<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: March 31, 1996
[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to ______
Commission file number: 33-29942-NY
RAGAR CORP.
- - --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 11-2925673
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation) Identification No.)
c/o Branin Investments, Inc., 100 Maiden Lane, New York, N.Y. 10038
- - --------------------------------------------------------------------------------
(Address of principal executive offices)
(212) 898-8888
- - --------------------------------------------------------------------------------
(Issuer's telephone number)
33 Whitehall Street, New York, NY 10004
- - --------------------------------------------------------------------------------
(Former name, former address or former fiscal year, if
changes since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 15,080,713 shares of Common
Stock, par value $.001 per share, were outstanding at May 10, 1996.
Transitional Small Business Disclosure Format: Yes |_| No |X|
<PAGE>
INDEX
PAGE
----
Part I - Financial Information
Item 1. Financial Statements
Consolidated balance sheets 3
Consolidated statements of income 4
Consolidated statement of changes in
stockholders' equity-Sucessor Business 5
Consolidated statement of changes in
stockholders' equity-Predecessor Business 6
Consolidated statements of cash flows 7
Notes to consolidated financial statements 8 - 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12 - 14
Part II - Other Information
Item 3. Changes in Securities 14
Item 4. Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
Ragar Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1996 1995
================================================================================
Current Assets
Cash $ 326,268 $ 693,356
Accounts receivable, less allowance for
doubtful accounts 1996 $60,000, 1995 $44,000 3,297,098 3,467,282
Inventory 547,121 638,295
Current portion of related party note receivable 145,256 132,800
Prepaid expenses 99,296 61,637
- - --------------------------------------------------------------------------------
Total current assets 4,415,040 4,993,370
- - --------------------------------------------------------------------------------
Related party note receivable, less current portion 122,322 146,736
Property and equipment, net 428,846 415,738
Intangibles assets, net 18,248,599 18,528,647
- - -------------------------------------------------------------------------------
$ 23,214,808 $ 24,084,491
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
================================================================================
Current Liabilities
Subordinated notes payable $ 548,855 $ 515,422
Note payable 2,241,001 1,865,604
Current maturities of long-term debt 3,530,000 3,527,862
Accounts payable 1,147,959 1,799,764
Accrued expenses 424,265 448,835
Customer deposits 700,788 592,496
- - --------------------------------------------------------------------------------
Total current liabilities 8,592,869 8,749,983
- - --------------------------------------------------------------------------------
Deferred income taxes 49,112 35,616
Long-term debt, less current maturities 7,953,461 8,811,558
- - --------------------------------------------------------------------------------
Stockholders' Equity
Preferred stock, $0.01 par value ($1,000
stated value); 12% Cummulative; 5,500 shares
authorized; 4,140 shares issued and outstanding 4,140,000 4,140,000
Discount on preferred stock (1,283,571) (1,283,571)
Common stock, $0.001 par value;
120,000,000 shares authorized;
14,932,142 shares issued and
outstanding 14,932 14,932
Additional paid-in-capital 3,330,008 3,330,008
Retained earnings 417,998 285,965
- - --------------------------------------------------------------------------------
6,619,367 6,487,334
- - --------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 23,214,808 $ 24,084,491
================================================================================
See Notes to Consolidated Financial Statements
3
<PAGE>
Ragar Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 and 1995
Predecessor
Ragar Corp. Business
================================================================================
Sales $ 9,764,955 $ 9,147,284
Costs of sales 7,087,047 6,296,347
- - --------------------------------------------------------------------------------
Gross profit 2,677,908 2,850,937
- - --------------------------------------------------------------------------------
Selling, general and administrative expenses:
Related party consulting fees 125,000 --
Related party rent expense 25,071 --
Other 1,409,823 824,632
- - --------------------------------------------------------------------------------
1,559,894 824,632
- - --------------------------------------------------------------------------------
