SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 8-K/A
(Amendment No. 2)
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 15, 1996
PRESSTEK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-17541 02-0415170
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
8 Commercial Street, Hudson, New Hampshire 03051
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 595-7000
- --------------------------------------------------------------------------------
Former name or former address, if changed since last report
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial statements of business acquired.
CATALINA COATINGS, INC.
Report of Independent Certified Public Accountants F-1
Balance Sheets as of December 31, 1994 and 1995 F-2-3
Statements of Operations for the Years Ended
December 31, 1993, 1994, and 1995 F-4
Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 1993, 1994, and 1995 F-5
Statements of Cash Flows for the Years Ended
December 31, 1993, 1994, and 1995 F-6-7
Notes to Financial Statements F-8-14
(b) Pro forma financial information
PRESSTEK, INC.
Introduction PF-1
Pro forma combined condensed balance sheet
as of December 30, 1995 PF-2
Pro forma combined condensed statement of
operations for the year ended December 30, 1995 PF-3
Notes to pro forma combined condensed financial
statements PF-4-5
(c) Exhibits.
23. Consent of BDO Seidman, LLP
-2-
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To The Board of Directors
Catalina Coatings, Inc.
We have audited the accompanying balance sheets of Catalina Coatings, Inc. as of
December 31, 1994 and 1995, and the related statements of operations, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995. 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 Catalina Coatings, Inc. as of
December 31, 1994 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
/s/ BDO Seidman, LLP
New York, New York
February 9, 1996
F-1
<PAGE>
CATALINA COATINGS, INC.
BALANCE SHEETS
December 31, 1994 and 1995
ASSETS
December 31, December 31,
1994 1995
---------- ----------
Current Assets:
Cash and cash equivalents (Note 1) $ 843,352 $ 943,980
Available for sale security (Note 2) 291,414 --
Accounts receivable, net of allowance
for doubtful accounts of $2,000 98,894 168,313
Inventory (Notes 1 and 3) 31,900 31,900
Prepaid expenses -- 27,235
Interest receivable from related
party (Note 6) -- 4,805
Costs and estimated earnings
in excess of billings on
uncompleted contracts (Notes 1 and 3) -- 1,019,581
---------- ----------
Total Current Assets 1,265,560 2,195,814
---------- ----------
Property and Equipment, Net (Notes 1 and 4) 92,208 366,155
---------- ----------
Other Assets:
Note receivable from related party (Note 6) -- 244,317
Deposits 2,000 1,435
Intangible assets, net (Notes 1 and 5) 61,234 159,523
---------- ----------
Total Other Assets 63,234 405,275
---------- ----------
$1,421,002 $2,967,244
========== ==========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-2
<PAGE>
CATALINA COATINGS, INC.
BALANCE SHEETS (Continued)
December 31, 1994 and 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, December 31,
1994 1995
----------- -----------
Current Liabilities:
Loan payable to stockholder (Note 6) $ 2,919 $ 2,919
Accounts payable 9,019 320,642
Interest payable to stockholder (Note 6) 6,554 6,554
Accrued expenses -- 95,162
Billings in excess of costs
and estimated earnings on
uncompleted contracts (Notes 1 and 3) 1,029,612 684,406
----------- -----------
Total Current Liabilities 1,048,104 1,109,683
----------- -----------
Commitments and Contingencies (Notes 7 and 9)
Stockholders' Equity:
Common stock, $1 par value; 1,000,000
shares authorized, 12,250 issued
and outstanding (Note 8)
Series A 12,250 10,000
Series B -- 2,250
Retained earnings 362,898 1,847,561
----------- -----------
375,148 1,859,811
Stock subscriptions receivable (2,250) (2,250)
----------- -----------
372,898 1,857,561
----------- -----------
$ 1,421,002 $ 2,967,244
=========== ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-3
<PAGE>
CATALINA COATINGS, INC.
