<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 8, 1995
----------------
FUQUA ENTERPRISES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-5091 13-1988043
- ------------------------------- ------------------------ ------------------------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
</TABLE>
One Atlantic Center, Suite 5000
1201 W. Peachtree Street, N.W., Atlanta, Georgia 30309
------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 404-815-2000
------------
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The audited financial statements of Basic American Medical Products,
Inc. ("Basic") for the year ended December 31, 1994 and for the nine months
ended September 30, 1995 are included herein.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated statements of income
for the nine months ended September 30, 1995 and for the year ended December
31, 1994 give effect to the acquisition of all of the outstanding shares of
Capital Stock of Basic (the "Merger") and to the sale of 100% of the stock of
American Southern Insurance Company ("American Southern")(which previously had
been reported as a discontinued operation) as if the transactions were
consummated on January 1, 1995 and January 1, 1994, respectively. The
unaudited pro forma condensed consolidated balance sheet at September 30, 1995
gives effect to the Merger and to the sale of American Southern as if the
transactions were consummated on September 30, 1995. The pro forma information
should be read in conjunction with the following: (a) the consolidated
financial statements of Fuqua which are included in Fuqua's Form 10-K for the
year ended December 31, 1994, (b) the condensed consolidated financial
statements included in Fuqua's quarterly report on Form 10-Q for the quarter
ended September 30, 1995, (c) Fuqua's Current Report on Form 8-K, dated
December 31, 1995, and (d) the audited financial statements of Basic included
in this Current Report on Form 8-K/A. The unaudited pro forma condensed
consolidated financial information contained herein is not necessarily
indicative of actual or future operating results or financial position that
would have occurred or will occur as a result of the Merger and/or the sale of
American Southern.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibits Incorporated Herein by Reference
-----------------------------------------------------------
Designation Document with Which Exhibit Designation of Such
of Exhibit in Description of Was Previously Filed with Exhibit in That
This Form 8-K Exhibits Commission Document
- ------------- ------------------------------------- --------------------------------------- -------------------
<S> <C>
23 Consent of Independent Auditors
</TABLE>
2
<PAGE> 3
Item 7(a)
FINANCIAL STATEMENTS
BASIC AMERICAN MEDICAL PRODUCTS, INC.
NINE MONTHS ENDED SEPTEMBER 30, 1995
AND THE
YEAR ENDED DECEMBER 31, 1994
WITH REPORT OF INDEPENDENT AUDITORS
3
<PAGE> 4
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND THE YEAR ENDED DECEMBER 31, 1994
CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Audited Financial Statements:
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Statements of Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
4
<PAGE> 5
Item 7(a)
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Fuqua Enterprises, Inc.
We have audited the accompanying balance sheets of Basic American Medical
Products, Inc. (Basic) as of September 30, 1995 and December 31, 1994 and the
related statements of income, shareholders' equity, and cash flows for the nine
months ended September 30, 1995 and the year ended December 31, 1994. These
financial statements are the responsibility of Basic'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 excludes 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, Basic's financial position at September 30, 1995 and
December 31, 1994, and the results of its operations and its cash flows for the
nine months ended September 30, 1995 and the year ended December 31, 1994 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Atlanta, Georgia
December 5, 1995
5
<PAGE> 6
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 688,395 $ 26,852
Trade accounts receivable, less allowance for doubtful
accounts of $1,152,776 and $1,299,529 at September 30,
1995 and December 31, 1994, respectively . . . . . . . . 4,932,387 4,263,916
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 4,120,031 4,872,311
Prepaid expenses and other current assets . . . . . . . . . 256,366 164,478
Investment available for sale . . . . . . . . . . . . . . . 617,650 402,203
Deferred income taxes . . . . . . . . . . . . . . . . . . . 1,195,990 1,145,650
--------------------------------------
Total Current Assets . . . . . . . . . . . . . . . . . . 11,810,819 10,875,410
Property, plant and equipment, net . . . . . . . . . . . . . 2,427,191 2,177,463
Deferred income taxes . . . . . . . . . . . . . . . . . . . . 1,066,114 1,365,165
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 118,084 -
--------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . $ 15,422,208 $ 14,418,038
======================================
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 1,723,906 $ 1,512,837
Income taxes . . . . . . . . . . . . . . . . . . . . . . . 900,266 675,610
Accrued expenses . . . . . . . . . . . . . . . . . . . . . 2,498,948 2,114,022
Line of credit . . . . . . . . . . . . . . . . . . . . . . - 150,170
Current maturities of long-term debt . . . . . . . . . . . 77,794 870,725
--------------------------------------
Total Current Liabilities . . . . . . . . . . . . . . . . 5,200,914 5,323,364
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . 2,066,874 1,784,048
--------------------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . 7,267,788 7,107,412
Excess of fair values of acquired net assets over cost, net . 1,341,942 1,406,358
Commitments and contingencies
Shareholders' Equity:
Common stock, no par value, 89,872 shares
issued and outstanding . . . . . . . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . . . . . . . . 4,869,452 4,869,452
Retained earnings . . . . . . . . . . . . . . . . . . . . . 1,791,279 1,008,416
Unrealized gain on investment . . . . . . . . . . . . . . . 151,747 26,400
--------------------------------------
Total Shareholders' Equity . . . . . . . . . . . . . 6,812,478 5,904,268
--------------------------------------
Total Liabilities and Shareholders' Equity . . . . . $ 15,422,208 $ 14,418,038
======================================
</TABLE>
See accompanying notes.