Amortization and depreciation 316,546 8,518
- - --------------------------------------------------------------------------------
Operating income 801,468 2,017,787
Other income (expense):
Miscellaneous income 4,509 7,906
Interest expense (414,993) (3,875)
- - --------------------------------------------------------------------------------
Income before taxes 390,984 2,021,818
Provision for income taxes 134,750 --
- - --------------------------------------------------------------------------------
Net income $ 256,233 $ 2,021,818
================================================================================
Net income per common share $ 0.01
================================================================================
Unaudited Proforma Information:
Net income before taxes $ 2,021,818
Proforma income tax expense 687,418
- - --------------------------------------------------------------------------------
Proforma net income after taxes $ 1,334,400
================================================================================
See Notes to Consolidated Financial Statements
4
<PAGE>
Ragar Corp. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY-SUCCESSOR BUSINESS
MARCH 31, 1996
<TABLE>
<CAPTION>
Common Stock
Preferred Stock Discount -------------------------------------
------------------------ on Preferred Additional Retained
Shares Dollars Stock Shares Dollars Paid-in-Capital Earnings Total
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 4,140 $ 4,140,000 $ (1,283,571) 14,932,142 $ 14,932 $ 3,330,008 $ 285,965 $ 6,487,334
Dividends paid - - - - - - (124,200) (124,200)
Net income - - - - - - 256,233 256,233
- - ------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 1996 4,140 $ 4,140,000 $ (1,283,571) 14,932,142 $ 14,932 $ 3,330,008 $ 417,998 $ 6,619,367
====================================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
Ragar Corp. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY-PREDECESSOR BUSINESS
MARCH 31, 1996
Shares Retained
Outstanding Dollars Earnings Total
================================================================================
Balance, December 31, 1994 100 $ 50,000 $ 737,780 $ 787,780
Dividends paid -- -- (1,100,000) (1,100,000)
Net income -- -- 2,021,818 2,021,818
- - --------------------------------------------------------------------------------
Balance, March 31, 1995 100 $ 50,000 $ 1,659,598 $ 1,709,598
================================================================================
See Notes to Consolidated Financial Statements
6
<PAGE>
Ragar Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996
Predecessor
Ragar Corp. Business
================================================================================
Cash flows from Operating Activities
Cash received from customers $ 10,049,458 $ 9,096,407
Cash paid to suppliers and employees (9,402,430) (7,921,892)
Interest paid (6,028) (3,875)
Miscellaneous income received 4,509 7,906
- - --------------------------------------------------------------------------------
Net cash provided by operating activities 645,509 1,178,546
- - --------------------------------------------------------------------------------
Cash flows from Investing Activities
Purchase of equipment (24,162) --
- - --------------------------------------------------------------------------------
Net cash used in investing activities (24,162) --
- - --------------------------------------------------------------------------------
Cash flows from Financing Activities
Net advances to related parties 11,228 --
Principal payments on long-term debt (6,404) --
Payments on notes payable (869,059) --
Cash dividends paid (124,200) (1,100,000)
- - --------------------------------------------------------------------------------
Net cash used in financing activities (988,435) (1,100,000)
- - --------------------------------------------------------------------------------
Net increase (decrease) in cash (367,088) 78,546
Cash, beginning 693,356 665,393
- - --------------------------------------------------------------------------------
Cash, ending $ 326,268 $ 743,939
================================================================================
Reconciliation of Net Income to Net Cash Provided
By Operating Activities
Net income $ 256,233 $ 2,021,818
Depreciation 36,498 8,518
Amortization 280,047 --
Accretion of discount on subordinated
notes payable 33,434 --
Deferred income taxes 14,226 --
Provision for bad debts 16,000 --
Interest on long-term debt and notes
added to note payable 369,456 --
Changes in assets and liabilities
Decrease in accounts receivable 154,184 61,107
(Increase) decrease in inventory 91,174 (108,761)
Increase in deposits and prepaids (37,659) (987)
Decrease in accounts payable (651,805) (662,108)
Increase (decrease) in customer deposits 108,292 (111,984)