STATEMENTS OF OPERATIONS
For The Years Ended December 31, 1993, 1994 and 1995
December 31, December 31, December 31,
1993 1994 1995
----------- ----------- -----------
Sales (Note 7) $ 989,489 $ 1,368,131 $ 5,376,405
Cost of sales 464,359 462,718 3,141,400
----------- ----------- -----------
Gross Profit 525,130 905,413 2,235,005
General and administrative expense 440,208 493,101 803,730
----------- ----------- -----------
Operating income 84,922 412,312 1,431,275
----------- ----------- -----------
Other Income (Expense):
Interest expense (12,768) (12,380) (3,259)
Interest income -- 7,392 105,499
Gain on sale of investment -- -- 8,586
Loss on sale of property and
equipment (1,000) -- --
Write-down of intangible asset (41,625) -- --
----------- ----------- -----------
(55,393) (4,988) 110,826
----------- ----------- -----------
Net Income $ 29,529 $ 407,324 $ 1,542,101
=========== =========== ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-4
<PAGE>
CATALINA COATINGS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Years Ended December 31, 1993, 1994 and 1995
<TABLE>
<CAPTION>
Common Stock Total
------------------------------- Retained Stock Stockholders'
Number Share Earnings Subscription Equity
of Shares Value (Deficit) Receivable (Deficit)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance,
December
31, 1992 10,000 $ 10,000 $ (12,735) $ -- $ (2,735)
Sale of
stock 2,250 2,250 -- (2,250) --
Net income -- -- 29,529 -- 29,529
Stock-
holders'
distribu-
tions -- -- (61,220) -- (61,220)
----------- ----------- ----------- ----------- -----------
Balance,
December
31, 1993 12,250 12,250 (44,426) (2,250) (34,426)
Net income -- -- 407,324 -- 407,324
----------- ----------- ----------- ----------- -----------
Balance,
December
31, 1994 12,250 12,250 362,898 (2,250) 372,898
Net income -- -- 1,542,101 -- 1,542,101
Stock-
holders'
distribu-
tions -- -- (57,438) -- (57,438)
----------- ----------- ----------- ----------- -----------
Balance,
December
31, 1995 12,250 $ 12,250 $ 1,847,561 $ (2,250) $ 1,857,561
=========== =========== =========== =========== ===========
</TABLE>
The Accompanying Notes are an Integral Part
of the Financial Statements
F-5
<PAGE>
CATALINA COATINGS, INC.
STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1993, 1994 and 1995
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Cash:
Cash flows from operating activities:
Cash received from customers $ 955,576 $ 2,330,762 $ 3,942,199
Cash paid to suppliers and
employees (878,749) (969,468) (3,510,402)
Interest paid (5,846) (12,748) (3,259)
Interest received -- 7,392 100,694
----------- ----------- -----------
Net cash provided by
operating activities 70,981 1,355,938 529,232
----------- ----------- -----------
Cash flows from investing activities:
Cash from sale of property and
equipment 3,000 -- --
Purchase of property and equipment (23,365) (41,302) (311,660)
Purchase of intangible asset (20,000) (45,234) --
Costs to develop intangible assets -- -- (115,189)
Purchase of available for sale
securities -- (291,414) --
Proceeds from sale of available for
sale securities -- -- 300,000
Disbursements for note receivable
from related party -- -- (244,317)
----------- ----------- -----------
Net cash used by investing
activities (40,365) (377,950) (371,166)
----------- ----------- -----------
Cash flows from financing activities:
Stockholder distributions (61,220) -- (57,438)
Proceeds from note payable to
stockholder -- 2,919 --
Payments on note payable to
stockholder -- (137,555) --
----------- ----------- -----------
Net cash used by financing
activities (61,220) (134,636) (57,438)
----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents (30,604) 843,352 100,628
Cash and cash equivalents at
beginning of year 30,604 -- 843,352
----------- ----------- -----------
Cash and cash equivalents at
end of year $ -- $ 843,352 $ 943,980
=========== =========== ===========
</TABLE>
The Accompanying Notes are an Integral Part
of the Financial Statements
F-6
<PAGE>
CATALINA COATINGS, INC.
