference
rate plus 1% (effective rate of 7% at December 31, 1993) and are secured by the
accounts receivable of the Company. Additionally, the Company has an available
$247,110 line of credit for equipment purchases through June 15, 1994. Under
the terms of this equipment line, the Company must convert any outstanding
balances to 48-month term loans at June 15, 1994 and 1995. All advances under
the equipment line are secured by the equipment purchased and bear interest at
the bank's reference rate plus 1%.
</PAGE>
<PAGE>
Valmark Industries, Inc.
Notes to Financial Statements
(continued)
2. Bank Borrowings (continued)
All bank borrowings are secured by substantially all of the Company's assets
and are guaranteed by the shareholders.
3. Commitments and Contingencies
The Company leases its office, manufacturing facility and certain equipment
under operating leases that require the Company to pay operating costs,
including property taxes, insurance and maintenance. Rent expense for
operating leases was $431,800 and $304,837 for the years ended December 31,
1993 and 1992, respectively.
The Company also has leased certain furniture and equipment under capital lease
agreements. Future minimum rental payments under noncancellable operating
leases of real property with initial terms in excess of one year and capital
leases are due as follows:
Operating Capital
Leases Leases
---------------------
1994 $ 405,032 $10,058
1995 409,500 4,519
1996 432,000 -
1997 432,000 -
1998 and thereafter 1,980,000 -
---------------------
$3,658,532 14,577
==========
Less amount representing interest (3,051)
--------
11,526
Amounts due within one year (8,850)
--------
$ 2,676
========
</PAGE>
<PAGE>
Valmark Industries, Inc.
Notes to Financial Statements
(continued)
4. Employee Benefit Plan
The Company has a defined contribution savings plan that qualifies under the
provisions of Section 401(k) of the Internal Revenue Code. Employees are
eligible to participate upon completion of one full year of service and
reaching 21 years of age. The Company contributes to the plan based on a
percentage of the participating employee's earnings as determined by the Board
of Directors, but not in excess of such amounts as may be deductible under the
provisions of the Internal Revenue Code. Company contributions of $65,000 and
$22,000 were charged to operations for the years ended December 31, 1993 and
1992, respectively.
</PAGE>
<PAGE>
Financial Statements
Pamco Printed Tape & Label Co., Inc.
Six months ended December 31, 1993 and
years ended June 30, 1993 and 1992
with Report of Independent Auditors
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Financial Statements
Six months ended December 31, 1993 and
years ended June 30, 1993 and 1992
Contents
Report of Independent Auditors........................................1
Financial Statements
Balance Sheets........................................................2
Statements of Income and Retained Earnings............................4
Statements of Cash Flows..............................................5
Notes to Financial Statements.........................................7
</PAGE>
<PAGE>
Report of Independent Auditors
The Board of Directors
Pamco Printed Tape & Label Co., Inc.
We have audited the accompanying balance sheets of Pamco Printed Tape & Label
Co., Inc. as of December 31, 1993 and June 30, 1993 and 1992, and the related
statements of income and retained earnings and cash flows for the six months
ended December 31, 1993 and the years ended June 30, 1993 and 1992. 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 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 Pamco Printed Tape & Label
Co., Inc. at December 31, 1993 and June 30, 1993 and 1992, and the results of
its operations and its cash flows for the six months ended December 31, 1993
and the years ended June 30, 1993 and 1992, in conformity with generally
accepted accounting principles.