6
<PAGE> 7
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- ------------
<S> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . . . . . . . $ 20,963,581 $ 23,252,250
Cost of sales . . . . . . . . . . . . . . . . . . . . . . 15,636,288 16,899,635
--------------------------------------
Gross profit . . . . . . . . . . . . . . . . . . . . . . 5,327,293 6,352,615
Selling, general and administrative expenses . . . . . . 3,753,914 4,345,154
Provision for doubtful accounts . . . . . . . . . . . . . 288,271 772,879
--------------------------------------
Operating income . . . . . . . . . . . . . . . . . . . . 1,285,108 1,234,582
Interest expense . . . . . . . . . . . . . . . . . . . . 145,722 207,406
Other, net . . . . . . . . . . . . . . . . . . . . . . . (53,474) (40,159)
--------------------------------------
Income before income taxes . . . . . . . . . . . . . . . 1,192,860 1,067,335
Provision for income taxes . . . . . . . . . . . . . . . 409,997 29,415
--------------------------------------
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 782,863 $ 1,037,920
======================================
</TABLE>
See accompanying notes.
7
<PAGE> 8
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(ACCUMULATED
COMMON ADDITIONAL DEFICIT)/ UNREALIZED
STOCK PAID-IN RETAINED GAIN ON
SHARES CAPITAL EARNINGS INVESTMENT TOTAL
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1993 . . . . . . . . 83,300 $ 4,600,000 $ (29,504) $ - $ 4,570,496
Issuance of common stock . . . 6,572 269,452 - - 269,452
Net income . . . . . . . . . . - - 1,037,920 - 1,037,920
Unrealized gain on
investment, net of income tax - - - 26,400 26,400
---------------------------------------------------------------
Balance at
December 31, 1994 . . . . . . . . 89,872 4,869,452 1,008,416 26,400 5,904,268
Net income . . . . . . . . . . - - 782,863 - 782,863
Unrealized gain on
investment, net of income tax . - - - 125,347 125,347
---------------------------------------------------------------
Balance at
September 30, 1995 . . . . . . . 89,872 $ 4,869,452 $ 1,791,279 $ 151,747 $ 6,812,478
===============================================================
</TABLE>
See accompanying notes.
8
<PAGE> 9
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 782,863 $ 1,037,920
Adjustments:
Depreciation and amortization, net . . . . . . . . . . 47,495 5,526
Provision for doubtful accounts . . . . . . . . . . . . 288,271 772,879
Deferred income taxes . . . . . . . . . . . . . . . . . 248,711 -
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . (956,742) (734,662)
Inventories . . . . . . . . . . . . . . . . . . . . . 752,280 (752,051)
Prepaid expenses and other current assets . . . . . . (98,388) (416,301)
Other assets . . . . . . . . . . . . . . . . . . . . (118,084) 282,573
Accounts payable, income taxes and accrued
expenses . . . . . . . . . . . . . . . . . . . . . 737,051 1,278,953
--------------------------------------
Net cash provided by operating activities . . . . . . . . 1,683,457 1,474,837
INVESTING ACTIVITIES
Net additions to property, plant and equipment . . . . . (361,639) (2,183,803)
--------------------------------------
Net cash used in investing activities . . . . . . . . . . (361,639) (2,183,803)
FINANCING ACTIVITIES
Proceeds from issuance of common stock . . . . . . . . . - 269,452
Additions to long-term debt . . . . . . . . . . . . . . . 506,032 5,059,174
Additions (payments) to line of credit . . . . . . . . . (150,170) 150,170
Payments on long-term debt . . . . . . . . . . . . . . . (1,016,137) (5,119,687)
--------------------------------------
Net cash (used in) provided by financing activities . . . (660,275) 359,109
--------------------------------------
Net increase (decrease) in cash . . . . . . . . . . . . . 661,543 (349,857)
Cash and cash equivalents at beginning of period . . . . 26,852 376,709
--------------------------------------
Cash and cash equivalents at end of period . . . . . . . $ 688,395 $ 26,852
======================================
</TABLE>
See accompanying notes.