STATEMENTS OF CASH FLOWS (Continued)
For The Years Ended December 31, 1993, 1994 and 1995
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Reconciliation of net income to net
cash provided by operating
activities:
Net income $ 29,529 $ 407,324 $ 1,542,101
----------- ----------- -----------
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 16,443 8,008 54,613
Loss on sale of property and
equipment 1,000 -- --
Write-down of intangible asset 41,625 -- --
Gain on sale of available for
sale security -- -- (8,586)
Changes in Assets and Liabilities:
Accounts receivable (33,913) (64,981) (69,419)
Inventory 1,100 -- --
Prepaid expenses 2,903 -- (27,235)
Interest receivable from related
party -- -- (4,805)
Costs and estimated earnings
in excess of billings on
uncompleted contracts -- -- (1,019,581)
Deposits -- (2,000) 565
Accounts payable 5,445 (21,657) 311,623
Interest payable to stockholder 6,922 (368) --
Accrued expenses (73) -- 95,162
Billings in excess of costs
and estimated earnings on
uncompleted contracts -- 1,029,612 (345,206)
----------- ----------- -----------
41,452 948,614 (1,012,869)
----------- ----------- -----------
Net cash provided by
operating activities $ 70,981 $ 1,355,938 $ 529,232
=========== =========== ===========
</TABLE>
The Accompanying Notes are an Integral Part
of the Financial Statements
F-7
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Organization, Business and Use of Estimates:
Catalina Coatings, Inc. is a Corporation organized under the laws of
the State of Arizona. The Corporation was approved by the State of
Arizona on October 14, 1991. The principal business of the Corporation
is the manufacture and sale of specialized coating machines and
related research and development projects, for which the Company has
customers worldwide.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Revenue and Cost Recognition:
Revenues and costs from fixed-price and modified fixed-price
production contracts are recognized on the percentage-of-completion
method, measured by the percentage of costs incurred to date to the
estimated total of direct costs for each contract. Direct costs
include, among other things, direct labor, direct materials and
direct overhead. General and administrative expenses are accounted for
as period costs and are, therefore, not included in the calculation of
the estimates to complete construction contracts in progress. Material
project losses are provided for in their entirety without reference to
the percentage-of-completion. As contracts can extend over one or more
accounting periods, revisions in costs and earnings estimated during
the course of the work are reflected during the accounting period in
which the facts that required such revisions become known.
Research and Development Costs:
Research and development costs are expensed as incurred for financial
reporting purposes. Such reimbursed costs were not material in any
period.
Cash and Cash Equivalents:
Cash and cash equivalents are considered to be all highly liquid
investments purchased with an initial maturity of three (3) months or
less.
Inventory:
Inventory is stated at the lower of cost, first-in, first-out method,
or market. Inventory quantities are reviewed periodically for
obsolescence.
F-8
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies: (Continued)
Property and Equipment:
Property and equipment are recorded at cost. Depreciation is provided
for on the straight-line method over the estimated useful lives of the
assets which range from 5 to 10 years. Depreciation expense was
$14,443, $6,008, and $37,713, for the years ended December 31, 1993,
1994 and 1995, respectively.
Intangible Assets:
The Company purchased a license to use certain patented technology,
along with the right to sub-license this technology to other
companies. The Company's license is recorded at cost, net of
accumulated amortization. The costs are being amortized ratably over
the estimated useful life of ten (10) years. The Company recorded
amortization expense of $2,000 for the years ended December 31, 1993,
1994 and 1995, respectively.
The Company internally develops software to control the machines sold
by the Company. Upon achievement of technological feasibility,
software development is deferred and being amortized ratably over the
estimated useful life of five years. The Company recorded amortization
expense of $14,900 for the year ended December 31, 1995.
The Company defers patent application costs, which represent the cost
of preparing and filing applications to patent the Company's
proprietary technologies. These costs will be amortized ratably over
their expected useful lives upon issuance of the related patents, or
expensed if such patents are not issued. The Company did not amortize
any expense for the year ended December 31, 1995 as all patent
applications are pending.