Decrease in accrued expenses (24,571) (29,057)
- - --------------------------------------------------------------------------------
Net cash provided by operating activities $ 645,509 $ 1,178,546
================================================================================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Capital lease obligation incurred for the use
of equipment $ 25,445 $ --
================================================================================
See Notes to Consolidated Financial Statements
7
<PAGE>
RAGAR CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies
Nature of Business
Ragar Corp. (Successor Business, Ragar, or Company) was organized under the laws
of the State of New York on July 19, 1988. Ragar Corp. had substantially no
operations prior to its exchange, on June 2, 1995, in a reverse acquisition with
Carpet Barn Holdings, Inc. (CBH), which was organized under the laws of the
State of Delaware on May 26, 1995 (see Note 2). CBH and its wholly owned
subsidiary, Carpet Barn, Inc. (CBI), a Delaware corporation, were formed for the
purpose of acquiring the assets and operations of Carpet Barn, Inc., a Nevada
corporation (Predecessor Business), a retail carpet sales and installation
outlet located in Las Vegas, Nevada. The Company began operations on June 2,
1995, the date of the acquisition, as described in Note 2.
The Company is also related, through common ownership, to C.B. Realty of
Delaware, Inc. (Realty).
The Company sells floor coverings, primarily carpet, to the new home and retail
replacement markets primarily in southern Nevada.
A summary of the Company's significant accounting policies follows. Unless
specifically discussed, the accounting policies apply to Ragar (and its
subsidiaries) and the Predecessor Business.
The results of operations of the Company are not comparable to those of the
Predecessor Business, due primarily to the amortization of intangible assets and
interest expense incurred on the acquisition debt. Comparisons to the quarter
ended March 31, 1995, refer to the operations of the Predecessor Business. Also,
the Predecessor Business' financial statements contain no provision for income
taxes.
Basis of Presentation
On June 2, 1995, the Company acquired all of the common stock of CBH in an
exchange (the Exchange) by the holders of such common stock for newly issued
common stock of the Company, representing 91% of the Company's common stock
outstanding after the Exchange. For financial reporting and accounting purposes,
the exchange was recorded as a reverse acquisition, with CBH as the accounting
acquirer. In a reverse acquisition, the accounting acquirer is treated as the
surviving entity, even though the registrant's legal existence does not change
and the financial statement titles refer to the Company, not the accounting
acquirer. The accounting acquirer treats the Exchange as a purchase acquisition.
As a result, the historical financial information presented is CBH's and not the
Company's as previously reported. The operating results of the Company are
included with CBH after June 2, 1995, the date of the Exchange. See Note 2 for a
further discussion of the Exchange.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for the complete financial
statements. In management's opinion, the accompanying consolidated financial
statements reflect all material adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of the results for the interim periods
presented. The results for the interim period ended March 31, 1996, are not
necessarily indicative of the results which will be reported for the entire
year.
The opening stockholders' equity of CBH was retroactively restated to give
effect to the impact of the exchange as if CBH has been recapitalized. As a
result, the preferred stock of CBH is presented as preferred stock of the
Company.
8
<PAGE>
RAGAR CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (continued)
Principles of consolidation:
The Successor Business consolidated financial statements include the accounts of
the Company and its subsidiaries CBH and CBI. All material intercompany accounts
and transactions have been eliminated in consolidation.
Cash
During the periods presented, the Company and the Predecessor Business
maintained cash balances, which at times, were in excess of federally insured
limits. At March 31, 1996 the Company's cash balances were maintained at
financial institutions in Nevada and Illinois.
Inventory
Inventory consists primarily of carpet and vinyl and is stated at the lower of
cost (first-in, first-out method) or market.
Property and equipment
Property and equipment is stated at cost, less accumulated depreciation.
Depreciation is provided on the straight line and accelerated methods for
financial reporting purposes using estimated useful lives of five to forty
years.