ERNST & YOUNG
March 11, 1994
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Balance Sheets
December 31 June 30
---------------------
1993 1993 1992
-----------------------------------------
Assets
Current assets
Cash and cash equivalents $ 124,616 $ 142,880 $ 10,992
Investments 3,146,757 5,032,155 3,763,257
Accounts receivable, less allowance
of $30,000 at December 31, 1993,
$20,000 at June 30, 1993, and
$15,000 at June 30, 1992 1,427,455 1,858,314 1,204,528
Inventories 690,788 622,929 671,706
Prepaid expenses 34,558 28,122 4,527
Note receivable - - 175,333
Deferred income taxes - - 75,000
Recoverable income taxes 37,289 - -
------------------------------------------
Total current assets 5,461,463 7,684,400 5,905,343
Property and equipment, net 2,785,190 2,914,944 2,678,075
Note receivable from affiliate - - 175,000
Other assets 107,969 83,594 129,844
------------------------------------------
Total assets $8,354,622 $10,682,938 $ 8,888,262
==========================================
</PAGE>
<PAGE>
December 31 June 30
--------------------------
1993 1993 1992
-------------------------------------------
Liabilities and stockholders'
equity
Current liabilities
Accounts payable $ 385,989 $ 273,169 $ 202,247
Accrued expenses 169,638 205,769 157,027
Accrued profit sharing
contribution 90,800 107,699 109,151
Income taxes payable - 2,019,043 165,284
Current maturities of notes
payable 106,614 706,246 6,304
------------------------------------------
Total current liabilities 753,041 3, 311,926 640,013
Notes payable, less current
maturities 733,839 737,776 829,623
Deferred income taxes - - 1,558,000
-----------------------------------------
733,839 737,776 2,387,623
Stockholders' equity
Preferred stock, no par value
Authorized shares - 1,000 issued
and outstanding shares - 1,000 - - 49,400
Common stock, no par value
Authorized shares - 1,000 issued
and outstanding shares - 756.173 250,000 250,000 -
Common stock - Class A, no par value
Authorized shares - 1,000 issued
and outstanding shares - 500 - - 200,600
Common stock - Class B, no par value
Authorized shares - 1,000 issued
and outstanding shares - none - - -
Retained earnings 6,617,742 6,383,236 5,610,626
------------------------------------------
Total stockholders' equity 6,867,742 6,633,236 5,860,626
------------------------------------------
Total liabilities and stockholders'
equity $8,354,622 $10,682,938 $8,888,262
==========================================
See accompanying notes.
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Statements of Income and Retained Earnings
Six months
ended
December 31 Year ended June 30
----------------------
1993 1993 1992
------------------------------------
Net sales $6,575,541 $12,529,077 $9,325,052
Cost of sales 3,139,169 5,870,546 4,397,019
------------------------------------
Gross profit 3,436,372 6,658,531 4,928,033
Selling, general, and
administrative expenses 2,898,720 4,480,101 3,427,137
------------------------------------
537,652 2,178,430 1,500,896
Other income (expense):
Investment income 107,171 267,076 273,557
Interest expense (36,649) (76,603) (55,177)
Miscellaneous income - 1,466 7,373
Write-off of note receivable
from affiliate - (225,000) -
-------------------------------------
Income before income taxes 608,174 2,145,369 1,726,649
Provision for income taxes 123,668 857,759 637,310
-------------------------------------
Net income 484,506 1,287,610 1,089,339
Retained earnings - beginning of
period 6,383,236 5,610,626 5,036,287
Dividends paid (250,000) (515,000) (515,000)
-------------------------------------
Retained earnings - end of period $6,617,742 $ 6,383,236 $5,610,626
=====================================
See accompanying notes.