Income Taxes:
Effective October 14, 1991, the Company elected to be treated as a
Sub-Chapter S Corporation for federal and state tax reporting
purposes. As such, all taxable income and available tax credits are
passed from the corporate entity to the individual stockholders. It is
the responsibility of the individual stockholders to report the
taxable income and tax credits, and pay the resulting taxes.
2. Investments:
Available for Sale Securities:
Available for sale securities are debt and equity securities purchased
and held for the purpose of selling over an undetermined period and
are reported at fair value, with unrealized gains and losses reported
as separate component of stockholders' equity.
F-9
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Investments: (Continued)
Available for Sale Securities: (Continued)
At December 31, 1994, the Company had securities classified as
available for sale, as follows:
Unrealized
Amortized Holding
Fair Value Cost Gain
---------- ---- ----
U.S. Treasury Bill $ 291,414 $ 291,414 $ --
========== ========== ==========
Realized gains and losses are determined on the specific identification
basis. During the year ended December 31, 1995, the Company recognized a
gain on the sale of available for sale securities of $8,586.
3. Inventory and Contract Costs:
At December 31, 1994 and 1995, inventory consists of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1994 1995
---------- ----------
<S> <C> <C>
Raw materials $ 31,900 $ 31,900
========== ==========
At December 31, 1994 and 1995, contract costs consist of the following:
<CAPTION>
December 31, December 31,
1994 1995
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 119,426 $3,155,448
Estimated earnings 51,762 1,558,527
---------- ----------
171,188 4,713,975
Less: Billings to date 1,200,800 4,378,800
---------- ----------
$(1,029,612) $ 335,175
========== ==========
Included in accompanying balance sheets
under the following captions:
Costs and estimated earnings in excess
of billings on uncompleted contracts $ -- $1,019,581
Billings in excess of costs and
estimated earnings on uncompleted
contracts (1,029,612) (684,406)
---------- ----------
$(1,029,612) $ 335,175
========== ==========
</TABLE>
F-10
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Property and Equipment:
At December 31, 1994 and 1995, property and equipment consists of the
following:
December 31, December 31,
1994 1995
---------- ----------
Machinery and equipment 96,020 $ 328,114
Furniture and fixtures 19,365 37,233
Leasehold improvements 14,305 76,003
--------- ----------
129,690 441,350
Less: accumulated depreciation (37,482) (75,195)
--------- ----------
92,208 $ 366,155
========= ==========
5. Intangible Assets:
At December 31, 1994 and 1995, intangible assets consist of the
following:
December 31, December 31,
1994 1995
---------- ----------
License $ 20,000 $ 20,000
Less: accumulated amortization (4,000) (6,000)
---------- ----------
16,000 14,000
---------- ----------
Software development 45,234 127,513
Less: accumulated amortization - (14,900)
---------- ----------
45,234 112,613
---------- ----------
Patent - 32,910
---------- ----------
$ 61,234 $ 159,523
========== ==========
F-11
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Related Party Transactions:
Note Receivable from Related Party:
At December 31, 1994 and 1995, note receivable from related party
consists of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1994 1995
---------- ----------
<S> <C> <C>
9% note receivable due to a Company
controlled by the majority stockholders
of the Company. The note is due on demand;
unsecured. $ - $ 244,317
========== ==========
</TABLE>
For the year ended December 31, 1995, the Company incurred and accrued
interest income in relation to the foregoing note receivable in the
amount of $4,804. Although the note receivable is due on demand,
management has no intention to exercise their demand rights within the
current operating cycle. As such, the note receivable has been reported
as a long-term asset in the accompanying financial statements for the
year ended December 31, 1995.
Loan Payable to Stockholder:
At December 31, 1994 and 1995, loan payable to stockholder consists of
the following:
<TABLE>
<CAPTION>
December 31, December 31,
1994 1995
---------- ----------
<S> <C> <C>
Loan payable to majority stockholder,
with no stated interest or repayment
schedule, due on demand; unsecured. $ 2,919 $ 2,919
========== ==========
</TABLE>
For the years ended December 31, 1993 and 1994, the Company incurred
interest expense in relation to a note payable to a stockholder in the
amounts of $12,768 and $12,380, respectively. Additionally, the Company
has interest payable to stockholder of $6,554 as of December 31, 1994
and 1995, respectively.