Intangibles
Cost in excess of net assets of the business' acquired in connection with the
Company's acquisitions (see Note 2) is being amortized by the straight-line
method over twenty-five years. The Company periodically reviews the value of its
goodwill to determine if an impairment has occurred. The Company does not
believe that an impairment of its goodwill has occurred based on an evaluation
of operating income, cash flows and business prospects.
The Company incurred financing costs related to the bank financing obtained in
connection with the acquisition of the Predecessor Business (see Note 2). These
costs are being amortized on the effective interest method over the term of the
debt.
The Company also entered into a covenant not-to-compete in connection with the
acquisition of Predecessor Business (see Note 2). The covenant is being
amortized on the straight-line method over the five-year term of the agreement.
Income taxes
The Company provides for deferred taxes on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effect of changes in tax laws and rates on the date of
enactment.
9
<PAGE>
RAGAR CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies (continued)
Advertising
Advertising costs are expensed as incurred.
Earnings per common share
Earnings per common share is calculated based on the weighted average number of
common shares outstanding during the period and the net income less preferred
stock dividends accrued for the period. There were no common stock equivalents
outstanding during the periods presented.
Use of estimates in the preparation of financial statements
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 disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expense during the reporting period. Actual
results could differ from those estimates.
Fair value of financial instruments
The carrying values of financial instruments including cash, accounts
receivables, subordinated notes payable, note payable, accounts payable and
accrued expenses approximate their fair values because of their short
maturities.
The carrying values of long-term debt and the related party note receivable
approximate their fair values because the interest rates on these instruments
are at market interest rates.
Note 2. Acquisitions
On June 2, 1995, the Company acquired all of the common stock of CBH in an
exchange by the holders of such common stock for 13,362,500 newly issued shares
of common stock of the Company, representing 91% of the Company's common stock
outstanding after the Exchange. Ragar had no operations prior to the acquisition
of the Predecessor Business. Its only asset was approximately $860,000 of cash
and it had immaterial liabilities.
Concurrent with CBH's exchange with the Company, CBI executed an Asset Purchase
Agreement to acquire certain assets net of assumed liabilities of the
Predecessor Business for a cash purchase price of $19,257,524. The acquisition
was accounted for as a purchase.
10
<PAGE>
RAGAR CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Pro Forma Financial Information
Unaudited pro forma results of operations of the Company assuming the
acquisitions occurred on January 1, 1995 and carried forward through March 31,
1996 are presented below. Pro forma adjustments made to the historical results
of operations consist principally of the amortization of intangible assets,
interest expense related to acquisition financing and income taxes.
Three Months Ended March 31,
----------------------------
1996 1995
============================
Net sales $ 9,764,955 $ 9,147,284
Gross profit 2,677,908 2,850,937
Net income 256,233 840,975
Net income per common share 0.01 0.05
The net income per common share was computed based on the 14,932,142 weighted
average common shares outstanding during the period ended March 31, 1996.
The above pro forma information does not purport to be indicative of the results
of operations that would have occurred had the acquisitions occurred on January
1, 1995 and is not intended to be a projection or indicative of future results.
Note 4. Subsequent Event
On May 9, 1996, CBH issued 520 shares of preferred stock, raising $520,000. The
preferred stock pays cumulative dividends, payable monthly, at the annual rate
of 12% of the stated value thereof. In connection with the issuance of the
preferred stock, the Company issued 148,571 shares of Common Stock. The holders
of such preferred stock have the right to vote on all matters as a single class
with the holders of the CBH Common Stock, and in the aggregate have votes equal
to 6% of the total voting power of CBH. The preferred stock is redeemable upon
an underwritten public offering of the Company. The proceeds were used to make
principal payments on CBH's subordinated debt.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company relates to the quarter ended March 31, 1996 and 1995 and should be
read in conjunction with the financial statements and notes thereto included
elsewhere in this Report. Discussion of information for 1995 relates to the
proforma consolidated financial results of the Company.