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Statements of Cash Flows
Six months
ended
December 31 Year ended June 30
------------------------
1993 1993 1992
-------------------------------------
Cash flows from operating activities
Net income $ 484,506 $1,287,610 $1,089,339
Adjustments to reconcile net
income to net cash (used for)
provided by operating activities:
Depreciation and amortization 166,288 329,437 260,012
Provision for bad debts 25,304 16,963 4,680
Write-off of note receivable
from affiliate - 225,000 -
Deferred income taxes - (1,483,000) 317,000
Changes in operating assets and
liabilities:
Accounts receivable 405,555 (670,749) (237,325)
Inventories (67,859) 48,777 (175,243)
Prepaid expenses (6,436) (23,595) 51,529
Other assets (25,000) (100,000) -
Accounts payable 112,820 70,922 52,221
Accrued expenses (36,131) 48,742 43,718
Accrued profit sharing
contribution (16,899) (1,452) (9,892)
Income taxes (2,056,332) 1,853,759 165,284
---------------------------------------
Net cash (used for) provided by
operating activities (1,014,184) 1,602,414 1,561,323
Cash flows from investing activities
Decrease (increase) in
investments - net 1,885,398 (1,268,898) (599,695)
Purchases of property and equipment (35,909) (514,056) (1,098,657)
Deposit on equipment - - (51,000)
Payment of note receivable - 175,333 175, 333
Advances to affiliates - - (125,000)
--------------------------------------
Net cash provided by (used for)
investing activities 1,849,489 (1,607,621) (1,699,019)
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Statements of Cash Flows (continued)
Six months
ended
December 31 Year ended June 30
---------------------------
1993 1993 1992
------------------------------------------
Cash flows from financing activities
Proceeds from note payable $ - $ 700,000 $ -
Payments of notes payable (603,569) (91,905) -
Proceeds from stock subscriptions - 44,000 48,000
Dividends paid on common stock (250,000) (515,000) (515,000)
------------------------------------------
Net cash (used for) provided by
financing activities (853,569) 137,095 (467,000)
------------------------------------------
(Decrease) increase in cash and
cash equivalents (18,264) 131,888 (604,696)
Cash and cash equivalents at
beginning of period 142,880 10,992 615,688
-----------------------------------------
Cash and cash equivalents at
end of period $ 124,616 $ 142,880 $ 10,992
=========================================
Supplemental disclosures of
cash flow information
Cash paid during the period for:
Interest $ 37,000 $ 70,000 $ 55,000
=========================================
Income taxes $2,180,000 $ 487,000 $ 104,000
=========================================
Supplemental schedule of noncash
investing and financing activities
Year ended June 30, 1992
The Company assumed an $839,799
mortgage note as partial payment for
the purchase of land and a building.
See accompanying notes.
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Notes to Financial Statements
December 31, 1993
1. Summary of Significant Accounting Policies
Nature of Business
The Company is engaged in the business of manufacturing, distributing, and
selling printed tape and label products and other similar products, primarily
in the greater Chicago, Illinois area.
Cash Equivalents
The Company considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents.
Investments
Investments are stated at cost which approximates market value. Investments
consist of certificates of deposit, stocks, and municipal instruments.
Inventories
Inventory has been valued at the lower of cost or market under the first in,
first out (FIFO) method.
Property and Equipment
Property and equipment are stated at cost. An accelerated depreciation method,
which approximates double declining balance, was used for calculating
depreciation.
Fiscal Year-End
Effective July 1, 1993, the Company's fiscal year-end was changed to December
31 from June 30.
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Notes to Financial Statement (continued)
2. Related Party Transactions
A note receivable from Queen Valley Associates Limited Partnership, an
affiliated partnership, was payable on March 31, 1994, and bore interest at 7%
on the outstanding balance due. Interest was payable annually on March 31.
During the year ended June 30, 1993, the $225,000 balance of this note and
related interest receivable was forgiven.
During the year ended June 30, 1993, a new note receivable was executed with an
individual of an affiliated partnership. The note bears interest at 6% and is
payable beginning October 15, 1993, and monthly thereafter. The $75,000
principal amount of the note at December 31, 1993 is due on January 1, 1995.
The note is unsecured.