7. Commitments and Contingencies:
Concentration of Credit Risk:
The Company maintains cash balances at various financial institutions.
Deposits not to exceed $100,000 at the financial institutions are
insured by the Federal Deposit Insurance Corporation.
At December 31, 1994 and 1995, the Company has uninsured cash of
approximately $791,700 and $886,200, respectively.
F-12
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Commitments and Contingencies: (Continued)
Product Warranty:
The Company sells its manufactured machines with a one (1) year
warranty. As of December 31, 1995, the Company included a provision of
$36,360 for estimated warranty claims. The provision is based on
management's past experience with similar machines. Management will
adjust the provision as future experience dictates.
Committed Costs:
The Company is committed to purchase agreements for special parts in
progress as of December 31, 1995. The Company has estimated that as of
December 31, 1995, the Company has an unrecorded commitment of
approximately $243,000. If the committed costs were included in work in
progress, the Company would recognize additional net income of
approximately $137,300.
Economic Dependency:
For the year ended December 31, 1995, the Company had one (1) customer
that accounted for approximately eighty-five percent (85%) of the
Company's revenue.
8. Stockholders' Equity:
On December 5, 1995, the Company's Board of Directors approved the
creation of three (3) different series of common stock. Series A has no
preferences, restrictions, or qualifications. Series B and C are
non-voting, and have restrictions regarding transferability.
9. Employee Benefit Plan:
Effective August 1, 1995, the Company implemented a profit sharing plan
covering virtually all full-time employees. The plan is designed as a
401(K) profit sharing plan. Employees are permitted to make voluntary
contributions to the plan, for which the Company may elect to make a
matching contribution up to a certain limitation. For the year ended
December 31, 1995, the Company made contributions in the amount of
$30,000 to the plan.
10. Statements of Cash Flows:
Non-Cash Investing and Financing Activities:
The Company recognized investing and financing activities that affected
assets, liabilities, and equity, but did not result in cash receipts or
payments. These non-cash activities are as follows:
In 1993, the Company issued stock and recorded a stock
subscription receivable in the amount of $2,250.
F-13
<PAGE>
CATALINA COATINGS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
11. Subsequent Events
On February 15, 1996, the Company's shareholders agreed to sell 90% of
their common stock to Presstek, Inc. for $8.2 million. Also, the Company
entered into four year employment agreements with two of the selling
shareholders providing for annual compensation aggregating $300,000. In
addition, the Company granted an option to the selling shareholders to
purchase a total of 5% of the Company's outstanding common stock. The
option is exercisable only in the event the Company completes an initial
public offering within five years. The option price is to be determined
based upon the Board of Directors current assessment of fair value.
F-14
<PAGE>
PRESSTEK, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
On February 15, 1996, Presstek, Inc. (the "Company") acquired 90% of the
outstanding common stock (the "Purchased Shares") of Catalina Coatings, Inc., an
Arizona corporation ("Catalina"). Catalina is engaged in the development,
manufacture and sale of vacuum deposition coating equipment and the licensing
and sublicensing of patent rights with respect to vapor deposition process to
coat moving webs of material at high rates. The Company intends to continue the
business of Catalina which will operate as a subsidiary of the Company. The
Purchased Shares were acquired from David G. Shaw ("Shaw"), Marc G. Langlois
("Langlois"), and David G. Shaw and Lynn R. Shaw, as trustees of the David and
Lynn Shaw Charitable Remainder Unitrust, dated February 12, 1996 (collectively,
the "Selling Shareholders"), pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement") dated and effective as of January 1, 1996 by and among the
Company, the Selling Shareholders and John E. Madocks ("Madocks") and Catalina.
The aggregate consideration paid by the Company pursuant to the Stock Purchase
Agreement was $8,400,000, of which $8,200,000 represented the purchase price of
the Purchased Shares and $200,000 represented consideration for the
non-competition and confidentiality covenants of Shaw and Langlois.