9
<PAGE> 10
Item 7(a)
BASIC AMERICAN MEDICAL PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. DESCRIPTION OF BUSINESS
Basic American Medical Products, Inc. ("Basic") manufacturers, distributes
and sells furnishings and equipment to organizations in the medical,
long-term care and home health care industries. Effective October 6, 1995,
Basic was acquired by Fuqua Enterprises, Inc. (see Note 10).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
ACCOUNTS RECEIVABLE
Concentrations of credit risk with respect to accounts receivable are
limited due to the large number of customers in Basic's customer base and
their dispersion across different geographic areas of the United States.
Basic maintains an allowance for doubtful accounts based upon the expected
collectibility of its receivables and routinely performs credit checks on
its customers.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.
INVESTMENT AVAILABLE FOR SALE
Effective January 1, 1994, Basic adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"). Basic has classified its investment in certain
units of Weeks Corporation, which are convertible into common stock of Weeks
Corporation, as available for sale. Available for sale securities are
carried at fair value, with the unrealized gains and losses, net of income
taxes, included in shareholders' equity. On November 8, 1995, such units
were registered and were exchanged for common stock.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost and are depreciated over
their estimated useful lives which range from 3 to 39 years. Depreciation
is provided using the straight-line method for financial reporting purposes
and using accelerated methods for income tax purposes.
EXCESS OF FAIR VALUES OF ACQUIRED NET ASSETS OVER COST
The excess of the fair values of acquired net assets over cost ("negative
goodwill") results from the acquisition of Basic in June 1993 and is being
amortized on a straight-line basis over 15 years. Accumulated amortization
of negative goodwill was approximately $195,000 and $131,000 at September
30, 1995 and December 31, 1994, respectively.
REVENUE RECOGNITION
Sales are recognized when the related products are shipped to customers.
INCOME TAXES
The liability method is used in accounting for income taxes. Accordingly,
deferred income tax assets represent the tax effects of temporary
differences between the financial reporting and income 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.
10
<PAGE> 11
Item 7(a)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)
ACCOUNTING RECORDS
Basic's accounting records are maintained using the accounting bases for
assets and liabilities of a predecessor owner; accordingly, the purchase
price paid in June 1993 has not been "pushed down" to such records. The
accompanying financial statements have been prepared to reflect the changes
in bases which resulted from the June 1993 acquisition. Such acquisition
resulted in changes to all asset and liability balances except for cash and
certain other working capital items.
RECLASSIFICATIONS
Certain reclassifications were made to the prior year's financial statements
to conform with the current period presentation.
RECENT PRONOUNCEMENT
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, which requires impairment losses to
be recorded on long-lived assets used in operations when indications of
impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amounts.
Statement No. 121 also addresses the accounting for long-lived assets that
are expected to be disposed. Basic will adopt Statement No. 121 in the
first quarter of 1996 and, based on current circumstances, does not believe
the effect of adoption will be material.