3. Inventories
Inventories consist of the following:
December 31 June 30
----------------------------
1993 1993 1992
-----------------------------------------
Raw materials $276,403 $288,408 $256,276
Work in process 111,594 73,968 282,932
Finished goods 302,791 260,553 132,498
-----------------------------------------
$690,788 $622,929 $671,706
=========================================
4. Property and Equipment
Property and equipment consist of the following:
December 31 June 30
---------------------------
1993 1993 1992
-----------------------------------------
Land $ 660,000 $ 660,000 $ 660,000
Building 990,000 990,000 990,000
Machinery and equipment 1,446,183 1,429,849 1,149,930
Machinery and equipment -
platemaking 158,729 158,729 -
Furniture and fixtures 327,950 327,950 327,950
Automobiles 280,676 283,084 212,323
Building improvements 461,042 461,042 422,842
Office equipment 41,434 41,434 37,439
----------------------------------------
4,366,014 4,352,088 3,800,484
Less: Accumulated depreciation (1,580,824) (1,437,144) ( 1,122,409)
----------------------------------------
Net property and equipment $2,785,190 $2,914,944 $2,678,075
========================================
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Notes to Financial Statements (continued)
5. Notes Payable
Notes payable consist of the following:
December 31 June 30
-----------------------------
1993 1993 1992
------------------------------------------
9.875% mortgage payable in
monthly installments of $6,620,
including interest, through
November 1999, secured by land
and building $740,453 $ 744,022 $835,927
6% unsecured note payable to bank 700,000 -
6% unsecured note payable to bank,
principal due March 1994,
interest due monthly 100,000 - -
------------------------------------------
Total notes payable 840,453 1,444,022 835,927
Less: Current maturities (106,614) (706,246) (6,304)
------------------------------------------
$733,839 $ 737,776 $829,623
==========================================
The interest rate on the mortgage note is adjustable monthly beginning on
November 1, 1994, to a rate equal to Moody's A Corporate Bond Index Daily Rate
plus one quarter of 1% (.25%).
Aggregate maturities of notes payable at December 31, 1993 are as follows:
Year ending December 31
1994 $106,614
1995 7,298
1996 8,052
1997 8,884
1998 9,802
1999 699,803
-------------
$840,453
=============
6. Profit-Sharing Plan
Substantially all of the employees of the Company are covered by a qualified
profit-sharing plan. The plan provides for contributions in such amounts as
the Company may annually determine. The contributions for the six months ended
December 31, 1993, and years ended June 30, 1993 and 1992 were $90,800,
$133,699, and $120,518, respectively.
</PAGE>
<PAGE>
Pamco Printed Tape & Label Co., Inc.
Notes to Financial Statements (continued)
7. Income Taxes
The provisions for income taxes consist of the following:
Six months
ended
December 31 Year ended June 30
-------------------
1993 1993 1992
---------------------------------
Currently payable:
Federal $115, 051 $1,896,385 $251,521
State 8,617 444,374 68,789
----------------------------------
123,668 2,340,759 320,310
Deferred - (1,483,000) 317,000
----------------------------------
$123,668 $ 857,759 $ 637,310
===================================
Effective July 1, 1993, the stockholders of the Company elected under
Subchapter S of the Internal Revenue Code to include the Company's income in
their own income for federal tax purposes. Accordingly, except for federal
income taxes related to built-in gains tax of $115,051, the Company is not
subject to federal income taxes. Therefore, the deferred tax asset of $85,000
at June 30, 1993 was reversed into income tax expense for the year ended June
30, 1993.
For the year ended June 30, 1993 and 1992, differences between income for
financial reporting and income tax purposes, which give rise to deferred tax
accounts, relate principally to an investment in a Limited Partnership, uniform
capitalization rules for inventory, allowance for doubtful accounts, and
depreciation.
8. Capital Stock
During the year ended June 30, 1993, the Board of Directors of the Company
reorganized the capital structure of the Company to eliminate the preferred
stock, eliminate its two classes of old common stock and authorize the Company
to issue 1,000 new shares of no par value common stock. The Company entered
into a plan of reorganization whereby the old preferred stock was exchanged for
the new common stock, and each share of old Class A common stock which was
issued and outstanding prior to the effective date of the reorganization was
converted into one share of new common stock.
</PAGE>
<PAGE>
SIGNATURE
---------
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.
Jordan Industries, Inc.
August 2, 1994 by Thomas C. Spielberger
Vice President, Controller
</PAGE>