Predecessor Company results have been adjusted for comparison purposes in the
following discussions. Due to the fact that the Predecessor Company was a
subchapter S corporation, the amount of owner's compensation and dividends paid
each year varied as his personal earnings increased or decreased.
Results of Operations
Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995
(on a pro forma basis).
Total revenues increased by $617,671 to $9,764,955 for the quarter ended March
31, 1996 from $9,147,284 for the quarter ended March 31, 1995, representing an
increase of 6.8%. This increase is attributable to an increase in new home sales
for the first quarter of 1996 over the first quarter of 1995.
Although total revenues increased, gross margin decreased from $2,850,937 in
1995 to $2,677,908, representing a decrease of 6.1%. This decrease is a direct
result of an increase in new home sales which generally have a lower gross
margin than replacement sales and to price increases from the Company's
vendors.
Selling, general and administrative expenses increased from $849,703 for the
quarter ended March 31, 1995 to $1,559,894 for the quarter ended March 31, 1996.
This increase is due to the following: 1) increases in salaries and related
payroll taxes, 2) an increase in the modification rate for workers' compensation
due to the change in ownership on June 2, 1995, 3) contract labor to upgrade the
Company's management information system, 4) professional expenses associated
with the annual audit and required public filings, 5) other general expenses to
upgrade the operations of the Company.
Operating income decreased by $883,220 from $1,684,688 for the quarter ended
March 31, 1995 to $801,468. Net income decreased from $840,975 for the quarter
ended March 31, 1995 to $256,233 for the quarter ended March 31, 1996. These
decreases were due to the above mentioned decreases in gross margin and
increases in selling, general and administrative expenses.
12
<PAGE>
Liquidity and Capital Resources
The Company's cash decreased by $367,088 during the quarter ended March 31,
1996. Cash provided by operating activities was $645,509. At March 31, 1996, the
Company has a working capital (deficit) of $(4,177,829). Included in such
deficit are short-term notes payable of $2,789,856 and current maturities of
long-term debt of $3,530,000. In addition to cash provided by operations, at
March 31, 1996, the Company had approximately $800,000 of available credit under
the Credit Agreement (the Credit Agreement) with First Source Financial, LLP
(First Source), described below. The Credit Agreement contains covenants
requiring CBI to maintain minimum levels of tangible net worth, working capital
and various ratios. As of December 31, 1995, the Company was in violation of the
following financial covenants: adjusted net worth at June 30, 1995, and
quarterly and annual interest coverage ratios during the period from June 2,
1995 (commencement of operations) through December 31, 1995. On April 15, 1996,
First Source waived these covenant violations and agreed to negotiate in good
faith to amend such covenants by June 1, 1996 so that the Company can reasonably
expect to be in compliance with such amended covenants based on its current
operating and cash flow budgets. The Company believes it can be in compliance
with the proposed amended covenants. There can be no assurance that such
amendments will be obtained. Until such covenants are amended, the Company has
agreed to limit certain payments, including principal payments on CBH's
subordinated debt, except these principal payments can be made from any new
capital contributions. The Credit Agreement also limits payments from CBI to CBH
and limits dividends, redemptions, and purchases of capital stock of CBI, CBH
and the Company.
During the three months ended March 31, 1996, cash used in investing activities
was $24,162. Cash used by financing activities during such period was $988,435,
primarily used to make principal payments on the First Source debt and preferred
stock dividends.
In June 1995, in order to aid it in consummating its acquisition of Carpet Barn,
the Company, through its indirect subsidiary CBI, entered into the Credit
Agreement with First Source (the Financing) pursuant to which First Source
Advanced to CBI approximately $15,200,000 in term and revolving loans and CBH
pledged to First Source all of the common stock of CBI to secure CBI's
obligations under the Credit Agreement and guaranteed CBI's debt obligations to
First Source under the Credit Agreement. The Credit Agreement contains covenants
that limit CBI's ability to upstream monies to CBH needed to pay principal and
interest on the short-term notes (the Notes) issued by CBH and to pay dividends
on the preferred stock, par value $.01 per share, stated value $1,000 per share
(CBH Preferred Stock), of CBH. See Item 3 below for further discussion of such
covenants.