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- -------------
<S> <C> <C>
Raw materials . . . . . . . . . . . . . . . . . . . $ 2,358,917 $ 2,291,792
Work-in-process . . . . . . . . . . . . . . . . . . 384,540 837,285
Finished goods . . . . . . . . . . . . . . . . . . 1,376,574 1,743,234
--------------------------------------
$ 4,120,031 $ 4,872,311
======================================
</TABLE>
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- -------------
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . . . . . $ 133,000 $ 133,000
Buildings and improvements . . . . . . . . . . . . 1,821,556 1,800,556
Machinery and equipment . . . . . . . . . . . . . . 543,479 213,928
Automobiles . . . . . . . . . . . . . . . . . . . . 84,259 84,259
Furniture and fixtures . . . . . . . . . . . . . . 57,513 46,425
--------------------------------------
2,639,807 2,278,168
Less accumulated depreciation 212,616 100,705
--------------------------------------
$ 2,427,191 $ 2,177,463
======================================
</TABLE>
11
<PAGE> 12
Item 7(a)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
5. LINES OF CREDIT
Basic has a $1,353,000 line of credit with a financial institution which
expires on December 31, 1995. The line of credit is secured by
substantially all of Basic's accounts receivable and inventory and is
guaranteed by its majority shareholder. Interest is computed at .5% above
the prime rate of interest. No amounts were borrowed under this line of
credit at September 30, 1995 or December 31, 1994.
Basic has a $1,000,000 line of credit with a financial institution which
expires on December 31, 1995. The line of credit is secured by
substantially all of Basic's property, plant and equipment and is guaranteed
by its majority shareholder. Interest is computed at .5% above the prime
rate of interest. At September 30, 1995 no amounts were borrowed under this
line of credit, and at December 31, 1994 there was $150,170 outstanding
under this line of credit.
At September 30, 1995 and December 31, 1994, Basic had $300,000 available
under a letter of credit with a financial institution. No amounts were
outstanding under this letter of credit at either date.
6. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- ------------
<S> <C> <C>
Term note payable in monthly installments of $37,605 plus
interest at .5% above prime rate (8.5% at December 31,
1994) through December 1998. The note, paid in full
during 1995, was collateralized by substantially all
assets of Basic and guaranteed by the majority
shareholder. . . . . . . . . . . . . . . . . . . . $ - $ 449,810
Step down revolver payable in monthly installments of
$8,124 including interest at 8.75% through April 1997
when balance is due. The note, prepaid in the amount of
$168,856 in 1995, is collateralized by a manufacturing
facility in Wisconsin. Maximum of $950,000 available
under this revolver as of September 30, 1995 . . . . 635,507 821,861
Master draw note with interest payable monthly at 7.5%
through April 1997 when balance is due. . . . . . . 968,080 985,538
Term note, payable in monthly installments of $3,600
including interest at 8.75% through May 2000. The note
is collateralized by equipment . . . . . . . . . . 158,846 -
Note payable in monthly installments of $4,263 including
interest at 8% through June 2007, callable at the option
of the lender within a 90 day period beginning July 1998,
July 2001 or July 2002. The note is collateralized by
company facilities in Georgia . . . . . . . . . . . 382,035 397,564
--------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . 2,144,668 2,654,773
Less current maturities . . . . . . . . . . . . . . . 77,794 870,725
--------------------------------------
$ 2,066,874 $ 1,784,048
======================================
</TABLE>
12
<PAGE> 13
Item 7(a)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
6. LONG-TERM DEBT (CONTINUED)
Future maturities of long-term debt, assuming the note payable is called in
July 1998, at September 30, 1995 for the twelve month periods ending
September 30, are as follows:
<TABLE>
<S> <C>
1996 . . . . . . . . . . . . . . . . . . . . . . . $ 77,794
1997 . . . . . . . . . . . . . . . . . . . . . . . 1,636,529
1998 . . . . . . . . . . . . . . . . . . . . . . . 372,049
1999 . . . . . . . . . . . . . . . . . . . . . . . 39,771
2000 . . . . . . . . . . . . . . . . . . . . . . . 18,525
-------------
$ 2,144,668
=============
</TABLE>
Cash paid for interest during the nine months ended September 30, 1995 and
the year ended December 31, 1994 approximated $146,000 and $192,000,
respectively.
Basic is required to comply with certain financial covenants including
maintaining adequate levels of working capital and tangible net worth, as
defined. At September 30, 1995 and December 31, 1994, Basic was in
compliance with all such covenants.
7. OPERATING LEASE
Basic was committed under an operating lease for one of its facilities which
had a remaining lease term in excess of one year at September 30, 1995.
However, subsequent to September 30, 1995, the lease was terminated. In
conjunction with the termination terms of this lease, an early termination
penalty of approximately $78,000 has been accrued by Basic as of September
30, 1995. Total rent expense under this lease for the nine months ended
September 30, 1995 and the year ended December 31, 1994 was approximately
$156,000 and $183,000, respectively.