A portion of the funds raised from private placements of an aggregate
282,846 shares of the Company's common stock for proceeds of $20,208,758, during
February, 1996, was the source of the consideration paid by the Company for the
Purchased Shares as well as the non-competition and confidentiality covenants of
Shaw and Langlois and the estimated acquisition costs.
The following financial statements present the Presstek, Inc. Pro Forma
Combined Condensed Balance Sheet as of December 30, 1995, and the Pro Forma
Combined Condensed Statement of Operations for the year ended December 30, 1995.
The Pro Forma Combined Condensed Balance Sheet as of December 30, 1995 is
presented giving effect to the acquisition as if it occurred on December 30,
1995. The Pro Forma Combined Condensed Statement of Operations for the year
ended December 30, 1995 is presented giving effect to the acquisition as if it
occurred January 1, 1995.
The pro forma information is based on each entity's historical financial
statements. The acquisition was accounted for as a purchase, with assets
acquired and liabilities assumed recorded at fair values.
The pro forma combined condensed results of operations does not purport to
be indicative of the results that actually would have occurred had the
acquisition occurred on January 1, 1995.
PF-1
<PAGE>
PRESSTEK, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF DECEMBER 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
CATALINA PRO FORMA PRO FORMA
PRESSTEK, INC. COATINGS, INC. ADJUSTMENTS COMBINED
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
$ 8,650,000 (A)
Cash and cash equivalents $ 3,628,021 $ 943,980 (8,650,000) (C) $ 4,572,001
Marketable securities 3,050,825 -- 3,050,825
Accounts receivable 7,888,559 168,313 ( 97,100) (B) 7,959,772
Inventory 5,861,743 31,900 5,893,643
Costs and estimated earnings
on uncompleted contracts -- 1,019,581 1,019,581
Other current assets 350,031 32,040 382,071
------------ ----------- ----------- -----------
Total current assets 20,779,179 2,195,814 ( 97,100) 22,877,893
------------ ----------- ----------- -----------
Property and equipment - net 4,291,312 366,155 ( 21,300) (B) 4,636,167
------------ ----------- ----------- -----------
Other assets:
Excess of cost over net assets acquired -- -- 6,478,195 (C) 6,478,195
Patent application costs and
license rights, net 1,012,147 46,910 300,000 (C) 1,359,057
Note receivable from related party - 244,317 -- 244,317
Other 585,980 114,048 200,000 (C) 900,028
------------ ----------- ----------- -----------
Total other assets 1,598,127 405,275 6,978,195 8,981,597
------------ ----------- ----------- -----------
TOTAL $ 26,668,618 $ 2,967,244 $ 6,859,795 $ 36,495,657
============ =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,942,182 $ 425,277 $( 97,100) (B) $ 4,270,359
Billings in excess of costs and estimated
earnings on uncompleted contracts -- 684,406 684,406
------------ ----------- ----------- -----------
Total current liabilities 3,942,182 1,109,683 ( 97,100) 4,954,765
------------ ----------- ----------- -----------
Minority interest 185,756 (C) 185,756
---------- ----------
8,650,000 (A)
( 21,300) (B)
Stockholders' equity 22,726,436 1,857,561 (1,857,561) (C) 31,355,136
------------ ----------- ----------- -----------
TOTAL $ 26,668,618 $ 2,967,244 $ 6,859,795 $36,495,657
============ =========== =========== ===========
</TABLE>
See notes to Pro Forma Combined Condensed Financial Statements
PF-2
<PAGE>
PRESSTEK, INC.
PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
CATALINA PRO FORMA PRO FORMA
PRESSTEK, INC. COATINGS, INC. ADJUSTMENTS COMBINED
------------ ----------- --------- ------------
<S> <C> <C> <C> <C>
Revenues $ 27,611,456 $ 5,376,405 $(234,000) (1) $ 32,753,861
------------ ----------- --------- ------------
Costs and expenses:
Cost of products sold 14,923,968 3,141,400 (212,700) (1) 17,852,668
Engineering and product development,
marketing, and general and administrative 9,932,797 803,730 416,767 (2) 11,153,294
Minority interest in net income of subsidiary -- -- 154,210 (3) 154,210
------------ ----------- --------- ------------
Total costs and expenses 24,856,765 3,945,130 358,277 29,160,172
------------ ----------- --------- ------------
Interest income
and other income (expense) - net 324,937 110,826 435,763
------------ ----------- --------- ------------
Income before income taxes 3,079,628 1,542,101 (592,277) 4,029,452
Provision for income taxes (220,000) -- -- (5) (220,000)
------------ ----------- --------- ------------
Net income $ 2,859,628 $ 1,542,101 $(592,277) $ 3,809,452
============ =========== ========= ============
Net income per common and
common equivalent share $ .18 $ .24
=== ===
Weighted average number of common
and common equivalent shares used
in computation 15,855,076 15,976,140
========== ==========
</TABLE>
See notes to Pro Forma Combined Condensed Financial Statements
PF-3
<PAGE>
PRESSTEK, INC.
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
Reference is made to the introduction at page PF-1
NOTE B - PRO FORMA ADJUSTMENTS
The pro forma adjustments to the combined condensed balance sheet are as
follows:
(A) To reflect the source of the consideration of the Purchased Shares,
non-competition and confidentiality covenants, and estimated acquisition costs
aggregating $8,650,000 (121,064 shares) from the private placements of Presstek,
Inc. common stock. Reference is made to the introduction at Page PF-1.
(B) To eliminate effect of intercompany transactions.
(C) To reflect the acquisition of Catalina Coatings, Inc. and the allocation of
purchase price on the basis of fair values of the assets acquired and the
liabilities assumed. The fair values of Catalina's tangible assets acquired and
liabilities assumed approximate their historical amounts. The components of the
purchase price and its allocation of assets and liabilities of Catalina
Coatings, Inc. are as follows:
Components of Purchase Price:
Cash to selling shareholders $ 8,400,000
Estimated acquisition costs 250,000
-----------
Total Purchase Price 8,650,000
Allocation of Purchase Price:
90% of Stockholders' equity of
Catalina Coatings, Inc. (1,671,805)
Non-competition and confidentiality
covenants (200,000)
Patents and license rights adjustment (300,000)
-----------
Cost in excess of net assets acquired $ 6,478,195
===========
The pro forma adjustments to the combined condensed statement of operations are
as follows:
(1) To eliminate effect of intercompany transactions.
(2) Amortization of excess of cost over fair value of net assets acquired over
20 years, non-competition and confidentiality covenants over 4 years, and patent
and license rights adjustment over 7 years, which reflects the remaining life of
the license rights. Amortization expense of the patent and license rights was
$2,000 in the historical financial statements and $42,857 in the pro forma
financial statements as a result of the allocation of the purchase price. There
was no change in the amortization period.
PF-4
<PAGE>
(3) To reflect minority interest in net income of subsidiary.
(4) Weighted average shares outstanding have been increased by 121,064 shares to
reflect $8,650,000 of the private placement stock offering as if it had occurred
at the beginning of the year.
(5) No proforma adjustments have been made for income taxes because Presstek
incurred a net operating loss for income tax purposes from compensation
deductions relative to stock option plans in excess of Catalina's proforma
income.
PF-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to this report to be signed on its
behalf by the undersigned thereunto duly authorized.
PRESSTEK, INC.
By:/s/ Robert E. Verrando
--------------------------
Robert E. Verrando
President
Date: May 20, 1996
-3-
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Catalina Coatings, Inc.
Tuscon, Arizona
We hereby consent to the incorporation by reference in the respective
Prospectuses constituting part of the Registration Statements on Form S-8 (Nos.
33-80466, 33-61215 and 33-39337) and on Form S-3 (No. 33-48342) of our report
dated February 9, 1996, relating to the financial statements of Catalina
Coatings, Inc. included in Form 8-KA of Presstek, Inc. for event dated February
15, 1996.
We also consent to the references to us under the caption "Experts" in the
Prospectuses.
/s/ BDO SEIDMAN, LLP
New York, New York
May 20, 1996