Immediately prior to the consummation of the Exchange and the Financing, CBH
privately sold an aggregate principal amount of $1,940,000 of Notes (the Note
Offering), together with shares of CBH common stock, raising $1,940,000, and
privately sold an aggregate of 2,215 shares of CBH Preferred Stock (the
Preferred Stock Offering), together with shares of CBH common stock, raising an
aggregate of $2,215,000. The Notes bore interest at 12% per annum payable
monthly. The first half of the principal due on November 30, 1995 were satisfied
by the Company making principal payments of $560,000 and the exchange of
$820,000 of the Notes for
13
<PAGE>
820 shares of 12% preferred stock of CBH. In addition, $1,125,000 was raised in
connection with the sale of 1,125 shares of such 12% preferred stock, ($605,000
of which was raised in November 1995 and $520,000 of which was raised in May
1996). The proceeds were used to make principal payments in November 1995 and
principal and interest payments in May 1996 and dividend payments in May 1996.
In connection with the issuance of the 1,945 shares of 12% preferred stock, the
Company issued 555,713 shares of common stock, par value of $.001 per share. The
newly issued shares of 12% preferred stock pay cumulative dividends, payable
monthly, at an annual rate of 12% of the stated value thereof and are redeemable
upon an underwritten public offering of the Company. The Company believes that
it has the capacity to obtain additional financing through the sale of equity
securities of the Company. However, there can be no assurance in this regard.
Impact of Inflation
The Company believes that its revenues are not materially affected by inflation
and that any increased expenses due to inflationary pressures will be offset,
over time, by corresponding increases in prices it charges to its customers.
PART II. OTHER INFORMATION
ITEM 3. CHANGES IN SECURITIES
On May 9, 1996, CBH issued 520 shares of preferred stock, raising $520,000 . The
preferred stock pays cumulative dividends, payable monthly, at the annual rate
of 12% of the stated value thereof. In connection with the issuance of the
preferred stock, the Company issued 148,571 shares of Common Stock. The holders
of such preferred stock have the right to vote on all matters as a single class
with the holders of the CBH Common Stock, and in the aggregate have votes equal
to 6% of the total voting power of CBH. The proceeds were used to make the final
principal and interest payments due on CBH's subordinated debt. The preferred
stock is redeemable upon an underwritten public offering of the Company.
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K.
None
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant had duly caused this report to be signed by the undersigned,
thereunto duly authorized.
RAGAR CORP.
May 15, 1996 /s/ Philip A. Herman
------------------------------------
Philip A. Herman
Chairman of the Board and President
(Principal Executive Officer)
May 15, 1996 /s/ Mark Szporka
------------------------------------
Mark Szporka
Chief Financial Officer
(Principal Financial and Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 326,268
<SECURITIES> 0
<RECEIVABLES> 3,357,098
<ALLOWANCES> 60,000
<INVENTORY> 547,121
<CURRENT-ASSETS> 4,415,040
<PP&E> 509,465
<DEPRECIATION> 80,619
<TOTAL-ASSETS> 23,214,808
<CURRENT-LIABILITIES> 8,592,869
<BONDS> 7,953,461
0
2,856,429
<COMMON> 14,932
<OTHER-SE> 3,748,006
<TOTAL-LIABILITY-AND-EQUITY> 23,214,808
<SALES> 9,764,955
<TOTAL-REVENUES> 9,764,955
<CGS> 7,087,047
<TOTAL-COSTS> 1,860,440
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 16,000
<INTEREST-EXPENSE> 414,993
<INCOME-PRETAX> 390,984
<INCOME-TAX> 134,750
<INCOME-CONTINUING> 390,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 256,233
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