8. EMPLOYEE BENEFIT PLANS
Basic has two defined contribution employee benefit plans for the employees
at its manufacturing facility in Fond du Lac, Wisconsin. One plan allows
employees to make contributions by salary reduction pursuant to Section
401(k) of the Internal Revenue Code. The other plan is a money purchase
plan which provides for employer contributions equal to 4% of eligible
employee salaries. Employees become eligible to participate in the money
purchase plan after 12 months of service.
Employees at Basic's Georgia facilities participate in a profit sharing
plan. This plan provides for discretionary annual Company contributions.
In September 1995 Basic adopted an employee benefit plan for its employees
at the Georgia facilities. This plan allows eligible employees to make
contributions by salary reduction pursuant to Section 401(k) of the Internal
Revenue Code.
Basic's contributions to the above-described plans approximated $63,700 and
$85,500 for the nine months ended September 30, 1995 and the year ended
December 31, 1994, respectively.
9. INCOME TAXES
The provision for income taxes for the nine months ended September 30, 1995
consisted of current and deferred federal taxes of $124,066 and $248,711,
respectively, and current state income taxes of $37,220. The provision for
income taxes for the year ended December 31, 1994 consisted entirely of
current state income taxes.
Cash paid for income taxes for the nine months ended September 30, 1995 and
the year ended December 31, 1994 was approximately $56,000 and $2,000,
respectively.
13
<PAGE> 14
Item 7(a)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1995
9. INCOME TAXES (CONTINUED)
The provision for income taxes differs from the amount computed by applying
statutory U.S. Federal income tax rates to income before income taxes for
the following reasons:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------------ ----------------
<S> <C> <C>
Provision for income taxes at U.S. statutory rates . $ 405,572 $ 362,894
State income taxes, net of federal income tax benefit 24,565 19,414
Permanent differences . . . . . . . . . . . . . . . . (18,787) -
Utilization of alternative minimum tax credits . . . - (362,894)
Other, net . . . . . . . . . . . . . . . . . . . . . (1,353) 10,001
--------------------------------------
$ 409,997 $ 29,415
======================================
</TABLE>
The tax effects of the types of temporary differences and carryforwards
which give rise to deferred income tax assets are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------------ ----------------
<S> <C> <C>
Allowance for doubtful accounts . . . . . . . . . . . $ 461,110 $ 519,812
Inventory reserves . . . . . . . . . . . . . . . . . 190,380 217,117
Accrued liabilities . . . . . . . . . . . . . . . . . 511,384 381,479
Depreciation . . . . . . . . . . . . . . . . . . . . 535,855 496,986
Alternative minimum tax credits . . . . . . . . . . . 530,259 617,106
Net operating loss carryforwards . . . . . . . . . . - 251,073
Other . . . . . . . . . . . . . . . . . . . . . . . . 33,116 27,242
--------------------------------------
Total deferred income tax assets . . . . . . . . . $ 2,262,104 $ 2,510,815
======================================
</TABLE>
10. SUBSEQUENT EVENTS
On October 6, 1995, Basic was acquired by Fuqua Enterprises, Inc. ("Fuqua")
and upon completion of the merger became a wholly-owned subsidiary of Fuqua.
The accompanying financial statements do not reflect any adjustments
relating to the acquisition.
On October 20, 1995, Basic purchased certain assets of SSC Medical Products
("SSC"), a division of Super Sagless, Inc., for approximately $1,376,000.
SSC sells a home care line of medical products primarily consisting of
electric beds. The acquisition was financed by existing working capital and
a note payable of approximately $690,000.
Basic acquired a facility on October 21, 1995 which replaced its leased
facility in Georgia. The cost of the facility, including improvements,
approximated $1,600,000 and was financed by existing working capital and
borrowing capacity.
14
<PAGE> 15
Item 7(b)
PRO FORMA FINANCIAL INFORMATION
FUQUA ENTERPRISES, INC,
NINE MONTHS ENDED SEPTEMBER 30, 1995
AND YEAR ENDED DECEMBER 31, 1994
15
<PAGE> 16
Item 7(b)
FUQUA ENTERPRISES, INC.
PRO FORMA FINANCIAL INFORMATION
CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
Description of Transactions Reflected in the Pro Forma Financial Information . . . . . . . 17
Pro Forma Condensed Consolidated Balance Sheet at September 30, 1995 . . . . . . . . . . . 18
Notes to Pro Forma Condensed Consolidated Balance Sheet
at September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Pro Forma Condensed Consolidated Statements of Income
For the Nine Months Ended September 30, 1995 . . . . . . . . . . . . . . . . . . . . . 21
For the Year Ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 22
Notes to Pro Forma Condensed Consolidated Statements of Income . . . . . . . . . . . . . . 23
</TABLE>
16
<PAGE> 17
Item 7(b)
FUQUA ENTERPRISES, INC.
PRO FORMA FINANCIAL INFORMATION
DESCRIPTION OF TRANSACTIONS REFLECTED IN THE PRO FORMA FINANCIAL INFORMATION.
On November 8, 1995, Fuqua Enterprises, Inc. ("Fuqua") consummated the
acquisition of all of the outstanding shares of capital stock of Basic American
Medical Products, Inc. ("Basic") (the "Merger") as contemplated in the
Agreement and Plan of Merger, dated as of October 6, 1995, by and among Basic,
BA Acquisition Corporation, Fuqua and with respect to Articles 7, 12 and 13
thereof, Gene J. Minotto. Fuqua paid the shareholders of Basic approximately
$2,500,000 in cash and issued 600,000 shares of Fuqua Common Stock to Gene J.
Minotto, the controlling shareholder of Basic.
As reported on Fuqua's Current Report on Form 8-K, dated December 31,
1995, Fuqua consummated the previously announced sale of 100% of the stock of
its wholly-owned subsidiary, American Southern Insurance Company ("American
Southern"), to Atlantic American Corporation ("Atlantic") on December 31, 1995.
The sale price was $34,000,000 and consisted of approximately $22,648,000 in
cash and a note of approximately $11,352,000 due October, 1996. The note
accrues interest at the prime rate; one-half of the interest is payable
quarterly and the remaining interest is due in October, 1996.
The Merger and the sale of American Southern described above are
reflected in the unaudited pro forma financial information included herein.
17
<PAGE> 18
Item 7(b)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(Dollars in Thousands)
<TABLE>
<CAPTION>
SALE OF
AMERICAN
ACTUAL SOUTHERN MERGER
----------------------- PRO FORMA PRO FORMA PRO FORMA
FUQUA BASIC ADJUSTMENTS ADJUSTMENTS COMBINED
----- ----- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . $ 4,652 $ 688 $ 22,648(1) $ 27,988
Investments available for sale . . . . . . . . . 8,465 618 9,083
Receivables, net . . . . . . . . . . . . . . . . 17,095 4,932 11,352(1) 33,379
Inventories . . . . . . . . . . . . . . . . . . . 23,885 4,120 28,005
Prepaid expenses . . . . . . . . . . . . . . . . 970 257 1,227
Deferred income taxes . . . . . . . . . . . . . . 970 1,196 2,166
-----------------------------------------------------------------------------
Total Current Assets . . . . . . . . . . . . 56,037 11,811 34,000 101,848
-----------------------------------------------------------------------------
Property, plant and equipment . . . . . . . . . . 27,967 2,640 $ 2,587(5) 33,194
Less accumulated depreciation . . . . . . . . . . (12,898) (213) 213(5) (12,898)
-----------------------------------------------------------------------------
Net Property, Plant and Equipment . . . . . . 15,069 2,427 2,800 20,296
-----------------------------------------------------------------------------
Goodwill . . . . . . . . . . . . . . . . . . . . 3,966(6) 3,966
Deferred income taxes . . . . . . . . . . . . . . 1,066 1,066
Other assets . . . . . . . . . . . . . . . . . . 147 118 265
-----------------------------------------------------------------------------
Total Assets of Continuing Operations . . . . . . 71,253 15,422 34,000 6,766 127,441
Total Assets of Discontinued Operations . . . . . 99,617 (99,617)(2) - -
-----------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . . . . . $ 170,870 $ 15,422 $ (65,617) $ 6,766 $ 127,441
=============================================================================
</TABLE>
See Notes to Pro Forma Condensed Consolidated Balance Sheet.
18
<PAGE> 19
Item 7(b)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(Dollars in Thousands)
<TABLE>
<CAPTION>
SALE OF
AMERICAN
ACTUAL SOUTHERN MERGER
----------------------- PRO FORMA PRO FORMA PRO FORMA
FUQUA BASIC ADJUSTMENTS ADJUSTMENTS COMBINED
----- ----- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
LIABILITIES
Accounts payable and accrued expenses . . . . . . . $ 6,282 $ 4,223 $ 300 (7) $ 10,805
Accrued income taxes . . . . . . . . . . . . . . . (766) 900 134
Long-term liabilities due within one year . . . . . 257 78 335
-----------------------------------------------------------------------------
Total Current Liabilities . . . . . . . . . . . 5,773 5,201 300 11,274
Excess of fair values of acquired net assets
over cost, net . . . . . . . . . . . . . . . . 1,342 (1,342)(8) -
Deferred income taxes . . . . . . . . . . . . . . . 644 - 644
Long-term liabilities . . . . . . . . . . . . . . . 28,039 2,067 2,500 (9) 32,606
-----------------------------------------------------------------------------
Total Liabilities of Continuing Operations . . . 34,456 8,610 1,458 44,524
Total Liabilities of Discontinued Operations . . 64,097 - $ (64,097)(2) - -
-----------------------------------------------------------------------------
Total Liabilities . . . . . . . . . . . . . . 98,553 8,610 (64,097) 1,458 44,524
-----------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Preference Stock, $1 par value:
authorized 8,000,000 shares; none issued . . . - -
Common Stock, $2.50 par value:
authorized 20,000,000 shares; issued
3,904,670 shares . . . . . . . . . . . . . . . 9,759 - - 9,759
Additional paid-in capital . . . . . . . . . . . 15,140 4,869 7,251 (10) 27,260
Retained earnings . . . . . . . . . . . . . . . . 48,122 1,791 (879)(3) (1,791)(10) 47,243
Unrealized gains on investments . . . . . . . . . 671 152 (641)(4) (152)(10) 30
Treasury stock, at cost: 70,501 shares . . . . . (1,375) - (1,375)
-----------------------------------------------------------------------------
Total Stockholders' Equity . . . . . . . . . 72,317 6,812 (1,520) 5,308 82,917
-----------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity . . $ 170,870 $ 15,422 $ (65,617) $6,766 $ 127,441
=============================================================================
</TABLE>
See Notes to Pro Forma Condensed Consolidated Balance Sheet.
19
<PAGE> 20
Item 7(b)
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(Dollars in Thousands)
(1) This adjustment represents the $34,000 proceeds from the sale of American
Southern consisting in cash of $22,648 and a note of $11,352, which is due
October 1996.
(2) This adjustment represents removal of the assets and liabilities of
American Southern which previously had been treated as a discontinued
operation in the historical financial statements and which are assumed to
have been sold at September 30, 1995.
(3) This adjustment represents the loss on the sale of American Southern which
would be realized if the sale transaction had occurred on September 30,
1995.
(4) This adjustment represents the removal of unrealized appreciation on the
investments of American Southern which are liquidated with the sale of
American Southern at September 30, 1995.
(5) This adjustment represents the write-up of property, plant and equipment
from historical cost to fair value as a result of the allocation of the
purchase price for the Merger.
(6) This adjustment represents the goodwill which would result from the Merger
transaction if the Merger had occurred on September 30, 1995.
(7) This adjustment represents reserves (primarily transaction costs) which
relate to and arise from the Merger.
(8) This adjustment removes negative goodwill which arose when Basic was
acquired in 1993.
(9) This adjustment represents the cash portion of the purchase price for the
Merger which was financed with borrowings under Fuqua's revolving credit
agreement.
(10) This adjustment represents the new equity arising from the issuance of
common stock to complete the merger, less the actual historical equity of
Basic prior to the Merger.
20
<PAGE> 21
Item 7(b)
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
SALE OF
AMERICAN
ACTUAL SOUTHERN MERGER
----------------------- PRO FORMA PRO FORMA PRO FORMA
FUQUA BASIC ADJUSTMENTS ADJUSTMENTS COMBINED
----- ----- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
REVENUES:
Net sales . . . . . . . . . . . . . . . . $ 96,186 $ 20,964 $ 117,150
Investment income . . . . . . . . . . . . 576 - $ 663(1) 1,239
-----------------------------------------------------------------------------
Total revenues . . . . . . . . . . . . . 96,762 20,964 663 118,389
-----------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . 83,929 15,636 99,565
Selling, general and administrative . . 7,823 3,989 $ 268 (3) 12,080
Interest expense . . . . . . . . . . . . 1,172 146 122 (4) 1,440
-----------------------------------------------------------------------------
Total costs and expenses . . . . . . . . 92,924 19,771 390 113,085
-----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES . . . . . . . . . . . . . . 3,838 1,193 663 (390) 5,304
INCOME TAXES . . . . . . . . . . . . . . . 1,340 410 265(2) (48)(5) 1,967
-----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS . . . . . $ 2,498 $ 783 $ 398 $ (342) $ 3,337
-----------------------------------------------------------------------------
PER SHARE:
Income from continuing operations . . . . $ .65 $ .75
--------- ---------
Common shares and equivalents . . . . . . . 3,864 4,464
--------- ---------
</TABLE>
See Notes to Pro Forma Condensed Consolidated Statements of Income.
21
<PAGE> 22
Item 7(b)
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
SALE OF
AMERICAN
ACTUAL SOUTHERN MERGER
----------------------- PRO FORMA PRO FORMA PRO FORMA
FUQUA BASIC ADJUSTMENTS ADJUSTMENTS COMBINED
----- ----- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
REVENUES:
Net sales . . . . . . . . . . . . . . . . $ 126,515 $ 23,252 $ 149,767
Investment income . . . . . . . . . . . . 541 - $ 541(1) 1,082
-----------------------------------------------------------------------------
Total revenues . . . . . . . . . . . . . 127,056 23,252 541 150,849
-----------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . 108,349 16,900 125,249
Selling, general and administrative . . 9,603 5,078 $ 357 (3) 15,038
Interest expense . . . . . . . . . . . . 906 207 162 (4) 1,275
-----------------------------------------------------------------------------
Total costs and expenses . . . . . . . . 118,858 22,185 519 141,562
-----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES . . . . . . . . . . . . . . 8,198 1,067 541 (519) 9,287
INCOME TAXES . . . . . . . . . . . . . . . 2,549 29 216(2) (65)(5) 2,729
-----------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS . . . . . $ 5,649 $ 1,038 $ 325 $ (454) $ 6,558
-----------------------------------------------------------------------------
PER SHARE:
Income from continuing operations . . . . $ 1.46 $ 1.47
--------- ---------
Common shares and equivalents . . . . . . 3,860 4,460
--------- ---------
</TABLE>
See Notes to Pro Forma Condensed Consolidated Statements of Income.
22
<PAGE> 23
Item 7(b)
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
AND
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in Thousands)
(1) This adjustment represents interest earned on the portion of the proceeds
from the sale of American Southern represented by the note which accrues
interest at prime. The interest which can be earned on the cash portion
of the proceeds from the sale of American Southern has not been reflected
in the pro forma adjustments. Such interest, at an assumed rate of 6% and
before the effect of income taxes, would be approximately $1,019 and
$1,510 ($.14 and $.20 per share, after tax) for the nine months ended
September 30, 1995 and for the year ended December 31, 1994, respectively.
(2) This adjustment represents the income taxes which would result from the
additional interest income earned on the note portion of the proceeds from
the sale of American Southern.
(3) This adjustment represents additional depreciation and amortization
arising from goodwill and the write-up of property, plant and equipment to
fair value, both of which are principally being amortized over 30 years.
(4) This adjustment represents interest expense arising from Fuqua's borrowing
the $2,500 cash portion of the Merger's consideration.
(5) This adjustment represents the income tax reduction which would result
from the additional interest expense on borrowings to finance the cash
portion of the Merger's consideration.
23
<PAGE> 24
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 hereunto duly authorized.
FUQUA ENTERPRISES, INC.
(Registrant)
/s/ Brady W. Mullinax, Jr.
-------------------------------------
Brady W. Mullinax, Jr., Vice President-Finance,
Treasurer and Chief Financial Officer (Principal
Financial and Accounting Officer and Executive Officer
duly authorized to sign on behalf of the Registrant)
Date: January 22, 1996
24
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8, No. 33-36157 and Form S-8, No. 33-54164) pertaining to the stock
option plans of Fuqua Enterprises, Inc. (formerly Vista Resources, Inc.) of our
report dated December 5, 1995, with respect to the financial statements of
Basic American Medical Products, Inc. included in Fuqua's Form-8K/A dated
November 8, 1995.
ERNST & YOUNG LLP
Atlanta, Georgia
January 22, 1996
